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CHAPTER TWO | REGULATION, REGIONALIZATION AND REORGANIZATION
With Bevis at the helm and young technology experts like Jaenike on board, BASIC began to explore several options for streamlining the handling of stock certificates. CCS would play a large role in developing a solution for BASIC. They would buy out the CCS-type solutions from the stock exchanges, then make them cooperatives owned and controlled by the users, including banks. “The banks said, ‘We’re not going to put our securities into this thing unless we have a voice on the board of directors and the management,’” Jaenike said. Another obstacle that needed to be discussed was what to do with stock certificates in the first place. Some on the committee wanted to move away from stock certificates altogether. At BASIC, “it was a debate that lasted about 15 seconds,” Jaenike said. “It was driven by strong feelings out of Congress that there were too many Americans who wanted to have their physical stock certificate. If we try to legislate it out of business, you’re going to have a lot of angry voters.” A contingent of brokers urged BASIC to move to a punch card stock certificate. “Everybody from the brokerage side saluted this and said, ‘Isn’t it wonderful?’” Jaenike said. “Even some of those people on the BASIC task force, including me, said, ‘Maybe we should go down this path as well, in case something goes wrong, and CCS gets derailed. We’ll have this as a backup.’” As the task force technologist, Jaenike ordered a few thousand punch card stock certificates that had been stored in an ordinary office environment with no special humidity control, the way anyone would assume punch cards could be stored. Jaenike took them to the back office of Shields & Company, one of the leading proponents of the punch cards.
197 4 DTC announces new policies to limit profits and return revenues for excess funds. It would keep half a million in its reserves and return about 10 percent of its total expenses—$2.4 million— to users this first year.
1975 JUNE President Gerald Ford
1975 OCTOBER
1978 DTC begins accepting over-the-counter issues. The move is designed to accommodate a merger of clearing corporations of NYSE, AMEX and NASD that form National Securities Clearing Corporation, centralizing the clearance and settlement of broker- to-broker trades.
The US Securities and Exchange Commission approves NYSE’s proposal to sell DTC. By 1976, broker-dealers would be allowed to purchase shares in DTC directly.
signs the Securities Acts Amendments of 1975. The act establishes a national securities market system and a national clearance and settlement system, among other provisions.
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