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SECURITIES INDUSTRY ASSOCIATION TO REPORT WEEKLY AVERAGE RATES FOR RETAIL BROKERED DEPOSITS

 SECURITIES INDUSTRY ASSOCIATION TO REPORT WEEKLY AVERAGE RATES
 FOR RETAIL BROKERED DEPOSITS
 NEW YORK, July 16 /PRNewswire/ -- The Securities Industry Association, next week, will begin reporting weekly the weighted average interest rates for insured retail brokered certificates of deposit (BCD) of banks and savings associations made available by securities brokerage firms across the nation, Edward I. O'Brien, president, said.
 The first report of the "SIA Brokered CD Rate Index" will be issued July 23 for weekly trades settling July 22.
 The BCD report was created to assist financial services firms, consumers, and the Federal Deposit Insurance Corp. to better gauge the rates of these instruments, O'Brien said.
 A year-end 1990 SIA sampling of firms showed about 2.75 million individuals, primarily small savers, with median incomes of $38,560, hold BCDs. The sampling showed the average deposit was $19,800 and the BCD was held for an average 2.1 years. About $60 billion BCDs were outstanding as of year-end 1991.
 Rate Report Will Show Nine Maturities
 The dollar-weighted average will show nine BCD rates -- those most commonly purchased by small investors -- with maturities from three months to 10 years. They will be based upon the actual rates of BCD issuance settled weekly by securities firms, with Depository Trust Co. (DTC) acting as custodian, as well as settlements reported to SIA by brokers not facilitated through DTC. Other information transmitted to SIA will be maturity dates, dollar amounts and method of rate calculation.
 The index will reflect SIA-calculated dollar-weighted averages of BCDs of similar maturities settled in the preceding Thursday through Wednesday period.
 The majority of BCDs are held by DTC as custodian. The majority of securities firms which originate BCDs placed at banks and savings institutions across the nation for customers, primarily individual investors, also keep those BCDs at DTC. Each BCD held by DTC as custodian carries with it a specified maturity and rate of interest.
 While rates in the index normally represent BCDs issued by a number of depository institutions, certain maturities, at times, due to market conditions, may be represented by a single issuer.
 Not all rates are calculated on the same basis; some banks and savings associations use a 360 day cycle to determine rates, while others use 365 days, SIA said. The average rates calculated by SIA are on a bond equivalent basis, representing the actual days in the year.
 DTC is a national clearinghouse for the settlement of securities transactions and provides securities custody services for its bank and broker-dealer users.
 SIA is the securities industry's trade association, representing the business interests of more than 600 securities brokerage and investment banking firms in the United States and Canada. Collectively, they account for more than 90 percent of securities activity in North America.
 -0- 7/16/92
 /CONTACT: Art Samansky or Karen San Antonio of Securities Industry Association, 212-608-1500/ CO: Securities Industry Association ST: New York IN: FIN SU:


TQ-OS -- NY071 -- 9791 07/16/92 13:09 EDT
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Publication:PR Newswire
Date:Jul 16, 1992
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