Full text of District Notices (Federal Reserve Bank of Dallas) : Par Payment of Bonds and Coupons, Circular No. 75-10

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federal

reserve

bank

DALLAS. TEXAS

of

Dallas

75222
C i r c u l a r No. 75-10
J a n u a r y 10, 1975

PAR PAYMENT OF BONDS AND COUPONS

TO ALL BANKS
IN THE ELEVENTH FEDERAL RESERVE DISTRICT:
It is th e p r a c t i c e of some commercial b a n k s to a s s e s s an
" e x c h a n g e " c h a r g e w h e n p a y i n g b o n d s a n d c o u p o n s p r e s e n t e d to them
b y o t h e r b a n k s , in c lu d in g F e d e ra l R e s e r v e B a n k s . T h e p r a c t i c e h a s d e ­
c lin e d to th e po in t w h e r e only a few b a n k s a n d i s s u e r s now follow th is
p r a c t i c e a n d a l a r g e m ajority of b o n d s a n d c o up o n s a r e p a id a t p a r .
T h e imposition of s u c h c h a r g e s p r e s e n t s p r o b le m s to both
commercial b a n k s a n d F e d e ra l R e s e r v e offices in a p p o r tio n in g the c h a r g e s
for g r o u p s of b o n d s a n d c o u po n s to in d iv id u a l o w n e r s . In a d d i t i o n , many
p a r t i e s h a v e e x p r e s s e d c o n c e r n r e g a r d i n g th e a p p r o p r i a t e n e s s of p a s s i n g
re d e m p tio n costs to th e o w n e r s of s u c h o b lig a tio n s r a t h e r th a n to th e is ­
suers.
C o n s e q u e n t l y , on J u l y 1, 1975, o p e r a t i n g c i r c u l a r s of all F e d ­
e ra l R e s e r v e Banks will be r e v i s e d to r e q u i r e p a r p a y m e n t for all b o n d s
a n d c o u p o n s w h e n p r e s e n t e d for p a y m e n t b y a F e d e ra l R e s e r v e B a n k .
T h i s sh o u ld re m ov e a m in o r im p edim en t to the f r e e flow of s u c h items
t h r o u g h th e collection p r o c e s s . Q u e stio n s o r comments r e g a r d i n g th is
c h a n g e s h o u ld be d i r e c t e d to Mr. T . E. S p r e n g , A s s i s t a n t Vice P r e s i d e n t ,
o r th e a p p r o p r i a t e B ra n c h officers h a v i n g r e s p o n s i b i l i t y o v e r th e N oncash
Collection F u n c tio n .
Sincerely y o u rs ,
T . W. Plant
F i r s t Vice P r e s i d e n t

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