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Federal Reserve Bank
OF DALLAS
TONY

J . S A L V A G G tO

FIRST VICE PRESIDENT

J a n u a r y 28, 1994

D ALLAS, TE X A S
75265-590 6

Not ic e 94-14
TO:

T h e C h i e f O p e r a t i n g O f f i c e r of
each f i n a n cia l i n s t i t u t i o n in the
E l e v e n t h Federal R e s e r v e D i s t r i c t
SUBJECT
O p e r a t i n g C i r c u l a r No. 14
(Book-Entry Securities Account Maintenance
and T r a n s f e r S er v i c e s )
DETAILS

In o r d e r to p r o v i d e c o n s i s t e n t s e r v i c e l ev e l s to all f in ancial
i n s t i t u t i o n s , the Federal R e s e r v e Ban ks h av e d e v e l o p e d a s t a n d a r d o p e r a t i n g
c i r c u l a r ( O p e r a t i n g C i r c u l a r 14) for the B o o k - E n t r y S a f e k e e p i n g and T r a n s f e r
S e r vi c e.
T h i s o p e r a t i n g c i r c u l a r will be u sed by all R e s e r v e D i s t r i c t s and
will b e c o m e e f f e c t i v e on M a r c h 1, 1994.
P le a s e r e v i e w the o p e r a t i n g c i r c u l a r
and d e t e r m i n e w h e t h e r c h a n g e s to y o u r o p e r a t i n g p r o c e d u r e s are n e c e s s a r y .
The
n e w O p e r a t i n g C i r c u l a r 14 r e p l a c e s t his B a n k ’s Fiscal A g e n c y O p e r a t i n g
C i r c u l a r 2 and B u l l e t i n 14 in t h e i r e nt ir ety .
T h e m o s t s i g n i f i c a n t c h a n g e is the r e q u i r e m e n t for o f f l i n e r e c e i v e r s
to p r o v i d e m a t c h i n g r e c e i p t i n s t r u c t i o n s b e f or e the a c c e p t a n c e of a t ra nsf er .
F a i l u r e to do so will r e s ul t in t r a n s f e r s b ei n g r e t u r n e d p r o m p t l y to the
sender.
T h i s p r o c e d u r e will be p h a s e d in o v e r a 1 2 - m o n t h p e r i o d in this
District.
D u r i n g the p h a s e - i n period, w h e n a t r a n s f e r is r e c e i v e d for an
o f f l i n e i n s t i t u t i o n w i t h o u t p ri o r n o t i f i c a t i o n , the r e c e i v i n g i n s t i t u t i o n will
be c o n t a c t e d by R e s e r v e B a n k s t a f f and will be n o t i f i e d t h a t s e c u r i t i e s have
b een r e c e i v e d f or t h e i r acc ou n t.
T he fin an c ia l i n s t i t u t i o n m a y i n f or m the
R e s e r v e B a n k s t a f f to a c c e p t or r e t u r n the s e c u r i ti es .
B e g i n n i n g M a r c h 1,
1995, R e s e r v e B a n k s t a f f will d i s c o n t i n u e this n o t i f i c a t i o n p r o c e d u r e and will
r e t u r n a ny i n c o m i n g s e c u r i t y t r a n s f e r f or an o f f l i n e i n s t i t u t i o n t ha t w a s not
p r e v i o u s l y a u t h o r iz e d .
ENCLOSURE
E n c l o s e d is O p e r a t i n g C i r c u l a r 14.
P l e a s e f il e it in y o u r O p e r a t i n g
C i r c u l a r s ( Bu l l e t i ns ) b i n d e r and d i s c a r d the old v e r s i o n s o f B u l l e t i n 14 and
Fiscal A g e n c y O p e r a t i n g C i r c u l a r 2.

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas:
Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162,
Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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2

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MORE INF ORMATION
F or m o r e i n f o r m a t i o n a bo u t B o o k - E n t r y S e c u r i t i e s A c c o u n t M a i n t e n a n c e
and T r a n s f e r S e r v i c e s , p l e a s e c o n t a c t R ob e r t F e i 1, (214) 9 2 2 - 6 7 8 7 , at the
D a l l a s O ff ice ; J a v i e r J i m en e z , (915) 521 -8 2 02 , at the El Paso Off ice; Luke
R i c h a r d s , (713) 6 5 2 - 1 5 44 , at the H o u s t o n Off ice; or R i c h a r d G u t i e r re z ,
(210) 9 7 8 - 1 4 0 1 , at the San A n t o n i o Office.
For a ddit i o n a l c o p i e s of t hi s B a n k ’s n o t i c e or O p e r a t i n g C i r c u l a r
14, p l e a s e c o n t a c t the P ub l i c A f f a i r s D e p a r t m e n t at (214) 9 2 2 - 5 2 54 .
S in ce r e l y,

O
peratingCircular
F e d e r a l

R e s e r v e

B a n k

of

D a l l a s

Book-Entry Securities
Account Maintenance
and Transfer Services

Scope
Operating Circular 14 sets forth the terms and conditions under which the Federal Reserve Bank
of Dallas maintains securities accounts and effects transfers of book-entry securities for Partici­
pants. By maintaining a securities account, a Participant agrees to accept and be bound by the
provisions of this Operating Circular and its appendixes, as amended from time to time.

ii

F e d e ra l R e s e rv e B a n k of D allas

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fthto of Contents *
BOOK-ENTRY SECURITIES ACCOUNT
MAINTENANCE AND TRANSFER SERVICES
Paragraphs
Governing Regulations.....................................................................

1

Definitions.........................................................................................

2

Securities Account M aintenance....................................................
General
Unrestricted securities accounts
Restricted securities accounts

3-5

Terms and Conditions of Access....................................................
General
Terms and conditions of online access
Terms and conditions of offline access
Security

6 -9

Settlement of Book-Entry Securities Transactions....................... 10-11
Finality
Credits and debits of book-entry securities
Transfer of Book-Entry Securities................................................... 12-20
Restrictions on transfers
Amount limitations on transfers
Transfer hours and extensions
Notices
Improper use of the reversal code
Requesting As-of A djustm ents.....................................................................21
Transfer and Securities Account Maintenance Fees........................22-25
Assessment of fees
Billing of fees

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F e d e r a l R e s e r v e B a n k of D a l l a s

Tableof Contents

Operating
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14

BOOK-ENTRY SECURITIES ACCOUNT
MAINTENANCE AND TRANSFER SERVICES
(continued)
Paragraphs
Emergency Conditions..................................................................... 26-27
Failure of a Participant’s equipment
Failure of Reserve Bank equipment
Limitations on Liability....................................................................

28

Right to Am end..................................................................................

29

Appendix 1: Applicable Regulatory Citations Governing
Book-Entry Securities of Agencies,
Instrumentalities, and Establishments of
the United States
Appendix 2: Fedwire Operating Hours for Book-Entry
Securities Transfers
Appendix 3: Telephone Tenders for Treasury Auctions

iv

F e d e ra l R e s e rv e B a n k of D allas

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G o v e r n in g Re g u l a t io n s
1. This Operating Circular incorporates by
reference the provisions of the regulations listed
in Appendix 1 as such regulations and that
Appendix are amended from time to time.

H. “Offline access” refers to other means of
sending transfer messages to this Bank,
such as by written, facsimile, or tele­
phone instruction. “Offline Participant”
refers to a Participant with offline access.
I.

D e f in it io n s
2. For purposes of this Operating Circular, the
following definitions apply. Where the context
requires, the singular includes the plural, and the
plural includes the singular. Headings are for
convenience only and do not constitute substan­
tive provisions of this Operating Circular.
A. “Bank” means the Federal Reserve Bank
issuing this Operating Circular and any
or all of its Branches.
B. “Board” means the Board of Governors
of the Federal Reserve System.
C. “Book-entry security” means a market­
able security issued in electronic form—
by the U.S. government (the “Trea­
sury”), any agency or instrumentality
thereof, certain international organiza­
tions, or others— that the Reserve Banks
have determined is eligible to be held in
a securities account and is eligible for
transfer.
D. “Fedwire” means the electronic facility
owned and operated by the Reserve
Banks for maintaining securities ac­
counts and effecting transfers.
E.

F.

“Free transfer” means a transfer that
does not involve any credit or debit to a
funds account other than a transaction
fee.
“Funds account” means a reserve,
clearing, or other funds deposit account
at a Reserve Bank against which debits
or credits are posted for transfers against
payment, book-entry securities transac­
tion fees, and principal and interest
payments.

G. “Online access” refers to sending
transfer messages electronically through
a terminal or computer linked directly to
this Bank. “Online Participant” refers to
a Participant with online access.

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“Participant” refers to any entity that
maintains a securities account with a
Reserve Bank in the entity’s name.
Subject to the risk reduction policies of
the Reserve Banks and the Board,
entities authorized by law, regulation,
policy, or agreement to be Participants
include the following:
(1) depository institutions as defined in
Section 19(b)(1)(A) of the Federal
Reserve Act, as amended (12 U.S.C.
§ 461(b)(1)(A));
(2) agencies and branches of foreign
banks as defined in Section 1(b) of
the International Banking Act of
1978, as amended (12 U.S.C. §§
3101(1) and (3));
(3) member banks of the Federal
Reserve System, as defined in
Regulation H issued by the Board
(12 C.F.R. Part 208);
(4) the U.S. Treasury and any entity
specifically authorized by federal
statute to use the Reserve Banks as
fiscal agents or depositories;
(5) entities designated by the Secretary
of the Treasury in accordance with
Section 15 of the Federal Reserve
Act (12 U.S.C. §391);
(6) foreign central banks, foreign
monetary authorities, foreign
governments, and certain interna­
tional organizations;
(7) entities authorized under Section 25,
paragraph 3, of the Federal Reserve
Act (12 U.S.C. § 601 (Third)) and
Section 25A of the Federal Reserve
Act (12 U.S.C. §611); and
(8) any other entity authorized by a
Reserve Bank to use Fedwire bookentry securities services.

F e d e ra l R e se rve B a n k of D allas

J.

“Securities account” means an account
at a Reserve Bank containing book-entry
securities held for a Participant.

K. “Reserve Bank(s)” means any one (or
more) of the 12 Federal Reserve Banks
and their Branches as determined by the
context.
L.

“Transfer” means the electronic move­
ment over Fedwire of a par amount of
book-entry securities (1) by debit to the
designated securities account of the
Participant sending the transfer message
(the “sender”) and by credit to the
designated securities account of the
Participant receiving the book-entry
securities (the “receiver”) or (2) by debit
to one securities account of a Participant
and credit to another securities account
of that same Participant, in which case
that Participant is both a sender and a
receiver. A transfer is either a free
transfer or a transfer against payment.

M. “Transfer message” means an instruc­
tion of the Participant to a Reserve Bank
to effect a transfer.
N. “Transfer against payment” means a
transfer that is effected with a credit to
the funds account of the sender and a
debit to the funds account of the re­
ceiver, for the amount of the payment.

Se c u r i t i e s A c c o u n t M a i n t e n a n c e

Participant, all book-entry securities
held in any unrestricted securities
account shall be held by this Bank for,
and subject to the sole order of, the
Participant.
B. A Participant is responsible for m ain­
taining accurate and current records
with regard to book-entry securities it
holds for its customers in accordance
with applicable law. This Bank does not
reflect in its records any interest of a
Participant’s customers in book-entry
securities held by this Bank for such
Participant. A Participant shall not
represent to its customers that this
Bank’s records reflect the interests of
Participant’s customers.
Restricted Securities Accounts
5. A. A Participant may hold book-entry
securities pledged as collateral for a
purpose described in paragraph 5B in
one or more restricted securities ac­
counts. Credits of book-entry securities
to, and debits from, restricted securities
accounts may require the approval of the
pledgee.
B. This Bank offers restricted securities
accounts that include, but are not
limited to, the following:
(1) Restricted securities accounts in
which this Bank holds book-entry
securities in its individual capacity

General
3. A Participant may have one or more securi­
ties accounts at this Bank, subject to the terms
and conditions required by this Bank. Securities
accounts may be restricted or unrestricted. In
addition, a Participant may also have certain
types of securities accounts for special purposes,
subject to terms and conditions agreed upon by
this Bank and the Participant.

(a) as collateral for advances (in­
cluding extension of intraday
credit) by the Bank to the
Participant;
(b) as collateral to secure deposits of
funds of public entities (includ­
ing states, municipalities, and
other political subdivisions);
and

Unrestricted Securities Accounts
4.

A. A Participant may hold book-entry
securities it owns, as well as book-entry
securities it holds for the account of its
customers, in one or more unrestricted
securities accounts. Regardless of the
combination or number of unrestricted
securities accounts maintained by a

(c) as collateral for bankruptcy
funds on deposit with the
Participant, pursuant to 11
U.S.C. § 345 and 31 C.F.R. Part
225, as amended from time to
time (Treasury Department
Circular No. 154).

F e d e ra l R e s e rv e B a n k of D allas

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(2) Restricted securities accounts in
which this Bank holds book-entry
securities in its capacity as fiscal
agent of the United States

as defined in and subject to the “Fedwire
Transfer Operations Consolidation
Agreement” and the Board’s payments
system risk reduction policies.

(a) as collateral to secure balances
held by the Participant in
Treasury Tax and Loan ac­
counts under 31 C.F.R. Part
203, as amended from time to
time (Treasury Department
Circular No. 92);

B. A Participant must maintain a funds
account to be a sender or a receiver of
transfers against payment. This Bank
reserves the right (1) to require a
Participant to maintain a balance in its
funds account on this Bank’s books or
pledge collateral sufficient at all times to
cover transfers against payment for
which it is the receiver, (2) to limit a
receiver to free transfers, or (3) to limit
transfers against payment or to reject
transfer messages.

(b) as collateral for revenues and
funds of the United States, as
well as any funds the deposit of
which is subject to the control
or regulation of the United
States or any of its officers,
agents, or employees, pursuant
to 31 C.F.R. Part 202, as
amended from time to time
(Treasury Department Circular
No. 176);
(c) as security in lieu of a surety on
penal bonds, pursuant to 31
C.F.R. Part 225, as amended
from time to time (Treasury
Department Circular No. 154);
and
(d) for such other purposes as this
Bank may designate with the
approval of the Secretary of the
Treasury, subject to Treasury
circulars or other relevant
instructions.
C. Proceeds of book-entry securities,
including interest payments on bookentry securities, held in a restricted
securities account at maturity or call
may be held by this Bank in a noninterest-bearing account until substitute
collateral is posted or the pledge is
released.

T erm s a n d C o n d it io n s o f a c c e ss
General
6. A. Each Participant is responsible for all
access to, and all debits and credits to, its
securities accounts and its funds ac­
count. A Participant may use the
services of a third-party service provider,
01-94

Operating
Circular

14

C. A Participant that does not have or is
not permitted to have a funds account in
its own name may only be a sender or a
receiver of free transfers and must
designate a correspondent with a funds
account on a Reserve Bank’s books,
which shall be credited for principal and
interest payments on book-entry
securities and debited for transaction
fees, as described in paragraphs 23 and
24. This Bank will reject transfer mes­
sages for transfers against payment to a
Participant that does not have a funds
account or that is only permitted to be a
receiver of free transfers.
D. The sender and the receiver of a transfer
have irrevocably authorized and in­
structed the Reserve Bank(s) involved in
such transfer to debit the sender’s
designated securities account and credit
the receiver’s designated securities
account for the par amount of the bookentry securities and to credit the sender’s
funds account and debit the receiver’s
funds account for the payment in the
case of a transfer against payment.
E.

If this Bank returns a transfer in the
circumstances described in paragraph
8B, the sender and the receiver of such
transfer irrevocably authorize and
instruct the Reserve Bank(s) involved in
the transfer to post debits and credits to
the sender’s and the receiver’s securities
accounts and their corresponding funds
accounts offsetting the debits and credits
previously made in connection with
such transfer.

F e d e ra l R e s e rv e B a n k of D allas

3

Operating
Circular

14

F.

This Bank provides Participants with
online access or offline access to Fed­
wire, described further below, but
reserves the right to terminate a Par­
ticipant’s access without prior notice.

Terms and Conditions o f Online Access
7. A. An Online Participant must manage its
access in order to receive timely ac­
knowledgment of credits and debits to
its securities accounts and its funds
account during Fedwire operating
hours.

Security
9. A Participant is responsible for preventing
disclosure of any codes or other security proce­
dures relating to either online access or offline
access except to those with a need to know. The
Participant must notify this Bank immediately if
it finds or suspects that the codes or security
procedures are compromised and must act to
prevent further disclosure.

S e t t l e m e n t o f B o o k -E n t r y
Se c u r i t i e s T r a n s a c t i o n s
Finality

B. This Bank assigns a time stamp, identi­
fied as Input Message Acknowledgment
Data (IMAD), to each transfer message
it receives from a Participant. Subject to
paragraph 6B, if this Bank does not
effect a transfer against payment on the
date of receipt of a transfer message that
has passed appropriate operational edits,
when an IMAD has been assigned five
minutes or more before Fedwire closes,
the sender is entitled to an as-of adjust­
ment, in accordance with paragraph 21,
if its funds account has not already been
credited.
Terms and Conditions o f Offline Access
8. A. A sender must provide transfer mes­
sages, and a receiver must provide
matching instructions, in writing or by
facsimile transmission under an autho­
rized name on file with this Bank or by
telephone. This Bank shall call the
Participant’s place of business to verify a
transfer message or other instruction,
may record any telephone call relating to
transfers, and may require verification of
all transfer messages or other instruc­
tions through code word in its discre­
tion. This Bank is entitled to rely on any
transfer messages or instructions
(whether or not authorized) that it
reasonably believes to be genuine.
B. If a receiver has not given matching
instructions, this Bank will return the
transfer as promptly as possible by
having debits and credits posted to the
securities accounts and the funds
accounts offsetting the debits and credits
previously made in connection with
such transfer.
4

10. A. Subject to this Bank’s right of rejection
in paragraph 6B, all debits and credits in
connection with a transfer become final
at the earlier of (1) the time such debits
and credits are posted to both the
sender’s and the receiver’s securities
accounts and their corresponding funds
accounts in the case of a transfer against
payment or (2) at the time notice of the
transfer is made available to the sender
and the receiver. Transfers m aybe
reversed only by a separate transfer
effected by a transfer message using the
reversal code, or transfers may be
returned by this Bank in accordance
with paragraph 8B.
B. Subject to paragraph 5C, this Bank
credits payments of principal and
interest on book-entry securities to the
funds account of the Participant (or,
subject to prior written agreement, of its
correspondent) on the due date (or the
next business day, if the payment date
falls on a weekend or holiday) from
available funds of the issuer, unless
otherwise instructed by the issuer.
C. Credits of principal and interest pay­
ments on book-entry securities to a
funds account are final, subject only to
this Bank’s right to debit or credit such
funds account (without further authori­
zation or instruction) to correct any
payment errors.
Credits and Debits o f Book-Entry Securities
11. A. Book-entry securities are credited to
a Participant’s securities account
whenever

F e d e ra l R e s e rv e B a n k of D allas

01-94

(1) a Participant is a receiver or requests
that book-entry securities be moved
from the TREASURY DIRECT
system (described at 31 C.F.R. Part
357.20 etseq.) to its securities
account at this Bank;
(2) a Participant purchases book-entry
securities upon original issue; or
(3) a Participant converts eligible
definitive securities to book-entry
form or from one book-entry form
to another book-entry form.
B. Book-entry securities are debited to
a Participant’s securities account
whenever
(1) this Bank effects a transfer for a
Participant that is a sender, or a
Participant requests that book-entry
securities be moved into the TREA­
SURY DIRECT system;
(2) Book-entry securities held in a
securities account mature or are
called for redemption; or
(3) a Participant converts eligible bookentry securities to bearer or regis­
tered definitive securities or from
one book-entry form to another
book-entry form in the same
amount, series, and maturity date as
the book-entry securities.
C. Book-entry securities can be credited to
a securities account upon original issue
or converted to or from definitive form
(bearer or registered) according to
relevant regulations and policies of the
issuers of the book-entry securities and
of the Reserve Banks. Book-entry
securities are redeemed at maturity or
called in accordance with the issuer’s
instructions.
D. Book-entry securities can be debited or
credited to a securities account in
accordance with paragraph 8B.
E.

01-94

If a transfer message does not designate
the securities account of the receiver to
be credited, book-entry securities will be
credited to the securities account
designated as a default by the receiver.

T r a n s f e r o f B o o k -E n t r y
Se c u r i t i e s

Operating
Circular

14

Restrictions on Transfers
12. A. Transfers are not authorized on or after
the date of maturity of a particular issue
or on or after the redemption date of a
bond or note that has been called for
redemption. Certain issues may contain
restrictions that do not allow transfers
for a specified time period before
maturity.
B. This Bank will not accept instructions
from a sender (or a receiver) to credit
(or debit) a correspondent’s funds
account for a payment in connection
with a transfer against payment.
A m ount Limitations on Transfers
13. A. A par amount maximum (“limit”) for
transfers is specified in Appendix 2. The
limit applies to all transfers, as well as to
transactions with the Federal Reserve’s
Open Market Desk, except as provided
in paragraph 13B. This Bank shall reject
a transfer message with a par amount
greater than the limit.
B. The limit on transfers does not apply to
(1) transactions, including the original
issuance of book-entry securities
and requests to strip and reconsti­
tute book-entry securities, with this
Bank in its capacity as fiscal agent of
the United States, federal and
federally sponsored agencies, or
international organizations; and
(2) debits or credits to restricted
securities accounts on this Bank’s
books.
C. Participants should establish procedures
to ensure that large transfers are not
delayed until late in the day. Specifically,
each Participant should encourage its
customers to provide it delivery instruc­
tions as soon as practical after a trade is
executed and to deliver book-entry
securities as soon as (par amount) lots of
book-entry securities at the limit are in
position.

F e d e ra l R e s e rv e B a n k of D allas

5

17. After the close of business, this Bank pro­
vides each Online Participant with

Transfer Hours and Extensions
14. This Bank will effect transfers in accordance
with the schedule of operating hours in Appen­
dix 2. However, the Reserve Banks may decide,
in their sole discretion, to open or close Fedwire
at an earlier time, or extend Fedwire, to facilitate
special market needs.
15. A. A Participant requiring an extension of
Fedwire operating hours should contact
this Bank as soon as possible; however,
requests made later than five minutes
before the scheduled Fedwire close shall
not be granted. Extensions may be
granted for reasons including, but not
limited to, the following:
(1) heavy volume in the book-entry
securities market;
(2) failure of Reserve Bank and/or
Fedwire network equipment; or

A. a summary of funds debited or credited
to the Participant’s funds account on
this Bank’s books as a result of transfers
against payment; and
B. a summary of net balances for each
book-entry security issue for which there
was activity.
18. Each Participant also receives information
detailing principal and/or interest payments
credited to its (or its correspondent’s) funds
account.
19. A Participant must notify this Bank in
writing of an exception to any notice, summary,
or statement as soon as possible but, in any
event, no later than 10 calendar days from the
date of the notice, summary, or statement.
Improper Use o f the Reversal Code

(3) failure of any Participant’s (or its
customer’s) equipment when such
failure is deemed disruptive to the
securities market as a whole.
B. When requesting an extension, the
Participant will be required to state the
dollar amount and volume of unpro­
cessed transfer messages and to assess
the severity of any technical difficulties.
C. Every extension of Fedwire is broadcast
electronically to all Reserve Banks and all
Online Participants.
Notices
16. This Bank sends each Participant a notice
after each credit or debit to its securities accounts
on this Bank’s books. The notice is not a negotia­
ble or transferable receipt but is merely confir­
mation of a completed transfer.

20. A. A Participant should not send a transfer
message for the first time during the
reversal period by using the reversal
code. A receiver unable to reverse a
transfer effected by such transfer mes­
sage to the sender may request an as-of
adjustment, as discussed in paragraph
21 .

B. No misuse of the reversal code has
occurred if a transfer effected by a
transfer message sent initially and
properly during the origination period
by using the origination code is reversed
one or more times by a transfer message
using the reversal code. However, any
request for compensation arising
therefrom is not handled by this Bank
and must be handled directly by the
sender and the receiver.

R e q u e s t in g A s-o f A d ju s t m e n t s
A. This Bank sends an Online Participant
an electronic notice of each such debit or
credit to its securities accounts.
B. This Bank sends an Offline Participant a
printed notice of each debit or credit to
its securities accounts. This Bank will
also attempt to notify such Participant
by telephone of each such debit or
credit.

21. Participants may request an as-of adjustment
for improper use of the reversal code and for
delays and operational errors caused by this
Bank. Participants must submit written docu­
mentation supporting the request within two
business days of the transaction giving rise to the
request.

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T r a n s f e r a n d Se c u r i t i e s
A c c o u n t M a i n t e n a n c e F ees
22. Fees for our book-entry securities account
maintenance and transfer services are set forth in
a fee schedule that we publish and amend from
time to time. Such fees are charged to an account
on our books designated by the Participant.
Assessment o f Fees
23. A. Transfer Fees
This Bank charges an Online Participant
that is a sender, and an Offline Partici­
pant that is a sender or a receiver, a fee
for each transfer, except transfers
affecting the following restricted securi­
ties accounts: Treasury Tax and Loan
(TT&L), loans and discounts, and
Circular 176. All receivers are charged a
fee for each reversal.
B. Issue and Securities Account
M aintenance Fees
For non-Treasury book-entry securities
only, fees are assessed for per-issue
balances maintained in each securities
account and for each securities account
maintained on this Bank’s books. A
separate per-issue fee is assessed for each
third-party pledge held in the same
securities account. Per-issue and securi­
ties account fees are not assessed for the
following restricted securities accounts:
Treasury Tax and Loan (TT&L), loans
and discounts, and Circular 176.
Billing o f Fees
24. A. The funds account of the Participant
(or, subject to prior written agreement,
of its correspondent) is debited for fees
for Treasury book-entry securities daily.
These fees may not be offset against
earnings credits.
B. Fees for book-entry securities other than
Treasury book-entry securities are billed
monthly and debited to the funds ac­
count of the Participant (or, subject to
prior written agreement, of its corre­
spondent). These fees can be offset
against earnings credits.
25. A Participant that does not have a funds
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account is not relieved of its liability for any fees
it incurs by using Fedwire.

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Em e r g e n c y C o n d it io n s
Failure o f a Participant’s Equipment
26. Online Participants are responsible for
developing their own contingency and recovery
plans, such as backup computer and operations
facilities, to ensure their ability to continue
Fedwire operations in the event of equipment
failure or other operational interruption. This
Bank assumes no responsibility for providing
any backup access facilities for Participants.
Failure o f Reserve Bank Equipment
27. A. In the event of an emergency or failure
of this Bank’s computer or operations
facilities, transfers m aybe delayed until
the emergency or failure is resolved.
During extended disruptions, this
Bank’s Fedwire operations may be
relocated to a backup site. Participants
should refer to this Bank’s contingency
guidelines regarding Participant require­
ments and responsibilities during
contingency operations.
B. Online Participants should be prepared
to reconcile their positions, up to the
point of the failure, under this Bank’s
instructions.
C. This Bank will notify Online Participants
of an operating problem at another
Reserve Bank and, should the problem
be deemed critical, will give instructions
to Online Participants.

L i m i t a t i o n s o n L i a b il it y
28. This Bank is not liable for the insolvency,
neglect, misconduct, mistake, or default of any
entity or person, including a Participant. Except
as otherwise provided herein, this Bank is liable
only for the actual direct loss sustained by the
immediate Participants to a transaction proximately caused by this Bank’s failure to exercise
ordinary care or act in good faith. Specifically,
the amount of this Bank’s liability to a Partici­
pant is limited to no more than the dollar
amount of the transaction plus reasonable
interest and incidental expenses, unless the
Participant’s claim is based on delay of a transac­
tion, in which case this Bank’s liability is limited

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to reasonable interest and incidental expenses.
This Bank may, in its discretion, satisfy its
obligation to pay interest hereunder by providing
an as-of adjustment or by paying compensation.
In no event shall this Bank be liable for conse­
quential, indirect, incidental, or special damages
(including lost profits), however derived and
regardless of whether this Bank has been in­
formed of the possibility thereof.

Rig h t t o Am e n d
29. We reserve the right to amend this Operat­
ing Circular at any time but will endeavor to give
30 days’ notice.

8

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A P P E N D IX 1
APPLICABLE REGULATORY CITATIONS GOVERNING BOOK-ENTRY
SECURITIES OF AGENCIES, INSTRUMENTALITIES,
AND ESTABLISHMENTS OF THE UNITED STATES
12 C.F.R. Part 615, Subpart 0 (Farm Credit System)
12 C.F.R. Part 615, Subpart R (Farm Credit System Financial Assistance Corporation)
12 C.F.R. Part 912 (Federal Home Loan Banks)
1 C.F.R. Part 462 (Federal Home Loan Mortgage Corporation)
24 C.F.R. Part 81, Subpart E (Federal National Mortgage Association)
12 C.F.R. Parts 912, 950.5 (Financing Corporation)
12 C.F.R. Part 1511 (Resolution Funding Corporation)
31 C.F.R. Part 354 (Student Loan Marketing Association)
18 C.F.R. Part 1314 (Tennessee Valley Authority)
31 C.F.R. Part 306, Subpart 0 (U.S. Department of the Treasury)
31 C.F.R. Part 350, Subpart B (U.S. Department of the Treasury)

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A P P E N D IX 2
FEDWIRE OPERATING HOURS FOR BOOK-ENTRY
SECURITIES TRANSFERS
Pa r A m o u n t M a x i m u m
The par amount m axim um for transfers is $50 million.
ONLINE TRANSFERS
Opening of Fedwire1

8:30 a.m. Eastern time (ET)

Close of the origination period
for transfers

2:30 p.m. ET

Close of the period for turnaround
transfers from a dealer to an
ultimate customer

2:45 p.m. ET

Close of the reversal period
fo r transfers

3:00 p.m. ET

OFFLINE INSTRUCTIONS
Begin accepting instructions

9:00 a.m. ET

Cutoff for accepting instructions
for current-day processing2

1:30 p.m. ET

Cutoff for accepting instructions
for future-days processing

3:00 p.m. ET

1Reserve Banks may decide, in their sole discretion, to open— or close— Fedwire at an earlier tim e, or extend Fedwire,
to facilitate special market needs.
2An attem pt w ill be made to process offline instructions received after the cuto ff time, but such processing cannot
be guaranteed. The requesting Participant w ill be notified if the transfer is not effected.

(Appendix 2 continued on the next page)

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A P P E N D IX 2 (continued)
B o o k -E n t r y

b u s in e s s d a y s

Our book-entry business days are all days except the follow ing standard holidays that are
observed by Reserve Banks:3
All Saturdays
All Sundays
New Year's Day (January 1)
Martin Luther King, Jr. Day (third Monday in January)
Presidents Day (third Monday in February)
Memorial Day (last Monday in May)
Independence Day (July 4)
Labor Day (first Monday in September)
Columbus Day (second Monday in October)
Veterans Day (November 11)
Thanksgiving Day (fourth Thursday in November)
Christmas Day (December 25)
If January 1, July 4, November 11, or December 25 falls on a Sunday, the next follow ing
Monday is a standard Reserve Bank holiday.

3The New Orleans Branch of the Federal Reserve Bank of Atlanta closes on Mardi Gras.

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A P P E N D IX 3
TELEPHONE TENDERS FOR TREASURY AUCTIONS
This Appendix sets forth the terms under which a subm itter in a Treasury auction ("the
Subm itter") may subm it a tender by telephone to the Federal Reserve Bank of Dallas or its
Branches at Houston or San Antonio ("the Bank") as fiscal agent of the United States. By
submission of a telephone tender, the Submitter accepts the provisions of Appendix 3 of this
Bank's Operating Circular 14.
Routine submission of telephone tenders is not permitted. However, under special emer­
gency circumstances, such as power failures and equipment or communications failures, the
Bank may, in its discretion, receive tenders submitted by telephone. A tender w ill not be re­
ceived by telephone if, in the Bank's judgment, the Submitter has the ability to subm it the
tender in a tim ely manner by either computer or paper and has not made a good faith effort to
do so.
ELIGIBLE SUBMITTERS
To subm it a telephone tender, the Submitter must have on file with the Bank's Securities
Department, Securities Division, an executed "Authorization for Persons to Submit Paper
Tenders on Behalf of Subm itter." Individuals authorized to subm it paper tenders on behalf of
the Submitter w ill be considered authorized to subm it telephone tenders. In addition, the
Submitter must have made arrangements for payment by an authorized charge to a funds
account of a depository institution. If the Submitter does not have a funds account at the
Bank or chooses not to pay by charge to its funds account, it must have on file with the
Bank a current autocharge agreement with a depository institution that has a funds account
at the Bank.
T im e l y S u b m is s io n s
Telephone tenders, to be considered timely, must be received before the relevant auction
deadline. Telephone tenders w ill be considered received when the Submitter has provided all
required tender information to the Bank. No withdrawals, corrections, or other adjustments
may be made after the deadline.
PROCEDURES
Telephone tenders w ill be received only over the follow ing recorded telephone lines: (214)
922-6751 at the Dallas Office; (713) 652-1628 at the Houston Branch; or (210) 978-1305 at the
San Antonio Branch.
An individual subm itting a telephone tender for the Submitter must satisfactorily identify
himself or herself to the Bank personnel receiving the tender.
Bank personnel receiving a telephone tender should read back to the caller the Sub­
mitter's tender information, including dollar amounts bid at each yield, names of customers,
and amounts of net long position.
The Bank may make a follow -up verification call to a person authorized to subm it tenders
under the Submitter's "Authorization for Persons to Subm it Paper Tenders on Behalf of
Subm itter." That person w ill be requested to repeat the tender information. Verification calls
will be made as quickly as possible after completion of the original call subm itting the tender.
The Submitter subm itting a tender by telephone must subm it a computer tender—or if the
Submitter is unable to subm it a computer tender, a paper tender—confirm ing its telephone
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A P P E N D IX 3 (continued)
tender. The confirming tender must be received by the Bank by the close of business on the day
of the auction in question. Any computer or paper tender submitted hereunder should be
marked clearly as a confirmation of the telephone tender.
G e n e r a l Pr o v is io n s
The Bank is entitled to rely on any telephone tender it believes to be genuine. All tenders
submitted by telephone are binding on the Submitter to the same extent as if they were paper
tenders. All terms, conditions, and certifications applicable to submissions of paper tenders
under "Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, and Bonds," Department
of the Treasury Circular, Public Debt Series No. 1-93 (31 C.F.R. Part 356)— and under the applica­
ble offering announcement— apply to tenders submitted by telephone. The Bank may disregard
or cancel any telephone tender it is unable to verify in accordance w ith its procedures. A failure
to subm it a confirmation as required by the "Procedures" section of this Appendix, a delay in
subm itting the confirmation, or a discrepancy between a tender and the confirmation shall not
relieve any Submitter of responsibility for its tender but may cause the Bank to refuse to accept
the same Submitter's tenders by telephone in the future.
The Bank may use tape recordings of telephone conversations to resolve disputes regard­
ing tenders submitted by telephone. All disputes must be presented before the issue date of the
security being auctioned.

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102