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reserve bank





April 6, 1998
Notice 98-29

TO: The Chief Operating Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District

Book-Entry Conversion for
Stripped U.S. Treasury Bearer Securities
April 6-October 9,1998
The Treasury’s Bureau of the Public Debt has announced the opening of a six-month
window to allow holders of physically stripped U.S. Treasury bearer securities to convert them to
book-entry. Called the Bearer Corpora Conversion System (BECCS), the program offers holders
of the principal portions, or corpora (singular: corpus), of U.S. Treasury bearer securities that
were stripped of some or all noncallable coupons an opportunity to convert their stripped corpora
to book-entry form. The program opens April 6, 1998, and closes October 9,1998.
Bearer corpora not subject to call will be converted to zero coupon book-entry securi­
ties that are transferable within BECCS. Bearer corpora subject to call (therefore redeemable on
call before maturity) and submitted with all associated callable coupons will also be converted to
zero coupon book-entry securities that are transferable within BECCS. The associated callable
coupons will be linked with the BECCS security and cannot be traded separately. If a callable
bearer corpus is not submitted with all of its associated coupons, the corpus will be converted to
a nontransferable zero coupon book-entry security within BECCS. Each callable coupon submit­
ted will be converted to a nontransferable coupon within the existing Coupons Under BookEntry Safekeeping (CUBES) program.
The Bureau of the Public Debt is also reopening the CUBES program during this sixmonth period. Participation in the BECCS program is not a prerequisite for using the CUBES
program. CUBES allows holders of coupons previously stripped from bearer Treasury securities
to convert those coupons to book-entry form, making them readily transferable.
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.

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Depository institutions wishing to participate in the BECCS or CUBES program
should contact either Grace Jaiman, (212) 720-8183, or JoAnna Grever, (212) 720-8184, at the
Federal Reserve Bank of New York Fiscal Services Department to obtain an information pack­
age. Depository institutions that notify the Federal Reserve Bank of New York of their intention
to participate can convert the stripped coupons between April 6 and October 9 by appointment,
beginning in April. Corpora and/or coupons may be mailed to the Federal Reserve Bank of New
York, Attn.: Fiscal Processing Division, BECCS or CUBES Program, 33 Liberty St., New York,
NY 10045-0001. They may also be delivered to the Federal Reserve Bank of New York on
Monday, Wednesday or Friday between 9 a.m. and 1 p.m., as scheduled. To allow time for the
Treasury’s verification and approval process, no trading of BECCS/CUBES balances will be
permitted for the 12 business days following a deposit into the designated book-entry accounts.
Individuals or entities other than depository institutions holding stripped Treasury
securities/coupons that wish to convert them to book-entry form under the BECCS or CUBES
program must arrange for such conversion through a depository institution. Participating institu­
tions will be charged a $4 fee per converted piece (corpus or coupon) and will bear the full cost
and risk associated with the delivery of the corpora or coupons to the Federal Reserve Bank of
New York. Conversions under the BECCS and CUBES programs are subject to 31 CFR Part
358, as amended on March 6, 1998.
If you have any questions on the BECCS or CUBES program, please call Robert G.
Kraus, (212) 720-1498, or Grace Jaiman, (212) 720-8183, at the Federal Reserve Bank of
New York.
For additional copies of this Bank’s notice, please call the Public Affairs Department
at (214) 922-5254.