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FEDERAL RESERVE BANK OF DALLAS DALLAS. TEXA S 75222 Circular No. 83-88 July 15, 1983 BULLETIN 7 CUSTODY OF SECURITIES (Revised Bulletin) TO ALL DEPOSITORY INSTITUTIONS IN THE ELEVENTH FEDERAL RESERVE DISTRICT: As a service to depository institutions, Federal Reserve Banks offer services relating to the custody of securities. In an e ffo rt toward improvement of this service, the Federal Reserve Bank of Dallas has stream lined its joint safekeeping procedures for holding securities as collateral to secure deposits of State of Texas political subdivisions. Effective August 1, 1983, when a joint safekeeping relationship is established between parties including this Bank, the depositor's governing body will adopt an agreem ent by resolution and also vest approval authority in the person or persons of its choice. This will elim inate the present requirem ent th a t the governing body m eet each tim e a transaction is effected. This Bank will then have th a t person's signature on file and will accept substituted securities of lesser amount over th a t person's signature. The SEC-20 form, our th re e -p a rty agreem ent for custody services, has been revised, and a revised form should be used for all future applications to this Bank for joint safekeeping with a S tate of Texas political subdivision. All institutions now using joint safekeeping services of this Bank will be notified by separate le tte r of the procedures and forms required in this process. Enclosed is a copy of this Bank's revised Bulletin 7, Custody of Securities, which incorporates the above mentioned changes in sections 8.05 and 8.20. Also, changes were made to section 2.00, which expands the types of securities accepted for custody, and to section 4.00, which indicates an absence of liability for failure to adhere to special requests. Appendix A re fle c ts changes in book-entry prices effective April 27, 1982. The enclosed bulletin should be filed in Volume 1 of your Regulations Binder to replace the old Bulletin 7. Questions regarding the m aterial contained in this circular should be directed to Trudy White, (214) 651-6179 at the Head Office; Je rry Silvey, (915) 544-4730 a t the El Paso Branch; Jack Stone, (713) 652-1637 at the Houston Branch; or Herb Barbee, (512) 224-2141 a t the San Antonio Branch. Banks and others are e n cou rage d.to use the following incoming WATS numbers in con tacting this Bank: 1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the extensio n referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - Additional copies of this circular will be furnished upon request to the Public Affairs D epartm ent, Extension 6289. Sincerely yours, William H. Wallace First Vice President Enclosure BULLETIN 7 Custody of Securities FEDERAL RESERVE BANK OF DALLAS SCOPE This bulletin d esc rib es our serv ices re la tin g to the custody of securities. Any depository institution depositing, eith er d irectly or through others, secu rities w ith this Bank shall, by such action, be und ersto o d to have ag re e d to the term s a n d conditions set forth herein. FEDERAL RESERVE BANK OF DALLAS BULLETIN 7 TABLE OF CONTENTS Section 1, GENERAL 1.00 1.05 1.10 6.30 R eference to Bulletin 1 A vailability of service Fees 6.35 6.40 Section 7, PLEDGING SECURITIES Section 2, TYPES OF SECURITIES ACCEPTED 2.00 2.05 7.00 7.05 7.10 G eneral Pledged secu rities 7.15 Section 3, BOOK-ENTRY 3.00 3.05 3.10 3.15 A uthority Conversion to book-entry form Term s of conversion Application of S u b p art O 8.00 8.05 8.10 8.15 Section 5, ACKNOWLEDGMENTS AND RECEIPTS 8.20 Section 6, SERVICES PERFORMED BY US 6.10 6.15 6.20 6.25 7-83 To U nited To U nited To U nited ap po inted C ollateral account S tates G overnm ent S tates D istrict Courts S tates D istrict Court tru s te e s to T re a s u ry T ax a n d Loan Section 8, PLEDGING SECURITIES— JOINT SAFEKEEPING Section 4, LIMITATION OF LIABILITY 6.00 6.05 M unicipal or c o rp o ra te securities received for the accou nt of depository institutions Collection of m atu ring coupons Unpaid coupons S tate T r e a s u r e r — S tate of T exas Political subdivisions—T exas Political subdivisions—oth er sta te s T ru s t d e p a rtm e n t of depository institu tions Liability Section 9, SHIPMENT OF SECURITIES G eneral Collection of m aturing United S tates Governm ent secu rities (unpledged) Collection of m atu rin g m unicipal or co rp o ra te securities (unpledged) Exchange of m aturing securities (unpledged) Pledged secu rities Notice of called or m aturin g secu rities 9.00 9.05 9.10 9.15 9.20 9.25 9.30 Risk of loss R egistered m ail in su ran c e Exclusion Limit of liability Shipm ents by us Shipm ents to us Shipm ents by this Bank as fiscal agent Appendix A—FEE SCHEDULE i BULLETIN 7 FEDERAL RESERVE BANK OF DALLAS Section 1, GENERAL 1.00 Reference to Bulletin 1 S everal definitions, ru les of co nstru ctio n an d oth er provisions app licable to this bulletin are found in our Bulletin 1, G eneral Provisions, an d a re in co rp o rated h e re in by re feren ce. 1.05 Availability of service The services d e sc rib e d h e re in a r e m ain tain ed prim arily for the convenience of depository in stitutions. T hese services a r e now ex te n d ed to in clude institutions lo cated in a F ed eral R eserve city. However, these services a re limited to the v ault c a p acity available a t e a c h R eserve Bank. 1.10 Fees Our fee schedule w hich is se t forth in A ppendix A show s the ch a rg es im posed for safekeeping s e r vices. W e re s e rv e the right to change th ese fees from time to time. Section 2, TYPES OF SECURITIES ACCEPTED 2.00 General Except as provided in Section 2.05, only secu rities w hich a re n eith er assigned nor pledged and w hich a re ow ned by the depositing institution or its custom ers will be accepted. Securities a c c e p t able for our custody include all bonds, notes, c e r tificates of ind ebtedn ess, a n d T re a s u ry bills issu ed or g u a ra n te e d by the United S tates Govern ment, a n d m iscellaneous state, m unicipal, co r p o ra te bonds, equity secu rities su ch as stocks an d bonds, ce rtificate s of deposit, a n d b a n k e rs a c c e p tan c es. Such secu rities will be held in custody for the account, a t the risk a n d sub ject only to the o rd e r of the depository institution nam ed as ow ner in the acknow ledgm ent issued by us. 2.05 Pledged securities (a) S ecurities belonging to depository institutions w hich a r e pledged to d ep a rtm en ts, agencies, or officials of the United S tates G overnm ent to be held sub ject to the in stru ction s th ereof will be a c ce p ted p u rs u a n t to any a c t of Congress or any regulation or re q u e s t of the S e c re ta ry of the T re a s u ry providing for the deposit of securities w ith a F ed eral R eserve Bank. (b) S ecurities belonging to depository institutions w hich a r e pledged to officials of states, or political subdivisions thereof, as security for public deposits, will be a c c e p te d w hen ap p lica tion is m ade jointly by th e depository institution an d the public body w hose deposit is secu red. W e fu rn ish special forms for this purpose. Section 3, BOOK-ENTRY 3.00 Authority (a) In ac c o rd a n c e w ith Section 306.117(a) of Sub p a r t O of T re a s u ry D ep artm en t C ircular No. 300 a n d the corresp ond ing section of regulations issued by those agencies, in stru m entalities, and estab lish m ents of the U nited S tates listed in Ap pendix B (Agency regulations) to our Bulletin 14, this Bank as fiscal agent of the United S tates may m ain tain T re a s u ry bonds, notes, certificate s of in d eb te d n ess a n d bills issu ed u n d e r the Second Liberty Bond Act, and d eb t obligations issued p u r su a n t to Agency reg ulations by m ean s of entries on the re c o rd s of this Bank as such fiscal agent (“ book-entry s e c u ritie s ” ) w hen su ch securities a re depo sited in accoun ts m ain tain ed by this Bank in its individual c a p acity a n d as to which sec u ritie s this Bank in its individual c a p acity is to continue to m ain tain such deposits n o tw ith sta n d ing app lication of the book-entry p ro c e d u re to su ch securities. (b) Such acco unts include, but a r e not limited to, accou nts in w hich T re a su ry or Agency securities a r e deposited: (i) as co llate ral pledged to a R eserve Bank (in its individual capacity) for ad v a n ces by it; (ii) by depository institutions for th eir own ac count; (iii) by a depository institution held for the a c count of its custom ers; (iv) a s c o l l a t e r a l to s e c u r e d e p o s its in depository institutions of public funds by a s ta te m unicipality, or o th er political su b division; (v) p u rs u a n t to Section 61 of the B ankruptcy FEDERAL RESERVE BANK OF DALLAS Act (11 U.S.C. 101) in connection w ith the deposit of b an k ru p tc y funds in depository institutions; (vi) as c o lla te ra l in co nn ectio n w ith the qualification of depository institutions to ex ercise tru s t pow ers; or (vii) as co llate ral to s e c u re deposits of tru s t funds. (c) Section 306.117(a) of S u b p art O of T re a su ry D ep artm en t C ircu lar No. 300 a n d the c o rre sp o n d ing section of Agency regu lation s provides th a t su ch application of the book-entry p ro c e d u re shall not d ero g ate from or ad versely affect the relationships th a t would o therw ise exist b etw e en this Bank in its individual c a p a c ity a n d its depositors. 3.05 Conversion to book-entry form Any depository institution or o ther depositor w hose T re a s u ry or Agency secu rities a r e on deposit in any accou nt specified in Section 3.00(b) above m ain tain ed by this Bank e ith er in its in dividual c a p acity or as fiscal ag en t on April 9, 1973, a n d any p erso n having an in te re st in T re a s u ry or Agency sec u ritie s w hich on or afte r su ch d a te a r e depo sited in any of the afo resa id accou nts or any other acco un t specified by this Bank for app lication of the book-entry p ro c e d u re u n d e r Section 306.117(a) of S u b p a rt O of T re a s u ry D epartm ent C ircular No. 300 or the co r responding section of Agency regulations, will be deem ed to have auth orized this Bank to employ the book-entry p ro c e d u re u n d e r th e provisions of su ch section w ith re s p e c t to su ch T re a s u ry or Agency sec u ritie s a n d to have consen ted to the conversion of any su ch T re a s u ry or Agency secu rities from definitive to book-entry form. 3.10 Terms o f conversion In connection w ith the ap plicatio n of the booke n try p ro c e d u re to T re a s u ry or Agency securities u n d e r the provisions of Section 306.117(a) of Sub p a r t 0 or th e co rresp on din g section of Agency regulations, it is u n d ersto o d that: (a) The term s a n d conditions of this bulletin and BULLETIN 7 this B ank’s Bulletin 14 en titled “ Book-Entry S ecu rities,” or in th e event of a p a r tic u la r a g re e m ent b etw e en this Bank a n d its d epositor the term s a n d conditions of su ch agreem ent, shall a p ply to su ch securities. (b) Advices of deposit a n d w ith d ra w a l w ith re s p e c t to su ch T re a s u ry or Agency secu rities should be re ta in e d in some circ u m sta n ces by the depositing institutions or o ther p a rtie s in in te re st for F ed eral income ta x p u rpo ses. (See a ttac h m en t to S u b p art O.) 3.15 Application o f Subpart O U nder Section 306.117(b) of S u b p a rt O of T re a s u ry D epartm ent C ircu lar No. 300 an d u n d er correspo nd in g sections of Agency regulations, this Bank, as fiscal agent of the United States, shall apply the book-entry p ro c e d u re to T re a su ry or Agency secu rities deposited w ith this Bank as co llate ral for b a la n c e s in T re a s u ry T ax a n d Loan A ccounts or for deposits of public monies u nd er T re a s u ry D ep artm en t C ircular No. 92 or No. 176, respectively, a n d m ay also apply book-entry p ro ce d u re to T re a s u ry secu rities deposited in other accou nts d esig n ate d by this Bank; a n d such secu rities will be h an d le d p u rs u a n t to such term s a n d conditions as m ay be ag re e d upon b etw een this Bank an d the depositors of such secu rities. This B ank’s Bulletin 14, entitled “ Book-Entry S ecu rities,” applies to such accounts. Section 4, LIMITATION OF LIABILITY E ach d epository in stitu tio n or o th er p a r ty depositing secu rities w ith us e ith er d irectly or through o thers shall by such action be deem ed to have a g re e d th a t this Bank: (a) Will be responsible only for the ex e rcise of the sam e diligence w ith w hich it c a re s for its own p ro perty; (b) Will not be liable for any loss of such secu rities w hen a loss is due to any ca u se oth er th a n lack of su ch diligence; (c) Will not be responsible for the genuineness, validity, or a lte ra tio n of or any defect in such BULLETIN 7 FEDERAL RESERVE BANK OF DALLAS securities; and (d) Will not be obligated to m ain tain any form of in su ra n c e for the ac co u n t of the depositor in r e la tion to secu rities held in custody for it. (e) Will not be liable for failure to a d h e re to sp e cial re q u e st su ch as req uirin g m ore th an one sig n a tu re for deposits a n d w ith d ra w a l tran sa ctio n s. Section 5, ACKNOWLEDGMENTS AND RECEIPTS An acknow ledgm ent form or joint safekeeping re c e ip t d escribing th e sec u ritie s a n d indicating the pu rp o se for w h ich they a r e held, will be issu ed for e a ch deposit. The acknow ledgm ent form a n d joint safekeeping re ceip t a r e not negotiable or tra n s f e ra b le a n d their re tu r n to us will not be re q u ire d for the re le a se of the securities. Section 6, SERVICES PERFORMED BY US 6.00 General In the a b se n ce of specific instruction s to the con tra ry , we will en d eav o r to p erform c e rta in s e r vices as outlined h erein but will assum e no liabili ty for failu re to p erfo rm su ch services. T hese s e r vices a r e inten ded m erely as an aid to depository institutions a n d do not relieve th e depository in stitution of its own duty to keep itself inform ed of m aturities, call d ate s, an d other inform ation af fecting its own portfolio. 6.05 Collection of maturing United States Gov ernment securities (unpledged) re n t Bulletin 9, Collection of N oncash Items, all m aturin g unpledged m unicipal or c o rp o ra te securities. S ecurities p ay a b le outside the con tin ental United S tates, will be shipped to the ow n ing depository institution. The shipping ch arg es for collecting m unicipal or c o rp o ra te securities will be c h a rg e d to the owning depository in stitu tion’s account. 6.15 Exchange of maturing securities (unpledged) U nder instructio ns from a depository institution, w e will effect the ex ch an g e of m aturing unpledg ed United S tates G overnm ent secu rities for available new issues. Upon re ceip t of the new s e c u ritie s to be held in custody, a new acknow ledgm ent will be issued therefor. 6.20 Pledged securities No action will be taken by us relative to m aturing or called secu rities w hich a re pledged, excep t upon receip t of a p p ro p ria te w ritten in stru ctio ns of the owning depository institution and the pledgee. W hen so in stru cted , m aturin g securities, oth er th an United S tates Governm ent securities, will be h an d le d for collection u n d er the term s and conditions of our c u r re n t Bulletin 9, Collection of N oncash Items, a n d United S tates Governm ent sec u ritie s will be redeem ed. Disposition of the pro ceeds, w hen available, will be m ade upon re c e ip t of a p p ro p ria te instructions. 6.25 Notice o f called or maturing securities U npledged United S tates Governm ent securities a n d fully g u a ra n te e d obligations of its agencies w hich a re p ayable by this Bank as fiscal ag en t of the U nited S tates a n d held by it in custody will, in the a b se n ce of specific in struction s from the ow ner, be w ith d ra w n p rio r to m atu rity or redem ption call date, a n d the p ro c eed s cred ited to the the depository in stitu tio n ’s accou nt on the due date. Notice of m atu rity of all m unicipal, co rp o rate, or U nited S tates G overnm ent secu rities will be given in ad v an ce of m aturity d ate. However, we do not m a in ta in a c a lle d s e c u ritie s re c o rd , an d, th erefo re, ca n n o t u n d e rta k e to advise depository institutions w hen secu rities a re called for redem ption. 6.10 Collection of maturing municipal or cor porate securities (unpledged) U nder a p p ro p ria te w ritte n in structions from a depository institution, w e will ac c e p t for the depository institu tion’s ac co u n t m unicipal or co r p o ra te secu rities delivered by bro kers a n d others Unless o th erw ise in s tru c te d w e will e n te r for col lection, u n d e r the term s a n d conditions of our c u r 6.30 Municipal or corporate securities received for the account o f depository institutions BULLETIN 7 FEDERAL RESERVE BANK OF DALLAS a n d m ake p ay m e n t th e re fo r a t the p rice s tip u la ted in the p u rc h asin g depository institu tion ’s letter. In handling these tra n sa c tio n s, this Bank a c ts solely as agent for the depository in stitution an d assu m es no responsibility for the genuineness, validity or any alteratio n of the sec u ritie s received. 6.35 Collection o f maturing coupons Upon w ritte n instructio ns from th e owning depository institution a n d su b ject to the approval of the T re a su ry D epartm ent, w e will hold secu rities or re c e ip ts issu ed by qualified institu tions pledged to d e p a rtm e n ts, agencies a n d of ficials of the U nited S tates as co llate ral to se c u re deposits u n d e r the term s of T re a s u ry D epartm ent C ircu lar No. 176. Unless o therw ise in s tru c te d we will: 7.05 (a) C redit the owning depository institution on m atu rity d a te for m aturing coupons d e ta c h e d from United S tates G overnm ent securities a n d fully g u a ra n te e d obligations of its agencies which a r e pay able by this Bank as fiscal agent of the United S tates an d held in custody for its account; an d U nder designation as cu sto d ian by a United S tates D istrict Court and a t the re q u e s t of th e Court an d a depository institution, w e will hold as co llateral, sec u ritie s pledged to se c u re co u rt deposits. S ecurities held as co lla te ra l to se c u re United S tates D istrict Court deposits c a n be su b stitu ted for, or w ith d raw n , only u n d e r o rd e r of the Court. (b) Enter for collection, u n d e r term s of our c u rre n t Bulletin 9, Collection of N oncash Items, coupons d e ta c h e d from o ther secu rities held in custody an d cred it the acco un t of the owning depository institution in ac c o rd a n c e w ith Bulletin 9. 7.10 To United States District Court appointed trustees M unicipal or c o rp o ra te coupons p ay a b le outside the con tinental United S tates will be shipped to the owning depository institution. Coupons a t ta c h e d to secu rities w hich a r e pledged a s col la te r a l to a cu sto m e r’s note held u n d er rediscount or as co llate ral to an a d v a n ce by this Bank and held by us will not be clipped and h an d le d for col lection, unless specific in stru ction s a re received in connection therew ith. 6.40 Unpaid coupons Coupons e n te re d for collection and re tu rn e d un p aid will be re a tta c h e d to the sec u ritie s from w hich they w e re d eta ch ed , a n d the owning depository institution will be advised of the re aso n for nonpaym ent. In the ab se n ce of specific instructions from the owning depository in stitu tion, no fu rth e r effort will be m ade to collect on these a n d su b seq u e n t coupons a tta c h e d to such securities. Section 7, PLEDGING SECURITIES 7.00 To United States Government To United States District Courts U nder designation as cu sto d ian by a United S tates D istrict Court, we will hold in custody secu rities pledged as co llate ral to se c u re deposits of tru s te e s in b a n k ru p tc y or receivership . S ecurities held as co llate ral to se c u re deposits of Court a p pointed tru s te e s ca n be su b stitu ted for, or w ith d raw n , only u n d er o rd e r of the Court. 7.15 Collateral to Treasury Tax and Loan account W e will hold sec u ritie s or re c e ip ts issu ed by a qualified institution pledged by a depository in stitution to se c u re its T re a s u ry Tax a n d Loan a c count. Deposit, re le ase, or substitution of pledged secu rities should be au th o rized by this Bank a c t ing as fiscal agent for the United States. Section 8, PLEDGING SECURITIES—JOINT SAFEKEEPING 8.00 State Treasurer— State o f Texas At the re q u e s t of a depository institution, su bject to the app rov al of the S tate Depository Board, we will hold in joint safekeeping secu rities pledged as co llate ral to se c u re deposits of the State T re a s u re r. A pplication for deposit, w ith d raw al, BULLETIN 7 FEDERAL RESERVE BANK OF DALLAS or su bstitu tio n of su ch pledged secu rities should be m ade on our a p p ro p ria te forms. 8.05 Political subdivisions—Texas At th e r e q u e s t of a fin a n c ia l in stitu tio n (“ D epository” ) a n d the governing body of a political subdivision (“ D epositor” ), we will hold in joint safekeeping secu rities pledged as co llate ral to se c u re deposits of political subdivisions of the S tate of Texas. W e re q u ire in our files a fully e x e c u ted A pplication to the F ed eral Reserve Bank of Dallas for the Holding of S ecurities in Joint S afekeeping authorizing o ur a c c e p ta n c e of pledged sec u ritie s offered to us for joint safek ee p ing. At our discretion we will a c c e p t some other a p p ro p ria te form authorizing us to hold securities in joint safekeeping. R equests for w ith d ra w a ls of, an d substitutions of lesser m ark e t value am ounts for, pledged secu rities should be m ad e in writing b earin g the sig n atu re of an au tho rized p erso n of both the Depository a n d the Depositor. 8.10 Political subdivisions—other states At the re q u e s t of a depository institution a n d the governing body of a political subdivision, we will hold in joint safekeeping secu rities pledged as col la te r a l to se c u re deposits of the political subdivi sion. R equests for deposits, substitutions, or w ith d ra w a ls should be m ad e on our a p p ro p ria te forms a n d e x e cu ted jointly by th e depository in stitution an d the governing body of the political subdivision. (This p a r a g r a p h is not app licable in any s ta te w h e re la w re q u ire s su c h pledged secu rities to be d eposited w ithin the state.) 8.15 Trust department o f depository institu tions At the re q u e s t of a depository institution a n d the depository institutio n’s tr u s t d e p a rtm en t, w e will hold in joint safekeeping secu rities pledged as col la te r a l to se c u re deposits of un inv ested funds of the depository in stitutio n’s tru s t d ep a rtm en t. Deposits, w ith d ra w a ls, or su bstitu tio ns of the pledged sec u ritie s should b e au th o rized by the joint execution of th e depository institution and its tru s t d e p a rtm e n t on our a p p ro p ria te forms. 8.20 Liability W e take no responsibility for a sc ertain in g the am ount of funds on deposit by the Depositor w ith the Depository nor the m ark e t value of securities held by us in joint safekeeping. Section 9, SHIPMENT OF SECURITIES 9.00 Risk of loss (a) R egardless of any o ther provisions of this bulletin, any depository institution or other p a rty shipping, or causing the shipm ent of, secu rities to this Bank shall by such action be deem ed to have a g re e d th a t the risk of loss on such shipm ents oc cu rrin g p rio r to the ac tu al delivery th ere o f to us by the post office, ex p ress com pany, or o ther c a r rie r is not assu m ed by us b u t is on the sender. (b) Likewise, any depository institution ordering shipm ents of secu rities from this Bank shall by su ch action be deem ed to have a g re e d th a t this Bank in making su ch shipm ents u n d e rta k e s m e re ly to m ake delivery to the post office, ex p ress com pany, or other c a rrie r , a n d th a t the risk of loss oc cu rrin g su b seq u e n t to su ch delivery is not a ssum ed by us b u t is on the p a r ty ordering such shipm ent. 9.05 Registered mail insurance W e hold open in s u ra n c e policies u n d e r w hich re g is te re d mail shipm ents of secu rities m ade to or by us m ay be insu red. T hese policies afford p ro tection ag a in st loss from th e time of a c c e p ta n c e by the m essen ger or c a rrie r , w h e th e r w ithin or w ithout the prem ises of th e sen d e r a n d end w hen a c tu a l delivery h a s b ee n m ad e to the office of the a d d ressee . They do not, how ever, cover losses th rough th eft by the employees of the se n d e r or the ad d re sse e , or losses by risks gen erally r e fe rre d to as “ w a r risk s.” 9.10 Exclusion T he po licies c o n ta in th e elim inating su ch coverages: following c la u se “ To cover. . .risks of physical loss of or dam ag e to or d e stru c tio n of p ro p e rty in sured , ex c ep t theft on the p a r t of employees of se n d e rs or a d d re sse es, b u t this policy does not in su re against: BULLETIN 7 FEDERAL RESERVE BANK OF DALLAS (a) c a p tu re , seizure, a r re s t, re s tra in t, detainm ent, con fiscatio n, p re em p tio n , re q u isitio n or n a tionalization, a n d the con sequ ences th ere o f or of any a ttem p t th e re a t, w h e th e r in time of p e a c e or w a r a n d w h e th e r law ful or otherw ise; any conse qu en ces of hostilities or w ar-like operations (w hether th e re be a d e c la ra tio n of w a r or not) but the foregoing shall not exclude collision, explo sion or co n ta ct w ith any fixed or floating object (other th a n a m ine or torpedo), stran d in g , heavy w e a th e r or fire unless c a u s e d directly (and in dependently of the n a tu re of the voyage or service w hich the vessel co n c ern e d or, in the c a se of a collision any other vessel involved th ere in , is p e r forming) by a hostile ac t by or ag ain st a belligeren t pow er, the term ‘p o w e r’ as u sed herein including any auth ority m aintaining naval, m ilitary, or a ir forces in association w ith a pow er; or any loss or d am age ca u se d by any w eap o n of w a r employing atom ic fission or rad io activ e force w h e th e r in time of p e a c e or w ar; (b) the con se quences of civil w a r, revolution, rebellion, in s u r rection, or civil strife arising therefrom , piracy, risks of c o n tra b a n d or illegal tra n sp o rta tio n or tra d e , a n d seizure or d estru c tio n u n d e r q u a r a n tine or custom s reg u latio n s.” 9.15 Limit of liability The liability of the in s u re rs u n d e r these policies is limited to $10,000,000 on p ro p e rty from any one se n d e r to any one a d d re s s e e on any one day unless d isp atch e d by tw o or m ore tra in s , boats, or oth er conveyances, in w hich event the limit of liability shall apply to e a c h tra in , boat, or other conveyance sep a rately . 9.20 Shipments by us Shipm ents of secu rities by us, o ther th a n shipm ents m ade in our c a p acity as fiscal agent of the United S tates at the exp en se a n d risk of the U nited S tates, will be m ad e by re g is te re d mail, and, unless in stru c te d to the c o n tra ry , w e will in s u re them as p ro v id ed h e re in u n d e r the re g iste re d mail policies r e fe r re d to a t the expense of the depository institution. 9.25 Shipments to us Shipm ents of sec u ritie s to us m ay be in su red u n d e r the re g is te re d mail policies r e fe r re d to, at the ex pense a n d risk of the sen d e r, p rovided the following conditions a r e observed: (a) On the day a shipm ent is m ade to us, a n advice is sen t by o rd in ary mail to the office to w hich the shipm ent is a d re sse d , showing the n am e of the shipper, the n um b er of sacks or p ack ag es com prising th e shipm ent, a description of the con ten ts, a n d the am ount of in s u ra n c e to be effected. A copy of this advice should be p laced in the ship m ent. (b) The contents of all shipm ents a r e verified and enclosed in a strong w ra p p e r, envelope, or cloth or ca n v as bag, securely sea le d with w ax, p a p e r seal, or in any m an n e r ac cep ta b le to the post of fice a t the p lace of mailing. (c) The verifying, packaging a n d sealing is done by an employee of the send er, a n d the sea le d p a c k age is in th e c h a rg e of a respo nsible p erso n until dep osited an d re g is te re d a t the post office, or is in the custody of an arm o red c a r service in tra n s it from the office of the sen d e r to the post office. (d) In th e event of loss of a shipm ent in su red u n d er th e re g is te re d mail policies r e fe r re d to, claim will be m ad e on b eh a lf of th e depository institution for the am ount for w hich the shipm ent is insured. Prom pt notice of loss should be given to us, togeth er w ith all available details re g ard in g the loss. 9.30 Shipments by this Bank as fiscal agent Shipm ents of sec u ritie s by this Bank as fiscal agent of the U nited S tates a t the ex pen se a n d risk of the U nited S tates will be m ade by re g iste re d mail a n d will be in su red u n d e r the Governm ent Losses in Shipm ent Act. This coverage is provided for shipm ents of United S tates sec u ritie s upon original issue a n d United S tates secu rities in ex change for tem p o ra ry certificate s. Risk of loss by the United S tates from such shipm ents term in ate s upon delivery by the post office. Stock of un issued United S tates Savings Bonds shipped to issuing agents is the p ro p e rty of the United S tates, and hen ce su ch shipm ents a re a t the ex pense a n d risk of the United S tates an d the in te re s t of the G overnm ent does not c e a se upon delivery by the post office. FEDERAL RESERVE BANK OF DALLAS • BULLETIN 7 ------------------------------------------------------ Appendix A FEE SCHEDULE Book Entry Securities: A ccount Sw itches (on-line institutions) p e r tra n s a c tio n $ 3.00 A ccount Sw itches (off-line institutions) p e r tra n s a c tio n 10.00 A ccount M ain ten a n ce p e r account p e r m onth 15.00 A ccount M ain ten a n ce p e r issue p e r account, p e r m onth .50 Definitive Securities: Deposit, W ith d ra w al, or Redemption* p e r tra n s a c tio n 12.00 A ccount Switch p e r tra n sa c tio n 5.00 A ccount M ain ten a n ce p e r receip t, p e r m onth 1.40 *For bonds as well as o ther n o n ca sh items, a d d shipping ex pen ses, in su ra n c e fees and fees a sse sse d by oth er F ed eral R eserve Banks, if any. Fees a r e n ot a s s e sse d on tra n s a c tio n s involving co llate ral acco un ts such as T re a s u ry T ax & Loan, C ircu lar 176 (S ec retary of the T reasury), a n d Loans. 7-83
@FedFRASER