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Federal reserve Bank OF DALLAS WILLIAM H. WALLACE f i r s t v ic e p r e s id e n t May 19, 1986 DALLAS, TEXAS 7 5 2 2 2 Circular 86-48 TO: The Chief Executive Officer of all depository institutions in the Eleventh Federal Reserve District SUBJECT Implementation of enhancements to the book-entry securities service DETAILS Effective June 2, 1986, the following types of securities will be eligible for book-entry transfer and safekeeping with the implementation of SHARE release (3.5): 1. Agency discount notes issued by the Farm Credit Administration (FCA), Federal Home Loan Bank Board (FHLBB), Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC), and the International Bank for Reconstruction and Development (IBRD); 2. mortgage-backed securities issued by the Federal National Mortgage Association; and 3. participation certificates issued by the Federal Home Loan Mortgage Corporation. ATTACHM ENTS Attached is specific information regarding agency discount notes and mortgage-backed securities. For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks,and others are encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800) 527-9200 (interstate). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - MORE INFORMATION To review prior correspondence regarding these securities refer to this Bank's Circular 86-15, dated February 5, 1986. For further information please contact Tyrone Gholson (214) 651-6263 at the Head Office; Robert W. Schultz (915) 544-4730 at the El Paso Branch; Luke E. Richards (713) 659-4433 at the Houston Branch or Tony 6. Valencia (512) 224-2141 at the San Antonio Branch. Sincerely yours, - 3 - SPECIFIC INFORMATION REGARDING AGENCY DISCOUNT NOTES AND MORTGAGE-BACKED SECURITIES Agency Discount Notes A notes. to one in the to the nine character CUSIP number has been assigned to each issue of discount Since discount notes of most agencies may be issued for maturities up year, numbers have been preassigned by the CUSIP Bureau for two years future. The CUSIP numbers of the various discount notes will be added SHARE system in advance. The telegraphic abbreviations, and the minimum and multiple denominations for each Agency's discount notes, are as follows: Agency Telegraphic Abbreviations FCA FHLBB FHLMC FNMA IBRD FCDN FHDN FMDN FNDN WBDN MM/DD/YY MM/DD/YY MM/DD/YY MM/DD/YY MM/DD/YY Minimum Denomination $ 5,000 100,000 25,000 10,000 5,000 Multiple Denomination $5,000 5,000 1,000 5,000 5,000 Mortgage-Backed Securities and Participation Certificates Each pool of securities has been assigned a unique nine character CUSIP number consisting of an issuer number (5 or 6 digits), an issue number (2 or 3 digits) and a check digit. For certain outstanding pools with multiple interest rates or series, separate CUSIP numbers have been assigned to each series or interest rate within the pool. Because of the number of new CUSIP numbers (approximately 30,000 currently), the SHARE data base will be divided into an active and inactive file. All issues which are held by any institution in the Eleventh District will be retained on the active file; all issues not held will be on the inactive file. This will insure that incoming CPD transfers of issues not previously held will be processed upon receipt and then automatically moved to the active file. While issues are in an inactive status, certain features of SHARE such as inquiry and matching functions will not be operative. For fixed rate issues, the securities description will include an interest rate, telegraphic abbreviations, pool number and series (where applicable), as follows: Agency FHLMC FNMA Telegraphic Abbreviations 09.250 FMPC 140023 A FNMS 09.250 AA 123456 Minimum Denomination $25,000 25,000 Multiple Denomination $1 1 - 4 - In addition, both FHLMC and FNMA offer a small number of issues which have interest rates that may change on a monthly basis. For these securities, different four letter security mnemonics will be used and the interest rate will not be reflected in the securities description. For FNMA, a series of "Xs" in place of the interest rate will indicate that it is an adjustable rate security; FHLMC issues will show only the pool number and series, as indicated below: Agency Sample Telegraphic Abbreviations Minimum Denomination FHLMC FNMA FMAR 123456 A FNAR XX.XXX VL 123456 $25,000 25,000 Multiple Denomination $1 1 Conversions of Mortgage-Backed Securities Held in Physical Form Definitive securities you wish to convert to book-entry form must be submitted to the Federal Reserve Bank of New York for conversion to book-entry form under procedures prescribed by that Bank. As with conversions of other registered securities, the completion of appropriate signature guarantees and/or detached assignments will be required prior to the acceptance of the definitive securities by the Federal Reserve Bank of New York. Upon receipt of the securities and appropriately executed documents, the New York Reserve Bank will convert the securities to book-entry form and transfer them by wire to your account here, generally within five business days. Instructions regarding the procedure to be followed as well as samples of the required form may be obtained from your local Federal Reserve office. Please note that there are no provisions for conversions from book-entry back to the definitive form.