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F ederal R eserve Bank of D allas
F IS C A L A G E N T O F T H E U N IT E D STATES
DALLAS, TE X AS
75222
C ircular N o. 73-64
M arch 30, 1973
PROGRAM FOR THE FURTHER EXPANSION OF THE BOOK-ENTRY PROCEDURE
To All Banking Institutions and Others Concerned
in the Eleventh Federal Reserve D istrict:
In our C ircular L e tte r N o. 72-149, dated J u ly 21, 1972, w e reported on th e s t a t u s o f t h e p ro gram
fo r th e f u r th e r ex p a n sio n o f th e book -en try procedure. T h e expanded p ro gram is d esig n e d to e x te n d
th e book -en try procedure to T r e a su r y se c u r itie s held b y all m e m b e r b a n k s th r o u g h o u t t h e c o u n try
fo r acco u n t o f th e ir cu sto m e r s, and also to e x te n d t h e procedures to include eligible A g e n c y
secu rities. T h e ex p e r im e n ta l p h a se o f t h e expanded p r og ra m h a s n o w been com pleted, and t h e
program is b e in g in itia te d in t h is D istr ic t.
T h e d etailed n e w o p e r a tin g ru les w h ich , to g e th e r w it h S u b p a rt O o f T r e a su r y D e p a r tm e n t
Circular N o. 300, w ill g ov e r n th e b asic b o ok-entry operations under t h e expanded p ro g ra m a re s e t
f o r t h in our B u lle tin 14 e n titled “B o o k -E n tr y S e c u r itie s ” effective A p r il 9, 1973. T he re v ise d
b u lletin incorporates t h e p ro v isio n s o f a re c e n t te ch n ica l a m en d m en t, e ffe c tiv e M arch 9, 1973, to
th e p r o v isio n s o f S u b p a rt 0 g o v e r n in g tr a n s f e r s and p le d g e s o f book -en try se cu rities. A copy o f
th e re v ise d bu lletin is enclosed. A lso enclosed are cop ies o f th e f o llo w in g o ther related bu lletin s
c o n ta in in g ce r ta in c o n fo r m in g r e v is io n s:
(a ) B u lletin 7, e n title d “C ustody o f S e c u r itie s,” r e v ise d e ffective A p ril 9, 1 9 7 3 ; and
(b) A m e n d m e n t N o. 1, e ffectiv e A pril 9, 1973, to B u lletin 2, e n title d “L o a n s.”
(B u lle tin s 2 and 7 are n o t a p plicable to n o n m em b er b a n k s.)
T h e r e v ise d boo k -en try b u lletin p rovides fo r t h e e x te n sio n o f t h e b o ok -en try procedure to
T r e a su r y se c u r itie s h eld b y m e m b e r b a n k s fo r th e acco u n t o f th e ir cu sto m e r s. It a lso prov id es fo r
th e book -en try dep o sit o f se c u rities held b y such b an k s a s fiduciary or a s c u sto d ian f o r a fiduciary,
p ro vid ed su ch d e p o sits a re c o n s is te n t w it h th e p r o v is io n s o f th e ap plicable s ta te la w s. U n d e r th e
exp anded b o ok-entry program , each m e m b e r bank in t h is D is tr ic t h a s t h e option o f o p en in g e ith e r
a sin g le, pooled b oo k -en try account, d e sig n a te d a “ General A c c o u n t” , fo r it s ow n se c u r itie s a s w ell
as t h e se c u r itie s o f its cu sto m ers, or a s m a n y a s t h r e e s e p a r a te a ccou n ts d e sig n a te d “ I n v e s t m e n t ”,
“T r u s t ” and “G eneral” . A s n o ted in our ea rlier an n o u n cem en t, su ch a cco u n t (s) w ould be in ad dition
to t h e v a r io u s b o ok-entry “collateral” a ccou n ts n o w b e in g m a in ta in e d b y t h is B ank, su ch a s
T r e a su r y T a x and L oan collateral acco u n ts. M em ber bank se c u r itie s on d ep o sit in f r e e s a fe k e e p in g
on A p r il 9, 1973 w ill be tr a n sfe r r e d to th e “ G eneral A c c o u n t” u n less th e o w n in g ba n k specifically
r e q u e s ts t h a t it s ow n se c u r itie s be s e g r e g a te d fr o m t h o s e o f its cu sto m e r s. In t h a t case, th e
m e m b e r b a n k s ’ o w n se c u r itie s can be held in th e “ I n v e s tm e n t A c c o u n t.”
Severa l U n ite d S t a t e s G o v ern m ent a g e n c ie s h a v e also issu e d r e g u la tio n s w h ic h p rovide f o r t h e
application o f t h e b o ok-entry procedure to m o s t o f th e ir ob liga tio n s. Our re v ise d b oo k -en try b u lletin
s e t s f o r t h th e t e r m s and conditions under w h ic h t h e A g e n c y se c u r itie s t h a t are elig ib le m a y be
d ep osited w ith t h is B a n k in b o ok-entry a ccounts. In addition, th e F ed eral R e s e r v e w ir e n e tw o r k is
b e in g expanded to provide f o r w ir e tr a n s f e r s o f b o ok-entry A g e n c y se c u r itie s to o th e r F edera l
R e s e r v e c ities. A s noted in th e a ppendix to our book -en try bulletin, a t th e p r e se n t t im e t h e se c u r itie s
o f th e F e d e r a l L and B a n k s, F e d e r a l In te r m e d ia te C redit B a n k s, B a n k s f o r C ooperatives a n d th e
U n ite d S ta te s P o sta l S e r v ic e a re e lig ib le fo r d e p o sit in book -en try f o r m and fo r t r a n s f e r over th e
F edera l R e s e r v e w ir e netw o rk . W h ile n o t all F e d e r a l R e se r v e B ank offices a re prepared to accep t
w ir e tr a n s fe r s o f eligible book -en try A g e n c y se c u r itie s f o r cred it to all accounts, i t is e x p ected t h a t
t h e book -en try prog ra m fo r A g e n c y se c u r itie s w ill becom e fu lly operational a t m o s t R e s e r v e B an k
offices w ith in th e n e x t se vera l m o n th s. In th e interim , m e m b e r ban k s w is h in g to utilize th e w ir e
n e tw o r k f o r A g e n c y se c u r ity tr a n s fe r s should confirm w ith us th e e x iste n c e o f ad equate fa c ilitie s
a t t h e F ed era l R e se r v e offices to w h ic h su ch t r a n s fe r s are to be directed.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
W ith t h e issu a n c e b y c e rta in F edera l A g e n c ie s o f boo k -en try r e g u la tio n s p aralleling Subpart
0 an d th e a v a ila b ility o f w ir e t r a n s fe r p ro cedures fo r book -en try A g e n c y se cu rities, w e are n o w in a
p ositio n to c o n v e r t into boo k -en try f o r m se c u r itie s issu e d b y su ch a g e n c ie s w h ic h w e are hold in g
f o r our d epositors. A ccord in g ly, se c u r itie s issu e d b y t h e a g e n c ie s o f t h e F a r m C redit A d m in is tr a
tio n and t h e P o sta l S e r v ic e w h ic h a re h eld b y t h is B an k on A pril 9, 1973 w ill be c o n v erted into
b o ok-entry se c u r itie s and dep osited in a n appropriate boo k -en try account.
It is e x p e c te d t h a t o th e r U n ite d S t a t e s G ov ern m en t a g e n c ie s w ill be is s u in g sep a r a te r e g u la
tio n s in t h e n ea r fu t u r e t h a t w ill p rovide fo r t h e application o f th e book -en try procedure to m o s t
o f th e ir se cu rities. A s such r e g u la tio n s are issued, w e plan to c o n vert eligible A g e n c y se c u r itie s held
b y t h is B a n k in to b ook-entry se cu rities. A t su ch tim e , w e w ill a lso b e in a p o sitio n to arra n g e fo r
t h e deposit, b y m e m b e r banks, o f su ch se c u r itie s and f o r t h e w ir e tr a n s f e r o f such se c u r itie s to
o th e r F ed era l R e se r v e offices. W e w ill keep y o u a d v ised o f a n y sign ifica n t d ev e lo p m e n ts re la tin g
to t h e book -en try p r o gram f o r A g e n c y sec u r itie s.
In order to develop an orderly p r og ra m f o r t h e co n version o f T r e a su r y and A g e n c y se c u rities
h eld b y m e m b e r b ank s fo r a ccou n t o f th e ir cu sto m e r s, it will be n e c e ss a r y fo r us to sch ed ule in
a d v ance t h e accep ta n ce o f se c u r itie s to b e delivered t o u s on b e h a lf o f ou r m e m b e r banks. In v ie w
o f t h e im p o r ta n t benefits o f th e exp anded boo k -en try program , w e t r u s t t h a t all m e m b e r b anks
w ill p a r tic ip a te in th e program . T h e officers in c h a rg e o f F is c a l A g e n c y a c tiv itie s a t each o f our
offices w ill be plea sed to d isc u ss w it h you t h e s c h e d u lin g o f d eliv eries o f se c u r itie s to u s f o r conver
sion, a s w ell a s a n y o th e r q u e stio n s y o u m a y h a v e r e g a r d in g t h e expan ded program .
A d d ition al copies o f t h is circular w ill be ava ila b le on req uest.
Y o u r s v e r y tru ly ,
P. E. Coldwell
P r e sid e n t
E n c lo su r e (s)
BULLETIN 7
Custody of Securities
FEDERAL RESERVE BANK OF DALLAS
This bulletin d escribes our se rv ices relating to the c u stod y of securities. A n y m em ber
bank depositing, either directly or through others, securities w ith this bank shall, b y such
action, b e u n d e r sto o d to h a v e agreed to the terms and con d itio n s set forth herein.
TABLE OF CONTENTS
Section 1, GENERAL
1.00 R eferen ce to B ulletin 1
1.05 A v a ilab ility o f service
1.10 Charges
Section 2, TYPES OF SECURITIES
ACCEPTED
2.00 G enerally
2.05 P ledged securities
Section 3, BOOK-ENTRY
3.00
3.05
3.10
3.15
A uth ority
C onv ersio n to b o ok-entry form
Term s o f c o n version
A p p lica tio n o f Subpart O
Section 4, LIMITATION OF LIABILITY
Section 5, ACKNOWLEDGMENTS AND
RECEIPTS
Section 6, SERVICES PERFORMED BY US
6.00 G eneral
6.05 C ollection of m aturing U n ited States
G overnm ent securities (unpledged)
6.10 C ollection o f maturing m unicipal or
corporate securities (unpledged)
6.15 E xchange of maturing securities
(unpledged)
6.20 Pledged securities
6 .2 5 N o tic e of called or maturing securities
6 .3 0 M unicipal or corporate securities
r eceiv ed for the account o f m em ber
banks
6 .3 5 C ollection of maturing co upons
6 .4 0 U np aid co upons
Section 7, PLEDGING SECURITIES
7 .0 0 To U nited States G overnm ent
7 .0 5 To U nited States D istrict Courts
7 .1 0 To U nited States D istrict Court
appointed trustees
7 .1 5 Collateral to Treasury T ax and Loan
acco u n t
Section 8, PLEDGING SECURITIES —
JOINT SAFEKEEPING
8.00 State Treasurer — State of T exa s
8 .0 5 Political su b d iv isio n s
8.10 Trust departm ent of m em ber banks
Section 9, SHIPMENT OF SECURITIES
9 .0 0
9 .0 5
9 .1 0
9 .1 5
9 .2 0
9 .2 5
9 .3 0
R isk o f loss
R egistered m ail insurance
E x c lu sio n
Limit of liability
Ship m en ts b y us
Ship m en ts to us
Shipm ents by this bank as fiscal agent
BULLETIN 7
FEDERAL RESERVE BANK OF DALLAS
Section 1, GENERAL
1.00 Reference to Bulletin 1
Several definitions, rules o f construction, and
other p r ov isio n s applicable to this bulletin are
found in our Bulletin 1, General P rovisions, and
are incorporated herein b y reference.
1.05 Availability of service
The se rv ices d escribed herein are m aintained
primarily for the c o n v e n ie n c e o f m em ber banks
located outsid e o f Federal R eserve cities. Under
sp ecial circum stances, h o w e v e r , th ese serv ices
m ay be e x te n d e d to m em ber banks lo ca ted in
outlying areas of Federal R eserve cities. A Fed
eral R eserve city bank m a y contact this bank for
specifics.
1.10 Charges
N o charge w ill be m ade for hold in g securities in
custody, but charges w ill be m ade to c ov er the
c o st of transportation and insurance on in c o m
ing and outgoing sh ipm ents of securities, for
telep h o n e and telegraph ex p en se, and collection
charges, if any, m ade b y collectin g banks.
Section 2, TYPES OF SECURITIES
ACCEPTED
2.00 Generally
E xcept as p rovided in se c tio n 2.05, o n ly secu ri
ties w h ic h are neither assign ed nor pled g ed and
w h ic h are o w n e d by the d ep ositing bank w ill be
accepted. Securities a ccep table for our c u sto d y
include all bonds, notes, certificates o f in d e b te d
ness, and Treasury bills issu e d or guaranteed by
the U nited States G overnm ent, and m isc e lla
n eo u s state, m unicipal or corporate bonds. S uch
securities w ill be held in cu sto d y for the account,
at the risk and subject o n ly to the order o f the
m em ber bank nam ed as o w n e r in the a c k n o w l
edgm ent issu e d by us.
2.05 Pledged securities
(a) S ecurities belonging to m em ber banks w h ic h
are pled ged to departm ents, agencies, or officials
of the U nited States G overnm ent to be h eld su b
ject to the instructions thereof w ill be accep ted
pursuant to any A c t of C ongress or any regula
tion or request o f the Secretary of the Treasury
providing for the d e p osit of securities w ith a
Federal R eserve Bank.
(b) Securities b elongin g to m em ber banks w h ic h
are pled g ed to officials of states, or p olitical su b
d ivision s thereof, as security for public d eposits,
w ill be accep ted w h e n application is m ade
jointly by the m em ber bank and the public b o d y
w h o s e dep o sit is secured. W e furnish sp ecia l
form s for this purpose.
Section 3, BOOK-ENTRY
3.00 Authority
(a) In accordance w ith S ection 306.117(a) of
Subpart O of Treasury D epartm ent Circular
No. 300 and the corresponding se ction o f regula
tions issu e d by th ose agencies, instrum entalities,
and estab lish m en ts o f the U nited States listed in
A p p e n d ix B (A gen cy regulations) to our B ulle
tin 14, this bank as fiscal agent o f the U nited
States m a y m aintain Treasury bonds, notes, cer
tificates o f in d e b te d n e ss and bills is su e d under
the S e c o n d Liberty Bond A ct, and debt obliga
tions issu e d pursuant to A g e n c y regulations by
m eans o f entries on the records o f this b ank as
such fiscal agent (“b ook-entry se c u r itie s”) w h e n
such securities are d e p o site d in acco u n ts m a in
tained by this bank in its ind ividual capacity and
as to w h ic h securities this bank in its individual
capacity is to contin ue to m aintain such dep o sits
n o tw ith sta n d in g application o f the b o ok-entry
procedure to su ch securities.
(b) Such acco u n ts include, but are not lim ited to,
accou n ts in w h ic h Treasury or A g e n c y securities
are deposited:
(i) as collateral p led ged to a R eserve Bank
(in its in dividu al capacity) for ad v a n ces
b y it;
(ii) by m em ber banks for their o w n account;
(iii) b y a m em ber bank h eld for the account
of its custom ers;
(iv) as collateral to secure dep o sits in m e m
ber banks of public fu n d s b y a state,
m unicipality, or other p olitical su b d iv i
sion;
(v) pursuant to S ectio n 61 o f the Bankruptcy
A c t (11 U.S.C. 101) in co n n ectio n w ith
the dep o sit o f bankruptcy fu n d s in c o m
m ercial banks;
(vi) as collateral in c o n n ectio n w ith the qual
ification of m em ber banks to e x ercise
trust p ow ers; or
(vii) as collateral to secure dep o sits o f trust
funds in com m ercial banking depart
m ents of m em ber banks.
BULLETIN 7
FEDERAL RESERVE BANK OF DALLAS
(c) S ectio n 306.117(a) o f Subpart O o f Treasury
D epartm ent Circular No. 300 and the co rrespond
ing se c tio n of A g e n c y regulations prov id es that
such application of the b ook-entry procedure
shall not derogate from or a d v ersely affect the
relationships that w o u ld oth e r w ise e x ist b e
t w e e n this bank in its individual capacity and its
d epositors.
3.05 Conversion to book-entry form
A n y bank or other d epositor w h o s e Treasury or
A g e n c y secu rities are on dep o sit in any account
specified in se c tio n 3.00(b) ab o ve m aintained by
this bank either in its ind ividual capacity or as
fiscal agent on A pril 9, 1973, and an y person
having an interest in Treasury or A g e n c y secu ri
ties w h ic h on or after such date are d e p o site d in
any o f the aforesaid a ccoun ts or any other a c
count specified b y this bank for application
o f the book -en try procedure under Sectio n
306.117(a) of Subpart O of Treasury D epartm ent
Circular N o. 300 or the correspon ding se c tio n of
A g e n c y regulations, w ill be d eem ed to h a v e au
thorized this bank to em p loy the b o o k-entry pro
cedure under the p r o vision s o f such se c tio n w ith
respect to such T reasury or A g e n c y securities
and to h av e co n se n te d to the co n v ersio n o f any
such Treasury or A g e n c y securities from defin
itive to boo k -en try form.
3.10 Terms of conversion
In co n n e c tio n w ith the application o f the bookentry procedure to Treasury or A g e n c y secu ri
ties under the p ro v isio n s o f S ection 306.117(a) of
Subpart O or the corresponding se c tio n of
A g e n c y regulations, it is u n d erstoo d that:
(a) The term s and conditions of this bulletin and
this b a n k ’s Bulletin 14 entitled “Book-Entry S e
curities”, or in the ev en t o f a particular agree
m ent b e tw e e n this bank and its depositor, the
terms and co n d ition s o f su ch agreem ent, shall
apply to such securities.
(b) A d v ic e s of d e p o sit and w ith d r a w a l w ith re
sp ect to such Treasury or A g e n c y securities
should be retained in so m e circum stances b y the
d ep ositin g banks or other parties in interest for
Federal in co m e tax purposes. (See attachm ent to
Subpart O).
3.15 Application of Subpart O
U nder S ectio n 306.117(b) o f Subpart O of Trea
sury D epartm ent Circular N o. 300 and under cor
responding se c tio n s o f A g e n c y regulations, this
bank, as fiscal agent of the U nited States, shall
apply the book-entry procedure to Treasury or
A g e n c y securities d e p o sited w ith this bank as
collateral for balances in Treasury T ax and Loan
A c c o u n ts or for d eposits o f public m o nies under
Treasury D epartm ent Circular No. 92 or No. 176,
respectiv ely, and m ay also apply book-entry pro
cedure to Treasury securities d e p o site d in other
a ccounts d esignated by this bank; and su ch s e
curities w ill be h a ndled pursuant to such terms
and cond itions as m a y be agreed up o n b e tw e e n
this bank and the d epositors of su ch securities.
This b a n k ’s Bulletin 14, entitled “Book-Entry
S e c u r itie s” applies to such accounts.
Section 4, LIMITATION OF
LIABILITY
Each bank or other party d epositing securities
w ith us either directly or through others shall by
such action be d eem ed to h ave agreed that this
bank:
(a) W ill be respo nsible only for the exercise of
the sam e diligence w ith w h ic h it cares for its
o w n property;
(b) W ill not be liable for any lo ss of such secu r
ities w h e n a lo ss is due to any cause other than
lack of su ch diligence;
(c) W ill not be responsible for the gen u in en ess,
validity, or alteration of or any d e fe c t in such
securities; and
(d) W ill not be obligated to m aintain any form
o f insurance for the acco u n t of the d ep ositor in
relation to securities h eld in c u sto d y for it.
Section 5, ACKNOWLEDGMENTS
AND RECEIPTS
A n ac k n o w le d g m e n t form or joint sa fek eep in g
receipt describing the securities and indicating
the purpose for w h ic h th ey are held, w ill be
issu e d for each deposit. The a ck n o w le d g m e n t
form and joint sa fek eep in g receipt are n o t n e g o
tiable or transferable and their return to us w ill
not be required for the release o f the securities.
Section 6, SERVICES PERFORMED
BY US
6.00 General
In the a b sen ce o f specific instructions to the c o n
trary, w e w ill e ndeavor to perform certain ser
v ic e s as outlined herein but w ill assum e no
liability for failure to perform su ch services.
BULLETIN 7
FEDERAL RESERVE BANK OF DALLAS
T hese se r v ices are inten d ed m erely as an aid to
m em ber banks and do n ot relieve the m em ber
bank of its o w n duty to keep itse lf inform ed of
m aturities, call dates, and other inform ation af
fecting its o w n portfolio.
6.05 Collection of maturing United States Gov
ernment securities (unpledged)
U npledged U nited States G overnm ent securities
and fully guaranteed obligations of its agencies
w h ic h are payable b y this bank as fiscal agent of
the U nited States and h eld by it in cu sto d y w ill,
in the ab sen ce of specific instructions from the
ow ner, be w ith d r a w n prior to m aturity or re
d em ption call date, and the p roceed s credited to
the m em ber b a n k ’s a ccou n t on the due date.
6.10 Collection of maturing municipal or cor
porate securities (unpledged)
U pon receipt o f w ritten authority fu rn ish ed by
the o w n in g bank, w e w ill enter for collection,
under the term s and conditions o f our current
Bulletin 9, C ollection o f N o n c a sh Items, m atur
ing unpled g ed m unicipal or corporate securities
payable in a city other than the dom icile o f the
o w n in g bank. Securities paya b le in the city or
to w n in w h ic h the ow n in g bank is located, or
payable o utside the co n tinental U n ited States,
w ill be shipp ed to the o w n in g bank. The sh ip
ping charges for co llecting m unicipal or corpo
rate securities w ill be charged to the ow n in g
b a n k ’s account.
6.15 Exchange of maturing securities
(unpledged)
Under instructions from a m em ber bank, w e w ill
effect the ex ch a n g e o f m aturing unpled ged
U nited States G overnm ent securities for av a il
able n e w issu e s. U pon receipt of the n e w secu ri
ties to be h eld in custody, a n e w a c k n o w le d g
m ent w ill be issu e d therefor.
6.20 Pledged securities
N o action w ill be taken by us relative to m atur
ing or called securities w h ic h are pledged, e x cep t
upon receipt o f appropriate w ritten instructions
o f the o w n in g bank and the pledgee. W h e n so
i n s t r u c t e d , m a t u r in g s e c u r i t i e s , o t h e r th a n
U nited States G overnm ent securities, w ill be
handled for c o llectio n under the term s and c o n
ditions o f our current Bulletin 9, C ollection of
N o n c a sh Items, and U nited States G overnm ent
securities w ill be redeem ed. D isp o sition of the
p roceeds, w h e n available, w ill be m ade upon
receipt of appropriate instructions.
6.25 Notice of called or maturing securities
N otice o f m aturity of all m unicipal, corporate, or
U n ited States G overnm ent securities w ill be
g iven in advance of m aturity date. H o w e v e r , w e
do not m aintain a called secu rities record, and,
therefore, cannot undertake to advise banks
w h e n securities are called for redem ption.
6.30 Municipal or corporate securities received
for the account of member banks
U nder appropriate w ritten instructions from a
m em ber bank, w e w ill accept for the m em ber
b ank’s acco u n t m unicipal or corporate securities
d elivered by brokers and others and m ake p a y
m ent therefor at the price stipulated in the pur
ch asin g b a n k ’s letter. In handling th ese tran sac
tions, this bank acts so le ly as agent for the
m em ber bank and a ssu m es no resp o n sib ility for
the g en u in en ess, va lid ity or any alteration o f the
securities received.
6.35 Collection of maturing coupons
U n less o th e r w ise instructed, w e w ill:
(a) credit the o w n in g bank on m aturity date for
maturing coup o n s detach ed from U n ited States
G overnm en t securities and fully guaranteed o b
ligations of its agen cies w h ic h are p ayable by
this bank as fiscal agent o f the U nited States
and h eld in cu sto d y for its account; and
(b) enter for collection, under term s o f our cur
rent Bulletin 9, C ollection o f N o n c a sh Items,
co u p o n s deta ch ed from other securities h eld in
c u sto d y and credit the account of the o w n in g
bank upon receipt of proceeds.
M unicipal or corporate co u p o n s payable in the
city or to w n in w h ic h the o w n in g bank is lo
cated, or payable outside the contin en tal U nited
States, w ill be shipp ed to the o w n in g bank.
C o u p o n s a t t a c h e d to s e c u r i t i e s w h i c h are
pledged as collateral to a c u sto m er’s n ote h eld
under rediscount or as collateral to an advance
by this bank and h eld b y us w ill not be clipped
and hand led for collection, u n le ss specific in
structions are r e ceived in co n n e c tio n therew ith.
6.40 Unpaid coupons
C oupons entered for c o llectio n and returned un
paid w ill be reattached to the securities from
w h ic h th ey w e r e detached, and the o w n in g bank
w ill be a d v ised of the reason for n onpaym ent.
In the a b se n c e o f specific instructions from the
o w n in g bank, no further effort w ill be m ade to
co llect on th ese and su b seq u en t coupon s at
tached to such securities.
BULLETIN 7
FEDERAL RESERVE BANK OF DALLAS
Section 7, PLEDGING SECURITIES
7.00 To United States Government
U p on w ritten instruction s from the o w n in g bank
and subject to the approval of the Treasury D e
partment, w e w ill h old secu rities p led g ed to d e
partm ents, a gen cies and officials o f the U nited
S ta tes as collateral to secure d e p o sits under the
term s o f Treasury D epartm ent Circular N o. 176.
7.05 To United States District Courts
U nder d esignation as cu stodian b y a U nited
States D istrict Court and at the request o f the
Court and a m em b er bank, w e w ill h o ld as c o l
lateral, securities p led ged to secure court d e p o s
its. Securities h eld as collateral to secure U nited
States District Court d e p o sits can be substitu ted
for, or w ith d ra w n , on ly under order o f the
Court.
7.10 To United States District Court appointed
trustees
U nder d esignation as cu stodian b y a U nited
States D istrict Court, w e w ill h o ld in c u stod y
securities pled g ed as collateral to secure d e p o s
its of tru stees in bankruptcy or receivership.
S ecurities h eld as collateral to secure d e p o sits of
Court appoin ted trustees can be sub stitu ted for,
or w ith d ra w n , o n ly under order o f the Court.
7.15 Collateral to Treasury Tax and Loan ac
count
W e w ill h old secu rities pled g ed b y a depositary
bank to secure its Treasury T ax and Loan ac
c o u n t . D e p o s i t , r e l e a s e , or s u b s t i t u t i o n o f
p ledged secu rities should be authorized b y this
bank acting as fiscal agent for the U n ited States.
Section 8, PLEDGING SECURITIES —
JOINT SAFEKEEPING
8.00 State Treasurer — State of Texas
A t the request of a m em ber bank, subject to the
approval o f the State D ep o sito ry Board, w e w ill
hold in joint sa fe k e e p in g securities p led ged as
collateral to secure d e p o sits o f the State Trea
surer. A p p lica tion for deposit, w ith d ra w a l, or
su b stitution o f su ch p led g ed securities should be
m ade on our appropriate form s.
8.05 Political subdivisions
A t the request o f a m em ber b ank and the g ov ern
ing b o d y o f a p o litical subdivision, w e w ill hold
in joint s a fe k e e p in g securities pled ged as collat
eral to secure d e p o sits of the p o litical su b d iv i
sion. R equests for d eposits, substitutions, or
w ith d raw a ls should be m ade on our appropriate
form s and e x e c u te d jointly by the depositary
bank and the govern ing b o d y of the political
su b division. (This paragraph is n o t applicable in
any state w h e r e la w requires such pled g ed s e
curities to be d e p o site d w ith in the state.]
8.10 Trust department of member banks
A t the request of a m em ber bank and the m e m
ber b a n k ’s trust departm ent, w e w ill h o ld in
joint sa fek eep in g securities pled ged as collateral
to secure dep osits o f u n in v e ste d fun ds o f the
m em ber b a n k ’s trust departm ent. D eposits, w it h
draw als, or su b stitutions of the p led ged secu ri
ties sh ould be authorized by the joint ex e c u tio n
by the m em ber bank and its trust departm ent on
our appropriate form s.
Section 9, SHIPMENT OF
SECURITIES
9.00 Risks of loss
(a) R egardless of any other pro vision s o f this
bulletin, any bank or other party shipping, or
causing the shipm ent of, securities to this bank
shall by such action be deem ed to h a v e agreed
that the risk of lo ss on su ch sh ipm ents occurring
prior to the actual d elivery thereof to us by the
p ost office, exp ress com pany, or other carrier is
not a ssu m ed by us but is on the sender.
(b) L ikew ise, any bank ordering ship m en ts of
securities from this bank shall b y su ch action be
d eem ed to h a ve agreed that this bank in m aking
such shipm ents undertakes m erely to m ake d e
livery to the p o st office, express com pany, or
other carrier, and that the risk o f lo ss occurring
su b seq u en t to such delivery is not a ssu m ed by
us but is on the party ordering su ch shipm ent.
9.05 Registered mail insurance
W e h old open insurance p o licies under w h ic h
registered m ail sh ipm en ts of secu rities m ade to
or by us m a y be insured. T h ese p o licies afford
protection against lo ss from the tim e o f a c c e p
tance by the m esse n g e r or carrier, w h e th e r
w ithin or w ith o u t the p rem ises o f the sender,
and end w h e n actual delivery has b e e n m ade to
the office of the addressee. T hey do not, h o w
ever, cover lo ss e s through theft by the e m p lo y
e es of the sender or the addressee, or lo s s e s by
risks generally referred to as “w a r r isk s”.
9.10 Exclusion
The p o licies contain the fo llo w in g clause elim i
nating su ch coverages:
FEDERAL RESERVE BANK OF DALLAS
BULLETIN 7
“To c o v e r . . . risks o f p h y sical lo s s o f or d am
age to or destruction of property insured, e x c e p t
theft on the part o f e m p lo y e e s of sen d ers or a d
d ressees, but this p o licy d oes n ot insure against:
Shipm ents of securities to us m a y be insured
under the registered m ail p o licies referred to, at
the e x p e n s e and risk of the sender, p rovided
the fo llo w in g conditions are observed:
(a) capture, seizure, arrest, restraint, detainm ent,
confiscation, preem ption, requisition or n a tion
alization, and the c o n se q u e n c e s thereo f or of any
attem pt thereat, w h e th e r in tim e of p ea ce or w ar
and w h e th e r la w fu l or o therw ise; any c o n s e
q u en ces o f h ostilities or w ar-like operations
(w hether there be a declaration of w a r or not]
but the foregoing shall not ex c lu d e collision , e x
plosion or contact w ith any fixed or floating ob
ject (other than a m ine or torpedo], stranding,
h e a v y w e a th e r or fire u n less cau sed directly (and
in d ep en d en tly of the nature of the v o y a g e or
serv ice w h ic h the v e s s e l concern ed or, in the
case of a co llision any other v e s s e l in v o lv e d
therein, is performing] by a h o stile act b y or
against a belligerent po w er, the term ‘p o w e r ’ as
u sed herein including any authority m aintaining
naval, m ilitary or air forces in a sso cia tio n w ith
a pow er; or any lo ss or dam age ca u sed b y any
w e a p o n o f w a r em ploying atom ic fission or
radioactive force w h e th e r in tim e o f p eace or
war; (b] the c o n se q u e n c e s o f civil war, r e v o lu
tion, rebellion, insurrection, or civil strife aris
ing therefrom, piracy, risks of contraband or il
legal transportation or trade, and seizure or
destruction under quarantine or c u sto m s regu
la tio n s.”
(a] On the day a ship m en t is m ade to us, an ad
vice is sent b y ordinary m ail to the office to
w h ic h the ship m en t is addressed, sh o w in g the
nam e o f the shipper, the num ber of sacks or
packages com prising the shipm ent, a description
o f the contents, and the am ount of insurance to
be effected. A c o p y o f this adv ice sh ou ld be
placed in the shipm ent.
9.15 Limit of liability
The liability o f the insurers under th ese p o licies
is lim ited to $10,000,000 on property from any
one send er to any one a d d ressee on any one day
unless dispatched by tw o or m ore trains, boats,
or other c o n v e y a n c e s, in w h ic h e v e n t the limit
of liability shall apply to each train, boat, or
other co n v e y a n c e separately.
9.20 Shipments by us
Shipm ents of securities by us, other than sh ip
m ents m ade in our capacity as fiscal agent of the
U nited States at the e x p e n s e and risk o f the
U nited States, w ill be m ade b y registered mail,
and, u n less instructed to the contrary, w e w ill
insure them as p rovided herein under the reg is
tered m ail p o licies referred to at the e x p e n se of
the m em ber bank.
9.25 Shipments to us
(b] The con ten ts of all ship m en ts are verified
and e n c lo se d in a strong wrapper, envelo p e, or
cloth or canvas bag, secu rely sealed w ith w a x ,
paper seal, or in any m anner acceptable to the
p ost office at the p lace of mailing.
(c] The verifying, packaging and sealing is done
by an em p lo y e e o f the sender, and the sea led
package is in charge of a resp o n sib le person
until d e p osited and registered at the p o st office,
or is in the cu sto d y o f an armored car service in
transit from the office o f the sen d er to the p ost
office.
(d] In the ev e n t o f lo ss of a shipm ent insured
under the registered m ail p o lic ie s referred to,
claim w ill be m ade on b eh alf of the m em ber
bank for the am ount for w h ic h the ship m en t is
insured. Prom pt n otice o f lo s s should be given
us, together w ith all available details regarding
the loss.
9.30 Shipments by this bank as fiscal agent
Shipm ents o f securities b y this bank as fiscal
agent o f the U nited States at the e x p e n se and
risk o f the U nited States w ill be m ade b y regis
tered m ail and w ill be insured under the G o v
ernm ent L osses in S h ipm ent A ct. This coverage
is p rovided for sh ipm ents of U nited States s e
curities u pon original issu e and U n ited States
securities in ex ch an g e for tem porary certificates.
Risk of lo ss by the U nited States from su ch sh ip
m ents term inates upon d elivery b y the p o st
office. S to ck o f u n issu e d U nited States S avings
B onds shipped to issu in g agents is the property
of the U nited States, and h e n c e such ship m en ts
are at the e x p e n se and risk o f the U n ited States
and the interest o f the G overnm ent d o e s not
c ea se u pon delivery b y the p o st office.
BULLETIN 2
FEDERAL RESERVE BANK OF DALLAS
Amendment No. 1
Effective April 9 ,1 9 7 3
To
Bulletin No. 2
D ated February 4, 1971
Paragraph 8.00 o f Bulletin N o. 2 revised
M ay 3, 1971, is am en ded to provide as fo llo w s :
Section 8, SECURITIES AS
COLLATERAL
8.00 Book-entry securities
In accordance w ith S e c tio n 306.117(a] o f Subpart
0 o f Treasury D epartm ent Circular N o. 300 and
the corresponding se ctio n o f A g e n c y regulations,
this bank, as fiscal agent o f the U nited States,
m aintains as “book-entry secu rities,” transfer
able Treasury or A g e n c y securities d e p o site d as
collateral for a d v an ces b y this bank. N o tw ith
standing the application o f the b ook-entry pro
cedures, this bank in its individual capacity shall
c o n t i n u e to m a i n t a in a p p r o p r ia t e a c c o u n t s
ev id en cin g such deposits. Transferable Treasury
or A g e n c y securities on dep osit or hereafter d e
p o site d for such purpose w ill be con verted into
b ook-en try form and m aintained in a book-entry
collateral account in accordance w ith the pro
v is io n s o f our current Bulletin 14, “Book-Entry
S ecu rities,” and in such e v e n t such securities
w ill be handled pursuant to the term s and c o n
ditions o f that circular, n o tw ith sta n d in g a n y in
c o n sisten t p r o visio n s herein.
BULLETIN 14
BOOK-ENTRY SECURITIES
FEDERAL RESERVE BANK OF DALLAS
SCOPE
This bulletin contains the general terms and conditions governing the issu an ce and m ain
tenance b y this Bank of: (1) b ook -entry Treasury securities under Subpart O of Treasury
D epartm ent Circular N o. 300, as am en d ed (hereinafter “Subpart 0 ”), a cop y of w h ic h is set
forth in A p p e n d ix A to this bulletin; (2) b ook-entry securities issu ed by th ose agencies, in
strum entalities and estab lish m en ts o f the U n ited States listed in A p p e n d ix B to this bulletin
(hereinafter “A g e n c y ”).
TABLE OF CONTENTS
1. D efinitions
11. A d v ic e s o f dep osit and w ith d ra w al
2. B ook-entry a ccou n ts
12. R edem ption of book-entry
securities; interest
3. B ook-entry c u sto d y acco u n ts for
m em ber banks
13. R ep resentation as to securities tendered
for deposit
4. B ook-entry collateral acco u n ts
14. D ep ositors instructions
5. D e p o sit o f securities
15. General
6. Original is su e o f b oo k-entry securities
16. Shipm ents o f securities
7. C o n version o f securities to and from
17. R ev ision of this bulletin
book-entry securities
18. Effect of this bulletin on previo u s circular
8. W ith d ra w al o f book-entry securities
Appendix A, TREASURY REGULATION
9. Transfer and p ledge of book -entry
securities
Appendix B, AGENCY REGULATIONS
Appendix C, CORRELATION TABLE
10. R eceipt and deliv ery o f securities
i
4-9-73
FEDERAL RESERVE BANK OF DALLAS
BULLETIN 14
To A ll Banking Institutions, and Others
C oncerned in the E leven th Federal
R eserve District:
book -entry securities for sa fekeeping, sale,
redem ption or exchange, and the shipm ent
of such securities, is c o v ered by this B ank’s
Bulletin 7, “C ustody of S e c u r itie s”.
1. [a] For p u rp o ses o f this bulletin
(1) the term “book-entry reg u lation s”
shall refer to Subpart O o f Treasury
D epartm ent Circular No. 300, as
am ended, and to regulations c o n
cerning the iss u e o f securities in
b o o k - e n t r y f o r m i s s u e d b y an
A gen cy ;
(2) the terms “Treasury se c u r ity ”,
fin itiv e T reasury s e c u r ity ” ,
“b oo k entry Treasury se c u r ity ”
h a ve the m eaning prescribed in
tion 306.115 o f Subpart O;
“ d e
and
shall
Sec
(3) the terms “A g e n c y se c u r ity ”, "de
finitive A g e n c y se c u r ity ”, and “bookentry A g e n c y se cu rity ” shall refer to
the debt obligations, issu e d b y an
A g en cy , w h ic h are liste d in A p p e n
dix B to this bulletin, and shall h a v e
the m ean ing prescribed in the appro
priate se c tio n s o f regulations w ith
respect to book-entry procedures i s
sued b y an A g en cy ;
(4) the term “sec u r itie s” shall include
both Treasury securities and A g e n c y
securities, and the term “book-entry
se c u r itie s” shall include b oth bookentry Treasury secu rities and bookentry A g e n c y securities; and
(5) the term “d e p o sito r ” shall refer to a
m em ber bank or other party in this
D istrict for w h ic h this Bank m ain
tains boo k-entry securities in a bookentry account specified in paragraph
2 hereof, pursuant to the b ook-entry
regulations and under this bulletin.
R eferen ces in this bulletin to se c tio n s o f the
book-entry regulations are to the sectio n
num bers in Subpart O, and are d eem ed to
refer as w e ll to the appropriate se ction n u m
bers o f book-entry regulations is su e d b y an
A g en cy ; a table correlating the se c tio n s of
Subpart O to the appropriate se c tio n s of
A g e n c y book-entry regulations is set forth
in A p p e n d ix C to this bulletin.
(b) The handling o f securities other than
Book-entry accounts
2. T his Bank is prepared to m aintain bookentry cu sto d y acco u n ts for its m em ber b anks in
w h ic h a m em ber bank m ay deposit, pursuant to
the book-entry regulations, a n y Treasury or
A g e n c y securities h eld by it, includin g securities
that are its o w n property and secu rities h eld by
it for acco u n t o f its custom ers. Such accounts
are d escribed in paragraph 3 hereof. This Bank
is also prepared to m aintain other book-entry
a ccou n ts for its d epositors in certain specified
c ases in v o lv in g p led ges o f securities entered in
the records o f this Bank (e.g., p led ges o f s e c u
rities h eld as collateral for ad v a n c e s b y this Bank
to its m em ber banks, or p led ges o f securities held
as collateral to secure dep osits in Treasury T a x
and Loan A c co u n ts). Such accoun ts, k n o w n as
“collateral a c c o u n ts”, are described in paragraph
4 hereof. In addition, this Bank m a y also m a in
tain certain other ty p es o f book-entry accou n ts
for sp ecial purposes, subject to term s and c o n d i
tions agreed upon b e tw e e n this Bank and the
d ep ositor o f securities in su c h accounts.
Book-entry custody accounts for member banks
3. (a) U nder this paragraph a m em ber bank
m ay d e p o sit w ith this Bank any securities held
by it, includin g securities that are its o w n prop
erty and securities h eld by it for account o f its
custom ers. A ll securities d e p o site d w ith this
Bank b y a m em ber bank and h eld for its account
under this paragraph m a y be h eld in a single
book -entry cu sto d y account. If a single acco u n t
is used, such accou n t w o u ld be d esign a ted a
“G eneral A c c o u n t.” H o w ev er, at the request and
for the c o n v e n ie n c e o f the m em b er bank d e p o s
itor, this Bank is prepared to o p en and m aintain
any or all o f the fo llo w in g ty p es o f accounts:
(1) In v estm en t A ccount: A n “I n v estm en t
c o u n t” m a y be o p en ed and u se d for
dep osit o f b ook-entry securities that
the property o f the m em ber bank
positor;
A c
the
are
de
(2) Trust A cco u n t: A “Trust A c c o u n t” m ay
be op e n e d and u se d for the d e p osit of
b ook-entry securities h eld b y the m em ber
bank depositor in the capacity o f a fidu
FEDERAL RESERVE BANK OF DALLAS
ciary or as custod ia n for a fiduciary, or for
securities o w n e d so le ly b y su ch bank and
set asid e in its trust departm ent under ap
plicable la w to secure d e p o sits o f trust
funds aw aitin g in v e stm e n t or distribution
(see e.g., Public Law 87-722 (12 U.S.C. 92
a(d]).
BULLETIN 14
(a) acco u n ts in w h ic h securities are d ep o sited
w ith this Bank pursuant to Sectio n 306.117 (a)
o f the book-entry regulations:
(1) as collateral for a d v an ces by this Bank,
in its individual capacity;
(3) General A cco u n t: A “ General A c c o u n t ”
m ay be o p en ed and u se d for the d e p o sit of
b ook-en try securities h eld by the m em ber
bank for account of its custom ers. In addi
tion, as ind icated above, if the m ain te
n ance o f the full range o f separate bookentry cu sto d y acco u n ts d escribed a b o v e is
n o t required b y a m em ber bank, any or all
o f th o se a ccou n ts m a y be co m b ined in the
General A cco u n t.
(2) as collateral to secure d ep o sits in m e m
ber banks o f fun ds of states, m unicipal
ities, or other political sub divisions;
(b) R egardless o f the com bination o f a ccoun ts
se le c te d b y a m em b er bank depositor, all se c u
rities d e p o site d in any accou n t under paragraph
3 (a] h e r e o f shall be subject to the so le order
o f su c h m em ber bank depositor. In th o se c a ses
in w h ic h this Bank m aintains tw o or m ore such
a cco u n ts for a depositor, securities d e p o site d
w ith this Bank that are n o t specifically d e sig
n ated for d ep osit in one o f su ch acco u n ts shall
be d e p o site d in the “G eneral A c c o u n t ” o f such
depositor, prov id ed su c h d ep ositor h a s op ened
a G eneral A c c o u n t w ith this Bank.
The acco u n ts referred to in (2), (3) and (4)
a b o ve shall be subject to sp ecial arrange
m en ts b e tw e e n this Bank, the public official or
authority that requires that su ch securities be
deposited, and the bank or entity depositing
the securities. The sp ecial arrangem ents are
outlined in this B ank’s Bulletin 7, “C ustody o f
S e cu rities.” In such cases, the public official
or authority shall be a dep ositor for p u rposes
of Section 306.119 (a) o f the book-entry regu
lations and this bulletin.
(c) M em ber b an ks d e p o sitin g securities h eld
b y th em for a cco u n t o f their cu stom ers are
e x p e c te d to m aintain appropriate records in
regard to their custom ers, coverin g su ch m atters
as transfer o f the securities, pledge in terests in
the securities, and redem ption o f the securities
and p a y m en t o f in terest thereon.
(d) Book-entry securities m a y be m o v e d b y a
m em ber bank d epositor b e tw e e n its book-entry
a ccou n ts specified in this paragraph (e.g., from
a b a n k ’s “In v estm en t A c c o u n t” to its “General
A c c o u n t”] b y m e a n s o f appropriate instructions
to this Bank.
Book-entry collateral accounts
4.
In addition to the b ook -en try c u sto d y a c
c o u n t s ) m aintained under paragraph 3, this
Bank w ill also m aintain b ook-en try “co llateral”
a ccou n ts in v o lv in g pled ges o f boo k -en try secu ri
ties entered in the records o f this Bank, pursuant
to S e c tio n 306.118 (a) o f the b o ok-entry regula
tions. S u c h a cc o u n ts include, but are n o t lim ited
(3) pursuant to S ectio n 61 o f the Bankruptcy
A c t in c on n ectio n w ith the dep osit of
bankruptcy fun ds in com m ercial banks;
(4) as collateral in con n ection w ith the qual
ifications o f m em ber bank d epositors to
ex e r c ise trust p ow ers.
(b) a cco u n ts in w h ic h securities are d e p o sited
w ith this Bank, as Fiscal A g e n t o f the U n ited
States, pursuant to Sectio n 306.117 (b) o f the
book-entry regulations, as collateral to secure
b alances in Treasury T a x and Loan A c c o u n ts,
or security in lieu o f surety or sureties on
penal bonds, or as collateral for d e p o sits of
public m onies, under Treasury D epartm ent
Circulars N os. 92, 154 or 176, resp ectiv ely .
S uch securities shall be subject to the pro
v isio n s o f the relevant Treasury D epartm ent
Circular or other instructions from the Trea
sury D epartm ent co n cernin g su ch securities.
Such collateral accou n ts m a y also in clude
securities d e p o sited w ith this Bank, as F iscal
A g e n t o f the U nited States, pursuant to S e c
tion 306.117 (b) o f the b ook-en try regulations,
for such other p urposes as shall be designated
by this Bank, as Fiscal A g e n t o f the U n ited
States, w ith the approval of the Secretary of
the Treasury.
Deposit, maintenance and withdrawal
Deposit of securities
FEDERAL RESERVE BANK OF DALLAS
5. Treasury or A g e n c y securities m ay be d e
p o sited in the book-entry acco u n ts referred to
in paragraphs 3 and 4 h ereof by (a) the deposit
o f such securities w ith this Bank in definitive
form, (b) the transfer, inclu ding telegraphic
transfer to this Bank, o f such securities for
dep osit in a b o ok -entry account or (c) the orig
inal issu e o f such secu rities in b ook -entry form
by this Bank in accordance w ith the prov isio n s
o f paragraph 6 hereof.
Original issue of book-entry securities
6. If upon original issu e of T reasury or A g e n c y
securities it is requested by a depositor that the
securities be m aintained in one o f the bookentry accounts referred to in paragraphs 3 and
4 hereof, such securities w ill be m ain tained in
the form o f b ook-entry securities in accordance
w ith the term s o f the appropriate book-entry
regulations and of this bulletin and w ill be
entered in the d esignated book-en try accou n t in
the nam e o f the depositor.
Conversion of securities to and from
book-entry securities
7. (a) U n le s s this Bank d eterm ines that s p e
cial circum stan ces require o th erw ise, definitive
Treasury and A g e n c y securities d e p o site d w ith
this Bank prior to m aturity or call to be m a in
tained in a book-entry account referred to in
paragraphs 3 and 4 h e r e o f w ill be conv erted to
book-entry secu rities in accordance w ith the
terms o f the appropriate b o ok-entry regulations
and this bulletin and entered in a b ook-entry
a ccount in the nam e o f the depositor. This Bank
reserves the right to convert any book-entry
security m aintained in a b ook-en try accou nt
referred to in paragraphs 3 and 4 h e r e o f to a d e
finitive T reasury or A g e n c y security o f the sam e
am ount, loan title (or series), and m aturity date;
such definitive security w ill be held, or other
w is e dealt w ith, in accordance w ith the agree
m ent b e tw e e n this Bank and its depositor pur
suant to w h ic h the security is then on deposit.
In accordance w ith the book-entry regulations,
this Bank shall, upon receipt o f appropriate in
structions, arrange for the co n v ersio n o f bookentry securities into definitive securities and
deliver them in accordance w ith the prov ision s
of paragraph 10 of this bulletin concerning the
w ith d raw al o f book-en try securities.
(b)
R egistered Treasury securities m ust be
a ssig n ed to “Federal R eserve Bank o f D allas, as
BULLETIN 14
Fiscal A g e n t o f the U nited States, for c o n versio n
to b o ok-entry Treasury se cu rities,” and such
a ssig n m en t m u st be e x e c u te d in accordance w ith
Subpart F o f Treasury D epartm ent Circular No.
300.1
(c)
In appropriate ca ses, bearer Treasury
securities p resen ted b y a d ep ositor for c o n v e r
sion to book-entry securities m a y be restrictively
endorsed, as provid ed in T reasury D epartm ent
Circular N o. 853, as revised, and this B ank’s
Bulletin 7 “C ustody o f S e cu rities.” S uch restric
tive endorsem en t should be in the fo llo w in g
form:
“For presen tation to the Federal R eserve
Bank o f Dallas, F iscal A g e n t o f the U nited
States, for co n v ersio n to b ook -entry securi
ties.
(Name o f p resenting bank)
A B A N o ________ ”
(d)
A ssig n m e n ts o f th o se registered A g e n c y
securities w h ic h are also available in bearer
form and are eligible for d ep o sit w ith this Bank
in a b ook-en try accou n t m u st be e x e c u te d in
accordance w ith the appropriate prov isio n s, if
any, o f the regulations o f the A g e n c y concerned
and assig n ed to “Federal R eserve Bank o f Dallas,
as Fiscal A g en t of (name o f A g ency), for c o n
version to b ook-entry (name o f A g e n c y securi
ties).”2
Withdrawal of book-entry securities
8.
A t any time prior to m aturity or call, b ookentry securities m a y be w ith d r a w n b y the d e
positor for w h o s e acco u n t such securities are
m aintained by this Bank from a book-entry ac
count referred to in paragraphs 3 and 4 hereof;
provided, h o w e v e r , that book-entry securities
m aintained for a collateral-pledge purpose sp e c i
fied in paragraphs 4 (a) and 4 (b) h e r e o f m a y be
*In accordance with Subpart O of Treasury Department
Circular No. 300, however, no such assignment is re
quired in respect of registered Treasury securities on
deposit with this Bank on the effective date of said
Subpart O.
2
Each of the book-entry regulations issued by an Agency
provides that no such assignment is required in respect
of the Agency’s registered Agency securities on deposit
with this Bank on the effective date of the book-entry
regulation issued by the Agency; the date of issue of
each Agency book-entry regulation is noted in Appendix
B to this bulletin.
BULLETIN 14
FEDERAL RESERVE BANK OF DALLAS
w ith d r a w n b y the d ep ositor o n ly in accordance
w ith the arrangem ent pursuant to w h ic h the s e
curities are m aintained and, if required under
the applicable arrangement, if the pled gor and
pled gee o f securities d e p o site d under paragraph
4 (a) h e r e o f join in a request for w ith d r a w a l on
form s prov id ed b y this Bank for such purpose.
C ustom ers o f m em ber bank d epositors m u st ar
range for the w ith d raw al o f book-en try securi
ties through the m em ber bank for w h o s e account
the book-entry securities are m aintained b y this
Bank. S ecurities w ith d r a w n h ereunder w ill be
con v erted into definitive securities in bearer
form, or, if this Bank is so requested, in regis
tered form ,3 in the am ount, loan title (or series),
and m aturity date o f the securities w ith d raw n ,
and su ch definitive securities w ill be delivered
under the p r o v isio n s of paragraph 10 h e r e o f to
the depositor effecting the w ith d raw al, or on its
order and at its e x p e n se , to a transferee.
Transfer and pledge of book-entry securities
9.
(a) D eta iled rules g overning transfer and
pledge o f Treasury securities w h ic h are on d e
p o sit w it h a R ese r v e Bank in book -en try form
are se t forth in S e c tio n 306.118 o f Subpart O.
That se c tio n e stab lish es t w o general rules pro
viding for transfers and pledges.
(b)
O ne rule is set forth in S e c tio n 306.118 (b)
stating, in part, that a transfer or pled ge o f bookentry Treasury securities is effected, and a
pledge is perfected, b y any m ea n s that w o u ld be
effective under applicable la w if the securities
w e r e m aintained b y the R eserve Bank in bearer
definitive form. U nder this rule no n o tic e or
ad vice is to be g iv en to the R eserve Bank and
no entry o f the particular transfer or pled g e in
the records o f the R eserve B ank is in v o lv e d . For
exam p le, a pledge o f Treasury securities o w n e d
by a custom er o f a m em ber bank and d ep o sited
w ith the m em b er bank and b y the latter w ith
the Federal R eserve Bank in one o f the c u stod y
accou n ts referred to in paragraph 3 o f this b u lle
t in w o u l d b e p e r f e c t e d u n d e r t h i s r u le , in
a ccordan ce w ith the requirem ents o f applicable
law , w ith o u t n o tic e or a d vice to the R eserve
Bank. In this co n nection, the U niform C om m er
cial Code p r o vid es for notification, w h e r e s e c u
rities are h eld b y a third person, to the bailee to
p erfect a pledge o f securities; and Subpart O
provides, in effect, that, w h e r e transferable
Treasury secu rities are m aintained on the b o ok s
o f a depositary (a bank, banking institution, fi
nancial firm, or similar party, w h ic h regularly
accepts in its course o f b u sin e ss securities as a
cu stodian service for custom ers, and m aintains
accou n ts in the nam e o f such custom ers, reflect
ing ow nersh ip o f or interest in su ch securities)
for account o f the pledgor thereof, su ch d e
positary shall, for p u rposes of p erfecting a p ledge
o f such securities, be the b ailee to w h ic h notifi
cation o f the pledge o f the securities m ay be
given.
(c) T he se c o n d rule is set forth in Section
306.118 (a) and pro vid es for effecting and per
fecting transfers and p led g es by m ea n s o f an
appropriate entry in the records o f a R eserve
Bank in th o se in sta n c e s w h e r e the transfer or
pledge is being m ade to one o f the transferees
or p le d g e e s described in such se ctio n (i.e., a
R eserve Bank, the U n ited States, or any trans
feree or pled g ee eligible to m aintain an appro
priate book -entry accou n t in its nam e w ith a
R eserve Bank under Subpart O). The collateral
a ccoun ts referred to in paragraph 4 of this
bulletin represent ex am p les of p led ges effected
and p e rfected under this rule.
(d) B ook-entry A g e n c y securities m a y be
transferred or pledged as provid ed in th ose se c
tions o f the b ook -entry regulations issu e d b y an
A g e n c y w h ic h correspond to S e c tio n 306.118 of
Subpart O (a table correlating the se c tio n s of
Subpart O to the appropriate se c tio n s o f A g e n c y
book-entry regulations is set forth in A p p e n d ix
B to this bulletin).
(e) The entry by this Bank o f b ook-entry
securities in an a ccoun t referred to in paragraph
4 h e r e o f shall be an appropriate entry under
S ectio n 306.118 (a) o f the book-entry regulations
o f the securities pledged.
(f) C ustom ers of m em ber banks w ish in g to
transfer or pledge book-entry secu rities should
arrange for such transfer or pledge w ith the
m em ber bank depositor in w h o s e nam e and
subject to w h o s e order the book-entry securities
are m aintained by this Bank.
Receipt and delivery of securities
‘Except for Treasury bills and EA and EO series of
Treasury notes, and those Agency securities which are
not issued in registered form.
10.
(a) U p o n the receipt o f appropriate in
structions, this Bank w ill arrange to receiv e
definitive Treasury and A g e n c y securities for
FEDERAL RESERVE BANK OF DALLAS
dep o sit in a book-entry account o f a m em ber
bank under this bulletin for a ccount o f a m e m
ber b ank either against receipt or against
paym ent. H ow e v e r , such securities w ill be re
c e iv e d for the accou n t o f d epositors other than
m em ber banks only against receipt.
(b) U p on the receipt o f appropriate instru c
tions, this Bank w ill also arrange to deliver, at
our w in d o w , definitive Treasury securities in
the am ount of w ith d r a w n book-entry Treasury
secu rities to either this B ank’s d epositor or, on
its order, to a d esign ated transferee. In the case
of m em ber bank depositors, such deliv eries w ill
be m ade either against receipt or paym ent; d e
liveries o f securities for accou n t o f d epositors
other than m em ber banks w ill be m ade against
receipt only.
(c) U p on the receipt o f appropriate instruc
tions, definitive Treasury securities w ith d r a w n
under paragraph 8 h e r e o f w ill also be shipped,
in accordance w ith paragraph 16 hereof, at the
e x p e n se o f this B ank’s depositor, either (1) to it
or (2) on its order to a designated transferee.
A ll such sh ipm en ts w ill be m ade against receipt
only.
(d) U pon the receipt o f appropriate in stru c
tions, this Bank w ill also arrange for the delivery
o f definitive A g e n c y securities in the am ount o f
w ith d ra w n book-entry A g e n c y securities. In
accordance w ith paragraph 16 hereof, such
securities w ill be shipped directly b y the Federal
R eserve Bank o f N e w York, at the e x p e n s e of
this B ank’s depositor, either (1) to it, (2] on its
instructions to a d esignated transferee or (3] to
this Bank. A ll such sh ipm ents w ill be m ade
against receipt only. If this B ank’s m em ber bank
depositor requires that d elivery be m ade to a
design a ted transferee against paym ent, this
Bank w ill a d vise the Federal R eserv e Bank of
N e w York to ship su ch securities to this Bank
and this Bank w ill m ake d elivery o f su ch securi
ties, at our w in d o w , to the d esign ated transferee,
against paym ent.
(e) Instructions to receiv e securities against
pa ym ent for a ccou nt o f a m em ber bank should
sp e c ify the am ount to be paid and w ill co nstitute
our authority to charge the reserve account of
the m em ber bank for such am ount on the day
the secu rities are r eceiv ed b y us. Instructions to
deliver securities at our w in d o w against p a y
m ent should s p e c ify the am ount to be r e ceived
BULLETIN 14
and, u n le ss other instructions are received, such
pa ym en t w ill be accep ted in the form o f a ch eck
draw n on a com m ercial bank and paya b le to
the order o f Federal R eserve Bank o f Dallas. The
am ount o f su ch p ay m en t w ill be credited to the
reserve acco u n t o f the m em b er bank for w h o s e
accou n t the securities are delivered, subject to
receipt o f p ay m en t in actually and finally c o l
le cted funds, at the c lo se o f b u sin e ss o f the
b u sin e ss day n e x t su c c e e d in g the day on w h ic h
the securities are delivered. H o w ev er, if p a y
m ent for the securities is m ade in “Federal
f u n d s ”, the p ro ceed s th ereof w ill be credited to
the reserve accou n t o f the m em ber bank on the
day the securities are delivered.
Advices of deposit and withdrawal
11. Securities d ep osited w ith this Bank in a
book-entry a ccou n t referred to in paragraphs 3
and 4 h e r e o f or transferred to such an account,
w ill be described in a serially num bered adv ice
w h ic h this Bank w ill sen d to the depositor o f
such securities. T h e s e a d v ices are n either trans
ferable nor n egotiable and their return w ill not
be required w h e n secu rities are w ith d r a w n from
m aintenance as b ook-entry secu rities in a bookentry acco u n t hereunder or transferred from
one book-entry accou n t to another such account.
The designation “BE” on such a d v ic e s indicates
that th o se securities w h ic h are eligible to be so
held h a v e b een d ep o sited w ith, and are being
m aintained by, this Bank as b ook-entry secu ri
ties in accordance w ith the b ook-entry regula
tions and this bulletin. A d v ic e s w ill also be sent
w h e n securities are w ith d r a w n from a bookentry account. A d v ic e s o f d ep osit and w it h
drawal should be retained by d epositors for
Federal in com e tax purp oses, as m ore fully
exp lain ed in the A tta ch m en t to Subpart O.
Redemption of book-entry securities; interest
12. A ll m aturing book-entry securities w ill be
redeem ed b y this Bank at m aturity or call. In
terest on all book-entry securities w ill be paid
by this Bank on the date on w h ic h such interest
b e c o m e s due and payable. U n le ss o th e r w ise
instructed b y the m em ber bank depositor, the
am ount o f such m aturing securities or su ch in
terest w ill be credited, under advice, to the
reserve a ccount o f su ch depositor in w h o s e nam e
this Bank m aintains such book-entry securities.
P aym ent or credit for the am ount of maturing
book-entry securities, or interest on book-entry
securities, due to a depositor other than a m e m
BULLETIN 14
FEDERAL RESERVE BANK OF DALLAS
ber bank w ill be m ade in accordance w ith the
instructions o f su c h depositor.
Representation as to securities tendered
for deposit
13. A n y party tendering securities to this
Bank for dep osit in book-entry form, or trans
ferring securities to or from a book -entry
account referred to in paragraphs 3 and 4 hereof,
and any party for w h ic h this Bank m aintains
su ch securities, is d e e m e d to represent that it
has the unqualified right to d e p o sit or transfer
such securities for the pu rp ose for w h ic h they
are being m aintained b y this Bank. A n y d e
positor for w h ic h this Bank m aintains booke n t r y s e c u r i t i e s u n d e r t h is b u l l e t i n w i l l be
d e e m e d to warrant that su ch securities are and
w ill be free and clear of any interest, as security
or otherw ise, in c o n siste n t w ith the purpose for
w h ic h th ey are m aintained and dealt w ith by
this Bank, pursuant to the instructions o f the
dep ositor of this Bank or transferor to this
Bank. Each request b y the d ep ositor for the
deposit, w ith d r a w a l or other action w ith respect
to b o ok-entry securities d e p o site d under this
bulletin w ill be deem ed to be a representation
by such depositor that it has full p o w e r and
authority to give su ch instruction, req u est or
authorization and to deal w ith the securities in
the m anner contem plated.
Depositors instructions
14. (a) U n le ss separate arrangem ents e x ist
b e tw e e n this Bank and its m em ber bank d e
positor, all instru ctions w ith reference to bookentry securities should be in w riting over
authorized signature(s) on b e h a lf o f the depositor
for w h o s e a ccou nt such secu rities are handled
by this Bank. T his Bank, in its discretion, m ay
accept and act u pon instructions from m em ber
banks transm itted b y telegraph or telep h on e on
the u n d erstanding that w ritten confirm ation o f
such in structions o v er authorized signature (s)
w ill be m ailed to u s prom ptly. T elegram s should
be in the A m erica n Bankers A s so c ia tio n code
w h e n e v e r p ossible.
(b)
Federal
include
draw al
In so m e c a se s it w ill be desirable for
in c o m e tax p urposes for a d ep ositor to
in its instruction concerning the w it h
or transfer o f its book -entry securities
the lot num bers o f the securities w ith d r a w n or
transferred. In determ ining w h e th e r to inclu de
such inform ation, the attention o f d epositors is
called to the A tta ch m en t to Subpart O. Inclusion
by a depositor in its in structions of inform ation
as to the lot num bers of such securities is for
Federal in co m e tax purp o ses only, and this Bank
w ill not attem pt to v e rify the accuracy of such
inform ation.
Risk of loss
General
15. A n y bank or person for w h o s e account
book-entry securities are m aintained by this
Bank, either directly or through others, shall be
deem ed to h a ve agreed that w e (a) w ill be re
sp o nsible o nly for the e x ercise o f the sam e
diligence w ith w h ic h w e care for our o w n prop
erty; and (b] w ill not be liable for any lo ss of
such securities w h e n a lo ss is due to any cause
other than lack o f such diligence.
Shipments of securities
16. A ll sh ip m ents o f definitive Treasury se c u
rities up on c o n version from book-entry Treasury
secu rities shall be at the risk and e x p e n se o f the
depositor effecting the w ithdraw al. The p rovi
sio n s o f our Bulletin 7 regarding ship m en ts of
securities to or from this Bank and insurance
o f such shipm ents apply to ship m en ts o f defini
tive Treasury securities for c o n v ersio n to or
from book-entry securities and to ship m en ts of
definitive A g e n c y secu rities for co n v ersio n to
book-entry securities. A g e n c y securities c o n
verted from book-entry securities and delivered
upon w ith d raw a l in definitive form w ill be
shipped b y private courier service or insured
registered m ail from the Federal R eserve Bank
of N e w York at the risk and e x p e n se o f the
d e p o s i t o r o f t h is B a n k r e q u e s t i n g t h e w i t h
drawal.
Revision of this bulletin
17. The right is reserved to w ith d raw , add to,
or am end at any tim e any o f the p r ov ision s o f
this bulletin.
Effect of this bulletin on previous circular
18. T h is b u ll e t in s u p e r s e d e s o u r F i s c a l
A g e n c y Operating Circular No. 3 dated S e p te m
ber 1, 1969.
FEDERAL RESERVE BANK OF DALLAS
BULLETIN 14
APPENDIX A
APPENDIX B
Subpart O o f Treasury D epartm ent Circular
N o. 300, 31 C.F.R. 306, issu e d b y the U nited
States Treasury D epartm ent on M arch 15, 1973,
is e n c lo s e d herew ith.
This A p p e n d ix contains a list o f the Federal
A g e n c ie s that h a v e is su e d a book-entry regula
tion su bstan tially in the form o f Subpart O of
Treasury D epartm ent Circular No. 300, and
w h o s e securities are issu e d and m aintained by
this Bank in book-en try form pursuant to such
regulation. Each entry for an A g e n c y g iv es the
citation o f its book -entry regulation and in d i
cates the securities issu e d by that A g e n c y w h ic h
are authorized to be iss u e d and m aintained in
book-entry form.
1. U n ite d S ta tes P ostal S ervice (39 C.F.R. 761)
is su e d A u g u st 16, 1972.
A n y obligation o f the P ostal Serv ice is
su ed under 39 U. S. C. § 2005.
2. Farm Credit A d m inistration (12 C.F.R. 615),
iss u e d O ctober 26, 1972.
C onsolidated Federal Farm Loan Bonds
C on so lid ated Federal Interm ediate Credit
Bank D eb en tures
C onsolidated D eb entures o f the Banks for
C ooperatives
S y s te m w id e N otes, Bonds, or D eb entures
APPENDIX C
This A p p e n d ix correlates the se c tio n head in gs o f Subpart O to the corresponding se ctio n num ber
referen ces in the b o ok-entry regulations o f various Federal A g en cies.
Subpart
O
D efinition o f t e r m s ................................................................ § 3 0 6 .1 1 5
A u thority o f R eserve B a n k s ............................................. § 3 0 6 .1 1 6
§ 3 0 6 .1 1 7
S co p e and effect o f book-entry p r o c e d u r e ..............
T ransfer and p ledge ........................................................... § 3 0 6 .1 1 8
W ithdraw al o f Treasury s e c u r i t i e s ............................... § 3 0 6 .1 1 9
D elivery o f Treasury s e c u r i t i e s ...................................... § 3 0 6 .1 2 0
R egistered b onds and n o tes ........................................... § 3 0 6 .1 2 1
Servicing book-entry Treasury securities; paym ent
of interest, paym ent at maturity or on c a l l.......... § 3 0 6 .1 2 2
A -1
4-9-73
Farm Credit
A dm inis
tration
(12CFR615)
U.S.
P ostal
Service
(39CFR761)
§ 6 1 5 .5 4 5 0
§ 7 6 1 .1
§ 6 1 5 .5 4 5 5
§ 7 6 1 .2
§ 6 1 5 .5 4 6 0
§ 7 6 1 .3
§ 6 1 5 .5 4 6 5
§ 7 6 1 .4
§ 6 1 5 .5 4 7 0
§ 7 6 1 .5
§ 6 1 5 .5 4 7 5
§ 7 6 1 .6
§ 7 6 1 .7
§ 6 1 5 .5 4 8 0
§ 7 6 1 .8
7089
RULES A ND REGULATIONS
EXCERPT:
FE DE RAL REGISTER. V O L .
. N O . 50 -
T H U R S D A Y , M A R C H 15. 19 73
this subpart on the records of a Reserve
Bank.
(e) “Pledge” includes a pledge of, or
any other security interest in, Treasury
securities as collateral for loans or ad
vances or to secure deposits of public
monies or the performance of an obliga
tion.
(f) “Date of call” (see § 306.2) is “the
date fixed in the official notice of call
published in the F e d e r a l R e g i s t e r * * *
on which the obligor will make payment
of the security before maturity in ac
cordance with its terms.”
(g) “Member bank” means any n a
tional bank, State bank or bank or trust
company which is member of a Reserve
Bank.
§ 3 0 6 .1 1 6
A u t h o r it y o f R e s e r v e B a n k s .
Each Reserve Bank is hereby author
ized, in accordance with the provisions of
this subpart, to (a) issue book-entry
Treasury securities by means of entries
on its records which shall include the
name of the depositor, the amount, the
loan title (or series) and maturity date;
(b)
effect conversions between bookentry Treasury securities and definitive
Treasury securities; (c) otherwise service
and maintain book-entry Treasury se
curities; and (d) issue a confirmation of
transaction in the form of a written ad
vice (serially numbered or otherwise)
which specifies the amount and descrip
tion of any securities, that is, loan title
(or series) and maturity date, sold or
transferred and the date of the transac
tion.
§ 3 0 6 .1 1 7
Scope and
entry p rocedure.
Subpart O— Book-Entry Procedure
§ 3 0 6 .1 1 5
D e f i n i t i o n o f t e r m s.
In this subpart, unless the context
otherwise requires or indicates:
(a) “Reserve Bank” means a Federal
Reserve bank and its branches acting as
Fiscal Agent of the United States and
when indicated acting in its individual
capacity.
(b) “Treasury security” means a
Treasury bond, pote, certificate of in
debtedness, or bill issued upder the Sec
ond Liberty Bond Act, as amended, in the
form of a definitive Treasury security or
a book-entry Treasury security.
(c) “Definitive Treasury security”
means a Treasury bond, note, certificate
of indebtedness, or bill issued under to
Second Liberty Bond Act, as amended, in
engraved or printed form.
(d) “Book-entry Treasury security”
means a Treasury bond, note certificate
of indebtedness, or bill issued under the
Second Liberty Bond Act, as amended, in
the form an entry made as prescribed in
e f fe c t
of
book-
(a)
A Reserve bank as fiscal agent of
the United States may apply the bookentry procedure provided for in this sub
part to any Treasury securities which
have been or are hereafter deposited for
any purpose in accounts with it in its
individual capacity under terms and
conditions which indicate that the
Reserve bank will continue to maintain
such deposit accounts in its individual
capacity, notwithstanding application of
the book-entry procedure to such securi
ties. This paragraph is applicable, but
not limited, to securities deposited: 1
1
(1) As collateral pledged to a Reserve
bank (in its individual capacity) for ad
vances by i t ;
(2) By a member bank for its sole
account;
(3) By a member bank held for the ac
count of its customers;
(4) In connection with deposits in a
member bank of funds of States, munici
palities, or other political subdivisions;
or
(5) In connection with the perform
ance of an obligation or duty under Fed
eral, State, municipal, or local law, or
judgments or decrees of courts.
The application of the book-entry pro
cedure under this paragraph shall not
derogate from or adversely affect the
12 T h e a p p e n d ix to t h is s u b p a r t c o n ta in s
r u le s of id e n tif ic a tio n o f b o o k -e n try s e c u ri
tie s fo r F e d e ra l in co m e ta x p u rp o se s.
7090
RULES A N D REGULATIONS
relationships that would otherwise exist
between a Reserve bank In its individual
capacity and its depositors concerning
any deposits under this paragraph.
Whenever the book-entry procedure Is
applied to such Treasury securities, the
Reserve bank is authorized to take all
action necessary in respect of the bookentry procedure to enable such Reserve
bank in its individual capacity to per
form its obligations as depositary with
respect to such Treasury securities.
ib) A Reserve bank, as fiscal agent
of the United States, shall apply the
book-entry procedure to Treasury se
curities deposited as collateral pledged
to the United States under current re
visions of Department of the Treasury
Circulars Nos. 92 and 176 (Parts 203 and
202 of this chapter), and may apply
the book-entry procedure, with the ap
proval of the Secretary of the Treasury,
to any other Treasury securities de
posited with a Reserve bank, as fiscal
agent of the United States.
(c) Any person having an interest in
Treasury securities which are deposited
with a Reserve bank (in either its in
dividual capacity or as fiscal agent) for
any purpose shall be deemed to have con
sented to their conversion to book-entry
Treasury securities pursuant to the pro
visions of this subpart, and in the m an
ner and under the procedures prescribed
by the Reserve bank.
(d) No deposits shall be accepted un
der this section on or after the date of
maturity or call of the securities.
and a pledge is perfected, by any means
that would be effective under applicable
law to effect a transfer or to effect and
perfect a pledge of the Treasury securi
ties, or any interest therein, if the securi
ties were maintained by the Reserve
bank in bearer definitive form. For pur
poses of transfer or pledge hereunder,
book-entry Treasury securities main
tained by a Reserve bank shall, notwith
standing any provision of law to the con
trary, be deemed to be maintained in
bearer definitive form. A Reserve bank
maintaining book-entry Treasury securi
ties either in its individual capacity or
as fiscal agent of the United States is
not a bailee for purposes of notification
of pledges of those securities under this
subsection, or a third person in posses
sion for purposes of acknowledgment of
transfers thereof under this subsection.
Where transferable Treasury securities
are recorded on the books of a depositary
(a bank, banking institution, financial
firm, or similar party, which regularly
accepts in the course of its business
Treasury securities as a custodial service
for customers, and maintains accounts
in the names of such customers reflect
ing ownership of or interest in such
securities) for account of the pledgor or
transferor thereof and such securities are
on deposit with a Reserve bank in a
book-entry account hereunder, such de
positary shall, for purposes of perfecting
a pledge of such securities or effecting
delivery of such securities to a purchaser
under applicable provisions of law, be the
bailee to which notification of the pledge
of the securities may be given or the
§ 3 0 6 .1 1 8
T r a n s f e r or p l e d g e .
third person in possession from which
(a) A transfer or a pledge of book- acknowledgment of the holding of the
entry Treasury securities to a Reserve securities for the purchaser may be ob
bank (in its individual capacity or as tained. A Reserve bank will not accept
fiscal agent of the United S ta tes), or to notice or advice of a transfer or pledge
the United States, or to any transferee effected or perfected under this subsec
or pledgee eligible to maintain an appro tion, and any such notice or advice shall
priate book-entry account in its name have no effect. A Reserve bank may con
with a Reserve bank under this subpart, tinue to deal with its depositor in acocrdis effected and perfected, notwithstand ance with the provisions of this sub
ing any provision of law to the contrary, part, notwithstanding any transfer or
by a Reserve bank making an appro pledge effected or perfected under this
priate entry in its records of the securi subsection.
ties transferred or pledged. The making
(c) No filing or recording with a public
of such an entry in the records of a recording office or officer shall be neces
Reserve bank shall (1) have the effect sary or effective with respect to any
of a delivery in bearer form of definitive transfer or pledge of book-entry Treas
Treasury securities; (2) have the effect ury securities or any interest therein.
of a taking of delivery by the transferee
(d) A Reserve bank shall, upon receipt
or pledgee; (3) constitute the transferee of appropriate instructions, convert
or pledgee a holder; and (4) if a pledge, book-entry Treasury securities into de
effect a perfected security interest finitive Treasury securities and deliver
therein in favor of the pledgee. A trans them in accordance with such instruc
fer or pledge of book-entry Treasury tions; no such conversion shall affect
securities effected under this paragraph existing interests in such Treasury
shall have priority over any transfer, securities.
pledge, or other interest, theretofore or
(e) A transfer of book-entry Treasury
thereafter effected or perfected under
paragraph (b) of this section or in any securities within a Reserve bank shall be
made In accordance with procedures
other manner.
(b) A transfer or a pledge of trans established by the bank not inconsistent
ferable Treasury securities, or any in with this subpart. The transfer of bookterest therein, which Is maintained by a entry Treasury securities by a Reserve
Reserve bank (in Its Individual capacity bank may be made through a telegraphic
or as fiscal agent of the United States) transfer procedure.
(f) All requests for transfer or with
In a book-entry account under this sub
part, Including securities In book-entry drawal must be made prior to the ma
form under S 306.117(a) (3), is effected, turity or date of call of the securities.
§ 3 0 6 .1 1 9
ritiee.
W ith d r a w a l o f T r e a su r y
(a) A depositor of book-entry Treas
ury securities may withdraw them from
a Reserve bank by requesting delivery of
like definitive Treasury securities to it
self or on its order to a transferee.
(b) Treasury securities which are
actually to be delivered upon withdrawal
may be issued either in registered or in
bearer form, except that Treasury bills
and EA and EO series of Treasury notes
will be issued in bearer form only.
§ 3 0 6 .1 2 0
rities.
D e liv e r y
of
T r e a su r y
secu
A Reserve bank which has received
Treasury securities and effected pledges,
made entries regarding them, or trans
ferred or delivered them according to the
instructions of its depositor is not liable
for conversion or for participation in
breach of fiduciary duty even though the
depositor had no right to dispose of or
take other action in respect of the se
curities. A Reserve bank shall be fully
discharged of its obligations under this
subpart by the delivery of Treasury se
curities in definitive form to its depositor
or upon the order of such depositor.
Customers of a member bank or other
depositary (other than a Reserve bank)
may obtain Treasury securities in defini
tive form only by causing the depositor
of the Reserve bank to order the with
drawal thereof from the Reserve bank.
§ 3 0 6 .1 2 1
R e g is te r e d b o n d s a n d n o te s .
.
No formal assignment shall be requireq
for the conversion to book-entry Treas
ury securities of registered Treasury se
curities held by a Reserve bank (in either
its individual capacity or as fiscal agent)
on the effective date of this subpart for
any purpose specified in § 306.117(a).
Registered Treasury securities deposited
thereafter with a Reserve bank for any
purpose specified in § 306.117 shall be
assigned for conversion to book-entry
Treasury securities. The assignment,
which shall be executed in accordance
with the provisions of Subpart F of this
part, so far as applicable, shall be to
“Federal Reserve Bank of ---------------__ , as fiscal agent of the United States,
for conversion to book-entry Treasury
securities.”
§ 3 0 6 .1 2 2
S e r v ic in g b o o k -e n t r y T r e a s
u ry s e c u r itie s ; p a y m e n t o f in te rest,
p a y m e n t at m a tu r ity o r u p o n call.
Interest becoming due on book-entry
Treasury securities shall be charged in
the Treasurer’s account on the interestdue date and remitted or credited in ac
cordance with the depositor’s instruc
tions. Such securities shall be redeemed
and charged in the Treasurer’s account
on the date of maturity or call, and the
redemption proceeds, principal and in
terest, shall be disposed of in accordance
with the depositor’s instructions.
FEDERAL REGISTER, VOL. 3 8 , NO. 5 0 — THURSDAY, MARCH 15 , 1 9 7 3
RULES AND REGULATIONS
A p p e n d ix
to
S u bpa rt O — B o o k -E n t k t
P rocedure
RECORDS FOR FEDERAL IN C O M E TAX PU RPO SES
T h e re a re a tta c h e d th r e e d o c u m e n ts In
c o n n e c tio n w ith th e b o o k -e n try p ro c e d u re
w h ich sim p lify reco rd k e e p in g fo r F ed e ra l I n
com e ta x p u rp o ses. T h ey ap p ly to tr a n s f e r
ab le T re a s u ry b o n d s, n o te s, c e rtific a te s of
In d eb ted n ess, o r b ills Issu ed u n d e r t h e S eco n d
L ib e rty B ond A ct, as a m en d ed , a n d to “ a n y
o th e r se c u rity o f th e U n ite d S ta te s .” T h e
q u o te d te r m is d efin ed to in c lu d e a b o n d ,
n o te , c e rtific a te o f In d e b te d n e ss, b ill, d e
b e n tu r e , o r s im ila r o b lig a tio n w h ic h Is s u b
je c t t o th e p ro v isio n s o f 31 CFR P a r t 306, o r
o th e r co m p a ra b le F e d e ra l re g u la tio n s a n d
w h ic h Is Issu ed b y a n y d e p a r tm e n t o r ag en cy
o f t h e G o v e rn m e n t o f t h e U n ite d S ta te s , o r
t h e F e d e ra l N a tio n a l M o rtg ag e A sso ciatio n ,
t h e F e d e ra l H om e L o a n B a n k s, th e F e d e ra l
L a n d B a n k s, t h e F e d e ra l I n te rm e d ia te C re d it
B a n k s, t h e B a n k s fo r C o o p e rativ es, o r th e
T e n n e sse e V alley A u th o rity .
T h e th r e e d o c u m e n ts a r e :
(1) T h e s u b s ta n c e o f T re a s u ry D e p a rt
m e n t D ecisio n 7081, p u b lis h e d In t h e Federal
R e g i s t e r o n D ece m b e r 31, 1970; 1
(2) R e v e n u e R u lin g 71-21, p u b lis h e d In
I n t e r n a l R e v e n u e B u lle tin 1971-3, d a te d
J a n u a r y 18, 1971; a n d
(3) R e v e n u e R u lin g 71-15, p u b lis h e d In
I n te r n a l R e v e n u e B u lle tin 1971-3, d a te d
J a n u a r y 18, 1971.
T h e f irs t d o c u m e n t m o d ifie s th e ta x Id e n
tific a tio n ru le s re g a rd in g t h e d e te r m in a tio n
o f b a s is a n d h o ld in g p e rio d of s e c u ritie s h e ld
a s I n v e s tm e n ts . I t a p p lie s t o t h e sa le o r
tr a n s f e r o f b o o k -e n try s e c u ritie s p u r s u a n t
t o a w r itte n I n s tr u c tio n by a ta x p a y e r. I t
p e rm its th e ta x p a y e r In Its w r itte n I n s tr u c
tio n to its b a n k o r t o t h e p e rso n th r o u g h
w h o m t h e ta x p a y e r m a k e s t h e sa le o r t r a n s
fe r to Id e n tify t h e se c u ritie s b e in g so ld o r
tr a n s f e r re d by sp e c ify in g t h e u n iq u e lo t
n u m b e r w h ic h h e h a s a s sig n e d to t h e lo t
c o n ta in in g th e m .
T h e ta x p a y e r m a y m a k e t h e sp e c ific a tio n
e ith e r — (a ) In t h e w r itte n I n s tr u c tio n , o r
(b ) in t h e c ase o f a ta x p a y e r h a v in g a b o o k e n tr y a c c o u n t a t a R eserv e h a n k , i n a l i s t o f
lo t n u m b e rs w ith re s p e c t t o a ll b o o k -e n try
s e c u ritie s o n t h e b o o k s o f t h e R e serv e b a n k
so ld o r tr a n s f e r re d b y h im o n t h a t d a te :
Provided, T h e li s t is m a ile d t o o r receiv ed
by t h e R eserve b a n k o n o r b e fo re t h e le tt e r 's
n e x t b u sin e ss d a y .
T h e se p ro v isio n s a p p ly o n ly If t h e ta x p a y e r
a s sig n s lo t n u m b e r s I n n u m e ric a l se q u e n c e
to successiv e p u rc h a s e s o f s e c u ritie s In t h e
sa m e lo a n t i t l e (series) a n d m a t u r ity d a te ,
ex ecp t t h a t s e c u ritie s o f th e sa m e lo a n t i t le
(series) a n d m a tu r ity d a te w h ic h a r e p u r
c h a se d a t t h e sa m e p ric e o n t h e sa m e d a te
m a y b e In c lu d e d w ith in t h e s a m e lo t.
T h e w r itte n ad v ice o f tr a n s a c tio n f u r
n is h e d to th e ta x p a y e r b y t h e R eserve b a n k ,
o r b y h is b a n k o r a n y o th e r p e rso n th r o u g h
w h o m t h e ta x p a y e r m a k e s t h e sa le o r t r a n s
fer, w h ic h specifies t h e a m o u n t a n d t h e d e
s c rip tio n of t h e se c u ritie s so ld o r tr a n s f e r r e d
a n d t h e d a te o f t h e tr a n s a c tio n Is su fficien t
c o n firm a tio n . T h e R eserve b a n k n e e d n o t
u se o r re fe r t o t h e lo t n u m b e r.
T h e e e c o n d d o c u m e n t c o n c e rn s a n o w n er
o f s e c u ritie s w h o h a s a s sig n e d s e q u e n tia l
n u m b e rs t o h is su ccessiv e p u rc h a se s. H i e
o w n er r e ta in s f u ll I n te r e s t in t h e s e c u ritie s
b u t tr a n s f e r s th e m t o a b a n k w h ic h h a s a
b o o k -e n try a c c o u n t w ith a R e serv e b a n k , o r
1 F ile d as p a r t o f th e o rig in a l d o c u m e n t.
S ee 26 C FR 1.1012-1 (c) ( 7 ) .
FEDERAL REGISTER, VOL. 38 , NO. 50— THURSDAY, MARCH 15, 1 9 7 3
7093
RULES A ND REGULATIONS
t o a n o th e r p a r ty w h ic h tr a n s f e r s th e m to a
b a n k w h ic h h a s a b o o k - e n try a c c o u n t w ith
a R eserv e b a n k .
W h e n a t a la te r d a te t h e b a n k i n s t r u c t s
t h e R e serv e b a n k to sell o r tr a n s f e r s e c u ritie s
h e ld In b o o k e n tr y fo r its c u s to m e r, t h e b a n k
n e e d n o t r e fe r to t h e s e q u e n tia l n u m b e r
w h ic h h a d b e e n a s sig n e d o n th e o w n e r’s
books.
T h e ta x id e n tif ic a tio n r e q u ire m e n ts are
sa tis fie d if t h e o w n e r’s w r itte n i n s tr u c tio n
t o h is b a n k o r t o t h e p e rs o n th r o u g h w h o m
t h e ta x p a y e r m a k e s t h e sa le o r tr a n s f e r
su ffic ie n tly Id e n tifie s t h e s e c u ritie s t o b e
so ld o r tr a n s f e r r e d a n d re fe rs to t h e lo t
n u m b e r a s sig n e d to th e m In th e o w n e r’s
b oo ks. T h e b a n k 's in s tr u c t i o n to t h e R eserv e
b a n k w ill n o t re fe r t o lo t n u m b e rs ; t h e R e
serv e b a n k w ill c o n firm t h e s a le to th e b a n k
In t h e m a n n e r i t d e e m s a p p r o p ria te . T h e
m e m b e r b a n k w ill c o n firm t h e s a le o r t r a n s
f e r t o I ts c u s to m e r b y f u r n is h in g a w r itte n
ad v ice of t r a n s a c tio n s p e c ify in g t h e a m o u n t
a n d d e s c rip tio n o f t h e s e c u ritie s so ld a n d
t h e d a te o f sa le. T h e c o n firm a tio n n e e d n o t
re fe r t o lo t n u m b e r .
T h is d o c u m e n t a lso p e r m its s u b s ta n tia lly
t h e « ■» "« k in d of I d e n tific a tio n a n d c o n firm a
tio n p ro c e d u re s w h e n s e c u ritie s a re p u r c h a s e d
t h r o u g h t h e b o o k - e n try a c c o u n t f o r t h e
b a n k ’s c u s to m e rs .
T h e t h ir d d o c u m e n t p ro v id e s t h a t a d e a le r,
w h o p ro p e rly h o ld s s e c u ritie s in in v e n to ry in
a c c o rd a n c e w ith I 1.471-5 o f t h e In c o m e T a x
R e g u la tio n s * n d p ro p o se s to t r a n s f e r th e m
t o a b o o k - e n try s y s te m i n a R eserv e b a n k ,
w ill c o n tin u e t o m a in ta in h is b o o k s a n d re c
o rd s f o r F e d e ra l In co m e ta x p u r p o s e s w ith
re s p e c t to s u c h s e c u ritie s in a c c o rd a n c e W ith
i 1.471-5 o f t h e r e g u la tio n s a n d n o t f 1.1012-1
o f t h e re g u la tio n s .
th e s e c u ritie s in h is books. T h e n u m b e rs wUl
b e a ssig n e d in n u m e ric a l se q u en ce to su c c e s
siv e p u rc h a s e s of t h e sa m e lo a n t i tl e (series)
a n d m a tu r ity d a te , e x c e p t t h a t s e c u ritie s of
th e sa m e lo a n t i t le (series) a n d m a tu r ity
d a te w h ic h a re p u rc h a s e d a t th e sa m e p ric e
o n t h e sa m e d a te m ay be In c lu d e d in th e
sa m e lo t.
T h e o w n er p ro p o ses to r e ta in f u ll in te r e s t
in th e s e c u ritie s b u t h e wUl tr a n s f e r p o sses
sio n of th e m to a b a n k . T h a t b a n k w ill n o t
k eep re c o rd s o f t h e s e c u ritie s by u se o f th e
a b o v e -d e sc rib e d lo t n u m b e rs. T h e b a n k w ill
also ta k e p o ssessio n of lik e se c u ritie s fo r o th e r
ta x p a y e rs.
T h e b a n k w ill tr a n s f e r a ll of th e s e s e c u ri
tie s to a b o o k -e n try sy s te m o f a F ed eral
R eserv e b a n k . T h e s e c u ritie s w ill be e n tr ie s in
th e b o o k -e n try a c c o u n t o f th e b a n k a n d , as
s u c h , t h e s e c u ritie s w ill n o lo n g e r e x is t In
d e fin itiv e fo rm . T h a t a c c o u n t w ill n o t reflec t
th e f a c t t h a t t h e b a n k h o ld s se c u ritie s fo r
se v era l ta x p a y e rs.
W h en t h e o w n e r w ish e s to sell c e r ta in
se c u ritie s , h e w ill so I n s tr u c t th e b a n k in
w ritin g . T h e o w n e r’s in s tr u c tio n wiU s u f
fic ie n tly Id e n tify t h e se c u ritie s to be sold,
a n d w ill a lso re fe r t o t h e lo t n u m b e r a s
s ig n e d in th e boo ks o f th e o w n er to th e
s e c u ritie s to be so ld . T h e b a n k w ill th e n
I n s tr u c t, in w ritin g , th e F ed e ra l R eserve b a n k
t o tr a n s f e r th e s e c u ritie s . T h e l a t t e r I n s tr u c
t io n wUl n o t re fe r to t h e p e r tin e n t lo t n u m
b e r. T h e F e d e ra l R eserv e b a n k w ill co n firm
t h e sa le to t h e b a n k in th e m a n n e r i t d eem s
a p p ro p ria te . T h e b a n k w ill co n firm th e sale
t o th e o w n er by f u r n is h in g a w r itte n adv ice
of tr a n s a c tio n sp e c ify in g th e a m o u n t a n d
d e s c rip tio n of t h e s e c u ritie s sold a n d th e
d a te o f th e sa le. T h e c o n firm a tio n w ill n o t
r e fe r to lo t n u m b e rs .
W h e n th e o w n er d e sire s to b u y a d d itio n a l
S e c t i o n 1012— B a s i s o r P b o p s b t y — C o s t
s e c u ritie s as in v e s tm e n ts of t h e k in d d e
36 C F H 1.1013.1 B a tU o f p rop erty. Rev. sc rib e d in th e n ew { 1.1012-1 (c) (7) (1U) (a)
o f t h e r e g u la tio n s , h e wUl o rd er t h e b a n k to
Jtul. 7 1 -2 1 .1 A ta x p a y e r o w n s a s In v e s tm e n ts
T re a s u ry s e c u ritie s a n d o e r ta in o th e r s e c u ri p u rc h a s e th e m . T h e b a n k w ill i n s t r u c t th e
F e d e ra l R eserve b a n k to o b ta in th e s e c u ritie s
t i e s d e s c rib e d In t h e n e w I 1.1013-1 (c) (7)
a n d t o p u t th e m in th e b a n k ’s b o o k -e n try
(ill) (« ) o f t h e In c o m e T a x R e g u la tio n s . T h e a c c o u n t. T h e c o n firm a tio n of th e p u rc h a s e
ta x p a y e r o w n e r w ill a s sig n a l o t n u m b e r to fro m t h e F e d e ra l R e serv e b a n k t o t h e b a n k
a n d fro m t h e b a n k t o th e o w ner wUl b e of
1 A lso re le a se d a s T e c h n ic a l I n f o r m a tio n t h e n a tu r e u s e d fo r t h e sale o f se c u ritie s .
T h e o w n er w ill a s sig n lo t n u m b e rs in t h e
R e le ase 1063, d a te d D ec. 3 0,1 970.
m a n n e r d e sc rib e d above to th e se p u rc h a s e d
sec u rities:
Held, t h e a b o v e p r o c e d u r e is c o n s i s t e n
w ith th e ta x reco rd re q u ire m e n ts of ne
§ 1.1012-1 (c ) (7 ) o f t h e r e g u l a t i o n s . T h i s p r o
c e d u r e e x e m p lif ie s t h e t a x r e c o r d r e q u i r e
m e n ts w h e n s e c u ritie s are tr a n s fe rre d by
p a r t i e s t o a b a n k w h o h a s a n a c c o u n t in t h e
b o o k - e n t r y s y s t e m o f a F e d e r a l R e s e rv e b a n k .
T h e t a x r e c o r d r e q u i r e m e n t s in t h e c a s e o f a
b a n k w ho p u ts its ow n in v e s tm e n t s e c u ritie s
i n t h e b o o k - e n t r y s y s t e m a r e s e t f o r t h in n e w
§ 1.1012-1 (c) (7) o f t h e r e g u l a t i o n s .
S
ection
G
eneral
R
ule
for
I
n v en to ries
I n v e n t o r i e s by dealers in
Rev. R u l. 7 1 - 1 5 1 se curities. (Also se c tio n
1012; 1.1012-1.) A d e a l e r , a s d e f i n e d in s e c
t i o n 1 .471-5 o f t h e I n c o m e T a x R e g u l a t i o n s ,
h o ld s T r e a s u ry s e c u ritie s a n d o th e r s e c u ritie s
of th e U n ite d S ta te s. “O th e r sec u rities of th e
U n ite d S ta te s " m e a n s a tra n s fe ra b le bon d ,
n o t e , c e r t i f i c a t e o f i n d e b t e d n e s s , b ill, d e
b e n t u r e , o r s i m i l a r o b l i g a t i o n w h i c h Is . s u b
j e c t t o t h e p r o v i s i o n s o f 31 C F R P a r t 306 o r
o th e r co m p a ra b le F ed eral re g u la tio n s a n d
w h i c h is i s s u e d b y (1 ) a n y d e p a r t m e n t o r
agency of th e G o v e rn m e n t of th e U n ite d
S t a t e s , o r (2 ) t h e F e d e r a l N a t i o n a l M o r tg a g e
A s s o c ia tio n , t h e F e d e r a l H o m e L o a n B a n k ,
th e F e d e ra l L a n d B anks, th e Federal I n t e r
m e d ia te C re d it B an k s, th e B an k s for C o
o p e ra tiv e s,
or
th e
T ennessee
V a lle y
A u th o rity .
T h e d e a le r p ro p e rly h o ld s s u c h s e c u ritie s
i n i n v e n t o r y i n a c c o r d a n c e w i t h 5 1.471-5 o f
t h e I n c o m e T a x R e g u l a t i o n s . H e p r o p o s e s to
tr a n s fe r th o s e s ec u rities to a b o o k -e n try
sy ste m m a i n t a i n e d b y a F e d e ra l R eserve
b a n k . T h e d e a l e r w ill c o n t i n u e t o m a i n t a i n
h i s b o o k s a n d r e c o r d s f o r F e d e r a l i n c o m e la x
p u r p o s e s w i t h r e s p e c t t o s u c h s e c u r i t i e s in
a c c o r d a n c e w i t h § 1.471-5 o f t h e r e g u l a t i o n s .
H e ld , t h e d e a l e r is n o t s u b j e c t t o t h e p ro -^
v i s io n s o f § 1.1012-1 o f t h e r e g u l a t i o n s r e l a t
in g t o I d e n t i f i c a t i o n o f p r o p e r t y w i t h r e s p e c
to s u c h s ec u rities. S u c h a d e a le r m u s t, h o w
e v e r, c o m p l y w i t h t h e p r o v i s i o n s o f § 1.471-5
of th e re g u la tio n s re la tin g to in v e n to ry by
d e a l e r s i n s e c u r it ie s .
[ F R D o c .73—
4897 F il e d 3 - 1 4 - 7 3 ; 8 : 4 5 a m ]
1 Also release d as T e c h n ic a l In fo r m a tio n
R elease 1064, d a te d J a n . 14, 1971.
FEDERAL REGISTER, VOL. 38 , NO. 50— THURSDAY, MARCH 15, 1 9 7 3
No. 50—Pt. n -------3
471—
26 C F R 1 .471-5
