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federal reserve
Ba n k
DALLAS, TEXAS
of
D allas
75222
Circular No. 83-4
January 10, 1983
PROPOSED REVISION OF FEE SCHEDULE
FOR BOOK-ENTRY SECURITIES SERVICES
TO ALL DEPOSITORY INSTITUTIONS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The Board of Governors has requested comment on a revised fee
schedule for its book-entry securities services. Enclosed are copies of the Board's
press release and the Federal Register document pertaining to this m atter.
Comments, which are requested by February 13, 1983, should be mailed
to Mr. William W. Wiles, Secretary, Board of Governors of the Federal Reserve
System, 20th S treet and Constitution Avenue, N.W., Washington, D.C., 20551. For
further information, please contact Charles W. Bennett, Assistant Director,
(202) 452-2738, or Gerald D. Manypenny, Manager, (202) 452-3954, Division of
Federal Reserve Bank Operations.
Additional copies of this circular will be furnished upon request to the
Public Affairs D epartment, Extension 6289.
Sincerely yours,
William H. Wallace
First Vice President
Enclosure
Banks and others are encouraged to use the follow ing incom ing WATS numbers in con tacting this Bank:
1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the
extension referred to above.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
FEDERAL RESERVE press release
For immediate release
December 23, 1982
The Federal Reserve Board today requested comment on a
revised fee schedule for its book entry securities services
(computer
recording of government securities and related wire transfers).
The Board asked for comment by February 13, 1983.
The Board's notice, including the proposed revised fee
schedule and explanation of the proposed revision, is attached.
Attachment
FEDERAL RESERVE SYSTEM
(Docket No. R-0443)
FEE SCHEDULES FOR FEDERAL RESERVE BANK SERVICES
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Request for comment.
SUMMARY:
The Board of Governors is requesting public comment on a
proposal to revise the fee structure for the Federal Reserve's
book-entry securities service.
The fee structure would be revised by
adding a maintenance fee based on the number of issues held in an
account.
DATE:
Comments must be received by February 13, 1983.
ADDRESS:
Comments, which should refer to Docket No. R-0443, may be
mailed to Mr. William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue, N . W . ,
Washington, D.C.
20551, or delivered to Room B-2223 between 8:45 a.m.
and 5:15 p.m.
Comments received may be inspected at Room B-1122
between 8:45 a.m. and 5:15 p.m., except as provided in § 261.6(a) of
the Board's Rules Regarding the Availability of Information, 12 C.F.R.
§ 2 6 1 . 6 (a).
FOR FURTHER INFORMATION CONTACT:
Charles W. Bennett, Assistant
Director
(202/452-2738)
or
Gerald D. Manypenny,
Manager
(202/452-3954) , Division of Federal Reserve Bank Operations; or
Gilbert T. Schwartz, Associate General Counsel (202/452-3625) or
Daniel L. Rhoads, Attorney (202/452-3711) , Legal Division.
SUPPLEMENTARY INFORMATION:
The Monetary Control Act of 1980 (Title I
of P.L. 96-221) ("Act") requires that fees be developed for Federal
Reserve Bank services according to a set of pricing principles
established by the Board.
The Board, in accordance with the
requirements of the Act, and after notice and comment, adopted revised
pricing principles and fee schedules for certain Federal Reserve
services.
46 F.R. 1338 (January 6, 1981).
Subsequently, the Board
adopted a fee schedule for the book-entry securities service and other
securities services on July 17, 1981, to be effective October 1,
1981.
46 F.R. 37972 (July 23, 1981).
As required by the Act, the fee
schedule adopted by the Board was designed to recover the full costs
of providing the service, plus a private sector adjustment factor of
-2 -
16 percent.
The book-entry securities service fee structure provided
for transaction fees for transfers originated on-line, originated or
received off-line, and a monthly account maintenance fee.
Since the implementation of the fee schedule in 1981, the
System has incurred a shortfall in the recovery of costs plus the
private sector adjustment factor.
The shortfall occurred because of a
greater than expected shift from the use of the relatively more
expensive off-line transfers to on-line transfers.
Further,
experience under the fee schedule during 1982 has demonstrated that
the costs of maintaining a book-entry account are directly related to
the number of issues held in that account.
Accounts with a large
number of issues are more costly to maintain than are accounts with
only several issues.
The Board has therefore determined to request public comment
on a proposed revision of the fee structure for the book-entry
service.
The fee structure would be revised to add a monthly fee for
each issue held in an account.
This per issue component would more
accurately reflect the costs of maintaining a multiple issue account
as well as recognize the benefits that accrue to such accountholders.
The individual fees for the components of the book-entry
service also would be revised to recover the costs of providing the
service, including the 16 percent private sector adjustment factor,
based on estimated 1983 volume.
The transaction fee for on-line
originations would be increased from $2 to $3.
Fees for off-line
originations and receipts would be established at $10.
The Board
believes this would more accurately reflect the cost of off-line
transactions.
The account maintenance fee would also be established
at $15 per account per month, with a $.50 charge per month for each
issue in an account.
The Federal Reserve Bank of New York would continue its "time
of day" pricing for book-entry transfers.
This procedure had been
adopted to provide incentives to shift some transfers away from
afternoon peak periods, thus avoiding difficulties related to
operational capacity constraints.
The fees for the New York Reserve
Bank on-line transfer service will average about $3 per transaction.
The proposed revised fee
book-entry securities service is:
schedule
and
structure
for
the
-3 -
Component_________________
.
Current
_____________ 1982
Proposed
1983
*0n-Line Transfers Originated
Per Transfer
$2.00
$ 3.00
Off-Line Transfers Originated
Per Transfer
8.50
10.00
Off-Line Transfers Received
Per Transfer
6.50
10.00
Account Maintenance
Per Account/
Per Month
6.00
15.00
Issues in Accounts Maintained
Per Issue/
Per Month
—
.50
*For all Federal Reserve Districts except New York.
The fee schedule
for on-line transfers originated through the Federal Reserve Bank of
New York would be:
Current
Proposed
1982
1983
Per transfer
9:00 AM - 12:00 Noon
12:01 PM - 2:00 PM
2:01 PM - Closing
$ .50
1.25
4.50
$1.00
3.00
5.00
The Board recognizes that the percentage increases
in
fees
may be significant.
However, increased fees are necessary to recover
the costs of providing the service, including the private sector
adjustment factor, as required under the Act.
Further, although the
percentage increases may be large, the Board does not believe that in
terms of absolute dollar value the revised fee schedules should have
any substantial effect on depository institutions utilizing the
Federal Reserve's book-entry service.
Comment on
February 13, 1983.
the
revised
fee
schedule
By order of the Board of Governors of
System, December 22, 1982.
is
requested
the Federal
by
Reserve
(signed) James McAfee
James McAfee
Associate Secretary of the Board
[SEAL]
@FedFRASER