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FE D E R A L R E S E R V E B A N K OF D A L L A S
Station K, Dallas, Texas 7 5 2 2 2
Circular No. 84-121
December 14, 1984
TO:
All depository institutions
Reserve District
ATTENTION:
Chief Executive Officer
SUBJECT:
Request for public comment on a revision to the fee
schedule for the book-entry securities safekeeping
service
SUIUARY:
The Board of Governors of the Federal Reserve System
is requesting public comment on a proposed 75 cent fee
to cover the settlement costs associated with a
securities transfer transaction.
DETAILS:
The Board of Governors of the Federal Reserve System
has requested public comment on a revision to the fee
schedule for the book-entry securities safekeeping
service. The proposed revision is a result of a
determination by the Department of the Treasury that
the safekeeping and transfer of Treasury book-entry
securities are performed by Federal Reserve Banks as
fiscal agents on behalf of the Treasury.
in the Eleventh Federal
Accordingly, the Treasury has proposed a fee schedule
for the transfer of its book-entry securities and is
requesting comment on the proposal by January 16,
1985.
The proposal does not include any fees for
account maintenance or for the processing of payments
associated with a securities transfer. The proposed
fee of 75 cents will cover payment settlement costs.
This fee will be applied to all securities transfers
involving U.S. Treasury issues.
After combining the proposed Treasury and Federal
Reserve fees, the on-line transfer fee will be $2.25
instead of the current $3.00.
In addition, the
off-line fee will be lowered to $7.00 from the current
$10.00 fee.
Banks and others are encouraged to use the following incoming WATS numbers in contacting 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)
- 2 It is anticipated that the fees
for Treasury
book-entry securities transfers and the related funds
settlement will
be charged directly to reserve or
clearing accounts on a daily basis, rather than as
part of priced service billings. Since these proposed
changes affect
only U.S. Treasury securities, the
existing pricing and billing arrangements
will
continue to apply to agency book-entry securities
pending further review.
Interested parties are invited to submit comments to
William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution
Avenue, N.W., Washington D.C. 20551. Comments must be
received by January 16, 1985, and should refer to
Docket No. R-0534.
ATTACHMENTS:
The Board's notice and the Treasury's proposal
MORE INFORMATION:
Lynn
Vick,
(214) 651-6263 at the Head Office;
Robert W. Schultz, (915) 544-4730 at the El Paso
Branch; Andrew W. Hogwood, (713) 659-4433 at the
Houston
Branch;
or Tony G.
Valencia,
(512)
224-2141 at the San Antonio Branch
ADDITIONAL COPIES:
Public Affairs Department, Extension 6289
PRINTED IN THE FEDERAL REGISTER MONDAY, DECEMBER 3, 1984
D e p a r t m e n t of the T r e a s u r y
Fiscal
Agency:
Service
D e p a r t m e n t of t he T r e a s u r y ,
F i s c a l Service,
B u r e a u of
t h e Publ i c Debt
Action:
N o t i c e of intent to e s t a b l i s h a fee s c h e d u l e for the
t r a n s f e r of U. S. T r e a s u r y b o o k - e n t r y s e c u r i t i e s
hel d
at F e d e r a l R e s e r v e Banks.
S u m mary:
T h e D e p a r t m e n t of t he T r e a s u r y has d e t e r m i n e d t h a t fees
i m p o s e d for the t r a n s f e r of b o o k - e n t r y T r e a s u r y s e c u r i
ties b e tween d e p o s i t o r y
institutions maintaining
a c c o u n t s t h e r e f o r at F e d e r a l R e s e r v e B a nks
s h o u l d be
i d e n t i f i e d and c o l l e c t e d as T r e a s u r y fees.
m i n a t i o n has r e s u l t e d
Thi s
deter
in the f o r m u l a t i o n of a p r o p o s e d
T r e a s u r y b o o k - e n t r y fee schedule, w h i c h is h e r e i n
p u b l i s h e d for c o m ment.
E f f e c t i v e Date:
The fee s c h e d u l e
e f f e c t i v e on M a r c h
28,
set o u t
1985,
in this n o t i c e w i l l
subject to a n y c h a n g e s
be
the
D e p a r t m e n t m a y d e e m a p p r o p r i a t e as a r e sult of c o m m e n t s
received.
Final
n o t i c e of the a d o ption of the fee
s c h e d u l e will be p r o v i d e d no later than t h i r t y
(30)
d a y s prior to the a b o v e e f f e c t i v e date.
D a tes:
C o m m e n t s mus t be r e c e i v e d on or before J a n u a r y 16,
1985.
Addresses:
C o m ments s h o u l d be d i r e c t e d to the O f f i c e of
F i n a ncing,
B u r e a u of t he P u b l i c Debt, R o o m 310
Washington Building,
F o r f u rther
Washington,
information contact:
Assistant Commissioner
D. C. 20239.
Carl M. Locken,
(Financing),
Jr.,
Acting
Bure a u of t h e
P u b l i c Debt, W a s h i n g t o n ,
(202)
376-0319,
L i a i s o n Of f i c e r ,
D. C.
20239,
D. C.
20239,
or A n n e M. M e i s t e r ,
telephone
Federal Reserve
B u r e a u of the P u b l i c Debt, W a s h i n g t o n ,
telephone
(202)
376-0249.
S u p p l e m e n t a r y I n formation:
T h e F e d e r a l R e s e r v e B a nks are a u t h o r i z e d ,
of the U n i t e d States,
in a c c o u n t s
as f i s c a l agents
to m a i n t a i n T r e a s u r y b o o k - e n t r y s e c u rities
for d e p o s i t o r y i n s t i t u t i o n s a n d to t r a n s f e r
s e c u r i t i e s b e t w e e n a c c o u n t s h e l d at the same Bank,
such
or at d i f f e r
ent Banks.
Until
1981,
the T r e a s u r y c h a r g e d a fee for the t r a n s f e r of
T r e a s u r y sec u r i t i e s
time,
tie s
b e t w e e n Fe d e r a l R e s e r v e Banks.
the F e d e r a l R e s e r v e S y s t e m ' s s c h e d u l e of fees
Services has
i n c l u d e d charges
S i nce that
for S e c u r i
for bot h the m a i n t e n a n c e by
R e s e r v e B a n k s of b o o k - e n t r y a c c o u n t s and for the t r a n s f e r of
s e c u rities
b e t w e e n accounts.
As a r e s u l t of a r e c e n t review,
the T r e a s u r y has d e t e r m i n e d
that:
1) A n y fees c h a rged in c o n j u n c t i o n w i t h b o o k - e n t r y a c t i v i t i e s
p e r f o r m e d on behalf of the T r e a s u r y by the F e d e r a l R e s e r v e
Banks s h o u l d be c l e a r l y i d e n t i f i e d as T r e a s u r y fees?
2) T h e T r e a s u r y w o u l d c o n t i n u e to impose a fee on d e p o s i t o r y
i n s t i t u t i o n s for t r a n s f e r s of b o o k - e n t r y T r e a s u r y sec u r i t i e s
c o n d u c t e d by the F e d e r a l R e s e r v e Banks,
the U n i t e d States,
d i f f erent,
between accounts
Federal R e s e r v e Banks.
as f i s c a l a g e n t s of
hel d at the same,
or
3) T h e fee for a c c o u n t m a i n t e n a n c e h e r e t o f o r e i m p o s e d w o u l d be
terminated.
As the p r o p o s e d fee s c h e d u l e s h o w n b e l o w i ndicates,
T r e a s u r y p l a n s to c h a r g e a fee to d e p o s i t o r y i n s t i t u t i o n s
on-line transfer originated,
r i t y is t r a n s f e r r e d .
for each
eac h o f f - l i n e t r a n s f e r originated,
a n d e a c h o f f - l i n e t r a n s f e r rec e i v e d .
on a n a t i o n a l basis,
the
T h e fees w i l l be e s t a b l i s h e d
w i t h no v a r i a n c e for the time of d ay a s e c u
No fee shall be a s s e s s e d for tra n s f e r s
and from collateral accounts
supporting borrowings
to
f r o m the
F e d e r a l R e s e r v e or T r e a s u r y d e p o s i t s .
T h e T r e a s u r y fee re l a t e s o n l y to the tr a n s f e r of the s e c u r i
ties.
The Federal R e s e r v e w i l l a s s e s s an a d d i t i o n a l
fee for the
p r o c e s s i n g of p a y ments a s s o c i a t e d w i t h a sec u r i t i e s t r a nsfe r
t r a n s a c t i o n w h ere s e c u r i t i e s are t r a n s f e r r e d a g a i n s t payment.
T h e Fe d e r a l R e serve fee for h a n d l i n g
such pa y m e n t s
is set out in
a s e p a r a t e notice b e i n g p u b l i s h e d by the Board of G o v e r n o r s of the
F e d e r a l R e s e r v e System.
will
of
T r e a s u r y fees
be c o l l e c t e d by the Fe d e r a l
the U n i t e d States,
T h e fo l l o w i n g
for s e c u r i t i e s trans fers
R e s e r v e Banks,
as fiscal a gents
for d e p o s i t to the Treasury.
is the p r o p o s e d T r e a s u r y fee s c h e d u l e for
T r e a s u r y s e c u rities transfers:
FE E S C H E D U L E
O n - l i n e transfers o r i g i n a t e d
$1.50 per t r a nsfer
O f f - l i n e t r a nsfers o r i g i n a t e d
$6.25 per transfer
O f f - l i n e transfers
$6.25 per t r a nsfer
received
C aro l e Jones D m e e n ,
F i s c a l A s s i s t a n t Secretary.
F E D E R A L R E S E R V E SYSTEM
(Docket No.
U.S.
R-0534)
TREASURY BOOK-ENTRY SECURITIES SERVICE
AGENCY:
B o a r d of Governors o f the Federal Reserve System.
ACTION:
Request for comment.
SUMMARY:
on
a
The
proposed
secondary
Board of
fee
for
market
Go v e r n o r s
is
the
settlement
funds
book-entry
requ e s t i n g
transfer
public
comment
com p o n e n t
of
U.S.
of
the
Treasury
securi tie s .
DATE:
Co m m e n t s mus t be r e c e i v e d b y J a n u a r y 16,
ADDRESS:
may
be
Comments,
mailed
Governors
of
which
to Mr.
the
Avenue,
delivered
Room
Co m m e n t s
received
8:45 a.m.
the
and
B o a rd's
12 C.F.R.
W.
N.W.,
between
may
inspected
Regard ing
8:45
at
as
the
No.
Secretary,
Washington,
except
Docket
System,
B-2223
be
to
Wiles,
Re s e r v e
p.m.,
Rules
2 0th
D.C.
of
20551,
or
5:15
p.m.
Roo m
B-112 2
in
Board
and
an d
provi d e d
R-053 4,
Street
a.m.
Availability
I N F O R M A T I O N CONTACT:
(202/452-3954)
Division
of
Schwartz,
or
Brada
Federal
Associate
Attorney
G o v e rnors
20551.
5:15
refer
between
§ 261.6(a)
of
of
Information,
§ 261.6(a) .
FOR FURTHER
Rhoads,
William
Federal
Constitution
to
should
1985.
of
the
W.
Panther,
Reserve
General
Bank
Reserve
D.
Manypenny,
An a l y s t
Operations;
Cbunsel
(2 02/452-3 711),
Federal
Gerald
(202/452-28 31),
or
Gilbert
(202/452-362 5) o r
Legal
Division,
System,
Manager
Daniel
Board
Washington,
T.
of
D.C.
L.
SUMMARY:
The
provides
for
F e d eral
Reserve's
safekeeping
book-entry
and
transfer
securities.
B o o k - e n t r y securities
T r e a s u r y are
the principal
b o o k - e n t r y system.
Prior
securities
s e r vices w ere
Treasury.
However,
Federal
to 1981,
in
the
the
fees
service
book-entry
United
Federal
States
Reserve's
for T r e a s u r y b o o k - e n t r y
by
the
Department
implementation
Reserve services u n der
("MCA"),
of
securities
the
of
issued by
established
w ith
secu r i t i e s
of
pricing
the M o n e t a r y Control
the
for
Act of
the ac c o u n t m a i n t e n a n c e a n d s e c o n d a r y m a r k e t
T r e a s u r y b o o k - e n t r y s e c u rities w e r e
of
regarded b y
1980
transfers
the
Federal
Reserve as p r i c e d services under the MCA.
B a sed
R eserve
a nd
Treasury
upon
the
a
Treasury
Department
book-entry
Treasury
review
service
has
in
the
shou l d
roles
providing
concluded
provided
securities
of
by
be
that
the
under
determined
the
that
M£A.
fees
fiscal
a g ents
charged
will
regarded
be
for
of
the
by
se p a r a t e
requesting
public
activity.
The
as
the
comment on
Tre a s u r y ' s
service,
secondary
Banks
a
the
the
market
for
fiscal
rather
by
the
U.S.
agency
than as a p r i c e d
Tr e a s u r y
fee
the
h as
securities
the
Treasury
Treasury.
Treasury
a proposed
proposed
Federal
Tr e a s u r y b y Reserve Banks
established
announcement
the
book-entry
c o l l e c t e d b y Reserve Banks o n b e h a l f of
regard,
the
Consequently,
a c t i v i t y p e r f o r m e d on b e h a l f
as
this
Reserve
activity conducted on Treasury's behalf
service
of
In this
Department
fee sch e d u l e
sched u l e
an d
would
for
is
this
co n t a i n
-3no
charge
for
account
$ 1 . 5 0 for securities
s ecu r i t i e s
would
impose
transfers o r i g i n a t e d o n - l i n e
book-entry
two
accompanying
Federal
but
fees
of
a nd $6.25
for
transfers o r i g i n a t e d o r r e c eived o f f - l i n e . — ^
A
co n t a i n s
maintenance
sec u r i t i e s
elements,
funds
the
se t t l e m e n t
secu r i t i e s
sett l e m e n t
Reserve a nd the
element
transfer
and
m e s sage
transfer
r e l ated
typically
and
the
accounting.
The
T r e a s u r y h a v e d e t e r m i n e d that the funds
of a
securities
transfer
message
is
n ot
a
fiscal a g e n c y a c t i v i t y p e r f o r m e d b y the Reserve Banks o n b e h a l f
of
the Treasury.
Therefore,
the
fees p r o p o s e d b y
the T r e a s u r y
for this s e r vice do not include funds settlement.
S e p a r a t i o n of
securities
the
funds
settlement
activity
time
believed
the
s e c u rities
necessary
to
a re
transferred.
support
secondary
b o o k - e n t r y T r e a s u r y securities.
it
appropriate
to
a c t i v i t y i ncidental
fiscal
the
transfer e l e m ent m a y h a v e a d i s r u p t i v e e f f e c t o n
se c o n d a r y m a r k e t since the s e t t l e m e n t m a y not
same
from
agency
regard
the
funds
on
beha l f
of
the
settlement
market
activity
the
is
in
the B o ard b e l i e v e s
settlement
to the p r o v i s i o n of
service
take p l a c e at
Funds
Accordingly,
the
el e m e n t
the s e c u rities
Treasury
as
an
transfer
Department
rather than as a priced s e r vice u n der the NCA.
C u r r e n t Federal Reserve fees pr o v i d e
for a m o n t h l y
a c c o u n t m a i n t e n a n c e fee of $15 plus $0.50 p er issue in the
account, a nd transfer fees of $3 for transfers o r i g i n a t e d
o n - l i n e a nd $10 for transfers o r i g i n a t e d or r e c eived off-lin e.
±'
-4The
costs
of
a lso
pro v i d i n g
recovered
has
Board
the
from users
determined
book-entry
believes
funds
of
the
the direct,
associated
this
announced
settlement
service.
transfer
fee w o u l d c o v e r
fees
by
el e m e n t
the
a nd
incidental
service,
the
fee does n o t take
this
Federal
el e m e n t
Reserve's
should
Consequently,
fee w o u l d be
r e c over
to
the
Further,
Since
in
the
of
into a c c o u n t
is
proposed
a recovery of
the
Board
$50.75 pe r
funds
This
float costs
addition
a
be
costs.
overhead and
provision
it
re g a r d e d as
these
w o u l d be
Treasury.
is
factor.
to
support,
activity
adjustment
the
to solicit p u b l i c c o m m e n t o n a fee of
s e c u rities
with
that
to
the
settlement
fiscal
agency
the p r ivate
sector
that
income
from
costs
r a ther
than
as revenue.
By
order
Reserve System,
of
the
Board
Nov e m b e r 2 9,
of
Governors
of
the
Federal
1984.
(signed) James McAfee
James M c A f e e
A s s o c i a t e S e c r e t a r y of the B o a r d
@FedFRASER