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Federal reserve Bank of Dallas F IS C A L A G E N T O F T H E U N IT E D S T A T E S DALLAS, TEXAS 75222 Circular No. 76-154 November 9, 1976 American Revolution Bicentennial TREASURY PROPOSAL FOR ISSUING 52-WEEK BILLS IN BOOK-ENTRY FORM ONLY BEGINNING IN DECEMBER TO ALL BANKING INSTITUTIONS AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: Our C ircu lar No. 76-122, dated A ugust 31, 1976, indicated that the Department of the T r e a s u r y plans to p h ase out definitive T r e a s u r y b ills, beginning with the 52-week bills to be issued in December 1976, and to issue such bills in b o o k -en try form only. Fol lowing is the text of a fu rth e r p r e s s statement on this su bject, issued by the T re a s u ry De partm ent on November 3, 1976: An open meeting to d isc u ss proposed T r e a s u r y regulations to accelerate a program to place all of its m arketable se cu rities on a b o ok -en try system , eliminating issuance of en g ra v ed certificates, will be held at 2 p . m . , Monday, November 15, in Room 4121, Main T r e a s u r y Building. Comment on the reg u latio n s, p u b lish ed in the FEDERAL REGISTER Novem b e r 1, must be submitted on or before November 24, 1976, to the Bureau of the Public Debt, Washington, D . C ., 20226. More than 80 p e rc e n t of the m arketable public debt is c u rre n tly held in b o o k -en try form u n d e r a system initiated in 1968 by the T r e a s u r y and the Federal R eserve Banks. Book-entry is a m odern, efficient, safe, and expeditious method of deal ing in se c u rities that is compatible with the com puter age. It is an an sw er to the p ap erw o rk c risis created by the mounting volume of public debt t r a n s actions; it protects the investor against loss, theft, and counterfeiting; and it su bstan tially red uces the cost of issu in g , sto rin g , and d eliv erin g T re a s u ry se c u ritie s. The proposal to completely eliminate the use of definitive se cu ritie s in public debt borro w ing s will begin next month with issuance of 52-week b ills. Exceptions will be made only for a small num ber of institutional investors p rev en ted by law o r by regulation from holding se cu rities in b o o k -en try form. Definitive bills of $100,000 denomination will be available to such investors for a limited period of time. 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 offerings of 26-week bills and 13-week bills in bo o k -en try form only will follow d u rin g the f irs t nine months of 1977. Later, the program will be extended to m arketable T r e a s u r y bonds and notes. As p a r t of its program for the discontinuance of definitive T re a s u ry b ills, the T r e a s u r y will offer d ir e c t b o ok -en try custody accounts to those investors who p re fe r not to deal th ro u g h commercial b anks or other financial in stitu tions. T e n d e rs for such bo o k -en try bills may be submitted to the Bureau of the Public Debt, eith e r d ire c tly , through a Federal R eserve Bank or B ranch, o r through an institution dealing in T r e a s u r y se c u ritie s . Investors may also a r r a n g e for the tr a n s fe r of outstanding eligible issues to a b o o k-entry account at the T r e a s u r y . While such accounts will be establish ed and maintained without ch a rg e to the in v esto r, th e re will be some limitations on the se rv ices the T re a s u ry will pro v id e. The T r e a s u r y and Federal Reserve Banks a re continuing th e ir efforts of recent months to explain the operation of the proposed system to financial in stitutions, se cu rities d e a le r s , in v e s to rs , and other interested p a rtie s. A special effort will be made to familiarize the g eneral public with the system p rio r to its inception in December. Additional details concerning the system will be announced in advan ce of that time. The new T r e a s u ry regulations pu blish ed in the FEDERAL REGISTER a r e listed in Department C ir c u la r , Public Debt S eries 26-76. Printed on the following pages a r e the notice of Proposed Rulemaking and text of proposed regulation from the FEDERAL REGISTER of November 1, 1976. Comments on the proposal should be mailed no later than November 24, 1976, to the Bureau of the Public Debt, Washington, D .C . 20226. We would again u r g e you to ad vise us of any legal o r other impediments to the full use of the b o o k-en try p r o c e d u re , p rio r to the implementation of the first phase of the new p ro c e d u re in December. Any such information (together with copies of any comments on the b o ok -en try regulation you may wish to submit) should be sent to C. T . Pat Powell, Manager of o u r S ecurities Departm ent, at (214) 651-6384. Sincerely yours, T . W. Plant First Vice President Extract From FEDERAL REGISTER VOL. 41, NO. 211, Monday, November 1, 1976 p p. 47959 - 47963 issued a fte r th e effective d ates provided fo r in th e new regulations. Provision h as been m ade to p erm it in vestors to continue to subm it ten ders for T reasury bills d irect to th e F ederal R e serve Banks, o r th ro u g h com m ercial banks an d o th e r entities. T reasury bills issued in response to such tenders will be m ain tain ed on th e records of a Reserve B ank fo r th e account of m em ber banks, including those held by such banks for th e account of cus tom ers. R elated records would be m ain ta in ed in accounts a t m em ber banks or a t o th e r in stitu tio n s having accounts a t m em ber banks. T reasury bills issued p rio r to th e d ates w hen th ey will be available only in booken try form , w hich are m ain tain ed , p u r su a n t to S u b p art O, u n der th e ootional book-entry procedure a t o r th ro u g h m em ber banks, will continu e to be con vertible to definitive bills a t th e request of th e p arty fo r whose account th ey are m aintained. D e pa r t m e n t DEPARTMENT OF THE TREASURY Fiscal Service [ 31 CFR Part 350 ] REGULATIONS GOVERNING BOOKENTRY TREASURY BILLS Notice of Proposed Rule Making Notice is hereby given th a t th e D e p a rtm e n t of th e T reasu ry h as u n d er con sid eratio n new regulations (31 CFR, P a r t 350) to govern th e issuance of, an d tra n s actions in, all 52-week, 26-week and 13week T reasury bills, an d any o th e r T reasury bills w hich, a fte r specified dates, will be issued only in book-entry form , w ith ce rtain lim ited exceptions. T h e proposed new regulations are set fo rth a t th e end of th is notice. , P urpo se B e n e f it s o f B o o k - E n t r y T r e a su r y B il l s and T he purpose of these regulations is to prom ulgate rules th a t are to apply to T reasu ry bills w hich, a fte r ce rtain dates, will be issued only as book-entries, n o t in definitive (i.e., engraved) form . T he elim ination of physical securities will of fe r su b stan tial benefits to investors, th e fin an cial com m unity, an d th e T reasury by: (1) protectin g ag ain st loss, th e ft, m is h an d lin g an d cou n terfeitin g: (2) reducing th e cost of issuing, s to r ing a n d delivering T reasury securities; and (3) m oderating th e bu rden of p ap e r work created by th e m ounting volume of public d eb t tran sactio n s. F ederal R ese r ve B a n k s S u b p art B of th e proposed regulations will govern book-entry T reasury bills to be m ain tain ed in accounts a t F ederal Reserve B anks. T hese reg ulations are practically th e sam e as those now p re scribed in S u b p art O of D ep artm en t of th e T reasury C ircular No. 300, 4 th Rev., d ated M arch 9, 1973 (31 CFR, P a rt 306), except th a t th e new provisions would be m an d ato ry w ith reg ard to T reasu ry bills of the T r e asu ry S u b p art C of th e proposed regulations will govern book-entry T reasury bills to be m ain tain ed in accounts a t th e D ep a rt m en t of th e T reasury, W ashington, D.C. T his sep arate custody service is designed p rim arily for, b u t n o t lim ited to, those who plan to re ta in T reasu ry bills u n til m atu rity . Investors desiring to place th e ir bills w ith th e T reasu ry m ay m ake th e ir request on a special ten d er form , w hich m ay be su bm itted to th e D ep artm en t of th e T reasu ry eith er directly or th ro ug h a F ederal R eserve Bank. Com m ercial banks m ay also subm it tenders fo r such in vestors directly or th ro u g h a F ederal R e serve Bank. U nder S u b p art C, book-entry T reasury bills would be redeem ed a t m atu rity , or, a t a n investor’s request, reinvested (rolled-over) in o th e r T reasury bills on which ten d ers are th e n being invited. B ook-entry T reasu ry bills m ain tain ed by th e T reasu ry m ay be w ithdraw n prio r to m a tu rity upon th e request of th e in vestor. by m eans of a tra n sfe r to a booken try account m ain tain ed a t, o r through, a m em ber b ank of th e F ederal Reserve System . In addition. T reasury bills m ain tain ed at. or thro ug h , m em ber banks m ay be tra n sfe rre d to book-entry a c counts m ain tain ed a t th e T reasury. S u b p art C does n o t p erm it book-entry T reasury bills m ain tain ed a t th e T re as ury to be tran sfe rred from one account a t th e T reasu ry to a n o th er such account by sale or fo r any reason o th e r th a n one of law ful succession, an d it does n o t p ro vide fq r th e recording of pledges. Al tho ug h th e T reasu ry will h an d le tra n s fers in to an d o ut of its book-entry a c counts, it will n o t h an dle p aym ents in connection w ith such tran sfe rs, an d w ithdraw als will have to be for delivery to a n account established u n d er S u b p art B a t o r th ro u g h a m em ber b an k in th e nam e of th e T reasu ry depositor. D e f in it iv e T r e a su r y B il l s S u b p art D of th e proposed regulations will govern th e definitive T reasu ry bills w hich will be available, in th e $100,000 denom ination only, u n til D ecem ber 31, 1978, to those en tities required to hold securities in definitive form by s ta tu te or o th er relev an t au th o rity . C o m m e n t s and R e q u e s t s P ro po se d R u l e s on Com m ents on’th e proposed rules o r re quests for ad d itio n al in form atio n con cerning th em should be m ailed to th e B ureau of th e Public D ebt, W ashington, D.C. 20226, no la te r th a n N ovem ber 24. 1976. (R.S. 3706; 40 S tat. 288, 502, 844, 1309; 42 S tat. 321; 46 S tat. 20; 48 S tat. 343; 49 S tat. 20; 50 S tat. 481; 52 S tat. 447; 53 S tat. 1359; 56 S tat. 189; 73 S tat. 622; and 85 S tat. 5, 74 (31 U.S.C. 738a, 739, 752, 752a, 753, 754. 754a, and 754b); 5 UJ9.C. 301.) D ated: O ctober 29, 1976. D a v id M oss, Fiscal A ssista n t Secretary. I t is th e refore proposed to add P a r t 350 to 31 CFR to read as set fo rth below: PART 350-^REGULATI0NS GOVERNING BQOK-ENTRY TREASURY BILLS Subpart A— Applicability and Effect— Definitions Sec. 350.0 350.1 ApplicabUity and effect. Definition of term s in th is part. Subpart B— Book-Entry Treasury Bills— Federal Reserve Banks 350.2 350.3 350.4 350.5 350.6 A uthority of Reserve Banks. Scope and effect of book-entry Treas-: ury bill accounts m aintained by Reserve Bank u nder th is subpart. Transfer or pledge. Reserve Bank discharged by acting on instructions—delivery of Treas ury securities. Book-entry Treasury bill accounts. Subpart C— Book-Entry Treasury Bills— Department of the Treasury 350.7 350.8 350.9 350.10 350.11 350.12 350.13 350.14 350.15 Establishing a book-entry Treasury bill account. Transfer. A ttorney-in-fact. Succeeding fiduciaries, partners, of ficers—succeeding corporations, unincorporated associations, parnerships. Term ination of tru st, guardianship estate, life tenancy—dissolution of corporation, partnership, unincor porated association. D eath of individual (n atu ral person in own rig h t). 'Reinvestment or paym ent a t m a tu r ity. Conclusive presum ptions. Transactions in regular course—no tices n o t effective—unacceptable notices. Subpart D— Definitive Treasury Bills 350.16 Definitive Treasury bUls—available where holding of definitive securi ties required by law—term ination d ate of December 31, 1978. 350.17 Sanctions for abuse of definitive Treasury bill privilege. A u t h o r i t y : R.S. 3706; 40 S tat. 288, 502, 844, 1309; 42 S tat. 321; 46 S tat. 20; 48 S tat. 343; 49 S tat. 20; 50 S tat. 481; 52 S tat. 447; 53 S tat. 1369; 56 S tat. 189; 73 S tat. 622; an d 85 S tat. 5. 74 (31 UJ3.C. 738a, 739, 752, 752a. 753, 754. 754a. an d 754b): 5 UJ3.0. 301. Subpart A— Applicability and Effect* Definitions § 3 5 0 .0 A p p licab ility and effect. (a) Applicability. H ie reg u latio ns in th is p a rt govern th e issuance of, a n d tran sa ctio n s in, th e following T reasury bills: (1) 52-week T reasu ry bills issued a fte r D ecem ber 1,1976; (2) 26-week T reasury bills issued a fte r Ju n e 1,1977; (3) 13-week T reasu ry bills issued on o r a fte r S eptem ber 1,1977; an d (4) Any o th e r T reasury bills issued a fte r Septem ber 1, 1977, including, b u t n o t lim ited to, ta x a n ticip atio n T reasury bills. (b) Effect. T h e T reasury bills de scribed in p a ra g ra p h (a) shall, a fte r th e d a te specified th erefor, be issued only in boo k-entry form , except as provided in S u b p art D. § 3 5 0 .1 D e fin itio n o f term s in this part. I n th is p a rt, unless th e co n text o th e r wise requires o r in d icates: (a) “T reasury bill” m ean s a n obliga tio n of th e U nited S ta te s issued un d er S ection 5 of th e Second L iberty Bond Act, as am ended (31 U.S.C. 754). (b) “B ook-entry T reasu ry b ill” m eans an y T reasury bill issued on o r a fte r th e d ates specified in § 350.0(a) in th e form of a n e n try on th e records of a Reserve B ank o r th e records of th e T reasury. (See D ep artm en t of th e T reasury C ir cular, Public D ebt Series No. 27-76, d e scriptive of th e issue an d sale of booke n try T reasury bills.) (c) “D efinitive T reasury bill”, as used in S u b p art D, m eans a T reasu ry bill of th e $100,000 denom ination issued in th e form o f a n engraved certificate. (d) “C ertified req uest” or “certified sta te m e n t”, as used in S u b p art C of th is p a rt, m eans a request o r sta te m en t signed by o r on b eh alf of a depositor an d certified by a n officer authorized to cer tify assignm ents of T reasury securities u nd er D ep artm en t o f th e T reasury c i r cu lar No. 300, cu rre n t revision, th e gen era l regulations governing U.S. securi ties. (e) “B ureau” m eans B ureau of th e Public Debt, W ashington, D.C. 20226. (f) “D epositor”, as used in S u b p art C, m eans th e individual, fiduciary, o r o th er en tity in whose nam e (including, w here ap p ro priate, th e title of a n officer) a n account is established a n d m ain tain ed on th e books of th e T reasury. (g) “F id u ciary ”, as used in S u b p art C, of th is P a rt, m eans a n executor, adm in istra to r, tru ste e; a legal gu ardian, com m ittee, conservator o r sim ilar rep resen tativ e appointed by a co u rt fo r th e estate of a m in or o r incom petent; a cus to d ian u n d er a s ta tu te auth orizing gifts to m inors; a n a tu ra l g u ard ian of a m i n o r; a vo lu ntary g u ard ian ; o r a life te n a n t un d er a will. (h) “M em ber b an k ” m eans any n a tio n al bank, o r S ta te ban k or o th e r b an k o r tru s t com pany, w hich is a m em ber of a R eserve Bank. (i) "N atu ral g u ard ia n ”, as used in S u b p art C, m eans eith er p a re n t of a (1) As co llateral pledged to a Reserve m in or or o th e r person ac tin g o n th e B ank (in its individual capacity) fo r a d m in o r’s behalf. (j) “Pledge” includes a pledge of, or vances by it; (2) F or a m em ber b an k foe.its sole a c any o th e r security in te re st in, booken try T reasu ry bills as collateral fo r co u nt; (3) F o r a m em ber b an k held fo r th e loans o r advances, o r to secure deposits of public m oneys o r th e perform ance of acco u nt of its custom ers (see § 350.6); a n obligation. (4) I n connection w ith deposits in a (k) “Reserve B ank” m eans a F ederal m em ber b an k of fun ds of S tates, m unici Reserve B ank an d its branches, actin g palities, o r o th e r political subdivisions; as Fiscal A gent of th e U nited S tates o r and, w here indicated, actin g in its in (5) in connection w ith th e p erform dividual capacity. ance of a n obligation o r du ty u n d er F ed (1) “T ax pay er identifying num ber” eral, S tate, m unicipal, o r local law, o r m eans th e ap p ro p riate id en tifying n u m jud gm en ts or decrees of courts. b er as required on ta x re tu rn s a n d o th e r T h e m ain ten ance by a Reserve B ank of docum ents subm itted to th e In te rn a l book-entry T reasu ry bills u n d er th is p a r R evenue Service, i.e., a n individual’s so cial security num ber o r a n em ployer ag ra p h sh all n o t derogate fro m o r a d id entification num ber. A social security versely affect th e relation sh ip s th a t account num ber is com posed of n ine would otherw ise exist betw een a R eserve digits separated by tw o hyphens, fo r ex B ank in its individual capacity a n d th e am ple, 123-45-6789; a n em ployer iden en tities fo r w hich accounts are m a in tification num ber is com posed of nine tained. T h e Reserve B ank is authorized digits sep arated by one hyphen, fo r ex to tak e all actio n necessary in respect of am ple, 12-3456789. T h e hyphens a re a n book-entry T reasury bills to enable such essential p a rt of th e num bers an d m u st Reserve B ank in its individual capacity to perform its obligations as depositary be included. (m ) “T reasu ry ” m eans D ep artm en t of w ith respect to such bills. (b) Use as collateral under Treasury th e T reasury. (n) “V oluntary g u ard ia n ”, as used in circulars. E ach Reserve B ank, as F iscal S u b p art C, m eans th e person who is Agent of th e U nited S tates, sh all hold in actin g fo r a n individual who is in c ap a book-entry form T reasury bills pledged citated by reason of age, infirm ity, or as collateral to th e U nited S tates u n d er cu rre n t revisions of D ep artm en t of th e m en tal disability. T reasu ry C irculars No. 92 a n d No. 176 Subpart B— Book-Entry Treasury Bills— — (P a rts 203 an d 202 of th is c h a p te r). Federal Reserve Banks § 3 5 0 .2 A u thority o f R eserve B ank s. § 3 5 0 .4 T ran sfer or p led g es. (a) R eserve B a nk records. A tra n sfe r E ach Reserve B ank is hereby a u th o r o r a pledge of book-entry T reasu ry bills ized, in accordance w ith th is su b p art, to to a Reserve B ank (in its individual (a) Issue book-entry T reasu ry bills by capacity o r as Fiscal A gent of th e U nited m eans of en tries on its records, w hich S ta te s), o r to th e U nited S tates, o r to shall include th e nam e of th e B ank’s de any tran sfe re e o r pledgee eligible to positor, th e la tte r ’s em ployer identifica m a in ta in a n ap p ro p riate book-entry ac tio n num ber, w here app rop riate, an d th e count in its nam e w ith a Reserve B ank am o u n t an d m a tu rity d ate of th e bills, u n d er th is su b p art, is effected an d p er including th e CUSIP num ber of each fected, n o tw ith stan d in g an y provision of lo an ; (b) issue a confirm ation of tra n s law to th e co n trary , by a R eserve B ank action in th e form of a n advice (serially m aking a n ap p ro p riate e n try in its num bered or o th erw ise), w hich specifies records of th e T reasury bills tra n sfe rre d th e am ount, m a tu rity d ate an d CUSIP or pledged. T h e m aking of such a n en try n um ber of th e bills, as well as th e d ate of in th e records of a Reserve B ank sh all th e tran sa ctio n ; an d (c) otherw ise serv (1) have th e sam e effect as th e delivery ice an d m a in ta in book-entry T reasury of T reasu ry bills in b ea rer definitive form ; (2) have th e effect of a tak in g of bills. delivery by th e tran sfe re e o r pledgee; (3) § 3 5 0 .3 Scop e and effect o f book -en try co n stitu te th e tran sfe re e or pledgee a T reasury bill accou nts m aintained by holder; an d (4) if a pledge, effect a p er R eserve B ank un der th is subpart. fected secu rity in te re st th e re in in favo r (a ) Scope and effect of accounts m a in of th e pledgee. A tra n sfe r or pledge of tained by R eserve B ank. E xcept as p ro T reasu ry bills effected u n d er th is p a ra vided in S u b p art D of th is P a rt, each R e g rap h shall h ave p rio rity over an y tra n s serve Bank, as Fiscal A gent of th e U nited fer, pledge, o r o th e r in terest, th ereto fo re S tates, is authorized to m a in ta in book- o r th e re a fte r effected o r perfected u n d er en try T reasury bills in accounts held in p a ra g ra p h (b) of th is section o r in any its individual capacity, u n d er term s and o th e r m anner. (b) M em ber banks and others. A tra n s conditions w hich in dicate th a t th e R e serve B ank will con tin ue to m ain ta in fe r of a pledge of book-entry T reasury such deposit accounts in its individual bills, o r any in te re st th erein , m ain tain ed capacity, n otw ithstand in g app licatio n of by a R eserve B ank (in its individual th e boo k -en try procedure to such bills. capacity or as F iscal A gent of th e U nited S tates) in a book-entry account un d er T h is p ara g ra p h is applicable, b u t n o t th is sub p art, including book-entry T re as lim ited, to book-entry T reasury bills u ry bills in accounts a t th e R eserve B ank m ain tain ed u n d er § 350.3(a) (3) by m em m a in ta in e d : b er banks fo r th e account of th e ir cus th e account of th e ir custom ers, and as tom ers, is effected, an d a pledge is p er otherw ise specified in § 350.3: P u rch as fected, by any m eans th a t would be effec ers of book-entry T reasury bills, on orig tive un der applicable law to effect a in al issue or otherw ise, m ay have such tra n sfe r or to effect an d p erfect a pledge bills m ain tain ed a t m em ber banks, or in of th e T reasu ry bills, or any in terest accounts m ain tain ed a t en tities provid th erein , if th e T reasu ry bills w ere m ain ing securities safekeeping services fo r ta in ed by th e R eserve B ank in bearer custom ers (e.g., nonm em ber banks or definitive form . F o r purposes of tran sfe r th r if t institu tio ns, or securities dealers) o r pledge hereunder, book-entry T reas w hich have related accounts a t m em ber ury bills m ain tain ed by a Reserve B ank banks. (2) Identification of accounts. Bookshall, no tw ith stan d in g an y provision of law to th e con trary, be deem ed to be en try accounts m ay be established in m ain tain ed in b earer definitive form . A such form or form s as custom arily p er Reserve B ank m ain tain in g book-entry m itted by th e en tity (e.g., m em ber bank, T reasu ry bills eith er in its individual or o th er banking o r th r if t in stitu tio n , or capacity o r as F iscal A gent of th e U nited a securities dealer) m ain tain in g them , S tates is n o t a bailee fo r purposes of provided identification of each custom er n otification of pledges of those bills u n account is possible by nam e, address and d er th is p ara g ra p h o r a th ird person in tax p ay er identifying num ber, an d in possession fo r purposes of acknow ledg cludes ap p rop riate loan and tra n s a c m en t of tra n sfe rs th ereo f u n d er this tio n d ata. (3) Pledges and transfers. W here bookp arag rap h . A Reserve B ank will n o t ac cept notice or advice of a tran sfe r or en try T reasury bills are m ain tain ed on pledge effected o r perfected u nder th is th e books of a n en tity for account of p arag rap h , an d any such notice or advice th e pledgor or tran sfe ro r thereof, such sh all have no effect. A Reserve B ank m ay en tity shall, for purposes of perfecting continue to deal w ith its depositor in ac a pledge of such T reasury bills or effect cordance w ith th e provisions of th is sub ing th e ir delivery to a p urch aser und er p a rt, no tw ith stan d in g any tra n sfe r or applicable provisions of law, be th e bailee pledge effected o r perfected u nder this to which notification of th e pledge of th e bills m ay be given or th e th ird person p arag rap h . (c) Filing and recording unnecessary.in possession from w hich acknow ledg No filing or recording w ith a public r e m en t of th e holding of th e bills for th e cording office o r officer sh all be neces purchaser m ay be obtained. (b» Servicing book-entry Treasury sary o r effective w ith respect to any tra n sfe r o r pledge of book-entry T re a s bills— payment of book-entry Treasury bills at maturity. B ook-entry T reasury u ry bills o r any in te re st th erein bills m ay be tran sferred between ac fd) Transfer by Reserve Banks. A counts prior to m a tu rity th ro ug h a wire tra n sfe r of book-entry T reasu ry bills tran sfe r arran g em en t m aintained by w ithin a Reserve B ank shall be m ade Reserve Banks. At m atu rity, th e bills in accordance w ith procedures estab sh all be redeem ed an d charged by a R e lished by th e Reserve B ank n o t incon serve B ank in th e account of th e U nited siste n t w ith th is subpart. T he tran sfe r S tates T reasury as of th e d ate of m a of book-entry T reasury bills by a R e tu rity , and th e redem ption proceeds shall serve B ank m ay be m ade th ro u g h a te l be disposed of in accordance w ith th e egraphic tra n sfe r procedure. instru ctio n s from th e m em ber bank or (e) Timeliness of requests. All requestso th er Reserve B ank depositor for whose fo r tra n sfe r or any authorized tra n s a c account th e T reasury bills shall have tio n m ust be received prio r to th e m a been m aintained tu rity of th e bills. § 3 5 0 .5 R eserve B ank discharged Itj ac tion o n instructions— delivery o f T reasury securities. A Reserve B ank w hich h as received book-entry T reasury bills and effected pledges, m ade en tries regarding them , or tran sfe rred or delivered them accord ing to th e instruction s of its depositor is n o t liable fo r conversion or fo r p a r ticip atio n in b reach of fiduciary duty even th o u g h th e depositor h ad no rig h t to dispose of or tak e o th er actio n in respect of th e securities. A Reserve B ank shall be fully discharged of its obliga tions un d er th is su b p art by th e tran sfe r o r delivery of book-entry T reasu ry bills upon th e order of its depositor. Subpart C— Book-Entry Treasury Bills— Department of the Treasury § 3 5 0 .7 E stab lishing a book-entry T reas ury bill accou nt, (a> General—T reasury bills m ay be held as book-entries in accounts m a in ta in ed by th e T reasury. Such accounts m ay be established, eith er upon ¥ th e original issue of book-entry T reasury bills or upon th e subsequent tran sfe r of such bills to th e T reasury, but no la ter th a n one m onth prio r to th e ir m atu rity date. E ach account shall consist of an en try show ing th e am ount, m a tu rity date an d CU SIP num ber of th e bills, th e nam e of th e individual, fiduciary or o th er en tity (including, w here ap p rop riate, th e § 3 5 0 .6 B ook-entry T reasury b ill ac title of a n officer) for whom th e account counts. is held, th e address, an d th e taxp ay er (a) Scope and effect of book-entry identifying num ber. T h e records shall Treasury bill accounts— (1) Classes of also include ap p ro p riate tran sactio n accounts. R eserve B anks are authorized d ata. (b> Recordation— (1) Individuals. Ac to m a in ta in book-entry T reasury bills counts for book-entry T reasury bills m ay for m em ber banks of th e F ederal R e be held in th e nam es of individuals in one serve System fo r bills th e m em ber banks of two form s: single nam e, i.e., “Jo h n hold fo r th e ir own account, or hold for A. Doe (123-45-6789) (address) ” ; o r two nam es, i.e., “Jo h n A. Doe (123-45-6789) (address) o r (M rs.) M ary B. Doe (98765-4321). No o th e r form of reco rdation in two nam es, w hether individuals or others, will be perm itted, except in th e case of "co-fiduciaries. (2) Others. Accounts fo r b o ok-entry T reasury bills m ay be held in th e nam es of fiduciaries an d o th e r en tities in th e form s ind icated by th e follow ing ex am ples: Jo hn Sm ith and F irst N ational Bank, exec utors of th e will of Jam es Sm ith, deceased (12-3456789) (address). Sm ith M anufacturing Company, Inc., Jam es Brown, Treasurer (12-3456789)- (ad dress) . Grey and W hite (12-3456789), Jo hn Grey, General P artn er (address). Jo hn Doe, Secretary-Treasurer of Local 100, Brotherhood of Locomotive Engineers, an unincorporated association (12-3456789) (address). John R. Greene, as n atu ral guardian of Max ine Greene (123--45-6789) (address). John A. Jones, as voluntary guardian of HenryM . Jones (123-45-6789) (address). (c) Confirmation of transaction —T he T reasury will issue to each accou n t holder a confirm ation of tran sa ctio n in th e form of an advice (serially num bered or otherw ise) w hich sh all describe th e am ount, m a tu rity d ate an d CU SIP n um b er of th e book-entry T reasu ry bills m ain tain ed u n d er th is su bp art, a n d in clude p ertin en t tran sa ctio n d ata. § 3 5 0 .8 T ran sfer. B ook-entry T reasury bills m ain tain ed under th is su b p a rt m ay n o t be tra n s ferred from one account m ain tain ed by th e T reasury to an o th er such account, except in cases of law ful succession, as provided in th is subp art. T hey m ay be w ithdraw n from a n acco u nt m ain tain ed by th e T reasu ry h ereu n d er an d tra n s ferred th ro ug h a Reserve B ank to an a c count m ain tain ed by or th rou g h a m em ber bank und er S u b p art B, w hich tra n s fe r shall be m ade in th e nam e o r nam es appearing in th e account recorded on th e books of th e T reasury. Such w ith draw al m ay be effected by a certified re quest th e re fo r by o r on behalf of th e acco u nt holder, provided th e request th erefo r is received no earlier th a n te n (10) business days a fte r th e issue d ate o r th e d ate th e securities a re tran sfe rred to th e T reasury, w hichever is later. T he r e quest m ust: (a) Id en tify th e book-entry account by th e nam e of th e depositor and title, if any, th e address, a n d th e tax p ay er identifying num ber; (b) spec ify by am ount, m a tu rity d a te an d CUSIP num ber th e book-entry T reasury bills to be w ithdraw n an d tran sfe rre d ; and'(c> specify th e nam e of th e m em ber bank to o r th ro u g h w hich th e tra n sfe r is to be effected and, w here appropriate, th e nam e of th e in stitu tio n o r en tity which is to m ain ta in th e book-entry a c count. I n th e case of book-entry T re as ury bills held in th e nam es of two in dividuals, a certified request by eith er will be accepted, b u t th e tra n s fe r sh all be m ade in th e nam es of both. § 3 5 0 .9 A tto m ey -in -fa ct. A request by a n a tto rn e y -in -fa c t for any tran sa c tio n in b oo k-entry T reasury bills a fte r th e ir original issue will be recognized in accordance w ith th is sub p a r t if supp o rted by a n ad equ ate power of atto rn ey T h e original pow er o r a photocopy show ing th e g ra n to r’s au to g rap h sig nature, properly certified, m ust be subm itted to th e B ureau. A request fo r tra n sfe r fo r th e a p p a re n t benefit of th e a tto rn e y -in -fa c t will n o t be recog nized unless expressly authorized. § 3 5 0 .1 0 S u cceed in g fid u ciaries, part* ners, officers— su cceed in g corpora tio n s, un in corp orated association s, p artnerships. (a) Death of fiduciary, partner or of ficer.—In case of th e death, rem oval o r disqualification of a fiduciary, p a rtn e r or officer of a n organization in whose nam e book-entry T reasury bills h av e been re corded, th e successor oi* o th e r authorized p erson will be recognized as th e depositor u n d er th is su bp art. P roof of d eath, res ignation, rem oval or disqualification, as th e case m ay be, and evidence th a t th e successor o r such o th e r person is fully authorized to ac t m ust be sub m itted to th e B ureau. P roof of d ea th shall be in th e form of a d eath certificate or pho to copy th ereof showing th e official seal. Evidence of au th o rity should be in th e form of a certified sta te m e n t by: (1) T h e surviving fiduciary o r fiduciaries, if any, sta tin g th a t application fo r th e a p p o in tm en t of a successor h a s n o t been m ade, is n o t contem plated an d is n o t necessary un d er th e term s of th e tru s t In stru m en t or otherw ise, (2) a surviving p a rtn e r or p a rtn e rs th a t th e p artn e rsh ip is being continued in th e sam e, or a n o th er nam e, w hich m ust be identified, or (3) th e secretary or o th er authorized officer of th e corporation or unincorpo ra te d association as to th e nam e an d title of th e successor officer. If th e re is m ore th a n one surviving fiduciary, a request fo r tra n sfe r of th e bills m u st be signed by all, unless evidence is subm itted to th e B ureau th a t one is auth o rized to ac t fo r th e o th e r o r others. If th e re is m ore th a n one surviving p artn e r, evidence should be subm itted to th e E u reau as to w hich survivor is authorized to a c t in behalf of th e p a rtn e rsh ip ; otherw ise, th e sign a tu re s of all surviving p a rtn e rs will be reauired fo r tra n sfe r of th e bills. (b) Succeeding corporations, unincor porated associations or partnerships.—If a co rporation h a s been succeeded by a n o th e r corporation, o r if a n unincorpo ra te d association o r p artn e rsh ip h as been succeeded by a corporation, an d such succession is by o p eratio n of law or otherw ise, as th e resu lt of m erger, con solidation, reincorporation, conversion o r reorganization, o r if a law ful succession h as occurred in an y m a n n er w hereby th e business o r activities of th e original o r g an ization a re continued w ith o u t su b s ta n tia l change, a n auth orized officer o r p a rtn e r, as th e case m av be, of th e suc cessor organ izatio n will be recognized as th e depositor u n d er th is su b p a rt upon subm ission to th e B ureau of satisfacto ry evidence of such succession. § 3 5 0 .1 1 T erm in ation o f trust, guard iansh ip estate, lif e tenancy— d issolu tion o f corp oration , partnership, u n incorporated association. (a) Termination of trust, life tenancy or guardianship estate.— (1) Trust or life estate. U pon th e term in atio n of a tru s t son o r persons rela te d to th e decedent by blood o r m arriage, b u t no paym ent will be m ade p rio r to m a tu rity of th e bills. T he provisions of th is section are fo r th e convenience of th e T reasu ry an d do n o t p u rp o rt to d eterm ine ow nership of th e bills or of th e ir redem ption p ro ceeds. or life estate, th e beneficiary or rem ain d erm an will 'be recognized as th e deposi § 3 5 0 .1 3 R ein vestm en t or p aym ent at to r u n d er th is sub p art. T he tru ste e will be m aturity. required to subm it to th e B ureau a c e r (a) Request for reinvestment.—U pon tified sta te m e n t concerning th e te rm in a tio n of th e tru s t a n d th e respective th e request of th e individual, fiduciary shares, if th e re is m ore th a n one benefi or o th er en tity in whose nam e th e ac ciary. In th e case of a life estate, proof count is m aintained, book-entry T re as of d eath in th e form of a d eath certifi ury bills held th e re in w ill be reinvested cate or photocopy th ereo f showing th e a t m atu rity , i.e., th e ir proceeds a t m a official seal will be required, to gether tu rity will be applied to th e purchase of w ith a certified sta te m e n t identifying the new T reasury bills a t th e average price rem ainderm an, and, if th e re is m ore (in th ree decim als) of accepted com th a n one, specifying th e respective petitive bids fo r such T reasu ry bills th e n being offered. T he request fo r a re in shares. (2) Guardianship. A fo rm er m inor or vestm ent m ay be m ade on th e te n d er incom petent will be recognized as the form a t th e tim e of p u rch ase; subse depositor u nd er th is su b p a rt upon su b quen t requests fo r reinvestm ent will be m ission to th e B ureau of a certified s ta te accepted if received by th e B ureau no m ent, o r o th e r evidence showing, in th e la te r th a n ten (10) business days prio r case of a m inor, a tta in m e n t of m ajority to th e m a tu rity of th e bills. T he differ o r o th er rem oval of the legal disability, ence between th e p a r value of th e m a and, in th e case of an incom petent, his tu rin g bills an d th e issue price of th e new bills will be rem itted to th e sub resto ratio n to com petency. (b) Dissolution of corporations, unin scriber in th e form of a T reasury check. Requests for th e revocation of th e re in corporated associations and partner ships.—T he person or persons entitled vestm ent of bills will also be accepted (o th er th a n creditors) to th e assets upon if received no la te r th a n te n (10) b usi dissolution of a corporation, unincorpo ness days prior to th e m a tu rity date. (b) Reinvestment in cases of delay. ra te d association or p artn e rsh ip will be recognized u nd er this su b p a rt upon proof W here a delay occurs in th e subm ission of dissolution. If th e re is m ore th a n one or receipt of evidence to su pport a re person en titled and th e book-entry quest fo r tra n sfe r, paym ent or o th er T reasury bills have n o t m atured , no authorized tran sa c tio n of b o ok-entry change in th e book-entry account will be T reasury bills, an d such delay is likely m ade pending tran sfe r or redem ption a t to extend beyond th e m a tu rity dates of th e bills, upon request o r p rio r notice, m a tu rity th e bills will be redeem ed, a t m a tu rity § 3 5 0 .1 2 D e a th , o f individual (natu ral or th e re a fte r, an d th e ir proceeds re in person in ow n r ig h t) . vested in new book-entry T reasu ry bills. U pon th e d eath of an individual in T h e bills purchased upon such rein vest whose nam e a n account is held an d who m en t sh all be those having th e sh o rtest was n o t actin g as a fiduciary o r in any te rm to m a tu rity th e n being offered, an d o th e r rep resen tativ e capacity, th e follow will be issued a t th e average price (in ing p erso n (s), in th e num erically in th ree decim als) of th e accepted com pe dicated order of preference, will be rec titiv e bids th erefo r. T h e discount rep re ognized u n d er th is su b p a rt as en titled to senting th e difference betw een th e p a r value of th e m atu rin g o r m atu red bills th e book-entry T reasury bills: (a) T he surviving jo in t designee of an an d th e issue price of th e new bills will acco u nt in th e nam es of two individuals, be rem itted in th e form of a T reasu ry check. if any; (b) E xecutor or ad m in istra to r (c) Payment. If reinvestm ent is n o t (c) Widow o r widower; ‘effected p u rsu an t to th is section, book(d) Child o r children of th e decedent en try T reasu ry bills will be paid as of an d descendants of deceased children by m a tu rity in regu lar course. rep resen tatio n ; (e) P a re n ts of th e decendent or th e § 3 5 0 .1 4 C onclusive preseumption%, survivor of th em ; F o r th e purposes of th is su b p a rt an d (f) Surviving b ro th ers or sisters; n o t w ithstanding' an y S ta te law o r any (g) D escendants of deceased b ro th ers regulation or any notice to th e co n trary , or sisters; it sh all be conclusively presum ed (A) (h) O th er n ex t-o f-k in as determ ined th a t any depositor in whose nam e, o r by th e laws of th e dom icile a t th e tim e nam e an d title, book-entry T reasury bills of d eath. are recorded is a co m petent adult, Ob) Any person o r persons en titled in th e above order of preference m ay request th a t reco rd atio n in tw o nam es, a s ,p re paym ent or o th e r disposition to any p er scribed in 1 350.7(b)(1), is intended, if th e re is a n a tte m p t to c re ate some o th e r fo rm of reco rd atio n in tw o nam es, (c) th a t record atio n in th e n am es of th e firs t tw o is intended, if th e re is a n a t te m p t to nam e m ore th a n tw o individ uals, an d (d) th a t th e first n am e is th e depositor in any case (n o t authorized an d n o t otherw ise provided fo r in th is sub p a rt) w herein a n a tte m p t is m ade to have book-entry T reasu ry bills recorded in tw o o r m ore nam es, e.g., tw o officers of a n o rganization o r two p artn e rs. § 3 5 0 .1 5 T ransactions in regular course— n o tic es n o t effective— u n a ccep tab le n otices. (a) Transactions in regular course— notices not effective. T ran sfers of booke n try T reasury bills, pay m en t thereo f o r rein vestm ent a t m a tu rity o r an y o th e r tran sa c tio n th e re in will be conducted in th e reg u lar course of business in accord an ce w ith th is sub part, n o tw ith stan d in g notice of th e ap p o in tm en t of a n a tto r n e y -in -fa c t, o r a legal g u ard ia n or sim ila r rep resentative, o r notice of successorship, th e te rm in atio n of a n estate, th e dissolution of a n en tity , o r th e d e a th of a n individual, unless th e requisite re quest, proof, a n d th e evidence necessary to estab lish e n titlem e n t u n d er th is su b p a r t is received by th e B u reau n o la te r th a n te n (10) business days p rio r to th e m a tu rity d a te of th e bills. (b) Unacceptable notices. T he T reas ury w ill n o t u n d e r an y conditions accept notices of p ending ju d icial proceedings, o r of ju d g m en ts in fav o r of creditors or o thers, o r of an y claim s w hatsoever, fo r th e purpose of suspending o r m odifying an y bo ok -en try account o r an y tra n sa c tio n In book-entry T reasu ry bills. Subpart D— Definitive Treasury Bills § 3 5 0 .1 6 D e fin itiv e T reasury b ills— a vailab le w here h o ld in g o f d e fin itiv e secu rities req uired b y law— term in a — tion d ate D ecem b er 3 1 ,1 9 7 8 . (a) General. E ach Reserve B ank is a u th orized to issue definitive T reasu ry bills, in th e $100,000 denom ination only, upon o riginal issue o r otherw ise (1) to any e n tity described in p a ra g ra p h (b) of th is section, an d (2) fo r th e acco u n t of any such en tity described in p a ra g ra p h (b) of th is section, to a securities d ealer or b roker or an y financial in stitu tio n w hich in th e reg u lar course of its business p u rchoses securities th erefo r. (b) Eligible entities. E n tities eligible to h ave definitive T reau ry bills a re th o se required by o r p u rsu a n t to F ederal, S tate, m unicipal o r local law to hold o r to pledge securities in definitive form , w hich m ay include, b u t a re n o t lim ited to : a S tate, m unicipality, city, tow nship, county or any o th e r p olitical subdivision, public co rpo ratio n o r o th e r public body, a n in su ran ce com pany, a b an k o r o th e r finan cial in stitu tio n , a n d a fiduciary so required to hold securities in definitive form . (c) Conversion of book-entry Treasury bills. E ach R eserve B ank is hereby a u thorized to effect, upon th e o rd er of its depositor, conversions fro m an d to booke n try T reasury bills of definitive bills is sued p u rsu a n t to th is su b p art. (d) Evidence of eligibility. I n ord er to o btain a definitive T reasu ry bill on orig in a l issue o r th e re a fte r (1) a n a u th o r ized officer on b ehalf of th e en tity m ust fu rn ish to th e R eserve B ank a certified sta te m e n t th a t it is req uired by, or p u r su a n t to, law to hold o r pledge securities in definitive form ; or (2) a financial in stitu tio n , d ealer, o r broker pu rch asin g definitive T re asu ry bills h ere u n d er fo r th e accou n t of an y such en tity m u st su b m it to th e R eserve B ank a certified s ta te m e n t th a t th e en tity h a s declared th a t it is required by o r p u rsu a n t to law to hold o r pledge securities in definitive form . (e) Redemption requirements. W here a definitive T reasu ry bill issued p u rsu a n t to th is su b p a rt is presen ted fo r p ay m e n t a t or a f te r m a tu rity , it m u st be a c com panied by a sta te m e n t (1) by a n a u th orized officer of th e en tity m aking th e p rese n tatio n th a t such en tity is eligible u n d er th is su b p a rt to hold definitive se curities, or (2) by th e in stitu tio n m aking th e p rese n tatio n iden tify in g th e en tity to whose acco u n t th e red em ption p ro ceeds of th e bill have befen or are to be credited, a n d certify in g th a t such en tity h a d declared th a t it is eligible u n d er th is su b p a rt to hold definitive securities. (f) Termination date. T he provisions of th is su b p a rt will apply only to defini tive T reasury bills issued to, or fo r th e account of, eligible en tities p rio r to De cem ber 31, 1978. § 3 5 0 .1 7 S a n c|io n s fo r a b u se o f d e fin i tive T reasury b ill p riv ileg e. T h e S ecretary of th e T reasu ry reserves th e rig h t to disqualify an y eligible en tity described in p a ra g ra p h (b) o f § 350.16 fro m p u rch asin g o r holding definitive T reasu ry bills if h e determ ines th a t such en tity h as disposed of such definitive T reasury bills solely fo r th e purpose of accom m odating an o th e r p arty , including a bank, broker, dealer, o r o th e r financial in stitu tio n , o r a custom er of such in stitu tion. [PR Doc.76-32111 Filed 10-29-76; 10:18 am]
@FedFRASER