The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK
OF NEW YORK
Fiscal Agent of the United States
C ir cu la r
No. 9020
F e b ru a ry 2 0 , 1981
TREASURY TO AUCTION $3,250 MILLION OF 5-YEAR 2-MONTH NOTES
To All Banking Institutions, and Others Concerned,
in the Second Federal Reserve District:
The following statement was issued yesterday by the Treasury Department:
The Department o f the Treasury will auction $3,250 million of 5-year 2-month notes to raise new cash.
Additional amounts o f the notes may be issued to Federal Reserve Banks as agents for foreign and international
monetary authorities at the average price o f accepted competitive tenders.
Printed on the reverse side is a table summarizing the highlights o f the offering. Copies o f the official
offering circular will be furnished upon request directed to our Government Bond Division (Tel. N o.
212-791-6619). In addition, enclosed is a copy o f the form to be used in submitting tenders.
This Bank will receive tenders up to 1:30 p.m ., Eastern Standard time, Thursday, February 26, 1981, at
the Securities Department o f its Head O ffice and at its Buffalo Branch. A ll com petitive tenders, whether
transmitted by mail or by other means, must reach this Bank or its Branch by that time. However, for
investors who wish to submit noncompetitive tenders and who find it more convenient to mail their tenders
than to present them in person, the official offering circular provides that noncom petitive tenders will be
considered timely received if they are mailed to this Bank or its Branch under a postmark no later than
February 25.
Bidders submitting noncompetitive tenders should realize that it is possible that the average price may
be above par, in which case they would have to pay more than the face value for the securities.
Payment with a tender may be in the form o f a personal check, which need not be certified, an official
bank check, or a Federal funds check (a check drawn by a depository institution on its Federal Reserve
account). All checks must be drawn payable to the Federal Reserve Bank o f New York; checks endorsed to
this Bank will not be accepted. Payment may also be made in cash or in Treasury securities maturing on or
before the issue date o f the securities being purchased.
Recorded messages provide information about Treasury offerings and about auction results: at the
Head O ffice — Tel. No. 212-791-7773 (offerings) and Tel. N o. 212-791-5823 (results); at the Buffalo
Branch — Tel. N o. 716-849-5046. Additional inquiries regarding this offering may be made by calling, at
the Head O ffice, Tel. N o. 212-791-6619, or, at the Buffalo Branch, Tel. N o. 716-849-5016.
Anthony
m
. So lo m o n ,
President.
(Over)
HIGHLIGHTS OF TREASURY
OFFERING TO THE PUBLIC
OF 5 -YEAR 2 -MONTH NOTES
TO BE ISSUED M ARCH 4 , 1981
(Delivery date f o r coupon securities is March 18, 1981)
Amount Offered:
To the p u b lic ...........................................................................................................
$3,250 million
Description of Security:
Term and type of security......................................................................................
5-year 2-month notes
Series and C U SIP designation.............................................................................
Series D-1986
(CUSIP No. 912827 LQ3)
Maturity d a te ...........................................................................................................
May 15, 1986
Call d a t e ....................................................................................................................
No provision
Interest coupon r a t e ..............................................................................................
To be determined, based on the
average of accepted bids
Investment yield.......................................................................................................
To be determined at auction
Premium or discount..............................................................................................
To be determined after auction
Interest payment d a t e s ..........................................................................................
November 15 and May 15
(first payment on November 15, 1981)
Minimum denomination available....................................................................... $1,000
Terms of Sale:
Method o f sa le .........................................................................................................
Yield auction
Accrued interest payable by investor..................................................................
None
Preferred allotm ent................................................................................................
Noncompetitive bid for
$1,000,000 or less
Payment by non-institutional in v e sto rs............................................................
Full payment to be submitted
with tender
Deposit guarantee by designated institutions...................................................
Acceptable
Key Dates:
Deadline for receipt of tenders.............................................................................
Settlement date (final payment due from institutions)
a) cash or Federal fu n ds...................................................................................
b) readily collectible check...............................................................................
Thursday, February 26, 1981,
by 1:30 p.m ., EST
Wednesday, March 4, 1981
Monday, March 2, 1981
Delivery date for coupon securities..................................................................... Wednesday, March 18,1981
Form N Y-ln
IMPORTANT — Closing time for receipt of this tender is 1:30 p.m., Thursday, February 26, 1981
FED ERAL RESERVE BANK OF NEW Y O R K
F isca l A g en t o f the U n ited States
N ew Y o rk . N .Y . 10045
Dated at
, 19 ..
The undersigned hereby offers to purchase the above-described securities in the amount indicated below, and
agrees to make payment therefor at your Bank in accordance with the provisions of the official offering circular.
COMPETITIVE TENDER
in in s crib in g the secu rities a n d e sta b lish in g an d se rv icin g the o w n e rsh ip and interest reco rd s. T h e tra n sa ctio n will n ot b e c o m p le te d unless all re q u ire d d a ta is fu rn ish e d .
T h e in d iv id u a lly id e n tifia b le in fo rm a tio n req u ire d o n this fo rm is necessa ry to p e rm it the s u b scrip tio n to b e p ro ce sse d and the secu rities to b e issu ed. I f registered secu rities
PRIVACY ACT STATEMENT —
are re q u e s te d , the reg u la tion s g o v e rn in g U n ited States secu rities (D e p a r tm e n t C ircu la r N o. 3 0 0 ) an d the o ffe rin g c irc u la r re q u ire su b m is sio n o f so cia l security n u m b e rs; the n u m b e rs a n d o th e r in fo rm a tio n are used
TENDER FOR 5-YEAR 2-MONTH TREASURY NOTES OF SERIES D-1986
Do not fill in both Competitive and
Noncompetitive tenders on one form
NONCOMPETITIVE TENDER
$ ..............................................................(maturity value)
or any lesser amount that may be awarded.
$ ..............................................................(maturity value)
Y ield:...................
at the average price of accepted competitive bids.
(Not to exceed $1,000,000 fo r one bidder through all sources)
(Yield must be expressed with not more than two
decimal places, fo r example, 10.06)
Subject to allotment, please issue, deliver, and accept payment for the securities as indicated below and on the
reverse side (if registered securities are desired, please also complete schedule on reverse side):
□
P ieces
D e n o m in a tio n
$
1,000
$
5 ,0 0 0
$
1 0 ,000
$
100,00 0
D eliver over the co u n te r to the
M a tu rity value
□
S hip to the u n d ersig n ed (2)
□
H o ld in s a fe k e e p in g (fo r m e m b e r
Q
□
Investm ent A c c o u n t (4)
□
G e n e ra l A c co u n t (5)
□
T ru st A c co u n t (6)
H o ld as co lla te ra l fo r T re a su ry T a x and
B y ch a rg e to o u r reserve a c c o u n t (D )
B y cash o r ch e ck in
available funds
□
b a n k o n ly ) in —
□
P a y m e n t w ill b e m a d e as fo llo w s :
Q
u n d e rsig n e d (1)
immediately
(F )
B y su rren d er o f m a tu rin g securities (E )
P I B y ch a rg e to m y co rr e s p o n d e n t
b a n k ............................................................ (D )
__________________ (N a m e o f b a n k )_________
□
S p ecial in stru ction s (3)
L o a n A c c o u n t * (7)
$ 1 ,0 0 0 ,0 0 0
□
T o ta ls
W ire t o ................................................................................................................................ (8)
(E x a ct R e ce ivin g B an k W ire A d d r e s s /A c c o u n t )
* T h e u n d ersig n ed certifies that the a llotted secu rities will b e o w n e d solely by the u n d e rsig n e d .
( I f a c o m m e r c ia l b a n k o r d e a le r is su b s c rib in g fo r its o w n a c c o u n t o r fo r a c c o u n t o f cu sto m e rs, the fo llo w in g
c e rtifica tio n s are m a d e a p a rt o f this te n d e r.)
WE H EREBY C ERTIFY that we have not made and will not make any agreements for the sale or purchase of
any securities o f this issue prior to the closing time for receipt o f this tender.
WE FU R TH ER CERTIFY that we have received tenders from customers in the amounts set forth opposite their
names on the list which is made a part o f this tender and that we have received and are holding for the Treasury, or
that we guarantee payment to the Treasury, o f the payments required by the official offering circular.
WE FURTH ER CERTIFY that tenders received by us, if any, from other commercial banks or primary dealers for
their own account, and for the account o f their customers, have been entered with us under the same conditions,
agreements, and certifications set forth in this form.
NAM E OF S U B S C R I B E R ( P L E A S E P R I N T OR T Y P E )
Insert this tender in
special envelope marked
“ Tenderfor Treasury
Notes or Bonds”
CITY
PHONE (I N C L U D E AREA C O D E )
S I G N A T U R E OF S UB S C RI B ER OR A U T H O R I Z E D S IG NA T U RE
T I T L E OF A U T H O R I Z E D S IGN ER
(In stitu tion s su b m ittin g ten d ers fo r c u s to m e r a c c o u n t m ust list c u s t o m e r s ’ nam es o n lines b e lo w o r o n an a tta ch ed r id e r.)
(Name of customer)
(Name of customer)
IN S T R U C T IO N S :
1. N o ten d er fo r less than $ 1 ,0 0 0 w ill b e c o n s id e r e d ; a n d e a ch ten d er m ust b e fo r a m u ltip le o f $ 1 ,0 0 0 (m a tu rity v a lu e ).
2 . O n ly b a n k in g in stitu tion s, a n d d ealers w h o m a k e p rim a ry m a rk ets in G o v e r n m e n t secu rities a n d re p o rt d a ily to this B ank their p o s itio n s
w ith resp ect t o G o v e r n m e n t secu rities a n d b o r r o w in g s th e re o n , m a y su b m it ten d ers f o r c u s to m e r a c c o u n t; in d o in g s o , they m ay c o n s o lid a t e
c o m p e t it iv e tend ers at the same yield a n d m a y c o n s o lid a t e n o n c o m p e tit iv e ten d ers, p r o v id e d a list is a tta ch e d s h o w in g the n a m e o f ea ch b id d e r
a n d the a m o u n t b id fo r his a c c o u n t. O th ers w ill n o t b e p erm itte d to su b m it tend ers e x ce p t f o r their o w n a c c o u n t.
3. T en d ers w ill b e receiv ed w ith o u t d e p o s it fr o m c o m m e r c ia l a n d o th e r b a n k s f o r their o w n a c c o u n t, fe d e ra lly insured savin gs a n d lo a n
a s s o cia tio n s , S tates, p o litic a l s u b d iv is io n s o r in stru m en talities th e r e o f, p u b lic p e n s io n a n d retirem en t a n d o th e r p u b lic fu n d s, in tern a tion a l
o r g a n iz a tio n s in w h ich the U n ited States h o ld s m e m b e rs h ip , fo r e ig n ce n tra l b a n k s a n d fo r e ig n states, d ealers w h o m a k e p rim a ry m arkets in
G o v e r n m e n t securities a n d r e p o rt d a ily t o the F ed era l R eserv e B an k o f N ew Y o r k their p o s itio n s w ith resp ect t o G o v e r n m e n t securities an d
b o r r o w in g s t h e re o n , a n d G o v e r n m e n t a c c o u n ts . T e n d e rs fr o m o th e rs m ust b e a c c o m p a n ie d b y fu ll p a y m e n t o f the fa ce a m o u n t o f the
secu rities a p p lie d fo r .
4 . P a y m en t w ith a ten d er m a y b e in the fo r m o f a p e rs o n a l c h e c k , w h ich need n o t b e c e rtifie d , an o f f ic ia l b a n k c h e c k , o r a F ederal fu n d s
c h e c k (a ch e c k d ra w n b y a c o m m e r c ia l b a n k o n its F ed era l R eserv e a c c o u n t ). A ll ch e ck s m ust b e d ra w n p a y a b le to the F ed era l R eserve B ank o f
N ew Y o r k ; checks endorsed to this Bank will not be accepted. P a y m e n t m ay a ls o b e m a d e in ca sh o r T re a su ry securities m a tu rin g o n o r b e f o r e
the issue d a te o f the securities b ein g p u rch a se d .
5. F o r in fo r m a t io n o n cu rren tly a v a ila b le T rea su ry offerings, ca ll o u r 2 4 -h o u r r e co r d e d m essa ge at (2 1 2 ) 79 1 -7 7 7 3 at the H e a d O f f i c e o r
(7 1 6 ) 8 4 9 -5 0 4 6 at the B u ffa lo B ra n ch . F o r results o f recen t T re a su ry a u ctio n s , ca ll (2 1 2 ) 7 9 1 -5 8 2 3 at the H e a d O f f i c e o r (7 1 6 ) 8 4 9 -5 0 4 6 at the
B u f fa l o B ra n ch . F o r o th e r in fo r m a t io n a b o u t T re a su ry secu rities, ca ll (2 1 2 ) 7 9 1 -6 6 1 9 at the H e a d O f f i c e o r (7 1 6 ) 8 4 9 -5 0 1 6 at the B u f fa lo
B ra n ch d u rin g n o r m a l bu sin ess h o u rs.
6 . I f the la n gu a g e o f this ten d er is c h a n g e d in a n y re sp e ct that, in the o p in io n o f the S e cre ta ry o f the T re a su ry , is m ateria l, the tend er m a y b e
d isre g a rd e d .
(O V E R )
SUBSCRIPTION NO
SCHEDULE FOR ISSUE OF REGISTERED TREASURY SECURITIES
DELIVERY INSTRUCTIONS
S U B S C R I B E R ’S NAME.
ADDRESS
□ DELIVER OVER THE COUNTER
____________
PAYMENT INSTRUCTIONS
□
□
SHIP TO SUBSCRIBER
□
□
OTHER INSTRUCTIONS:
□
BY CHARGE TO OUR
RESERVE ACCOUNT
BY CASH OR CHECK IN
I M M E D I A T E L Y
CITY
_________________
STATE
.Z IP
SIGNATURE.
REGISTRATION
NO. OF
PIECES
INSTRUCTIONS
NAME(S)
ID
OR
S.S.
NO.
A D D R ESS
C IT Y
S T A T E
OR
S.S.
C IT Y
S T A T E
S.S.
32
5,000
34
10,000
38
100,000
42
1,000,000
99
TOTAL
SERIAL NOS.
(LEAVE BLANK)
FOR
FRB
F U N D S
IS S U E A G E N T 12
30
1,000
32
5,000
34
10,000
38
100,000
42
1,0 0 0 ,0 0 0
99
TOTAL
USE O N LY
T R . CA SE NO.
30
1 ,0 00
32
5,000
34
10,000
38
100 ,000
42
1, 0 0 0 , 0 0 0
99
TOTAL
NO.
ADD RESS
C IT Y
S T A T E
ZIP
LOAN CODE
1 1 0 -0 1
T R . CASE NO.
ZIP
N AM E(S)
O R
1,000
AMOUNT
A V A I L A B L E
BY SURRENDER OF
MATURING SECURITIES
[ 1BY CHARGE TO MY
CORRESPONDENT BANK
TRANS. A C C OU N TIN G D A TE
NO.
A D D R ESS
ID
30
ZIP
N AME(S)
ID
□E N0 M .
FO R F R B USE O N L Y
T R . C A S E NO.
U N I T E D S T A T E S OF A M E R I C A
T R E A S U R Y N O T E S OF MAY 15, 1986
S E R I E S D- 19 86
D EPA RTM EN T C IR C U L A R
DEPARTM ENT OF THE T R E A S U R Y ,
P u b l i c D e b t S e r i e s - No.
6-81
1.
1.
1.
O F F I C E OF THE S E CR ET AR Y,
W a s h i n g t o n , F e b r u a r y 20,
IN V IT A T IO N
FOR T E N D E R S
The S e c r e t a r y of the T r e a s u r y ,
the S e c o n d L i b e r t y Bo nd Act,
as am en de d,
un de r the a u t h o r i t y of
in vi te s
te nd er s for
a p p r o x i m a t e l y $ 3 , 2 5 0 , 0 0 0 , 0 0 0 o f U n i t e d S t at es
se cu r i t i e s ,
T r e a s u r y N o t e s of May 15,
(CUSIP No.
1986,
S e r i e s D - 19 86
T h e s e c u r i t i e s w i l l be sold at au ct io n,
yield.
te nd er .
9 1 28 27 LQ 3).
wi t h b i d d i n g on the ba si s of
The
i n t e r e s t rate on the s e c u r i t i e s
the p r i c e e q u i v a l e n t of e a ch a c c e p t e d bid w i ll be d e t e r m i n e d
the m a n n e r d e s c r i b e d below.
for f o r e i g n and
1.
interest
to Fe d e r a l R e s e r v e Banks,
D E S C R I P T I O N OF S E C U R I T I E S
The s e c u r i t i e s w i l l be da te d M a r c h 4, 1981,
fr om that date,
and will
p a y a b l e on a s e m i a n n u a l ba si s on
N o v e m b e r 15,
1981,
and e a c h s u b s e q u e n t 6 m o n t h s on May 15 and
N o v e m b e r 15,
un ti l
the p r i n c i p a l
M a y 15,
1986,
to m a t u r i t y .
date
b e c o m e s p a y a bl e.
T h e y will m a t u r e
and w i l l not be s u b j e c t to call for r e d e m p t i o n pr io r
In the e v e n t an i n t e r e s t p a y m e n t date or the m a t u r i t y
is a S a t u r d a y ,
principal
S u nd ay ,
or o t h e r n o n b u s i n e s s day,
the in t e r e s t or
is p a y a b l e on the n e x t - s u c c e e d i n g b u s i n e s s day.
[Ref. Cir. No. 9020]
as ag ents
international monetary authorities.
2.
2.
in
A d d i t i o n a l a m o u n t s of these s e c u r i t i e s
m a y be is su ed at the a v e r a g e p r i c e
bear
designated
P a y m e n t w i l l be r e q u i r e d at the pric e e q u i v a l e n t of the bid
y i e l d of e a ch a c c e p t e d
and
1981.
2
2.
taxes
2,
The
income d e r i v e d
from the s e c u r i t i e s
is s u b j e c t to all
im po se d un de r the I n t e r n a l R e v e n u e Code of 1954.
s u b j e c t to es tate,
F e d e r a l or State,
inheritance,
gift,
The s e c u r i t i e s
or o t h e r e x c i s e taxes, w h e t h e r
but are e x e m p t f r om all t a x a t i o n now or h e r e a f t e r
im p o s e d on the p r i n c i p a l or i n t e r e s t t h er eo f by any State,
of the U n i t e d States,
2.
3.
2.
or any local
4.
any p o s s e s s i o n
ta xi ng au t h o r i t y .
The s e c u r i t i e s w i l l be a c c e p t a b l e
public monies.
T h e y w i l l not be a c c e p t a b l e
Bearer securities with
to s e c u t e d e p o s i t s of
in p a y m e n t of taxes.
i n t e r e s t c o u p o n s a t t a ch ed ,
and
s e c u r i t i e s r e g i s t e r e d as to p r i n c i p a l and
interest,
wi ll be issued
d e n o m i n a t i o n s of $1,000,
$1 00 ,0 00 ,
and $ 1 , 0 0 0 , 0 0 0 .
$5 ,0 00 ,
$1 0, 00 0,
B o o k - e n t r y s e c u r i t i e s will be a v a i l a b l e
of
those a m ou nt s.
and of co upon,
registered
2..
to e l i g i b l e b i d d e r s
registered,
and b o o k - e n t r y s e c u r i t i e s ,
5.
and the t r a n s f e r of
The D e p a r t m e n t of the T r e a s u r y ' s g e n e r a l r e g u l a t i o n s
a p p l y to the s e c u r i t i e s o f f e r e d
These general regulations
include those c u r r e n t l y
in
in
as we l l as those that m a y be issued at a la te r date.
3.
3.
1.
SA LE P R O C E D U R E S
T e n d e r s wi ll be r e c e i v e d at Fe de ra l R e s e r v e Ba nk s and
B r a n c h e s and at the 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 ,
up to 1:30 p. m. ,
Noncompetitive
postmarked
3.
Eastern Standard
2.
Th u r s d a y ,
F e b r u a r y 25,
20226,
1981.
t i me ly
if
1981.
Each t e nd er m u s t stat e the face a m o u n t of s e c u r i t i e s bid
is $ 1 , 0 0 0 and l a r g e r bids m u s t be in m u l t i p l e s of
C o m p e t i t i v e t e n d e r s m u s t a l so s h ow the y i e l d d e si re d,
in terms of an a n n u a l y i e l d w i t h two d e c i m a l s ,
f r a c t i o n s m a y not be used.
term "noncompetitive"
Noncompetitive
m a y not e x c e e d
e.g.,
7.11%.
t e n d e r s m u s t s h ow the
on the t e n d e r form in lieu of a s p e c i f i e d yield.
No b i d d e r m a y s u b m i t m o r e than one n o n c o m p e t i t i v e
D. C.
F e b r u a r y 26,
t e n d e r s as d e f i n e d b e l o w wi ll be c o n s i d e r e d
The m i n i m u m bid
expressed
time,
no l a t e r than W e d n e s d a y ,
th at am ou nt .
Common
in m u l t i p l e s
s e c u r i t i e s w i ll be p e r m i t t e d .
this c i r c u l a r .
for.
in
I n t e r c h a n g e s of s e c u r i t i e s of d i f f e r e n t d e n o m i n a t i o n s
g o v e r n i n g U n i t e d S t at es s e c u r i t i e s
effect,
are
$ 1 , 0 00 ,0 00 .
t e nd er and the a m o u n t
- 3 -
3,
3.
All b i d d e r s m u s t c e r t i f y that they have not m a de and will
n o t m a k e any a g r e e m e n t s
t h is
for the sale or p u r c h a s e of any s e c u r i t i e s of
issue p r i o r to the d e a d l i n e e s t a b l i s h e d
r e c e i p t of te nd er s.
Those authorized
of c u s t o m e r s w i ll be r e q u i r e d
s u b m i t t e d d i r e c t l y by b i d d e r s
3.
banks
4.
for
to s u b m i t te nd er s for the a c c o u n t
to c e r t i f y that such te nd er s are
s u b m i t t e d u n d e r the same c o n d i t i o n s ,
tenders
in S e c t i o n 3.1.
C o m m e r c i a l ba nks,
which
accepting demand deposits,
agreements,
and c e r t i f i c a t i o n s as
for th ei r own account.
for this p u r p o s e are d e f i n e d as
and p r i m a r y d e a l er s,
w h i c h for this
p u r p o s e are d e f i n e d as d e a l e r s wh o m a k e p r i m a r y m a r k e t s
in G o v e r n m e n t
s e c u r i t i e s and r e p o r t d a i l y to the F e d e r a l R e s e r v e B a nk of N e w Y o rk
their positions
tenders
in and b o r r o w i n g s on such se cu r i t i e s ,
for a c c o u n t of c u s t o m e r s
amount
for ea ch c u s t o m e r are
submit
te n d e r s
3.
5.
account
as d e f i n e d above;
to
States,
and
i n st it ut io ns ;
primary
F e d e r a l l y - i n s u r e d s a v i n g s and loan
th ei r p o l i t i c a l
s u b d i v i s i o n s or
p u b l i c p e n s i o n and r e t i r e m e n t and o t h e r p u b l i c
international organizations
membership;
in w h i c h the U n it ed S t at es holds
f o r e i g n c e n t r a l b a n k s and
and G o v e r n m e n t a c c o u n t s .
a c c o m p a n i e d by full p a y m e n t
(in the
O t h e r s are o n l y p e r m i t t e d
for thei r own ac co un t.
instrumentalities;
Ba nk s;
fu rn is he d.
T e n d e r s w i ll be r e c e i v e d w i t h o u t d e p o s i t for their own
associations;
funds;
if the names of the c u s t o m e r s and the
from c o m m e r c i a l b a n k s and o t h e r b a n k i n g
dealers,
m a y su bm it
fo r e i g n states;
Tenders
Fe de ra l R e s e r v e
fr om o t h e r s m u s t be
for the a m o u n t of s e c u r i t i e s a p p l i e d
form of cash, m a t u r i n g T r e a s u r y s e c u r i t i e s ,
for
or r e a d i l y
c o l l e c t i b l e c h e c k s ) , or by a p a y m e n t g u a r a n t e e of 5 p e r c e n t of the face
amount applied
3.
opened,
of
6.
for,
fr o m a c o m m e r c i a l b a nk or a p r i m a r y de aler.
I m m e d i a t e l y a f t e r the c l o s i n g hour,
te nd er s wi ll be
f o l l o w e d b y a p u b l i c a n n o u n c e m e n t of the a m o u n t and yi el d range
a c c e p t e d bids.
noncompetitive
S u b j e c t to the r e s e r v a t i o n s e x p r e s s e d
t e nd er s w i l l be a c c e p t e d
t e n d e r s wi ll be a c c e p t e d ,
in full,
in S e c t i o n 4,
and then c o m p e t i t i v e
s t a r t i n g w i t h those at the l o w e s t yields,
-
through successively higher yields
amount offered.
if n e c e s s a r y .
accepted,
4
-
to the e x t e n t r e q u i r e d to a t t a i n the
T e n d e r s at the h i g h e s t •a c c e p t e d y i e l d w i l l be p r o r a t e d
A f t e r the d e t e r m i n a t i o n
is ma de as to w h i c h
a c o u p o n rate w i l l be e s t a b l i s h e d ,
which results
on the b a s i s of a 1/8 of
one percent
increm en t,
p r i c e cl os e
to 1 0 0 . 0 0 0 and a l o w e s t a c c e p t e d p r i c e a b o v e
issue d i s c o u n t li mi t of 98 .7 50 .
all of the s e c u r i t i e s .
competitive
the o r i g i n a l
i n t e r e s t w i ll be pa id on
B a s e d on such i n t e r e s t rate,’ the p r i c e on ea ch
t e n d e r a l l o t t e d w i l l be d e t e r m i n e d and e a ch s u c c e s s f u l
to p a y the pr ic e e q u i v a l e n t to the
Those submitting noncompetitive
equivalent
te n d e r s .
in an e q u i v a l e n t a v e r a g e a c c e p t e d
T h a t rate of
c o m p e t i t i v e b i d d e r w i l l be r e q u i r e d
y i e l d bid.
te nders are
te nd er s w i ll p a y the price
to the w e i g h t e d a v e r a g e y i e l d of a c c e p t e d c o m p e t i t i v e
Pr ic e c a l c u l a t i o n s w i l l be c a r r i e d to three d e c i m a l p l a c e s on
the b a s i s of p r i c e pe r h u nd re d,
e.g.,
99.923,
and the d e t e r m i n a t i o n s of
the S e c r e t a r y of the T r e a s u r y shall be final.
noncompetitive
offering,
If the a m o u n t of
te n d e r s r e c e i v e d w o u l d a b s o r b all or m o s t of the
competitive
t e n d e r s wi ll be a c c e p t e d
to p r o v i d e a fair d e t e r m i n a t i o n of the yield.
in an a m o u n t s u f f i c i e n t
Tenders received
from
G o v e r n m e n t a c c o u n t s and F e d e r a l R e s e r v e Bank s wi ll be a c c e p t e d at the
p r i c e e q u i v a l e n t to the w e i g h t e d a v e r a g e yield of a c c e p t e d c o m p e t i t i v e
tenders.
3.
7.
C o m p e t i t i v e b i d d e r s wi l l be a d v i s e d of the a c c e p t a n c e or
r e j e c t i o n of thei r tend er s.
w i l l o n l y be n o t i f i e d
the p r i c e
Th os e
if the t e n d e r
is not a c c e p t e d
in full,
or w h e n
1.
RESERVATIONS
The S e c r e t a r y of the T r e a s u r y e x p r e s s l y r e s e r v e s
to a c c e p t or r e j e c t any or all t e n d e r s
in w h o l e or in part,
m o r e or less than the a m o u n t of s e c u r i t i e s s p e c i f i e d
to m a k e d i f f e r e n t p e r c e n t a g e a l l o t m e n t s
ca nt s w h e n the S e c r e t a r y c o n s i d e r s
5.
1.
the r i g h t
to a l l o t
in S e c t i o n 1, and
to v a r i o u s c l a s s e s of a p p l i
it in the p u b l i c
S e c r e t a r y ' s a c t i o n under this S e c t i o n
5.
te nd er s
is o v e r par.
4.
4.
submitting noncompetitive
interest.
The
is final.
PAYMENT AND DELIVERY
S e t t l e m e n t for a l l o t t e d s e c u r i t i e s m u s t be m a d e at the
F e d e r a l R e s e r v e Ba nk or B r a n c h or at the B u r e a u of the P u b l i c Debt,
w h e r e v e r the t e nd er was s u b m i t t e d .
to i n s t i t u t i o n a l
i n v e s t o r s and to o t h e r s w h o s e
by a p a y m e n t g u a r a n t e e as p r o v i d e d
S e t t l e m e n t on s e c u r i t i e s a l l o t t e d
te nd er s are a c c o m p a n i e d
in S e c t i o n 3.5., m u s t be m a d e or
j
4
-
c o m p l e t e d on or b e f o r e W e d n e s d a y ,
accompany
cash;
5
-
M a r c h 4, 1981.
t e n d e r s s u b m i t t e d by all o t h e r
in o t h e r funds
P a y m e n t in full m u st
in vestors.
P a y m e n t m u s t be in
i m m e d i a t e l y a v a i l a b l e to the T r e a su ry ;
bills,
notes,
before
the s e t t l e m e n t d a t e but w h i c h are not o v e r d u e as d e f i n e d
general
or bo nd s
(with all c o u p o n s de ta ch ed )
in T r e a s u r y
in the
r e g u l a t i o n s g o v e r n i n g U n i t e d S t at es s e c u r i t i e s ; or by ch ec k
d r a w n to the o r d e r of the i n s t i t u t i o n to w h i c h
mitted,
m a t u r i n g on or
w h i c h m u s t be r e c e i v e d
than Monday,
M a r c h 2, 1981.
the t e nd er was s u b
fr om i n s t i t u t i o n a l
i n v e st or s no later
W h e n p a y m e n t has b e en s u b m i t t e d wi t h the
t e n d e r and
the p u r c h a s e p r i c e of a l l o t t e d s e c u r i t i e s
is o v e r par,
settlement
for the p r e m i u m m u s t be c o m p l e t e d
as s p e c i f i e d
timely,
in
the p r e c e d i n g s e n t e n c e . W h e n p a y m e n t has be en s u b m i t t e d w i t h the tender
and
the p u r c h a s e p r i c e
the bi dd er .
is u n d e r p a r ,
the d i s c o u n t w i ll be r e m i t t e d to
P a y m e n t w i ll not be c o n s i d e r e d c o m p l e t e wh er e r e g i s t e r e d
s e c u r i t i e s are r e q u e s t e d
if the a p p r o p r i a t e
i d e n t i f y i n g n u m b e r as
r e q u i r e d on tax r e t u r n s and o t h e r d o c u m e n t s s u b m i t t e d
Revenue Service
(an i n d i v i d u a l ' s s o ci al s e c u r i t y n u m b e r or an e m p l o y e r
i d e n t i f i c a t i o n number)
securities,
to the Internal
is not fu r n i s h e d .
When payment
a c a sh a d j u s t m e n t wi ll be m a d e
is ma de
in
to or r e q u i r e d of the b i dd er
for any d i f f e r e n c e b e t w e e n the face a m o u n t of s e c u r i t i e s p r e s e n t e d and
the a m o u n t p a y a b l e on the s e c u r i t i e s al lo tt ed .
5.
time,
2.
In e v e r y ca se w h e r e
full p a y m e n t has not been c o m p l e t e d on
an a m o u n t of up to 5 p e r c e n t of the face a m o u n t of s e c u r i t i e s
allotted,
shall,
at the d i s c r e t i o n of the S e c r e t a r y of the Tr e a s u r y ,
be
f o r f e i t e d to the U n i t e d St ates.
5.
3.
Registered securities
s e c u r i t i e s are not r e q u i r e d
be
registered
to be a s s i g n e d
in the same n a m e s and
o r a s s i g n m e n t s of the s e c u r i t i e s
are
tendered
to be r e g i s t e r e d
in n a m e s and
in p a y m e n t for a l l o t t e d
if the new s e c u r i t i e s are to
forms as a p pe ar
surrendered.
in the r e g i s t r a t i o n s
W h e n the new s e c u r i t i e s
forms d i f f e r e n t from those
i n s c r i p t i o n s or a s s i g n m e n t s of the s e c u r i t i e s p r e s e n t e d ,
s h o u l d be to "The S e c r e t a r y of the T r e a s u r y for
th is ci rc ul ar )
in the name of
If new s e c u r i t i e s
in c o u p o n fo rm are desi re d,
instructions
to be d e l i v e r e d
for c o u p o n
(s ec ur it ie s o f f e r e d by
the a s s i g n m e n t should be
( s e c ur it ie s o f f e r e d by
to (name and a d dr es s) ."
Sp e c i f i c
for the i s s u a n c e and d e l i v e r y of the new s e c u ri ti es ,
b y the o w n e r or a u t h o r i z e d r e p r e s e n t a t i v e ,
the a s s i g n m e n t
(name and t a x p a y e r i d e n t i f y i n g nu mb er ). "
to "The S e c r e t a r y of the T r e a s u r y
this ci r c u l a r )
in the
signed
m u s t a c c o m p a n y the s e c u r i t i e s
presented.
Securities
te n d e r e d
in p a y m e n t should be s u r r e n d e r e d
to
the F e d e r a l R e s e r v e B a n k or B r a n c h or the B u r e a u of the P u b l i c Debt,
Washington,
D. C. 20226.
The s e c u r i t i e s m u s t be d e l i v e r e d at the
e x p e n s e and r i s k of the ho lder.
5.
4.
If b e a r e r s e c u r i t i e s are not r e a d y for d e l i v e r y on the
s e t t l e m e n t date,
p u r c h a s e r s m a y e l e c t to re c e i v e
T h e s e c e r t i f i c a t e s shall be issued
exchangeable
in b e a r e r fo rm a n d shall be
for d e f i n i t i v e s e c u r i t i e s of this
s e c u r i t i e s are a v a i l a b l e ,
interim certificates.
issue, w h e n such
at any F e d e r a l R e s e r v e Ba nk or B r a n c h or at
•the 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 ,
D. C. 20226.
The i n t e r i m
c e r t i f i c a t e s m u s t be r e t u r n e d at the ri sk and e x p e n s e of the ho ld er .
5.
5.
D e l i v e r y of s e c u r i t i e s
a f t e r the r e q u e s t e d
registered
in r e g i s t e r e d
form w i l l be m a d e
form of r e g i s t r a t i o n has be en v a l i d a t e d ,
i n t e r e s t a c c o u n t has b e e n e s t a b l i s h e d ,
the
and the s e c u r i t i e s
h a v e b e e n insc ri be d.
6.
6.
1.
GENERAL PROVISIONS
As fi scal a g e n t s of the U n i t e d States,
B a n k s are a u t h o r i z e d and r e q u e s t e d
ments
of
to re c e i v e tenders,
as d i r e c t e d by the S e c r e t a r y of the Tr e a s u r y ,
notices
as m a y be n e c e s s a r y ,
Fe de ra l R e s e r v e
to ma ke a l l o t
to issue such
to r e c e i v e p a y m e n t for and make d e l i v e r y
s e c u r i t i e s on f u l l - p a i d a l l o t m e n t s ,
and to issue
in te ri m c e r t i f i
ca te s p e n d i n g d e l i v e r y of the d e f i n i t i v e se cu ri ti es .
6.
2.
The S e c r e t a r y of the T r e a s u r y m a y at any time
s u p p l e m e n t a l or a m e n d a t o r y ru le s and r e g u l a t i o n s g o v e r n i n g
offering.
issue
the
P u b l i c a n n o u n c e m e n t of such c h a n g e s will be p r o m p t l y
provided.
Paul H. Ta ylor,
F i sc al A s s i s t a n t S e c r e t a r y .
Federal
of
Reserve Bank
N ew York
[
Operating Circular No. 10 "1
Effective August 1, 1981 J
AUTOMATED CLEARING HOUSE ITEMS
To All Depository Institutions in the Second Federal
Reserve District, and Others Concerned:
General
1. This operating circular and our time schedules govern the
handling and settlement of automated clearing house ( “ACH” ) items
by this Bank. This circular is issued pursuant to Sections 4, 11 A, 13,
16, and 19 of the Federal Reserve Act and related statutes. It is
binding on originators, receivers, and other parties interested in an
ACH item and on each account holder agreeing to settle for ACH
items under this circular. This circular preempts or supersedes agree
ments or other arrangements among parties to ACH items only to the
extent that provisions of those arrangements are inconsistent with
this circular.
2. Each Reserve Bank other than this Bank has issued a circular
governing ACH transactions and containing uniform provisions con
cerning interoffice transactions. Copies of the uniform language of
the other Reserve Banks’ operating circulars are available from our
Check Processing Function on request. This Bank’s circular gov
erns only this Bank’s sending and receiving of interoffice ACH items
and settlement of amounts stated on the settlement statements of an
ACH association. When we send an item to another Reserve Bank,
that Reserve Bank handles the item subject to its operating circular
and time schedules.
Definitions
3.
As used in this circular, unless the context otherwise requires:
(a )
“Account holder” means a Reserve Bank, a depository
institution, or other institution maintaining an account with a Re
serve Bank.
(b ) “Actually and finally collected funds” means cash or any
other form of payment that is, or has become, final and irrevocable.
(c ) “Applicable ACH rules” means ACH rules that are des
ignated by a Reserve Bank in its operating circular as applicable
to ACH transactions within the region or between ACH regions.
“Applicable ACH rules” does not include provisions in ACH rules
that are not applicable to transactions under this circular because
they are in conflict with regulations and policy guidelines of the
Board of Governors of the Federal Reserve System or policy
guidelines of the Conference of First Vice Presidents or the Con
ference of Presidents of the Federal Reserve Banks or applicable
law.
(d ) “Approved medium” means any of the following writings
specified in this circular or in the applicable ACH rules: any form
of communication, other than voice, registered on ( or in a form
suitable for being registered on) magnetic tape, disc, or other
medium designed to contain in durable form conventional signals
used for electronic communication of messages, or output produced
from this form of communication.
(e ) “Automated clearing house” or “A CH ” means a Reserve
Bank or other facility that clears debit and credit items for an
originator or recipient.
(f) “ACH association” means an organization that operates an
ACH itself or through a Reserve Bank.
( g ) “ACH region” means a geographic area within which
institutions are eligible to participate under certain ACH rules.
(h ) “Automated clearing house rules” means the rules and
procedures or agreements provided by a group of institutions,
such as an ACH association, that govern the clearing of items
among participants in an ACH payments system.
(i) “Banking day” means a day during which a Reserve Bank,
an account holder, originator, or receiver is open to the public for
carrying on substantially all of its banking functions.
(j) “Credit item” means an ACH item pursuant to which the
originator is to receive a debit and the receiver a credit.
(k ) “Debit item” means an ACH item pursuant to which the
originator is to receive a credit and the receiver a debit.
(l) “Depository institution” means a depository institution as
defined in § 19(b ) of the Federal Reserve Act (12 U.S.C. 461« b ) ).
( m) “Interoffice transaction” means a transaction involving an
ACH item sent by an originator in one ACH region to a receiver
in a different region.
2
(n ) “Intraoffice transaction" means a transaction involving an
ACH item sent by an originator in one ACH region to a receiver
in the same region.
(o ) “Item” or “ACH item” means a writing in an approved
medium that evidences a right to the payment of money and that
is handled by an ACH. “Item” does not include: (1 ) an “item”
as defined in § 210.2 of Regulation J that is handled under Subpart
A governing the collection of checks and other items; (2 ) an
“item” as defined in § 210.26 of Regulation J that is handled
under Subpart B governing wire transfers of funds; (3 ) a credit
payment subject to 31 Code of Federal Regulations, Part 210,
governing Federal recurring payments by means othei than by
check; or (4 ) a wire transfer of securities by this Bank. An item
is deemed to be the same item even if its medium changes during
handling of the item. “Item” may include a prenotification or
other notice, or a return item, adjustment or notice in accordance
with paragraphs 27, 28, or 29.
(p ) “Originator” means a depository institution or other
authorized institution, whether or not a member of an ACH
association, that sends an ACH item to an ACH.
(q ) “Originator’s account” or “receiver’s account” means the
account at a Reserve Bank that the originator or receiver main
tains or uses for settlement under an operating circular governing
ACH items.
(r ) “Originator’s Reserve Bank” means the first Reserve Bank
to which an originator directly or indirectly sends an item in
accordance with the Reserve Bank’s operating circular.
(s) “Receiver” means a depository institution or other author
ized institution, whether or not a member of an ACH association,
that is designated in an item to receive the item.
(t) “Receiver’s Reserve Bank” means the Reserve Bank from
which the receiver directly or indirectly receives an item.
(u ) “Settlement statement” means an instruction to this Bank
by an ACH association showing the amounts to be debited or
credited to the accounts maintained or used by settling participant
members of the association as the result of ACH items.
Sending and receiving credit and debit items
4.
An ACH association that has made prior arrangements with us
may deliver credit and debit items and related data to this Bank for
transmission to automated clearing houses operated by other Reserve
Banks and may pick up such items and data regarding members of the
association that we have received by transmission from other auto
mated clearing houses.
3
5. Items must be in the format prescribed by applicable ACH
rules. We may handle an item on the basis of any routing number
or other designation of a receiver appearing in any form on the item
when we receive it. We are not responsible for any delay resulting
from our acting on any designation of a receiver whether or not the
designation is consistent with any other designation on the item.
Originator’s agreement
6. By sending an interoffice ACH item directly or indirectly to
this Bank, a member of an ACH association:
( a ) agrees to comply with the applicable ACH rules and
agrees that such rules shall govern the relationships among
the originator, the receiver, and other parties interested in
the item and covered by the applicable ACH rules;
(b ) authorizes this Bank and the receiver’s Reserve Bank to
handle the item in accordance with the Reserve Banks’
operating circulars;
(c ) agrees to indemnify each Reserve Bank handling or settling
for the item for any loss or expense sustained (including
attorneys’ fees and expenses or litigation) resulting from
any action taken by the Reserve Bank in accordance with
the Reserve Bank’s applicable operating circular.
7. The agreements, authorizations, and indemnities in paragraph 6
do not limit any other agreement, authorization, or indemnity, not
inconsistent with paragraph 6, made by an originator to a receiver,
a Reserve Bank, or another party.
Applicable ACH rules
8. For participating bank members of the New York Automated
Clearing House the applicable ACH rules are the Operating Rules of
the National Automated Clearing House Association. These rules,
as amended from time to time, are applicable to interoffice transactions
involving originators or receivers located in this Federal Reserve
District.
9. If applicable ACH rules for a local ACH region provide for
remote origination by originators located outside the local ACH
region, such a remote originator may send items to the Reserve
Bank used by originators located in the ACH region, subject to agree
ment by that Reserve Bank as provided in paragraph 4 of this
4
circular, and subject to the applicable ACH rules for transactions
within the local ACH region.
10. Except as otherwise specifically provided in this circular,
we do not have or assume any responsibility for determining whether
an originator or receiver complies with applicable ACH rules.
Handling of items
11. We handle an interoffice transaction as follows: We transmit
items we receive from a local ACH to the receiver’s Reserve Bank.
The receiver’s Reserve Bank sends or makes available the item it
receives to the receiver. A local ACH picks up items we receive from
the originator’s Reserve Bank. The ACH sends or makes available the
item to the receiver.
12. This Bank may,
local ACH association to
nated by the receiver to
from an originator to the
in its discretion, deliver ACH items for a
the receiver or to any other person desig
receive ACH items or deliver ACH items
ACH.
Time schedules and extensions of time limits
13. The time schedule made a part of this circular (Appendix A)
shows the cutoff hours for receipt by us from an ACH of ACH items.
If we receive items from an ACH after a cutoff hour, we handle them
on our next banking day unless, in emergency or other circumstances,
we decide to handle them on the day of receipt.
14. The time schedule also shows the time certain operations are
scheduled to occur. We act in a timely manner if we take proper
action within the times shown in our time schedule. If, because of
circumstances bevond our control, we are delayed in acting beyond
applicable time limits, the time for acting is extended for the time
necessary to complete the action, if we exercise such diligence as the
circumstances require.
Settlement and availability of credit
15. Each banking dav on which we receive a settlement state
ment from an ACH association, we settle the debit or credit balances
on the statement bv debiting or crediting the accounts maintained or
used by the members of the ACH association. The ACH association
5
must include on the settlement statement debits and credits for ACH
items sent to or received from this Bank. We settle balances only {
if the sum of the debit balances on the settlement statement equals
the sum of the credit balances.
16. A credit that we give based on a settlement statement is
available for use on the date given, subject to our right to apply the
funds to an obligation owed to us by the account holder.
17. We reserve the right to refuse to settle any balances on a
settlement statement if:
(a) a member of the ACH association with a balance listed
on the statement has failed, been suspended, been closed,
or the like;
(b) the ACH association notifies us that a balance is in error;
(c ) this Bank detects an error in the settlement statement; or
(d) in our opinion, there will not be a balance of actually and
finally collected funds in an account on our books suffi
cient to cover an amount listed on the settlement statement
to be debited to the account.
18. If we elect not to settle the balances on a settlement state-,
ment, we promptly notify the ACH association. The ACH association
may then issue a revised settlement statement to this Bank, which we
will handle as the settlement statement. We may, in our discretion,
settle the balances on a revised settlement statement on the same
banking day on which we receive the revised statement or on the
next banking day.
19. If we learn that a balance on a settlement statement is in
error, we do not unilaterally adjust the error. The ACH association
should adjust the error in a subsequent settlement statement.201
20. Credit we give at once qualifies as reserve for purposes of
Regulation D of the Board of Governors of the Federal Reserve Sys
tem, subject to our right to apply the funds to an obligation owed to
us by the account holder.
Settlement agreements
21. We make settlement for a settlement statement only if each
account holder whose account is to be debited or credited executes a
6
settlement agreement with this Bank in the form of Exhibit I below.
The settlement agreement must provide that in consideration of the
handling of items and settlement of balances by the Reserve Bank for
the originator or receiver, and for other originators and receivers, the
account holder agrees to the applicable Reserve Bank operating cir
culars governing ACH items, and to applicable ACH rules, each as
amended from time to time, for the benefit of all parties interested in
the items. A settlement agreement with this Bank executed by an
account holder, if any, in effect on August 1, 1981, providing for settle
ment of ACH items is considered to comply with this paragraph upon
the origination or receipt by such an institution of items on or after
such date, unless such originator or receiver ceases to be a member
of an ACH association.
Receiver’s agreements
22. A receiver designated in an item, by accepting an interoffice
ACH item directly or indirectly from this Bank:
(a ) agrees to comply with applicable ACH rules and agrees
that such rules shall govern the relationships among the
originator, the receiver, and other parties interested in the
item and covered by the applicable ACH rules;
(b ) agrees to handle the item in accordance with this operating
circular;
(c) agrees to indemnify each Reserve Bank handling or settling
for the item for anv loss or expense sustained (including
attorneys’ fees and expense of litigation) resulting from a
breach of the foregoing agreements or from any action
taken by the Reserve Bank holding the receiver’s account
in accordance with the foregoing authorization.
23. The agreements and indemnities in paragraph 22 do not limit
any other agreement, authorization or indemnity, not inconsistent
with paragraph 22, made by a receiver to an originator, a Reserve
Bank, or another party.
Revocation of items
24.
No originator or prior party has a right to revoke an item
after it has been received by a Reserve Bank, except as provided for
in applicable ACH rules.
7
25. We may, on our own initiative, cease acting on or settling for
a credit item if the originator’s Reserve Bank judges that there may
not be sufficient funds in the originator’s account on the settlement
date to cover the item. We promptly notify the ACH to which we
have sent the item of nonpayment of the item.
26. We may initiate a reversing batch of items in accordance
with applicable ACH rules, if we discover that we caused a duplicate
or erroneous batch of items to be sent. We notify the ACH associa
tion and the Reserve Bank to which the items were sent accordingly.
Return of items and funds
27. We accept, from a local ACH association, return of an ACH
item that we handled originally. We deliver the item, as instructed
by the ACH association, to the originator’s Reserve Bank. The ACH
association must include the debit or credit for return of the item on
a supplemental settlement statement.
28. We deliver to a local ACH association an item that has been
returned to us from an ACH in another Federal Reserve District. The
local ACH association must include the debit or credit for return of
the item on a supplemental settlement statement. If the debits and
credits on the supplemental statement are in balance for members of
the local ACH association and other ACHs, this Bank makes the
appropriate entries. If not, this Bank returns the supplemental settle
ment statement to the local ACH association.
29. We handle a rejection of prenotification or notification of
change or other similar notices as items, except that no funds are
transferred.301*
30. We do not have or assume any responsibility for determining
whether the action taken by a receiver was timely.
Advices to account holders
31. We provide, in a statement, advice of credit or debit to our
account holders for amounts on settlement statements for which they
have agreed to settle. An advice of credit indicates that credit has
been given, subject to the provisions of this circular. Unless our
account holder sends to us prompt written objection to an advice of
debit, it is deemed to approve the debit.
8
Records
32. Originators and receivers should keep records that permit
them to resolve questions with their ACH that arise concerning the
handling of items. We do not keep any copies of items handled by an
ACH. We discard our copy of a settlement statement one year from
the date of the settlement statement, and no claim except one based
on alleged fraud by this Bank, may be made against us after that
time.
33. We disclose our records of transmission, settlement, and
delivery if the person requesting the information is a party to the
transaction. Otherwise, we do not disclose our records of items
handled except in response to valid grand jury subpoenas or court
orders.
Pricing
34. Our fee schedule (Appendix A) shows the charges we im
pose for our ACH services. WTe make the charges as shown in the
schedule to the local ACH association or its designated correspond
ent’s account.
Reserve Bank liability
35. Limitations on liability. This Bank is responsible or liable
only to an originator, a receiver, or another Reserve Bank, and only
for its own lack of good faith or failure to exercise ordinary care.
This Bank does not act as the agent or subagent of another bank or
person and is not liable for the insolvency, neglect, misconduct,
mistake, or default of another bank or person. This Bank does not
make any warranty with respect to an item it handles or settles for
under this circular.
36. Measure of damages. The measure of damage for our failure
to exercise ordinary care with respect to an item is the amount of
the item reduced by an amount that could not have been realized
by the use of ordinary care. Where there is a lack of good faith, the
measure of damages includes other damages, if any, suffered by the
party as a proximate consequence.37
37. Reserve Bank indemnity. A Reserve Bank handling or
settling for an item agrees to indemnify another Reserve Bank that
9
handles or settles for an item for any loss or expense sustained (in
cluding attorneys’ fees and expenses of litigation) as a result of the
former Reserve Bank’s failure to exercise ordinary care or to act in
good faith.
38. Limitation on claims. No claim may be made by any person
against a Reserve Bank for loss resulting from the Reserve Bank’s
handling of or settling for an item after one year from the settlement
date of the item.
39. Recovery by Reserve Bank. If an action or proceeding is
brought against a Reserve Bank that has handled or settled for an
item, based on:
(a) the alleged breach of, or the alleged failure to have the
authority to make, any of the warranties, authorizations
and agreements referred to in paragraphs 6, 22, and 37
of this circular or the alleged breach of applicable ACH
rules, by the originator, the receiver or another Reserve
Bank; or
(b) any action by the Reserve Bank in accordance w’ith its
operating circular,
the Reserve Bank may, upon the entry of a final judgment or decree,
recover from the originator, the receiver, or the other Reserve Bank,
as the case may be, any amount the Reserve Bank is required to pay
under the judgment or decree, together with interest, as well as
the amount of attorneys’ fees and other expenses of litigation incurred.
40. Methods of recovery. The Reserve Bank may recover the
amount stated in paragraph 39 of this circular by charging the
originator’s or receiver’s account (or if the item was received from,
sent to, or settled through another Reserve Bank, by charging the
other Reserve Bank through the Inter-District Settlement F u n d \ if
(a) the Reserve Bank has made seasonable written demand
on the originator, receiver, or other Reserve Bank to
assume defense of the action or proceeding; and
(b ) no other arrangement for payment acceptable to the
Reserve Bank has been made.
A Reserve Bank that has been charged through the Inter-District
Settlement Fund may recover from the originator or receiver in the
manner and under the circumstances set forth in this paragraph. A
Reserve Bank's failure to avail itself of the remedy provided in this
paragraph does not prejudice its enforcement in any other manner
of the indemnity agreements referred to in paragraphs 6, 22, and 37.
Right to amend
41.
We reserve the right to amend this circular at any time.
Anthony M. Solomon,
President
EXHIBIT I
SETTLEM EN T AG REEM ENT
As provided in paragraph 21 of Operating Circular No. 10, the
Federal Reserve Bank of New York ( “Reserve Bank” ) makes settle
ment for a settlement statement received from an ACH association
under the terms of this Agreement. The account holder agrees to
these terms bv executing a letter in the following form:
[To Be Typed on Account Holder’s Letterhead]
[Date]
Federal Reserve Bank of New York
33 Liberty Street
New York, New York 10045
Attention:
Vice President, Check Processing Function
Gentlemen :
In accordance with your Operating Circular No. 10, we agree
to the terms of applicable Reserve Bank operating circulars governing
ACH items, and to applicable ACH rules, each as amended from
time to time, for the benefit of all parties interested in an ACH item.
We authorize you to settle on your books our bank’s daily net
credit or debit balance by posting to our account the balance as
certified to you by the
[Sam e of ACH association]
(the “ACH
..
association” ) arising out of the operations of the
. Should at any time our daily debit balance
[Same of ACH]
exceed the balance we have on deposit with you, we agree to promptly
put you in funds available for immediate use. It is understood that,
if, because any of the institutions settling in this manner are, in
your sole judgment, unable to cover the daily debit balance certified
12
to you, you will not settle any of the balances certified to you and
that you will return the certified settlement sheet to the ACH associa
tion.
Very truly yours,
[Name of account holder]
By:
[Name and title ]
By:
[Name and title, if two
signatures are required .]
13
Federal Reserve Bank
of N ew Y ork
First Supplement to
Operating Circular No. 10
(Effective August 1.1981)
F e b r u a r y 22. 1983
A U T O M A T E D C L E A R IN G H O U S E IT E M S
To All Depository Institutions in the Second Federal
Reserve District, and Others Concerned:
The handling and settlement o f ACH transactions at this Bank has been
transferred from our Check Processing Function to our new Electronic Pay
ments Function. In order to reflect this organizational change in our Operating
Circular No. 10, that circular is amended as follow s:
1. The reference to “ Check Processing Function” in paragraph 2 is
replaced by “ Electronic Payments Function.”
2. The attention line o f the Settlement Agreement form in Exhibit I
is amended to read “ Attention: Officer in Charge, Electronic Payments
Function. ”
A n t h o n y M. So l o m o n .
President.
Federal Reserve Bank
of New York
S«cond Supplement to
Operating Circular No. 10
'Effective August 1. 1981)
January 14. 1985
AUTOMATED CLEARING HOUSE ITEMS
To A ll D e p o sito r y Institutions in the S eco n d
F ed era l R e se rv e D istrict, and O th ers C o n c e r n e d :
The Electronic Services Function is now responsible for the han
dling and settlement of ACH transactions at this Bank. In order to reflect
this organizational change in our Operating Circular No. 10, that circu
lar is amended as follows:
1. The reference to “ Electronic Payments Function" in
paragraph 2 (as amended by the First Supplement to the operating
circular) is replaced by “ Electronic Services Function."
2. The attention line of the Settlement Agreement form in
Exhibit I is amended to read “ Attention: Officer in Charge, Elec
tronic Services Function."
This Supplement replaces and supersedes the First Supplement,
dated February 22, 1983, to Operating Circular No. 10.
E.
G
erald
C o r r ig a n ,
President.
[Enc. Cir. No. 9786]
Federal Reserve Bank
of New York
Third Supplement to
Opera tint Circular No. 10
(Revised effective August 1. 1981)
Effective February 25, 19*5
AUTOMATED CLEARING HOUSE ITEMS
To A ll D e p o s ito r y Institutions in the S eco n d
F ed era l R e se r v e D istrict, and O th ers C o n c e r n e d :
Below are amendments to Operating Circular No. 10 that concern:
(1) a temporary approach to dealing with automated clearing house
(ACH) debit and credit float created because of different holiday sched
ules in different parts of the country, and (2) the conversion of paper
ACH return items to automated form.
The float amendment requires an ACH association that handles
items that give rise to float because of different holiday schedules in dif
ferent parts of the country to determine which items create float. The
ACH association is to provide this Bank with a statement that will permit
this Bank to make entries to the accounts of the depository institutions
concerned to offset the float. This procedure is temporary until more
efficient software is installed at automated clearing houses.
The conversion of ACH paper return items to automated form is
another step in the improvement of the ACH system. It is expected that
eliminating the manual processing of paper return items by converting
them at the first Reserve Bank to receive them will save both time and
money. An ACH association itself, of course, may convert paper return
items to automated form.
Finally, a new paragraph emphasizes that Reserve Banks do not
handle ACH returns of items that were originated through private-sector
automated clearing houses, and requires receivers to maintain records
that show source of receipt.
(OVER)
Effective February 25, 1985, Operating Circular No. 10 is
amended as follows:
1.
A new paragraph 19A is added as follows:
19A. In connection with a settlement statement, an ACH associ
ation must send this Bank a supplemental statement showing the adjust
ments that are required to be made to the accounts of originators to
implement the Federal Reserve holiday float policy. Under that policy,
if an item specifies a settlement date that is not a banking day for either
a particular banking institution (originator or receiver) or for a Reserve
Bank involved in the transaction, settlement is effected, with respect to
that party, on the next day that is a banking day for both the originator
or receiver and its Reserve Bank. Credit and debit float is eliminated by
“ as o f” adjustment to the originator’s account, or the originator may
elect to pay for debit float by explicit charge. This Bank will make the
adjustments shown on the supplemental statement but reserves the right
to refuse to make any or all entries for any of the reasons listed in
subparagraphs 17(a)-(d) of this operating circular.
2.
Paragraph 27 is amended to read as follows:
27.
We accept, from a local ACH association, return of an ACH
item that we handled originally. We deliver an automated return item,
as instructed by the ACH association, to the originator’s Reserve Bank.
We convert a paper item to automated form and deliver the item to the
originator’ s Reserve Bank. The ACH association must include the debit
or credit for return of an item on a supplemental settlement statement.
3.
A new paragraph 30A is added as follows:
30A. A receiver should keep records that permit it to identify the
source of receipt of items. By sending a returned item or notice to us, a
receiver (a) warrants to us, to the originator's Reserve Bank, and to the
originator that we originally handled the item, and (b) agrees to provide
to us on request records showing that we originally handled the item.
E.
G
erald
C o r r ig a n ,
President.
federal Reserve Bank
of New York
Fourth Supplement to
Operating C irc u la r No. 10
(Revised effective August 1, 1981
Effective April I, 1987
AUTOMATED CLEARING HOUSE ITEMS
To A ll D e p o sito r y Institutions in the S eco n d
F ed era l R e se r v e D istrict, and O th ers C o n c e rn e d
Effective April 1, 1987, paragraph 19A of Operating Circular No.
10, which was added by the Third Supplement, dated February 25,
1985, to the operating circular, has been amended to read as follows:
19A. In connection with a settlement statement, an ACH associa
tion must send this Bank a supplemental statement showing the adjust
ments that are required to be made to the accounts of originators or receiv
ers to implement the Federal Reserve holiday float policy. Under that
policy:
1. If an item does not specify a settlement date, or if an item
specifies a date the same as or earlier than the banking day of
receipt by us, settlement shall occur on the banking day following
receipt by us.
2. If an item specifies a settlement date that is a standard Federal
Reserve holiday, the settlement date shall be the next banking
day for us.
(E n c.C ir. N o. 10160]
(O V E R )
3. If an item specifies a settlement date that is not a banking day for
the originator or receiver, settlement shall be effected, with re
spect to that party, as follows:
ACH debit items:
Originator closed: Credit originator's account on settle
ment date.
Receiver closed: Debit receiver’s account on settlement
date, or receiver may choose next-day debit with “as o f ’
adjustment or explicit charge for float.
ACH credit items:
Originator closed: Debit originator’s account on settle
ment date, or originator may choose next-day debit with
“as o f ’ adjustment or explicit charge for float.
Receiver closed: Credit receiver’s account on settlement
date.
The receiver is not considered to receive an item made available
to it on the day it is closed until its next banking day, for purposes
of determining the deadline for return.
E. G e r a l d C o r r ig a n .
President.
Federal Reserve Bank
of New York
Fifth Supplement to
O perating C irc u la r No. 10
(Revised effective August 1. 1981)
September 28. 1988
AUTOMATED CLEARING HOUSE ITEMS
To A ll D e p o sito r y Institutions in the S eco n d
F ed era l R e se r v e D istrict, and O th ers C o n c e r n e d :
Below are amendments to this Bank’ s Operating Circular No. 10
that concern: (1) the exclusion from the operating circular o f certain
rules adopted by the National Automated Clearing House Association
(“ NACHA” ) and (2) measures designed to reduce risk in ACH transac
tions.
Ordinarily, NACHA rules apply to an originator of an ACH item
by agreement under paragraph 6 of the operating circular, which pro
vides that an originator agrees to comply with “ applicable ACH rules.”
The definition of “ applicable ACH rules” provides, in paragraph 3(c),
however, that it does not include provisions in ACH rules that conflict
with regulations and policy guidelines o f the Federal Reserve System.
The amendment to paragraph 3(c) also indicates that the “ applicable
ACH rules” do not include provisions governing arbitration of disputes
or providing for payment of legal expenses to an ACH association in
suits against the association. Also excluded are provisions limiting the
rules’ application to members of an ACH association, provisions requir
ing dues or fees, and provisions requinng execution of agreements.
The risk reduction measures were adopted by the Board of Gov
ernors o f the Federal Reserve System as pan of the ACH portion o f the
overall payments system risk reduction efforts. The amendment relates
to monitoring of ACH transactions originated by problem banks and re
quiring funding or collateral as necessary.
(OVER)
Accordingly, Operating Circular No. 10 is amended as follows:
1. Paragraph 3(c) is amended by deleting the period at the end
thereof and adding the following, effective on the effective dates of the
NACHA rules:
nor provisions (i) limiting the rules’ application to members
o f an ACH association, (ii) requiring dues or fees (other than a rea
sonable fee for copies of the ACH rules), (iii) requiring execution
of agreements (such as settlement or indemnity agreements), (iv)
governing arbitration of disputes among participants, or (v) provid
ing for payment of legal expenses to an ACH association in suits
against the association; but such provisions may bind members of
the ACH association.”
2. Paragraph 6A is added as follows, effective July 18, 1988:
“ 6A. An ACH association shall send this Bank a supplemen
tal statement giving this Bank advice of the amounts o f credit and
debit item(s) originated by each participant in the ACH. This Bank
may require a participant in the ACH to give this Bank prior notice
of the origination o f a credit item and may require the originator
to fund or provide collateral for a credit item if this Bank judges
that there may not be sufficient funds in the originator's account
on the settlement date to cover the item.”
E. G
er a ld
C o r r ig a n .
President.
CORRECTED COPY
Federal Reserve Bank
of New York
Appendix A to
Operating Circular No. 10
Revised effective January 1, 1989
TIME AND FEE SCHEDULES
Automated Clearing House Services
T o A ll D e p o s ito r y Institutions in the S eco n d
F ed era l R e se r v e D istrict, and O th ers C o n c e r n e d :
This Bank’ s time and fee schedules for automated clearing house
(ACH) services are as follows:
D e p o s it D e a d lin e s
Night Cycle
(Sunday through
Thursday)
Day Cycle
(Monday through
___ Friday)
ACH files:
ACH files for interregional
transmission.........................
ACH files for local
courier delivery ...................
11:30 a.m.
12:00 midnight
5:00 p.m.
4:00 a.m.
Settlement Statement Time Schedule
The following schedule shows the cut-off hours for receipt by us of settlement
statements from local ACH associations:
Type of Settlement
Day Cycle
Night Cycle
Supplemental
Truncation
[Ref. Cir. No. 10279]
Receipt Deadline
(Day of Settlement)
11:00
11:00
3:00
5:00
a.m.
a.m.
p.m.
p.m.
(OVER)
Transaction Fees1
Origination:
Interregional presorted deposits1
2 ....................................................
Interregional addenda record........................................................
Nighttime surcharges:
Debits........................................................................................
Next-day credits........................................................................
Receipt:
Interregional items...............
Interregional addenda record........................................................
1.20
0.20
3.50
1.50
1.20
0.20
F ix e d F e es
File processing...................................................................
Non-electronic delivery fee ........................................
$1.00 per file
$5.00 per delivery
Effect of this Appendix on previous Appendix
This Appendix supersedes Appendix A, revised effective January 1,
1988, to Operating Circular No. 10.
1. The fo llo w in g A utom ated Clearing H ouse transactions will be billed as regular items: C o r
porate Trade Payments (C T P ), C orporate Trade E xchange (C T X ), D epository Institution A u to
mated Returns (R E T ), D epository Institution A utom ated N otification o f Changes (C O R ), and Pre
notifications.
2. Presorted deposits consist o f files o f interregional transactions presorted by receiving Federal
R eserve O ffice .
E.
G e rald C o r r ig a n ,
President.
CORRECTED COPY
Federal Reserve Bank
of New York
Appendix A to
Operating Circular No. 10
Revised effective January 1, 1989
TIME AND FEE SCHEDULES
Automated Clearing House Services
T o A ll D e p o s ito r y Institutions in the S eco n d
F ed er a l R e se r v e D istrict, and O th ers C o n c e r n e d :
This Bank’ s time and fee schedules for automated clearing house
(A C H ) services are as follow s:
D e p o s it D e a d lin e s
Night Cycle
(Sunday through
Thursday)
Day Cycle
(Monday through
____ Friday)
ACH files:
ACH files for interregional
transmission............................
ACH files for local
courier delivery .....................
11:30 a.m.
12:00 midnight
5:00 p.m.
4:00 a.m.
Settlement Statement Time Schedule
The following schedule shows the cut-off hours for receipt by us o f settlement
statements from local ACH associations:
Type of Settlement
Day Cycle
Night Cycle
Supplemental
Truncation
[Ref. Cir. No. 10279]
Receipt Deadline
(Day of Settlement)
11:00
11:00
3:00
5:00
a.m.
a.m.
p.m.
p.m.
(OVER)
Transaction Fees1
Origination:
Interregional presorted deposits1
2 .........................................................
Interregional addenda record..............................................................
Nighttime surcharges:
D eb its.................................................................................................
Next-day credits................................................................................
Receipt:
Interregional item s................................................................................
Interregional addenda record..............................................................
1.20
0.20
3.50
1.50
1.20
0.20
Fixed Fees
File p rocessin g..........................................................................
Non-electronic delivery fee ............................................
$1.00 per file
$5.00 per delivery
Effect of this Appendix on previous Appendix
This Appendix supersedes Appendix A, revised effective January 1,
1988, to Operating Circular No. 10.
1. The fo llo w in g A utom ated Clearing H ouse transactions will be billed as regular items: C o r
porate Trade Payments (C T P ), C orporate Trade Exchange (C T X ), D epository Institution A u to
mated Returns (R E T ), D epository Institution A utom ated N otification o f Changes (C O R ), and Pre
notifications.
2. Presorted deposits consist o f files o f interregional transactions presorted by receiving Federal
R eserve O ffice .
E.
G e r a ld C o r r ig a n ,
President.
@FedFRASER