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FEDERAL RESERVE B A * OF NEW YORK [ Circular No. 9795 11 January 30, 1985 SECURITIES SAFEKEEPING AND NONCASH COLLECTION SERVICES Fee Schedules, Effective February 28, 1985 To All Depository Institutions, and Others Concerned, in the Second Federal Reserve District: Following is the text of a statement issued by the Board of Governors of the Federal Reserve System: The Federal Reserve Board today approved revised fee structures for the definitive securities safe keeping and noncash collection service, effective February 28. The Board’s action results in the introduction of a re-registration fee for registered securities and permits Reserve Banks to charge a fee for maintaining coupon-bearing securities. The Board also approved several changes to the fee stmcture for noncash collection. A Reserve Bank may charge a fee to the depositor for any coupon deposit that is returned as uncollectible. Reserve Banks are given the option of adopting a mixed deposit program, which will allow a depository institu tion the opportunity to deposit all of its coupons in one mixed deposit. The Reserve Banks also have the option of charging a higher fee to recover the additional costs of collecting noncash items payable at country endpoints. Printed on the following pages is a copy of the fee schedules. In addition, enclosed — for depository institutions in this District— is the text of the Board’s official notice in this matter, which contains a discussion of the comments received on the November 1984 proposed revision of the fee structures; additional copies will be furnished upon request directed to our Circulars Division (Tel. No. 212-791-5216). Questions on this matter should be directed to your Account Manager or to Carol W. Barrett, Assistant Vice President, Fiscal Services Function (Tel. No. 212-791-6073) or Joseph J. Grimshaw, Manager, Safekeeping Department (Tel. No. 212-791-7726). E . G e r a l d C o r r ig a n , President. ATTACHMENT I 1985 PRICE SCHEDULE DEFINITIVE SAFEKEEPING DEPOSITS 1985 1984 WITHDRAWALS 1/ 1984 1985 RECEIPTS/ISSUES 1-400 1-400 400+ 1984 1985 1984 400+ 1985 PURCHASES AND SALES 1984 1985 12.50 12.50 12.50 12.50 2.80 2.90 2.10 2.20 15.00 15.00 12. 50 35.50 35.50 35.50 35.50 5.35 . 5.35 4.75 4.75 23.00 23.00 35.50 PHILADELPHIA 15.00 16.00 15.00 16.00 3.00 3.25 2.00 2.25 19.00 20.00 20.00 CLEVELAND 15.00 15.00 15.00 15.00 2.25 2.00 1.75 1.50 25.00 25.00 15.00 RICHMOND 15.00 15.00 15.00 15.00 1.50 1.95 1.00 1.45 20.00 20.00 15.00 ATLANTA 0.00 0.00 5.00 5.00 N/A N/A 5.00 CHICAGO 11.00 15.00 11.00 11.00 11.00 ST. LOUIS 8.00 MINNEAPOLIS BOSTON NEW YORK REREGISTRATIONS 1985 y PAR VALUE 1985 2/ 0.0050 3/ 0.0050 4/ * see be! ow * see be! ow 15.00 3.00 3.50 2.75 2.75 19.00 21.00 15.00 11.00 11.00 2.00 2.25 1.75 2.00 N/A N/A 11.00 10.00 8.00 10.00 1.25 1.50 0.90 0.90 N/A N/A 10.00 8.00 8.00 8.00 8.00 1.40 1.40 0.75 0.75 10.00 10.00 8.00 KANSAS CITY 15.00 15.00 15.00 15.00 1.50 2.50 1.25 2.25 20.00 20.00 15.00 DALLAS 10.00 10.00 10.00 10.00 2.75 2.25 2.50 2.00 26.50 26.50 10.00 5/ DETROIT 1/ ACTUAL SHIPPING COSTS ADDITIONAL. 2/ APPLIED TO COUPON BEARING SECURITIES ONLY; FEE PER $1,000 PAR VALUE0 3/ PHILADELPHIA-$2.25 FEE FOR ALL REGISTERED SECURITIES. OF REGISTERED SECURITIES VERSUS BEARER SECURITIES. 4/ ATLANTA 1-500 RECEIPTS @ $2.50 IN 1984/85, 500-1000 @ $2.00 IN 1984/85, AND 1000+ @ $1.50 IN 1984/85. 5/ DETROIT PILOT 1-100 RECEIPTS PRICED AT @ $3.00 1984/85, OVER 100 RECEIPTS INCLUDING COLLECTION OF COUPONS. —— ■ 0.0080 THIS IS TO RECOGNIZE THE LOWER HANDLING COSTS & $2.25 IN 1984 AND $2.50 IN 1985 1985 PRICE SCHEDULE NONCASH COLLECTION (FOR BANKS NOT OFFERING A MIXED DEPOSIT PRODUCT) LOCAL COUPONS ADD-ON FEE FOR INTERDISTRICT COUPONS COUNTRY LOCAL CITY POSTAGE & INSURANCE 1/ RETURN ITEMS BOND REDEMPTIONS ANDSALES 2/ 1984 1985 1985 1984 1985 1984 1985 1985 1984 1985 BOSTON 2.00 2.00 2.00 2.55 2.75 1.00 1.00 3.00 12.50 12.50 NEWYORK 2.50 2.75 4.00 2.75 2.75 0.50 0.75 10.00 35.50 35.50 PHILADELPHIA 2.90 2.90 2.90 2.55 2.85 1.00 1.00 10.00 15.00 20.00 RICHMOND 2.00 2.00 2.00 2.50 3.50 1.00 1.00 5.00 20. 00 20.00 3/ CHICAGO ~ 3.50 3.50 3.50 2.75 2.75 .70/ 1.00/ 1.70 2.00 10. 00 11.00 20.00 2.50 2.50 2.50 2.60 3. 00 1.00 1.00 10.00 11.00 11.00 2.50 2.50 2.50 2.70 3.00 0.60 0.60 10.00 8. 00 8.00 KANSAS CITY 3.20 3.50 3.50 2.50 3.50 1.00 1.00 10.00 15.00 20.00 SAN FRANCISCO 4.00 5.00 5.00 N/A N/A 1.00 1.00 10.00 35.50 35.50 DETROIT MINNEAPOLIS 4/ (FOR BANKS OFFERING A MIXED DEPOSIT PRODUCT) LOCAL COUPONS FROM IN-DISTRICT DFI'S CITY INTER-DISTRICT COUPONS RETURN BOND REDEMPTIONS ITEMS AND SALES 2/ 1984 1985 1984 1985 CITY 5/ 1984 1985 CLEVELAND 2.25 2.75 2.75 3.00 3.00 3.25 3.00 3.50 2.75 4.00 3.75 5.00 10.00 1.75 1.75 2.50 2.50 1.40 2.40 1.40 3.15 2.75 2.75 3.75 3.75 0.00 ST. LOUIS 2.00 3.25 2.00 3.25 2.00 3.25 2.00 3.25 2.75 3.25 3.25 3.25 0.00 10.00 10.00 2.75 3.00 2.75 3.00 2.10 3.50 2.10 3.50 2.75 3.25 3.75 4.50 10.00 15.00 20.00 ATLANTA DALLAS 1/ COUNTRY LOCAL COUPONS FROM OUT-OF-DISTRICT DFI'S COUNTRY 5/ 1984 1985 1984 1985 1984 1985 1985 FINE SORT MIXED PER $1000. 2/ ACTUAL SHIPPING COSTS ADDITIONAL. 3/ CHICAGO - 1985 POSTAGE AND INSURANCE $1.00 PER $1000 LOCAL, $2.00 PER $1000 INTERDISTRICT. 4/ MINNEAPOLIS - 12TH DISTRICT COUPONS $4.00; BONDS $8.00. 5/ PLUS POSTAGE AND INSURANCE. 1984 1985 15.00 15.00 7.50 7.50 FEDERAL RESERVE (Docket FEE SCHEDULES AGENCY: Board ACTION: 1985 Safekeeping SUMMARY: for noncash FOR Board DATE: FURTHER L„ of D.C. 20551o Donna matching factor The of of the Federal providing based 1983)=, costs, on costs [Enc. Cir. No. 9795] fee S y s t e m =, Securities structures securities Gerald and fees safekeeping In September the were the revenues in recovered the revenues Senior Reserve Bank and 98 end of Manager Analyst Ope r a t i o n s , 0 or Legal Division, System, 1983, definitive collection in D 0 Manypenny, Reserve Federal excluding service and new (202/452-3711), Fees and Reserve this Definitive DeCorleto, for noncash ( " P S A F " ), Reserve Service • Federal Attorney schedules 29, the SERVICES 1985. A e of approved (September for 28, INFORMATION: and Federal definitive SUPPLEMENTARY safekeeping the CONTACT: Division Governors fee of BANK service., or Rhoads, Board RESERVE approved INFORMATION (202/452-3956), Daniel has February (202/452-3954), FEDERAL Collection Reserves' collection EFFECTIVE R - 0 5 3 3) Schedules Noncash Federal Noo Governors Fee and The the of FOR SYSTEM Washington, the Board securities s e r v i c e =, 48 F 0R„ established to provide private the third percent of sector the the third approximately of 1984. costs of quarter $4.7 a adjustment quarter of 44647 of million 1984 and -2 - $4o6 million* quarter the of 1984 indicates quarter^ third aatch, r e s p e c t i v e l y <= including industry practices Act* fee in 1984)0 The fee reregistration sending a a fee coupon fee b y to fee? (2) 2/ basis?™ country all the and Reserve security the the as Proposed revisions structure included? (3) the collection 1/ Preliminary including PSAF* $ 1 8 e5 m i l l i o n o of a fees (1) for of Equity to to the to the (1) an deposit setting Reserve Banks Fiscal the (November 26* securities addition of with the of for basis safekeeping registered collection on different return a permanent city electing item and to offer data for the year indicates that costs* were $ 2 1 „7 m i l l i o n with revenue of 2/ The mixed deposit program provides depository institutions in participating districts the option of submitting unsorted coupon envelopes. a costs option optional option of agent noncash not of to a district compared that and recover costs to changes transfer on higher the fourth changing definitive Banks mixed option of several the introduction securities addition to the cost/revenue 4 9 F 0R 0 4 6 4 8 8 included? differentiate bearing fee (2) 1984o a view Tax proposed revisions registered securitieso activity November in the for comparable achieve and to data rate to 1985* Board structure reregistration? of order in the proposed safekeeping recovery attributable Responsibility structures a In PSAF* Preliminary -3 - a mixed deposit program. average of percent. 21o5 Ten concerning the depository B o a r d 8s suggested of objected registered the is commercial banks commercial bank stated the that, option bearing and necessary deposit System charge and charges in i ts charge intensive a registered the proposed that districtc local fee Reserve to securities, in declining concern about the increase withdrawal review for request recovers of 1985 for declining such which in line commenter was not most with also exercising between coupon an option was of coupon bearing costs. in One its not commenter Reserve B a n k 8s fees. the Reserve indicates comment fully number for that was This Bank for solely for differentiate result and fee One fee stated procedure would projections the labor from institution Bank commenter the A in a Reserve an continue reregistration a Another efforts by received received depository a at were favorable. reduction One increase Banks, generally of to Comments because securities expressed Reserve cost kept although to were imposition purposes. projected p r o p o s a l s «, fees. securities reregistration were from that increasing to pledging six institutions commenter instead comments, Fees the that are cost, Banks8 the cost fee necessary including and revenue increases to ensure PSAF, of reflected that the providing -4 - this service revisions to safekeeping 3/ in 1985,— the fee of costly because the transported to safekeeping0 registered to a registered from the costs These to as the because of their maintain high With coupon number of security supported coupon standards the the is and bearing labor coupons no nature noncash imposition this as the into the number optional costs twice fee and yearly. Generally* not decline operation as declines requirements a return of resulting securities and and safekeeping* securities collection of goal. intensive returned securities- do in this coupons. bearing securities from increased have intensive to achieving Similarly* maturing that definitive increasing the bearing labor regard been coupon usually believes withdrawn agent* reflects clip to be increases0 securities the security must have between to rapidly commenters costs securities also essential transfer securities related for registered the need Registered are security differentiate Board structure activity Reregistration The to 4/ activity* item fee on two a 3/ Reserve Banks are continuing cost reduction efforts. In 1984* c o s t for the s e r v i c e i n c r e a s e d a p p r o x i m a t e l y 3 p e r c e n t d u e to s i g n i f i c a n t v o l u m e i n c r e a s e s and to the i n t r o d u c t i o n of f l o a t c o s t i n g in 1 9 8 4 , E x c l u d i n g float* 1 9 8 4 costs, d e c l i n e d 1 p e r c e n t c o m p a r e d to 1983, C o s t s a r e p r o j e c t e d to d e c l i n e b y 2,3 p e r c e n t in 1985, 1/ T h r e e R e s e r v e B a n k s w i l l a d o p t a p a r v a l u e fee for c o u p o n b e a r i n g s e c u r i t i e s to r e f l e c t t h i s d i f f e r e n t i a l a n d a n o t h e r R e s e r v e B a n k w i l l a l t e r i t s a c c o u n t m a i n t e n a n c e f e e. ■=■5“ district fee. not option One be In result of of the of not to 5/ fee.— 1 ' The return to sufficient volume sorting. of the The also deposit city and After the issues Board the Reserve and fee will supported the to be the should Banks Reserve item assessed a As believed St . L o u i s impose Banks handling. Banks program be the of that approved that given collection review to depository be mixed return only a the Reserve Bank item by deposit institutions believes these the items the justify in do the light on a of district Banks option of not not time the institutions, Reserve the that option as have involved benefits the option mixed basis. offering adopting the different fees. the comments Board has *L/ The Atlanta Reserve Bank charge a return item f e e . Reserve received, option determined raised, of items• the noncash should country level institution two return depository of for program Board mixed The of with of the Bank» those program deposit item commenter beneficial fees appropriate exercise Reserve in ten over depository comments associated fee w a s One a item the review, decided collecting that return costs that concern out-of-district light the stated the returned reviewed expressed commenter charged handling level but received decided had to and approve previously analysis the decided of revised not to -6 - fee schedules noncash The of the collection revised that for the fee service* schedules revised costs* definitive fee including to are schedules PSAF* in securities be effective attached0 will February The provide 1985 based safekeeping on Board for 28* and 1985o believes full recovery projected costs of $ 2 1 o 2 m i l l i o n a n d p r o j e c t e d r e v e n u e o f $ 2 1 o 3 million*, By Reserve order System* of the January Board 29* of Governors of the Federal 1985o (signed) William W. Wiles W i l l i a m W„ W i l e s Secretary of the Board Attachments
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