[Federal Register Volume 75, Number 90 (Tuesday, May 11, 2010)]
[Rules and Regulations]
[Pages 26089-26091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-11141]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Part 363
Securities Held in TreasuryDirect
AGENCY: Bureau of the Public Debt, Fiscal Service, Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: TreasuryDirect[supreg] is an account-based, book-
entry, online system for purchasing, holding, and conducting
transactions in Treasury securities. This final rule benefits
TreasuryDirect[supreg] customers by simplifying the
procedures for advance scheduling of marketable Treasury security
purchases, enhancing the process of scheduling reinvestments of
marketable Treasury securities, and improving the procedures when the
proceeds of the maturing security are insufficient to pay for a new
security.
DATES: Effective Date: May 15, 2010.
ADDRESSES: You can download this Final Rule at the following Internet
addresses: http://www.publicdebt.treas.gov or http://www.gpoaccess.gov/ecfr.
FOR FURTHER INFORMATION CONTACT:
Elisha Whipkey, Director, Division of Program Administration,
Office of Retail Securities, Bureau of the Public Debt, at (304) 480-
6319 or [email protected].
Susan Sharp, Attorney-Adviser, Dean Adams, Assistant Chief Counsel,
Edward Gronseth, Deputy Chief Counsel, Office of the Chief Counsel,
Bureau of the Public Debt, at (304) 480-8692 or
[email protected]>.
SUPPLEMENTARY INFORMATION:
TreasuryDirect[supreg] is an online, account-based
system for individuals and entities to purchase, hold, and conduct
transactions in eligible Treasury securities. This final rule makes
changes to the procedures for purchasing and reinvesting marketable
Treasury securities.
TreasuryDirect[supreg] currently allows a customer to
schedule a marketable security purchase up to five years in advance.
Because the auction schedule for marketable Treasury securities cannot
be predicted with certainty that far in advance, some scheduled
security purchases must be canceled when no matching security is
available at that time. This final rule limits the advance scheduling
of new purchases of marketable securities. One day each week,
marketable securities that are scheduled for auction within 8 weeks
will be made available on the TreasuryDirect[supreg] Web
site for scheduling a purchase. These securities are the only
marketable securities available for advance purchase. Marketable
security purchases scheduled before May 15, 2010, to take effect after
July 9, 2010, will be canceled.
Treasury is streamlining the procedures for reinvesting marketable
Treasury securities purchased and held in
TreasuryDirect[supreg]. Prior to the effective date of this
rule, a customer was required to take several steps to reinvest a
marketable security. First, the customer had to determine the date that
the security matured, then direct that the proceeds of the maturing
security be used to purchase a certificate of indebtedness, and then
schedule a new purchase to coincide with the maturity date of the
original security, with the payment for the new security being made
using the redemption proceeds of the certificate of indebtedness. Any
purchase of a marketable security in which the payment was made through
the redemption proceeds of the customer's certificate of indebtedness
was treated as a reinvestment. The new procedure will streamline the
reinvestment process by permitting the customer to schedule automatic
reinvestments without requiring the customer to calculate dates and
schedule purchases. Reinvestments will be limited at any one time to 25
times for a 4-week bill, 7 times for a 13-week bill, 3 times for a 26-
week bill, and once for all other marketable security types. The
customer can schedule a reinvestment either at the time of purchase or
after the security is issued into the account. However, the customer
cannot schedule, edit, or cancel a reinvestment when the maturing
security goes into a closed book period, or when a noncompetitive bid
for the replacement security is no longer accepted, whichever comes
first. Because of the changes made to the reinvestment process, any
marketable security purchase scheduled prior to the effective date of
this rule, and with an effective issue date on or after the effective
date of this rule (except for purchases scheduled to take effect after
July 9, 2010, which, as noted above, will be canceled), will be treated
as a new purchase, even if the transaction would have been treated as a
reinvestment prior to this rule.
In addition, the procedure is changing whenever there are
insufficient funds from the maturing security to pay the full purchase
price of the replacement security. Previously, in that event,
TreasuryDirect[supreg] would cancel the transaction. This
final rule provides that, in the event that the proceeds of the
maturing security are insufficient to pay the full purchase price of
the replacement security, the additional amount will be paid by either
debiting the customer's primary account at a financial institution or
by using the redemption proceeds from the customer's certificate of
indebtedness. The source for the additional funds depends on how the
maturing security was acquired. If the maturing security was purchased
within TreasuryDirect[supreg] prior to the effective date of
this rule, or purchased after the effective date of this rule and the
source of the funds to purchase the security was a debit from a
financial institution account, or if the maturing security was received
through a transfer, then the customer's primary account at a financial
institution will be debited for the additional amount. If there are
insufficient funds in the customer's primary account at a financial
institution, the reinvestment will be canceled. If the maturing
security was purchased after the effective date of this rule using
redemption proceeds from the customer's certificate of indebtedness,
then a redemption from the customer's certificate of indebtedness will
be made for the additional funds. If the amount available for
redemption from the certificate of indebtedness is insufficient to pay
the additional amount, the reinvestment will be canceled.
Procedural Requirements
Executive Order 12866. This rule is not a significant regulatory
action pursuant to Executive Order 12866.
Administrative Procedure Act (APA). Because this rule relates to
United States securities, which are contracts between Treasury and the
owner of the security, this rule falls within the contract exception to
the APA, 5 U.S.C. 553(a)(2). As a result, the notice, public comment,
and delayed effective date provisions of the APA are inapplicable to
this rule.
Regulatory Flexibility Act. The provisions of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., do not apply to this rule
because, pursuant to 5 U.S.C. 553(a)(2), it is not required to be
issued with notice and opportunity for public comment.
[[Page 26090]]
Paperwork Reduction Act (PRA). There is no new collection of
information contained in this final rule that would be subject to the
PRA, 44 U.S.C. 3501 et seq. Under the PRA, an agency may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless it displays a valid OMB control number. The Office
of Management and Budget already has approved all collections of
information in 31 CFR part 363 under OMB control number 1535-0138.
Congressional Review Act (CRA). This rule is not a major rule
pursuant to the CRA, 5 U.S.C. 801 et seq., because it is a minor
amendment that requires less reporting, and is not anticipated to have
any effect on investors; therefore, it is not expected to lead to any
of the results listed in 5 U.S.C. 804(2). This rule may take immediate
effect after we submit a copy of it to Congress.
List of Subjects in 31 CFR Part 363
Bonds, Electronic funds transfer, Federal Reserve system,
Government securities, Securities.
0
Accordingly, for the reasons set out in the preamble, 31 CFR Chapter
II, Subchapter B, is amended as follows:
PART 363--REGULATIONS GOVERNING SECURITIES HELD IN TREASURYDIRECT
0
1. The authority citation for part 363 continues to read as follows:
Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3102, et seq.;
31 U.S.C. 3121, et seq.
0
2. Amend Sec. 363.6 by:
0
a. Adding the definition of ``Closed book period'' and ``Reinvestment''
in alphabetical order; and
0
b. Revising the definition of ``Owner,'' to read as follows:
Sec. 363.6 What special terms do I need to know to understand this
part?
* * * * *
Closed book period means a period of four business days prior to
the date a scheduled marketable security interest and/or maturity
payment is made, during which time certain transactions will be delayed
until after the closed book period is completed. (See Sec. 363.210.)
* * * * *
Owner when referring to an individual, is either the single
individual named in the registration of a security held in the single
owner form of registration, the first individual named on a security
held in the owner with beneficiary form of registration, the first
individual named on a security held in the primary owner with secondary
owner form of registration, or either individual named on a converted
savings bond held in the coowner form of registration; when referring
to a minor linked account, the owner is the minor; when referring to an
entity, the owner is the entity.
* * * * *
Reinvestment means using the redemption proceeds of a maturing
marketable security to purchase a new marketable security of the same
type and term, using the automatic reinvestment option available in
TreasuryDirect.
* * * * *
0
3. Amend Sec. 363.202 by revising paragraph (a) to read as follows:
Sec. 363.202 What marketable Treasury securities may I purchase and
hold through my TreasuryDirect [supreg] account?
(a) Purchase. (1) Advance purchase. You may purchase any marketable
Treasury security that is available for purchase through the
TreasuryDirect [supreg] website. One day each week, marketable
securities that are scheduled for auction within 8 weeks will be made
available on the TreasuryDirect website for scheduling an advance
purchase, and are the only marketable securities that you can schedule
for advance purchase.
(2) Purchases scheduled prior to May 15, 2010, with an effective
issue date on or after May 15, 2010. (i) Any marketable security
purchase scheduled prior to May 15, 2010, and with an effective issue
date of May 15, 2010, through July 9, 2010, will be treated as a new
purchase, even if the transaction would have been treated as a
reinvestment under the rules in effect prior to May 15, 2010.
(ii) Any marketable security purchase scheduled prior to May 15,
2010, with an effective issue date after July 9, 2010, will be
canceled.
* * * * *
0
4. Revise Sec. 363.205 to read as follows:
Sec. 363.205 How do I reinvest the proceeds of a maturing security
held in TreasuryDirect [supreg]?
(a) Method for reinvesting a maturing security. The only method of
reinvesting a maturing marketable security in TreasuryDirect [supreg]
is through the automatic reinvestment option available in your
TreasuryDirect account. Purchasing a security by directing that the
proceeds of a maturing security be used to purchase a certificate of
indebtedness, and then scheduling the purchase of a new security using
the redemption proceeds of the certificate of indebtedness, is not a
reinvestment.
(b) When a reinvestment can be scheduled, edited, or canceled. You
can schedule your reinvestment either at the time of purchase or after
the security is issued into your TreasuryDirect account. You cannot
schedule, edit, or cancel a reinvestment when the maturing security
goes into a closed book period, or when a noncompetitive bid for the
replacement security is no longer accepted, whichever comes first.
(c) What securities can be reinvested. Any marketable security can
be reinvested.
(d) Limits on scheduling reinvestments. Reinvestments will be
limited at any one time to 25 times for a 4-week bill, 7 times for a
13-week bill, 3 times for a 26-week bill, and once for all other
marketable security types.
(e) Canceling reinvestments. If there is no security available for
reinvestment with an issue date that coincides with the maturity date
or call date, if invoked, of the maturing security, and with the same
type and term, the scheduled reinvestment will be canceled and the
proceeds of the maturing security will be returned to the customer.
(f) Procedure if there are insufficient funds from the maturing
security to pay the full purchase price of the replacement security. If
there are insufficient funds from the maturing security to pay the full
purchase price of the replacement security, we will either debit your
primary account at a financial institution or pay the additional funds
using the redemption proceeds of your certificate of indebtedness.
(1) Debit from primary account at financial institution. If the
maturing security is purchased on or after May 15, 2010, we will pay
the additional funds by a debit from your primary account at a
financial institution if the maturing security was purchased within
TreasuryDirect by a debit from a financial institution account or if
the maturing security was received through a transfer. If we are unable
to obtain sufficient funds from your primary account at a financial
institution, the reinvestment will be canceled and we will refund the
proceeds of the maturing security.
(2) Withdrawal of funds from certificate of indebtedness. If the
maturing security is purchased on or after May 15, 2010, we will pay
the additional funds using the redemption proceeds of your certificate
of indebtedness if the purchase of the maturing security was made using
the certificate of indebtedness. If the amount available from a
redemption of the certificate of indebtedness is insufficient to pay
the additional amount, the reinvestment will be
[[Page 26091]]
canceled and we will refund the proceeds of the maturing security.
(3) Special rules if the maturing security was purchased prior to
May 15, 2010. If the maturing security was purchased within
TreasuryDirect or received through a transfer prior to May 15, 2010, we
will debit your primary account at a financial institution for the
additional funds. If we are unable to obtain sufficient funds from your
primary account at a financial institution, the reinvestment will be
canceled and we will refund the proceeds of the maturing security
0
5. Revise Sec. 363.210 to read as follows:
Sec. 363.210 Is there any period of time during which I will be
unable to process certain transactions regarding my security?
A closed book period will be in effect for four business days prior
to the date a marketable security interest and/or redemption payment is
made. During the closed book period, you cannot change the registration
of the security, change the payment destination of the proceeds, change
the view or transaction rights, make transfers, initiate a SellDirect
[supreg] transaction, or schedule, edit, or cancel a reinvestment. We
will hold transactions requiring submission of a form for processing
until the closed book period ends. If the security entered the closed
book period due to a scheduled interest payment, we will delay until
after the closed book period any SellDirect requests scheduled but not
processed prior to the closed book period. If the security entered the
closed book period due to a maturity payment, we will cancel SellDirect
requests scheduled but not processed prior to the closed book period.
Richard L. Gregg,
Acting Fiscal Assistant Secretary.
[FR Doc. 2010-11141 Filed 5-10-10; 8:45 am]
BILLING CODE 4810-39-P