[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR356.12]

[Page 358-359]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 356--SALE AND ISSUE OF MARKETABLE BOOK-ENTRY TREASURY BILLS, NOTES, AND BONDS (DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT SERIES NO. 1-93)--Table of Contents
 
             Subpart B--Bidding, Certifications, and Payment
 
Sec. 356.12  Noncompetitive and competitive bidding.

    (a) General. All bids, including bids for reopenings, must state the 
par amount of securities bid for and must equal or exceed the minimum 
bid amount stated in the offering announcement. Bids that exceed the 
minimum bid amount must be in the multiple stated in the offering 
announcement.
    (b) Noncompetitive. A bidder bidding competitively for its own 
account may not bid noncompetitively for its own account in the same 
auction. A request for reinvestment of securities maturing in TREASURY 
DIRECT is a noncompetitive bid.
    (1) Maximum bid. A bidder may not bid noncompetitively for more than 
$1 million in a bill auction or more than $5 million in a note or bond 
auction. The maximum bid limitation does not apply to bidders who are 
bidding solely through TREASURY DIRECT reinvestment requests.
    (2) Additional restrictions. Between the date of the offering 
announcement and the time of the official announcement by the Department 
of the auction results, a noncompetitive bidder may not hold, at any 
time, a position for its

[[Page 359]]

own account in when-issued trading or in futures or forward contracts in 
the security being auctioned or enter into any agreement to purchase or 
sell or otherwise dispose of the securities it is acquiring in the 
auction. For purposes of this paragraph, futures contracts include 
those:
    (i) That require delivery of the specific security being auctioned;
    (ii) For which the security being auctioned is one of several 
securities that may be delivered; or
    (iii) That are cash-settled.
    (c) Competitive. A bidder bidding noncompetitively for its own 
account may not bid competitively for its own account in the same 
auction.
    (1) Bid format--(i) Treasury bills. For all bills except cash 
management bills, a competitive bid must show the discount rate bid, 
expressed with three decimals in .005 percent increments. The third 
decimal must be either a zero or a five, e.g., 5.320 or 5.325. Fractions 
may not be used. For cash management bills, a competitive bid must show 
the discount rate bid, expressed with two decimals in .01 percent 
increments, e.g., 5.14. Fractions may not be used.
    (ii) Treasury fixed-principal securities. A competitive bid must 
show the yield bid, expressed with three decimals, e.g., 4.170. 
Fractions may not be used.
    (iii) Treasury inflation-indexed securities. A competitive bid must 
show the real yield bid, expressed with three decimals, e.g., 3.070. 
Fractions may not be used.
    (2) Maximum recognized bid. There is no limitation on the maximum 
dollar amount that a bidder may bid for competitively, either at one 
yield or discount rate, or at different yields or discount rates. 
However, a competitive bid by a bidder at a single yield or discount 
rate that exceeds 35% of the public offering amount will be reduced to 
that amount. For example, if the public offering is $10 billion, the 
maximum bid amount that will be recognized at any one yield or discount 
rate from any bidder is $3.5 billion. (See Sec. 356.22 for award 
limitations.)

[58 FR 414, Jan. 5, 1993, as amended at 60 FR 13907, Mar. 15, 1995; 62 
FR 851, Jan. 6, 1997; 62 FR 32033, June 12, 1997; 62 FR 43093, Aug. 12, 
1997; 63 FR 4187, Jan. 28, 1998]