[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: 31CFR356.21]

[Page 364-365]
 
                  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 C--Determination of Auction Awards; Settlement
 
Sec. 356.21  Proration of awards.

    (a) Awards to submitters. In auctions where bids at the highest 
accepted yield or discount rate are prorated under Sec. 356.20(a)(2) of 
this part, the Federal Reserve Banks are responsible for prorating 
awards for submitters at the percentage announced by the Department. For 
example, if 80% is the announced percentage at the highest yield or 
discount rate, then each bid at that rate or yield shall be awarded 80% 
of the amount bid. Hence, a bid for $100,000 at the highest accepted 
yield or discount rate would be awarded $80,000. In all cases, awards 
will be for, at least, the minimum to hold, and awards must be in an 
appropriate multiple to hold. Awards at the highest accepted yield or 
rate are adjusted upwards, if necessary, to an appropriate multiple to 
hold. For example, Treasury bills may be issued with a minimum to hold 
of $1,000 and multiples of $1,000. Where an $18,000 bid is accepted at 
the high discount rate, and the percent awarded at the high discount 
rate is 88%, the award to that bidder will be $16,000, representing an 
upward adjustment from $15,840 ($18,000 x .88) to an appropriate 
multiple to hold. If tenders at the highest accepted discount rate are 
prorated at, for example, a rate of 4%, the award for a $10,000 bid will 
be $1,000, instead of

[[Page 365]]

$400, in order to meet the minimum to hold for a bill issue.
    (b) Awards to customers. In auctions where bids at the highest 
accepted yield or discount rate are prorated under Sec. 356.20(a)(2), 
depository institutions and dealers, whether submitters or 
intermediaries, are responsible for prorating awards for their customers 
at the same percentage as that announced by the Department. For example, 
if 80% is the announced percentage at the highest yield or discount 
rate, then each customer bid at that rate or yield shall be awarded 80%. 
The same prorating rules apply to customers as apply to submitters.

[58 FR 414, Jan. 5, 1993, as amended at 61 FR 37011, July 16, 1996; 64 
FR 3634, Jan. 25, 1999]