[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: 31CFR357.20] [Page 399-400] TITLE 31--MONEY AND FINANCE: TREASURY CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY PART 357--REGULATIONS GOVERNING BOOK-ENTRY TREASURY BONDS, NOTES AND BILLS (DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT SERIES NO. 2-86)--Table of Contents Subpart C--Treasury Direct Book-Entry Securities System (TREASURY DIRECT) Sec. 357.20 Securities account in TREASURY DIRECT. (a) Account. A securities account consists of: (1) An account master record, and (2) A securities portfolio. (b) Security. A security in TREASURY DIRECT is evidenced by the account master record and a description of the security as set out in the securities portfolio associated with an account master record. (c) Account master record. An owner must establish an account master record before the owner may deposit a security in TREASURY DIRECT. If the security is being purchased on original issue, the request that an account master record be established may be made on the form used for purchase of the security. If the security is being acquired other than on original issue, the request that an account master record be established should be made on the appropriate form that is provided by the Department. The account master record includes, but is not limited to, the following data: (1) The exact form of registration in which the securities are held; (2) The TREASURY DIRECT account number; (3) The correspondence address for the account; (4) The TIN of the owner, or in the case of ownership by two individuals, of the first-named owner; and (5) Payment instructions. (See Sec. 357.26.) (d) Securities portfolio. The securities portfolio contains a description of each security and is the aggregate of all securities in the securities account. (e) Statement of account. The Department shall send a statement of account (statement): (1) Upon the establishment of an account master record; (2) Upon a change in the securities portfolio; (3) At an owner's request; or (4) Upon the determination on December 31 that an owner has not received a statement of account for that current calendar year. The statement shall contain information regarding the account as of the date of such statement. The price associated with each security in the securities portfolio will also appear on the statement.\1\ The statement may be sent [[Page 400]] to the correspondence address designated in the account master record, or may be sent by electronic means. When the statement is issued as a result of a change in ownership of a security, statements will be sent, where appropriate, to both the former and current owners. Other information regarding the account may be obtained in accordance with Sec. 357.24. --------------------------------------------------------------------------- \1\ IRS regulations require reporting of income information on a security. (1) If the security is a bill, the price information will be used to comply with this requirement. The earnings reported to IRS for the year of a bill's maturity will be the difference between the par value of the bill and its price. (a) If a bill is deposited in TREASURY DIRECT at original issue, the price shown will be the issue price. (b) If a bill is transferred to TREASURY DIRECT from TRADES, the price shown will be that included in the transfer wire or supplied subsequently by the bill owner. If a price is not furnished, the price shown will be the weighted average price of the bill of the longest maturity having the identical CUSIP number. (c) If a bill is transferred from one TREASURY DIRECT account to another, the price shown in the receiving (transferee's) account will be that shown on the transfer instructions or supplied subsequently by the transferee. If a price is not furnished, the price shown will be the weighted average price at original issue of the bill of the longest maturity having the identical CUSIP number, unless the term of the bill can be determined from the account record in which case the price shown will be the weighted average price at original issue of the bill with that term. (2) If the security is a note or bond, the earnings reported to IRS for a year will be the periodic interest payments made during that year. If a note or bond is transferred to a TREASURY DIRECT account between interest payment dates, the earnings reported to IRS for the transferee will show the interest for the entire interest payment period. The price for notes and bonds will be shown on the statement of account for the account owner's information. The price shown will be determined following the procedures described above for bills. (3) The security owner should report directly to the IRS (a) adjustments to annual earnings amounts arising from acquisition of notes and bonds between interest payment periods and (b) price corrections for bills reported after preparation of the reports to the IRS. --------------------------------------------------------------------------- (f) Confirmation notice. The Department shall send a confirmation notice (notice): (1) Upon a change in an account master record; (2) Upon scheduling or canceling a reinvestment; or (3) To confirm the interest earned on a Treasury Inflation Indexed Security. The notice shall contain information regarding the account as of the date of such confirmation. The notice may be sent to the correspondence address designated in the account master record, or may be sent by electronic means. All changes reflected in paragraph (f) (1) and (2) of this section will be included in the next regularly scheduled statement of account. See paragraph (e) of this section for the statement schedule. (g) Account maintenance fees. An annual maintenance fee shall be charged for each TREASURY DIRECT securities account holding securities that in the aggregate exceed a stipulated par amount. The amount of the fee will be published by notice in the Federal Register. (Approved by the Office of Management and Budget under control number 1535-0068) [51 FR 18265, May 16, 1986, as amended at 60 FR 4377, Jan. 23, 1995; 62 FR 18004, Apr. 11, 1997; 62 FR 32033, June 12, 1997]