[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR356.15]

[Page 372-373]
 
                  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, 
 
             Subpart B_Bidding, Certifications, and Payment
 
Sec. 356.15  Bidding through investment advisers.

    (a) General. Where bids or positions of a person or entity are 
controlled by an investment adviser, such bids or positions are 
considered to be a controlled account, separate from the bids and 
positions of any person or entity with which they would otherwise be 
associated under the bidder definitions in appendix A of this part. The 
investment adviser may bid for controlled accounts

[[Page 373]]

by including, in a bid in the adviser's name, amounts that it is 
investing for the controlled accounts. The investment adviser may also 
bid for controlled accounts in the names of such accounts. Where bids 
are in an investment adviser's name, the investment adviser is 
considered the bidder for such bids and, where bids are in the name of a 
controlled account, the named controlled account is considered the 
bidder, for all purposes of this part 356, except as specified in this 
Sec. 356.15.
    (b) Noncompetitive and competitive bidding. Regardless of whether 
the bid for a controlled account is in the name of the investment 
adviser or in the name of the controlled account, such account may not 
be bid for both noncompetitively and competitively in the same auction. 
In addition, such account is subject to the noncompetitive bidding 
restrictions and award limitations contained in Sec. Sec. 356.12(b) and 
356.22(a).
    (c) Reporting net long positions. In calculating the amount of its 
bids and positions for purposes of the net long position reporting 
requirement found in Sec. 356.13(a), the investment adviser must 
include, in addition to what would otherwise be included for the 
investment adviser as a bidder under the bidder definitions, all other 
competitive bids and positions controlled by the investment adviser. The 
investment adviser may exclude any net long position less than $100 
million of any nonproprietary controlled account unless the adviser is 
placing a competitive bid for that account either in the name of the 
investment adviser or in the name of the account. However, if any net 
long position less than $100 million of any nonproprietary account not 
being bid for is excluded, then all net short positions less than $100 
million of nonproprietary accounts not being bid for must also be 
excluded. Regardless of whether the investment adviser bids in its own 
name or in the name of its controlled accounts, if the net long position 
is reportable, it must be reported as a total in connection with only 
one bid in accordance with Sec. 356.13(a).
    (d) Submitting bids for controlled accounts. Notwithstanding the 
definition of submitter found in Sec. 356.2, and the restriction 
against submitting bids for others found in Sec. 356.14, an investment 
adviser may submit bids, whether in the adviser's own name or in the 
names of its controlled accounts, directly to a Federal Reserve Bank or 
the Bureau of the Public Debt, in which case the investment adviser is 
considered a submitter. In the alternative, the investment adviser may 
forward such bids to a depository institution or dealer.
    (e) Certifications. By bidding for a controlled account, an 
investment adviser is deemed to have certified that it is in compliance 
with this part and the offering announcement governing the sale and 
issue of the security. Further, the investment adviser is deemed to have 
certified that the information provided on the tender or provided to a 
submitter or intermediary with regard to bids for controlled accounts is 
accurate and complete.
    (f) Proration of awards. In auctions where bids at the highest 
accepted yield or discount rate are prorated under Sec. 356.20(a)(2) of 
this part, investment advisers that submit bids for controlled accounts 
in the names of such accounts are responsible for prorating awards for 
their controlled accounts at the same percentage as that announced by 
the Department. The same prorating rules apply to controlled accounts as 
apply to submitters. See Sec. 356.21 of this part.

[61 FR 37010, July 16, 1996]