[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR356.12]

[Page 372]
 
                  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  What are the different types of bids and do they have 
specific requirements or restrictions?

    (a) General. All bids must state the par amount of securities bid 
for and must equal or exceed the minimum to bid amount stated in the 
auction announcement. Bids in larger amounts must be in the multiple 
stated in the auction announcement.
    (b) Noncompetitive bids--(1) Maximum bid. You may not bid 
noncompetitively for more than $5 million. The maximum bid limitation 
does not apply if you are bidding solely through either a 
TreasuryDirect[supreg] or a Legacy Treasury Direct[supreg] reinvestment 
request. A request for reinvestment of securities maturing in either 
TreasuryDirect or Legacy Treasury Direct is a noncompetitive bid.
    (2) Additional restrictions. You may not bid noncompetitively in an 
auction in which you are bidding competitively. You may not bid 
noncompetitively if, in the security being auctioned, you hold a 
position in when-issued trading or in futures or forward contracts at 
any time between the date of the auction announcement and the time we 
announce the auction results. During this same timeframe, a 
noncompetitive bidder may not enter into any agreement to purchase or 
sell or otherwise dispose of the securities it is acquiring in the 
auction. For 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 bids.--(1) Bid format (i) Treasury bills. A 
competitive bid must show the discount rate bid, expressed with three 
decimals in .005 increments. The third decimal must be either a zero or 
a five, for example, 5.320 or 5.325. We will treat any missing decimals 
as zero, for example, a bid of 5.32 will be treated as 5.320.
    (ii) Treasury fixed-principal securities. A competitive bid must 
show the yield bid, expressed with three decimals, for example, 4.170. 
We will treat any missing decimals as zero, for example, a bid of 4.1 
will be treated as 4.100.
    (iii) Treasury inflation-protected securities. A competitive bid 
must show the real yield bid, expressed with three decimals, for 
example, 3.070. We will treat any missing decimals as zero, for example, 
a bid of 3 will be treated as 3.000. The real yield may be a positive 
number, a negative number, or zero.
    (2) Maximum recognized bid. There is no limit on the maximum dollar 
amount that you may bid for competitively, either at a single yield or 
discount rate, or at different yields or discount rates. However, a 
competitive bid at a single yield or discount rate that exceeds 35 
percent of the offering amount will be reduced to that amount. For 
example, if the offering amount is $10 billion, the maximum bid amount 
we will recognize at any one yield or discount rate from any bidder is 
$3.5 billion. (See Sec.  356.22 for award limitations.)
    (3) Additional restrictions. You may not bid competitively in an 
auction in which you are bidding noncompetitively. You may not bid 
competitively for securities to be bought through either TreasuryDirect 
or Legacy Treasury Direct.

[69 FR 45202, July 28, 2004, as amended at 69 FR 53621, Sept. 2, 2004; 
70 FR 57440, Sept. 30, 2005]