[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: 31CFR356.17]

[Page 376-377]
 
                  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.  356.17  How and when do I pay for securities awarded in an auction?

    (a) General. By bidding in an auction, you agree to pay the 
settlement amount for any securities awarded to you. (See Sec.  356.25.) 
For notes and bonds, the settlement amount may include a premium amount, 
accrued interest, and, for inflation-protected securities, an inflation 
adjustment.
    (b) TreasuryDirect[supreg]. You must pay for your awarded securities 
by a debit entry to a deposit account that you are authorized to debit 
or by using the redemption proceeds of your certificate of indebtedness 
held in your TreasuryDirect account. Payment by debit entry occurs on 
the settlement date for the actual settlement amount due. (See Sec.  
356.25.)
    (c) Legacy Treasury Direct[supreg]. Unless you make other 
provisions, you must pay by debit entry to a deposit account that you 
are authorized to debit or submit payment with your bids. Payment by 
debit entry occurs on the settlement date for the actual settlement 
amount due. (See Sec.  356.25.) If you are paying with a check or with 
maturing securities, you must pay separately for any premium, accrued 
interest, or inflation adjustment as soon as you receive your Payment 
Due Notice.
    (1) Bidding and payment by computer or by telephone. If you are 
bidding by computer or by telephone, you must pay for any securities 
awarded to you by debit entry to a deposit account. If a depository 
institution or dealer is submitting your bids for securities to be held 
in Legacy Treasury Direct, payment may be either by debit entry to a 
deposit account or by allowing us to charge the Federal Reserve Bank 
funds account of a depository institution.
    (2) Bidding and payment by paper form. If you are mailing bids to us 
on a paper form, you may either enclose your payment with the form or 
pay for any securities awarded to you by debit entry to a deposit 
account. For bills, you may pay by depository institution (cashier's or 
teller's) check, certified check, or currently dated Treasury or fiscal 
agency check made payable to you. For notes or bonds, in addition to the 
payment options for bills, you may also pay by personal check. If you 
submit a personal check, make it payable to Legacy Treasury Direct and 
mail it with the bid to the Federal Reserve Bank handling your account. 
In your payment amount you must include the par amount and any announced 
accrued interest and/or inflation adjustment.
    (3) Payment by maturing securities. You may use maturing securities 
held in Legacy Treasury Direct as payment for reinvestments into new 
securities that we are offering, as long as we receive the appropriate 
transaction request on time.
    (d) Commercial book-entry system. Unless you make other provisions, 
payment of the settlement amount must be by charge to the funds account 
of a depository institution at a Federal Reserve Bank.
    (1) A submitter that does not have a funds account at a Federal 
Reserve Bank or that chooses not to pay by charge to its own funds 
account must have an approved autocharge agreement on file with us 
before submitting any bids. Any depository institution whose funds 
account will be charged under an autocharge agreement will receive 
advance notice from us of the total par amount of, and price to be

[[Page 377]]

charged for, securities awarded as a result of the submitter's bids.
    (2) A submitter that is a member of a clearing corporation may 
instruct that delivery and payment be made through the clearing 
corporation for securities awarded to the submitter for its own account. 
To do this, the following requirements must be met prior to submitting 
any bids:
    (i) We must have acknowledged and have on file an autocharge 
agreement between the clearing corporation and a depository institution. 
By entering into such an agreement, the clearing corporation authorizes 
us to provide aggregate par and price information to the depository 
institution whose funds account will be charged under the agreement. The 
clearing corporation is responsible for remitting payment for auction 
awards of the clearing corporation member.
    (ii) We must have acknowledged and have on file a delivery and 
payment agreement between the submitter and the clearing corporation. By 
entering into such an agreement, the submitter authorizes us to provide 
award and payment information to the clearing corporation.

[69 FR 45202, July 28, 2004, as amended at 70 FR 57440, Sept. 30, 2005; 
70 FR 71401, Nov. 29, 2005]