[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR225.7]

[Page 77]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 225_ACCEPTANCE OF BONDS SECURED BY GOVERNMENT OBLIGATIONS IN LIEU OF 
 
Sec.  225.7  Custodian duties and responsibilities.

    (a) General. A custodian shall authenticate instructions received 
from a bond official and shall act in accordance with such authenticated 
instructions. The custodian assumes no liability and is without 
liability of any kind for acting in accordance with such authenticated 
instructions, except for the custodian's failure to exercise ordinary 
care. By providing a bond secured by Government obligations in lieu of a 
bond with surety or sureties, an obligor agrees not to hold either the 
custodian or the Secretary liable or responsible for the actions or 
inactions of a bond official or for carrying out a bond official's 
authenticated instructions.
    (b) Interest. Absent authenticated instructions from the bond 
official to retain interest, interest received by the custodian on 
Government obligations pledged to the bond official's agency in 
accordance with this part will be remitted in the regular course of 
business to the obligor or to a depositary acting as agent or sub-agent 
for the obligor.
    (c) Principal. Absent authenticated instructions from the bond 
official to retain the proceeds of matured Government obligations, a 
custodian will release to the obligor proceeds from matured Government 
obligations only if the obligor has deposited Government obligations 
acceptable under 31 U.S.C. 9301, as amended, in substitution for those 
which have matured.
    (d) Liquidation of Government obligations. A custodian will collect, 
sell, assign, or transfer Government obligations, including any interest 
therefrom, only in accordance with a bond official's authenticated 
instructions.
    (e) Application of proceeds of liquidated Government obligations. A 
custodian will apply the proceeds from the collection, sale, assignment, 
or transfer of Government obligations only in accordance with a bond 
official's authenticated instructions.