31 306 General Regulations Governing US Securities

SUBCHAPTER B—BUREAU OF THE PUBLIC DEBT
PART 306—GENERAL REGULATIONS CERTIFICATES OF INDEBTEDNESS, AND COM-

PUTATION OF DISCOUNT ON TREASURY
GOVERNING U.S. SECURITIES BILLS—INTEREST TABLES
Subpart A—General Information Subpart F—Assignments of Registered

Sec.
Securities—General
306.0 Applicability of regulations. 306.40 Execution of assignments.
306.1 Official agencies. 306.41 Form of assignment.
306.2 Definitions of words and terms as used 306.42 Alterations and erasures.
in these regulations. 306.43 Voidance of assignments.
306.3 Transportation charges and risks in 306.44 Discrepancies in names.
the shipment of securities. 306.45 Certifying individuals.
Subpart B—Registration Subpart G—Assignments by or in Behalf of
306.10 General. Individuals
306.11 Forms of registration for transferable 306.55 Signatures, minor errors and change
securities. of name.
306.12 Errors in registration. 306.56 Assignment of securities registered in
306.13 Nontransferable securities. the names of or assigned to two or more
persons.
Subpart C—Transfers, Exchanges and 306.57 Minors and incompetents.
Reissues 306.58 Nontransferable securities.
306.15 Transfers and exchanges of securi-
Subpart H—Assignments in Behalf of
ties—closed periods.
306.16 Exchanges of registered securities. Estates of Deceased Owners
306.17 Exchanges of registered securities for 306.65 Decedent’s estate.
coupon securities. 306.66–306.67 [Reserved]
306.18 Exchanges of coupon securities for 306.68 Nontransferable securities.
registered securities.
306.19 Denominational exchanges of coupon Subpart I—Assignments by or in Behalf of
securities.
306.20 Reissue of registered transferable se-
Trustees and Similar Fiduciaries
curities. 306.75 Individual fiduciaries.
306.21 Reissue of nontransferable securities. 306.76 Fiduciaries acting as a unit.
306.22 Exchange of Treasury Bonds, Invest- 306.77 Corepresentatives and fiduciaries.
ment Series B–1975–80. 306.78 Nontransferable securities.
306.23 Securities eligible to be held in the
Legacy Treasury Direct® Book-entry Se- Subpart J—Assignments in Behalf of Private
curities System. or Public Organizations
306.24 Collection of fees on definitive securi-
ties. 306.85 Private corporations and unincor-
porated associations (including nomi-
Subpart D—Redemption or Payment nees).
306.86 Change of name and succession of pri-
306.25 Presentation and surrender. vate organizations.
306.26 Redemption of registered securities 306.87 Partnerships (including nominee
at maturity, upon prior call, or for partnerships).
prerefunding or advance refunding. 306.88 Political entities and public corpora-
306.27 Redemption of bearer securities at tions.
maturity, upon prior call, or for advance 306.89 Public officers.
refunding or prerefunding. 306.90 Nontransferable securities.
Subpart E—Interest Subpart K—Attorneys in Fact
306.35 Computation of interest. 306.95 Attorneys in fact.
306.36 Termination of interest. 306.96 Nontransferable securities.
306.37 Interest on registered securities.
306.38 Interest on bearer securities. Subpart L—Transfer Through Judicial
APPENDIX TO SUBPART E—INTEREST—COM- Proceedings
PUTATION OF INTEREST ON TREASURY
BONDS, TREASURY NOTES, AND TREASURY 306.100 Transferable securities.
158
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Fiscal Service, Treasury § 306.2
306.101 Evidence required. in securities. Correspondence con-
306.102 Nontransferable securities. cerning transactions in securities and
requests for appropriate forms may be
Subpart M—Requests for Suspension of addressed to the Division of Customer
Transactions Service, Parkersburg, WV 26102.
306.105 Requests for suspension of trans- [64 FR 38125, July 15, 1999]
actions in registered securities.
306.106 Requests for suspension of trans-
§ 306.2 Definitions of words and terms
actions in bearer securities.
as used in these regulations.
Subpart N—Relief for Loss, Theft, Destruc- (a) Advance refunding offer is an offer
tion, Mutilation, or Defacement of Se- to a holder of a security, usually a year
curities or more in advance of its call or matu-
rity date, to exchange it for another se-
306.110 Statutory authority and require-
ments.
curity.
306.111 Procedure for applying for relief. (b) A bearer security is payable on its
396.112 Type of relief granted. face at maturity or call for redemption
306.113 Cases not requiring bonds of indem- before maturity in accordance with its
nity. terms to bearer. The ownership is not
recorded. Title to such a security may
Subpart O—Book-Entry Procedure pass by delivery without endorsement
306.115 Definition of terms. and without notice. A coupon security
306.116 Scope and effect of book-entry pro- is a bearer security with interest cou-
cedure. pons attached.
306.117 Withdrawal of eligible book-entry (c) Bureau refers to the Bureau of the
Treasury securities for conversion to reg- Public Debt, Division of Customer
istered form. Service, Parkersburg, WV 26102.
Subpart P—Miscellaneous Provisions (d) Call date or date of call is the date
fixed in the official notice of call pub-
306.125 Additional requirements. lished in the FEDERAL REGISTER as the
306.126 Waiver of regulations. date on which the obligor will make
306.127 Preservation of existing rights. payment of the security before matu-
306.128 Supplements, amendments or revi- rity in accordance with its terms.
sions.
(e) Court means one which has juris-
AUTHORITY: 31 U.S.C. Chapter 31; 5 U.S.C. diction over the parties and the subject
301; 12 U.S.C. 391. matter.
SOURCE: 38 FR 7078, Mar. 15, 1973, unless (f) Department refers to the Depart-
otherwise noted. ment of the Treasury.
(g) Depository institution means an en-
Subpart A—General Information tity described in section 19(b)(1)(A)(i)–
(vi) of the Federal Reserve Act (12
§ 306.0 Applicability of regulations. U.S.C. 461(b)(1)(A)(i)—(vi)). Under sec-
These regulations apply to all U.S. tion 19(b) of the Federal Reserve Act,
transferable and nontransferable secu- the term depository institution includes:
rities, 1 other than U.S. Savings Bonds (1) Any insured bank as defined in 12
and U.S. Savings Notes, to the extent U.S.C. 1813 or any bank which is eligi-
specified in these regulations, the of- ble to make application to become an
fering circulars or special regulations insured bank under 12 U.S.C. 1815;
governing such securities. (2) Any mutual savings bank as de-
fined in 12 U.S.C. 1813 or any bank
§ 306.1 Official agencies. which is eligible to make application
The Bureau of the Public Debt of the to become an insured bank under 12
Department of the Treasury is charged U.S.C. 1815;
with matters relating to transactions (3) Any savings bank as defined in 12
U.S.C. 1813 or any bank which is eligi-
1 These regulations may also be applied to ble to make application to become an
securities issued by certain agencies of the insured bank under 12 U.S.C. 1815;
United States and certain Government and (4) Any insured credit union as de-
Government-sponsored corporations. fined in 12 U.S.C. 1752 or any credit
159
§ 306.2 31 CFR Ch. II (7–1–11 Edition)
union which is eligible to make appli- istered securities assigned simply to

cation to become an insured credit The Secretary of the Treasury or in the
union under 12 U.S.C. 1781; case of Treasury Bonds, Investment Se-
(5) Any member as defined in 12 ries B—1975–80, to The Secretary of the
U.S.C. 1422; and Treasury for exchange for the current Se-
(6) Any savings association (as de- ries EA or EO Treasury notes are consid-
fined in 12 U.S.C. 1813) which is an in- ered to be so assigned as to become in
sured depository institution, as defined effect payable to bearer.
in the Federal Deposit Insurance Act, (q) Signature guarantee program means
12 U.S.C. 1811 et seq., or is eligible to a signature guarantee program estab-
apply to become an insured depository lished in response to Rule 17 Ad–15 (17
institution under such Act. CFR 240.17Ad–15), issued under author-
(h) Face maturity date is the payment ity of the Securities Exchange Act of
date specified in the text of a security. 1934. For the purpose of the regula-
(i) Incompetent refers to a person tions, in this part, the Securities
under any legal disability except mi- Transfer Agents Medallion Program
nority. (STAMP), the Stock Exchanges Medal-
(j) Joint owner and joint ownership lion Program (SEMP), and the New
refer to any permitted form of owner- York Stock Exchange, Inc. Medallion
ship by two or more persons. Signature Program (MSP) are recog-
(k) Nontransferable securities are those nized by Treasury as such signature
issued only in registered form which guarantee programs.
according to their terms are payable (r) Taxpayer identifying number means
only to the registered owners or recog- the appropriate identifying number as
nized successors in title to the extent required on tax returns and other docu-
and in the manner provided in the of- ments submitted to the Internal Rev-
fering circulars or special applicable enue Service, i.e., an individual’s social
regulations. security account number or an em-
(l) Payment and redemption, unless ployer identification number. A social
otherwise indicated by the context, are security account number is composed
used interchangeably for payment at of nine digits separated by two hy-
maturity or payment before maturity phens, for example, 123–45–6789; an em-
pursuant to a call for redemption in ac- ployer identification number is com-
cordance with the terms of the securi- posed of nine digits separated by one
ties. hyphen, for example, 12–3456789. The
(m) Prerefunding offer is an offer to a hyphens are an essential part of the
holder of a security, usually within the numbers and must be included.
year preceding its call or maturity (s) Transferable securities, which may
date, to exchange it for another secu- be in either registered or bearer form,
rity. refers to securities which may be sold
(n) Redemption-exchange is any au- on the market and transfer of title ac-
thorized redemption of securities for complished by assignment and delivery
the purpose of applying the proceeds in if in registered form, or by delivery
payment for other securities offered in only if in bearer form.
exchange. (t) Treasury securities, Treasury bonds,
(o) A registered security refers to a se- Treasury notes, Treasury certificates of
curity the ownership of which is reg- indebtedness, and Treasury bills, or sim-
istered on the books of the Depart- ply securities, bonds, notes, certificates,
ment. It is payable at maturity or call and bills, unless otherwise indicated by
for redemption before maturity in ac- the context, refer only to transferable
cordance with its terms to the person securities.
in whose name it is inscribed, or his as- (u) Voluntary representative means the
signee. person qualified by the Department of
(p) Securities assigned in blank or secu- the Treasury to request payment or
rities so assigned as to become in effect make an assignment of a decedent’s se-
payable to bearer refers to registered securities pursuant to § 306.65.
curities which are assigned by the [38 FR 7078, Mar. 15, 1973, as amended at 59
owner or his authorized representative FR 59036, Nov. 15, 1994; 64 FR 38125, July 15,
without designating the assignee. Reg- 1999; 70 FR 57429, Sept. 30, 2005]
160
§ 306.3 Transportation charges and any applicable title, as, for example,
risks in the shipment of securities. Mrs., Miss, Ms., Dr., or Rev., or fol-
The following guidelines apply to the lowed by a designation such as M.D.,
transportation of reissued securities or D.D., Sr., or Jr. Any other similar suf-
securities presented for authorized fix should be included when ordinarily
transactions: used or when necessary to distinguish
(a) The securities may be presented the owner from a member of his family.
in person by the owner or the owner’s A married woman’s own given name,
agent. not that of her husband, must be used,
(b) If securities are not presented in for example, Mrs. Mary A. Jones, not
person, shipment of the securities is at Mrs. Frank B. Jones. The address
the owner’s risk and expense. should include, where appropriate, the
(c) Reissued securities will be deliv- number and street, route, or any other
ered by certified mail or by other local feature and the Zip Code.
means, at the risk of the registered § 306.11 Forms of registration for
owner and at the expense of the De- transferable securities.
partment.
The forms of registration described
[64 FR 38125, July 15, 1999] below are authorized for transferable
securities:
Subpart B—Registration (a) Natural persons in their own right.
In the names of natural persons who
§ 306.10 General. are not under any legal disability, in
The registration used must express their own right, substantially as fol-
the actual ownership of a security and lows:
may not include any restriction on the (1) One person. In the name of one in-
authority of the owner to dispose of it dividual. Examples:
in any manner, except as otherwise John A. Doe (123–45–6789).
specifically provided in these regula- Mrs. Mary C. Doe. (123–45–6789).
tions. The Treasury Department re- Miss Elizabeth Jane Doe (123–45–6789).
serves the right to treat the registra-
An individual who is sole proprietor of
tion as conclusive of ownership. Re-
a business conducted under a trade
quests for registration should be clear,
name may include a reference to the
accurate, and complete, conform with
trade name. Examples:
one of the forms set forth in this sub-
part, and include appropriate taxpayer John A. Doe, doing business as Doe’s Home
identifying numbers. 2 The registration Appliance Store (123–45–6789).
of all bonds owned by the same person, or
organization, or fiduciary should be John A. Doe (123–45–6789), doing business as
uniform with respect to the name of Doe’s Home Appliance Store.
the owner and, in the case of a fidu- (2) Two or more persons—general. Secu-
ciary, the description of the fiduciary rities will not be registered in the
capacity. Individual owners should be name of one person payable on death to
designated by the names by which they another, or in any form which purports
are ordinarily known or under which to authorize transfer by less than all
they do business, preferably including the persons named in the registration
at least one full given name. The name (or all the survivors). 3 Securities will
of an individual may be preceded by
3 Warning. Difference Between Transferable
2 Taxpayer identifying numbers are not re- Treasury Securities Registered in the Names
quired for foreign governments, nonresident of Two or More Persons and United States
aliens not engaged in trade or business with- Savings Bonds in Coownership Form. The ef-
in the United States, international organiza- fect of registering Treasury securities to
tions and foreign corporations not engaged which these regulations apply in the names
in trade or business and not having an office of two or more persons differs decidedly from
or place of business or a financial or paying registration of savings bonds in coownership
agent within the United States, and other form. Savings bonds are virtually redeem-
persons or organizations as may be exempted able on demand at the option of either co-
from furnishing such numbers under regula- owner on his signature alone. Transferable
tions of the Internal Revenue Service. Continued
161
§ 306.11 31 CFR Ch. II (7–1–11 Edition)
not be registered in the forms John A. his chief support, will be recognized as
Doe and Mrs. Mary C. Doe, or either of his natural guardian and will be con-
them or William C. Doe or Henry J. sidered a fiduciary. Registration in the
Doe, or either of them and securities so name of a minor in his own right as
assigned will be treated as though the owner or as joint owner is not author-
words or either of them do not appear in ized. Securities so registered, upon
the assignments. The taxpayer identi- qualification of the natural guardian,
fying number of any of the joint own- will be treated as though registered in
ers may be shown on securities reg- the name of the natural guardian in
istered in joint ownership form. that capacity.
(i) With right of survivorship. In the (2) Custodian under statute authorizing
names of two or more individuals with gifts to minors. A security may be pur-
right of survivorship. Examples: chased as a gift to a minor under a
John A. Doe (123–45–6789) or Mrs. Mary C.
gifts to minors statute in effect in the
Doe or the survivor. State in which either the donor or the
John A. Doe (123–45–6789) or Mrs. Mary C. minor resides. The security should be
Doe or Miss Mary Ann Doe or the survivors registered as provided in the statute,
or survivor. with an identifying reference to the
John A. Doe (123–45–6789) or Mrs. Mary C. statute if the registration does not
Doe. clearly identify it. Examples:
John A. Doe (123–45–6789) and Mrs. Mary C.
Doe. William C. Jones, as custodian for John A.
John A. Doe (123–45–6789) and Mrs. Mary C. Smith, a minor (123–45–6789), under the
Doe as joint tenants with right of survivor- California Uniform Gifts to Minors Act.
ship and not as tenants in common. Robert C. Smith, as custodian for Henry L.
Brown, a minor (123–45–6789), under the
Limited to husband and wife: laws of Georgia; Chapter 48–3, Code of Ga.
John A. Doe (123–45–6789) and Mrs. Mary C. Anno.
Doe, as tenants by the entireties. (3) Incompetents not under guardian-
(ii) Without right of survivorship. In ship. Registration in the form John A.
the names of two or more individuals Brown, an incompetent (123–45–6789),
in such manner as to preclude the right under voluntary guardianship, is per-
of survivorship. Examples: mitted only on reissue after a vol-
untary guardian has qualified for the
John A. Doe (123–45–6789) and William B. Doe purpose of collecting interest. (See
as tenants in common. §§ 306.37(c)(2) and 306.57(c)(2)). Other-
John A. Jones as natural guardian of Henry
B. Jones, a minor, and Robert C. Jones wise, registration in the name of an in-
(123–45–6789), without right of survivorship. competent not under legal guardian-
ship is not authorized.
Limited to husband and wife: (c) Executors, administrators, guard-
Charles H. Brown (123–45–6789) and Ann R. ians, and similar representatives or fidu-
Brown, as partners in community. ciaries. A security may be registered in
the names of legally qualified execu-
(b) Minors and incompetents—(1) Nat-
tors, administrators, guardians, con-
ural guardians of minors. A security
servators, or similar representatives or
may be registered in the name of a nat-
fiduciaries of a single estate. The
ural guardian of a minor for whose es-
names and capacities of all the rep-
tate no legal guardian or similar rep-
resentatives or fiduciaries, as shown in
resentative has legally qualified. Ex-
their letters of appointment, must be
ample:
included in the registration and must
John R. Jones as natural guardian of Henry be followed by an adequate identifying
M. Jones, a minor (123–45–6789). reference to the estate. Examples:
Either parent with whom the minor re- John Smith, executor of will (or adminis-
sides, or if he does not reside with ei- trator of estate) of Henry J. Jones, de-
ther parent, the person who furnishes ceased (12–3456789).
William C. Jones, guardian (or conservator,
etc.) of estate of James D. Brown, a minor
Treasury securities are redeemable only at (or an incompetent) (123–45–6789).
maturity or upon prior call by the Secretary
of the Treasury. (d) Life tenant under will. A security
4-6 [Reserved] may be registered in the name of a life
162
tenant followed by an adequate identi- other authority from which its powers
fying reference to the will. Example: are derived, must be included in the
Anne B. Smith, life tenant under the will of
registration and may be followed, if de-
Adam A. Smith, deceased (12–3456789). sired, by a reference to a particular ac-
count or fund, other than a trust fund,
The life tenant will be considered a fi- in accordance with the rules and exam-
duciary. ples given below:
(e) Private trust estates. A security (1) A corporation. The name of a busi-
may be registered in the name and title ness, fraternal, religious, or other pri-
of the trustee or trustees of a single vate corporation must be followed by
duly constituted private trust, followed descriptive words indicating the cor-
by an adequate identifying reference to porate status unless the term corpora-
the authority governing the trust. Ex- tion or the abbreviation Inc. is part of
amples: the name or the name is that of a cor-
John Jones and Blank Trust Co., Albany, poration or association organized
NY, trustees under will of Sarah Jones, de- under Federal law, such as a national
ceased (12–3456789). bank or Federal savings and loan asso-
John Doe and Richard Roe, trustees under ciation. Examples:
agreement with Henry Jones dated Feb-
ruary 9, 1970 (12–3456789). Smith Manufacturing Co., a corporation (12–
3456789).
The names of all trustees, in the form The Standard Manufacturing Corp. (12–
used in the trust instrument, must be 3456789).
included in the registration, except as Jones & Brown, Inc.—Depreciation Acct. (12–
follows: 3456789).
(1) If there are several trustees des- First National Bank of Albemarle (12–
ignated as a board or authorized to act 3456789).
as a unit, their names should be omit- Abco & Co., Inc., a nominee corporation (12–
ted and the words Board of Trustees sub- 3456789).
stituted for the word trustees. Example: (2) An unincorporated association. The
Board of Trustees of Blank Co. Retirement name of a lodge, club, labor union, vet-
Fund, under collective bargaining agree- erans’ organization, religious society,
ment dated June 30, 1970 (12–3456789). or similar self-governing organization
which is not incorporated (whether or
(2) If the trustees do not constitute a
not it is chartered by or affiliated with
board or otherwise act as a unit, and
a parent organization which is incor-
are either too numerous to be des-
porated) must be followed by the words
ignated in the inscription by names
an unincorporated association. Exam-
and title, or serve for limited terms,
ples:
some or all of the names may be omit-
ted. Examples: American Legion Post No. ll, Department
of the D.C., an unincorporated association
John Smith, Henry Jones, et al., trustees
(12–3456789).
under will of Henry J. Smith, deceased (12–
Local Union No. 100, Brotherhood of Loco-
3456789).
motive Engineers, an unincorporated asso-
Trustees under will of Henry J. Smith, de-
ciation (12–3456789).
ceased (12–3456789).
Trustees of Retirement Fund of Industrial Securities should not be registered in
Manufacturing Co., under directors’ resolu- the name of an unincorporated asso-
tion of June 30, 1950 (12–3456789).
ciation if the legal title to its prop-
(f) Private organizations (corporations, erty in general, or the legal title to
unincorporated associations and partner- the funds with which the securities
ships). A security may be registered in are to be purchased, is held by trust-
the name of any private corporation, ees. In such a case the securities
unincorporated association, or partner- should be registered in the title of
ship, including a nominee, which for the trustees in accordance with para-
purposes of these regulations is treated graph (e) of this section. The term
as the owner. The full legal name of unincorporated association should not
the organization, as set forth in its be used to describe a trust fund, a
charter, articles of incorporation, con- partnership or a business conducted
stitution, partnership agreement, or under a trade name.
163
§ 306.12 31 CFR Ch. II (7–1–11 Edition)
(3) A partnership. The name of a part- § 306.13 Nontransferable securities.

nership must be followed by the words
Upon authorized reissue, Treasury
a partnership. Example:
Bonds, Investment Series B—1975–80,
Smith & Brown, a partnership (12–3456789). may be registered in the forms set
Acme Novelty Co., a limited partnership (12– forth in § 306.11.
3456789).
Abco & Co., a nominee partnership (12–
3456789).
Subpart C—Transfers, Exchanges
and Reissues
(g) States, public bodies, and corpora-
tions and public officers. A security may § 306.15 Transfers and exchanges of se-
be registered in the name of a State or curities—closed periods.
county, city, town, village, school dis- (a) General. The transfer of registered
trict, or other political entity, public securities should be made by assign-
body or corporation established by law ment in accordance with subpart F of
(including a board, commission, admin- this part. Transferable registered secu-
istration, authority or agency) which rities are eligible for denominational
is the owner or official custodian of exchange. Specific instructions for
public funds, other than trust funds, or issuance and delivery of the new secu-
in the full legal title of the public offi- rities, signed by the owner or his au-
cer having custody. Examples: thorized representative, must accom-
State of Maine. pany the securities presented. (Form
Town of Rye, NY. PD 3905 or PD 1827, as appropriate, may
Maryland State Highway Administration. be used.) Denominational exchanges
Treasurer, City of Springfield, IL. may be made at any time. Securities
Treasurer of Rhode Island—State Forestry presented for transfer must be received
Fund. by the Bureau not less than 1 full
(h) States, public officers, corporations month before the date on which the se-
or bodies as trustees. A security may be curities mature or become redeemable
registered in the title of a public offi- pursuant to a call for redemption be-
cer or in the name of a State or county fore maturity. Any security so pre-
or a public corporation or public body sented which is received too late to
acting as trustee under express author- comply with this provision will be ac-
ity of law. An appropriate reference to cepted for payment only.
the statute creating the trust may be (b) Closing of transfer books. The
included in the registration. Examples: transfer books are closed for one full
month preceding interest payment
Insurance Commissioner of Pennsylvania, dates and call or maturity dates. If the
trustee for benefit of policyholders of date set for closing of the transfer
Blank Insurance Co. (12–3456789), under
Sec. ll, Pa. Stats.
books falls on Saturday, Sunday, or a
Rhode Island Investment Commission, trust-
legal holiday, the books will be closed
ee of General Sinking Fund under Ch. 35, as of the close of business on the last
Gen. Laws of RI. business day preceding that date. The
State of Colorado in trust for Colorado Sur- books are reopened on the first busi-
plus Property Agency. ness day following the date on which
interest falls due. Registered securities
[38 FR 7078, Mar. 15, 1973; 38 FR 8153, Mar. 29,
1973] which have not matured or been called,
submitted for transfer, reissue, and
§ 306.12 Errors in registration. coupon securities which have not ma-
tured or been called, submitted for ex-
If an erroneously inscribed security change for registered securities, which
is received, it should not be altered in are received during the period the
any respect, but the Bureau should be books for that loan are closed, will be
furnished full particulars concerning processed on or after the date such
the error and asked to furnish instruc- books are reopened. If registered secu-
tions. rities are received for transfer, or cou-
[38 FR 7078, Mar. 15, 1973, as amended at 64 pon securities are received for ex-
FR 38125, July 15, 1999] change for registered securities, during
164
the time the books are closed for pay- § 306.19 Denominational exchanges of
ment of final interest at maturity or coupon securities.
call, unless otherwise provided in the Denominational exchanges of bearer
offering circular or notice of call, the securities are not permitted.
following action will be taken:
(1) Payment of final interest will be [64 FR 38126, July 15, 1999]
made to the registered owner of record
§ 306.20 Reissue of registered transfer-
on the date the books were closed. able securities.
(2) Payment of principal will be made
to the assignee under a proper assign- Assignments are not required for re-
ment of the securities. issue of registered transferable securi-
ties in the name(s) of:
[38 FR 7078, Mar. 15, 1973, as amended at 64 (a) The surviving joint owner(s) of se-
FR 38125, July 15, 1999] curities registered in the names of or
assigned to two or more persons, unless
§ 306.16 Exchanges of registered secu- the registration or assignment includes
rities.
words which preclude the right of sur-
No assignments will be required for: vivorship,
(a) Authorized denominational ex- (b) A succeeding fiduciary or other
changes of registered securities for like lawful successor,
securities in the same names and forms (c) A remainderman, upon termi-
of registration and nation of a life estate,
(b) Redemption-exchanges, or (d) An individual, corporation or un-
prefundings, or advance refundings in incorporated association whose name
the same names and forms as appear in has been legally changed,
the registration or assignments of the (e) A corporation or unincorporated
securities surrendered. association which is the lawful suc-
cessor to another corporation or unin-
§ 306.17 Exchanges of registered secu- corporated association, and
rities for coupon securities. (f) A successor in title to a public of-
Exchanges of registered securities for ficer or body.
bearer securities are not permitted. Evidence of survivorship, succession, or
[64 FR 38126, July 15, 1999] change of name, as appropriate, must
be furnished. The appropriate taxpayer
§ 306.18 Exchanges of coupon securi- identifying number also must be fur-
ties for registered securities. nished if the registration of the securi-
ties submitted does not include such
Coupon securities presented for ex-
number for the person or organization
change for registered securities should
to be named on the reissued securities.
have all matured interest coupons de-
tached. All unmatured coupons should § 306.21 Reissue of nontransferable se-
be attached, except that if presented curities.
when the transfer books are closed (in
Treasury Bonds, Investment Series
which case the exchange will be ef- B—1975–80, may be reissued only in the
fected on or after the date on which the names of:
books are reopened), the next maturing (a) Lawful successors in title,
coupons should be detached and held
(b) The legal representatives or
for collection in ordinary course when distributees of a deceased owner’s es-
due. If any coupons which should be at- tate, or the distributees of a trust es-
tached are missing, the securities must tate, and
be accompanied by a remittance in an (c) State supervisory authorities in
amount equal to the face amount of pursuance of any pledge required of the
the missing coupons. The new reg- owner under State law, or upon termi-
istered securities will bear interest nation of the pledge in the names of
from the interest payment date next the pledgors or their successors.
preceding the date on which the ex-
Bonds presented for reissue must be ac-
change is made. companied by evidence of entitlement.
165
§ 306.22 31 CFR Ch. II (7–1–11 Edition)
§ 306.22 Exchange of Treasury Bonds, change, reissue, withdrawal from book-

Investment Series B–1975–80. entry, or the granting of relief on ac-
Bonds of this series presented for ex- count of loss, theft, destruction, muti-
change for 11⁄2 percent 5-year Treasury lation, or defacement. The applicable
notes must bear duly executed assign- fee, and the basis for its determination,
ments to ‘‘The Secretary of the Treas- will be published by notice in the FED-
ury for exchange for the current series ERAL REGISTER.
of EA or EO Treasury notes to be deliv-
[60 FR 4377, Jan. 23, 1995, as amended at 64
ered to (inserting the name and address
FR 38126, July 15, 1999]
of the person to whom the notes are to
be delivered).’’ The notes will bear the
April 1 or October 1 date next pre- Subpart D—Redemption or
ceding the date the bonds, duly as- Payment
signed with supporting evidence, if nec-
essary, are received by the Bureau or a § 306.25 Presentation and surrender.
Federal Reserve Bank or Branch. Inter- (a) General. Securities, whether in
est accrued at the rate of 23⁄4 percent registered or bearer form, are payable
on the bonds surrendered from the next
in regular course of business at matu-
preceding interest payment date to the
rity unless called for redemption before
date of exchange will be credited, and
interest at the rate of 11⁄2 percent on maturity in accordance with their
the notes for the same period will be terms, in which case they will be pay-
charged and the difference will be paid able in regular course of business on
to the owner. the date of call. The Secretary of the
Treasury may provide for the exchange
§ 306.23 Securities eligible to be held of maturing or called securities, or in
in the Legacy Treasury Direct® advance of call or maturity, may afford
Book-entry Securities System. owners the opportunity of exchanging
(a) Eligible issues. The Secretary has a security for another security pursu-
published in the FEDERAL REGISTER no- ant to a prerefunding or an advance re-
tices describing Treasury issues of funding offer. Registered and bearer se-
bonds and notes issued before August 1, curities should be presented and sur-
1986, that are eligible for conversion to rendered for redemption to the Bureau.
the Legacy Treasury Direct book-entry No assignments or evidence in support
securities system. of assignments will be required by or
(b) Conversion of Registered Security to on behalf of the registered owner or as-
book-entry form to be held in Legacy
signee for redemption for his or its ac-
Treasury Direct. To convert a registered
count, or for redemption-exchange, or
security to book-entry form to be held
in Legacy Treasury Direct, the owner exchange pursuant to a prerefunding or
must contact the Bureau of the Public an advance refunding offer, if the new
Debt, P.O. Box 426, Parkersburg, West securities are to be registered in ex-
Virginia 26106–0426, for instructions. A actly the same names and forms as ap-
security that has been converted to pear in the registrations or assign-
book-entry form in Legacy Treasury ments of the securities surrendered. To
Direct shall be subject to subpart C and the extent appropriate, these rules also
other applicable portions of 31 CFR apply to securities registered in the
part 357, and the provisions of 31 CFR title of public officers who are official
part 306 shall no longer apply. custodians of public funds.
(c) Securities held under subpart O of (b) ‘‘Overdue’’ securities. If a bearer
this part may not be transferred to security or a registered security as-
Legacy Treasury Direct. signed in blank, or to bearer, or so as-
[76 FR 18063, Apr. 1, 2011] signed as to become in effect payable
to bearer, is presented and surrendered
§ 306.24 Collection of fees on definitive for redemption after it has become
securities. overdue, the Secretary of the Treasury
A fee shall be charged for each reg- will ordinarily require satisfactory
istered security, as defined in § 306.115 proof of ownership. (Form PD 1071 may
(a), issued as a result of a transfer, ex- be used.) A security shall be considered
166
to be overdue after the lapse of the fol- offer of prerefunding or advance re-
lowing periods of time from its face funding, should be left attached to the
maturity: securities. If any such coupons are
(1) One month for securities issued missing, the full face amount thereof
for a term of 1 year or less. will be deducted from the payment to
(2) Three months for securities issued be made upon redemption or the
for a term of more than 1 year but not prerefunding or advance refunding ad-
in excess of 7 years. justment unless satisfactory evidence
(3) Six months for securities issued of their destruction is submitted. Any
for a term of more than 7 years. amounts so deducted will be held in the
[38 FR 7078, Mar. 15, 1973; 38 FR 8432, Apr. 2,
Department to provide for adjustments
1973, as amended by 64 FR 38126, July 15, 1999] or refunds in the event it should be de-
termined that the missing coupons
§ 306.26 Redemption of registered se- were subsequently presented or their
curities at maturity, upon prior destruction is later satisfactorily es-
call, or for prerefunding or advance tablished. In the absence of other in-
refunding. structions, payment or bearer securi-
Registered securities presented and ties will be made by check drawn to
surrendered for redemption at matu- the order of the person presenting and
rity or pursuant to a call for redemp- surrendering the securities and mailed
tion before maturity need not be as- to him at his address, as given in the
signed, unless the owner desires that advice accompanying the securities.
payment be made to some other per- (Form PD 3905 may be used.) Under ap-
son, in which case assignments should propriate circumstances, payment to a
be made to ‘‘The Secretary of the financial institution for detached past
Treasury for redemption for the ac- due coupons may be made by crediting
count of (inserting name and address of the amount of the proceeds to the ac-
person to whom payment is to be count maintained by the financial in-
made). Specific instructions for the stitution at the Federal Reserve bank
issuance and delivery of the redemp- of its district.
tion check, signed by the owner or his [38 FR 7078, Mar. 15, 1973, as amended at 64
authorized representative, must ac- FR 38126, July 15, 1999]
company the securities, unless in-
cluded in the assignment. (Form PD Subpart E—Interest
3905 may be used.) Payment of the prin-
cipal will be made by check drawn on § 306.35 Computation of interest.
the United States Treasury to the The interest on Treasury securities
order of the persons entitled and accrues and is payable on a semiannual
mailed in accordance with the instruc- basis unless otherwise provided in the
tions received. Securities presented for circular offering them for sale or ex-
prerefunding or advance refunding change. If the period of accrual is an
should be assigned as provided in the exact 6 months, the interest accrual is
prerefunding or advance refunding an exact one-half year’s interest with-
offer. out regard to the number of days in the
[64 FR 38126, July 15, 1999] period. If the period of accrual is less
than an exact 6 months, the accrued in-
§ 306.27 Redemption of bearer securi- terest is computed by determining the
ties at maturity, upon prior call, or daily rate of accrual on the basis of the
for advance refunding or exact number of days in the full inter-
prerefunding. est period and multiplying the daily
All interest coupons due and payable rate by the exact number of days in the
on or before the date of maturity or fractional period for which interest has
date fixed in the call for redemption actually accrued. A full interest period
before maturity should be detached does not include the day as of which se-
from coupon securities presented for curities were issued or the day on
redemption and should be collected which the last preceding interest be-
separately in regular course. All cou- came due, but does include the day on
pons bearing dates subsequent to the which the next succeeding interest
date fixed in a call for redemption, or payment is due. A fractional part of an
167
§ 306.36 31 CFR Ch. II (7–1–11 Edition)
interest period does not include the livery of interest checks will be with-
day as of which the securities were held pending receipt and approval of
issued or the day on which the last pre- evidence showing who is entitled to re-
ceding interest payment became due, ceive the interest checks. If the in-
but does include the day as of which scriptions on securities do not clearly
the transaction terminating the ac- identify the owners, delivery of inter-
crual of interest is effected. The 29th of est checks will be withheld pending re-
February in a leap year is included issue of the securities in the correct
whenever it falls within either a full registration. The final installment of
interest period or a fractional part
interest, unless otherwise provided in
thereof. 7
the offering circular or notice of call,
§ 306.36 Termination of interest. will be paid by check drawn to the
Securities will cease to bear interest order of the registered owner of record
on the date of their maturity unless and mailed in advance of the interest
they have been called for redemption payment date in time to reach the ad-
before maturity in accordance with dressee on or about that date. Interest
their terms, or are presented and sur- on securities presented for
rendered for redemption-exchange or prerefunding or advance refunding will
exchange pursuant to an advance re- be adjusted as provided in the
funding or prerefunding offer, in which prerefunding or advance refunding
case they will cease to bear interest on offer.
the date of call, or the exchange date, (b) Change of address. To assure time-
as the case may be. ly delivery of interest checks, owners
should promptly notify the Bureau of
§ 306.37 Interest on registered securi-
ties. any change of address. (Form PD 345
may be used.) The notification must be
(a) Method of payment. The interest signed by the registered owner or a
on registered securities is payable by
joint owner or an authorized represent-
checks drawn on the United States
ative, and should show the owner’s tax-
Treasury to the order of the registered
owners, except as otherwise provided payer identifying number, the old and
herein. Interest checks are prepared by new addresses, the serial number and
the Department in advance of the in- denomination of each security, the ti-
terest payment data and are ordinarily tles of the securities (for example: 41⁄4
mailed in time to reach the addresses percent Treasury Bonds of 1987–92,
on that date. Interest on a registered dated August 15, 1962), and the registra-
security which has not matured or tion of each security. Notifications by
been called and which is presented for attorneys in fact, trustees, or by the
any transaction during the period the legal representatives of the estates of
books for that loan are closed will be deceased, incompetent, or minor own-
paid by check drawn to the order of the ers should be supported by proof of
registered owner of record. Upon re- their authority, unless, in the case of
ceipt of notice of the death or incom- trustees or legal representatives, they
petency of an individual named as reg- are named in the registration.
istered owner, a change in the name or (c) Collection of interest checks—(1)
in the status of a partnership, corpora- General. Interest checks may be col-
tion, or unincorporated association, lected in accordance with the regula-
the removal, resignation, succession, tions governing the endorsement and
or death of a fiduciary or trustee, de-
payment of Government warrants and
checks, which are contained in the cur-
7 The appendix to this subpart contains a
rent revision of Department Circular
complete explanation of the method of com-
puting interest on a semiannual basis on No. 21 (part 240 of this chapter).
Treasury bonds, notes, and certificates of in- (2) By voluntary guardians of
debtedness, and an outline of the method of incompetents. Interest checks drawn to
computing the discount rates on Treasury the order of a person who has become
bills. Also included are tables of computa- incompetent and for whose estate no
tion of interest on semiannual and annual
basis.
168
Fiscal Service, Treasury Pt. 306, Subpt. E, App.
legal guardian or similar representa- APPENDIX TO SUBPART E OF PART 306—

tive has been appointed should be re- INTEREST—COMPUTATION OF INTER-
turned to the Bureau with a full expla- EST ON TREASURY BONDS, TREASURY
nation of the circumstances. For col- NOTES, AND TREASURY CERTIFICATES
lection of interest, the Department will OF INDEBTEDNESS, AND COMPUTATION
recognize the relative responsible for OF DISCOUNT ON TREASURY BILLS—
the incompetent’s care and support or INTEREST TABLES
some other person as voluntary guard- COMPUTATION OF INTEREST ON ANNUAL BASIS
ian for the incompetent. (Application
One Day’s Interest is 1⁄365 or 1⁄366 of 1-Year’s
may be made on Form PD 1461.)
Interest
(d) Nonreceipt, loss, theft, or destruc-
tion of interest checks. If an interest Computation of interest on Treasury
bonds, notes, and certificates of indebtedness
check is not received within a reason- will be made on an annual basis in all cases
able period after an interest payment where interest is payable in one amount for
date, or if a check is lost, stolen, or de- the full term of the security, unless such
stroyed after receipt, notification term is an exact half-year (6 months), and it
should be sent to the Bureau of the is provided that interest shall be computed
on a semi-annual basis.
Public Debt, Division of Customer If the term of the securities is exactly 1
Service, Parkersburg, WV 26102. Notifi- year, the interest is computed for the full pe-
cation should include the name and ad- riod at the specified rate regardless of the
dress of the owner, his taxpayer identi- number of days in such period.
fying number, and the serial number, If the term of the securities is less than 1
full year, the annual interest period for pur-
denomination, and title of the security
poses of computation is considered to be the
upon which the interest was payable. If full year from but not including the date of
the check is subsequently received or issue to and including the anniversary of
recovered, the Bureau should be noti- such date.
fied. If the term of the securities is more than
1 full year, computation is made on the basis
[38 FR 7078, Mar. 15, 1973, as amended at 64 of one full annual interest period, ending
FR 38126, July 15, 1999] with the maturity date, and a fractional part
of the preceding full annual interest period.
§ 306.38 Interest on bearer securities. The computation of interest for any frac-
tional part of an annual interest period is
Unless the offering circular and no- made on the basis of 365 actual days in such
tice of call provide otherwise, interest period, or 366 days if February 29 falls within
on coupon securities is payable in reg- such annual period.
ular course of business upon presen- COMPUTATION OF INTEREST ON SEMIANNUAL
tation and surrender of the interest BASIS
coupons as they mature. Such coupons
are payable at participating Federal ONE DAY’S INTEREST IS 1⁄181, 1⁄182, 1⁄183 OR 1⁄184
OR 1⁄2 YEAR’S INTEREST
Reserve banks or by the Bureau. 8 In-
terest on Treasury bills, and any other Computation of interest on Treasury
bearer securities which may be sold bonds, notes, and certificates of indebtedness
will be made on a semiannual basis in all
and issued on a discount basis and cases where interest is payable for one or
which are payable at par at maturity, more full half-year (6 months) periods, or for
is represented by the difference be- one or more full half-year periods and a frac-
tween the purchase price and the par tional part of a half-year period. A semi-
value, and no coupons are attached. annual interest period is an exact half-year
or 6 months, for computation purposes, and
[38 FR 7078, Mar. 15, 1973, as amended at 64 may comprise 181, 182, 183 or 184 actual days.
FR 38126, July 15, 1999] An exact half-year’s interest at the speci-
fied rate is computed for each full period of
exactly 6 months, irrespective of the actual
number of days in the half-year.
If the initial interest covers a fractional
part of a half-year, computation is made on
the basis of the actual number of days in the
8 Banking institutions will usually cash the
half-year (exactly 6 months) ending on the
coupons without charge as an accommoda- day such initial interest becomes due. If the
tion to their customers. initial interest covers a period in excess of 6
169
Pt. 306, Subpt. E, App. 31 CFR Ch. II (7–1–11 Edition)
months, computation is made on the basis of the exact number of days in the full period,
one full half-year, ending with the interest including February 29 whenever it falls with-
due date, and a fractional part of the pre- in such a period.
ceding full half-year period. The number of days in any half-year period
Interest for any fractional part of a full is shown in the following table:
half-year period is computed on the basis of
FOR THE HALF-YEAR
Beginning and ending days are Beginning and ending days are
1st or 15th of months listed last days of months listed
under interest period (number of under interest period (number
Interest period days) of days)
Regular year Leap year Regular year Leap year
January to July ...................................................................... 181 182 181 182

February to August ............................................................... 181 182 184 184
March to September ............................................................. 184 184 183 183
April to October ..................................................................... 183 183 184 184
May to November .................................................................. 184 184 183 183
June to December ................................................................. 183 183 184 184
July to January ...................................................................... 184 184 184 184
August to February ............................................................... 184 184 181 182
September to March ............................................................. 181 182 182 183
October to April ..................................................................... 182 183 181 182
November to May .................................................................. 181 182 182 183
December to June ................................................................. 182 183 181 182
1 year (any 2 consecutive half-years) .................................. 365 366 365 366
The following are dates for end-of-the- and the rate of interest (percent per annum)
month interest computations. may be determined from the text of the secu-
rity, or from the official circular governing
When interest period Interest-computation period will the issue.
ends on— be from but will not include—
(2) Determine the interest period of which
January 31 ...................... July 31. the fraction is a part, and calculate the num-
February 28 in 365-day August 31. ber of days in the full period to determine
year.. the proper column to be used in selecting the
February 29 .................... Do. decimal for 1 day’s interest.
March 30, 31 ................... September 30. (3) Calculate the actual number of days in
April 30 ............................ October 31.
May 30, 31 ...................... November 30.
the fractional period from but not including
June 30 ........................... December 31. the date of issue or the day on which the last
July 31 ............................ January 31. preceding interest payment was made, to and
August 29, 30, or 31 ....... February 28 in 365-day year. including the day on which the next suc-
February 29 in leap year. ceeding interest payment is due or the day
September 30 ................. March 31. as of which the transaction which termi-
October 30, 31 ................ April 30. nates the accrual of additional interest is ef-
November 30 .................. May 31. fected.
December 30, 31 ............ June 30.
(4) Multiply the appropriate decimal (1
day’s interest on $1,000) by the number of
USE OF INTEREST TABLES days in the fractional part of the interest pe-
In the appended tables decimals are set riod. The appropriate decimal will be found
forth for use in computing interest for frac- in the appended table for interest payable
tional parts of interest periods. The decimals semiannually or annually, as the case may
cover interest on $1,000 for 1 day in each pos- be, opposite the rate borne by the security,
sible semiannual (Table I), and annual (Table and in the column showing the full interest
II) interest period, at all rates of interest, in period of which the fractional period is a
steps of 1⁄8 percent, from 1⁄8 to 9 percent. The part. (For interest on any other amount,
amount of interest accruing on any date (for multiply the amount of interest on $1,000 by
a fractional part of an interest period) on the other amount expressed as a decimal of
$1,000 face amount of any issue of Treasury $1,000.)
bonds, Treasury notes, or Treasury certifi-
TREASURY
cates of indebtedness may be ascertained in
the following way: The methods of computing discount rates
(1) The date of issue, the dates for the pay- on U.S. Treasury bills are given below:
ment of interest, the basis (semiannual or Computation will be made on an annual
annual) upon which interest is computed, basis in all cases. The annual period for bank
170
Fiscal Service, Treasury Pt. 306, Subpt. E, App.
discount is a year of 360 days, and all com- 91-day bill:
putations of such discount will be made on Principal amount—maturity value .... $100.00
that basis. The annual period for true dis- Price at issue—amount received ......... 99.50
count is 1 full year from but not including
the date of issue to and including the anni- Amount of discount ...................... .50
$0.50÷91×360÷$100=.01978 or 1.978 percent
versary of such date. Computation of true
discount for a fractional part of a year will TRUE DISCOUNT
be made on the basis of 365 days in the year,
or 366 days if February 29 falls within the The true discount rate on a Treasury bill
year. of not more than one-half year in length may
be ascertained by (1 and 2) obtaining the
BANK DISCOUNT amount of discount per day by following the
The bank discount rate on a Treasury bill first two steps described under ‘‘Bank Dis-
may be ascertained by: (1) Subtracting the count’’; (3) multiplying the amount of dis-
sale price of the bill from its face value to count per day by the actual number of days
obtain the amount of discount; (2) dividing in the year from date of issue (365 ordinarily,
the amount of discount by the number of but 366 if February 29 falls within the year
days the bill is to run to obtain the amount from date of issue) to obtain the amount of
of discount per day; (3) multiplying the discount per year; and (4) dividing the
amount of discount per day by 360 (the num- amount of discount per year by the sale price
ber of days in a commercial year of 12 of the bill to obtain the true discount rate.
months of 30 days each) to obtain the For example:
amount of discount per year; and (4) dividing 91-day bill:
the amount of discount per year by the face Principal amount—maturity value .... $100.00
value of the bill to obtain the bank discount Price at issue—amount received ......... 99.50
rate. Amount of discount ...................... .50
For example: $0.50÷91×365÷$99.50=.02016 or 2.016 percent
TABLE I—DECIMAL FOR 1 DAY’S INTEREST ON $1,000 AT VARIOUS RATES OF INTEREST, PAYABLE
SEMIANNUALLY OR ON A SEMIANNUAL BASIS, IN REGULAR YEARS OF 365 DAYS AND IN LEAP
YEARS OF 366 DAYS (TO DETERMINE APPLICABLE NUMBER OF DAYS, SEE ‘‘COMPUTATION OF IN-
TEREST ON SEMIANNUAL BASIS’’)
Half-year of 184 Half-year of 183 Half-year of 182 Half-year of 181

Rate per annum (percent) days days days days
⁄ ...................................................................................
18 $0.003 396 739 $0.003 415 301 $0.003 434 066 $0.003 453 039
⁄ ...................................................................................
14 .006 793 478 .006 830 601 .006 868 132 .006 906 077
⁄ ...................................................................................
38 .010 190 217 .010 245 902 .010 302 198 .010 359 116
1⁄2 ................................................................................... .013 586 957 .013 661 202 .013 736 264 .013 812 155
5⁄8 ................................................................................... .016 983 696 .017 076 503 .017 170 330 .017 265 193
3⁄4 ................................................................................... .020 380 435 .020 491 803 .020 604 396 .020 718 232
7⁄8 ................................................................................... .023 777 174 .023 907 104 .024 038 462 .024 171 271
1 .................................................................................... .027 173 913 .027 322 404 .027 472 527 .027 624 309
11⁄8 ................................................................................. .030 570 652 .030 737 705 .030 906 593 .031 077 348
11⁄4 ................................................................................. .033 967 391 .034 153 005 .034 340 659 .034 530 387
13⁄8 ................................................................................. .037 364 130 .037 568 306 .037 774 725 .037 983 425
11⁄2 ................................................................................. .040 760 870 .040 983 607 .041 208 791 .041 436 464
15⁄8 ................................................................................. .044 157 609 .044 398 907 .044 642 857 .044 889 503
13⁄4 ................................................................................. .047 554 348 .047 814 208 .048 076 923 .048 342 541
17⁄8 ................................................................................. .050 951 087 .051 229 508 .051 510 989 .051 795 580
2 .................................................................................... .054 347 826 .054 644 809 .054 945 055 .055 248 619
21⁄8 ................................................................................. .057 744 565 .058 060 109 .058 379 121 .058 701 657
21⁄4 ................................................................................. .061 141 304 .061 475 410 .061 813 187 .062 154 696
23⁄8 ................................................................................. .064 538 043 .064 890 710 .065 247 253 .065 607 735
21⁄2 ................................................................................. .067 934 783 .068 306 011 .068 681 319 .069 060 773
25⁄8 ................................................................................. .071 331 522 .071 721 311 .072 115 385 .072 513 812
23⁄4 ................................................................................. .074 728 261 .075 136 612 .075 549 451 .075 966 851
27⁄8 ................................................................................. .078 125 000 .078 551 913 .078 983 516 .079 419 890
3 .................................................................................... .081 521 739 .081 967 213 .082 417 582 .082 872 928
31⁄8 ................................................................................. .084 918 478 .085 382 514 .085 851 648 .086 325 967
31⁄4 ................................................................................. .088 315 217 .088 797 814 .089 285 714 .089 779 006
33⁄8 ................................................................................. .091 711 957 .092 213 115 .092 719 780 .093 232 044
31⁄2 ................................................................................. .095 108 696 .095 628 415 .096 153 846 .096 685 083
35⁄8 ................................................................................. .098 505 435 .099 043 716 .099 021 978 .100 138 122
33⁄4 ................................................................................. .101 902 174 .102 459 016 .103 021 978 .103 591 160
37⁄8 ................................................................................. .105 298 913 .105 874 317 .106 456 044 .107 044 190
4 .................................................................................... .108 695 652 .109 289 617 .109 890 110 .110 497 238
41⁄8 ................................................................................. .112 092 391 .112 704 918 .113 324 176 .113 950 236
41⁄4 ................................................................................. .115 489 130 .116 120 219 .116 758 242 .117 403 375
43⁄8 ................................................................................. .118 885 870 .119 535 519 .120 192 308 .120 856 317
171
Pt. 306, Subpt. E, App. 31 CFR Ch. II (7–1–11 Edition)
TABLE I—DECIMAL FOR 1 DAY’S INTEREST ON $1,000 AT VARIOUS RATES OF INTEREST, PAYABLE
SEMIANNUALLY OR ON A SEMIANNUAL BASIS, IN REGULAR YEARS OF 365 DAYS AND IN LEAP
YEARS OF 366 DAYS (TO DETERMINE APPLICABLE NUMBER OF DAYS, SEE ‘‘COMPUTATION OF IN-
TEREST ON SEMIANNUAL BASIS’’)—Continued
Half-year of 184 Half-year of 183 Half-year of 182 Half-year of 181

Rate per annum (percent) days days days days
41⁄2 ................................................................................. .122 282 609 .122 950 820 .123 626 374 .124 309 394
45⁄8 ................................................................................. .125 679 348 .126 366 120 .127 060 440 .127 762 432
43⁄4 ................................................................................. .129 076 087 .129 781 421 .130 494 505 .131 215 471
47⁄8 ................................................................................. .132 472 826 .133 196 721 .133 928 571 .134 668 500
5 .................................................................................... .135 869 565 .136 612 022 .137 362 637 .138 121 548
51⁄8 ................................................................................. .139 266 304 .140 027 322 .140 796 703 .141 574 586
51⁄4 ................................................................................. .142 663 043 .143 442 623 .144 230 769 .145 027 624
53⁄8 ................................................................................. .146 059 783 .146 857 923 .147 664 835 .148 480 663
51⁄2 ................................................................................. .149 456 522 .150 273 224 .151 098 901 .151 933 702
55⁄8 ................................................................................. .152 853 261 .153 688 525 .154 532 967 .155 386 748
53⁄4 ................................................................................. .156 250 000 .157 103 825 .157 967 033 .158 839 706
57⁄8 ................................................................................. .159 646 739 .160 519 126 .161 401 099 .162 292 876
6 .................................................................................... .163 043 478 .163 934 426 .164 835 165 .165 745 856
61⁄8 ................................................................................. 166 440 217 .167 349 727 .168 269 231 .169 198 895
61⁄4 ................................................................................. .169 836 957 .170 765 027 .171 703 297 .172 651 934
63⁄8 ................................................................................. .173 233 696 .174 180 328 .175 137 363 .176 104 972
61⁄2 ................................................................................. .176 630 435 .177 595 628 .178 571 429 .179 558 011
65⁄8 ................................................................................. .180 027 174 .181 010 929 .182 005 495 .183 011 050
63⁄4 ................................................................................. .183 423 913 .184 426 230 .185 439 560 .186 464 088
67⁄8 ................................................................................. .186 820 652 .187 841 530 .188 873 626 .189 917 127
7 .................................................................................... .190 217 391 .191 256 831 .192 307 692 .193 370 166
71⁄8 ................................................................................. .193 614 130 .194 672 131 .195 741 758 .196 823 204
71⁄4 ................................................................................. .197 010 870 .198 087 432 .199 175 824 .200 276 243
73⁄8 ................................................................................. .200 407 609 .201 502 732 .202 609 890 .203 729 282
71⁄2 ................................................................................. .203 804 348 .204 918 033 .206 043 956 .207 182 320
75⁄8 ................................................................................. .207 201 087 .208 333 333 .209 478 022 .210 635 359
73⁄4 ................................................................................. .210 597 826 .211 748 634 .212 912 088 .214 088 398
77⁄8 ................................................................................. .213 994 565 .215 163 934 .216 346 154 .217 541 436
8 .................................................................................... .217 391 304 .218 579 235 .219 780 220 .220 994 475
81⁄8 ................................................................................. .220 788 043 .221 994 536 .223 214 286 .224 447 514
81⁄4 ................................................................................. .224 184 783 .225 409 836 .226 648 352 .227 900 552
83⁄8 ................................................................................. .227 581 522 .228 825 137 .230 082 418 .231 353 591
81⁄2 ................................................................................. .230 978 261 .232 240 437 .233 516 484 .234 806 630
85⁄8 ................................................................................. .234 375 000 .235 655 738 .236 950 549 .238 259 669
83⁄4 ................................................................................. .237 771 739 .239 071 038 .240 384 615 .241 712 707
87⁄8 ................................................................................. .241 168 478 .242 486 339 .243 818 681 .245 165 746
9 .................................................................................... .244 565 217 .245 901 639 .247 252 747 .248 618 785
91⁄8 ................................................................................. .247 961 957 .249 316 940 .250 686 813 .252 071 823
91⁄4 ................................................................................. .251 358 696 .252 732 240 .254 120 879 .255 524 862
93⁄8 ................................................................................. .254 755 435 .256 147 541 .257 554 945 .258 977 901
91⁄2 ................................................................................. .258 152 174 .259 562 842 .260 989 011 .262 430 939
95⁄8 ................................................................................. .261 548 913 .262 978 142 .264 423 077 .265 883 978
93⁄4 ................................................................................. .264 945 652 .266 393 443 .267 857 143 .269 337 017
97⁄8 ................................................................................. .268 342 391 .269 808 743 .271 291 209 .272 790 055
10 .................................................................................. .271 739 130 .273 224 044 .274 725 275 .276 243 094
101⁄8 ............................................................................... .275 135 870 .276 639 344 .278 159 341 .279 696 133
101⁄4 ............................................................................... .278 853 609 .280 054 645 .281 593 407 .283 149 171
103⁄8 ............................................................................... .281 929 348 .283 469 945 .285 027 473 .286 602 210
101⁄2 ............................................................................... .285 326 087 .286 885 246 .288 461 538 .290 055 249
105⁄8 ............................................................................... .288 722 826 .290 300 546 .291 895 604 .293 508 287
103⁄4 ............................................................................... .292 119 565 .293 715 847 .295 329 670 .296 961 326
107⁄8 ............................................................................... .295 516 304 .297 131 148 .298 763 736 .300 414 365
11 .................................................................................. .298 913 043 .300 546 448 .302 197 802 .303 867 403
111⁄8 ............................................................................... .302 309 783 .303 961 749 .305 631 868 .307 320 442
111⁄4 ............................................................................... .305 706 522 .307 377 049 .309 065 934 .310 773 481
113⁄8 ............................................................................... .309 103 261 .310 792 350 .312 500 000 .314 226 519
111⁄2 ............................................................................... .312 500 000 .314 207 650 .315 934 066 .317 679 558
115⁄8 ............................................................................... .315 896 739 .317 622 951 .319 368 132 .321 132 597
113⁄4 ............................................................................... .319 293 478 .321 038 251 .322 802 198 .324 585 635
117⁄8 ............................................................................... .322 690 217 .324 453 552 .326 236 264 .328 038 674
12 .................................................................................. .326 086 957 .327 868 852 .329 670 330 .331 491 713
172
TABLE II—DECIMAL FOR 1 DAY’S INTEREST ON TABLE II—DECIMAL FOR 1 DAY’S INTEREST ON
$1,000 AT VARIOUS RATES OF INTEREST, $1,000 AT VARIOUS RATES OF INTEREST,
PAYABLE ANNUALLY OR ON AN ANNUAL BASIS, PAYABLE ANNUALLY OR ON AN ANNUAL BASIS,
IN REGULAR YEARS OF 365 DAYS AND IN IN REGULAR YEARS OF 365 DAYS AND IN
LEAP YEARS OF 366 DAYS LEAP YEARS OF 366 DAYS—Continued
Rate per annum (per- Regular year, Leap year, 366 Rate per annum (per- Regular year, Leap year, 366
cent) 365 days days cent) 365 days days
⁄ ...................................
18 $0.003 424 658 $0.003 415 301 83⁄8 ................................. .229 452 055 .228 825 137
⁄ ...................................
14 .006 849 315 .006 830 601 81⁄2 ................................. .232 876 712 .232 240 437
⁄ ...................................
38 .010 273 973 .010 245 902 85⁄8 ................................. .236 301 370 .235 655 738
1⁄2 ................................... .013 698 630 .013 661 202 83⁄4 ................................. .239 726 027 .239 071 038
5⁄8 ................................... .017 123 288 .017 076 503 87⁄8 ................................. .243 150 685 .242 486 339
3⁄4 ................................... .020 547 945 .020 491 803
7⁄8 ...................................
9 ..................................... .246 575 342 .245 901 639
.023 972 603 .023 907 104 91⁄8 ................................. .250 000 000 .249 316 940
1 ..................................... .027 397 260 .027 322 404
91⁄4 ................................. .253 424 658 .252 732 240
11⁄8 ................................. .030 821 918 .030 737 705
93⁄8 ................................. .256 849 315 .256 147 541
11⁄4 ................................. .034 246 575 .034 153 005
13⁄8 ................................. .037 671 233 .037 568 306 91⁄2 ................................. .260 273 973 .259 562 842
11⁄2 ................................. .041 095 890 .040 983 607 95⁄8 ................................. .263 698 630 .262 978 142
15⁄8 ................................. .044 520 548 .044 398 907 93⁄4 ................................. .267 123 288 .266 393 443
13⁄4 ................................. .047 945 205 .047 814 208 97⁄8 ................................. .270 547 945 .269 808 743
17⁄8 ................................. .051 369 863 .051 229 508 10 ................................... .273 972 603 .273 224 044
2 ..................................... .054 794 521 .054 644 809 101⁄8 ............................... .277 397 260 .276 639 344
21⁄8 ................................. .058 219 178 .058 060 109 101⁄4 ............................... .280 821 918 .280 054 645
21⁄4 ................................. .061 643 836 .061 475 410 103⁄8 ............................... .284 246 575 .283 469 945
23⁄8 ................................. .065 068 493 .064 890 710 101⁄2 ............................... .287 671 233 .286 885 246
21⁄2 ................................. .068 493 151 .068 306 011 105⁄8 ............................... .291 095 890 .290 300 546
25⁄8 ................................. .071 917 808 .071 721 311 103⁄4 ............................... .294 520 548 .293 715 847
23⁄4 ................................. .075 342 466 .075 136 612 107⁄8 ............................... .297 945 205 .297 131 148
27⁄8 ................................. .078 767 123 .078 551 913 11 ................................... .301 369 863 .300 546 448
3 ..................................... .082 191 781 .081 967 213 111⁄8 ............................... .304 794 521 .303 961 749
31⁄8 ................................. .085 616 438 .085 382 514 111⁄4 ............................... .308 219 178 .307 377 049
31⁄4 ................................. .089 041 096 .088 797 814 113⁄8 ............................... .311 643 836 .310 792 350
33⁄8 ................................. .092 465 753 .092 213 115 111⁄2 ............................... .315 068 493 .314 207 650
31⁄2 ................................. .095 890 411 .095 628 415 115⁄8 ............................... .318 493 151 .317 622 951
35⁄8 ................................. .099 315 068 .099 043 716 113⁄4 ............................... .321 917 808 .321 038 251
33⁄4 ................................. .102 739 726 .102 459 016 117⁄8 ............................... .325 342 466 .324 453 552
37⁄8 ................................. .106 164 384 .105 874 317 12 ................................... .328 767 123 .327 868 852
4 ..................................... .109 589 041 .109 289 617
41⁄8 ................................. .113 013 699 .112 704 918
41⁄4 ................................. .116 438 356 .116 120 219 [38 FR 7078, Mar. 15, 1973; 38 FR 8153, Mar. 29,
43⁄8 ................................. .119 863 014 .119 535 519
1973; 38 FR 10004, Apr. 23, 1973, as amended at
41⁄2 ................................. .123 287 671 .122 950 820
45⁄8 ................................. .126 712 329 .126 366 120 44 FR 34125, June 14, 1979]
43⁄4 ................................. .130 136 986 .129 781 421
47⁄8 ................................. .133 561 644 .133 196 721
5 ..................................... .136 986 301 .136 612 022
Subpart F—Assignments of
51⁄8 ................................. .140 410 959 .140 027 322 Registered Securities—General
51⁄4 ................................. .143 835 616 .143 442 623
53⁄8 ................................. .147 260 274 .146 857 923 § 306.40 Execution of assignments.
51⁄2 ................................. .150 684 932 .150 273 224
55⁄8 ................................. .154 109 589 .153 688 525 The assignment of a registered secu-
53⁄4 ................................. .157 534 247 .157 103 825 rity should be executed by the owner,
57⁄8 ................................. .160 958 904 .160 519 126
6 ..................................... .164 383 562 .163 934 426
or his or her authorized representative,
61⁄8 ................................. .167 808 219 .167 349 727 in the presence of an individual author-
61⁄4 ................................. .171 232 877 .170 765 027 ized to certify assignments. All assign-
63⁄8 ................................. .174 657 534 .174 180 328 ments must be made on the backs of
61⁄2 ................................. .178 082 192 .177 595 628
65⁄8 ................................. .181 506 849 .181 010 929 the securities, unless otherwise author-
63⁄4 ................................. .184 931 507 .184 426 230 ized by the Bureau. An assignment by
67⁄8 ................................. .188 356 164 .187 841 530 mark (X) must be witnessed not only
7 ..................................... .191 780 822 .191 256 831
71⁄8 ................................. .195 205 479 .194 672 131
by a certifying individual, but also by
71⁄4 ................................. .198 630 137 .198 087 432 at least one other person, who should
73⁄8 ................................. .202 054 795 .201 502 732 add an endorsement substantially as
71⁄2 ................................. .205 479 452 .204 918 033 follows: ‘‘Witness to signature by
75⁄8 ................................. .208 904 110 .208 333 333
73⁄4 ................................. .212 328 767 .211 748 634 mark,’’ followed by the witness’ signa-
77⁄8 ................................. .215 753 425 .215 163 934 ture and address.
8 ..................................... .219 178 082 .218 579 235
81⁄8 ................................. .222 602 740 .221 994 536 [59 FR 59036, Nov. 15, 1994, as amended by 64
81⁄4 ................................. .226 027 397 .225 409 836 FR 38126, July 15, 1999]
173
§ 306.41 31 CFR Ch. II (7–1–11 Edition)
§ 306.41 Form of assignment. In the absence of a disclaimer, an affi-

davit or affidavits should be submitted
Registered securities may be as-
for consideration explaining why a dis-
signed in blank, to bearer, to a speci-
claimer cannot be obtained, reciting
fied transferee, or to the Secretary of
all other material facts and cir-
the Treasury for redemption or for ex-
cumstances relating to the trans-
change for other securities offered at
action, including whether or not the
maturity, upon call or pursuant to an
security was delivered to the person
advance refunding or prerefunding
named as assignee and whether or not
offer. Assignments to ‘‘The Secretary
the affiants know of any basis for the
of the Treasury,’’ ‘‘The Secretary of
assignee claiming any right, title, or
the Treasury for transfer,’’ or ‘‘The
interest in the security. After an as-
Secretary of the Treasury for ex- signment has been voided, in order to
change’’ will not be accepted unless dispose of the security, an assignment
supplemented by specific instructions by or on behalf of the owner will be re-
by or in behalf of the owner. quired.
[38 FR 7078, Mar. 15, 1973, as amended at 64 [38 FR 7078, Mar. 15, 1973, as amended at 64
FR 38126, July 15, 1999] FR 38126, July 15, 1999]
§ 306.42 Alterations and erasures. § 306.44 Discrepancies in names.
If an alteration or erasure has been The Department will ordinarily re-
made in an assignment, the assignor quire an explanation of discrepancies
should appear before an authorized cer- in the names which appear in inscrip-
tifying officer and execute a new as- tions, assignments, supporting evi-
signment to the same assignee. If the dence or in the signatures to any as-
new assignment is to other than the assignments. (Form PD 385 may be used
signee whose name has been altered or for this purpose.) However, where the
erased, a disclaimer from the first- variations in the name of the reg-
named assignee should be obtained. istered owner, as inscribed on securi-
Otherwise, an affidavit of explanation ties of the same or different issues, are
by the person responsible for the alter- such that both may properly represent
ation or erasure should be submitted the same person, for example, ‘‘J. T.
for consideration. Smith’’ and ‘‘John T. Smith,’’ no proof
of identity will be required if the as-
§ 306.43 Voidance of assignments.
signments are signed exactly as the se-
An assignment of a security to or for curities are inscribed and are duly cer-
the account of another person, not tified by the same certifying officer.
completed by delivery, may be voided
by a disclaimer of interest from that § 306.45 Certifying individuals.
person. This disclaimer should be exe- (a) General. The following individuals
cuted in the presence of an officer au- may certify assignments of, or forms
thorized to certify assignments of secu- with respect to, securities:
rities. Unless otherwise authorized by (1) Officers and employees of deposi-
the Bureau, the disclaimer must be tory institutions, corporate central
written, typed, or stamped on the back credit unions, and institutions that are
of the security in substantially the fol- members of Treasury-recognized signa-
lowing form: ture guarantee programs who have
The undersigned as assignee of this secu- been authorized:
rity hereby disclaims any interest herein. (i) Generally to bind their respective
institutions by their acts;
(Signature)
(ii) Unqualifiedly to guarantee signa-
I certify that the above-named person as tures to assignments of securities; or
described, whose identity is well known or (iii) To certify assignments of securi-
proved to me, personally appeared before me ties.
the lll day of llllll (Month and
year) at llllllllll (Place) and
(2) Officers and authorized employees
signed the above disclaimer of interest. of Federal Reserve Banks and
(SEAL) llllllllllllllllllll branches.
(Signature and official designation of (3) Officers of Federal Land Banks,
certifying officer) Federal Intermediate Credit Banks and
174
Banks for Cooperatives, and Federal dorsement: ‘‘Signature guaranteed,

Home Loan Banks. First National Bank of Smithville,
(4) Commissioned officers and war- Smithville, NH, by A.B. Doe, Presi-
rant officers of the Armed Forces of dent’’, and add the date. In guaran-
the United States but only with re- teeing a signature, the certifying indi-
spect to signatures executed by Armed vidual and the organization for which
Forces personnel, civilian field employ- he or she is acting warrant to the De-
ees, and members of their families. partment that the signature is genuine
(5) U.S. Attorneys, Collectors of Cus- and that the signer had the legal ca-
toms, and Regional Commissioners, pacity to execute the assignment or re-
District Directors, and Service Center lated form.
Directors, Internal Revenue Service. (3) Absence of signature guaranteed by
(6) Judges and Clerks of U.S. Courts.
depository institution. A security or re-
(7) Such other persons as the Com-
lated form need not be actually signed
missioner of the Public Debt or his des-
by the owner in any case where a certi-
ignee may authorize.
fying individual associated with a de-
(b) Foreign countries. The following
individuals are authorized to certify pository institution has placed an en-
assignments of, or forms with respect dorsement on the security or the form
to, securities executed in a foreign reading substantially as follows: ‘‘Ab-
country: sence of signature by owner and valid-
(1) United States diplomatic or con- ity of transaction guaranteed, Second
sular officials. State Bank of Jonesville, Jonesville,
(2) Managers and officers of foreign NC, by B.R. Butler, Vice President’’.
branches of depository institutions and The endorsement should be dated, and
institutions that are members of the seal of the institution should be
Treasury-recognized signature guar- added. This form of endorsement is an
antee programs. unconditional guarantee to the Depart-
(3) Notaries public and other officers ment that the institution is acting for
authorized to administer oaths, pro- the owner under proper authorization.
vided their official position and au- (d) Evidence of certifying individual’s
thority are certified by a United States authority. The authority of a certifying
diplomatic or consular official under individual to act is evidenced by
seal of the office. affixing to the certification the fol-
(c) Duties and liabilities of certifying lowing:
individuals—(1) General. Except as spec- (1) Officers and employees of depository
ified in paragraph (c)(2) of this section, institutions. The institution’s seal or
a certifying individual shall require signature guarantee stamp; if the insti-
that the security or related form be tution is an authorized paying agent
signed in the certifying individual’s for U.S. Savings Bonds, a legible im-
presence after he or she has established
print of the paying agent’s stamp; or, if
the identity of the person seeking the
the institution is a member of the Se-
certification. An employee who is not
curities Transfer Agents Medallion
an officer should insert the words ‘‘Au-
thorized signature’’ in the space pro- Program (STAMP), a legible imprint of
vided for the title. A certifying indi- the STAMP signature guarantee
vidual and the organization for which stamp.
he or she is acting are jointly and sev- (2) Officers and authorized employees of
erally liable for any loss the United institutions that are members of Treasury-
States may incur as a result of the in- recognized signature guarantee programs.
dividual’s negligence in making the A legible imprint of the program’s sig-
certification. nature guarantee stamp, e.g., the
(2) Signature guaranteed. The assign- STAMP, SEMP, or MSP stamp for
ment or related form need not be exe- members of the Securities Transfer
cuted in the presence of a certifying in- Agents Medallion Program, the Stock
dividual if he or she unqualifiedly Exchanges Medallion Program, or the
guarantees the signature, in which case New York Stock Exchange Incor-
the certifying individual shall, after porated Medallion Signature Program,
the signature, add the following en- respectively.
175
§ 306.55 31 CFR Ch. II (7–1–11 Edition)
(3) Officers and authorized employees of Subpart G—Assignments by or in

Federal Reserve Banks. Whatever is pre- Behalf of Individuals
scribed in procedures established by
the Department. § 306.55 Signatures, minor errors and
(4) Officers and employees of corporate change of name.
central credit unions and other entities The owner’s signature to an assign-
listed in paragraph (a)(3) of this section. ment should be in the form in which
The entity’s seal. the security is inscribed or assigned,
(5) Notaries public, diplomatic or con- unless such inscription or assignment
sular officials. The official seal or stamp is incorrect or the name has since been
of the office. If the certifying indi- changed. In case of a change of name,
vidual has no seal or stamp, then the the signature to the assignment should
official’s position must be certified by show both names and the manner in
some other authorized individual, which the change was made, for exam-
under seal or stamp, or otherwise ple, ‘‘John Young, changed by order of
proved to the satisfaction of the De- court from Hans Jung.’’ Evidence of
partment. the change will be required. However,
(6) Commissioned or warrant officers of no evidence is required to support an
the United States Armed Forces. A state- assignment if the change resulted from
ment which sets out the officer’s rank marriage and the signature, which
and the fact that the person executing must be duly certified by an authorized
officer, is written to show that fact, for
the assignment or form is one whose
example, ‘‘Mrs. Mary J. Brown,
signature the officer is authorized to
changed by marriage from Miss Mary
certify under the regulations in this
Jones.’’
part.
(7) A judge or clerk of the court. The § 306.56 Assignment of securities reg-
seal of the court. istered in the names of or assigned
(8) Any other certifying individual. The to two or more persons.
official seal or stamp of the office. If (a) Transfer or exchange. Securities
the certifying individual has no seal or registered in the names of or assigned
stamp, then the certifying individual’s to two or more persons may be trans-
position and signature must be cer- ferred during the lives of all the joint
tified by some other authorized indi- owners only upon assignments by all or
vidual under official seal or stamp, or on their behalf by authorized rep-
otherwise proved to the satisfaction of resentatives. Upon proof of the death of
the Department. one, the Department will accept an as-
(e) Interested persons not to act as certi- signment by or in behalf of the sur-
fying individual. Neither the transferor, vivor or survivors, unless the form of
the transferee, nor any person having registration or assignment includes
an interest in a security involved in words which precludes the right of sur-
the transaction may act as a certifying vivorship. 9 In the latter case, in addi-
individual. However, an authorized offi- tion to assignment by or in behalf of
cer or employee of a depository institu- the survivor or survivors, an assign-
ment in behalf of the decedent’s estate
tion or of an institution that is a mem-
will be required.
ber of a Treasury-recognized signature
(b) Advance refunding or prerefunding
guarantee program may act as a certi-
offers. No assignments are required for
fying individual on a security or re-
exchange of securities registered in the
lated form for transfer of a security to names of or assigned to two or more
the institution, or any security or re- persons if the securities to be received
lated form executed by another indi- in the exchange are to be registered in
vidual on behalf of the institution. the same names and form. If securities
[59 FR 59037, Nov. 15, 1994] in a different form are to be issued, all
persons named must assign, except
9 See § 306.11(a) (2) for forms of registration
expressing or precluding survivorship.
176
that in case of death paragraph (a) of authorized transaction except one for
this section shall apply. the apparent benefit of the natural
(c) Redemption or redemption-ex- guardian. If the natural guardian in
change—(1) Alternative registration or as- whose name the securities are reg-
signment. Securities registered in the istered is deceased or is no longer
names of or assigned to two or more qualified to act as natural guardian,
persons in the alternative, for example, the securities may be assigned by the
‘‘John B. Smith or Mrs. Mary J. person then acting as natural guardian.
Smith’’ or ‘‘John B. Smith or Mrs. The assignment by the new natural
Mary J. Smith or the survivor,’’ may guardian should be supported by proof
be assigned by one of them at maturity of the death or disqualification of the
or upon call, for redemption or redemp- former natural guardian and by evi-
tion-exchange, for his own account or dence of his own status as natural
otherwise, whether or not the other guardian. (Form PD 2481 may be used
joint owner or owners are deceased. for this purpose.) No assignment by a
(2) Joint registration or assignment. Se- natural guardian will be accepted after
curities registered in the names of or receipt of notice of the minor’s attain-
assigned to two or more persons joint- ment of majority, removal of his dis-
ly, for example, ‘‘John B. Smith and ability of minority, disqualification of
Mrs. Mary J. Smith,’’ or ‘‘John B. the natural guardian to act as such,
Smith and Mrs. Mary J. Smith as ten-
qualification of a legal guardian or
ants in common,’’ or ‘‘John B. Smith
similar representative, or the death of
and Mary J. Smith as partners in com-
the minor.
munity,’’ may be assigned by one of
them during the lives of all only for re- (c) Assignments by voluntary guardian
demption at maturity or upon call, and of incompetents. Registered securities
then only for redemption for the ac- belonging to an incompetent for whose
count of all. No assignments are re- estate no legal guardian or similar rep-
quired for redemption-exchange for se- resentative is legally qualified may be
curities to be registered in the same assigned by the relative responsible for
names and forms as appear in the reg- his care and support or some other per-
istration or assignment of the securi- son as voluntary guardian:
ties surrendered. Upon proof of the (1) For redemption, if the proceeds of
death of a joint owner, the survivor or the securities are needed to pay ex-
survivors may assign securities so reg- penses already incurred, or to be in-
istered or assigned for redemption or curred during any 90-day period, for the
redemption-exchange for any account, care and support of the incompetent or
except that, if words which preclude his legal dependents.
the right of survivorship 9 appear in the (2) For redemption-exchange, if the
registration or assignment, assignment securities are matured or have been
in behalf of the decedent’s estate also called, or pursuant to an advance re-
will be required. funding or prerefunding offer, for rein-
vestment in other securities to be reg-
[38 FR 7078, Mar. 15, 1973, as amended at 64
FR 38126, July 15, 1999] istered in the form ‘‘A, an incompetent
(123–45–6789) under voluntary guardian-
§ 306.57 Minors and incompetents. ship.’’
(a) Assignments by natural guardian of An application on Form PD 1461 by the
securities registered in name of minor. Se- person seeking authority to act as vol-
curities registered in the name of a untary guardian will be required.
minor for whose estate no legal guard- (d) Assignments by legal guardians of
ian or similar representative has quali- minors or incompetents. Securities reg-
fied may be assigned by the natural istered in the name and title of the
guardian upon qualification. (Form PD legal guardian or similar representa-
2481 may be used for this purpose.) tive of the estate of a minor or incom-
(b) Assignments of securities registered petent may be assigned by the rep-
in name of natural guardian of minor. Se- resentative for any authorized trans-
curities registered in the name of a action without proof of his qualifica-
natural guardian of a minor may be as- tion. Assignments by a representative
signed by the natural guardian for any of any other securities belonging to a
177
§ 306.58 31 CFR Ch. II (7–1–11 Edition)
minor or incompetent must be sup- or small estates procedures under ap-

ported by properly certified evidence of plicable local law may request pay-
qualification. The evidence must be ment of matured securities, or may re-
dated not more than 1 year before the quest assignment of the securities. Ap-
date of the assignments and must con- propriate evidence is required.
tain a statement showing the appoint- (d) When administration is required. If
ment is in full force unless (1) it shows the total redemption value of the
the appointment was made not more Treasury securities and undelivered
than 1 year before the date of the as- payments, if any, held directly on our
signment, or (2) the representative or a records that are the property of the de-
corepresentative is a corporation. An cedent’s estate is greater than $100,000,
assignment by the representative will administration of the decedent’s estate
not be accepted after receipt of notice will be required. The redemption value
of termination of the guardianship, ex- of savings bonds and the principal
cept for transfer to the former ward. amount of marketable securities will
be used to determine the value of secu-
FR 38126, July 15, 1999] rities, and will be determined as of the
date of death. Administration may also
§ 306.58 Nontransferable securities. be required at the discretion of the De-
partment for any case.
The provisions of this subpart, so far
(e) Voluntary representative for small
as applicable, govern transactions in
estates that are not being otherwise ad-
Treasury Bonds, Investment Series B–
ministered—(1) General. A voluntary
1975–80.
representative is a person qualified ac-
cording to paragraph (e)(3) of this sec-
Subpart H—Assignments in Behalf tion, to request payment of a dece-
of Estates of Deceased Owners dent’s matured securities or to make
an assignment of a decedent’s
§ 306.65 Decedent’s estate. unmatured securities. The voluntary
(a) Estate is being administered. (1) A representative procedures are for the
legal representative of a deceased own- convenience of the Department; enti-
er’s estate may request payment of ma- tlement to the decedent’s securities
tured securities to the estate, or may and held payments, if any, is deter-
assign securities to or for the benefit of mined by the law of the jurisdiction in
the persons entitled. which the decedent was domiciled at
(2) Appropriate proof of appointment the date of death. Voluntary represent-
for the legal representative of the es- ative procedures may be used only if:
tate is required. Letters of appoint- (i) There has been no administration,
ment must be dated not more than one no administration is contemplated, and
year prior to the date of submission of no summary or small estate procedures
the letters of appointment. under applicable local law have been
(b) Estate has been settled previously. If used;
the estate has been settled previously (ii) The total redemption value of the
through judicial proceedings, the per- Treasury securities and held payments,
sons entitled may request payment of if any, held directly on our records
matured securities, or may request as- that are the property of the decedent’s
signment of unmatured securities. A estate is $100,000 or less as of the date
certified copy of the court-approved of death; and
final accounting for the estate, the (iii) There is a person eligible to
court’s decree of distribution, or other serve as the voluntary representative
appropriate evidence is required. according to paragraph (e)(3) of this
(c) Special provisions under the law of section.
the jurisdiction of the decedent’s domicile. (2) Authority of voluntary representa-
If there is no formal or regular admin- tive. A voluntary representative may:
istration and no representative of the (i) Request payment of the decedent’s
estate is to be appointed, the person matured securities on behalf of the per-
appointed to receive or distribute the sons entitled by the law of the jurisdic-
assets of a decedent’s estate without tion in which the decedent was domi-
regular administration under summary ciled at the date of death;
178
(ii) Assign the decedent’s securities of this section, then a creditor may
to the persons entitled by the law of make a claim for the amount of the
the jurisdiction in which the decedent debt, providing the debt has not been
was domiciled at the date of death. barred by applicable local law. The
(3) Order of precedence for voluntary claim may only be satisfied by the pro-
representative. An individual eighteen ceeds of matured securities.
years of age or older may act as a vol- [70 FR 57429, Sept. 30, 2005]
untary representative according to the
following order of precedence: a sur- §§ 306.66–306.67 [Reserved]
viving spouse; if there is no surviving
spouse, then a child of the decedent; if § 306.68 Nontransferable securities.
there are none of the above, then a de- The provisions of this subpart, so far
scendant of a deceased child of the de- as applicable, govern transactions in
cedent; if there are none of the above, Treasury Bonds, Investment Series B–
then a parent of the decedent; if there 1975–80.
are none of the above, then a brother
or sister of the decedent; if there are
none of the above, then a descendant of
Subpart I—Assignments by or in
a deceased brother or sister of the dece- Behalf of Trustees and Similar
dent; if there are none of the above, Fiduciaries
then a next of kin of the decedent, as
§ 306.75 Individual fiduciaries.
determined by the law of the jurisdic-
tion in which the decedent was domi- (a) General. Securities registered in,
ciled at the date of death. As used in or assigned to, the names and titles of
this order of precedence, child means a individual fiduciaries will be accepted
natural or adopted child of the dece- for any authorized transaction upon as-
dent. signment by the designated fiduciaries
(4) Liability. By serving, the vol- without proof of their qualification. If
untary representative warrants that the fiduciaries in whose names the se-
the distribution of payments or securi- curities are registered, or to whom
ties is to or on behalf of the persons en- they have been assigned, have been
titled by the law of the jurisdiction in succeeded by other fiduciaries, evi-
which the decedent was domiciled at dence of successorship must be fur-
the date of death. The United States is nished. If the appointment of a suc-
not liable to any person for the im- cessor is not required under the terms
proper distribution of payments or se- of the trust instrument or otherwise
curities. Upon payment or assignment and is not contemplated, assignments
of the securities at the request of the by the surviving or remaining fiduciary
voluntary representative, the United or fiduciaries must be supported by ap-
States is released to the same extent as propriate proof. This requires:
if it had paid or delivered to a rep- (1) Proof of the death, resignation,
resentative of the estate appointed pur- removal or disqualification of the
suant to the law of the jurisdiction in former fiduciary and
which the decedent was domiciled at (2) Evidence that the surviving or re-
the date of death. The voluntary rep- maining fiduciary or fiduciaries are
resentative shall indemnify and hold fully qualified to administer the fidu-
harmless the United States and all ciary estate, which may be in the form
creditors and persons entitled to the of a certificate by them showing the
estate of the decedent. The amount of appointment of a successor has not
the indemnification is limited to an been applied for, is not contemplated
amount no greater than the value re- and is not necessary under the terms of
ceived by the voluntary representative. the trust instrument or otherwise.
(f) Creditor. If there has been no ad- Assignments of securities registered in
ministration, no administration is con- the titles, without the names of the fi-
templated, no summary or small estate duciaries, for example, ‘‘Trustees of the
procedures under applicable local law George E. White Memorial Scholarship
have been used, and there is no person Fund under deed of trust dated 11/10/40,
eligible to serve as a voluntary rep- executed by John W. White,’’ must be
resentative pursuant to paragraph (e) supported by proof that the assignors
179
§ 306.76 31 CFR Ch. II (7–1–11 Edition)
are the qualified and acting trustees of named on the securities, will be accept-
the designated trust estate, unless they ed.
are empowered to act as a unit in
[38 FR 7078, Mar. 15, 1973; 38 FR 10004, Apr. 23,
which case the provisions of § 306.76 1973]
shall apply. (Form PD 2446 may be used
to furnish proof of incumbency of fidu- § 306.77 Corepresentatives and fidu-
ciaries.) Assignments by fiduciaries of ciaries.
securities not registered or assigned in
If there are two or more executors,
such manner as to show that they be-
administrators, guardians or similar
long to the estate for which the assign-
ors are acting must also be supported representatives, or trustees of an es-
by evidence that the estate is entitled tate, all must unite in the assignment
to the securities. of any securities belonging to the es-
tate. However, when a statute, a decree
(b) Life tenants. Upon termination of
of court, or the instrument under
a life estate by reason of the death of
which the representatives or fidu-
the life tenant in whose name a secu-
rity is registered, or to whom it has ciaries are acting provides otherwise,
been assigned, the security will be ac- assignments in accordance with their
cepted for any authorized transaction authority will be accepted. If the secu-
upon assignment by the remainderman, rities have matured or been called and
supported by evidence of entitlement. are submitted for redemption for the
account of all, or for redemption-ex-
§ 306.76 Fiduciaries acting as a unit. change or pursuant to an advance re-
funding or prerefunding offer, and the
Securities registered in the name of securities offered in exchange are to be
or assigned to a board, committee or registered in the names of all, no as-
other body authorized to act as a unit signment is required.
for any public or private trust estate
may be assigned for any authorized § 306.78 Nontransferable securities.
transaction by anyone authorized to
act in behalf of such body. Except as The provisions of this subpart, so far
otherwise provided in this section, the as applicable, govern assignments of
assignments must be supported by a Treasury Bonds, Investment Series B–
copy of a resolution adopted by the 1975–80.
body, properly certified under its seal,
or, if none, sworn to by a member of Subpart J—Assignments in Behalf
the body having access to its records. of Private or Public Organizations
(Form PD 2495 may be used.) If the per-
son assigning is designated in the reso- § 306.85 Private corporations and un-
lution by title only, his incumbency incorporated associations (includ-
must be duly certified by another ing nominees).
member of the body. (Form PD 2446 Securities registered in the name of,
may be used.) If the fiduciaries of any or assigned to, an unincorporated asso-
trust estate are empowered to act as a ciation, or a private corporation in its
unit, although not designated as a own right or in a representative or fi-
board, committee or other body, secu- duciary capacity, or as nominee, may
rities registered in their names or as- be assigned in its behalf for any au-
signed to them as such, or in their ti- thorized transaction by any duly au-
tles without their names, may be as- thorized officer or officers. Evidence, in
signed by anyone authorized by the the form of a resolution of the gov-
group to act in its behalf. Such assign- erning body, authorizing the assigning
ments may be supported by a sworn officer to assign, or to sell, or to other-
copy of a resolution adopted by the wise dispose of the securities will ordi-
group in accordance with the terms of narily be required. Resolutions may re-
the trust instrument, and proof of their late to any or all registered securities
authority to act as a unit may be re- owned by the organization or held by it
quired. As an alternative, assignments in a representative or fiduciary capac-
by all the fiduciaries, supported by ity. (Form PD 1010, or any substan-
proof of their incumbency, if not tially similar form, may be used when
180
the authority relates to specific securi- § 306.88 Political entities and public
ties; Form PD 1011, or any substan- corporations.
tially similar form, may be used for se- Securities registered in the name of,
curities generally.) If the officer de- or assigned to, a State, county, city,
rives his authority from a charter, con- town, village, school district or other
stitution or bylaws, a copy, or a perti- political entity, public body or cor-
nent extract therefrom, properly cer- poration, may be assigned by a duly
tified, will be required in lieu of a reso- authorized officer, supported by evi-
lution. If the resolution or other sup- dence of his authority.
porting document shows the title of an
authorized officer, without his name, it § 306.89 Public officers.
must be supplemented by a certificate Securities registered in the name of,
of incumbency. (Form PD 1014 may be or assigned to, a public officer des-
used.) ignated by title may be assigned by
such officer, supported by evidence of
§ 306.86 Change of name and succes- incumbency. Assignments for the offi-
sion of private organizations.
cer’s own apparent individual benefit
If a private corporation or unincor- will not be recognized.
porated association changes its name
or is lawfully succeeded by another § 306.90 Nontransferable securities.
corporation or unincorporated associa- The provisions of this subpart apply
tion, its securities may be assigned in to Treasury Bonds, Investment Series
behalf of the organization in its new B–1975–80.
name or that of its successor by an au-
thorized officer in accordance with Subpart K—Attorneys in Fact
§ 306.85. The assignment must be sup-
ported by evidence of the change of § 306.95 Attorneys in fact.
name or successorship.
(a) General. Assignments by an attor-
§ 306.87 Partnerships (including nomi- ney in fact will be recognized if sup-
nee partnerships). ported by an adequate power of attor-
ney. Every power must be executed in
An assignment of a security reg- the presence of an authorized certi-
istered in the name of or assigned to a fying officer under the conditions set
partnership must be executed by a gen- out in § 306.45 for certification of as-
eral partner. Upon dissolution of a signments. Powers need not be sub-
partnership, assignment by all living mitted to support redemption-ex-
partners and by the persons entitled to changes or exchanges pursuant to ad-
assign in behalf of any deceased part- vance refunding or prefunding offers
ner’s estate will be required unless the where the securities to be issued are to
laws of the jurisdiction authorize a be registered in the same names and
general partner to bind the partnership forms as appear in the inscriptions or
by any act appropriate for winding up assignments of the securities surren-
partnership affairs. In those cases dered. In all other cases, the original
where assignments by or in behalf of power, or a photocopy showing the
all partners are required this fact must grantor’s autograph signature, prop-
be shown in the assignment; otherwise, erly certified, must be submitted, to-
an affidavit by a former general part- gether with the security assigned on
ner must be furnished identifying all the owner’s behalf by the attorney in
the persons who had been partners im- fact. An assignment by a substitute at-
mediately prior to dissolution. Upon torney in fact must be supported by an
voluntary dissolution, for any jurisdic- authorizing power of attorney and
tion where a general partner may not power of substitution. An assignment
act in winding up partnership affairs, by an attorney in fact or a substitute
an assignment by a liquidating part- attorney in fact for the apparent ben-
ner, as such, must be supported by a efit of either will not be accepted un-
duly executed agreement among the less expressly authorized. (Form PD
partners appointing the liquidating 1001 or 1003, as appropriate, may be
partner. used to appoint an attorney in fact. An
181
§ 306.96 31 CFR Ch. II (7–1–11 Edition)
attorney in fact may use Form PD 1006 § 306.96 Nontransferable securities.

or 1008 to appoint a substitute. How-
The provisions of this subpart shall
ever, any form sufficient in substance
apply to nontransferable securities,
may be used.) If there are two or more
joint attorneys in fact or substitutes, subject only to the limitations imposed
all must unite in an assignment, unless by the terms of the particular issues.
the power authorizes less than all to
act. A power of attorney or of substi- Subpart L—Transfer Through
tution not coupled with an interest Judicial Proceedings
will be recognized until the Bureau re-
ceives proof of revocation or proof of § 306.100 Transferable securities.
the grantor’s death or incompetency. The Department will recognize valid
(b) For legal representatives and fidu- judicial proceedings affecting the own-
ciaries. Assignments by an attorney in ership of or interest in transferable se-
fact or substitute attorney in fact for a curities, upon presentation of the secu-
legal representative or fiduciary, in ad- rities together with evidence of the
dition to the power of attorney and of proceedings. In the case of securities
substitution, must be supported by evi-
registered in the names of two or more
dence, if any, as required by §§ 306.57(d),
persons, the extent of their respective
306.66(b), 306.75, and 306.76. Powers must
interests in the securities must be de-
specifically designate the securities to
be assigned. termined by the court in proceedings
to which they are parties or must oth-
(c) For corporations or unincorporated
associations. Assignments by an attor- erwise be validly established. 10
ney in fact or a substitute attorney in § 306.101 Evidence required.
fact in behalf of a corporation or unin-
corporated association, in addition to Copies of a final judgment, decree, or
the power of attorney and power of order of court and of any necessary
substitution, must be supported by one supplementary proceedings must be
of the following documents certified submitted. Assignments by a trustee in
under seal of the organization, or, if it bankruptcy or a receiver of an
has no seal, sworn to by an officer who insolvent’s estate must be supported by
has access to the records: evidence of his qualification. Assign-
(1) A copy of the resolution of the ments by a receiver in equity or a simi-
governing body authorizing an officer lar court officer must be supported by
to appoint an attorney in fact, with a copy of an order authorizing him to
power of substitution, if pertinent, to assign, or to sell, or to otherwise dis-
assign, or to sell, or to otherwise dispose of, the securities. Where the docu-
pose of, the securities, or ments are dated more than 6 months
(2) A copy of the charter, constitu- prior to presentation of the securities,
tion, or bylaws, or a pertinent extract there must also be submitted a certifi-
therefrom, showing the authority of an cate dated within 6 months of presen-
officer to appoint an attorney in fact, tation of the securities, showing the
or judgment, decree, or order, or evidence
(3) A copy of the resolution of the of qualification, is in full force. Any
governing body directly appointing an such evidence must be certified under
attorney in fact.
court seal.
If the resolution or other supporting
document shows only the title of the
10 Title in a finder claiming ownership of a
authorized officer, without his name, a
registered security will not be recognized. A
certificate of incumbency must also be
finder claiming ownership of a bearer secu-
furnished. (Form PD 1014 may be used.)
rity or a registered security assigned in
The power may not be broader than the blank or so assigned as to become in effect
resolution or other authority. payable to bearer must perfect his title in
(d) For public corporations. A general accordance with the provisions of State law.
power of attorney in behalf of a public If there are no such provisions, the Depart-
corporation will be recognized only if ment will not recognize his title to the secu-
it is authorized by statute. rity.
182
§ 306.102 Nontransferable securities. ing judicial proceedings by any person

The provisions of this subpart shall for the purpose of suspending trans-
apply to Treasury Bonds, Investment actions in bearer securities, or reg-
Series B–1975–80, except that prior to istered securities so assigned as to be-
maturity any reference to assignments come in effect payable to bearer which
shall be deemed to refer to assignments are not overdue as defined in § 306.25. 11
of the bonds for exchange for the cur- However, if the securities are received
rent series of 11⁄2 percent 5-year EA or and retired, the department will under-
EO Treasury notes. take to notify persons who appear to be
entitled to any available information
Subpart M—Requests for concerning the source from which the
Suspension of Transactions securities were received.
(b) Overdue securities. Reports that
§ 306.105 Requests for suspension of bearer securities, or registered securi-
transactions in registered securities so assigned as to become in effect
ties. payable to bearer, were lost, stolen, or
(a) Timely notice. If prior to the time possibly destroyed after they became
a registered security bearing an appar- overdue as defined in § 306.25 will be ac-
ently valid assignment has been func- cepted by the Bureau for the purpose of
tioned, a claim is received from the suspending redemption of the securi-
owner or his authorized representative ties if the claimant establishes his in-
showing that: terest. If the securities are presented,
(1) The security was lost, stolen, or their redemption will be suspended and
destroyed and that it was unassigned, the presenter and the claimant will
or not so assigned as to have become in each be given an opportunity to estab-
effect payable to bearer, or lish ownership.
(2) The assignment was affected by
fraud, the transaction for which the se-
curity was received will be suspended.
The interested parties will be given a
reasonable period of time in which to
effect settlement of their interests by
11 It has been the longstanding policy of the
agreement, or to institute judicial pro-
ceedings. Department to assume no responsibility for
the protection of bearer securities not in the
(b) Late notice. If, after a registered
possession of persons claiming rights therein
security has been transferred, ex-
and to give no effect to any notice of such
changed, or redeemed in reliance on an claims. This policy was formalized on April
apparently valid assignment, an owner 27, 1867, when the Secretary of the Treasury
notifies the Bureau that the assign- issued the following statement:
ment was affected by fraud or that the ‘‘In consequence of the increasing trouble,
security had been lost or stolen, the wholly without practical benefit, arising
Department will undertake only to fur- from notices which are constantly received
nish available information. at the Department respecting the loss of cou-
(c) Forged assignments. A claim that pon bonds, which are payable to bearer, and
an assignment of a registered security of Treasury notes issued and remaining in
is a forgery will be investigated. If it is blank at the time of loss, it becomes nec-
established that the assignment was in essary to give this public notice, that the
fact forged and that the owner did not Government cannot protect and will not un-
authorize or ratify it, or receive any dertake to protect the owners of such bonds
and notes against the consequences of their
benefit therefrom, the Department will
own fault or misfortune.’’
recognize his ownership and grant ap-
‘‘Hereafter all bonds, notes, and coupons,
propriate relief. payable to bearer, and Treasury notes issued
and remaining in blank, will be paid to the
§ 306.106 Requests for suspension of
party presenting them in pursuance of the
transactions in bearer securities.
regulations of the Department, in the course
(a) Securities not overdue. Neither the of regular business; and no attention will be
Department nor any of its agents will paid to caveats which may be filed for the
accept notice of any claim or of pend- purpose of preventing such payment.’’
183
§ 306.110 31 CFR Ch. II (7–1–11 Edition)
Subpart N—Relief for Loss, Theft, (b) At or after call or maturity. Pay-
Destruction, Mutilation, or De- ment will be made on account of the
loss, theft, destruction, mutilation, or
facement of Securities defacement of a called or matured se-
§ 306.110 Statutory authority and re- curity after the claim has been satis-
quirements. factorily established and the condi-
tions for granting relief have been met.
Relief is authorized, under certain (c) Interest coupons. Where relief has
conditions, for the loss, theft, destruc- been authorized on account of a de-
tion, mutilation or defacement of U.S. stroyed, mutilated or defaced coupon
securities, whether before, at, or after security which has not matured or
maturity. A bond of indemnity, in such been called, the replacement security
form and with such surety, sureties or will have attached all unmatured inter-
security as may be required to protect est coupons if it is established to the
the interests of the United States, is satisfaction of the Secretary of the
required as a condition of relief on ac- Treasury that the coupons were at-
count of any bearer security or any tached to the original security at the
registered security assigned in blank or time of its destruction, mutilation or
so assigned as to become in effect pay- defacement. In every other case only
able to bearer, and is ordinarily re- those unmatured interest coupons for
quired in the case of unassigned reg- which the Department has received
istered securities. payment will be attached. The price of
the coupons will be their value as de-
§ 306.111 Procedure for applying for termined by the Department at the
relief. time relief is authorized using interest
Prompt report of the loss, theft, de- rate factors based on then current mar-
struction, mutilation or defacement of ket yields on Treasury securities of
a security should be made to the Bu- comparable maturities.
reau. The report should include:
(a) The name and present address of § 306.113 Cases not requiring bonds of
indemnity.
the owner and his address at the time
the security was issued, and, if the re- A bond of indemnity will not be re-
port is made by some other person, the quired as a condition of relief for the
capacity in which he represents the loss, theft, destruction, mutilation, or
owner. defacement of registered securities in
(b) The identity of the security by any of the following classes of cases
title of loan, issue date, interest rate, unless the Secretary of the Treasury
serial number and denomination, and deems it essential in the public inter-
in the case of a registered security, the est:
exact form of inscription and a full de- (a) If the loss, theft, destruction, mu-
scription of any assignment, endorse- tilation, or defacement, as the case
ment or other writing. may be, occurred while the security
(c) A full statement of the cir- was in the custody or control of the
cumstances. United States, or a duly authorized
agent thereof (not including the Postal
All available portions of a mutilated, Service when acting solely in its capac-
defaced or partially destroyed security ity as public carrier of the mails), or
must also be submitted. while in the course of shipment ef-
fected under regulations issued pursu-
§ 306.112 Type of relief granted. ant to the Government Losses in Ship-
(a) Prior to call or maturity. After a ment Act (parts 260, 261, and 262 of this
claim on account of the loss, theft, de- chapter).
struction, mutilation, or defacement of (b) If substantially the entire secu-
a security which has not matured or rity is presented and surrendered and
been called has been satisfactorily es- the Security of the Treasury is satis-
tablished and the conditions for grant- fied as to the identity of the security
ing relief have been met, a security of and that any missing portions are not
like description will be issued to re- sufficient to form the basis of a valid
place the original security. claim against the United States.
184
(c) If the security is one which by the such conversion shall affect existing
provisions of law or by the terms of its interests in such Treasury securities.
issue is nontransferable or is transfer- (c) All requests for withdrawal of eli-
able only by operation of law. gible book-entry Treasury securities
(d) If the owner or holder is the must be made prior to the maturity or
United States, a Federal Reserve bank, date of call of the securities.
a Federal Government corporation, a (d) Treasury securities which are to
State, the District of Columbia, a terri- be delivered upon withdrawal may be
tory or possession of the United States, issued in registered form, to the extent
a municipal corporation, or, if applica- permitted by the applicable offering
ble, a political subdivision of any of the
circular.
foregoing, or a foreign government.
[61 FR 43637, Aug. 23, 1996; 64 FR 38126, July
Subpart O—Book-Entry Procedure 15, 1999]
§ 306.115 Definition of terms. Subpart P—Miscellaneous

For the purposes of this subpart, the Provisions
definitions provided in 31 CFR 357.3 are
applicable, with the following addi- § 306.125 Additional requirements.
tions: In any case or any class of cases aris-
Definitive Treasury security means a ing under these regulations the Sec-
Treasury bond, note, certificate of in- retary of the Treasury may require
debtedness, or bill issued under 31 such additional evidence and a bond of
U.S.C. chapter 31 in engraved or print- indemnity, with or without surety, as
ed form. may in his judgment be necessary for
Eligible book-entry Treasury security the protection of the interests of the
means a security maintained in United States.
TRADES that was originally issued
prior to August 15, 1986, which by the § 306.126 Waiver of regulations.
terms of its offering circular is avail-
able in either definitive or book-entry The Secretary of the Treasury re-
form. serves the right, in his discretion, to
waive or modify any provision or provi-
[61 FR 43637, Aug. 23, 1996] sions of these regulations in any par-
ticular case or class of cases for the
§ 306.116 Scope and effect of book-
entry procedure. convenience of the United States or in
order to relieve any person or persons
(a) Except as provided in § 306.117, the of unnecessary hardship, if such action
provisions of 31 CFR part 357, subparts is not inconsistent with law, does not
A, B, and D apply. impair any existing rights, and he is
(b) This subpart is effective January satisfied that such action would not
1, 1997. subject the United States to any sub-
[61 FR 43637, Aug. 23, 1996] stantial expense or liability.
§ 306.117 Withdrawal of eligible book- § 306.127 Preservation of existing

entry Treasury securities for con- rights.
version to registered form.
Nothing contained in these regula-
(a) Eligible book-entry Treasury se- tions shall limit or restrict existing
curities may be withdrawn from rights which holders of securities here-
TRADES by requesting delivery of like tofore issued may have acquired under
definitive Treasury securities. the circulars offering such securities
(b) Public Debt shall, upon receipt of for sale or under the regulations in
appropriate instructions to withdraw force at the time of acquisition.
eligible book-entry Treasury securities
from book-entry form in TRADES, con-
vert such securities into registered
Treasury securities and deliver them in
accordance with such instructions; no
185
§ 306.128 31 CFR Ch. II (7–1–11 Edition)
§ 306.128 Supplements, amendments or § 308.3 Exchanges of denominations.

revisions. Pending availability of definitive se-
The Secretary of the Treasury may curities, exchanges of authorized de-
at any time, or from time to time, pre- nominations of interim certificates,
scribe additional supplemental, amend- from higher to lower will be permitted.
atory or revised regulations with re-
spect to U.S. securities. The Secretary § 308.4 Applicable regulations.
also may lower the minimum and mul- Except as may otherwise be provided,
tiple requirements for stripping mar- and in so far as applicable, the general
ketable Treasury notes and bonds regulations of the Treasury Depart-
issued prior to March 1, 1993, through ment, as contained in part 306 of this
an announcement as provided in § 356.31 subchapter, as amended or revised,
of this title. shall apply to full-paid interim certifi-
[65 FR 66175, Nov. 3, 2000]
cates.
§ 308.5 Reservations.
PART 308—GENERAL REGULATIONS The Secretary of the Treasury re-
GOVERNING FULL-PAID INTERIM serves the right to withdraw or amend
CERTIFICATES at any time or from time to time any
or all of the provisions of this part.
Sec.
308.1 Issue.
308.2 Exchange for definitive securities.
PART 309—ISSUE AND SALE OF
308.3 Exchanges of denominations. TREASURY BILLS
308.4 Applicable regulations.
308.5 Reservations. Sec.
309.1 Authority for issue and sale.
AUTHORITY: 80 Stat. 379; sec. 8. 50 Stat. 481, 309.2 Description of Treasury bills (Gen-
as amended; secs. 1, 18, 5, 40 Stat. 288, as eral).
amended, 1309, as amended, 290, as amended; 309.3 Denominations and exchange.
sec. 32, 30 Stat. 466, as amended; 5 U.S.C. 301; 309.4 Taxation.
31 U.S.C. 738a, 752, 753, 754, 756. 309.5 Acceptance of Treasury bills for var-
SOURCE: 6 FR 5289, Oct. 17, 1941, unless oth- ious purposes.
erwise noted. 309.6 Public notice of offering.
309.7 Tenders; submission through Federal
§ 308.1 Issue. Reserve Banks and branches and to the
Bureau of the Public Debt.
Federal Reserve Banks, as Fiscal 309.8 Tenders; when cash deposit is re-
Agents of the United States, and the quired.
Treasury Department may issue full- 309.9 Tenders; acceptance by the Secretary
paid interim certificates in lieu of de- of the Treasury.
finitive securities, against full-paid al- 309.10 Tenders; reservation of right to re-
ject.
lotments of subscriptions, when specifi- 309.11 Tenders; payment of accepted
cally authorized by the Secretary of tenders.
the Treasury in connection with the 309.12 Relief on account of loss, theft or de-
issue, hereafter, to the public, of struction, etc.
United States securities. Interim cer- 309.13 Functions of Federal Reserve Banks.
tificates shall be in such form, and in 309.14 Reservation as to terms of circular.
such denominations, as the Secretary AUTHORITY: 80 Stat. 379; sec. 8, 50 Stat. 481,
of the Treasury may determine when as amended; sec. 5, 40 Stat. 290, as amended;
an issue is authorized. 5 U.S.C. 301; 31 U.S.C. 738a, 754.
SOURCE: 41 FR 44006, Oct. 5, 1976, unless
§ 308.2 Exchange for definitive securi- otherwise noted.
ties.
Upon surrender of a full-paid interim § 309.1 Authority for issue and sale.
certificate to a Federal Reserve Bank, The Secretary of the Treasury is au-
or to the Treasury Department, Wash- thorized by the Second Liberty Bond
ington, DC 20226, the definitive securi- Act, as amended, to issue Treasury
ties described therein, when prepared, bills of the United States on an inter-
will be delivered. Exchanges shall be est-bearing basis, on a discount basis,
made on like par amount basis. or on a combination interest-bearing
186
and discount basis, at such price or Public Debt, Washington, DC 20226. In-
prices and with interest computed in sofar as applicable, the general regula-
such manner and payable at such time tions of the Treasury Department gov-
or times as he may prescribe; and to fix erning transactions in bonds and notes
the form, terms, and conditions there- will govern transactions in Treasury
of, and to offer them for sale on a com- bills.
petitive or other basis, under such reg-
ulations and upon such terms and con- § 309.4 Taxation.
ditions as he may prescribe. Pursuant The income derived from Treasury
to said authorization, the Secretary of bills, whether interest or gain from the
the Treasury may, from time to time, sale or other disposition of the bills,
by public notice, offer Treasury bills shall not have any exemption, as such,
for sale, and invite tenders therefor, and loss from the sale or other disposi-
through the Federal Reserve Banks and tion of Treasury bills shall not have
branches and through the Department any special treatment, as such, under
of the Treasury, Bureau of the Public the Internal Revenue Code, or laws
Debt. The Treasury bills so offered, and amendatory or supplementary thereto.
the tenders made, will be subject to the The bills shall be subject to estate, in-
terms and conditions and to the gen- heritance, gift or other excise taxes,
eral rules and regulations herein set whether Federal or State, but shall be
forth, except as they may be modified exempt from all taxation now or here-
in the public notices issued by the Sec- after imposed on the principal or inter-
retary of the Treasury in connection est thereof by any State, or any of the
with particular offerings. 1 possessions of the United States, or by
any local taxing authority. For pur-
§ 309.2 Description of Treasury bills poses of taxation the amount of dis-
(General). count at which Treasury bills are origi-
Treasury bills are bearer obligations nally sold by the United States shall be
of the United States promising to pay considered to be interest.
a specified amount on a specified date.
They will be payable at maturity upon § 309.5 Acceptance of Treasury bills for
presentation to the Bureau of the Pub- various purposes.
lic Debt, Washington, DC 20226, or to (a) Acceptable as security for public de-
any Federal Reserve Bank or branch. posits. Treasury bills will be acceptable
Treasury bills are issued only by Fed- at maturity value to secure deposits of
eral Reserve Banks and branches and public monies.
the Bureau of the Public Debt pursuant (b) Acceptable in payment of taxes. The
to tenders accepted by the Secretary of Secretary of the Treasury, in his dis-
the Treasury, and shall not be valid un- cretion, when inviting tenders for
less the issue date and the maturity Treasury bills, may provide that Treas-
date are entered thereon. Treasury ury bills of any series will be accept-
bills bearing the same issue date and able at maturity value, whether at or
the same maturity date shall con- before maturity, under such rules and
stitute a series. regulations as he shall prescribe or ap-
prove, in payment of income taxes pay-
§ 309.3 Denominations and exchange. able under the provisions of the Inter-
Treasury bills will be issued in de- nal Revenue Code. Treasury bills which
nominations (maturity value) of by the terms of their issue are accept-
$10,000, $15,000, $50,000, $100,000, $500,000, able in payment of income taxes may
and $1,000,000. Exchanges from higher be surrendered to any Federal Reserve
to lower and lower to higher denomina- Bank or Branch, acting as fiscal agent
tions of the same series (bearing the of the United States, or to the Bureau
same issue and maturity dates) will be of the Public Debt, Washington, DC
permitted at Federal Reserve Banks 20226, 15 days or less before the date on
and branches and at the Bureau of the which the taxes become due.
(1) In the case of payments of cor-
1 Accordingly, these regulations do not poration income taxes (including pay-
constitute a specific offering of Treasury ments of estimates) for taxable years
bills. ending on or after December 31, 1967,
187
§ 309.6 31 CFR Ch. II (7–1–11 Edition)
the bills shall be accompanied by a Public Debt, Washington, DC 20226, and

preinscribed Form 503, Federal Tax De- the date on which payment for accept-
posit, Corporation Income Taxes, on ed tenders must be made or completed.
which the face amount of the bills
being surrendered should be entered in § 309.7 Tenders; submission through
the space provided for the amount of Federal Reserve Banks and
the tax deposit. The office receiving branches and to the Bureau of the
Public Debt.
the bills and Form 503 will acknowl-
edge receipt of the bills to the owner Tenders in response to any such pub-
corporation and effect the tax deposit lic notice will be received at the Fed-
on the date on which the taxes become eral Reserve Banks, or Branches there-
due. Accordingly, in these cases, it will of and at the Bureau of the Public
no longer be necessary to submit re- Debt, Washington, DC 20226, and unless
ceipts for Treasury bills to the Internal received before the time fixed for clos-
Revenue Service with the corporation’s ing will be disregarded. Each tender
declaration or tax return. must be for a minimum amount of
(2) In the case of payments of all $10,000. Tenders over $10,000 must be in
other income taxes the office receiving multiples of $5,000 (maturity value). In
the bills will issue receipts (in dupli- the case of competitive tenders the
cate) to the owners. The original of the price or prices offered by the bidder for
receipt shall be submitted, by the the amount or amounts (at maturity
owner, in lieu of the bills, together value) applied for must be stated, and
with the tax return, to the District Di- must be expressed on the basis of 100,
rector, Internal Revenue Service. with not more than three decimals,
(c) Discounting by Federal Reserve e.g., 99.925. Fractions may not be used.
Bank of notes secured by Treasury bills.
Notes securied by Treasury bills are el- § 309.8 Tenders; when cash deposit is
igible for discount or rediscount at required.
Federal Reserve Banks as provided Tenders should be submitted on the
under the provisions of section 13 of printed forms and forwarded in the spe-
the Federal Reserve Act, as are notes cial envelopes which will be supplied
securied by bonds and notes of the on application to any Federal Reserve
United States. Bank, or Branch or to the Bureau of
(d) Acceptable in connection with for- the Public Debt, Washington, DC 20226.
eign obligations held by United States. If a special envelope is not available,
Treasury bills will be acceptable at the inscription ‘‘Tender for Treasury
maturity, but not before, in payment Bills’’ should be placed on the envelope
of interest or of principal on account of used. The instructions set forth in the
obligations of foreign governments public notice announcing the offering
held by the United States. should be observed with respect to the
submission of tenders. Banking institu-
§ 309.6 Public notice of offering. tions generally may submit tenders for
When Treasury bills are to be offered, account of customers provided the
tenders therefor will be invited names of the customers are set forth in
through public notice given by the Sec- such tenders. Others than banking in-
retary of the Treasury. Such public no- stitutions, will not be permitted to
tices may be issued by the Secretary of submit tenders except for their own ac-
the Treasury in the name of ‘‘the count. Tenders from incorporated
Treasury Department’’ with the same banks and trust companies, and from
force and effect as if issued in the name responsible and recognized dealers in
of the Secretary of the Treasury. In investment securities will be received
such notice there will be set forth the without deposit. Tenders from all oth-
amount of Treasury bills for which ers must be accompanied by a payment
tenders are then invited, the date of of such percent of the face amount of
issue, the date or dates when such bills the Treasury bills applied for as the
will become due and payable, the date Secretary of the Treasury may from
and closing hour for the receipt of time to time prescribe: Provided, how-
tenders at the Federal Reserve Banks ever, That such deposit will not be re-
and branches and at the Bureau of the quired if the tender is accompanied by
188
an express guaranty of payment in full (a) That any qualified depositary

by an incorporated bank or trust com- may make such settlement by credit,
pany. Forfeiture of the prescribed pay- on behalf of itself and its customers, up
ment may be declared by the Secretary to any amount for which it shall be
of the Treasury, if payment is not com- qualified in excess of existing deposits,
pleted, in the case of accepted tenders, when so notified by the Federal Re-
on the prescribed date. serve Bank of its District or
(b) That such settlement may be
§ 309.9 Tenders; acceptance by the Sec- made in maturing Treasury bills ac-
retary of the Treasury. cepted in exchange.
At the time fixed for closing, as spec- Whenever the Secretary provides for
ified in the public notice, all tenders settlement in maturing Treasury bills,
received by the Federal Reserve Banks cash adjustments will be made for dif-
and Branches and by the Bureau of the ferences between the par value of the
Public Debt will be opened. The Sec- maturing bills and the issue price of
retary of the Treasury will determine the new bills.
the acceptable prices offered and will
make public announcement thereof § 309.12 Relief on account of loss, theft
or destruction, etc.
those submitting tenders will be ad-
vised of the acceptance or rejection (a) Relief on account of the loss,
thereof, and payment on accepted theft, destruction, mutilation or de-
tenders must be made or completed on facement of Treasury bills may be
the date specified in the public notice. given only under the authority of, and
subject to the conditions set forth in
§ 309.10 Tenders; reservation of right section 8 of the act of July 8, 1937 (50
to reject. Stat. 481), as amended (31 U.S.C. 738a)
and the regulations pursuant thereto
In considering the acceptance of
in (Treasury Department Circular No.
tenders, the highest prices offered will
300 insofar as applicable.
be accepted in full down to the amount
(b) In case of the loss, theft, destruc-
required, and if the same price appears
tion, mutilation or defacement of
in two or more tenders and it is nec-
Treasury bills, immediate advice, with
essary to accept only a part of the
a full description of the bill or bills in-
amount offered at such price, the
volved, should be sent to the Bureau of
amount accepted at such price will be the Public Debt, Division of Securities
prorated in accordance with the respec- Operations, Department of the Treas-
tive amounts applied for. However, the ury, Washington, DC 20226, either di-
Secretary of the Treasury expressly re- rect or though any Federal Reserve
serves the right on any occasion to ac- Bank or Branch, and, if relief under the
cept non-competitive tenders entered statutes may be given, instructions
in accordance with specific offerings, and necessary blank forms will be fur-
to reject any or all tenders or parts of nished.
tenders, and to award less than the
amount applied for; and any action he § 309.13 Functions of Federal Reserve
may take in any such respect or re- Banks.
spects shall be final. Federal Reserve Banks and Branches,
as fiscal agents of the United States,
§ 309.11 Tenders; payment of accepted are authorized to perform all such acts
tenders.
as may be necessary to carry out the
Settlement for accepted tenders in provisions of this circular and of any
accordance with the bids must be made public notice or notices issued in con-
or completed at the appropriate Fed- nection with any offering of Treasury
eral Reserve Bank or branch or at the bills.
Bureau of the Public Debt in cash or
other immediately available funds on § 309.14 Reservation as to terms of cir-
or before the date specified, except cular.
that the Secretary of the Treasury, in The Secretary of the Treasury re-
his discretion, when inviting tenders serves the right further to amend, sup-
for Treasury bills, may provide: plement, revise or withdraw all or any
189
Pt. 312 31 CFR Ch. II (7–1–11 Edition)
of the provisions of this circular at any § 312.1 Authority.

time, or from time to time. (a) Home Owners’ Loan Act. Section
5(k) of the Home Owners’ Loan Act of
PART 312—FEDERAL SAVINGS AND 1933, as amended (48 Stat. 645; 12 U.S.C.
LOAN ASSOCIATIONS AND FED- 1464(k), is as follows:
ERAL CREDIT UNIONS AS FISCAL (k) When designated for that purpose by
AGENTS OF THE UNITED STATES the Secretary of the Treasury, any Federal
savings and loan association * * * may be
NOTE: Pursuant to the regulations in this employed as fiscal agent of the Government
part, the Acting Secretary of the Treasury under such regulations as may be prescribed
on September 15, 1936, designated for employ- by said Secretary and shall perform all such
ment as fiscal agents of the United States reasonable duties as fiscal agent of the Gov-
for the purpose of taking applications solely ernment as may be required of it * * *.
from their own members and forwarding re- (b) Federal Credit Union Act. Section
mittances for, and making delivery of, 17 of the Federal Credit Union Act (48
United States Savings Bonds, all Federal
Stat. 1222; 12 U.S.C. 1767) is as follows:
savings and loan associations and Federal
credit unions in good standing having five Each Federal credit union organized under
hundred or more members, and further des- this Act, when requested by the Secretary of
ignated all Federal savings and loan associa- the Treasury, shall act as fiscal agent of the
tions in good standing for employment as fis- United States and shall perform such serv-
cal agents of the United States, for the pur- ices as the Secretary of the Treasury may re-
pose of collecting delinquent accounts aris- quire in connection with * * * the lending,
ing out of insurance and loan transactions of borrowing, and repayment of money by the
the Administrator under Title I of the Na- United States, including the issue, sale, re-
tional Housing Act, and making investiga- demption or repurchase of bonds, notes,
tions and rendering reports respecting the Treasury certificates of indebtedness, or
said delinquencies as may be directed from other obligations of the United States * * *.
time to time by the Administrator.
Pursuant to these same regulations, the § 312.2 [Reserved]
Fiscal Assistant Secretary has now des-
ignated for employment, as fiscal agents of § 312.3 Collections, investigations, and
the United States, for the purpose of taking reports for the Federal Housing Ad-
applications from nonmembers, as well as ministration.
their own members, and forwarding remit- Federal savings and loan associa-
tances for, and making delivery of United tions, when designated for employment
States Savings Bonds, all Federal credit
as fiscal agents of the United States for
unions in good standing.
Sec.
the purpose of collecting delinquent ac-
312.1 Authority.
counts arising out of insurance and
312.2 [Reserved]
loan transactions of the Administrator
312.3 Collections, investigations, and re- under Title I of the National Housing
ports for the Federal Housing Adminis- Act (48 Stat. 1246, 1247; 12 U.S.C. 1702–
tration. 1706), and making investigations and
312.4 Bond of indemnity. rendering reports respecting the said
312.5 Fiscal agents to serve without com- delinquencies as may be directed from
pensation. time to time by the Administrator,
312.6 Applications other than to Federal Re- shall promptly forward remittances in
serve Banks. the form collected to the Commis-
AUTHORITY: Secs. 5(k), 17, 48 Stat. 646, 1222; sioner of the Federal Housing Adminis-
12 U.S.C. 1464(k), 1767. tration, except, that remittances re-
ceived in cash should be forwarded in
SOURCE: 1 FR 1587, Sept. 17, 1936; 57 FR the form of money order or check.
34684, Aug. 6, 1992, unless otherwise noted.
CROSS REFERENCES: For National Credit § 312.4 Bond of indemnity.
Union Administration, see 12 CFR chapter No Federal savings and loan associa-
VII. For Farm Credit Administration, see 12 tion or Federal credit union which may
CFR chapter VI. For Federal Home Loan
have been designated for employment
Bank Board, see 12 CFR chapter V. For Fed-
eral Housing Commissioner, Office of Assist- mentioned in this part shall perform,
ant Secretary for Housing, Department of or make any effort to perform any of
Housing and Urban Development, see 24 CFR the acts included in such employment,
chapter II. or advertise in any manner that it is
190
Fiscal Service, Treasury Pt. 315
authorized to perform such acts until PART 315—REGULATIONS GOV-

it has qualified by the execution of, de- ERNING U.S. SAVINGS BONDS,
livery to, and approval of a bond of in- SERIES A, B, C, D, E, F, G, H, J,
demnity in favor of the United States AND K, AND U.S. SAVINGS
with satisfactory surety, or with the
NOTES
pledge of collateral security as pro-
vided in part 225 of this chapter, condi-
Subpart A—General Information
tioned upon the faithful performance of
the obligor’s duties as fiscal agent of Sec.
the United States in the principal 315.0 Applicability.
amount of $1,000 and until the Federal 315.1 Official agencies.
Home Loan Bank Board or the Bureau 315.2 Definitions.
of Federal Credit Unions, Department 315.3 Converting definitive savings bonds to
book-entry bonds in New Treasury Di-
of Health, Education, and Welfare, re-
rect.
spectively, shall have certified to the
Secretary of the Treasury that such as- Subpart B—Registration
sociation or credit union is in good
standing and is eligible, under the 315.5 General rules.
terms and conditions prescribed by the 315.6 Restrictions on registration.
Secretary, to qualify for the perform- 315.7 Authorized forms of registration.
ance of the designated acts. The Fed- Subpart C—Limitations on Annual
eral Home Loan Bank Board and the Purchases
Bureau of Credit Unions, respectively,
shall keep the Secretary of the Treas- 315.10 Limitations.
ury currently advised of the changes in 315.11 Excess purchases.
the lists of associations and credit
unions which are eligible, under the Subpart D—Limitations on Transfer or
aforesaid terms and conditions, to Pledge
qualify for the performance of the des- 315.15 Transfer.
ignated acts. 315.16 Pledge.
[32 FR 3447, Mar. 2, 1967]
Subpart E—Limitations on Judicial Pro-
§ 312.5 Fiscal agents to serve without ceedings—No Stoppage or Caveats
compensation. Permitted
All of the fiscal agency employment 315.20 General.

mentioned in this part shall be per- 315.21 Payment to judgment creditors.
formed without compensation, reim- 315.22 Payment or reissue pursuant to judg-
ment.
bursement for expenses, or allowance
315.23 Evidence.
of service charges.
Subpart F—Relief for Loss, Theft, Destruc-
§ 312.6 Applications other than to Fed- tion, Mutilation, Defacement, or Non-
eral Reserve Banks.
receipt of Bonds
Nothing contained in this part shall
be construed as preventing such asso- 315.25 General.
315.26 Application for relief—after receipt of
ciations and credit unions, if they de-
bond.
sire to assume such responsibility, 315.27 Application for relief—nonreceipt of
from acting as agents of prospective bond.
purchasers in making applications to, 315.28 Recovery or receipt of bond before or
and obtaining United States Savings after relief is granted.
Bonds from post offices or other des- 315.29 Adjudication of claims.
ignated places of issuance.
Subpart G—Interest
315.30 Series E bonds and savings notes.
315.31 Series H bonds.
315.32 Series A, B, C, D, F, G, J, and K
bonds.
191
§ 315.0 31 CFR Ch. II (7–1–11 Edition)
Subpart H—General Provisions for Payment 315.77 Exchanges by fiduciaries.
315.35 Payment (redemption). Subpart N—Private Organizations (Cor-

315.36 Payment during life of sole owner. porations, Associations, Partnerships,
315.37 Payment during lives of both co- etc.) and Governmental Agencies,
owners. Units and Officers
315.38 Payment during lifetime of owner of
beneficiary bond. 315.80 Payment to corporations or unincor-
315.39 Surrender for payment. porated associations.
315.40 Special provisions for payment. 315.81 Payment to partnerships.
315.41 Partial redemption. 315.82 Reissue or payment to successors of
315.42 Nonreceipt or loss of check issued in corporations, unincorporated associa-
payment. tions, or partnerships.
315.43 Effective date of request for payment. 315.83 Reissue or payment on dissolution of
315.44 Withdrawal of request for payment. corporation or partnership.
315.84 Payment to certain institutions.
Subpart I—Reissue and Denominational 315.85 Reissue in name of trustee or agent
Exchange for reinvestment purposes.
315.86 Reissue upon termination of invest-
315.45 General. ment agency.
315.46 Effective date of request for reissue. 315.87 Payment to governmental agencies,
315.47 Authorized reissue—during lifetime. units, or their officers.
315.48 Restrictions on reissue.
315.49 Correction of errors. Subpart O—Miscellaneous Provisions
315.50 Change of name.
315.90 Waiver of regulations.
315.51 Requests for reissue.
315.91 Additional requirements; bond of in-
demnity.
Subpart J—Certifying Officers 315.92 Preservation of rights.
315.55 Individuals authorized to certify. 315.93 Supplements, amendments, or revi-
315.56 General instructions and liability. sions.
315.57 When a certifying officer may not AUTHORITY: 31 U.S.C. 3105 and 5 U.S.C. 301.
certify.
315.58 Forms to be certified. SOURCE: 45 FR 64091, Sept. 26, 1980, unless
otherwise noted.
Subpart K—Minors, Incompetents, Aged
Persons, Absentees, et al. Subpart A—General Information
315.60 Conditions for payment to represent- § 315.0 Applicability.
ative of an estate.
315.61 Payment after death. The regulations in this circular, De-
315.62 Payment to minors. partment of the Treasury Circular No.
315.63 Payment to a parent or other person 530, and the provisions of the respective
on behalf of a minor. offering circulars, govern—
315.64 Payment, reinvestment, or ex- (a) Definitive (paper) United States
change—voluntary guardian of an inca- Savings Bonds of Series E that have
pacitated person. not been converted to book-entry sav-
315.65 Reissue. ings bonds in New Treasury Direct, and
Series H and United States Savings
Subpart L—Deceased Owner, Coowner or Notes, and
Beneficiary (b) United States Savings Bonds of
315.70 General rules governing entitlement. Series A, B, C, D, F, G, J, and K, all of
315.71 Decedent’s estate. which have matured and are no longer
315.72 [Reserved] earning interest.
The regulations in Department of the
Subpart M—Fiduciaries Treasury Circular, Public Debt Series
315.75 Payment or reissue during the exist-
No. 3–80 (31 CFR, part 353), govern
ence of the fiduciary estate. United States Savings Bonds of Series
315.76 Payment or reissue after termination EE and Series HH.
of the fiduciary estate. [45 FR 64091, Sept. 26, 1980, as amended at 70
FR 14941, Mar. 23, 2005]
192
§ 315.1 Official agencies. (b) Communications concerning

transactions and requests for forms
(a) The Bureau of the Public Debt of
should be addressed to:
the Department of the Treasury is re- (1) A Federal Reserve Bank or Branch
sponsible for administering the Savings in the list below; the Bureau of the
Bonds Program. Authority to process Public Debt. 200 Third Street, Parkers-
most transactions has been delegated burg, WV 26101; or the Bureau of the
to Federal Reserve Banks and Branches Public Debt, Washington, DC 20226.
in the list below, as fiscal agents of the (2)(i) The following Federal Reserve
United States. Offices have been designated to provide
savings bond services:
Reserve districts
Servicing office Geographic area served
served
Federal Reserve Bank, Buffalo New York, Boston CT, MA, ME, NH, NJ (northern half), NY (City & State), RI, Vt,
Branch, P.O. Box 961, Buffalo, NY Puerto Rico and Virgin Islands.
14240.
Federal Reserve Bank, Pittsburgh Cleveland, Phila- DE, KY (eastern half), NJ (southern half), OH, PA, WV (northern
Branch, P.O. Box 867, Pittsburgh, delphia. panhandle).
PA 15230.
Federal Reserve Bank of Richmond, Richmond, Atlanta AL, DC, FL, LA (southern half), MD, MS (southern half), NC, SC,
P.O. Box 27622, Richmond, VA TN (eastern half), VA, WV (except northern panhandle).
23261.
Federal Reserve Bank of Min- Minneapolis, Chi- IA, IL (northern half), IN (northern half), MN, MT, ND, SD, WI.
neapolis, 250 Marquette Avenue, cago.
Minneapolis, MN 55480.
Federal Reserve Bank of Kansas Dallas, San Fran- AK, AR, AZ, CA, CO, HI, ID, IL (southern half), IN (southern half),
City, 925 Grand Avenue, Kansas cisco, Kansas KS, KY (western half), LA (northern half), MO, MS (northern half),
City, MO 64198. City, St. Louis. NE, NM, NV, OK, OR, TN (western half), TX, WA, WY, UT and
GU.
(ii) Until March 1, 1996, other Federal sions of the circular offering the bond
Reserve Offices may continue to pro- for sale.
vide some savings bond services, but (d) Extended maturity value is the
such services will be phased out over value of a bond at the end of the appli-
the period prior to that date. cable extended maturity period.
[45 FR 64091, Sept. 26, 1980, as amended at 59 (e) Final extended maturity date is the
FR 10534, Mar. 4, 1994] date on which a bond will mature and
cease to bear interest at the end of the
§ 315.2 Definitions. final extended maturity period.
As used in these regulations— (f) Incompetent means an individual
(a) Bond means a United States Sav- who is incapable of handling his or her
ings Bond of any series except EE and business affairs because of a legal,
HH, unless the context indicates other- mental or medically-established phys-
wise. General references to bonds and ical disability, except that a minor is
direct references to Series E bonds also not an incompetent solely because of
include United States Savings Notes, age.
unless specifically excluded. (g) Inscription means the information
(b) Converted bond means a savings that is printed on the face of the bond.
bond originally issued as a definitive (h) Issuing agent means an organiza-
bond that has been surrendered to us tion that has been qualified under the
and converted to a book-entry savings provisions of Department of the Treas-
bond to be maintained by Treasury ury Circular, Public Debt Series No. 4–
solely as a computer record. 67, current revision (31 CFR part 317),
(c) Extended maturity period means to issue savings bonds.
any period after the original maturity (i) Original maturity date means the
date during which the owner may re- date on which the bond reaches the end
tain a bond and continue to earn inter- of the term for which it was initially
est on the maturity value or extended offered and, unless further extended,
maturity value under applicable provi- ceases to earn interest.
193
§ 315.3 31 CFR Ch. II (7–1–11 Edition)
(j) Paying agent means a financial in- the Treasury to request payment or
stitution that has been qualified under distribution of a decedent’s savings
the provisions of Department of the bonds pursuant to § 315.71.
Treasury Circular No. 750, current revi-
[45 FR 64091, Sept. 26, 1980, as amended at 70
sion (31 CFR part 321), to make pay- FR 14941, Mar. 23, 2005; 70 FR 57430, Sept. 30,
ment of savings bonds. 2005; 71 FR 46856, Aug. 15, 2006]
(k) Payment means redemption, un-
less otherwise indicated by context. § 315.3 Converting definitive savings
(l) Person means any legal entity in- bonds to book-entry bonds in New
cluding, but without limitation, and Treasury Direct.
individual, corporation (public or pri- Series E savings bonds that were
vate), partnership, unincorporated as- originally issued as definitive bonds
sociation, or fiduciary estate. may be converted to book-entry bonds
(m) Personal trust estates means trust through New Treasury Direct, an on-
estates established by natural persons line system for holding Treasury secu-
in their own right for the benefit of rities. The Web address for New Treas-
themselves or other natural persons in ury Direct is www.treasurydirect.gov.
whole or in part, and common trust Bond owners who wish to convert their
funds comprised in whole or in part of definitive savings bonds should follow
such trust estates. online instructions for conversion.
(n) Registration means that the names Regulations governing converted bonds
of all persons named on the bond and are found at 31 CFR part 363.
the taxpayer identification number
(TIN) of the owner, first-named co- [70 FR 14941, Mar. 23, 2005]
owner, or purchaser of a gift bond are
maintained on our records. Subpart B—Registration
(o) Reissue means the cancellation
and retirement of a bond and the § 315.5 General rules.
issuance of a new bond or bonds of the (a) Registration is conclusive of owner-
same series, same issue date, and same ship. Savings bonds are issued only in
total face amount. registered form. The registration must
(p) Representative of the estate of a express the actual ownership of, and in-
minor, incompetent, aged person, absen- terest in, the bond. The registration is
tee, et al. means the court-appointed or conclusive of ownership, except as pro-
otherwise qualified person, regardless vided in § 315.49.
of title, who is legally authorized to (b) Requests for registration. Registra-
act for the individual. The term does tions requested must be clear, accurate
not include parents in their own right, and complete, conform substantially
voluntary or natural guardians, or the with one of the forms set forth in this
executors or administrators of dece- subpart, and include the taxpayer iden-
dents’ estates. tifying number of the owner or first-
(q) Surrender means the actual re- named coowner. The taxpayer identi-
ceipt of a bond with an appropriate re- fying number of the second-named co-
quest for payment or reissue by either owner or beneficiary is not required
a Federal Reserve Bank or Branch, the but its inclusion is desirable. The reg-
Bureau of the Public Debt, or, if a pay- istration of all bonds owned by the
ing agent is authorized to handle the same person, organization, or fiduciary
transaction, the actual receipt of the should be uniform with respect to the
bond and the request for payment by name of the owner and any description
the paying agent. of the fiduciary capacity. An individual
(r) Taxpayer identifying number means should be designated by the name he or
a social security account number or an she is ordinarily known by or uses in
employer identification number. business, including at least one full
(s) Voluntary guardian means an indi- given name. The name may be preceded
vidual who is recognized as authorized or followed by any applicable title,
to act for an incompetent, as provided such as Miss, Mr., Mrs., Ms., Dr., Rev.,
by § 315.64. M.D., or D.D.. A suffix, such as Sr. or
(t) Voluntary representative means the Jr., must be included when ordinarily
person qualified by the Department of used or when necessary to distinguish
194
the owner from another member of his (2) Bonds purchased by another per-
family. A married woman’s own given son with funds belonging to a minor
name, not that of her husband, must be not under legal guardianship or similar
used; for example, Mary A. Jones or fiduciary estate must be registered,
Mrs. Mary A. Jones, NOT Mrs. Frank B. without a coowner or beneficiary, in
Jones. The address must include, where the name of the minor or a natural
appropriate, the number and street, guardian on behalf of a minor.
route, or any other local feature, city, (3) Bonds purchased with funds of an-
State, and ZIP Code. other may be registered to name the
minor as owner, coowner, or bene-
§ 315.6 Restrictions on registration.
ficiary. If the minor is under legal
(a) Natural persons. Only an indi- guardianship or similar fiduciary es-
vidual in his or her own right may be tate, the registration must include an
designated as coowner or beneficiary appropriate reference to it.
along with any other individual, (4) Bonds purchased as a gift to a
whether on original issue or reissue, minor under a gifts-to-minors statute
except as provided in § 315.7(g). must be registered as prescribed by the
(b) Residence. The designation of an statute and no coowner or beneficiary
owner or first-named coowner is re- may be named.
stricted, on original issue only, to per-
(5) Bonds purchased by a representa-
sons (whether individuals or others)
tive of a minor’s estate must be reg-
who are—
istered in the name of the minor and
(1) Residents of the United States, its
must include in the registration an ap-
territories and possessions, the Com-
propriate reference to the guardianship
monwealth of Puerto Rico, and the
or similar fiduciary estate. Bonds pur-
former Canal Zone;
chased by a representative of the es-
(2) Citizens of the United States re-
tates of two or more minors, even
siding abroad;
though appointed in a single pro-
(3) Civilian employees of the United
ceeding, must be registered in the
States or members of its armed forces,
regardless of their residence or citizen- name of each minor separately with ap-
ship; and propriate reference to the guardianship
(4) Residents of Canada or Mexico or similar fiduciary estate.
who work in the United States but only (d) Incompetents. Bonds may be reg-
if the bonds are purchased on a payroll istered to a name as owner, coowner, or
deduction plan and the owner provides beneficiary an incompetent for whose
a taxpayer identifying number. estate a guardian or similar represent-
ative has been appointed, except that a
A nonresident alien may be designated
coowner or beneficiary may not be
coowner or beneficiary or, on author-
ized reissue, owner, unless the non- named on bonds purchased with funds
resident alien is a resident of an area belonging to the incompetent. The reg-
with respect to which the Department istration must include appropriate ref-
of the Treasury restricts or regulates erence to the guardianship or similar
the delivery of checks drawn against fiduciary estate. Bonds should not be
funds of the United States or its agen- registered in the name of an incom-
cies or instrumentalities. See Depart- petent unless there is a representative
ment of the Treasury Circular No. 655, for his or her estate, except as provided
current revision (31 CFR part 211). Reg- in § 315.64.
istration is not permitted in any form
which includes the name of any alien § 315.7 Authorized forms of registra-
tion.
who is a resident of any restricted
area. (a) General. Subject to any limita-
(c) Minors. (1) Minors may purchase tions or restrictions contained in these
with their wages, earnings, or other regulations on the right of any person
funds belonging to them and under to be named as owner, coowner, or ben-
their control bonds registered in their eficiary, bonds should be registered as
names alone or with a coowner or bene- indicated below. A savings bond reg-
ficiary. istered in a form not substantially in
195
§ 315.7 31 CFR Ch. II (7–1–11 Edition)
agreement with one of the forms au- pointed or authorized representative of

thorized by this subpart is not consid- the estate of a minor, incompetent,
ered validly issued. aged or infirm person, absentee, et al.,
(b) Natural persons. A bond may be or in the name of that individual fol-
registered in the names of individuals lowed by an appropriate reference to
in their own right, but only in one of the estate. Examples:
the forms authorized by this para- Tenth National Bank, guardian (or conser-
graph. vator, trustee, etc.) of the estate of George
(1) Single ownership form. A bond may N. Brown 123–45–6789, a minor (or an incom-
be registered in the name of one indi- petent, aged person, infirm person, or ab-
vidual. Example: sentee).
Henry C. Smith, conservator of the estate of
John A. Jones 123–45–6789. John R. White 123–45–6789, an adult, pursu-
(2) Coownership form. A bond may be ant to Sec. 633.572 of the Iowa Code.
John F. Green 123–45–6789, a minor (or an in-
registered in the names of two individ-
competent) under custodianship by des-
uals in the alternative as coowners. ignation of the Veterans Administration.
The form of registration ‘‘A and B’’ is Frank M. Redd 123–45–6789, an incompetent
not authorized. Examples: for whom Eric A. Redd has been designated
trustee by the Department of the Army
John A. Jones 123–45–6789 or Ella S. Jones
pursuant to 37 U.S.C. 602.
987–65–4321.
Arnold A. Ames, as custodian for Barry B.
John A. Jones 123–45–6789 or (Miss, Ms. or Bryan 123–45–6789, under the California
Mrs.) Ella S. Jones. Uniform Gifts to Minors Act.
Ella S. Jones 987–65–4321 or John A. Jones. Thomas J. Reed, as custodian for Lawrence
(3) Beneficiary form. A bond may be W. Reed 123–45–6789, a minor, under the
registered in the name of one indi- laws of Georgia.
Richard A. Rowe 123–45–6789, for whom Reba
vidual payable on death to another. L. Rowe is representative payee for social
‘‘Payable on death to’’ may be abbre- security benefits (or black lung benefits, as
viated to ‘‘P.O.D.’’ Examples: the case may be). (If the beneficiary is a
John A. Jones 123–45–6789 payable on death minor, the words ‘‘a minor’’ should appear
to Mrs. Ella S. Jones. immediately after the social security num-
John A. Jones 123–45–6789 P.O.D. Ella S. ber.)
Jones 987–65–4321. Henry L. Green 123–45–6789 or George M.
Brown, a minor under legal guardianship of
(c) Fiduciaries (including legal guard- the Tenth National Bank.
ians and similar representatives, certain Henry L. Green 123–45–6789 P.O.D. George M.
custodians, natural guardians, executors, Brown, a minor under legal guardianship of
administrators, and trustees)—(1) Gen- the Tenth National Bank.
Redd State Hospital and School, selected
eral. A bond may be registered in the payee for John A. Jones 123–45–6789, a Civil
name of any person or persons or any Service annuitant, pursuant to 5 U.S.C.
organization acting as fiduciary of a 8345(e).
single fiduciary estate, but not where
the fiduciary will hold the bond merely (3) Natural guardians. A bond may be
or principally as security for the per- registered in the name of either parent
formance of a duty, obligation, or serv- of a minor, as natural guardian. The
ice. Registration should conform to a registration of a bond in this form is
form authorized by this paragraph. A considered as establishing a fiduciary
coowner or beneficiary may be named relationship. A coowner or beneficiary
only in accordance with the applicable may be named but only if the funds
provisions of § 315.6(c) and (d). A com- used to purchase the bond do not be-
mon trust fund established and main- long to the minor. Examples:
tained by a financial institution au- John A. Jones, as natural guardian for Henry
thorized to act as a fiduciary will be M. Jones 123–45–6789.
considered a single fiduciary estate Melba Smith, as natural guardian for Thel-
within the meaning of these regula- ma Smith 123–45–6789 P.O.D. Bartholomew
Smith.
tions.
(2) Legal guardians, conservators, simi- (4) Executors and administrators. A
lar representives, certain custodians. A bond may be registered in the name of
bond may be registered in the name the representative appointed by a court
and title or capacity of the legally ap- to act for an estate of a decedent, or in
196
the name of an executor authorized to Board of Trustees of Immediate Relief Trust

administer a trust under the terms of a of Federal Aid Association, under trust in-
will although not named trustee. The denture dated 2/1/76, 12–3456789.
name and capacity of all the represent- (B) If the trustees do not constitute a
atives as shown in the letters of ap- board or are not required to act as a
pointment must be included in the reg- unit, and are too numerous to be des-
istration and be followed by an ade- ignated in the registration by names
quate identifying reference to the es- and title, some or all the names may be
tate. Examples: omitted. Examples:
John H. Smith and Calvin N. Jones, execu- John A. Smith, Henry B. Jones, et al., trust-
tors of the will (or administrators of the ees under the will of Edwin O. Mann, de-
estate) of Robert J. Smith, deceased 12– ceased 12–3456789.
3456789. Trustees under the will of Edwin O. Mann,
John H. Smith, executor of the will of Rob- deceased 12–3456789.
ert J. Smith, deceased, in trust for Mrs.
Jane L. Smith, with remainder over 12–
(6) Employee thrift, savings, vacation
3456789. and similar plans. A bond may be reg-
istered in the name and title, or title
(5) Trustee or life tenants under wills, alone, of the trustee of an eligible em-
deeds of trust, agreements, or similar in- ployee thrift, savings, vacation or simi-
struments. A bond may be registered in lar plan, as defined in § 316.5, of Depart-
the name and title of the trustee of a ment of the Treasury Circular No. 653,
trust estate, or in the name of a life current revision. If the instrument cre-
tenant, followed by an adequate identi- ating the trust provides that the trust-
fying reference to the authority gov- ees shall serve for a limited term, their
erning the trust or life tenancy. Exam- names may be omitted. Examples:
ples:
Tenth National Bank, trustee of Pension
Thomas J. White and Tenth National Bank, Fund of Safety Manufacturing Company,
trustees under the will of Robert J. Smith, U/A with the company, dated March 31,
deceased 12–3456789. 1976, 12–3456789.
Jane N. Black 123–45–6789, life tenant under Trustees of Retirement Fund of Safety Man-
the will of Robert J. Black, deceased. ufacturing Company, under directors’ reso-
Tenth National Bank, trustee under agree- lution adopted March 31, 1976, 12–3456789.
ment with Paul E. White, dated 2/1/76, 12– County Trust Company, Trustee of the Em-
3456789. ployee Savings Plan of Jones Company,
Carl A. Black and Henry B. Green, trustees Inc., U/A dated January 17, 1976, 12–3456789.
under agreement with Paul E. White, dated Trustee of the Employee Savings Plan of
2/1/76, 12–3456789. Brown Brothers, Inc., U/A dated January
Paul E. White, trustee under declaration of 20, 1976, 12–3456789.
trust dated 2/1/76, 12–3456789. (7) Funds of lodges, churches, societies,
(i) If the trust instrument designates or similar organizations. A bond may be
by title only an officer of a board or an registered in the title of the trustees,
organization as trustee, only the title or a board of trustees, holding funds in
of the officer should be used. Example: trust for a lodge, church, or society, or
similar organization, whether or not
Chairman, Board of Trustees, First Church incorporated. Examples:
of Christ, Scientist, of Chicago, Illinois, in
trust under the will of Robert J. Smith, de- Trustees of the First Baptist Church, Akron,
ceased 12–3456789. Ohio, acting as a Board under section 15 of
its bylaws 12–3456789.
(ii) The names of all trustees, in the Trustees of Jamestown Lodge No. 1000, Be-
form used in the trust instrument, nevolent and Protective Order of Elks,
must be included in the registration, under section 10 of its bylaws 12–3456789.
except as follows: Board of Trustees of Lotus Club, Wash-
(A) If there are several trustees des- ington, Indiana, under Article 10 of its con-
stitution 12–3456789.
ignated as a board or they are required
to act as a unit, their names may be (8) Investment agents for religious, edu-
omitted and the words ‘‘Board of cational, charitable and non-profit orga-
Trustees’’ substituted for the word nizations. A bond may be registered in
‘‘trustee’’. Example: the name of a bank, trust company, or
197
§ 315.7 31 CFR Ch. II (7–1–11 Edition)
other financial institution, or an indi- partnership agreement, or other au-

vidual, as agent under an agreement thority from which its powers are de-
with a religious, educational, chari- rived, must be included in the registra-
table or non-profit organization, tion and may be followed by a par-
whether or not incorporated, if the enthetical reference to a particular ac-
agent holds funds for the sole purpose count other than a trust account.
of investing them and paying the in- (2) Corporations. A bond may be reg-
come to the organization. The name istered in the name of a business, fra-
and designation of the agent must be ternal, religious, non-profit, or other
followed by an adequate reference to private corporation. The words ‘‘a cor-
the agreement. Examples: poration’’ must be included in the reg-
Tenth National Bank, fiscal agent U/A with
istration unless the fact of incorpora-
the Evangelical Lutheran Church of the tion is shown in the name. Examples:
Holy Trinity, dated 12/28/76, 12–3456789. Smith Manufacturing Company, a corpora-
Sixth Trust Company, Investment Agent U/A tion 12–3456789.
dated September 16, 1976, with Central City Green and Redd, Inc. 12–3456789 (Depreciation
Post, Department of Illinois, American Le- Acct.).
gion, 12–3456789.
John Jones, Investment Agent U/A dated (3) Unincorporated associations. A bond
September 16, 1976, with Central City Post, may be registered in the name of a
Department of Illinois, American Legion, club, lodge, society, or a similar self-
12–3456789. governing association which is unin-
(9) Funds of school groups or activities. corporated. The words ‘‘an unincor-
A bond may be registered in the title of porated association’’ must be included
the principal or other officer of a pub- in the registration. This form of reg-
lic, private, or parochial school holding istration must not be used for a trust
funds in trust for a student body fund fund, board of trustees, a partnership,
or for a class, group, or activity. If the or a sole proprietorship. If the associa-
amount purchased for any one fund tion is chartered by or affiliated with a
does not exceed $2,500 (face amount), no parent organization, the name or des-
reference need be made to a trust in- ignation of the subordinate or local or-
strument. Examples: ganization must be given first, followed
by the name of the parent organiza-
Principal, Western High School, in trust for
the Class of 1976 Library Fund, 12–3456789. tion. The name of the parent organiza-
Director of Athletics, Western High School, tion may be placed in parentheses and,
in trust for Student Activities Association, if well known, may be abbreviated. Ex-
under resolution adopted 5/12/76, 12–3456789. amples:
(10) Public corporations, bodies, or offi- The Lotus Club, an unincorporated associa-
cers as trustees. A bond may be reg- tion, 12–3456789.
istered in the name of a public corpora- Local 447, Brotherhood of Railroad Train-
tion or a public body, or in the title of men, an unincorporated association, 12–
3456789.
a public officer, acting as trustee under Eureka Lodge 317 (A.F. and A.M.), an unin-
express authority of law, followed by corporated association, 12–3456789.
an appropriate reference to the statute
creating the trust. Examples: (4) Partnerships. A bond may be reg-
istered in the name of a partnership.
Rhode Island Investment Commission, trust- The words ‘‘a partnership’’ must be in-
ee of the General Sinking Fund under Title cluded in the registration. Examples:
35, Ch. 8, Gen. Laws of Rhode Island.
Superintendent of the Austin State Hospital Smith & Jones, a partnership, 12–3456789.
Annex, in trust for the Benefit Fund under Acme Novelty Company, a partnership, 12–
Article 3183C, Vernon’s Civ. Stat. of Texas 3456789.
Ann.
(5) Sole proprietorships. A bond may be
(d) Private organizations (corporations, registered in the name of an individual
associations, partnerships)—(1) General. who is doing business as a sole propri-
A bond may be registered in the name etor. A reference may be made to the
of any private organization in its own trade name under which the business is
right. The full legal name of the orga- conducted. Example:
nization as set forth in its charter, ar- John Jones d.b.a. Jones Roofing Company,
ticles of incorporation, constitution, 123–45–6789
198
(e) Institutions (churches, hospitals, amounts applicable to each series of

homes, schools, etc.). A bond may be reg- bonds and savings notes for each spe-
istered in the name of a church, hos- cific year, which has varied from time
pital, home, school, or similar institu- to time, can be found in the appro-
tion conducted by a private organiza- priate offering circulars, as revised and
tion or by private trustees, regardless amended.
of the manner in which it is organized
or governed or title to its property is § 315.11 Excess purchases.
held. Descriptive words, such as ‘‘a cor- The Commissioner of the Public Debt
poration’’ or ‘‘an unincorporated asso- may permit excess purchases to stand
ciation’’, must not be included in the in any particular case or class of cases.
registration. Examples:
Shriners’ Hospital for Crippled Children, St. Subpart D—Limitations on Transfer
Louis, MO, 12–3456789. or Pledge
St. Mary’s Roman Catholic Church, Albany,
NY, 12–3456789. § 315.15 Transfer.
Rodeph Shalom Sunday School, Philadel-
phia, PA, 12–3456789. Savings bonds are not transferable
and are payable only to the owners
(f) States, public bodies and corpora- named on the bonds, except as specifi-
tions, and public officers. A bond may be cally provided in these regulations and
registered in the name of a State, then only in the manner and to the ex-
county, city, town, village, school dis- tent so provided.
trict, or other political entity, public
body, or corporation established by law § 315.16 Pledge.
(including a board, commission, admin-
(a) General. A savings bond may not
istration, authority, or agency) which
be hypothecated, pledged, or used as se-
is the owner or official custodian of
curity for the performance of an obli-
public funds, other than trust funds, or
gation, except as provided in paragraph
in the full legal title of the public offi-
(b) of this section.
cer having custody of the funds. Exam-
(b) Pledge under Treasury Circular No.
ples:
154. A bond may be pledged by the reg-
State of Maine. istered owner in lieu of surety under
Town of Rye, NY (Street Improvement the provisions of Department of the
Fund). Treasury Circular No. 154, current revi-
Maryland State Highway Administration.
sion (31 CFR part 225), if the bond ap-
Treasurer, City of Chicago.
proving officer is the Secretary of the
(g) The United States Treasury. A per- Treasury. In this case, an irrevocable
son who desires to have a bond become power of attorney shall be executed au-
the property of the United States upon thorizing the Secretary of the Treasury
his or her death may designate the to request payment.
United States Treasury as coowner or
beneficiary. Examples: Subpart E—Limitations on Judicial
George T. Jones 123–45–6789 or the United Proceedings—No Stoppage or
States Treasury. Caveats Permitted
George T. Jones 123–45–6789 P.O.D. the United
States Treasury. § 315.20 General.
[45 FR 64091, Sept. 26, 1980, as amended at 71 The following general rules apply to
FR 46857, Aug. 15, 2006] the recognition of a judicial determina-
tion on adverse claims affecting sav-
Subpart C—Limitations on Annual ings bonds:
Purchases (a) The Department of the Treasury
will not recognize a judicial determina-
§ 315.10 Limitations. tion that gives effect to an attempted
Specific limitations have been placed voluntary transfer inter vivos of a
on the amounts of bonds of each series bond, or a judicial determination that
and savings notes that might be pur- impairs the rights of survivorship con-
chased in any one year in the name of ferred by these regulations upon a co-
any one person or organization. The owner or beneficiary. All provisions of
199
§ 315.21 31 CFR Ch. II (7–1–11 Edition)
this subpart are subject to these re- § 315.22 Payment or reissue pursuant
strictions. to judgment.
(b) The Department of the Treasury (a) Divorce. The Department of the
will recognize a claim against an owner Treasury will recognize a divorce de-
of a savings bond and conflicting cree that ratifies or confirms a prop-
claims of ownership of, or interest in, a erty settlement agreement disposing of
bond between coowners or between the bonds or that otherwise settles the in-
registered owner and the beneficiary, if terests of the parties in a bond. Reissue
established by valid, judicial proof a savings bond may be made to
ceedings, but only as specifically pro- eliminate the name of one spouse as
vided in this subpart. Section 315.23 owner, coowner, or beneficiary, or to
specifies the evidence required to es- substitute the name of one spouse for
tablish the validity of the judicial pro- that of the other spouse as owner, co-
owner, or beneficiary pursuant to the
ceedings.
decree. However, if the bond is reg-
(c) The Department of the Treasury istered in the name of one spouse with
and the agencies that issue, reissue, or another person as coowner, there must
redeem savings bonds will not accept a be submitted either:
notice of an adverse claim or notice of (1) A request for reissue by the other
pending judicial proceedings, nor un- person or
dertake to protect the interests of a (2) A certified copy of a judgment, de-
litigant not in possession of a savings cree, or court order entered in pro-
bond. ceedings to which the other person and
the spouse named on the bond are par-
§ 315.21 Payment to judgment credi- ties, determining the extent of the in-
tors. terest of that spouse in the bond.
(a) Purchaser or officer under levy. The Reissue will be permitted only to the
Department of the Treasury will pay extent of that spouse’s interest. The
(but not reissue) a savings bond to the evidence required under § 315.23 must be
purchaser at a sale under a levy or to submitted in every case. When the di-
the officer authorized under appro- vorce decree does not set out the terms
priate process to levy upon property of of the property settlement agreement,
the registered owner or coowner to sat- a certified copy of the agreement must
isfy a money judgment. Payment will be submitted. Payment, rather than re-
issue, will be made if requested.
be made only to the extent necessary
(b) Gift causa mortis. A savings bond
to satisfy the money judgment. The
belonging solely to one individual will
amount paid is limited to the redemp- be paid or reissued at the request of the
tion value 60 days after the termi- person found by a court to be entitled
nation of the judicial proceedings. Pay- by reason of a gift causa mortis from
ment of a bond registered in coowner- the sole owner.
ship form pursuant to a judgment or a (c) Date for determining rights. When
levy against only one coowner is lim- payment or reissue under this section
ited to the extent of that coowner’s in- is to be made, the rights of the parties
terest in the bond. That interest must will be those existing under the regula-
be established by an agreement be- tions current at the time of the entry
tween the coowners or by a judgment, of the final judgment, decree, or court
decree, or order of a court in a pro- order.
ceeding to which both coowners are
§ 315.23 Evidence.
parties.
(b) Trustee in bankruptcy, receiver, or (a) General. To establish the validity
similar court officer. The Department of of judicial proceedings, certified copies
the Treasury will pay, at current re- of the final judgment, decree, or court
order, and of any necessary supple-
demption value, a savings bond to a
mentary proceedings, must be sub-
trustee in bankruptcy, a receiver of an
mitted. If the judgment, decree, or
insolvent’s estate, a receiver in equity,
court order was rendered more than six
or a similar court officer under the pro- months prior to the presentation of the
visions of paragraph (a) of this section. bond, there must also be submitted a
200
certificate from the clerk of the court, bond is known, the claimant should
under court seal, dated within six execute an application for relief on the
months of the presentation of the bond, appropriate form and submit it to the
showing that the judgment, decree, or Bureau of the Public Debt, Parkers-
court order is in full force. burg, WV 26101.
(b) Trustee in bankruptcy or receiver of (b) Serial number not known. If the
an insolvent’s estate. A request for pay- bond serial number is not known, the
ment by a trustee in bankruptcy or a claimant must provide sufficient infor-
receiver of an insolvent’s estate must
mation to enable the Bureau of the
be supported by appropriate evidence of
appointment and qualification. The Public Debt to identify the bond by se-
evidence must be certified by the clerk rial number. See § 315.29(c). The Bureau
of the court, under court seal, as being will furnish the proper application
in full force on a date that is not more form and instructions.
than six months prior to the presen- (c) Defaced or mutilated bond. A de-
tation of the bond. faced bond and all available fragments
(c) Receiver in equity or similar court of a mutilated bond should be sub-
officer. A request for payment by the mitted to the Bureau.
receiver in equity or a similar court of- (d) Execution of claims application. The
ficer, other than a receiver of an application must be made by the per-
insolvent’s estate, must be supported son or persons (including both co-
by a copy of an order that authorizes owners, if living) authorized under
the presentation of the bond for re- these regulations to request payment
demption, certified by the clerk of the of the bonds. In addition—
court, under court seal, as being in full
(1) If the bond is in beneficiary form
force on a date that is not more than
and the owner and beneficiary are both
six months prior to the presentation of
the bond. living, both will ordinarily be required
to join in the application.
(2) If a minor named on a bond as
Subpart F—Relief for Loss, Theft,
owner, coowner, or beneficiary is not of
Destruction, Mutilation, De- sufficient competency and under-
facement, or Nonreceipt of standing to request payment, both par-
Bonds ents will ordinarily be required to join
§ 315.25 General. in the application.
(e) If the application is approved, re-
Relief, by the issue of a substitute
lief will be granted by the issuance of a
bond or by payment, is authorized for
the loss, theft, destruction, mutilation, bond bearing the same issue date as the
or defacement of a bond after receipt bond for which the claim was filed or
by the owner or his or her representa- by the issuance of a check in payment.
tive. As a condition for granting relief,
the Commissioner of the Public Debt, § 315.27 Application for relief—non-
receipt of bond.
as designee of the Secretary of the
Treasury, may require a bond of indem- If a bond issued on any transaction is
nity, in the form, and with the surety, not received, the issuing agent must be
or security, he considers necessary to notified as promptly as possible and
protect the interests of the United given all information available about
States. In all cases the savings bond the nonreceipt. An appropriate form
must be identified by serial number and instructions will be provided. If the
and the applicant must submit satis- application is approved, relief will be
factory evidence of the loss, theft, or granted by the issuance of a bond bear-
destruction, or a satisfactory expla- ing the same issue date as the bond
nation of the mutilation or deface-
that was not received.
ment.
§ 315.26 Application for relief—after § 315.28 Recovery or receipt of bond
receipt of bond. before or after relief is granted.
(a) Serial number known. If the serial (a) Recovery prior to granting relief. If
number of the lost, stolen, or destroyed a bond reported lost, stolen, destroyed,
201
§ 315.29 31 CFR Ch. II (7–1–11 Edition)
or not received, is recovered or re- 67, current revision (31 CFR part 342)
ceived before relief is granted, the Bu- for savings notes.
reau of the Public Debt, Parkersburg,
WV 26101, must be notified promptly. § 315.31 Series H bonds.
(b) Recovery subsequent to granting of (a) General. Series H bonds are cur-
relief. A bond for which relief has been rent income bonds issued at par (face
granted is the property of the United amount). Interest on a Series H bond is
States and, if recovered, must be paid semiannually beginning six
promptly submitted to the Bureau of months from the issue date. Interest
the Public Debt, Parkersburg, WV ceases at final maturity, or if the bond
26101, for cancellation. is redeemed prior to final maturity, as
of the end of the interest period last
§ 315.29 Adjudication of claims. preceding the date of redemption. For
(a) General. The Bureau of the Public example, if a bond on which interest is
Debt will adjudicate claims for lost, payable on January 1 and July 1 is re-
stolen or destroyed bonds on the basis deemed on September 1, interest ceases
of records created and regularly main- as of the preceding July 1, and no in-
tained in the ordinary course of busi- terest will be paid for the period from
ness. July 1 to September 1. However, if the
(b) Claims filed ten years after payment. redemption date falls on an interest
A bond for which no claim has been payment date, interest ceases on that
filed within ten years of the recorded date. Information regarding authorized
date of redemption will be presumed to extended maturity periods and invest-
have been properly paid. If a claim is ment yields is found in Department
subsequently filed, a photographic copy Circular No. 905, current revision (31
of the bond will not be available to sup- CFR part 332).
port the disallowance. This provision (b) Payment of interest. Series H bond
will be effective 60 days after the effec- interest accounts are maintained by
tive date of the Eleventh Revision of the Bureau of the Public Debt, Par-
Department of the Treasury Circular kersburg, WV. Interest is paid on each
No. 530 (31 CFR part 315). payment date by check drawn to the
(c) Claims filed six years after final ma- order of the owner or both coowners or,
turity. No claim filed six years or more upon request, by the Automated Clear-
after the final maturity of a savings ing House (ACH) method to the owner
bond will be entertained, unless the or coowner’s account at a financial in-
claimant supplies the serial number of stitution. Checks will be mailed to the
the bond. delivery address provided to the Bu-
reau.
(c) Delivery of interest—(1) Notices af-
Subpart G—Interest fecting the delivery of interest payments.
To ensure appropriate action, notices
§ 315.30 Series E bonds and savings
notes. affecting the delivery of interest pay-
ments on Series H bonds must be re-
Series E bonds and savings notes are ceived by the Bureau of the Public
discount securities. The accrued inter- Debt, Parkersburg, WV, 26102–1328, at
est is added to the issue price at stated least one month prior to the interest
intervals and is payable only at repayment date. Each notice must in-
demption as part of the redemption clude the owner or coowner’s name and
value. All Series E bonds and savings the taxpayer identifying number ap-
notes have been extended and continue pearing on the account under which
to earn interest until their final matu- records of the bonds are maintained.
rity dates, unless redeemed earlier. In-
formation regarding extended maturity (Approved by the Office of Management and
Budget under control number 1535–0094)
periods, investment yields and redemp-
tion values is found in Department of (2) Owner or coowner deceased—(i) Sole
the Treasury Circular No. 653, current owner. Upon receipt of notice of the
revision (31 CFR part 316) for Series E death of the owner of a bond, payment
bonds, and in Department of the Treas- of interest will be suspended until sat-
ury Circular, Public Debt Series No. 3– isfactory evidence is submitted as to
202
who is authorized to receive and collect ment dates. The Series H accounts
interest payments on behalf of the es- maintained by the Bureau of the Public
tate of the decedent, in accordance Debt will be closed in the first week of
with the provisions of subpart L. the month preceding each interest pay-
(ii) Coowner. Upon receipt of notice of ment date, and payments will be made
the death of the ooowner to whom in- pursuant to the information contained
terest payments have been directed, in the accounts as of the date they are
payment of interest will be suspended closed.
until delivery instructions are received (g) Endorsement of checks. Interest
from the other coowner, if living. If checks must be endorsed in accordance
both coowners are deceased, payment with the regulations governing the
of interest will be suspended until sat- payment of fiscal agency checks con-
isfactory evidence is submitted as to tained in 31 CFR part 355.
who is authorized to receive and collect (h) Deposit account information for
interest payments on behalf of the es- ACH payments—(1) Payments on same ac-
tate of the last deceased coowner, in count. Payments on all Series H bonds
accordance with the provisions of sub- assigned to the same account main-
part L. tained by the Bureau will be made to
(iii) Owner with beneficiary. Interest the same deposit account at a financial
on a bond registered in beneficiary institution.
form is paid to the owner during his or
(2) Deposit account held by individuals
her lifetime. Upon receiving notice of
in their own right. Where the Series H
the owner’s death, the Bureau of the
bonds are registered in the name of in-
Public Debt will suspend payment of
dividual(s) as sole owner, or as owner
interest until the bond is presented for
and beneficiary, and the deposit ac-
payment or reissue by the beneficiary,
if surviving, or some other proper count at the financial institution is
party. Interest so withheld will be paid held in the name of individual(s) in
to the person entitled to the bond. their own right, the owner’s name must
(d) Representative appointed for the es- appear on the deposit account. Where
tate of a minor, incompetent, absentee, et the bonds are registered in the names
al. Interest on Series H bonds is paid in of two individuals as coowners and the
accordance with the provisions of deposit account is held in the name of
§ 315.60 to the representative appointed individual(s) in their own right, the
for the estate of an owner who is a registration of the bonds and the title
minor, incompetent, absentee, et al. If of the account must contain at least
the registration of the bonds does not one name that is common to both. The
include reference to the owner’s status, deposit account to which the interest
the bonds should be submitted for repayments are directed should pref-
issue to a designated Federal Reserve erably be established in a form iden-
Bank so that interest payments may be tical to the registration of the bonds to
properly delivered. They must be ac- ensure that rights of ownership and
companied by proof of appointment as survivorship can be more easily identi-
required by § 315.60. fied and preserved. Neither the United
(e) Adult incapacitated owner having States nor any Federal Reserve Bank
no representative. If an adult owner of a shall be liable for any loss sustained
Series H bond is incompetent to re- because the interest(s) of the holder(s)
ceive and collect interest payments, of a deposit account to which payments
and no legal guardian or similar rep- are directed are not the same as the
resentative has been appointed to act owner(s) of the bonds.
for him or her, the relative, or other (3) Deposit account held by organiza-
person, responsible for the owner’s care tion. Where the deposit account to
and support may apply to the Bureau which interest payments are to be di-
of the Public Debt for recognition as rected is held in the name of the finan-
voluntary guardian for the purpose of cial institution itself, acting as sole
receiving and collecting the payments. trustee or as co-trustee, or is in the
(f) Reissue during interest period. Phys- name of a commercially-managed in-
ical reissue of a Series H bond may be vestment fund, the owner or coowner
made without regard to interest pay- should inquire whether the financial
203
§ 315.32 31 CFR Ch. II (7–1–11 Edition)
institution is able to receive ACH pay- sion (31 CFR part 211). Payment will be
ments; if not, the owner or coowner made without regard to any notice of
should make alternative arrangements. adverse claims to a bond and no notifi-
(4) Financial institution cannot accept cation of stoppage or caveat against
ACH payments. If after submission of payment of a bond will be made.
deposit account information, it is de- (b) Series A, B, C, D, F, and J. A bond
termined that ACH payments cannot of Series A, B, C, D, F, or J will be paid
be accepted by the designated financial at face value.
institution, pending receipt of new de-
(c) Series E and Savings Notes. A Se-
posit account information, payment
will be made by check drawn to the ries E bond will be paid at any time
registered owner or both coowners and after two months from issue date at
mailed to the address of record. the appropriate redemption value
(5) Cancellation of ACH arrangement. shown in Department of the Treasury
An ACH arrangement shall remain in Circular No. 653 (31 CFR part 316), cur-
effect until it is terminated by a re- rent revision. A savings note will be
quest from the owner or coowner sub- paid at anytime at the appropriate re-
mitted to the Bureau of the Public demption value shown in Department
Debt, Parkersburg, WV 26102–1328. of the Treasury Circular, Public Debt
(6) Rules. Series H interest payments Series No. 3–67, current revision (31
made by the ACH method are governed CFR part 342).
by the regulations at 31 CFR part 370. (d) Series G and K. A bond of Series G
(7) Nonreceipt or loss of interest pay- or K will be paid at face value plus the
ment. The Bureau of the Public Debt, final semiannual interest due. For Se-
Parkersburg, WV 26102 should be noti-
ries G bonds, the final interest paid
fied if:
with principal is $1.25 per $100; for Se-
(i) An interest check is not received
or is lost after receipt or ries K bonds, the final interest is $6.90
(ii) An ACH payment is not credited per $500.
to the designated account and the fi- (e) Series H. A Series H bond will be
nancial institution has no record of re- redeemed at face value at any time
ceiving it. The notice should include after six (6) months from issue date. In
the owner or coowner’s name and tax- any case where Series H bonds are sur-
payer identifying number and the in- rendered to a designated Federal Re-
terest payment date. serve Bank or Branch or the Depart-
[54 FR 40255, Sept. 29, 1989, as amended at 59 ment of the Treasury for redemption in
FR 10535, Mar. 4, 1994; 64 FR 40486, July 26, the month prior to an interest pay-
1999] ment date, redemption will not be de-
ferred but will be made in regular
§ 315.32 Series A, B, C, D, F, G, J, and course, unless the presenter specifi-
K bonds.
cally requests that the transaction be
All bonds of these series have ma- delayed until that date. A request to
tured and no longer earn interest. defer redemption made more than one
month preceding the interest payment
Subpart H—General Provisions for date will not be accepted.
Payment
§ 315.35 Payment (redemption). FR 23753, July 1, 1986; 59 FR 10535, Mar. 4,
1994]
(a) General. Payment of a savings
bond will be made to the person or per- § 315.36 Payment during life of sole
sons entitled under the provisions of owner.
these regulations, except that checks
in payment will not be delivered to ad- A savings bond registered in single
dresses in areas with respect to which ownership form (i.e., without a co-
the Department of the Treasury re- owner or beneficiary) will be paid to
stricts or regulates the delivery of the owner during his or her lifetime
checks drawn against funds of the upon surrender with an appropriate re-
United States. See Department of the quest.
204
§ 315.37 Payment during lives of both thorized to process any case involving
coowners. partial redemption or any case in
A savings bond registered in co- which supporting evidence is required.
ownership form will be paid to either (b) Procedure for all other cases. In the
coowner upon surrender with an appro- case of a bond to which the procedure
priate request, and, upon payment (as in paragraph (a) of this section does
determined in § 315.43), the other co- not apply, or if otherwise preferred, the
owner will cease to have any interest owner or coowner, or other person enti-
in the bond. If both coowners request tled to payment, should appear before
payment and payment is to be made by an officer authorized to certify re-
check, the check will be drawn in the quests for payment, establish his or her
form, ‘‘John A. Jones and Mary C. identity, sign the request for payment,
Jones’’. and provide information as to the
addresss to which the check in pay-
§ 315.38 Payment during lifetime of
owner of beneficiary bond. ment is to be mailed. In addition, in
the case of a Series E bond or savings
A savings bond registered in bene- note, the presenter must record his or
ficiary form will be paid to the reg- her social security number on the face
istered owner during his or her lifetime of the security, provided it does not al-
upon surrender with an appropriate re- ready appear in the inscription. The
quest. Upon payment (as determined in
bond must be forwarded to a designated
§ 315.43), the beneficiary will cease to
Federal Reserve Bank or Branch or the
have any interest in the bond.
Bureau of the Public Debt. Usually,
§ 315.39 Surrender for payment. payment will be expedited by submis-
sion to a designated Federal Reserve
(a) Procedure for bonds of Series A to E,
Bank or Branch. In all cases, the cost
inclusive, in the names of individual own-
ers or coowners only. An individual who and risk of presentation of a bond will
is the owner or coowner of a bond of be borne by the owner. Payment will be
Series A, B, C, D, or E may present the made by check drawn to the order of
bond to an authorized paying agent for the registered owner or other person
redemption. The presenter must be pre- entitled and will be mailed to the ad-
pared to establish his or her identity in dress requested.
accordance with Treasury instructions (c) Date of request. Requests executed
and identification guidelines. The more than six months before the date
owner or coowner must sign the re- of receipt of a bond for payment will
quest for payment on the bond or, if not be accepted. Neither will a bond be
authorized, on a separate detached re- accepted if payment is requested as of
quest, and add his or her address. In ad- a date more than three months in the
dition, in the case of a Series E bond or future.
savings note, the presenter must record
his or her social security number on
FR 10535, Mar. 4, 1994]
the face of the security, provided it
does not already appear in the inscrip- § 315.40 Special provisions for pay-
tion. Paying agents are authorized to ment.
refuse payment in any case where the
presenter’s number is not provided. If (a) Owner’s signature not required. A
the request for payment has been bond may be paid by a paying agent or
signed, or signed and certified, before a designated Federal Reserve Bank
presentation of the bond, the paying without the owner’s signature to the
agent must be satisfied that the person request for payment, if the bond bears
presenting the bond for payment is the the special endorsement of a financial
owner or coowner and may require the institution specifically qualified to
person to sign the request for payment place such an endorsement on savings
again. If the bond is in order for pay- bonds under the provisions of Depart-
ment, the paying agent will make im- ment of the Treasury Circular No. 888,
mediate payment at the current re- current revision (31 CFR part 330).
demption value without charge to the (b) Signature by mark. A signature by
presenter. Paying agents are not au- mark (X) must be witnessed by at least
205
§ 315.41 31 CFR Ch. II (7–1–11 Edition)
one disinterested person and a certi- Bank or Branch or to the Bureau of the
fying officer. See subpart J. The wit- Public Debt in accordance with
ness must attest to the signature by § 315.39(b). In any case in which partial
mark substantially as follows: ‘‘Wit- redemption is requested, the phrase ‘‘to
ness to signature by mark,’’ followed the extent of $ll (face amount) and
by his or her signature and address. reissue of the remainder’’ should be
(c) Name change. If the name of the added to the request. Upon partial re-
owner, coowner, or other person enti- demption of the bond, the remainder
tled to payment, as it appears in the will be reissued as of the original issue
registration or in evidence on file in date, as provided in subpart I.
the Bureau of the Public Debt, has
been changed in any legal manner, the [45 FR 64091, Sept. 26, 1980, as amended at 59
FR 10535, Mar. 4, 1994]
signature to the request for payment
must show both names and the manner § 315.42 Nonreceipt or loss of check
in which the change was made; for ex- issued in payment.
ample, ‘‘Mary T. Jones Smith (Mary T.
J. Smith or Mary T. Smith) changed by If a Treasury check in payment of a
marriage from Mary T. Jones,’’ or bond surrendered for redemption is not
‘‘John R. Young, changed by order of received within a reasonable time or is
court from Hans R. Jung.’’ See § 315.50. lost after receipt, notice should be
(d) Attorneys-in-fact. A request for given to the same agency to which the
payment, reinvestment, or exchange bond was surrendered for payment. The
executed by an attorney-in-fact will be notice should give the date the bond
recognized if it is accompanied by a was surrendered for payment, and de-
copy of the power of attorney that scribe the bond by series, denomina-
meets the following requirements: tion, serial number, and registration,
(1) The power of attorney must bear including the taxpayer identifying
the grantor’s signature, properly cer- number of the owner.
tified or notarized, in accordance with
applicable State law; § 315.43 Effective date of request for
payment.
(2) The power of attorney must grant,
by its terms, authority for the attor- The Department of the Treasury will
ney-in-fact to sell or redeem the treat the receipt of a bond with an
grantor’s securities, sell his or her per- appropiate request for payment by:
sonal property, or, otherwise contain (a) A Federal Reserve Bank or
similar authority; and Branch,
(3) In the case of a grantor who has (b) The Bureau of the Public Debt, or
become incapacitated, the power of at- (c) A paying agent authorized to pay
torney must conform with pertinent that bond, as the date upon which the
provisions of State law concerning its rights of the parties are fixed for the
durability. Generally, in such cir- purpose of payment.
cumstances, the power of attorney
should provide that the authority § 315.44 Withdrawal of request for pay-
granted will not be affected by the sub- ment.
sequent incompetence or incapacity of (a) Withdrawal by owner or coowner.
the grantor. Medical evidence or other An owner or coowner, who has surren-
proof of the grantor’s condition may be dered a bond to a Federal Reserve Bank
required in any case. or Branch or to the Bureau of the Pub-
[45 FR 64091, Sept. 26, 1980, as amended at 57 lic Debt or an authorized paying agent
FR 39602, Sept. 1, 1992; 59 FR 10535, Mar. 4, with an appropriate request for pay-
1994] ment, may withdraw the request if no-
tice of intent to withdraw is received
§ 315.41 Partial redemption. by the same agency prior to payment
A bond of any series may be re- either in cash or through the issuance
deemed in part at current redemption of the redemption check.
value, but only in an amount cor- (b) Withdrawal on behalf of deceased
responding to one or more authorized owner or incompetent. A request for pay-
denominations, upon surrender of the ment may be withdrawn under the
bond to a designated Federal Reserve same conditions as in paragraph (a) of
206
this section by the executor or admin- (i) The new owner is related to the
istrator of the estate of a deceased previous owner by blood (including
owner or by the person or persons who legal adoption) or marriage,
would have been entitled to the bond (ii) The previous owner and the new
under subpart L, or by the legal rep- owner are parties to a divorce or annul-
resentative of the estate of a person ment, or
under legal disability, unless surrender (iii) The new sole owner is the trust-
of the bond for payment has eliminated ee of a personal trust estate which was
the interest of a surviving coowner or created by the previous owner or which
beneficiary. See § 315.70 (b) and (c). designates as beneficiary either the
previous owner or a person related to
Subpart I—Reissue and him or her by blood (including legal
Denominational Exchange adoption) or marriage.
(b) Coownership—(1) Reissue—to name
§ 315.45 General. a related individual as owner or coowner.
During the lifetime of both coowners, a
Reissue of a bond may be made only
coownership bond may be reissued in
under the conditions specified in these
the name of another individual related
regulations, and only at:
by blood (including legal adoption) or
(a) A Federal Reserve Bank or
marriage to either coowner—
Branch, or
(i) As single owner,
(b) The Bureau of the Public Debt.
(ii) As owner with one of the original
Reissue will not be made if the request coowners as beneficiary, or
is received less than one full calendar (iii) As a new coowner with one of the
month before the final maturity date original coowners.
of a bond. The request, however, will be (2) Reissue—to name either coowner
effective to establish ownership as alone or with another individual as co-
though the reissue had been made. owner or beneficiary. During the life-
time of both coowners, a coownership
§ 315.46 Effective date of request for
reissue. bond may be reissued in the name of ei-
ther coowner alone or with another in-
The Department of the Treasury will dividual as coowner or beneficiary if—
treat the receipt by: (i) After issue of the submitted bond,
(a) A Federal Reserve Bank or either coowner named thereon marries,
Branch or or the coowners are divorced or legally
(b) The Bureau of the Public Debt of separated from each other, or their
a bond and an acceptable request for marriage is annulled; or
reissue as determining the date upon (ii) Both coowners on the submitted
which the rights of the parties are bond are related by blood (including
fixed for the purpose of reissue. legal adoption) or marriage to each
For example, if the owner or either co- other.
owner of a bond dies after the bond has (3) Reissue—to name the trustee of a
been surrendered for reissue, the bond personal trust estate. A bond registered
will be regarded as having been rein coownership form may be reissued to
issued in the decedent’s lifetime. name a trustee of a personal trust es-
tate created by either coowner or by
§ 315.47 Authorized reissue—during some other person if:
lifetime. (i) Either coowner is a beneficiary of
A bond belonging to an individual the trust, or
may be reissued in any authorized form (ii) A beneficiary of the trust is re-
of registration upon an appropriate related by blood or marriage to either co-
quest for the purposes outlined below: owner.
(a) Single ownership. A bond reg- (c) Beneficiary. A bond registered in
istered in single ownership form may beneficiary form may be reissued—
be reissued— (1) To name the beneficiary as co-
(1) To add a coowner or beneficiary; owner;
(2) To name a new owner, with or (2) To eliminate the name of the
without a coowner or beneficiary, but owner and to name as owner a custo-
only if: dian for the beneficiary, if a minor,
207
§ 315.48 31 CFR Ch. II (7–1–11 Edition)
under a statute authorizing gifts to mi- of his or her death. Public Debt forms
nors; are available for requesting reissue.
(3) To eliminate the beneficiary or to
substitute another individual as bene- Subpart J—Certifying Officers
ficiary, but only if the request is sup-
ported by the certified consent of the § 315.55 Individuals authorized to cer-
beneficiary or by proof of his or her tify.
death; or The following individuals are author-
(4) To eliminate the names of the ized to act as certifying officers for the
owner and the beneficiary and to name purpose of certifying a request for pay-
as new owner the trustee of the per- ment, reissue, or a signature to a Pub-
sonal trust estate which was created by lic Debt form:
the previous owner or which designates (a) Officers generally authorized—(1) At
as beneficiary either the previous banks, trust companies, and member orga-
owner or a person related to him or her nizations of the Federal Home Loan Bank
by blood (including legal adoption) or System. (i) Any officer of a bank incor-
marriage, but only if the request is porated in the United States, the terri-
supported by the certified consent of tories or possessions of the United
the beneficiary or by proof of his or her States, or the Commonwealth of Puer-
death. to Rico.
(ii) Any officer of a trust company in-
§ 315.48 Restrictions on reissue. corporated in the United States, the
(a) Denominational exchange. Reissue territories or possessions of the United
is not permitted solely to change de- States, or the Commonwealth of Puer-
nominations. to Rico.
(b) United States Treasury. Reissue (iii) Any officer of an organization
may not be made to eliminate the that is a member of the Federal Home
United States Treasury as coowner or Loan Bank System. This includes Fed-
beneficiary. eral savings and loan associations.
(iv) Any officer of a foreign branch or
§ 315.49 Correction of errors. a domestic branch of an institution de-
A bond may be reissued to correct an scribed in paragraphs (a) (1)(i) through
error in registration upon appropriate (iii) of this section.
request, supported by satisfactory (v) Any officer of a Federal Reserve
proof of the error. Bank, a Federal Land Bank, or a Fed-
eral Home Loan Bank.
§ 315.50 Change of name. (vi) Any employee of an institution
An owner, coowner, or beneficiary described in paragraphs (a)(1)(i)
whose name is changed by marriage, through (v) of this section, who is ex-
divorce, annulment, order of court, or pressly authorized to certify by the in-
in any other legal manner after the stitution.
issue of bond should submit the bond Certification by these officers or des-
with a request for reissue to substitute ignated employees must be authenti-
the new name for the name inscribed cated by a legible imprint either of a
on the bond. Documentary evidence corporate stamp of the institution or of
may be required in any appropriate the issuing or paying agent’s stamp.
case. An employee authorized to certify re-
quests must sign his or her name over
§ 315.51 Requests for reissue. the title ‘‘Designated Employee’’.
A request for reissue of bonds in co- (2) At issuing agents that are not banks
ownership form during the lifetime of or trust companies. Any officer of an or-
the coowners must be signed by both ganization, not a bank or a trust com-
coowners, except that a request solely pany, that is qualified as an issuing
to eliminate the name of one coowner agent for savings bonds. The agent’s
may be signed by that coowner only. A stamp must be imprinted in the certifi-
bond registered in beneficiary form cation.
may be reissued upon the request of (3) By United States officials. Any
the owner, supported by the certified judge, clerk, or deputy clerk of a
consent of the beneficiary or by proof United States court, including United
208
States courts for the territories and trative Services of American Samoa;
possessions of the United States, and and designated officers of the Panama
the Commonwealth of Puerto Rico or Canal Commission.
any United States Commissioner or (e) Special provisions. If no certifying
United States Attorney. officer is readily accessible, the Com-
(b) Officers with limited authority—(1) missioner of the Public Debt, Deputy
In the Armed Forces. Any commissioned Commissioner, any Assistant Commis-
officer or warrant officer of the Armed sioner, or other designated official of
Forces of the United States, but only the Bureau or of a Federal Reserve
for members of the respective services, Bank or Branch is authorized to make
their families, and civilian employees special provision for any particular
at posts, bases, or stations. The certi- case.
fying officer must indicate his or her
rank and state that the individual § 315.56 General instructions and li-
signing the request is one of the class ability.
whose request the certifying officer is (a) Certification procedure. Certifying
authorized to certify. officers at financial institutions quali-
(2) At Veterans Administration facili- fied as paying agents should observe
ties, Federal penal institutions, and the Treasury’s payment instructions
United States Public Health Service hos- and identification guidelines in certi-
pitals. Any officer in charge of a home, fying savings bonds and savings notes
hospital, or other facility of the Vet- being forwarded to a designated Fed-
erans Administration, but only for the eral Reserve Bank for any transaction.
patients, or employees of the facility; Other certifying officers should provide
any officer of a Federal penal institu- certification services for persons with
tion or a United States Public Health whom they have substantial personal
Service hospital expressly authorized acquaintance, and for other persons
to certify by the Secretary of the whose identities have been unmistak-
Treasury or his designee, but only for ably established. A notation showing
the inmates, patients or employees of exactly how identification was estab-
the institution involved. Officers of lished should be placed on the back of
Veterans Administration facilities, the security or Public Debt form, or in
Federal penal institutions, and Public a separate record. As part of the cer-
Health Service hospitals must use the tification, the certifying officer must
stamp of the particular institution or affix his or her official signature, title
service. and address, the exact date of execu-
(c) Authorized officers in foreign coun- tion and, where one is available, a cor-
tries. Any United States diplomatic or porate stamp or issuing or paying
consular representative, or the officer agent’s stamp.
of a foreign branch of a bank or trust (b) Liability. The certifying officer
company incorporated in the United and, if such person is an officer or an
States whose signature is attested by employee of an organization, the orga-
an imprint of the corporate stamp or is nization will be held fully responsible
certified to the Department of the for the adequacy of the identification.
Treasury. If none of these individuals
is available, a notary public or other [45 FR 64091, Sept. 26, 1980, as amended at 59
officer authorized to administer oaths FR 10535, Mar. 4, 1994]
may certify, but his or her official
character and jurisdiction must be cer- § 315.57 When a certifying officer may
not certify.
tified by a United States diplomatic or
consular officer under seal of his or her Certifying officers may not certify
office. the requests for payment of bonds, or
(d) Authorized officers in particular lo- appropriate Public Debt forms if, in
calities. The Governor and the Treas- their own right or in a representative
urer of Puerto Rico; the Governor and capacity, they
the Commissioner of Finance of the (a) Have an interest in the bonds, or
Virgin Islands; the Governor and the (b) Will, by virtue of the requests
Director of Finance of Guam; and the being certified, acquire an interest in
Governor and the Director of Adminis- the bonds.
209
§ 315.58 31 CFR Ch. II (7–1–11 Edition)
§ 315.58 Forms to be certified. sufficient competency to sign the re-

quest for payment and to understand
When required in the instructions on
the nature of the transaction. In gen-
a Public Debt form, the form must be
eral, the fact that the request for pay-
signed before an authorized certifying
ment has been signed by a minor and
officer.
certified will be accepted as sufficient
proof of competency and under-
Subpart K—Minors, Incompetents, standing.
Aged Persons, Absentees, et al.
§ 315.63 Payment to a parent or other
§ 315.60 Conditions for payment to person on behalf of a minor.
representative of an estate. If the owner of a savings bond is a
(a) General. The representative of an minor and the form of registration does
estate of an owner who is a minor, an not indicate that there is a representa-
aged person, incompetent, absentee, et tive of his or her estate, and if the
al., may receive upon request— minor is not of sufficient competency
(1) If the registration shows the name to sign the request for payment and to
and capacity of the representative; understand the nature of the trans-
(2) If the registration shows the ca- action, payment will be made to either
pacity but not the name of the rep- parent with whom the minor resides or
resentative and the request is accom- to whom legal custody has been grant-
panied by appropriate evidence; or ed. If the minor does not reside with ei-
(3) If the registration includes neither parent, payment will be made to
ther the name of the representative nor the person who furnishes the chief sup-
his or her capacity but the request is port for the minor. The request must
accompanied by appropriate evidence. appear on the back of the bond in one
(b) Evidence. Appropriate evidence for of the following forms:
paragraphs (a) (2) and (3) of this section (a) Request by parent.
includes a certified copy of the letters I certify that I am the mother of John C.
of appointment or, if the representa- Jones (with whom he resides) (to whom legal
tive is not appointed by a court, other custody has been granted). He is ll years of
proof of qualification. Except in thee age and is not of sufficient understanding to
case of corporate fiduciaries, the evi- make this request.
dence must show that the appointment Mary Jones on behalf of John C. Jones.
is in full force and be dated not more (b) Request by other person.
than one year prior to the presentation
of the bond for payment. The request I certify that John C. Jones does not reside
for payment appearing on the back of a with either parent and that I furnish his
bond must be signed by the representa- chief support. He is ll years of age and is
not of sufficient understanding to make this
tive as such, for example, ‘‘John S. request.
Jones, guardian (committee) of the es-
Alice Brown, grandmother, on behalf of John
tate of Henry W. Smith, a minor (an in- C. Jones.
competent).’’
§ 315.64 Payment, reinvestment, or ex-
§ 315.61 Payment after death. change—voluntary guardian of an
After the death of the ward, and at incapacitated person.
any time prior to the representative’s (a) Payment of bonds. When an adult
discharge, the representative of the es- owner of bonds is incapable of request-
tate will be entitled to obtain payment ing payment as a result of incapacity
of a bond to which the ward was solely and there is no other person legally
entitled. qualified to do so, the relative, or other
person, responsible for the owner’s care
§ 315.62 Payment to minors. and support may submit an application
If the owner of a savings bond is a for recognition as voluntary guardian
minor and the form of registration does for the purpose of redeeming the own-
not indicate that there is a representa- er’s bonds, if the total redemption
tive of the minor’s estate, payment value of all of the owner’s bonds does
will be made to the minor upon his or not exceed $20,000. The redemption
her request, provided the minor is of value of the bonds shall be determined
210
as of the date the bonds are received, (c) A minor coowner for whose estate
accompanied by an appropriate request no representative has been appointed,
for payment. If the total redemption may be named sole owner upon the re-
value exceeds $20,000, a legal represent- quest of the competent coowner.
ative must be appointed, as set forth in (d) Reissue to eliminate the name of
§ 315.60. a minor or incompetent for whose es-
(b) Reinvestment of bonds. If the bonds tate a legal representative has been ap-
have finally matured and it is desired pointed is permitted only if supported
to redeem them and reinvest the pro- by evidence that a court has authorized
ceeds in other savings bonds, the new the representative of the minor’s or
bonds must be registered in the name incompetent’s estate to request the re-
of the incapacitated person, followed issue. See § 315.23.
by words showing that he or she is
under voluntary guardianship; for ex- Except to the extent provided in para-
ample, ‘‘John Jones 123–45–6789, under graphs (a) through (d), of this section,
voluntary guardianship’’. A living co- reissue will be restricted to a form of
owner or beneficiary named on the ma- registration which does not adversely
tured bonds must be designated on the affect the existing ownership or inter-
new bonds, unless such person fur- est of a minor who is not of sufficient
nishes a certified statement consenting understanding to make a request, or
to omission of his or her name. If an other person under legal disability. Re-
amount insufficient to purchase an ad- quests for reissue should be executed
ditional bond of any authorized de- by the person authorized to request
nomination of either series remains payment under §§ 315.60 and 315.63, or
after the reinvestment, the voluntary the person who may request recogni-
guardian may furnish additional funds tion as voluntary guardian under
sufficient to purchase another bond of § 315.64.
either series of the lowest available de- [45 FR 64091, Sept. 26, 1980. Redesignated at
nomination. If additional funds are not 57 FR 39602, Sept. 1, 1992]
furnished, the remaining amount will
be paid to the voluntary guardian for
the use and benefit of the incapacitated Subpart L—Deceased Owner,
person. Coowner or Beneficiary
(c) Exchange of bonds. The provisions
for reinvestment of the proceeds of ma- § 315.70 General rules governing enti-
tured bonds are equally applicable to tlement.
any authorized exchange of bonds of The following rules govern ownership
one series for those of another. or entitlement where one or both of the
[57 FR 39602, Sept. 1, 1992] persons named on a bond have died
without the bond having been surren-
§ 315.65 Reissue. dered for payment or reissue:
A bond on which a minor or other (a) Single owner bond. If the owner of
person under legal disability is named a bond registered in single ownership
as the owner or coowner, or in which he form has died, the bond becomes the
or she has an interest, may be reissued property of that decedent’s estate, and
under the following conditions: payment or reissue will be made as pro-
(a) A minor for whose estate no rep- vided in this subpart.
resentative has been appointed may re- (b) Coowner bond—(1) One coowner de-
quest reissue if the minor is of suffi- ceased. If one of the coowners named on
cient competency to sign his or her a bond has died, the surviving coowner
name to the request and to understand will be recognized as its sole and abso-
the nature of the transaction. lute owner, and payment or reissue will
(b) A bond on which a minor is named be made as though the bond were reg-
as beneficiary or coowner may be re- istered in the name of the survivor
issued in the name of a custodian for alone. Any request for reissue by the
the minor under a statute authorizing surviving coowner must be supported
gifts to minors upon the request of the by proof of death of the other coowner.
adult whose name appears on the bond (2) Both coowners deceased. If both co-
as owner or coowner. owners named on a bond have died, the
211
§ 315.71 31 CFR Ch. II (7–1–11 Edition)
bond becomes the property of the estate is required. Letters of appoint-
tate of the coowner who died last, and ment must be dated not more than one
payment or reissue will be made as if year prior to the date of submission of
the bond were registered in the name of the letters of appointment.
the last deceased coowner alone. Proof (b) Estate has been settled previously. If
of death of both coowners will be re- the estate has been settled previously
quired to establish the order of death. through judicial proceedings, the per-
(3) Simultaneous death of both co- sons entitled may request payment or
owners. If both coowners die under con- reissue of the savings bonds. A certified
ditions where it cannot be established, copy of the court-approved final ac-
either by presumption of law or other- counting for the estate, the court’s de-
wise, which coowner died first, the cree of distribution, or other appro-
bond becomes the property of both priate evidence is required.
equally, and payment or reissue will be (c) Special provisions under the law of
made accordingly. the jurisdiction of the decedent’s domicile.
(c) Beneficiary bond—(1) Owner de- If there is no formal or regular admin-
ceased. If the owner of a bond registration and no representative of the
istered in beneficiary form has died and estate is to be appointed, the person
is survived by the beneficiary, upon appointed to receive or distribute the
proof of death of the owner, the bene- assets of a decedent’s estate without
ficiary will be recognized as the sole regular administration under summary
and absolute owner of the bond. Pay- or small estates procedures under ap-
ment or reissue will be made as though plicable local law may request pay-
the bond were registered in the sur-
ment or reissue of savings bonds. Ap-
vivor’s name alone. A request for pay-
propriate evidence is required.
ment or reissue by the beneficiary
(d) When administration is required. If
must be supported by proof of death of
the owner. the total redemption value of the
(2) Beneficiary deceased. If the bene- Treasury securities and undelivered
ficiary’s death occurs before, or simul- payments, if any, held directly on our
taneous with, that of the registered records that are the property of the de-
owner, payment or reissue will be made cedent’s estate is greater than $100,000,
as though the bond were registered in administration of the decedent’s estate
the owner’s name alone. Proof of death will be required. The redemption value
of the owner and beneficiary is re- of savings bonds and the principal
quired to establish the order of death. amount of marketable securities will
(d) Nonresident aliens. If the person be used to determine the value of secu-
who becomes entitled to a bond be- rities, and will be determined as of the
cause of the death of an owner is an date of death. Administration may also
alien who is a resident of an area with be required at the discretion of the De-
respect to which the Department of the partment for any case.
Treasury restricts or regulates the de- (e) Voluntary representative for small
livery of checks drawn against funds of estates that are not being otherwise ad-
the United States or its agencies or in- ministered—(1) General. A voluntary
strumentalities, delivery of the re- representative is a person qualified ac-
demption check will not be made so cording to paragraph (e)(3) of this sec-
long as the restriction applies. See De- tion, to redeem or to distribute a dece-
partment of the Treasury Circular No. dent’s savings bonds. The voluntary
655, current revision (31 CFR part 211). representative procedures are for the
convenience of the Department; enti-
§ 315.71 Decedent’s estate. tlement to the decedent’s savings
(a) Estate is being administered. (1) A bonds and held payments, if any, is de-
legal representative of a deceased own- termined by the law of the jurisdiction
er’s estate may request payment of in which the decedent was domiciled at
savings bonds to the estate, or may dis- the date of death. Voluntary represent-
tribute the savings bonds to the per- ative procedures may be used only if:
sons entitled. (i) There has been no administration,
(2) Appropriate proof of appointment no administration is contemplated, and
for the legal representative of the es- no summary or small estate procedures
212
under applicable local law have been States is released to the same extent as
used; if it had paid or delivered to a rep-
(ii) The total redemption value of the resentative of the estate appointed pur-
Treasury securities and held payments, suant to the law of the jurisdiction in
if any, held directly on our records which the decedent was domiciled at
that are the property of the decedent’s the date of death. The voluntary rep-
estate is $100,000 or less as of the date resentative shall indemnify and hold
of death; and harmless the United States and all
(iii) There is a person eligible to creditors and persons entitled to the
serve as the voluntary representative estate of the decedent. The amount of
according to paragraph (e)(3) of this the indemnification is limited to an
section. amount no greater than the value re-
(2) Authority of voluntary representa- ceived by the voluntary representative.
tive. A voluntary representative may: (f) Creditor. If there has been no ad-
(i) Redeem the decedent’s savings ministration, no administration is con-
bonds on behalf of the persons entitled templated, no summary or small estate
by the law of the jurisdiction in which procedures under applicable local law
the decedent was domiciled at the date have been used, and there is no person
of death; eligible to serve as a voluntary rep-
(ii) Distribute the decedent’s savings resentative pursuant to paragraph (e)
bonds to the persons entitled by the of this section, then a creditor may
law of the jurisdiction in which the de- make a claim for payment for the
cedent was domiciled at the date of amount of the debt, providing the debt
death. has not been barred by applicable local
(3) Order of precedence for voluntary law.
representative. An individual eighteen
[70 FR 57430, Sept. 30, 2005]
years of age or older may act as a vol-
untary representative according to the § 315.72 [Reserved]
following order of precedence: A sur-
viving spouse; if there is no surviving
spouse, then a child of the decedent; if Subpart M—Fiduciaries
there are none of the above, then a de-
scendant of a deceased child of the de- § 315.75 Payment or reissue during the
existence of the fiduciary estate.
cedent; if there are none of the above,
then a parent of the decedent; if there (a) Payment or reissue before matu-
are none of the above, then a brother rity—(1) Request from the fiduciary
or sister of the decedent; if there are named in the registration. A request for
none of the above, then a descendant of reissue or payment prior to maturity
a deceased brother or sister of the dece- must be signed by all of the fiduciaries
dent; if there are none of the above, unless by statute, decree of court, or
then a next of kin of the decedent, as the terms of the governing instrument,
determined by the law of the jurisdic- any lesser number may properly exe-
tion in which the decedent was domi- cute the request. If the fiduciaries
ciled at the date of death. As used in named in the registration are still act-
this order of precedence, child means a ing, no further evidence will be re-
natural or adopted child of the dece- quired. In other cases, evidence to sup-
dent. port the request will be required, as
(4) Liability. By serving, the vol- specified:
untary representative warrants that (i) Fiduciaries by title only. If the bond
the distribution of payments or savings is registered only in the titles, without
bonds is to the persons entitled by the the names, of fiduciaries not acting as
law of the jurisdiction in which the de- a board, satisfactory evidence of their
cedent was domiciled at the date of incumbency must be furnished, except
death. The United States is not liable in the case of bonds registered in the
to any person for the improper dis- title of public officers as trustees.
tribution of payments or savings (ii) Boards, committees, commissions,
bonds. Upon payment or distribution of etc. If a bond is registered in the name
the savings bonds at the request of the of a governing body which is empow-
voluntary representative, the United ered to act as a unit, and which holds
213
§ 315.76 31 CFR Ch. II (7–1–11 Edition)
title to the property of a religious, edu- § 315.77 Exchanges by fiduciaries.

cational, charitable or nonprofit orga- Fiduciaries are authorized to request
nization or a public corporation, the an exchange of bonds of one series for
request should be signed in the name of those of another, pursuant to any ap-
the body by an authorized person. Ordi- plicable Department of the Treasury
narily, a signed and certified request offering. A living coowner or bene-
will be accepted without further evi- ficiary named on the bonds submitted
dence. in exchange may be retained in the
(iii) Corporate fiduciaries. If a bond is same capacity on the new bonds.
registered in the name of a public or
private corporation or a governmental
body as fiduciary, the request must be
Subpart N—Private Organizations
signed by an authorized officer in the (Corporations, Associations,
name of the organization as fiduciary. Partnerships, etc.) and Gov-
Ordinarily, a signed and certified re- ernmental Agencies, Units
quest will be accepted without further and Officers
evidence.
§ 315.80 Payment to corporations or
(2) Trustee of a common trust fund. A unincorporated associations.
bond held by a financial institution in
a fiduciary capacity may be reissued in A bond registered in the name of a
the name of the institution as trustee private corporation or an unincor-
of its common trust fund to the extent porated association will be paid to the
that participation in the common trust corporation or unincorporated associa-
fund is authorized by law or regulation. tion upon a request for payment on its
The request for reissue should be exe- behalf by an authorized officer. The
cuted by the institution and any co- signature to the request should be in
fiduciary. the form, for example, ‘‘The Jones Coal
(3) Successor fiduciary. If the fiduciary Company, a corporation, by John
in whose name the bond is registered Jones, President’’, or ‘‘The Lotus Club,
has been replaced by another fiduciary, an unincorporated association, by Wil-
liam A. Smith, Treasurer’’. A request
satisfactory evidence of successorship
for payment so signed and certified will
must be furnished.
ordinarily be accepted without further
(b) Payment at or after final maturity. evidence of the officer’s authority.
At or after final maturity, a request
for payment signed by any one or more § 315.81 Payment to partnerships.
of the fiduciaries will be accepted. Pay-
A bond registered in the name of an
ment will be made by check drawn as
existing partnership will be paid upon a
the bond is registered.
request for payment signed by a gen-
§ 315.76 Payment or reissue after ter- eral partner. The signature to the re-
mination of the fiduciary estate. quest should be in the form, for exam-
ple, ‘‘Smith and Jones, a partnership,
A bond registered in the name or by John Jones, a general partner’’. A
title of a fiduciary may be paid or re- request for payment so signed and cer-
issued to the person who has become tified will ordinarily be accepted as
entitled by reason of the termination sufficient evidence that the partner-
of a fiduciary estate. Requests for re- ship is still in existence and that the
issue made by a fiduciary pursuant to person signing the request is author-
the termination of a fiduciary estate ized.
should be made on the appropriate
form. Requests for payment or reissue § 315.82 Reissue or payment to succes-
by other than the fiduciary must be ac- sors of corporations, unincor-
companied by evidence to show that porated associations, or partner-
the person has become entitled in ac- ships.
cordance with applicable State law or A bond registered in the name of a
otherwise. When two or more persons private corporation, an unincorporated
have become entitled, the request for associations, or a partnership which
payment or reissue must be signed by has been succeeded by another corpora-
each of them. tion, unincorporated association, or
214
partnership by operation of law or oth- provided for. The appropriate form

erwise, in any manner whereby the should be used.
business or activities of the original or-
ganization are continued without sub- § 315.84 Payment to certain institu-
stantial change, will be paid to or re- tions.
issued in the name of the succeeding A bond registered in the name of a
organization upon appropriate request church, hospital, home, school, or simi-
on its behalf, supported by satisfactory lar institution, without reference in
evidence of successorship. The appro- the registration to the manner in
priate form should be used. which it is organized or governed or to
the manner in which title to its prop-
§ 315.83 Reissue or payment on dis- erty is held, will be paid upon a request
solution of corporation or partner- for payment signed on behalf of such
ship. institution by an authorized represent-
(a) Corporations. A bond registered in ative. A request for payment signed by
the name of a private corporation a pastor of a church, superintendent of
which is in the process of dissolution a hospital, president of a college, or by
will be paid to the authorized rep- any official generally recognized as
resentative of the corporation upon a having authority to conduct the finan-
request for payment, supported by sat- cial affairs of the particular institution
isfactory evidence of the representa- will ordinarily be accepted without fur-
tive’s authority. At the termination of ther proof of authority. The signature
dissolution proceedings, the bond may to the request should be in the form,
be reissued upon the request of the au- for example, ‘‘Shriners’ Hospital for
thorized representative in the names of Crippled Children, St. Louis, MO, by
those persons, other than creditors, en- William A. Smith, Superintendent’’, or
titled to the assets of the corporation, ‘‘St. Mary’s Roman Catholic Church,
to the extent of their respective inter- Albany, NY, by the Rev. John Smyth,
ests. Proof will be required that all Pastor’’.
statutory provisions governing the dis- § 315.85 Reissue in name of trustee or
solution of the corporation have been agent for reinvestment purposes.
complied with and that the persons in
whose names reissue is requested are A bond registered in the name of a
entitled and have agreed to the reissue. religious, educational, charitable or
If the dissolution proceedings are under nonprofit organization, whether or not
the direction of a court, a certified incorporated, may be reissued in the
copy of an order of the court, showing name of a financial institution, or an
the authority of the representative to individual, as trustee or agent. There
make the distribution requested must must be an agreement between the or-
be furnished. ganization and the trustee or agent
holding funds of the organization, in
(b) Partnerships. A bond registered in
whole or in part, for the purpose of in-
the name of a partnership which has
vesting and reinvesting the principal
been dissolved by death or withdrawal
and paying the income to the organiza-
of a partner, or in any other manner—
tion. Reissue should be requested on
(1) Will be paid upon a request for behalf of the organization by an au-
payment by any partner or partners thorized officer using the appropriate
authorized by law to act on behalf of form.
the dissolved partnership, or
(2) Will be paid to or reissued in the § 315.86 Reissue upon termination of
names of the persons entitled as the reinvestment agency.
sult of such dissolution to the extent of A bond registered in the name of a fi-
their respective interests, except that nancial institution, or individual, as
reissue will not be made in the names agent for investment purposes only,
of creditors. under an agreement with a religious,
The request must be supported by sat- an educational, a charitable, or a non-
isfactory evidence of entitlement, in- profit organization, may be reissued in
cluding proof that the debts of the the name of the organization upon ter-
partnership have been paid or properly mination of the agency. The former
215
§ 315.87 31 CFR Ch. II (7–1–11 Edition)
agent should request such reissue and (a) Such additional evidence as he
should certify that the organization is may consider necessary or advisable, or
entitled by reason of the termination (b) A bond of indemnity, with or
of the agency. If such request and cer- without surety, in any case in which he
tification are not obtainable, the bond may consider such a bond necessary for
will be reissued in the name of the or- the protection of the interests of the
ganization upon its own request, sup- United States.
ported by satisfactory evidence of the
termination of the agency. The appro- § 315.92 Preservation of rights.
priate form should be used. Nothing contained in these regula-
tions shall be construed to limit or re-
§ 315.87 Payment to governmental strict existing rights which holders of
agencies, units, or their officers.
savings bonds previously issued may
(a) Agencies and units. A bond reg- have acquired under circulars offering
istered in the name of a State, county, the bonds for sale or under the regula-
city, town, village, or in the name of a tions in force at the time of the pur-
Federal, State, or local governmental chase.
agency, such as a board, commission,
or corporation, will be paid upon a re- § 315.93 Supplements, amendments, or
quest signed in the name of the govern- revisions.
mental agency or unit by an authorized The Secretary of the Treasury may
officer. A request for payment so at any time, or from time to time, pre-
signed and certified will ordinarily be scribe additional, supplemental,
accepted without further proof of the amendatory, or revised rules and regu-
officer’s authority. lations governing the United States
(b) Officers. A bond registered in the Savings Bonds and Savings Notes to
official title of an officer of a govern- which this circular applies.
mental agency or unit will be paid
upon a request for payment signed by
the officer. The request for payment so
PART 316—OFFERING OF UNITED
signed and certified will ordinarily be STATES SAVINGS BONDS, SERIES E
accepted as proof that the person sign-
Sec.
ing is the incumbent of the office.
316.1 Offering of bonds.
316.2 Description of bonds.
Subpart O—Miscellaneous 316.3 Governing regulations.
Provisions 316.4 Registration.
316.5 Limitation on holdings.
§ 315.90 Waiver of regulations. 316.6 Purchase of bonds.
316.7 Delivery of bonds.
The Commissioner of the Public 316.8 Extended terms and yields for out-
Debt, as designee of the Secretary of standing bonds.
the Treasury, may waive or modify any 316.9 Taxation.
provision or provisions of these regula- 316.10 Payment or redemption.
tions. He may do so in any particular 316.11 Reservation as to issue of bonds.
316.12 Fiscal agents.
case or class of cases for the conven- 316.13 Reservation as to terms of offer.
ience of the United States or in order
to relieve any person or persons of un- AUTHORITY: 31 U.S.C. 3105 and 5 U.S.C. 301.
necessary hardship: SOURCE: 57 FR 14276, Apr. 17, 1992, unless
(a) If such action would not be incon- otherwise noted.
sistent with law or equity, (b) if it does
not impair any existing rights, and (c) § 316.1 Offering of bonds.
if he is satisfied that such action would The Secretary of the Treasury of-
not subject the United States to any fered for sale to the people of the
substantial expense or liability. United States, United States Savings
Bonds of Series E, hereinafter gen-
§ 315.91 Additional requirements; bond erally referred to as ‘‘Series E bonds’’
of indemnity. or ‘‘bonds’’.
The Commissioner of the Public This offer was terminated as of De-
Debt, as designee of the Secretary of cember 31, 1979, except that, as to
the Treasury, may require bonds purchased under payroll savings
216
plans and employee plans, the offer was of any extended maturity period (see
terminated as of June 30, 1980. paragraph (a) of § 316.8). The bond may
be redeemed at the owner’s option at
§ 316.2 Description of bonds. any time at fixed redemption values.
(a) General. Definitive (paper) Series (e) Investment yield (interest). The in-
E bonds bear a facsimile of the signa- vestment yield (interest) on Series E
ture of the Secretary of the Treasury bonds is defined in paragraphs (c) and
and of the Seal of the Department of (d) of § 316.8. Beginning in the third
the Treasury. They were issued only in month from its issue date, a bond in-
registered form and are nontransfer- creased in redemption value on the
able. first day of each month, up to and in-
(b) Denominations and prices. Series E cluding the thirtieth month from issue
bonds were issued on a discount basis. date, so as to provide for such period
The denominations and issue prices an investment yield of no less than 4
were: percent per annum, compounded semi-
annually. Thereafter, its redemption
Issue
Denomination value increases at the beginning of
price
each successive half-year period. The
$25 .......................................................... $18.75
50 ............................................................ 37.50 interest is paid as part of the redemp-
75 ............................................................ 56.25 tion value.
100 .......................................................... 75.00
200 .......................................................... 150.00 [57 FR 14276, Apr. 17, 1992, as amended at 70
500 .......................................................... 375.00 FR 14941, Mar. 23, 2005]
1,000 ........................................................ 750.00
10,000 ...................................................... 7,500.00 § 316.3 Governing regulations.
1
100,000 ................................................... 75,000.00
1 The $100,000 denomination was available only for (a) The regulations in 31 CFR part 315
purchase by trustees of employee savings and sav- apply to definitive Series E bonds that
ings and vacation plans (see paragraph (b) of § 316.5).
have not been converted to book-entry
(c) Inscription and issue. At the time bonds.
of issue, the issuing agent: (b) The regulations in 31 CFR part 363
(1) Inscribed on the face of each bond apply to definitive Series E bonds that
the name, social security number and have been converted to book-entry
address of the owner, and the name of bonds through New Treasury Direct.
the beneficiary, if any, or the name, so-
cial security number and address of the [70 FR 14941, Mar. 23, 2005]
first-named coowner and the name of
§ 316.4 Registration.
the other coowner (the inscription of
the social security number was re- Series E bonds were permitted to be
quired for bonds issued on or after Jan- registered as set forth in subpart B of
uary 1, 1974); 31 CFR part 315, also published as De-
(2) Entered the issue date in the partment of the Treasury Circular No.
upper right-hand portion of the bond; 530, current revision.
and
(3) Imprinted the agent’s validation § 316.5 Limitation on holdings.
indicia in the lower right-hand portion (a) General limitation. The amount of
to show the date the bond was actually Series E bonds, originally issued during
inscribed. A bond was valid only if an any one calendar year, that could be
authorized issuing agent received pay- held by any one person, computed in
ment therefor and duly inscribed, dated accordance with the governing regula-
and imprinted validation indicia on the tions, ranged from $5,000 (face amount)
bond. to $20,000 (face amount), depending
(d) Term. A Series E bond was dated upon the issue date.
as of the first day of the month in (b) Special limitation for employee sav-
which payment of the purchase price ings plans. A special limitation for em-
was received by an agent authorized to ployee savings plans was provided,
issue the bonds. This date is the issue which was $2,000 (face amount) multi-
date. The bonds mature as shown in plied by the highest number of partici-
§ 316.8. The bond may not be called for pants in any employee savings plan, as
redemption by the Secretary of the defined in paragraph (b)(1) of this sec-
Treasury prior to maturity or the end tion, at any time during the year in
217
§ 316.5 31 CFR Ch. II (7–1–11 Edition)
which the bonds were issued. The plan ployer’s contribution did not vest abso-
had to be established, as set forth lutely until the employee had made
below. contributions under the plan in each of
(1) Definition of plan and conditions of not more than 60 calendar months suc-
eligibility. (i) The employee savings ceeding the month for which the em-
plan must have been established by the ployer’s contribution was made.
employer for the exclusive and irrev- (v) Upon the death of an employee,
ocable benefit of employees or their his or her beneficiary has the absolute
beneficiaries, afforded employees the and unconditional right to demand and
means of making regular savings from receive from the trustee all assets
their wages through payroll deduction, credited to the account of the em-
and provided for employer contribu- ployee, or the value thereof, if he or
tions to be added to such savings. she so prefers.
(ii) The entire assets thereof must (vi) When settlement is made with an
have been credited to the individual ac- employee, or his or her beneficiary,
counts of participating employees and with respect to any bond registered in
the assets so credited could be distrib- the name and title of the trustee in
uted only to the employees or their which the employee has a share (see
beneficiaries, except as otherwise pro- paragraphs (b)(1) (ii) and (iii) of this
vided herein. section), the bond must be submitted
(iii) Series E bonds were to be pur- for redemption or reissue to the extent
chased only with assets credited to the of such share. If an employee or his or
accounts of participating employees her beneficiary is to receive distribu-
and only if the amount taken from any tion in kind, bonds bearing the same
account at any time for that purpose issue dates as those credited to the em-
was equal to the purchase price of a ployee’s account will be reissued in the
bond or bonds in an authorized denomi- name of the distributee to the extent
nation or denominations, and shares to which he or she is entitled, in any
therein were credited to the accounts authorized form of registration, upon
of the individuals from whom the pur- the request and certification of the
chase price thereof was derived, in trustee, in accordance with the gov-
amounts corresponding with such erning reguations.
shares. For example, if $37.50 credited (2) Definitions of terms used in para-
to the account of John Jones was com- graph (b)—related provisions. (i) The
mingled with funds credited to the ac- term savings plan includes any regula-
counts of other employees to make a tions issued under the plan with regard
total of $7,500, with which a Series E to Series E bonds. A trustee desiring to
bond in the denomination of $10,000 purchase bonds in excess of the general
(face amount) was purchased in Decem- limitation in any calendar year should
ber 1978 and registered in the name and have submitted to the Federal Reserve
title of the trustee, the plan must have Bank of the district a copy of the plan,
provided, in effect, that John Jones’ any such regulations, and the trust
account would be credited to show that agreement, all certified to be true cop-
he was the owner of a Series E bond in ies, in order to establish eligibility.
the denomination of $50 (face amount) (ii) The term assets means all funds,
bearing the issue date of December 1, including the employee contributions
1978. and employer contributions and assets
(iv) Each participating employee has purchased therewith, as well as accre-
an irrevocable right at any time to de- tions thereto, such as dividends on
mand and receive from the trustee all stock, the increment in value on bonds
assets credited to his or her account or and all other income; but, notwith-
the value thereof, if he or she so pre- standing any other provision of this
fers, without regard to any condition paragraph, the right to demand and re-
other than the loss or suspension of the ceive all assets credited to the account
privilege of participating further in the of an employee shall not be construed
plan. However, a plan was not deemed to require the distribution of assets in
to be inconsistent herewith if it lim- kind when it would not be possible or
ited or modified the exercise of any practicable to make such distribution;
such right by providing that the em- for example, Series E bonds may not be
218
reissued in unauthorized denomina- (c) Savings stamps. The sale of United

tions, and fractional shares of stock States Savings Stamps was terminated
are not readily distributable in kind. effective June 30, 1970. However, out-
(iii) The term beneficiary means the standing stamps affixed in fully or par-
person or persons, if any, designated by tially completed albums could be used
the employee in accordance with the to purchase Series E bonds at banks or
terms of the plan to receive the bene- other financial institutions authorized
fits of the trust upon his or her death, to issue such bonds. Stamps may be re-
or the estate of the employee, and the deemed at banks and other financial
term distributee means the employee, or institutions, through designated Fed-
his or her beneficiary. eral Reserve Banks and the Bureau of
the Public Debt, Parkersburg, West
§ 316.6 Purchase of bonds. Virginia.
Series E bonds were purchased, as [57 FR 14276, Apr. 17, 1992, as amended at 59
follows: FR 10535, Mar. 4, 1994]
(a) Over-the-counter for cash—(1)
Bonds registered in names of natural per- § 316.7 Delivery of bonds.
sons in their own right only. At such in-
Issuing agents were authorized to de-
corporated banks, trust companies, and
liver Series E bonds either over-the-
other agencies as had been duly quali-
counter in person, or by mail at the
fied as issuing agents.
risk and expense of the United States,
(2) Bonds registered in names of trustees
to the address given by the purchaser,
of employee savings plans. At such incor-
but only within the United States, its
porated bank, trust company, or other
agency, duly qualified as an issuing territories and possessions, and the
agent, provided the agent was trustee Commonwealth of Puerto Rico. No
of an approved employee savings plan mail deliveries elsewhere were made. If
eligible for the special limitation in purchased by citizens of the United
paragraph (b) of § 316.5 and prior ap- States temporarily residing abroad, the
proval to issue the bonds was obtained bonds were delivered to such address in
from the Federal Reserve Bank of the the United States as the purchaser di-
agent’s district. rected.
(3) Bonds registered in all authorized § 316.8 Extended terms and yields for
forms. At Federal Reserve Banks and outstanding bonds.
Branches and at the Department of the
Treasury, Washington, DC 20226. (a) General. The terms extended matu-
(b) On mail order. By mail upon appli- rity period, second extended maturity pe-
cation to any Federal Reserve Bank or riod, third extended maturity period and
Branch or to the Department of the fourth extended maturity period, when
Treasury, accompanied by a remit- used herein, refer to periods of 10 years
tance to cover the issue price. Any or less after the original maturity
form of exchange, including personal dates during which owners may retain
checks, was accepted, subject to collec- their bonds and continue to earn inter-
tion. Checks or other forms of ex- est. No special action is required to
change were to be drawn to the order of take advantage of any extensions here-
the Federal Reserve Bank or the tofore or herein granted. Series E
United States Treasury, as the case bonds cease to accrue interest upon
may be. Checks payable by endorse- reaching final maturity.
ment were not acceptable. Any deposi- (b) Extended maturity periods—(1)
tary qualified pursuant to the provi- Bonds issued from May 1, 1941 through
sions of 31 CFR part 203, also published April 1, 1952. Series E bonds with issue
as Department of the Treasury Cir- dates of May 1, 1941, through April 1,
cular No. 92, current revision, was per- 1952, reached or will reach final matu-
mitted to make payment by credit for rity 40 years after their respective
bonds applied for on behalf of its cus- issue dates, as shown below.
tomers up to any amount for which it Issue dates—1st day Life of Final maturity dates—
was qualified in excess of existing de- of bonds yrs. 1st day of
posits, when so notified by the Federal
May 1941–Apr. 1952 .. 40 May 1981–Apr. 1992.
Reserve Bank of its district.
219
§ 316.8 31 CFR Ch. II (7–1–11 Edition)
(2) Bonds issued from May 1, 1952 Issue dates—1st day of Final maturity dates—1st day
through November 1, 1965. Bonds with of
issue dates of May 1, 1952, through No- Dec. 1965–May 1969 ............ Dec. 1995–May 1999.
vember 1, 1965, will receive an addi- Jun. 1969–Nov. 1973 ............ Jun. 1999–Nov. 2003.
tional extension of maturity ranging Dec. 1973–Jun. 1980 ............ Dec. 2003–Jun. 2010.
from 4 months to 2 years and 3 months,
as shown below, so that these bonds (c) Guaranteed minimum investment
will reach final maturity 40 years after yield—(1) General. Except as provided in
their respective issue dates. paragraph (c)(2) of this section, the
guaranteed minimum investment
Previous matu-
Issue dates—lst day rities Previous maturity yields for outstanding Series E bonds
of dates—1st day of are as follows:
yrs. mos.
(i) For Series E bonds that were in
May 1952–Jan. 1957 39 8 Jan. 1992–Sept. original or extended maturity periods
1996.
Feb. 1957–May 38 11 Jan. 1996–Apr.
prior to November 1, 1982, the guaran-
1959. 1998. teed minimum investment yield was 8.5
Jun. 1959–Nov. 37 9 Mar. 1997–Aug. percent per annum, compounded semi-
1965. 2003. annually, effective for the period from
the first semiannual interest accrual
Additional ex- date on or after May 1, 1981, through
tended matu- Life of
Issue dates—1st day of rity period bonds— the end of such periods, unless the
yrs. bonds reached final maturity before
yrs. mos.
November 1, 1981. 3 For bonds that en-
May 1952–Jan. 1957 ............... .......... 4 40 tered extensions, see paragraphs
Feb. 1957–May 1959 .............. 1 1 40
Jun. 1959–Nov. 1965 .............. 2 3 40.
(c)(1)(ii) through (c)(1)(iv) of this sec-
tion.
Final maturity dates—1st day
(ii) For Series E bonds that entered
Issue dates—1st day of extended maturity periods during the
of
period of November 1, 1982, through Oc-
May 1952–Jan. 1957 ............. May 1992–Jan. 1997.
Feb. 1957–May 1959 ............ Feb. 1997–May 1999. tober 1, 1986, the guaranteed minimum
Jun. 1959–Nov. 1965 ............ June. 1999–Nov. 2005. yield was or is 7.5 percent per annum,
compounded semiannually, for such pe-
(3) Bonds issued from December 1, 1965 riods, including bonds that entered
through June 1, 1980. Bonds with issue into an extended maturity period, as
dates of December 1, 1965, through June shown below:
1, 1980, will receive an additional exten-
sion of maturity ranging from 3 years Issue dates—1st day Entered on 1st day
Extension
of— of—
to 5 years, as shown below, so that
these bonds will reach final maturity Mar. 1953–Nov. 1957 3rd ............... Nov. 1982–Oct. 1986.
30 years after their respective issue Feb. 1965–Dec. 1970 2nd .............. Nov. 1982–Oct. 1986.
dates. Nov. 1977–June 1980 1st ............... Nov. 1982–June
1985.
Previous matu-
Issue dates—1st day rities Previous maturity (iii) For Series E bonds that entered
of dates—1st day of
yrs. mos. into extended maturity periods during
the period of November 1, 1986, through
Dec. 1965–May 27 .......... Dec. 1992–May
1969. 1996.
February 1, 1993, the guaranteed min-
June. 1969–Nov. 25 10 Apr. 1995–Sept. imum yield was or is 6 percent per
1973. 1999. annum, compounded semiannually, for
Dec. 1973–Jun. 25 .......... Dec. 1998–Jun.
1980. 2005.
such periods, including bonds that en-
tered into an extended maturity pe-
riod, as shown below:
Additional ex-
tended matu- Life of
Issue dates—1st day of rity period bonds—
3 Series E bonds issued from May 1, 1941,
yrs.
yrs. mos. through October 1, 1941, had reached final
maturity May 1, 1981, through October 1,
Dec. 1965–May 1969 .............. 3 .......... 30
Jun. 1969–Nov. 1973 .............. 4 2 30
1981, before the 8.5 percent yield had become
Dec. 1973–Jun. 1980 .............. 5 .......... 30 effective.
4,5 [Reserved]
220
Issue dates—1st day Extension 4 Entered on 1st day 1982. The market-based variable invest-
of— of— ment yield shall be determined by the
May 1952–Aug. 4th (final) 5 ..... Jan. 1992–Apr. Secretary of the Treasury as follows:
1953. 1993. (1) For each 6-month period, starting
Dec. 1957–May 3rd ................. Nov. 1986–Feb. with the period beginning May 1, 1982,
1965. 1993.
Dec. 1965–Feb. 3rd (final) ....... Dec. 1992–Feb. the average market yield on out-
1966. 1993. standing marketable Treasury securi-
Jan. 1971–Feb. 1978 2nd ................. Nov. 1986–Feb. ties with a remaining term to maturity
1993.
of approximately 5 years during such
4 Interest for interest accrual periods of less than 6 months
is prorated.
period is determined. Such determina-
5 All Series E bonds issued between May 1, 1941 and April tion by the Secretary of the Treasury
1, 1953, have matured and are no longer earning interest. or his or her delegate shall be final and
(iv) For Series E bonds entering ex- conclusive.
tended maturity periods on or after (2) For bonds which entered an ex-
March 1, 1993, the guaranteed minimum tended maturity period prior to May 1,
yield is 4 percent per annum, com- 1989, the market-based variable invest-
pounded semiannually, or the guaran- ment yield from the first semiannual
teed minimum investment yield in ef- interest accrual date occurring on or
fect at the beginning of the period, in- after November 1, 1982 to each semi-
cluding bonds that enter extended ma- annual interest accrual date occurring
turity periods, as shown below: 6 on or after November 1, 1987, will be 85
percent, rounded to the nearest one-
Issue dates—1st Entered on 1st day
day of— Extension 7 of— fourth of one percent, of the arithmetic
average of the market yield averages,
Sep. 1953–May 4th (final) .......... May 1993–Feb. as determined in accordance with para-
1965. 2003.
Jun. 1965–Nov. 3rd .................... Mar. 1993–Aug. graph (d)(1) of this section, for the ap-
1965. 1993. propriate number of 6-month periods
Jun. 1965–Nov. 4th (final) .......... Mar. 2003–Aug. involved, starting with the period be-
1965. 2003.
Mar. 1966–Feb. 3rd (final) .......... Mar. 1993–Feb. ginning May 1, 1982.
1978. 2003. (3) For bonds which entered an ex-
Mar. 1978–Jun. 2nd .................... Mar. 1993–Jun. tended maturity period on or after May
1980. 1995
Mar. 1978–Jun. 3rd (final) .......... Mar. 2003–Jun.
1, 1989, the market-based variable in-
1980. 2005. vestment yield from the first semi-
7 See footnote 2 above.
annual interest accrual date occurring
on or after November 1, 1982 to each
(2) Eleven-year bonus. If a bond bear- semiannual interest accrual date oc-
ing an issue date of January 1, 1951, or curring on or after November 1, 1989,
thereafter, was held for the 11-year pe- will be 85 pecent, rounded to the near-
riod from the first semianual interest est one-hundredth of one percent, of
accrual period that began on or after the arithmetic average of the market
January 1, 1980, its guaranteed min- yield averages, as determined in ac-
imum investment yield for such period cordance with paragraph (d)(1) of this
was increased by one-half of one per- section, for the appropriate number of
cent per annum, compounded semi- 6-month periods involved, starting with
annually. the period beginning May 1, 1982.
(d) Market-based variable investment (e) Determination of redemption values
yield. In order to be eligible for the during any extended maturity period. The
market-based variable investment redemption value of a bond on a given
yield, Series E savings bonds had to be interest accrual date during any ex-
held at least five years beginning with tended maturity period will be the
the first semiannual interest accrual higher of the value produced by using
date occurring on or after November 1, the applicable guaranteed minimum in-
vestment yield or the value produced
6 Series E bonds with issue dates of July 1
by using the appropriate market-based
and August 1, 1953, entered a final maturity variable investment yield. The calcula-
period of 4 months on March 1, and April 1,
1993, respectively, and received a minimum tion of these values is described below:
investment yield of 6 percent per annum, (1) Guaranteed minimum investment
compounded semiannually, for that period. yield and resulting values during an ex-
7[Reserved] tended maturity period. A bond has a
221
§ 316.9 31 CFR Ch. II (7–1–11 Edition)
guaranteed minimum investment yield available prior to each of those dates

for each of its extended maturity peri- by the Bureau of the Public Debt, Par-
ods. The applicable guaranteed min- kersburg, West Virginia 26106–1328, ac-
imum investment yields for the cur- companied by tables of the redemption
rent extended maturity period and any values of bonds for the following 6
subsequent periods are specified in months, based on either the applicable
paragraph (c) of this section. In order market-based variable investment
to determine the value of a bond during yields or guaranteed minimum invest-
an extended maturity period, the value ment yields.
of the bond either at the end of the [57 FR 14276, Apr. 17, 1992, as amended at 58
next preceding maturity period or FR 60936, 60937, Nov. 18, 1993]
when the guaranteed minimum invest-
ment yield last increased, 8 whichever § 316.9 Taxation.
occurs later, is determined using the (a) General. For the purpose of deter-
applicable guaranteed minimum in- mining taxes and tax exemptions, the
vestment yield. This value is then used increment in value represented by the
as the base upon which interest accrues difference between the price paid for
during the extended maturity period at Series E bonds and the redemption
the guaranteed minimum investment value received therefor constitutes in-
yield in effect for savings bonds at the terest. Such interest is subject to all
beginning of that period. The resulting taxes imposed under the Internal Rev-
semiannual values are then compared enue Code of 1986, as amended. The
with the corresponding values deter- bonds are subject to estate, inherit-
mined by using the applicable market- ance, gift, or other excise taxes, wheth-
based variable investment yields. er Federal or State, but are exempt
(2) Market-based variable investment from all other taxation now or here-
yield and resulting values during an ex- after imposed on the principal or inter-
tended maturity period. The market- est thereof by any State, or any of the
based variable investment yield from possesions of the United States, or by
the first semiannual interest accrual any local taxing authority.
date occuring on or after November 1, (b) Federal income tax on bonds. An
1982 to each semiannual interest ac- owner of Series E bonds who is a cash-
crual date occurring on or after No- basis taxpayer may use either of the
vember 1, 1987, is determined as speci- following two methods of reporting the
fied in paragraph (d) of this section. increase in the redemption value of the
The value of a bond on its first bonds for Federal income tax purposes:
seimannual interest accrual date oc- (1) Defer reporting the increase to
curring on or after November 1, 1982 is the year of final maturity, actual re-
used as the base upon which interest
demption, or other disposition, which-
accrues during an extended maturity
ever is earlier; or
period at the applicable market-based
(2) Elect to report the increases each
variable investment yield. If redeemed,
year as they accrue, in which case the
the bond will receive the higher of the
election applies to all Series E bonds
two values produced by using the appli-
then owned and those subsequently ac-
cable guaranteed minimum investment
quired, as well as to any other similar
yield and the applicable market-based
obligations purchased on a discount
variable investment yield.
basis. If the method in paragraph (b)(1)
(f) Market-based variable investment
of this section is used, the taxpayer
yields and tables of redemption values.
The market-based variable investment may change to the method in para-
yields for bonds redeemed during each graph (b)(2) of this section without ob-
6-month period, beginning on May 1 taining permission from the Internal
and November 1 of each year, are made Revenue Service. However, once the
election to use the method in para-
8 The 11-year bonus was the last increase in
graph (b)(2) of this section is made, the
the guaranteed minimum investment yield
taxpayer may not change the method
(see paragraph (b)(2)). Series E bonds which of reporting without permission from
were eligible to receive this bonus received it the Internal Revenue Service. For fur-
on the first semiannual interest accrual date ther information on Federal income
occuring on or after January 1, 1991. taxes, the Service Center Director, or
222
District Director, Internal Revenue structions and identification guide-

Service, of the taxpayer’s district may lines, and signs and completes the re-
be contacted. quests for payment.
(2) A paying agent may (but is not re-
§ 316.10 Payment or redemption. quired to) pay a Series E bond, at cur-
(a) General. A Series E bond may be rent redemption value, upon the re-
redeemed in accordance with its terms quest of a legal representative des-
at the appropriate redemption value ignated in the bond’s registration by
shown in the applicable table described name and capacity, a court-appointed
in paragraph (f) of § 316.8. The redemp- legal representative of the last-de-
tion values of bonds in the denomina- ceased registrant’s estate, or a bene-
tion of $100,000 are not shown in the ta- ficiary, if he or she survives the owner,
bles. However, the redemption value of provided:
a bond in that denomination will be (i) The bond is in order for payment;
equal to ten times the redemption and
value of a $10,000 bond of the same (ii) The presenter establishes his or
issue date. A bond in a denomination her identity to the satisfaction of the
higher that $25 (face amount) may be agent, in accordance with Treasury in-
redeemed in part but only in the structions, indentification guidelines,
amount of an authorized denomination and otherwise complies with evi-
or multiple thereof. dentiary requirements.
(b) Federal Reserve Banks and [57 FR 14276, Apr. 17, 1992, as amended at 59
Branches and United States Treasury. FR 10535, Mar. 4, 1994]
Owners of Series E bonds may obtain
payment upon presentation and sur- § 316.11 Reservation as to issue of
render of the bonds to a Federal Re- bonds.
serve Bank or Branch referred to in The Secretary of the Treasury re-
§ 316.12 or to the Department of the served the right to reject any applica-
Treasury with the request for payment tion for purchase of Series E bonds, in
on the bonds duly executed and cer- whole or in part, and to refuse to issue,
tified in accordance with the governing or permit to be issued hereunder, any
regulations. such bonds in any case or any class or
(c) Incorporated banks, savings and classes of cases if such action was
loan associations and other financial in- deemed to be in the public interest.
stitutions. (1) A financial institution Any action in any such respect was
qualified as a paying agent under the final.
provisions of 31 CFR part 321, also pub-
lished as Department of the Treasury § 316.12 Fiscal agents.
Circular, Public Debt Series No. 750, as (a) Federal Reserve Banks and
revised, will pay the current redemp- Branches referred to below, as fiscal
tion value of a Series E bond presented agents of the United States, are au-
for payment by an individual whose thorized to perform such services as
name is inscribed on the bond as owner may be requested of them by the Sec-
or coowner, provided: retary of the Treasury in connection
(i) The bond is in order for payment; with the redemption and payment of
and Series E bonds.
(ii) The presenter establishes his or (b)(1) The following Federal Reserve
her identity to the satisfaction of the Offices have been designated to provide
agent, in accordance with Treasury in- savings bond services:
Reserve districts
served
Federal Reserve Bank, Buffalo New York, Boston CT, MA, ME, NH, NJ (northern half), NY (City & State), RI, VT,
14240.
PA 15230.
223
§ 316.13 31 CFR Ch. II (7–1–11 Edition)
Reserve districts
served
23261.
GU.
(2) Until March 1, 1996, other Federal § 317.1 Definitions.

Reserve Offices may continue to pro- (a) Bond(s) means Series EE United
vide some savings bond services, such States Savings Bonds and Series I
services will be phased out over the pe- United States Savings Bonds.
riod prior to that date. (b) Federal Reserve Bank refers to the
[59 FR 10535, Mar. 4, 1994] Federal Reserve Bank or Branch pro-
viding savings bond services to the dis-
§ 316.13 Reservation as to terms of trict in which the issuing agent or the
offer. applicant organization is located. See
The Secretary of the Treasury may § 317.9(a).
at any time, or from time to time, sup- (c) Issuing agent refers to an organiza-
plement or amend the terms of this of- tion that has been qualified by a des-
fering of bonds, or of any amendments ignated Federal Reserve Bank or the
or supplements thereto. Commissioner of the Bureau of the
Public Debt to sell savings bonds. An
PART 317—REGULATIONS GOV- issuing agent acts as an agent of the
purchaser in handling the remittance.
ERNING AGENCIES FOR ISSUE OF The definition encompasses:
UNITED STATES SAVINGS BONDS (1) Each organization that accepts
and processes purchase orders for bonds
Sec. sold over-the-counter, but does not in-
317.0 Purpose and effective date.
scribe bonds, and
317.1 Definitions.
317.2 Organizations authorized to act.
(2) Each organization that is author-
317.3 Procedure for qualifying and serving ized to inscribe bonds sold over-the-
as issuing agent. counter.
317.4 Issuing agents currently qualified. (d) Offering circular refers to Depart-
317.5 Termination of qualification. ment of the Treasury Circular, Public
317.6 Issuance of bonds. Debt Series No. 1–80, current revision,
317.7 Obtaining and accounting for bond for Series EE savings bonds, and to De-
stock. partment of the Treasury Circular,
317.8 Remittance of sales proceeds and reg-
Public Debt Series No. 1–98 for Series I
istration records.
317.9 Role of Federal Reserve Banks. savings bonds.
317.10 Reservation. (e) Organization means an entity, as
described in § 317.2, that may qualify as
AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 12
an issuing agent of bonds.
U.S.C. 1767; and 31 U.S.C. 3105.
SOURCE: 54 FR 40830, Oct. 3, 1989, unless [63 FR 64550, Nov. 20, 1998, as amended at 75
otherwise noted. FR 52460, Aug. 26, 2010]
§ 317.0 Purpose and effective date. § 317.2 Organizations authorized to

act.
The regulations in this part govern
The following organizations are eligi-
the manner in which an organization
ble to apply for qualification and to
may qualify and act as an agent for the
serve as savings bond issuing agents:
sale and issue of Series EE and Series (a) Banks, credit unions, trust com-
I United States Savings Bonds. panies and savings institutions, if they
[63 FR 38041, July 14, 1998] are chartered by or incorporated under
224
the laws of the United States, any applied for qualification as an issuing
State or Territory of the United agent. After receipt of a certificate of
States, the District of Columbia, or the qualification, an organization may per-
Commonwealth of Puerto Rico. form the functions of an issuing agent.
(b) Agencies of the United States and Under the terms of the application-
State and local governments. agreement, the proceeds of the sale of
(c) Other organizations specifically bonds are at all times the property of
and individually qualified by the Com- the United States for which the organi-
missioner of the Bureau of the Public zation shall be fully accountable.
Debt whenever the Commissioner
(c) Adverse action or change in quali-
deems such a qualification to be in the
public interest. In selecting an issuing fication. An organization will be noti-
agent, the Commissioner may use such fied by the designated Federal Reserve
process that the Commissioner deems Bank or the Bureau of the Public Debt
to be appropriate. The selected issuing if its application-agreement to act as
agent will be subject to such conditions issuing agent is not approved, or if,
that the Commissioner deems to be ap- after issuance, its certificate of quali-
propriate. fication is terminated.
[63 FR 64550, Nov. 20, 1998, as amended at 65 [54 FR 40830, Oct. 3, 1989, as amended at 59 FR
FR 2035, Jan. 13, 2000; 75 FR 52460, Aug. 26, 10535, 10536, Mar. 4, 1994; 63 FR 64550, Nov. 20,
2010] 1998; 75 FR 52460, Aug. 26, 2010]
§ 317.3 Procedure for qualifying and § 317.4 Issuing agents currently quali-
serving as issuing agent. fied.
(a) Execution of application agreement. Each organization, qualified as an
An organization seeking issuing agent issuing agent under a trust agreement
qualification generally shall obtain currently in effect, is authorized to
from and file with a designated Federal
continue to act in that capacity with-
Reserve Bank an application-agree-
out requalification. By so acting, it
ment form. However, if an organization
shall be subject to the terms and condi-
seeks qualification under § 317.2(c), it
shall make application directly to the tions of the previously executed appli-
Bureau of the Public Debt for approval cation-agreement and these regula-
by the Commissioner of the Bureau of tions in the same manner and to the
the Public Debt. An application-agree- same extent as though it had requali-
ment sent directly to the Bureau of the fied hereunder.
Public Debt shall be supplemented by
such other information as the Bureau § 317.5 Termination of qualification.
of the Public Debt may request. (a) By the United States. The Sec-
(1) The terms of each application retary of the Treasury or a delegate
agreement shall include the provisions may terminate the qualification of an
prescribed by section 202 of Executive issuing agent at any time, upon due no-
Order No. 11246, entitled ‘‘Equal Em- tice to the agent. If this action is
ployment Opportunity’’ (3 CFR, sub- taken, the agent will be required to
chapter B, 42 U.S.C. 2000e note). make a final accounting for the bal-
(2) The provisions of the Privacy Act ance of savings bond stock for which it
of 1974, as amended (5 U.S.C. 552a), and
is charged, based on the records of the
regulations issued pursuant thereto (31
designated Federal Reserve Bank. The
CFR part 1, subpart C).
(b) Certificate of qualification. Upon agent must surrender all unissued
approval of an application-agreement, bonds and remit the issue price of any
the designated Federal Reserve Bank remaining bonds included in its ac-
or the Bureau of the Public Debt will countability.
issue a certificate of qualification to (b) At request of issuing agent. A des-
the organization. Until the receipt of ignated Federal Reserve Bank will ter-
such a certificate, an organization minate the qualification of an issuing
shall not perform any act as an issuing agent upon its request, provided the
agent, or advertise in any manner that agent is in full compliance with the
it is authorized to so act or that it has
225
§ 317.6 31 CFR Ch. II (7–1–11 Edition)
terms of its agreement and the applica- § 317.7 Obtaining and accounting for
ble regulations and instructions, and bond stock.
renders a final accounting. An issuing agent that is authorized
[54 FR 40830, Oct. 3, 1989, as amended at 59 FR to inscribe bonds sold over-the-counter
10536, Mar. 4, 1994] may obtain bond stock from the des-
ignated Federal Reserve Bank. The
§ 317.6 Issuance of bonds. bond stock is, at all times, the prop-
erty of the United States. The organi-
(a) General. Each issuing agent shall
zation shall be fully accountable for
comply with all regulations and in-
the bond stock consigned to it in ac-
structions issued by the Department of
cordance with all regulations and in-
the Treasury directly, or through the
structions issued by the Department of
designated Federal Reserve Bank, con-
the Treasury.
cerning the sale, inscription, dating,
and validation of bonds; the accept- [54 FR 40830, Oct. 3, 1989, as amended at 59 FR
ance, processing, and transmittal of 10536, Mar. 4, 1994; 75 FR 52460, Aug. 26, 2010]
over-the-counter purchase orders; the
§ 317.8 Remittance of sales proceeds
remittance of sales proceeds; and the and registration records.
disposition of paper and electronic reg-
istration records. No issuing agent An issuing agent shall account for
shall have authority to sell bonds other and remit bond sales proceeds and reg-
than as provided in the offering cir- istration records promptly in accord-
cular. ance with regulations and instructions
issued by the Department of the Treas-
(b) Fees. Each issuing agent, other
ury, either directly or through the des-
than a Federal agency, will be paid
ignated Federal Reserve Banks. Failure
fees. Only issuing agents are eligible to to comply with these instructions may
collect fees. With prior approval, subject an agent to penalties, including
agents that are authorized to inscribe termination of its qualification as an
bonds and receive fee payments will issuing agent.
also be paid a bonus for presorting sav-
ings bond mailings. Schedules reflect- [54 FR 40830, Oct. 3, 1989, as amended at 59 FR
ing the amount of the fees and presort 10536, Mar. 4, 1994; 63 FR 38041, July 14, 1998;
63 FR 64550, Nov. 20, 1998; 75 FR 52460, Aug. 26,
bonuses, and the basis on which they 2010]
are computed and paid, will be pub-
lished separately in the FEDERAL REG- § 317.9 Role of Federal Reserve Banks.
ISTER.
(a) Role as fiscal agents. In their ca-
(c) No charge to customers. Any issuing pacity as fiscal agents of the United
agent that accepts fees from the De- States, the Federal Reserve Banks re-
partment of the Treasury for selling ferred to below are authorized to per-
savings bonds, and/or accepting over- form such duties, including the
the-counter purchase orders, shall not issuance of instructions and forms, as
make any charge to customers for the may be necessary to fulfill the pur-
same service. poses and requirements of these regula-
[54 FR 40830, Oct. 3, 1989, as amended at 55 FR tions.
39960, Oct. 1, 1990; 58 FR 63529, Dec. 2, 1993; 59 (b) The following Federal Reserve Of-
FR 10536, Mar. 4, 1994; 63 FR 64550, Nov. 20, fices have been designated to provide
1998] savings bond services:
Reserve districts
served
14240.
PA 15230.
P.O. Box 27622, Richmond, VA TN (eastern half), VA, WV, (except northern panhandle).
23261.
226
Reserve districts
served
Federal Reserve Bank of Min- Minneapolis, Chi- IA, IL (northern half), IN (northern half), MI, MN, MT, ND, SD, WI.
neapolis, 90 Hennepin Avenue, cago.
Minneapolis MN 55401.
GU.
(c) Specific activities of designated Fed- 321.7 Authorized cash payments.

eral Reserve Banks. The specific activi- 321.8 Redemption-exchange of Series E and
ties of designated Federal Reserve EE savings bonds and savings notes.
321.9 Specific limitations on payment au-
Banks include:
thority.
(1) Qualifying issuing agents; 321.10 Responsibilities of paying agents.
(2) Supplying agents with bond stock,
maintaining records of agent account- Subpart D—Payment and Transmittal of
ability, and monitoring compliance Securities
with stock consignment rules;
(3) Instructing agents regarding the 321.11 Payment.
sale and issue of bonds, the custody 321.12 Redemption value of securities.
321.13 Cancellation of redeemed securities.
and control of bond stock, and the ac- 321.14 Transmittal to and settlement by
counting for and remittance of sales Federal Reserve Bank.
proceeds; and
(4) Providing guidelines covering the Subpart E—Losses Resulting From Erroneous
amount of bond stock agents may ordi- Payments
narily requisition and maintain.
321.15 Liability for losses.
[54 FR 40830, Oct. 3, 1989, as amended at 59 FR 321.16 Report of erroneous payment.
10536, Mar. 4, 1994; 63 FR 38041, July 14, 1998] 321.17 Investigation of potential loss.
321.18 Determination of loss.
§ 317.10 Reservation. 321.19 Certification of signatures.
The Secretary of the Treasury may 321.20 Applicability of provisions.
at any time, or from time to time, sup- 321.21 Replacement and recovery of losses.
plement or amend the terms of these Subpart F—Forwarding Items
regulations.
321.22 Forwarding securities not payable by
PART 321—PAYMENTS BY BANKS an agent.
AND OTHER FINANCIAL INSTITU- Subpart G—Miscellaneous Provisions
TIONS OF UNITED STATES SAV-
INGS BONDS AND UNITED STATES 321.23 Paying agent fees and charges.
321.24 Claims on account of lost securities.
SAVINGS NOTES (FREEDOM 321.25 Role of Federal Reserve Banks.
SHARES) 321.26 Preservation of rights.
321.27 Supplements, amendments, or revi-
Subpart A—General Information sions.
APPENDIX TO PART 321—APPENDIX TO DEPART-
Sec. MENT OF THE TREASURY CIRCULAR NO. 750,
321.0 Purpose. FOURTH REVISION
321.1 Definitions.
AUTHORITY: 2 U.S.C. 901; 5 U.S.C. 301; 12
Subpart B—Procedures for Qualification U.S.C. 391; 31 U.S.C. 3105, 3126.
321.2 Eligible organizations. SOURCE: 53 FR 37511, Sept. 26, 1988, unless

321.3 Procedure for qualifying and serving otherwise noted.
as paying agent.
321.4 Paying agents previously qualified. Subpart A—General Information
321.5 Termination of qualification.
§ 321.0 Purpose.
Subpart C—Scope of Authority
These regulations govern the manner
321.6 General. in which financial institutions may
227
§ 321.1 31 CFR Ch. II (7–1–11 Edition)
qualify and act as paying agents for thorized to act for a decedent’s estate;
the redemption of: and the trustee of a personal trust es-
(a) United States Savings Bonds of tate.
Series A, B, C, D, E, EE, and I, and (h) Mixed cash letter refers to a bundle
United States Savings Notes (Freedom containing nonsegregated redeemed se-
Shares), presented for cash payment; curities, cash items, and other items
and submitted to a Federal Reserve Bank
(b) Eligible Series E and EE savings via the commercial check collection
bonds and savings notes presented for system.
redemption in exchange for Series HH (i) Paying agent or agent means:
savings bonds under the provisions of
(1) A financial institution that is
Department of the Treasury Circular,
qualified under the provisions of this
Public Debt Series No. 2–80 (31 CFR
part as originally issued, or any subse-
part 352).
quent revision, to make payment of se-
[53 FR 37511, Sept. 26, 1988, as amended at 63 curities, and includes branches located
FR 38042, July 14, 1998] within the United States, its terri-
tories and possessions, and the Com-
§ 321.1 Definitions.
monwealth of Puerto Rico; and
(a) ACH payment or ACH means an (2) Any banking facilities of such in-
Automated Clearing House method of stitutions establishing at military in-
transferring funds under the provisions stallations overseas, provided the offer-
of 31 CFR part 210. ing of such redemption services has
(b) Beneficiary means an individual been authorized by the Department of
whose name is inscribed on a security the Treasury.
as the person to whom it is payable in (j) Presenter means the individual re-
his or her right upon the prior death of questing the redemption or redemp-
the other individual designated thereon tion-exchange of securities.
as owner, shown commonly in the
(k) Presenting institution means the
form: ‘‘A P.O.D. [payable on death to]
organization from which the Federal
B.’’
Reserve Bank receives redeemed secu-
(c) Cash payment means payment in
rities to be processed via EZ CLEAR. If
currency, by check or by credit to a
a paying agent submits separately
checking, savings or share account.
(d) Central Site refers to the Federal sorted or mixed cash letters directly to
Reserve Bank of Cleveland, Pittsburgh the Bank, using its own ABA code, it is
Branch, EZ CLEAR Department. the presenting institution. If a cor-
(e) EZ CLEAR refers to the system by respondent financial institution sub-
which financial institutions present re- mits cash letters on behalf of another
deemed securities to a Federal Reserve institution using the correspondent’s
Bank through the commercial check ABA code, the correspondent is the
collection system in the same manner presenting institution.
as other cash items. (l) Redemption and payment are used
(f) Federal Reserve Bank or Branch re- interchangeably for payment of a secu-
fers to the Federal Reserve Bank to rity in accordance with the terms of its
which the agent is instructed to trans- offering and governing regulations, in-
mit redeemed securities; or to which cluding redemption-exchange.
the agent is instructed to forward secu- (m) Redemption-exchange means the
rities for payment or other trans- authorized redemption of eligible secu-
actions, and includes parent Banks, rities for the purpose of applying the
Branches and Regional Check Proc- proceeds in payment for other securi-
essing Centers, as appropriate. ties offered in exchange by the Treas-
(g) Legal Representative or representa- ury.
tive means the court-appointed (or oth- (n) Registrant means a person whose
erwise qualified) person, regardless of name is inscribed on a security as
title, who is legally authorized to act owner, coowner, or beneficiary.
for the estate of a minor, incompetent, (o) Security means a United States
aged person, absentee, et al., the court- Savings Bond of Series A, B, C, D, E,
appointed executor or administrator, EE, or I and/or a United States Savings
regardless of title, who is legally au- Note (Freedom Share).
228
(p) Separately sorted cash letter refers bond paying agents and enroll in EZ
to a bundle of redeemed securities that CLEAR.
have been segregated from all other [53 FR 37511, Sept. 26, 1988, as amended at 59
items prior to transmittal to a Federal FR 10536, Mar. 4, 1994]
Reserve Bank via EZ CLEAR.
(q) Taxpayer identifying number means § 321.3 Procedure for qualifying and
a social security account number or an serving as paying agent.
employer identification number. (a) Execution of application-agreement.
An eligible organization wishing to act
[53 FR 37511, Sept. 26, 1988; 53 FR 39581, Oct.
7, 1988, as amended at 55 FR 35395, Aug. 29, as a paying agent shall obtain from,
1990; 59 FR 10536, Mar. 4, 1994; 63 FR 38042, execute, and file an application-agree-
July 14, 1998] ment with the appropriate Federal Re-
serve Office referred to in § 321.25. The
terms of each application-agreement
Subpart B—Procedures for shall include a reference to the fol-
Qualification lowing provisions to which paying
agents are subject:
§ 321.2 Eligible organizations. (1) The provisions prescribed by sec-
(a) Organizations eligible to apply for tion 202 of Executive Order 11246, enti-
qualification and to serve as paying tled ‘‘Equal Employment Oppor-
agents are commercial banks, trust tunity’’, as amended (42 U.S.C. 2000e
companies, savings banks, savings and note); and
loan associations, building and loan as- (2) The provisions of the Privacy Act
sociations (including cooperative of 1974, as amended (5 U.S.C. 552a), and
banks), credit unions, cash deposi- regulations issued pursuant thereto (31
tories, industrial banks, or similar fi- CFR part 1, subpart C).
nancial institutions which: For the purpose of these regulations,
(1) Are incorporated under Federal eligible institutions in Puerto Rico and
law or the laws of a State, territory or the Virgin Islands shall make applica-
possession of the United States, the tion to the Federal Reserve Bank
District of Columbia, or the Common- Branch in Buffalo, New York and eligi-
wealth of Puerto Rico; ble institutions in Guam shall make
(2) In the usual course of business ac- application to the Federal Reserve
cept, subject to withdrawal, funds for Bank of Kansas City.
desposit or the purchase of shares; (b) Qualification. Each Federal Re-
(3) Are under the supervision of the serve Bank referred to in § 321.25, as fis-
banking department or equivalent au- cal agent of the United States, is au-
thority of the jurisdiction in which thorized to qualify any eligible organi-
they are incorporated; and zation, located in the Reserve Bank’s
geographical area, as shown in § 321.25,
(4) Maintain regular offices for the
which possesses adequate authority
transaction of business.
under its charter to act as paying
(b)(1) An organization that desires to agent. Upon approval of an application-
redeem securities must first qualify as agreement, the Bank will issue a cer-
a paying agent. An organization that tificate of qualification to the organi-
has qualified and is serving as a paying zation. Such a certificate automati-
agent must: cally qualifies the branches of the or-
(i) MICR-encode data on securities ganization to redeem securities as pro-
accepted for payment, vided in this part.
(ii) Submit them directly to the (c) Announcement of authority. Upon
Check Department of the appropriate receipt of a certificate of qualification
Federal Reserve Bank or Branch or the from a Federal Reserve Bank referred
Regional Check Processing Center, and to in § 321.25, a financial institution
(iii) Receive payment of fees by ACH, may announce or advertise its author-
or arrange to obtain one or more of ity to redeem eligible securities for
these services from another financial cash and to process eligible Series E
institution. and EE savings bonds and savings notes
(2) All presenting institutions, as de- presented for redemption in exchange
fined in § 321.1, must qualify as savings for Series HH savings bonds under the
229
§ 321.4 31 CFR Ch. II (7–1–11 Edition)
provisions of Department of the Treas- Subpart C—Scope of Authority

ury Circular, Public Debt Series No. 2–
80 (31 CFR part 352). § 321.6 General.
(d) Adverse action. An organization Securities are issued only in reg-
will be notified by the appropriate Fed- istered form (subject to 31 CFR 359.11),
eral Reserve Bank referred to in are not transferable, may not be hy-
§ 321.25, in writing, if its application- pothecated or used as collateral for a
agreement to act as paying agent is loan, and, except as otherwise specifi-
not approved. cally provided in the governing regula-
tions and this part, are payable to the
owner or coowner named on the secu-
FR 35395, Aug. 29, 1990; 59 FR 10537, Mar. 4,
1994; 63 FR 38042, July 14, 1998]
rity. The regulations governing Series
EE and HH bonds are contained in De-
§ 321.4 Paying agents previously quali- partment of the Treasury Circular,
fied. Public Debt Series No. 3–80, current re-
vision (31 CFR part 353); those gov-
Institutions qualified as paying erning Series I bonds are contained in
agents under previous revisions of this Department of the Treasury Circular,
part are authorized to continue to act Public Debt Series No. 2–98 (31 CFR
in that capacity without requalifica- part 360); and, those governing all
tion. By so acting, they shall be sub- other series of U.S. savings securities
ject to the terms and conditions of are contained in Department of the
their previously executed application- Treasury Circular No. 530, current revi-
agreements and these regulations in sion (31 CFR part 315).
the same manner and to the same ex-
[63 FR 38042, July 14, 1998]
tent as though they had requalified
hereunder. § 321.7 Authorized cash payments.
§ 321.5 Termination of qualification. (a) General. Subject to the terms and
conditions appearing on the securities,
(a) By the Treasury. The Secretary of the governing regulations, and the pro-
the Treasury, or a designee, may au- visions of this part, and any instruc-
thorize a Federal Reserve Bank re- tions issued in connection therewith,
ferred to in § 321.25 to terminate the an agent may make payment of savings
qualification of any paying agent at bonds of Series A, B, C, D, E, EE, and
any time, following prior written no- I, and savings notes, presented for cash
tice of such action to the agent. redemption. Except as provided in
(b) At request of paying agent. A Fed- paragraphs (b) through (d), and (f) of
eral Reserve Bank referred to in § 321.25 this section, the securities must be pre-
will terminate the qualification of a sented by an individual whose name is
paying agent upon its written request, inscribed on the securities as owner or
provided the agent renders a final ac- coowner, and who is known to the
counting for all redeemed securities agent, or who can establish his or her
and is found to have fully complied identity in accordance with Treasury
with the terms of its agreement and instructions and guidelines (See
§ 321.11(b)).
the applicable regulations and instruc-
(b) Change of name by marriage. If the
tions.
name of the presenter has been
(c) Reservation. Termination of the changed by marriage from that shown
qualification as paying agent of any in- on the security, and the agent knows
stitution shall not prejudice the right or establishes that the presenter and
of the Treasury to recover the amounts the person whose name appears on the
of any erroneous payment(s) made by security are one and the same indi-
the institution. vidual, the agent may pay the security
[53 FR 37511, Sept. 26, 1988, as amended at 59 in accordance with paragraph (a) of
FR 10537, Mar. 4, 1994] this section. The signature to the re-
quest for payment should show both
names, e.g., ‘‘Mary J. Smith, changed
by marriage from Mary T. Jones.’’
230
(c) Parent of a minor. Payment of a se- president, trust officer, etc., should be
curity bearing the name of a minor shown. Examples:
child, who is not of sufficient com- Henry C. Smith, conservator of the estate
petency and understanding to sign the of John R. White, an adult, pursuant to Sec.
request for payment and comprehend 633.572 of the Iowa Code.
the nature of the act, may be made to Tenth National Bank by Arnold A. Ames,
either parent with whom the minor re- Vice President, guardian of the estate of
sides or to whom custody has been Barry B. Bryan, a minor.
granted, provided the form of registra- (f) Payment to a legal representative of
tion does not indicate that a guardian a decedent’s estate not designated on a se-
or similar representative of the estate curity. An agent may redeem a security
of the minor has been appointed or is bearing the names of deceased persons
otherwise legally qualified. Payment in the registration, if the legal rep-
under this subsection may not be made resentative of the estate of the last de-
to any person other than a parent. The ceased registrant:
parent requesting payment must sign (1) Presents the security;
the request for payment in the form, (2) Signs the request for payment on
e.g., ‘‘John A. Jones, on behalf of John the back of the security, showing the
C. Jones.’’ The following endorsement representative’s full title adjacent to
must be typed or imprinted on the the signature; and
back of the security: (3) Presents acceptable evidence of
I certify that I am the (father or mother) the legal representative’s appointment
of John C. Jones and the person (with whom and of the dates of death of all persons
he resides) (to whom custody has been grant- named in the security’s registration, in
ed). He is ll years of age and is not of suffi- accordance with this part and the ap-
cient competency and understanding to sign pendix.
the request. In the case of a corporate legal rep-
(d) Payment to beneficiary. An agent resentative, the full corporate name, as
may redeem a security registered ‘‘A well as the title, must be shown. Exam-
P.O.D. [payable on death to] B’’ for ples:
cash at the request of the surviving John H. Smith and Charles N. Jones, co-ex-
beneficiary following the owner’s ecutors of the will of Robert J. Smith, de-
death. A copy of the owner’s death cer- ceased.
tificate, certified under seal of the Tenth National Bank by John F. Green,
State or local registrar, must be fur- Trust Officer, executor of the will of George
N. Brown, deceased.
nished to support the request for pay-
ment. (g) Interest reporting. A paying agent
(e) Payment to a legal representative is required to report interest in the
designated on a security by name and amount of $10 or more, paid as part of
title. An agent may redeem a security the redemption value of securities, to
registered in the name and title of a the payee and to the Internal Revenue
legal representative as defined in Service, in accordance with 26 CFR
§ 321.1(f), if the legal representative is 1.6049–4. (See Item 26 of the appendix to
known to the agent, or can establish this part for information concerning
identity in accordance with Treasury the education feature of Series EE sav-
instructions and guidelines. The re- ings bonds issued on or after January 1,
quest for payment on the back of each 1990, and of Series I savings bonds.)
security must be signed by the legal [53 FR 37511, Sept. 26, 1988, as amended at 55
representative designated by name and FR 35395, Aug. 29, 1990; 63 FR 38042, July 14,
title in the registration on the front of 1998]
the security, or by a person authorized
or empowered to act for a corporate § 321.8 Redemption-exchange of Series
legal representative so designated. The E and EE savings bonds and sav-
full title of the legal representative ings notes.
should be shown adjacent to each sig- (a) General. Subject to the provisions
nature and, in the case of a corporate of Circular No. 2–80 (31 CFR part 352),
legal representative, the full corporate the governing regulations, and the pro-
name, as well as the title, i.e., vice visions of this part and its appendix, an
231
§ 321.9 31 CFR Ch. II (7–1–11 Edition)
agent may make payment of eligible (c) Interest reporting. To the extent
securities presented for redemption in that it represents interest of $10 or
exchange for Series HH bonds. Securi- more, a paying agent is required to re-
ties eligible for exchange are: port cash, refunded in an exchange
(1) Series EE bonds bearing issue transaction, to the presenter and to
dates of January 1, 2003, or earlier, pre- the Internal Revenue Service under the
sented no earlier than six months from provisions of 26 CFR 1.6049–4.
their issue dates; (d) Completion of transaction. An agent
(2) Series EE bonds bearing issue shall transmit for settlement via EZ
dates of February 1, 2003, or thereafter, CLEAR securities redeemed on ex-
presented no earlier than 12 months change and, at the same time, forward
from their issue dates; and the exchange application (PD F 3253)
(3) Series E bonds and savings notes and any additional cash needed to com-
presented no later than one year from plete the transaction, to the Fiscal
the month in which they reached final Agency Department of the servicing
maturity. The total redemption value Federal Reserve Bank referred to in
of the securities presented for exchange § 321.25. Securities redeemed on ex-
must be at least $500. change may be commingled with cash
(b) Requirements for redemption-ex- redemptions in mixed or separately
change. An agent shall not accept and sorted cash letters.’’
redeem eligible securities on exchange [53 FR 37511, Sept. 26, 1988, as amended at 55
unless: FR 35396, Aug. 29, 1990; 59 FR 10537, Mar. 4,
(1) The securities are accompanied by 1994; 68 FR 2666, Jan. 17, 2003; 68 FR 7427, Feb.
a completed exchange subscription 14, 2003]
signed by the presenter;
§ 321.9 Specific limitations on payment
(2) The presenter is the owner, the authority.
legal representative (excluding a rep-
resentative of a decedent’s estate), the An agent is not authorized to redeem
surviving coowner or beneficiary, or a security for cash or on redemption-
the principal coowner (as defined in exchange:
§ 352.7(e)(2) in 31 CFR part 352 (Circular (a)(1) If it is a Series EE bond or a Se-
No. 2–80)) of the securities presented ries I bond issued on January 1, 2003, or
for exchange and is to be named as earlier, presented for payment prior to
owner or first-named coowner on the six months from its issue date; or
Series HH bonds; and (2) If it is a Series EE bond or a Se-
(3) The request for payment on each ries I bond issued on February 1, 2003,
security is signed by the presenter. A or thereafter, presented for payment
presenter who is a legal representative prior to 12 months from its issue date.
should show the full title adjacent to (b) If it is a savings bond of Series F,
each signature and, in the case of a G, H, J, K, or HH.
corporate legal representative, should (c) If the presenter is acting under a
show the full corporate name, as well power of attorney.
as the title. If the name of the pre- (d) If the agent does not know or can-
senter has been changed by marriage, not establish the identity of the pre-
or if the presenter is named as bene- senter as a person entitled to request
ficiary or legal representative on the payment as provided in § 321.7.
securities, the agent may process the (e) If the presenter does not sign his
transaction in accordance with the pro- or her name in ink as it is inscribed on
visions of § 321.7 (b), (d), or (e) of this the security (except as provided in
part. If the agent is authorized and § 321.7 (b) or (c) of this part, or appears
elects to use the special endorsement in evidence of appointment (see
procedure, set out in 31 CFR part 330 § 321.7(f)), and show a home or business
(Circular No. 888, current revision), the address.
requests for payment do not need to be (f) If the taxpayer identifying number
signed; however, this special endorse- of the presenter, or the estate rep-
ment may not be used in lieu of the resented by the presenter, is not known
presenter’s signature on the exchange to the agent and the presenter refuses
subscription. to furnish the number.
232
(g) If the security bears a material ir- and establish identity in accordance
regularity, such as an illegible, incom- with this part.
plete or unauthorized inscription, issue (b) Restrictions. A paying agent shall
date, or issuing agent’s validating not advance money, make loans on, or
data, or if any essential part of the se- discount the redemption value of secu-
curity appears to have been altered or rities, nor in any manner assist others
is mutilated or defaced in such a man- to do so. An agent shall not pay a pre-
ner as to create doubt or arouse sus- senter the current value of a security
picion. and then defer presentation to the
(h) If the security is registered in the Treasury for the purpose of obtaining
name of a corporation, association, for its own profit an increased value.
partnership, or other organization in [53 FR 37511, Sept. 26, 1988, as amended at 55
its own right. FR 35396, Aug. 29, 1990]
(i) If Treasury regulations require
the submission of documentary evi- Subpart D—Payment and
dence to support the redemption, ex- Transmittal of Securities
cept as provided in § 321.7 (d) or (f) of
this part, as in the case of § 321.11 Payment.
incompetents, minors under legal
guardianship, or the change of a reg- (a) Examination. Before making a
istrant’s name other than by marriage. payment of a security, a paying agent
shall examine the security to deter-
(j) If the presenter is a minor who, in
mine that it is eligible for redemption
the opinion of the agent, is not of suffi-
and is one the agent is authorized to
cient competency and understanding to
pay under the provisions of this part.
sign the request for payment and com-
(b) Identification and evidence of enti-
prehend the nature of the act.
tlement. The agent shall determine that
(k) If it is known to the agent that the presenter of the security is entitled
the presenter has been legally declared to request payment, as provided in
incompetent to manage his or her af- § 321.7 of this part. Unless the presenter
fairs. is a person whose identity is well-
(l) If partial redemption is requested. known to the agent or is an established
[53 FR 37511, Sept. 26, 1988, as amended at 55 customer, he or she should be asked to
FR 35396, Aug. 29, 1990; 63 FR 38042, July 14, furnish satisfactory identification in
1998; 68 FR 2666, Jan. 17, 2003; 68 FR 7427, Feb. accordance with the Treasury instruc-
14, 2003] tions and guidelines. At the time of
payment, the agent should make a no-
§ 321.10 Responsibilities of paying tation on the back of the security, or
agents. in its own records, specifying precisely
(a) Payment of securities. A paying what was relied on to establish the pre-
agent is required to redeem eligible se- senter’s identity.
curities during its regular business (c) Evidence—Payment to a beneficiary.
hours for any presenter, whether or not The agent shall determine that the pre-
a customer, who can establish his or senter of the security as beneficiary is
her identity as the owner or co-owner entitled to request payment, as pro-
named on the securities, in accordance vided in § 321.7(d). In addition to estab-
with the provisions of this part, and lishing the presenter’s identification,
the appendix to this part, and the as required by paragraph (b) of this sec-
Treasury Identification Guide for Cash- tion, the agent shall require presen-
ing United States Savings Bonds. An tation of the owner’s death certificate
agent is encouraged, but is not rein accordance with this part and the
quired, to redeem eligible securities appendix.
during its regular business hours for a (d) Evidence—Payment to a legal rep-
surviving beneficiary, a legal representative of the last deceased reg-
resentative designated in the registra- istrant’s estate. The agent shall deter-
tion of securities presented, or a legal mine whether the legal representative
representative of the last deceased reg- is entitled to request payment, as pro-
istrant’s estate who can provide ac- vided in § 321.7(f). In addition to estab-
ceptable evidence (see § 321.7 (d) or (f)) lishing the presenter’s identification,
233
§ 321.12 31 CFR Ch. II (7–1–11 Edition)
as required by paragraph (b) of this sec- lished in accordance with this part and
tion, the agent shall require evidence the appendix hereto.
of appointment as well as evidence of [53 FR 37511, Sept. 26, 1988, as amended at 55
the dates of death of all persons named FR 35396, Aug. 29, 1990; 59 FR 10537, Mar. 4,
in the registrations of the securities 1994]
presented. Evidence of the representa-
tive’s appointment must be either a § 321.12 Redemption value of securi-
court certificate or a copy of the let- ties.
ters of appointment, certified to be The redemption value of each savings
true and correct under seal of the court security is determined by the terms of
or clerk of court. If the original ap- its offering and the length of time it
pointment was made more than one has been outstanding. The Bureau of
year prior to the presentation of the the Public Debt determines redemption
securities it must also bear the court values for Series A-E bonds, eligible
clerk’s statement that the appoint- Series EE and I bonds, and savings
notes, that should be used in redeeming
ment is in full force and effect. This
savings securities.
statement must be under seal of the
court or clerk of court and dated with- [63 FR 38042, July 14, 1998]
in six months of the presentation. Such
evidence of appointment must pertain § 321.13 Cancellation of redeemed se-
curities.
to the estate of the last deceased reg-
istrant designated on the securities. A An agent shall cancel each redeemed
copy of a death certificate, certified security by imprinting the word
under seal of the State or local reg- ‘‘PAID’’ on its face and entering the
istrar, is the only acceptable evidence amount and date of the actual payment
and the agent’s name, location, and
of the date of death.
four-digit code number assigned by the
(e) Execution of request. (1) The agent
appropriate Federal Reserve Bank. The
shall require: recordation of this data shall con-
(i) That the request for payment on stitute a certification by the agent
the back of each security be signed by that the security was redeemed in ac-
the presenter in the presence of one of cordance with the provisions of this
its officers or authorized employees; part, that the presenter’s identity and
and entitlement to request payment were
(ii) That the presenter’s address be duly established, and that the proceeds
furnished. Fiduciaries must sign as were paid to the presenter or remitted
provided in § 321.7 (e) and (f). to an appropriate Federal Reserve
(2) If the agent is qualified under 31 Bank in payment for Series HH bonds.
CFR part 330 (Circular No. 888, current [53 FR 37511, Sept. 26, 1988, as amended at 59
revision) and elects to use the special FR 10537, Mar. 4, 1994]
endorsement procedure, the request for
payment need not be signed. If the re- § 321.14 Transmittal to and settlement
quest has already been signed when the by Federal Reserve Bank.
security is presented, it should be In accordance with Federal Reserve
signed again. Bank instructions, a paying agent shall
(f) Certification of request. An agent is transmit with an EZ CLEAR cash let-
not required to complete the certifi- ter securities redeemed for cash and on
cation to the requests for payment on redemption-exchange, either directly
securities it redeems. When an agent or through a correspondent institution,
transmits redeemed securities for set- to the Check Department of the appro-
tlement, as indicated in § 321.14 of this priate Bank or Branch, or to a Re-
part, such agent shall be understood by gional Check Processing Center
(RCPC). Upon receipt of the securities,
such submission to have represented
the Bank, Branch, or RCPC will ar-
and certified that the identity of the
range for immediate settlement with
presenter, and his or her entitlement the presenting institution. Such settle-
to request payment, have been estab- ment shall be made by a credit to the
presenting institution’s Reserve or
234
other clearing account in the total sults, the Bureau of the Public Debt
amount paid, as reflected on the cash shall advise the agent through which
letter, and shall be subject to adjust- the payment occurred:
ment via a charge or credit to that ac- (a) That no final loss to the United
count if any discrepancy is subse- States has occurred, and, accordingly,
quently discovered. that the agent is relieved from liability
for the payment, or that no claim for
[59 FR 10537, Mar. 4, 1994]
reimbursement shall be made unless
and until a loss has been sustained; or
Subpart E—Losses Resulting From (b) That while a final loss to the
Erroneous Payments United States has occurred, the agent
is not required to make reimbursement
§ 321.15 Liability for losses. therefor, as the Secretary of the Treas-
Under the governing statute, as ury, or his designee, has determined
amended (31 U.S.C. 3126(a)), an agent that such loss resulted from no fault or
cannot be relieved of liability for a loss negligence on the part of such agent; or
resulting from an erroneous payment (c) That a final loss to the United
unless the Secretary of the Treasury States has occurred, and that, the Sec-
can make a determination that the loss retary of the Treasury, or his designee,
resulted from no fault or negligence on has been unable to make an affirmative
the agent’s part. finding that such loss resulted from no
fault or negligence on the part of such
§ 321.16 Report of erroneous payment. agent, reimbursement must be made
If an agent discovers an erroneous promptly, except where credit for the
payment of securities, it should imme- payment had not previously been ex-
diately advise the Bureau of the Public tended.
Debt, Parkersburg, WV 26106–1328, (304)
420–6402. If the circumstances of the § 321.19 Certification of signatures.
payment warrant such action, the The regulations in this subpart shall,
agent should also notify the nearest of- to the extent appropriate, apply to
fice of the United States Secret Serv- losses resulting from payments made
ice. in reliance on certifications of signa-
tures by an officer or designated em-
§ 321.17 Investigation of potential loss. ployee of any financial institution au-
(a) Notice to an agent. When it deter- thorized to certify requests for pay-
mines that a loss has occurred, because ment.
of the erroneous payment of securities,
§ 321.20 Applicability of provisions.
the Bureau of the Public Debt will no-
tify the agent in writing and identify The provisions of this subpart shall
the securities. apply to securities redeemed by any
(b) Investigative procedure. The Bu- Federal Reserve Bank referred to in
reau of the Public Debt may request § 321.25, as fiscal agent, or any Treasury
the United States Secret Service to in- office authorized to redeem securities,
vestigate potential losses. Upon re- as well as to paying agents.
quest, the agent shall make available [53 FR 37511, Sept. 26, 1988, as amended at 59
to the Bureau of the Public Debt, or its FR 10537, Mar. 4, 1994]
investigative agent, all records and in-
formation pertaining to the trans- § 321.21 Replacement and recovery of
action in question, including the dis- losses.
position of the redemption proceeds. If (a) If a final loss results from the re-
the proceeds were deposited in an ac- demption of a security, and the paying
count maintained by the agent, the in- agent redeeming the security is not re-
formation made available shall include lieved of liability for such loss under 31
the ultimate disposition of the redemp- U.S.C. 3126(a), the Bureau of the Public
tion proceeds from the account. Debt will demand that the paying
agent promptly reimburse the United
§ 321.18 Determination of loss. States in the amount of the final loss
Upon completion of the investiga- and will take such other action as may
tion, and after consideration of the re- be necessary to collect such amount as
235
§ 321.22 31 CFR Ch. II (7–1–11 Edition)
set out in the procedure described in tion by ACH. No fees will be paid for
paragraph 21 of the appendix to this redeemed securities received by a Bank
part. in mixed cash letters.
(b) If a final loss has resulted from (2) To comply with the provisions of
the redemption of a security, and no the Balanced Budget and Emergency
reimbursement has been or will be Deficit Control Act of 1985, as amended
made, the loss shall be subject to re- (2 U.S.C. 901, et seq.), or the legislative
placement out of the fund established resolution resulting therefrom, the
by the Government Losses in Shipment Secretary may authorize, upon notice
Act, as amended. in the FEDERAL REGISTER, the dis-
[61 FR 37197, July 16, 1996] continuance, reduction or delay of fee
payments. Fee payments so affected
Subpart F—Forwarding Items may subsequently be paid in accord-
ance with the schedule of fees as here-
§ 321.22 Forwarding securities not after published, subject to the avail-
payable by an agent. ability of funds therefor, and to the ex-
Any securities an agent is not au- tent permitted by law. Fee payments
thorized to pay under the provisions of for servicing occurring after notice of
this part should be forwarded for re- the resumption of such payments has
demption to the Fiscal Agency Depart- been published in the FEDERAL REG-
ment of a Federal Reserve Bank re- ISTER will be made in accordance with
ferred to in § 321.25. The requests for the schedule of fees published in such
payment on the securities should be notice.
properly certified. Any documentary (b) Charges to presenters. A paying
evidence required to support the re- agent shall not make any charge what-
demption should accompany the secu- ever to persons entitled to request pay-
rities. If the securities are presented ment of securities, for redeeming them
for redemption-exchange, they must under the provisions of this part.
also be accompanied by a completed [53 FR 37511, Sept. 26, 1988; 53 FR 39581, Oct.
and signed exchange subscription and 7, 1988, as amended at 55 FR 39960, Oct. 1,
any additional cash needed to complete 1990; 59 FR 10537, Mar. 4, 1994]
the transaction. Unpaid securities so
forwarded must not be commingled § 321.24 Claims on account of lost secu-
with redeemed securities transmitted rities.
for settlement. If a security redeemed by an agent is
[53 FR 37511, Sept. 26, 1988, as amended at 59 lost, stolen or destroyed while in its
FR 10537, Mar. 4, 1994] custody or in transit prior to settle-
ment, the agent’s claim for reimburse-
Subpart G—Miscellaneous ment of the missing security’s redemp-
Provisions tion value on the original payment
date will be considered, provided the
§ 321.23 Paying agent fees and security can be identified by serial
charges. number.
(a) Fees. Fees shall be paid as out-
lined in this section. A schedule setting § 321.25 Role of Federal Reserve
out the fees, and the basis on which Banks.
they are computed and paid, is sepa- (a) The Federal Reserve Banks re-
rately published in the FEDERAL REG- ferred to below, as fiscal agents of the
ISTER. Current information is available United States, shall perform such serv-
from a Federal Reserve Bank referred ices in connection with this part as
to in § 321.25. may be requested by the Secretary of
(1) Securities transmitted via EZ the Treasury, or his designee. The
CLEAR. A fee will be paid for each se- Banks are authorized and directed to
curity redeemed during a calendar perform such duties, including the
month and transmitted via EZ CLEAR issuance of instructions and forms, as
to a Federal Reserve Bank in sepa- may be necessary to fulfill the pur-
rately sorted cash letters. Payment poses and requirements of these regula-
will be made to the presenting institutions.
236
Fiscal Service, Treasury Pt. 321, App.
(b) The following Federal Reserve Of-

fices have been designated to provide
Reserve districts
served
14240.
PA 15230.
23261.
GU.
[59 FR 10537, Mar. 4, 1994, as amended at 63 FR 38042, July 14, 1998]
§ 321.26 Preservation of rights. (a) Offering circulars. Department of the

Treasury Circulars, Public Debt Series Nos.
Nothing contained in this part shall 1–80 (31 CFR part 351, Series EE bonds), 2–80
limit or restrict any existing rights (31 CFR part 352, Series HH bonds), 1–98 (31
which holders of securities may have CFR part 359, Series I bonds), and 3–67 (31
acquired under the offering circulars CFR part 342, savings notes), and Depart-
and the applicable regulations. ment of the Treasury Circulars Nos. 653 (31
CFR part 316, Series E bonds) and 905 (31 CFR
§ 321.27 Supplements, amendments, or part 339, Series H bonds).
revisions. (b) Regulations. Department of the Treas-
ury Circular, Public Debt Series No. 3–80 (Se-
The Secretary of the Treasury may, ries EE and HH bonds); Department of the
at any time or from time to time, re- Treasury Circular, Public Debt Series 2–98
vise, supplement, amend or withdraw, (Series I bonds); Department of the Treasury
in whole or in part, the provisions of Circulars Nos. 530 (all other series of savings
this part. securities) and 888 (special endorsements);
Federal Tax Regulations (26 CFR 1.6049);
APPENDIX TO PART 321—APPENDIX TO Federal Claims Collection Standards (4 CFR
DEPARTMENT OF THE TREASURY CIR- parts 101–105); Regulation J, Collection of
CULAR NO. 750, FOURTH REVISION
Checks and Other Items and Wire Transfers
of Funds (12 CFR part 210); and operating cir-
FISCAL SERVICE, BUREAU OF THE PUBLIC DEBT culars issued by Federal Reserve Banks re-
lating to the collection of cash items and
Subpart A—General Information Federal payments by ACH.
1. Purpose. This appendix is issued for the Subpart B—Procedures for Qualification
guidance of banks and other financial insti-
tutions qualified as paying agents of United 3. Qualification of branches. [Sec. 321.3(b)]
States Savings Bonds and United States Sav- Qualification of an institution as a paying
ings Notes (Freedom Shares) under the pro- agent automatically qualifies only its do-
visions of 31 CFR part 321 [Department of the mestic branches. A foreign branch of a quali-
Treasury Circular No. 750, Fourth Revision]. fied paying agent may redeem securities pro-
Its purpose is to provide information to sup- vided settlement is made through a qualified
plement the regulations contained in the facility located in the Unied States.
part and specific instructions for processing 4. Paying agent code numbers. [§§ 321.3(b) and
redemption and redemption-exchange trans- 321.13] The appropriate Federal Reserve Bank
actions. The information and instructions will assign a four-digit code number to each
are indexed to the sections and subsections agent it qualifies. A separate number will be
of part 321 which they explain or expand. assigned to each branch authorized to re-
2. Other pertinent publications. In addition deem and submit redeemed securities for its
to part 321, agents should be familiar with own account to a Federal Reserve Bank or
the provisions of the following publications: Branch or to a Regional Check Processing
237
Pt. 321, App. 31 CFR Ch. II (7–1–11 Edition)
Center. At the paying agent’s request, only tain written instructions to credit the re-
one four-digit code will be assigned for use demption proceeds to the customer’s account
by all of its branches. The presenting insti- or to make some other disposition. For its
tution’s ABA number will be used in the ad- protection, the agent should retain such in-
justment of discrepancies and in the com- structions for as long as ten years in the
putation and payment of fees for securities event the transaction is later questioned.
transmitted in separately sorted cash let- (c) Interest reporting. [Sec. 321.7(e)] Pursu-
ters. ant to 26 CFR 1.6049–4, an agent is required
5. Requalification. [Sec. 321.3(b)] If there has to report interest income in the amount of
been a change in the corporate name of an $10 or more paid as part of the redemption
agent, whether through merger, consolida- value of securities. Reports to payees should
tion, sale of assets, or in any other manner, be made on Form 1099–INT or an IRS-ap-
the agent may be asked by the appropriate proved substitute; reports to the Internal
Federal Reserve Bank referred to in § 321.25 Revenue Service should be made in accord-
to requalify to reflect the change. Ordi- ance with that agency’s instructions. A sepa-
narily, requalification is not required unless rate report may be made for each trans-
(a) the change results in a corporation that, action in which interest in the amount of $10
under State law, cannot retain the rights of or more is paid, or all interest payments,
the corporation that ceased to exist, or (b) in made during a calendar year, may be aggre-
the case of a purchase of assets and assump- gated and reported annually should the total
tion of liability, the purchaser corporation is amount be $10 or more.
not a qualified paying agent. 8. Redemption-exchange of Series E and EE
6. Announcement of authority. [Sec. 321.3(c)]
savings bonds and savings notes. [Sec. 321.8]
On and after the effective date of its quali-
(a) General. [Sec. 321.8 (a) and (b)] The gen-
fication, a paying agent may appropriately
announce or advertise its authority to re- eral authority of paying agents to redeem se-
deem eligible securities for cash and in ex- curities in exchange for Series HH bonds ex-
change for Series HH bonds. Such statements tends only to eligible Series E and EE sav-
and notices should not, directly or indi- ings bonds and savings notes presented with
rectly, encourage the encashment of the se- a completed Form PD 3253, ‘‘Exchange Sub-
curities. Two examples of acceptable state- scription for United States Savings Bonds of
ments for use in advertisements or displays Series HH.’’ Securities eligible for exchange
are: are: (1) Series EE bonds issued January 1,
(a) ‘‘We are an authorized agent for pay- 2003, or earlier, presented no earlier than six
ment of U.S. Savings Bonds and U.S. Savings months from their issue dates; (2) Series EE
Notes (Freedom Shares).’’ bonds issued February 1, 2003, or thereafter,
(b) ‘‘This (bank/savings and loan associa- presented no earlier than 12 months from
tion/credit union, etc.) is authorized to pay their issue dates; and (3) Series E bonds and
U.S. Savings Bonds and U.S. Savings Notes savings notes presented no later than one
(Freedom Shares) and process eligible Series year from the month in which they reached
E and EE bonds and savings notes in ex- final maturity. The current redemption
change for Series HH bonds.’’ value of securities presented in one trans-
action must be at least $500. The presenter
Subpart C—Scope of Authority must establish his or her identity and enti-
7. Authorized cash payments. [Sec. 321.7] tlement to request the exchange and sign the
(a) General. [§ 321.7(a)] The general author- exchange subcription and the requests for
ity of paying agents to redeem savings secu- payment on the securities.
rities for cash extends to Series A, B, C, D, (b) Securities in the name of a minor. [Sec.
E, EE, and I bonds and savings notes pre- 321.8(b)] If an exchange subscription is sub-
sented by the owner, coowner, surviving ben- mitted on behalf of a minor who is too young
eficiary, parent on behalf of a minor, legal to comprehend the nature of the transaction,
representative designated in the registra- the form must be completed to request that
tions of savings securities presented, or legal the Series HH bonds be registered either in
representative of the last deceased reg- the minor’s name alone or in exactly the
istrant’s estate. The presenter must sign the same form as the securities presented for ex-
requests for payment and establish his or her change. Agents are instructed to discourage
identity and, in the case of a beneficiary, exchange transactions involving minors who
parent or legal representative of the last de- are too young to conduct them on their own.
ceased registrant’s estate, entitlement to re- (c) Interest reporting. [Sec. 321.8(c)] Pursu-
quest payment. ant to 26 CFR 1.6049–4, an agent is required
(b) Securities submitted by mail. [Sec. to report interest income in the amount of
321.7(a)] An agent may accept eligible securi- $10 or more included in any cash refunded in
ties submitted, for redemption by mail, from a redemption-exchange transaction. Reports
known customers. The agent should be satis- to payees should be made on Form 1099–INT
fied that the customer is entitled to request or an IRS-approved substitute; reports to the
payment and that he or she has signed the Internal Revenue Service should be made in
requests for payment. The agent should ob- accordance with that agency’s instructions.
238
A separate report may be made for each re- (b) Restrictions. [Sec. 321.10(b)] Violation of
demption-exchange transaction in which in- the regulatory prohibitions on making
terest in the amount of $10 or more is re- charges for redeeming securities; on advanc-
funded, or all interest paid in both cash ing money on, making loans on, or dis-
transactions and redemption-exchanges dur- counting the redemption value of securities;
ing a calendar year may be aggregated and and on deferring presentation of redeemed
reported annually should the total amount securities to obtain a larger credit, will be
be $10 or more. cause for disqualification and recovery of the
9. Specific limitations on payment authority. redemption proceeds and profits realized
[Sec. 321.9] therefrom.
(a) Allowable exceptions. [Sec. 321.9] Securi-
ties which an agent may not redeem because Subpart D—Payment and Transmittal of
of the limitations in § 321.9 should be for- Securities
warded to the Fiscal Agency Department of 11. Identification of presenter. [Sec. 321.11(b)]
a Federal Reserve Bank referred to in § 321.25 (a) Identification guide. [Sec. 321.11(b)] The
for handling. However, if an agent is willing Treasury Department has issued an identi-
to assume full responsibility, it may make fication guide, Form PD 3900, to assist pay-
payment of an eligible security which bears ing agents in redeeming securities. Careful
a minor irregularity, such as a misspelled compliance with the instructions contained
name, a transposition of letters, etc., be- therein will enable agents to accommodate
cause of its knowledge of the facts, or be- reasonable redemption requests and protect
cause it wishes to rely on the integrity of themselves from losses. Reliance on newly
the presenter. opened customer accounts as identification,
(b) Taxpayer identifying number of presenter. or paying more than $1,000 in a single trans-
[Sec. 321.9(f)] An agent shall refuse payment action based on documentary evidence alone,
of any security if the taxpayer identifying should be particularly avoided.
number of the presenter, or the estate rep- (b) Record of identification practice and
resented by the presenter, is not known to evidence presented. [Sec. 321.11 (b) through
the agent and the presenter is unwilling to (d)] At the time of payment, the agent
furnish the number. A parent who requests should make a notation on the back of the
payment on behalf of a minor in accordance security or in its own records specifying pre-
with § 321.7(c) of this part must provide the cisely what was relied on to establish the
minor’s social security number. presenter’s identity. The identification
(c) Payments to minors. [Sec. 321.9(j)] A should be adequate to identify the payee
minor may not request payment of securities under the circumstances of the transaction.
if he or she is not of sufficient competency If an agent redeems a security upon the re-
and understanding to comprehend the nature quest of a surviving beneficiary or a legal
of the act. Because of individual differences representative of the last deceased reg-
in comprehension, the Treasury has not es- istrant’s estate, it should also make a nota-
tablished any rule as to the exact age at tion of the evidence presented to establish
which a minor should be able to redeem secu- the payee’s entitlement; this might include
rities. An agent may interview a minor to the document or case number on the death
ascertain his or her ability to understand the certificate(s) and/or evidence of the legal
transaction. representative’s appointment, the date(s) of
10. Responsibilities of paying agents. [Sec. death, and the names and locations of the
321.10] issuing authorities. The notations should be
(a) Requirements for redeeming securities. sufficient to permit a determination of the
[§ 321.10(a)] A paying agent shall redeem eli- evidence of identity and entitlement at a
gible savings securities during its regular later date. Otherwise, the agent runs the
business hours for a presenter who estab- risk that no evidence can be developed to
lishes his or her identity as the owner or co- show that it acted without fault or neg-
owner of the securities, in accordance with ligence, in which case it could not be re-
this part and this appendix. While a paying lieved of liability should a loss occur.
agent is not required to redeem eligible Se- 12. Request for payment. [Sec. 321.11(d)]
ries E and EE savings bonds and savings (a) Signature. [Sec. 321.11(e)] Except where
notes in exchange for Series HH bonds for an agent qualified under 31 CFR part 330
any presenter, or Series E, EE, or I bonds or (Circular No. 888) elects to use the special en-
savings notes for cash upon the request of a dorsement procedure, each security re-
surviving beneficiary or legal representative, deemed by the agent must bear the signature
it is encouraged to do so, provided the pre- of the presenter. The name must be signed
senter can establish his/her identity and pro- exactly as it is inscribed on the security, un-
vide acceptable evidence to accordance with less the provisions of 31 CFR part 330 and
this part and this appendix (See § 321.7 (d) this appendix provide for an exception, such
and (f)). An agent is not required to redeem as in cases involving a change of name by
savings securities during Saturday and marriage, a request by a parent on behalf of
evening hours if it is open during such peri- a minor, or a legal representative of the last
ods primarily as a service for its depositors. deceased registrant’s estate. An agent may
239
be held liable if the request for payment is stance, the agent will pay the presenter
not properly signed. Legal representatives $253.33; in the second, it will collect $246.67
must sign as provided in § 321.7 (e) and (f). when it accepts the exchange subscription.
(b) Address. [Sec. 321.11(d)] The presenter 14. Cancellation of redeemed securities. [Sec.
must enter a current home or business ad- 321.13]
dress in the space provided on the back of (a) Paying agent stamp. [Sec. 321.13] Each
the security. If a single transaction includes redeemed security must be cancelled by the
a group of securities, the address must be imprint of a payment stamp. The stamp may
shown on at least one security of each of the not exceed 11⁄8 inches in any dimension and
following types: (1) Paper securities issued must include the following information in
prior to October 1957; (2) punch card or ma- the arrangement shown:
chine readable paper securities issued prior Paid $lll (for recording amount paid).
to January 1989; and (3) machine readable Name, location, and four-digit paying agent
paper securities issued subsequent to Decem- code number assigned by the appropriate
ber 1988. Federal Reserve Bank referred to in
13. Redemption value of securities. [Sec. § 321.25 (subject to abbreviation and ar-
321.12] rangement by the Bank).
(a) Redemption value tables. [§ 321.12] The Date lll (for recording actual date of pay-
Bureau of the Public Debt distributes re- ment).
demption values in various formats and as By lll (for use by agent in recording ini-
part of programs for personal computers, for: tials, or signature, codes, symbols, etc., of
(1) Series E bonds, (2) Series EE bonds, (3) the officer or employee who approved or
Series I bonds, and (4) savings notes. Addi- made the payment).
tional tables or information may be re-
quested from the appropriate Federal Re- (b) Procurement of stamps. [Sec. 321.12] A
serve Bank referred to in § 321.25. paying agent may requisition stamps from
(b) Use of tables. [§ 321.12] Care should be ex- the Fiscal Agency Department of the appro-
ercised to correctly determine the current priate Federal Reserve Bank referred to in
redemption value of the security presented § 321.25 or purchase its own stamps. Stamps
for the month in which it is redeemed. Incor- not provided by the appropriate Federal Re-
rect payments can lead to costly and time- serve Bank referred to in § 321.25 must con-
consuming adjustments for the agent, De- form exactly in size and design to that pre-
partment of the Treasury, and the appro- scribed or approved by the Bank. To insure
priate Federal Reserve Bank referred to in legible impressions, stamps should be re-
§ 321.25. placed when worn.
(c) Cash redemption. [Sec. 321.12] The cor- (c) Imprinting payment stamp and recording
rect redemption value of securities redeemed payment date. [Sec. 321.13] After determining
by an agent should be paid to the presenter that a security is eligible for payment, the
in currency or, upon request, by check pay- agent should carefully imprint the payment
able to the presenter or by credit to his or stamp on its face in the open space imme-
her account. diately to the left of, and as close as possible
(d) Redemption-exchange. [§ 321.12] The re- to, the issue date and issuing agent vali-
demption values of eligible Series E and EE dating data. It is important not to overprint
savings bonds and savings notes presented any data on the security, particularly the se-
for exchange (Series I savings bonds are not rial number, since the security will subse-
eligible for exchange) for Series HH bonds quently be microfilmed. No other stamps
shall be those payable in the month the shall be placed on the face of the security.
agent accepts a correctly completed and Care should be taken to record legibly the
signed exchange subscription, Public Debt correct amount, the exact date of redemp-
Form 3253. The total redemption value of se- tion, and the signature, initials, or other
curities presented for exchange in any one identification of the agent’s employee who
transaction must be at least $500. If the re- approved or made the payment. A dark-col-
demption value is $500 or an even multiple ored ink must be used, and care should be
thereof, Series HH bonds must be requested taken not to smear the stamp impression or
in that exact amount. If the redemption the writing.
value exceeds $500, but is not an even mul- (d) Redemption-exchange. [§ 321.13] Eligible
tiple of that amount, the presenter may add Series E and EE savings bonds and savings
cash to increase the amount of the subscrip- notes presented for redemption-exchange
tion to the next higher $500 multiple, or re- shall be stamped ‘‘PAID’’ in the same man-
duce the amount of the subscription to the ner as securities redeemed for cash, but only
next lower $500 multiple. The maximum when all elements of the transaction have
amount which may be added to or refunded been completed, including receipt of any ad-
in an exchange transaction is $499.99. For ex- ditional cash. The exact date of redemption
ample, if the total redemption value of the shall also be recorded on the exchange sub-
securities is $4,253.33, the presenter may re- scription to enable the appropriate Federal
quest no less than $4,000 and no more than Reserve Bank referred to in § 321.25 to estab-
$4,500 in Series HH bonds. In the first in- lish the proper issue date for the Series HH
240
bonds. An officer or other authorized em- separately sorted redeemed securities (sepa-
ployee of the agent shall also sign the ex- rately sorted cash letter) or one or more
change subscription, in his or her official ca- bundles of mixed items (mixed cash letter).
pacity, and furnish other requested informa- The cash letter shall show the name, ad-
tion that identifies the paying agent. dress, and ABA number of the presenting in-
(e) MICR-encoding of payment information. stitution, the date of presentation, the total
[§ 321.13] An agent shall MICR-encode the re- number of pieces transmitted, the value of
demption value in the ‘‘Amount’’ field on the each of the bundles in the cash letter, and
face of each security or arrange to have this the total value of the cash letter.
service performed by another financial insti-
(b) Composition of cash letters. [§ 321.14] Se-
tution. If the agent transmits securities in
mixed cash letters, it must also MICR-en- ries A, B, C, D, E, EE, and I bonds and sav-
code the routing/transit number assigned to ings notes redeemed for cash or eligible Se-
the Bureau of the Public Debt’s savings bond ries E and EE bonds and savings notes re-
activity in the ‘‘R/T’’ field on the face of all deemed on exchange may be commingled in
pre-October 1957 paper securities and those mixed cash letters containing commercial
punch card securities on which it does not checks and other items or separately sorted
already appear. The Bureau’s routing/transit cash letters containing only redeemed secu-
number is 000090007. Care should be taken in rities. Each cash letter shall also contain a
repairing MICR-encoded items so as not to listing prepared in accordance with the Fed-
obliterate any data in surrounding MICR eral Reserve Bank’s instructions.
fields or elsewhere on the face of the secu- (c) Transmittal of securities. [Sec. 321.14]
rity. Cash letters containing redeemed securities
15. Transmittal of securities to Federal Re- shall be transmitted to a Federal Reserve
serve Bank. [§ 321.14] An agent shall transmit Bank in accordance with the Bank’s circu-
and receive settlement for redeemed securi- lars and instructions.
ties via EZ CLEAR, i.e., the Check Depart-
(d) Timing of transmittals. [Sec. 321.14] Cash
ment of a Federal Reserve Bank or Branch or
letters containing redeemed securities
the Regional Check Processing Center. Re-
deemed securities may be transmitted in should be transmitted according to the same
separately sorted or mixed cash letters to schedule used for other commercial check
the Check Department of a Federal Reserve collection system items.
Bank or Branch, or to a Regional Check (e) Settlement for the audit of paid securi-
Processing Center, either directly, or via a ties—(1) Settlement. [Sec. 321.14] The Federal
parent office or correspondent institution. Reserve Bank will make immediate settle-
An agent shall transmit redeemed securities ment for the total value of redeemed securi-
under cover of the appropriate transmittal ties as shown on each cash letter. Settle-
document. Eligible Series E and EE savings ment will be made by a credit to the reserve
bonds and savings notes redeemed in ex- or clearing account of the agent or des-
change for Series HH bonds must be trans- ignated correspondent institution. Data con-
mitted for settlement via EZ CLEAR at the cerning redeemed security transmittals will
same time as the exchange application (Pub- be sent to the Bureau of the Public Debt for
lic Debt Form 3253) and any additional cash audit. The amount will be subject to adjust-
needed to complete the transaction are for- ment if discrepancies are discovered after
warded to the Fiscal Agency Department of settlement has been made.
the servicing Federal Reserve Bank referred (2) Audit and adjustment [§ 321.14] The Bu-
to in § 321.25. Eligible Series E and EE sav- reau of the Public Debt will audit all re-
ings bonds and savings notes redeemed on ex- demption data received from the Central
change may be commingled with cash re- Site as promptly as possible. Each pre-
demptions in mixed or separately sorted cash
senting institution will, in due course, be no-
letters.
tified by the Bank of any adjustments re-
16. Transmittal of securities to Federal Re-
quired. The Bank will adjust via a charge or
serve Bank via fiscal agency system. [§ 321.14]
credit to the presenting institution’s Reserve
The Fiscal Agency Department of a Federal
Reserve Bank or Branch will not accept for or clearing account any amounts previously
settlement securities an agent has redeemed. credited to that account.
17. Transmittal of securities to Federal Re- (3) Requests for Adjustments. Depositors who
serve Bank via EZ CLEAR. [Sec. 321.14] discover errors in their EZ CLEAR cash let-
(a) Form to be used. [Sec. 321.14] The pre- ters subsequent to deposit should allow sixty
senting institution shall transmit all re- (60) calendar days from the date of their EZ
deemed securities to the Check Department CLEAR cash letter before requesting adjust-
of a Federal Reserve Bank or Branch or Re- ments for the cash letter. This will allow suf-
gional Check Processing Center in accord- ficient time for the Treasury to classify the
ance with the Bank’s instructions. Except as savings bonds, forward adjustments to the
otherwise provided in the Bank’s instruc- Central Site and for the Central Site to re-
tions and operating circulars, cash letters search and function adjustments to the de-
may be comprised of one or more bundles of positor.
241
(4) Separately Sorting Depositors should sub- FEDERAL REGISTER and in effect during the
mit adjustment requests directly to the Cen- entire period in which the remittance is late.
tral Site Adjustments Department in cor- (2) Administrative costs shall be assessed
respondence. However, all requests for ad- as set out in the first demand letter, if reim-
justments due to incorrect cash letter cred- bursement is not made within 30 days of the
iting should be directed to the servicing Fed- date the first demand letter is mailed.
eral Reserve Bank. (3) Penalty charges shall be assessed, in ac-
(5) Mixed Depositors should submit adjust- cordance with 31 U.S.C. 3717(e), if reimburse-
ment requests to their servicing Federal Re- ment is not made within 120 days of the date
serve Bank. the first demand letter is mailed. The pen-
18. Record of securities paid. [§§ 321.14 and alty charge will accrue and be calculated
321.24] A record of the serial number and the from 30 days after the date the first demand
amount paid for each redeemed security letter is mailed to the date of reimburse-
must be retained by the agent for one year ment.
so that settlement can be made if the secu- (b) When a paying agent fails, within 120
rity is lost in transit, and so that the agent days of the date the first demand letter is
can process any subsequent adjustment as mailed, to make such reimbursement or to
described in paragraph 17(e)(2) above. For submit new evidence sufficient for Public
that purpose, agents are authorized to Debt to change the determination of liabil-
microfilm the face and back of each security ity, by virtue of the paying agent’s accept-
they redeem. Such film records shall be kept ance of settlement via credits to a Reserve,
confidential and prints therefrom may be correspondent, or clearing account with a
made only with the permission of the Bureau Federal Reserve Bank or Branch, the agent
of the Public Debt or an appropriate Federal is deemed to have authorized the Federal Re-
Reserve Bank. serve Bank to debit the amount due from
that account designated or utilized by the
Subpart E—Losses Resulting from Erroneous agent at the Federal Reserve Bank or
Payments Branch. An institution, designated by a pay-
19. Report of erroneous payment. [Sec. 321.16] ing agent to receive settlement on its behalf,
Any erroneous payment that comes to the in authorizing such paying agent to utilize
attention of an agent should be reported im- its Reserve, correspondent, or clearing ac-
mediately to the Bureau of the Public Debt, count on the books at the Federal Reserve
Parkersburg, WV 26106–1328. The nearest of- Bank shall similarly be deemed to authorize
fice of the Secret Service should also be noti- such debits from that account.
fied if the agent believes that a security pre- (c) Reconsideration of a determination of
sented for redemption may be counterfeit or liability will be made in any case when a
stolen, or if the circumstances of the presen- paying agent so requests and presents addi-
tation are suspicious in any other respect. tional evidence and information regarding
20. Notice to agent. [Sec 321.17(a)] The pay- the transaction.
ing agent will be notified if an erroneous 22. Relief for lack of timely notice. [Sec
payment has occurred. The notice will gen- 321.18] A paying agent will be relieved of li-
erally be in writing from the Bureau of the ability to the United States for any loss re-
Public Debt. If an investigation is to be sulting from the erroneous payment of secu-
made, the notice will enable the agent to no- rities where the Secretary of the Treasury,
tify its bonding company, assemble pertinent or his designee, determines that written no-
information concerning the transaction for tice of either liability or potential liability
presentation during the investigation, and has not been given to the agent within ten
take any other action it deems appropriate years of the date of the erroneous payment.
to protect its interest.
Subpart F—Forwarding Items
21. Determination of liability. [Sec. 321.18 and
Sec. 321.21] 23. Securities forwarded to Federal Reserve
(a) Upon completing the investigation, the Bank for payment. [Sec 321.22]
Bureau of the Public Debt will examine the (a) General. [Sec 321.22] Securities pre-
available information and determine wheth- sented for cash payment or redemption-ex-
er a paying agent may be relieved of liability change, that an agent is not authorized to
for any loss that may have resulted. If the redeem, shall be forwarded to the Fiscal
paying agent cannot be relieved of liability, Agency Department of the appropriate Fed-
demand will be made upon the paying agent eral Reserve Bank referred to in § 321.25, with
to reimburse the Treasury promptly. Any all required supporting documentation and
amount not paid within 30 days following the any necessary payment instructions.
mailing of the first demand letter is subject (b) Signature to and certification of request
to the following charges. for payment. [Sec 321.22] An agent qualified
(1) Interest shall accrue from the date the under part 330 (Circular No. 888) may elect to
first demand letter is mailed to the date re- specially endorse securities for presenters in
imbursement is made. The rate of interest to lieu of requiring completion of the requests
be used will be the current value of funds for payment. Unless this procedure is used,
rate published annually or quarterly in the the presenter must sign the request on each
242
security and the signature must be certified. 25. Claims on account of lost securities
Before completing the certification, the [§ 321.24] If a security redeemed by an agent
agent should establish the identity of the is lost, stolen, or destroyed while in the cus-
presenter. The Treasury’s identification tody of the agent, or in transit prior to set-
guidelines should be followed in view of the tlement or audit, relief will be considered,
potential liability that attaches to such cer- provided the security can be identified by se-
tification. rial number. [See paragraph 18 of this appen-
(c) Address and Taxpayer identifying number. dix regarding the maintenance of records of
[Sec 321.22] In every case, a current address redeemed securities]. The presenting institu-
shall be furnished. The presenter’s taxpayer tion should resubmit a photocopy of the se-
identifying number (social security number curity to obtain settlement in accordance
or employer identification number) shall be with established procedures. Questions con-
provided if it is not included in the inscrip- cerning the established procedures should be
tion. referred to the servicing Federal Reserve
(d) Redemption-exchange. [Sec 321.22] For re- Bank.
demption-exchange transactions submitted 26. Education savings bond program. [Sec.
as forwarding items, the issue date of the Se- 321.7(g)]
ries HH bonds will be the first day of the (a) Section 6009 of the Technical Correc-
month in which a correctly completed and tions and Miscellaneous Revenue Act of 1988,
signed exchange subscription and full pay- Public Law 100–647 (see 26 U.S.C. 135), per-
ment are received by the appropriate Federal mits taxpayers to exclude all, or a portion,
Reserve Bank referred to in § 321.25. of the interest earned on Series EE savings
(e) Partial redemption. [§§ 321.9(l) and 321.22] bonds bearing issue dates on or after Janu-
Partial redemption of a security other than ary 1, 1990, and on Series I savings bonds
a $25 Series E bond or savings note, a $50 Se- from their income under certain conditions.
ries EE or I bond, or a $500 Series H or HH This legislation did not create new savings
bond may be made by the appropriate Fed- bond redemption and interest reporting re-
eral Reserve Bank referred to in § 321.25. The quirements for savings bond paying agents.
amount paid must be equal to the redemp- However, if a bond owner indicates that he
tion value of one or more authorized denomi- or she intends to seek the special tax treat-
nations on the date of the transaction. If a ment offered under this program, the paying
security is received by an agent for partial agent is encouraged to provide assistance by:
redemption, the words ‘‘to the extent of $ (1) Suggesting that he or she read IRS
(face amount) and reissue of the remainder’’ Form 8815 (particularly, the instructions on
should be added to the first sentence of the the form) as well as relevant portions of IRS
request for payment. The request should Publication 17, ‘‘Your Federal Income Tax ‘‘,
then be completed in the regular manner and and Publication 550, ‘‘Investment Income
the signature of the presenter certified or and Expenses,’’ for detailed information; and
guaranteed. The security shall be forwarded (2) Suggesting that the presenter make a
to the Fiscal Agency Department of a Fed- record of eligible bonds redeemed either by
eral Reserve Bank. using IRS Optional Form 8818, or otherwise.
(b) Bond owners seeking to benefit from
Subpart G—Miscellaneous Provisions the special tax exclusion, available through
24. Fees and charges. [Sec 321.23] Service the savings bond education feature, should
fees are not intended to compensate paying be aware of the following basic rules:
agents for the reporting of interest paid as (1) Only interest earned on Series EE bonds
part of the redemption value of securities as bearing issue dates on or after January 1,
required by Federal Tax Regulations (26 CFR 1990, is eligible for the exclusion of interest
1.0649–4). income, where the proceeds from the re-
Fees will be paid to the presenting institu- demption of the bonds are used to pay quali-
tion for securities redeemed during each cal- fied post-secondary education expenses. In-
endar month that are submitted in sepa- terest received on bonds bearing issue dates
rately sorted cash letters; such fee payments prior to January 1, 1990, is not eligible.
will be made only by ACH. No fees will be (2)(i) The bonds must be registered in the
paid for securities received by the Federal name of a taxpayer as sole owner, or in the
Reserve Bank in mixed cash letters. The name of the taxpayer as co-owner, with the
Bank will charge the presenting institution taxpayer’s spouse as the other co-owner.
for processing redeemed securities received Bonds registered in the name of the tax-
in mixed cash letters. Inquiries regarding payer’s child, as owner or co-owner, will not
separately sorted cash letters should be di- qualify for the exclusion. A taxpayer may
rected to the Pittsburgh Branch, Federal Re- purchase bonds registered in beneficiary
serve Bank of Cleveland, P.O. Box 867, Pitts- form, i.e., ‘‘A payable on death to B’’, nam-
burgh, PA 15230–0867. Inquiries regarding ing any individual, including a child, as
mixed cash letters should be directed to the beneficary.
Federal Reserve Bank or Branch or Regional (ii) The bonds must be registered in the
Check Processing Center where the cash let- name of a taxpayer who has attained the age
ters were directed. of 24 years at the time of issue. Generally, a
243
taxpayer must be 24 years of age on or before sion, in accordance with applicable rules and
the first day of the month in which the tax- regulations of the Internal Revenue Service.
payer purchases the bond, because savings (9) The Internal Revenue Service should be
bonds bear the issue date of the first day of consulted for advice concerning the eligi-
the month in which purchased. bility and tax treatment of bonds for the in-
(3) The bond must be redeemed by the come exclusion under the educational sav-
owner or co-owner. It may not be transferred ings bond program.
to-the educational institution. 27. Additional information. [Sec 321.25] Re-
(4) If the entire amount of the proceeds of quests for additional advice, clarification of
the eligible bonds is less than, or equal to, the payment regulations or this appendix,
the qualified post-secondary educational ex- and other matters relating to the actions of
penses incurred by the owner, his or her a financial institution as paying agent
spouse, or his or her dependent, all interest should generally be made to the appropriate
received is excludable, subject to the limita- Federal Reserve Bank referred to in § 321.25.
tions in paragraph (b)(7) of this section. If [53 FR 37511, Sept. 26, 1988; 53 FR 39581, Oct.
the amount of the proceeds exceeds such 7, 1988, as amended at 55 FR 35397, Aug. 29,
qualified expenses, the excludable portion of 1990; 59 FR 10538, Mar. 4, 1994; 61 FR 37197,
the interest will be reduced by a pro rata July 16, 1996; 63 FR 38042, 38043, July 14, 1998;
amount. 68 FR 2666, Jan. 17, 2003; 68 FR 7427, Feb. 14,
(5) Qualified educational expenses are lim- 2003]
ited to tuition and fees required for the en-
rollment of, or attendance by, the taxpayer,
or the taxpayer’s spouse or dependent, at an PART 323—DISCLOSURE OF
eligible educational institution. These ex- RECORDS
penses are calculated net of scholarships, fel-
lowships, employer-provided educational as- Sec.
sistance, and other tuition reduction 323.1 Purpose of regulations.
amounts, and must be incurred during the 323.2 Rules governing availability of infor-
tax year of the redemption of the bonds for mation.
which the interest exclusion is claimed. 323.3 Materials available for inspection and
(6) Eligible educational institutions in- copying.
clude those defined in sections 1201(a) and 323.4 Requests for identifiable records.
481(a)(1) (C) and (D) of the Higher Education 323.5 Fees.
Act of 1965, as in effect on October 21, 1988,
AUTHORITY: 80 Stat. 379; sec. 3, 60 Stat. 238,
excluding proprietary institutions. Such eli-
as amended; 5 U.S.C. 301, 552.
gible institutions include post-secondary in-
stitutions, and vocational schools that meet SOURCE: 32 FR 9967, July 7, 1967, unless oth-
the standards for participation in Federal fi- erwise noted.
nancial aid programs, excluding proprietary
institutions. Additional gudiance concerning § 323.1 Purpose of regulations.
eligible institutions should be obtained from The regulations of this part are
the Department of Education.
issued to implement 5 U.S.C. 552(a) (2)
(7)(i) Interest exclusion benefits are based
on the modified adjusted gross income of the and (3). The requirements of 5 U.S.C.
taxpayer. For taxpayers filing a joint Fed- 552(a)(1) are met through the publica-
eral income tax return, the exclusion is tion in the FEDERAL REGISTER of the
gradually decreased for modified adjusted statement of the organization, func-
gross income between $60,000 and $90,000. tions and procedures available of the
Married taxpayers filing jointly who have Fiscal Service, including the Bureau of
modified adjusted gross incomes above the Public Debt, and revisions thereof,
$90,000 are ineligible for the exclusion. For
and through the publication therein of
single taxpayers and heads of households,
the exclusion is gradually decreased for such substantive and procedural regulations
incomes between $40,000 and $55,000. Single of the Bureau. A synopsis of the state-
taxpayers with such incomes above $55,000 ments of Bureau organization, func-
are ineligible for the exclusion. After 1990, tions and procedures available will be
these income limits will be adjusted for in- published annually by the Office of the
flation. Federal Register in the U.S. Govern-
(ii) Married taxpayers must file a joint re- ment Organization Manual.
turn in order to qualify for the exclusion.
Married taxpayers filing separate returns § 323.2 Rules governing availability of
will not qualify for the exclusion, regardless information.
of their modified adjusted gross incomes.
(8) The taxpayer is responsible for main- (a) General. The records of the Bureau
taining adequate records of bond redemption of the Public Debt required by 5 U.S.C.
transactions to support claims for the exclu- 552 to be made available to the public
244
shall be made available in accordance § 323.3 Materials available for inspec-

with the regulations on the Disclosure tion and copying.
of Records of the Office of the Sec- (a) Availability. The materials which
retary issued under 5 U.S.C. 552 and are required under 5 U.S.C. 552(a)(2) to
published as part I of title 31 of the be made available for inspection and
Code of Federal Regulations, 32 FR copying are:
9562, July 1, 1967, except as specifically (1) Final opinions or orders made in
provided in this part. the adjudication of cases. Any issued
(b) Limitations on the availability of by the Bureau of the Public Debt would
records relating to securities. Records re- be in the form of letters or memoran-
lating to the purchase, ownership of, dums setting out determinations made
and transactions in Treasury securities in disposing of any matter before the
or other securities handled by the Bu- Bureau.
reau of the Public Debt for government (2) Statements of policy and interpre-
agencies or wholly or partially Govern- tations which have been adopted by the
ment-owned corporations will ordi- Bureau but not published in the FED-
narily be disclosed only to the owners ERAL REGISTER.
of such securities, their executors, ad- (3) Administrative staff manuals and
ministrators or other legal representa- instructions to the staff that affect any
tives or to their survivors or to inves- member of the public. Some Federal
tigative and certain other agencies of Reserve Bank memorandums and Pub-
the Federal and State governments, to lic Debt memorandums will be made
trustees in bankruptcy, receivers of available under this provision.
insolvents’ estates or where a proper (b) Location. The materials listed in
order has been entered requesting dis- paragraph (a) of this section are avail-
closure of information to Federal and able for inspection and copy during of-
State courts. These records are con- fice hours in the Public Reading Room
fidential because they relate to private of the Treasury Department, 15th
financial affairs of the owners under Street and Pennsylvania Avenue NW.,
this part. In addition, the information Washington, DC 20220.
falls within the category of ‘‘personnel § 323.4 Requests for identifiable
and medical files and similar files the records.
disclosure of which would constitute a
clearly unwarranted invasion of per- (a) Procedure. (1) A written request
sonal privacy’’ under the Freedom of for an identifiable record relating to a
Information Act (FOIA), 5 U.S.C. U.S. savings bond or note shall be ad-
552(b)(6). FOIA Exemption (b)(6) pro- dressed to the Deputy Commissioner,
Bureau of the Public Debt, Chicago, IL
tects the privacy of living persons who
60605.
own securities as well as the close sur-
(2) A request for an identifiable
vivors of deceased owners. Privacy in-
record relating to any Treasury De-
terests, in the sense of the right to con-
partment security, other than a sav-
trol, use, or disclose information about
ings bond or note, or a security of a
oneself, cease at death. However, the
Government agency or a wholly or par-
exemption protects the deceased per-
tially Government-owned corporation,
son’s family-related privacy interests
the record of which is maintained by
that survive death where disclosure the Bureau of the Public Debt, shall be
would cause embarrassment, pain, addressed to the Chief, Division of
grief, or disrupt the peace of mind, of Loans and Currency, Bureau of the
the surviving family. The Bureau of Public Debt, Washington, DC 20226.
the Public Debt will determine, under (3) A request for an identifiable
FOIA exemption (b)(6), whether disclo- record relating to any security of a
sure of the records is in the public in- Government agency or wholly or par-
terest by balancing the surviving fam- tially Government-owned corporation,
ily members’ privacy interest against the record for which is maintained by
the public’s right to know the informa- the Federal Reserve Bank of New York,
tion. shall be addressed to the Federal Re-
[32 FR 9967, July 7, 1967, as amended at 68 FR serve Bank of New York, New York, NY
67944, Dec. 5, 2003] 10045.
245
§ 323.5 31 CFR Ch. II (7–1–11 Edition)
(4) A written request for any identifi- agency or a wholly or partially Govern-
able record that the Bureau of the Pub- ment-owned corporation.
lic Debt has other than those set out in (d) No charge will be made for fur-
paragraphs (a) (1), (2), and (3) of this nishing an owner, coowner, joint
section shall be addressed to the Com- owner, surviving beneficiary, or person
missioner of the Public Debt, Wash- who is entitled to the security under
ington, DC 20220. the applicable regulations a photocopy
(5) A request may be presented in or similar reproduction of any Treas-
person at the office to which a written ury security, with any necessary sup-
request would be addressed. porting documents, which it is alleged
(b) Determination of availability. De- was improperly paid or was reissued,
termination as to whether or not a re- transferred or redeemed on a forged or
quested record shall be disclosed will defective request, endorsement, or as-
be made by the Officer to whom the re- signment.
quest should be directed under para- (e) Fees may be waived for other
graph (a) of this section, and by the classes of requested records upon a
Bureau of Public Debt Information Of- finding by the Commissioner of the
ficer for requests directed to the Office Public Debt that the person requesting
of the Commissioner, subject to an ap- the information is entitled to the
peal to the Commissioner of the Public record requested without charge.
Debt. The decision of the Commis-
sioner shall constitute final agency ac- PART 328—RESTRICTIVE ENDORSE-
tion unless he refers the appeal to the MENTS OF U.S. BEARER SECURI-
Fiscal Assistant Secretary, in which TIES
case the decision of the Fiscal Assist-
ant Secretary shall constitute final Sec.
agency action. 328.1 Scope of regulations.
328.2 Definitions.
§ 323.5 Fees. 328.3 Authorization for restrictive endorse-
ments.
The fees provided in part 1 of title 31 328.4 Effect of restrictive endorsements.
of the CFR (32 FR 9562, July 1, 1967), 328.5 Forms of endorsement.
shall apply to all requests for identifi- 328.6 Requirements for endorsement.
able records under this part except as 328.7 Shipment of securities.
328.8 Loss, theft, or destruction of securi-
follows: ties bearing restrictive endorsements.
(a) No charge will be made for 328.9 Miscellaneous.
verifying the record of a savings bond
AUTHORITY: R.S. 3706; 40 Stat. 288, 502, 1309;
or note identified by series and denomi- 46 Stat. 20; 48 Stat. 343; 49 Stat. 20; 56 Stat.
nation and either the registration and 189; 73 Stat. 622; 85 Stat. 5, 74 (31 U.S.C. 738a,
issue date or the serial number at the 739, 752, 752a, 753, 754, 754a and 754b); and 5
request of the owner, coowner, or sur- U.S.C. 301.
viving beneficiary or person entitled to SOURCE: 38 FR 10682, Apr. 30, 1973, unless
the security under the applicable regu- otherwise noted.
lations.
(b) No charge will be made for § 328.1 Scope of regulations.
verifying the record of a registered The regulations in this part are ap-
Treasury security, other than a savings plicable only to U.S. bearer securities 1
bond or note, or a registered security presented:
of a Government agency or a wholly or (a) By or through banks for payment
partially Government-owned corpora- at or after their maturity or call date,
tion, identified as to loan and registra- or in exchange for any securities under
tion for an owner, joint owner or per- any exchange offering,
son entitled to the security under the (b) By banks for conversion to book-
applicable regulations. entry securities,
(c) No charge will be made for advis-
ing a person who has submitted satis- 1 Certain agencies of the United States and
factory evidence of ownership as to the certain Government and Government-spon-
status of a bearer Treasury security or sored corporations also authorize the restric-
a bearer security of a Government tive endorsement of bearer securities.
246
(c) By or through banks at any time (1) For payment or redemption—at

prior to their maturity or call date for any time within 1 calendar month prior
redemption at par and application of to their maturity date, or the date on
the entire proceeds in payment of Fed- which they become payable pursuant
eral estate taxes, provided said securi- to a call for redemption, or at any time
ties by the terms of their issue are eli- after their maturity or call date;
gible for such redemption, and (2) For exchange—during any period
(d) By Service Center Directors and for their presentation pursuant to an
District Directors, Internal Revenue exchange offering;
Service, for redemption, with the pro- (3) For redemption at par in payment
ceeds to be applied in payment of taxes of Federal estate taxes (only eligible
(other than securities presented under securities)—at any time prior to their
paragraph (c) of this section). maturity or call redemption date; and
These regulations do not apply to bear- (4) For conversion to book-entry se-
er securities presented for any other curities under subpart O of part 306 of
transactions, or to registered securities this chapter—at any time prior to their
assigned in blank, or to bearer, or so maturity or call redemption date.
assigned as to become, in effect, pay- (b) By Service Center Directors and Dis-
able to bearer. trict Directors, Internal Revenue Service.
Service Center Directors and District
§ 328.2 Definitions. Directors, Internal Revenue Service,
Certain words and terms, as used in are authorized, under the conditions
these regulations, are defined as fol- and in the form hereinafter provided,
lows: to place restrictive endorsements upon
(a) Banks refer to, and include, incor- the face of bearer securities for the
porated banks (i.e., banks doing a gen- purpose of presentation to Federal Re-
eral commercial banking business), in- serve banks or branches, or to the Bu-
corporated trust companies (i.e., trust reau of the Public Debt, for redemption
companies doing either a general bank- and application of the proceeds in pay-
ing business or a general trust busi- ment of taxes (other than securities
ness), and savings and loan associa- presented for redemption at par and ap-
tions, building and loan associations, plication of the proceeds in payment of
and such other financial institutions as Federal estate taxes).
may be designated by the Federal Re- (c) Instructions from Federal Reserve
serve banks. This definition is limited banks. Federal Reserve banks will in-
to institutions incorporated within the form eligible banks and Service Center
United States, its territories and pos- Directors and District Directors, Inter-
sessions, the Commonwealth of Puerto nal Revenue Service, in their respec-
Rico and the Canal Zone. tive districts as to the procedure to be
(b) Bearer securities or securities are followed under the authority granted
those which are payable on their face by these regulations. Restrictive en-
to bearer, the ownership of which is not dorsements shall not be placed on secu-
recorded. They include Treasury rities until such information is re-
bonds,Treasury notes, Treasury certifi- ceived from the Federal Reserve banks.
cates of indebtedness, and Treasury
bills. § 328.4 Effect of restrictive endorse-
ments.
§ 328.3 Authorization for restrictive Bearer securities bearing restrictive
endorsements. endorsements as herein provided will
(a) By banks. Banks are authorized, thereafter be nonnegotiable and pay-
under the conditions and in the form ment, redemption, or exchange will be
hereinafter provided, to place restric- made only as provided in such endorse-
tive endorsements upon the face of ments.
bearer securities owned by themselves
or their customers for the purpose of § 328.5 Forms of endorsement.
presentation to Federal Reserve banks (a) When presented by banks—(1) For
or branches, or to the Bureau of the payment or exchange. The endorsement
Public Debt, as follows: placed on a bearer security presented
247
§ 328.6 31 CFR Ch. II (7–1–11 Edition)
for payment or exchange by a bank of the text on the face of the security.
should be in the following form: The dimensions of the endorsement
For presentation to the Federal Reserve
should be approximately 4 inches in
Bank of llllllllll, Fiscal Agent of width and 11⁄2 inches in height, and
the United States, for redemption or in ex- must be imprinted by stamp or plate of
change for securities of a new issue, in ac- such character as will render the en-
cordance with written instructions sub- dorsement substantially ineradicable.
mitted by llllllllll. (Insert name The name of the Federal Reserve bank
of presenting bank) of the district must appear on the plate
(2) For redemption at par. The endorse- or stamp used for the imprinting of the
ment placed on a bearer security pre- endorsement, and presentation to the
sented for redemption at par in pay- appropriate branch of the Federal Re-
ment of Federal estate taxes should be serve bank named will be considered as
in the following form: presentation to the bank. When securi-
ties are to be presented to the Bureau
Bank of llllllll, Fiscal Agent of the
of the Public Debt, the words ‘‘United
United States, for redemption at par in pay- States Treasury’’ should be used in lieu
ment of Federal estate taxes, in accordance of the words ‘‘Federal Reserve Bank of
with written instructions submitted by lllllll, Fiscal Agent of the
llllllllllllllll. (Insert name United States.’’ No subsequent en-
of presenting bank) dorsement will be recognized. If the
(b) For conversion to book-entry securi- form of endorsement on a security is
ties. The endorsement placed on a bear- different than that prescribed in § 328.5,
er security presented for conversion to the provisions of §§ 328.7 and 328.8 shall
a book-entry security shall be in the not apply to the security.
following form: (b) On coupons. Unmatured coupons
attached to restrictively endorsed se-
curities should be canceled by imprint-
Bank of lllllllll, Fiscal Agent of
the United States, for conversion to book- ing the prescribed endorsement in such
entry securities by lllllllll. (Insert manner that a substantial portion of
name of presenting bank) the endorsement will appear on each
such coupon. If any such coupons are
(c) When presented by Service Center
missing, deduction of their face
Directors or District Directors, Internal
amount will be made in cases of re-
Revenue Service. The endorsement
demption, and in cases of exchange, re-
placed on a bearer security by a Serv-
mittance equal to the face amount of
ice Center Director or a District Direc-
the missing coupons must accompany
tor, Internal Revenue Service, should
the securities. All matured coupons, in-
be in the following form:
cluding coupons which will mature on
For presentation to the Federal Reserve or before the date of redemption or ex-
Bank of lllllll;, Fiscal Agent of the change (except as otherwise specifi-
United States, for redemption, the proceeds cally provided in an announcement of
to be credited to the account of the Service
an exchange offering), should be de-
Center Director, Internal Revenue Service,
at lllll, for credit on the Federal tached from securities upon which re-
lllllllll (Income, gifts, or other) strictive endorsements are to be im-
taxes due from lllllllll. (Name and printed.
address)
§ 328.7 Shipment of securities.
§ 328.6 Requirements for endorsement. Securities bearing restrictive en-
(a) On bearer securities. The endorse- dorsements may be shipped, at the risk
ment must be imprinted in the and expense of the shipper, by reg-
lefthand portion of the face of each se- istered mail, messenger, armored car
curity with the first line thereof par- service, or express to the Federal Re-
allel to the left edge of the security serve bank of the district in which the
and in such manner as to be clearly presenting bank, the Service Center Di-
legible and in such position that it will rector, or the District Director, Inter-
not obscure the serial number, series nal Revenue Service, is located, or to
designation, or other identifying data, the appropriate branch of such Federal
and cover the smallest possible portion Reserve bank, shipments to the Bureau
248
of the Public Debt, Washington, DC, PART 330—REGULATIONS GOV-

should be made by messenger or ar- ERNING PAYMENT UNDER SPE-
mored car. CIAL ENDORSEMENT OF UNITED
§ 328.8 Loss, theft, or destruction of se- STATES SAVINGS BONDS AND
curities bearing restrictive endorse- UNITED STATES SAVINGS NOTES
ments. (FREEDOM SHARES)
(a) General. Relief will be provided on
Sec.
account of securities bearing restric-
330.0 Purpose.
tive endorsements proved to have been
330.1 Definition of terms.
lost, stolen or destroyed, upon the own- 330.2 Qualification for use of special en-
er’s application, in the same manner as dorsement.
registered securities which have not 330.3 Special endorsement of securities.
been assigned. (See subpart N of the 330.4 Guaranty given to the United States.
current revision of Department Cir- 330.5 Evidence of owner’s or beneficiary’s
cular No. 300, the general regulations authorization to affix special endorse-
governing United States securities.) ment.
330.6 Securities eligible for special endorse-
Except for bearer securities submitted
ment.
for redemption at par in payment of 330.7 Payment or redemption—exchange by
Federal estate taxes, a bank will be agent.
considered the owner of securities han- 330.8 Payment or redemption—exchange by
dled on behalf of customers unless it Federal Reserve Bank.
otherwise requests. The application for 330.9 Fiscal agents.
relief (Form PD 2211) and instructions 330.10 Modifications of other circulars.
will be furnished by the Federal Re- 330.11 Supplements, amendments, or revi-
serve banks. sions.
(b) Bond of indemnity. Where securi- AUTHORITY: 5 U.S.C. 301; 31 U.S.C. 3105.
ties bearing restrictive endorsements SOURCE: 53 FR 37519, Sept. 26, 1988, unless
shipped by a bank have been lost, sto- otherwise noted.
len, or destroyed, a bond of indemnity
with surety satisfactory to the Sec- § 330.0 Purpose.
retary of the Treasury will be required The regulations in this part establish
from the owner. If such bond is exe- a procedure under which qualified pay-
cuted by a bank or other corporation, ing agents may specially endorse
the execution must be authorized by United States Savings Bonds of certain
general or special resolution of the series and United States Savings Notes
board of directors, or other body exer- (Freedom Shares), and either redeem
cising similar functions under its by- the securities so endorsed, or forward
laws. Ordinarily, no surety will be re- them to a Federal Reserve Bank for re-
quired on a bond executed by a pre- demption, with or without the owner’s
senting bank. The Secretary of the signature to the requests for payment.
Treasury reserves the right, however,
to require a surety in any case in § 330.1 Definition of terms.
which he considers such action nec- As used in this part:
essary for the protection of the United (a) Federal Reserve Bank or Bank re-
States. fers to the Federal Reserve Bank pro-
viding savings bond services to the dis-
§ 328.9 Miscellaneous. trict in which a paying agent is lo-
The provisions of this circular are cated. See § 330.9.
subject to the current revision of De- (b) Owner(s) means the person(s)
partment Circular No. 300. The Sec- named as registered owner or coowners
retary of the Treasury reserves the on a bond or note, or as the designated
beneficiary who has succeeded to own-
right at any time to amend, supple-
ership of the bond or note upon the
ment, or withdraw any or all of the
death of the owner. For the purposes of
provisions of these regulations.
special endorsement, but not payment,
by a qualified agent, the term may also
249
§ 330.2 31 CFR Ch. II (7–1–11 Edition)
include fiduciaries, corporations, part- to employ the special endorsement pro-

nerships, associations, and other enti- cedure by executing and submitting
ties named on a security, where such the appropriate application-agreement
registration is authorized. form to the designated Federal Reserve
(c) Paying agent(s) or agent(s) refers Bank. In executing the form, the agent
to an eligible financial institution certifies that, by duly executed resolu-
qualified under the provisions of this tion of its governing board or com-
part to specially endorse securities and mittee, it has been authorized to apply
qualified, under the provisions of De- for the privilege of paying and proc-
partment of the Treasury Circular No. essing securities in accordance with
750, current revision (31 CFR part 321), the provisions and conditions of this
to redeem eligible savings bonds and part (Circular No. 888, including all
notes. The term includes the branches supplements, amendments, and revi-
of a qualified agent that redeem bonds sions, and any related instructions). If
and notes and are themselves directly the application is approved, the des-
accountable for such redemptions. ignated Federal Reserve Bank will
(d) Redemption and payment are used issue a certificate of qualification.
interchangeably for payment of a bond (b) Agents previously qualified. Paying
or note in accordance with the terms of agents qualified under previous revi-
its offering and the regulations gov- sions of this part are authorized to con-
erning it, and include redemption-ex- tinue to act without requalification.
change. They shall, however, be subject to the
(e) Redemption-exchange means any terms and conditions of the previously
authorized redemption of eligible secu- executed application and these regula-
rities for the purpose of applying the tions in the same manner and to the
proceeds in payment for other securi- same extent as though they had re-
ties offered in exchange by the Treas- qualified hereunder.
ury.
(c) Termination of qualification. The
(f) Savings bond(s) or bond(s) means a
United States Savings Bond of Series Secretary of the Treasury reserves the
A, B, C, D, E, EE, or I. right to withdraw the special endorse-
(g) Savings notes(s) or notes(s) means a ment authority from any paying agent
United States Savings Note (Freedom at any time. Such authority will also
Share). be terminated at any time at the re-
(h) Security or securities means a sav- quest of the paying agent. In either
ings bond or note, as defined in para- event, formal notice of the termination
graphs (f) and (g) of this section. shall be given to the agent in writing
(i) Special endorsement means a proce- by the designated Federal Reserve
dure under which a security is re- Bank.
deemed by an agent, qualified under [53 FR 37519, Sept. 26, 1988, as amended at 59
the provisions of this part, for cash or FR 10539, Mar. 4, 1994]
on redemption-exchange (or forwarded
for redemption to a designated Federal § 330.3 Special endorsement of securi-
Reserve Bank, where appropriate), uti- ties.
lizing a special stamp placed on the se- (a) Form of endorsement. Each secu-
curity in lieu of a request for payment rity processed under the provisions of
signed by the owner. this part shall bear the following en-
[53 FR 37519, Sept. 26, 1988, as amended at 59 dorsement:
FR 10538, 10539, Mar. 4, 1994; 63 FR 38044, July
14, 1998] Request by owner and validity of trans-
action guaranteed in accordance with T.D.
§ 330.2 Qualification for use of special Circular No. 888, as revised. (Name, location,
endorsement. and paying agent code number assigned by
designated Federal Reserve Bank.)
(a) Application for authority. Any fi-
nancial institution qualified as a pay- This endorsement must be legibly im-
ing agent of savings bonds and notes pressed in black or other dark-colored
under the provisions of Department of ink on the back of the security in the
the Treasury Circular No. 750, current space provided for the owner to request
revision, may establish its eligibility payment.
250
(b) Endorsement stamps. Endorsement (b) Assumed complete and uncondi-

stamps may be obtained from the des- tional liability to the United States for
ignated Federal Reserve Bank or, with any loss which may be incurred by the
its approval, purchased by the agent. United States as a result of the trans-
Requests for stamps to be furnished or action; and
approved by the Bank must be made in (c) Unconditionally agreed to make
writing by an officer of the paying prompt reimbursement for the amount
agent. Stamps procured by an agent of any loss, upon request of the Depart-
may not exceed a space bounded by 13⁄4 ment of the Treasury.
inches vertically and 3 inches hori- [53 FR 37519, Sept. 26, 1988, as amended at 59
zontally. They must follow exactly the FR 10539, Mar. 4, 1994]
wording prescribed. They may also in-
clude space for the transaction date § 330.5 Evidence of owner’s or bene-
and the initials or signature of the offi- ficiary’s authorization to affix spe-
cer or employee authorized to approve cial endorsement.
the transaction. (a) Form of authorization. The Treas-
(c) Securities registered in coownership ury does not prescribe the form or type
or beneficiary form. In the case of secu- of instructions an agent must obtain
rities registered in coownership or ben- from each owner, co-owner or bene-
eficiary form, the agent shall indicate ficiary in order to use the special en-
which person, whose name is inscribed dorsement procedure. In the case of eli-
thereon, requested payment or ex- gible Series E and EE savings bonds
change by encircling in black or other and savings notes presented for a re-
dark-colored ink the name of that per- demption-exchange, the owner, co-
son (or both coowners, if the request is owner or beneficiary authorized to re-
joint) in the inscription on the face of quest the exchange (as specified in Cir-
the securities. cular No. 750, § 321.8(b)), must sign the
(d) Restrictions. Under no cir- exchange subscription even though the
cumstances shall the special endorse- eligible Series E and EE savings bonds
ment procedure be used to give effect and savings notes are specially en-
to a transfer, hypothecation or pledge dorsed.
of a security, or to permit payment to (b) Securities in coownership or bene-
any person other than the owner, co- ficiary form. Securities registered in co-
owner, or, where appropriate, bene- ownership or beneficiary form should
ficiary. Violation of these provisions be accepted for special endorsement
will be cause for withdrawal of an only for immediate payment or ex-
agent’s authority to process securities change. Acceptance of bonds and notes
under the special endorsement proce- for processing at some future date
dure, and may involve additional pen- should be avoided as authority to uti-
alties if the circumstances warrant lize such endorsement generally ex-
such action. pires upon the death of the owner or
[53 FR 37519, Sept. 26, 1988, as amended at 59 coowner on whose behalf securities
FR 10539, Mar. 4, 1994] were to be paid. Requests for payment
of securities present by the surviving
§ 330.4 Guaranty given to the United beneficiary must be supported by a cer-
States. tificate of death for the owner named
By the act of paying or presenting to thereon, as required by Circular No.
a designated Federal Reserve Bank, for 750, part 321 and the appendix to that
payment or exchange, a security on part.
which it has affixed the special en- (c) Record of authorization. Agents
dorsement, a payment agent shall be should maintain such records as may
deemed to have: be necessary to establish the receipt of,
(a) Unconditionally guaranteed to and compliance with, instructions sup-
the United States the validity of the porting the special endorsement. If the
transaction, including the identifica- agent elects to make notations on the
tion of the owner and the disposition of backs of the securities to serve as a
the proceeds or the new bonds, as the record, the Bureau of the Public Debt
case may be, in accordance with the will undertake to produce, on request,
presenter’s instruction; photocopies of such securities at any
251
§ 330.6 31 CFR Ch. II (7–1–11 Edition)
time up to ten years after the redemp- ries E and EE savings bonds or savings
tion date. However, the Bureau does notes, redeemed in exchange for Series
not not assume responsibility for the HH bonds pursuant to the authority
adequacy of such notations, for the leg- and subject, in all other respects, to
ibility of any photocopy, or for failure the provisions of Circular No. 750, cur-
to produce a photocopy from its rent revision (31 CFR part 321), its ap-
records. pendix, and any other instructions
issued under its authority. Each spe-
FR 38044, July 14, 1998] cially endorsed bond or note paid by an
agent must have the agent’s payment
§ 330.6 Securities eligible for special stamp imprinted on its face and show
endorsement. the date and amount paid. Securities
(a) General authority. A qualified so paid should be combined with other
agent is authorized to affix the special securities paid under that Circular and
endorsement to: presented for settlement through EZ
(1) Savings bonds of Series A, B, C, D, CLEAR. Securities redeemed by an
E, EE, and I and savings notes to be re- agent in an exchange must be pre-
deemed for cash; and sented for settlement through EZ
(2) Eligible savings bonds of Series E CLEAR separately from, but at the
and EE and savings notes to be re- same times as, an exchange subscrip-
deemed in exchange for Series HH tion and any remittance are forwarded
bonds under the provisions of Circular to the Fiscal Agency Department of
No. 2–80 (31 CFR part 352). the appropriate Federal Reserve Bank.
(b) Securities which may not be spe- [63 FR 38044, July 14, 1998]
cially endorsed. The special endorse-
ment procedure may not be used in any § 330.8 Payment or redemption—ex-
case in which payment or exchange: change by Federal Reserve Bank.
(1) Is requested by a parent on behalf Specially endorsed securities which
of a minor child named on the security, an agent is not authorized to redeem
or for cash or on exchange should be for-
(2) Requires documentary evidence, warded to the Fiscal Agency Depart-
under regulations contained in Circu- ment of the designated Federal Reserve
lars Nos. 530 and 3–80 (31 CFR parts 315 Bank. The transmittals must be ac-
and 353, respectively), except as indi- companied by appropriate instructions
cated in § 330.5. governing the transaction and the dis-
(c) Securities owned by nonresident
position of the redemption proceeds or
aliens. As securities owned by a non-
new bonds, as the case may be. The se-
resident alien individual, or a non-
curities must be kept separate from
resident foreign corporation, partner-
others the agent has paid and must be
ship, or association, may be subject to
submitted in accordance with instruc-
the nonresident alien withholding tax,
tions issued by the Bank.
bonds and notes held or received by an
agent for the account of such owners [63 FR 38044, July 14, 1998]
must be forwarded to the designated
Federal Reserve Bank for redemption, § 330.9 Fiscal agents.
even though the agent may specially (a) The Federal Reserve Banks re-
endorse the securities. ferred to below, as fiscal agents of the
[53 FR 37519, Sept. 26, 1988, as amended at 59 United States, are authorized to per-
FR 10539, Mar. 4, 1994; 63 FR 38044, July 14, form such services as may be requested
1998] by the Secretary of the Treasury, or
his or her delegate, in connection with
§ 330.7 Payment or redemption—ex- this part.
change by agent. (b) The following Federal Reserve Of-
Specially endorsed securities may be fices have been designated to provide
paid in cash or, if they are eligible Se- savings bond services:
252
Reserve districts
served
14240.
PA 15230.
23261.
GU.
[59 FR 10539, Mar. 4, 1994, as amended at 63 FR 38044, July 14, 1998]
§ 330.10 Modifications of other circu- 332.10 Payment or redemption.

lars. 332.11 Reservation as to issue of bonds.
332.12 Fiscal agents.
The provisions of this part shall be
332.13 Reservation as to terms of offering.
considered as amending and
supplementing: Department of the AUTHORITY: 31 U.S.C. 3105 and 5 U.S.C. 301.
Treasury Circulars Nos. 530, 653, and 750 SOURCE: 57 FR 14281, Apr. 17, 1992, unless
(31 CFR parts 315, 316, and 321, respec- otherwise noted.
tively), and Department of the Treas-
ury Circulars, Public Debt Series Nos. § 332.1 Offering of bonds.
1–80, 2–80, 3–80, 3–67, 1–98, and 2–98 (31
The Secretary of the Treasury of-
CFR parts 351, 352, 353, 342, 359, and 360
respectively), and any revisions thereof fered for sale to the people of the
or amendments or supplements there- United States, Unites States Savings
to, and those Circulars are hereby Bonds of Series H, hereinafter gen-
modified to the extent necessary to ac- erally referred to as ‘‘Series H bonds’’
cord with the provisions of this part. or ‘‘bonds’’. This offer was terminated
on December 31, 1979.
[63 FR 38044, July 14, 1998]
§ 332.2 Description of bonds.
§ 330.11 Supplements, amendments, or
revisions. (a) General. Series H bonds bear a fac-
The Secretary of the Treasury may, simile of the signature of the Secretary
at any time, or from time to time, re- of the Treasury and of the Seal of the
vise, supplement, amend or withdraw, Department of the Treasury. They
in whole or in part, the provisions of were issued only in registered form and
this part. are nontransferable.
(b) Denominations and prices. Series H
PART 332—OFFERING OF UNITED bonds were issued at face (par) amount
and were available in denominations of
STATES SAVINGS BONDS, SERIES H $500, $1,000, $5,000 and $10,000.
Sec. (c) Inscription and issue. A bond is
332.1 Offering of bonds. valid only if an authorized issuing
332.2 Description of bonds. agent received payment therefore and
332.3 Governing regulations. duly inscribed, dated, and imprinted
332.4 Registration. validated indicia on the bond. The face
332.5 Limitation on holdings. of each bond was to be inscribed as set
332.6 Purchase of bonds.
forth below:
332.8 Extended terms and yield for out- (1) The name, social security account
standing bonds. number and address of the owner, and
332.9 Taxation. the name of the beneficiary, if any, or
253
§ 332.3 31 CFR Ch. II (7–1–11 Edition)
the name, social security account num- Department of the Treasury were au-
ber, and address of the first-named co- thorized to issue Series H bonds. How-
owner and the name of the other co- ever, financial institutions were per-
owner. The inscription of the social se- mitted to forward applications for pur-
curity number was required for bonds chase of the bonds to the Federal Re-
issued on or after January 29, 1963. serve Bank of their district. The date
(2) The issue date in the upper right- of receipt, by the Reserve Bank or the
hand portion of the bond; and Department of the Treasury, of the ap-
(3) The imprint of the agent’s valida- plication and payment governed the
tion indicia in the lower right-hand issue date of the bond purchased.
portion to show the date the bond was (b) Application for purchase and remit-
actually inscribed. tance. (1) The applicant for purchase of
Series H Bonds furnished.
§ 332.3 Governing regulations. (i) Instructions for registration of the
Series H bonds are subject to the reg- bonds to be issued, which must have
ulations of the Department of the been in an authorized form;
Treasury, now or hereafter prescribed, (ii) The appropriate social security or
governing United States Savings bonds employer identification number;
of Series A, B, C, D, E, F, G, H, J and (iii) The post office address of the
K, contained in 31 CFR part 315, also owner or first-named coowner; and
published as Department of the Treas- (iv) The address(es) for delivery of
ury Circular No. 530, current revisions, the bonds and for mailing checks in
except as otherwise specifically pro- payment of interest, if other than that
vided herein. of the owner or first-named coowner.
(2) The application was to be for-
§ 332.4 Registration. warded to a Federal Reserve Bank or
Series H bonds were permitted to be Branch, or the Department of the
registered as set forth in subpart B of Treasury, accompanied by a remit-
31 CFR part 315, also published as De- tance to cover the purchase price. Any
partment of the Treasury Circular No. form of exchange, including personal
530. checks, was acceptable, subject to col-
lection. Checks or other forms of ex-
§ 332.5 Limitation on holdings. change were to be drawn to the order of
The amount of Series H bonds, origi- the Federal Reserve Bank or the
nally issued during any one calendar United States Treasury. Checks pay-
year, that could be held by any one able by endorsement were not accept-
person, at any one time, computed in able. Any depositary qualified pursuant
accordance with the governing regula- to 31 CFR part 203, also published as
tions, was limited as follows: Department of the Treasury Circular
(a) General limitation. From $5,000 to No. 92, current revision, was permitted
$30,000 depending upon the issue date. to make payment by credit for bonds
(b) Special limitation for gifts to exempt applied for on behalf of its customers,
organizations under 26 CFR 1.501(c)(3)–1. up to any amount for which it was
$200,000 for bonds received as gifts by qualified in excess of existing deposits,
an organization which at the time of when so notified by the Federal Re-
purchase was an exempt organization serve Bank of its district.
under the terms of 26 CFR 1.501(c)(3)–1.
(c) Exchange pursuant to 31 CFR part § 332.7 Delivery of bonds.
339. Series H bonds issued in an ex- Authorized issuing agents delivered
change pursuant to the provisions of 31 Series H bonds, either over-the-counter
CFR part 339, also published as Depart- in person or by mail, at the risk and
ment of the Treasury Circular No. 1036, expense of the United States, to the ad-
were exempt from the annual limita- dress given by the purchaser, but only
tion. within the United States, its terri-
tories and possessions, and the Com-
§ 332.6 Purchase of bonds. monwealth of Puerto Rico. No mail de-
(a) Issuing agents. Only Federal Re- liveries elsewhere were made. If pur-
serve Banks and Branches, as fiscal chased by citizens of the United States
agents of the United States, and the temporarily residing abroad, the bonds
254
were delivered at such address in the Issue dates—1st Extension Entered—1st day of
United States as the purchaser di- day of—
rected. Nov. 1972–Oct. 1st ..................... Nov. 1982–Oct.
1976. 1986.
§ 332.8 Extended terms and yield for
outstanding bonds. (3) For Series H bonds that entered
(a) Extended maturity period—(1) Gen- extended maturity periods from No-
eral. The terms extended maturity pe- vember 1, 1986, through February 1,
riod, and second extended maturity pe- 1993, the investment yield was 6 per-
riod, when used herein, refer to 10-year cent per annum, paid semiannually, for
intervals after the original maturity such periods, including bonds that en-
dates during which owners may retain tered into an extended maturity pe-
their bonds and continue to earn inter- riod, as shown below:
est thereon. No special action is re-
quired of owners desiring to take ad- Issue dates—1st Extension Entered—1st day of
day of—
vantage of any extensions heretofore or
herein granted. Nov. 1966–Feb. 2nd (final) ......... Nov. 1986–Feb.
(2) Two extensions. All Series H bonds 1973. 1993.
Nov. 1976–Dec. 1st ..................... Nov. 1986–Dec.
may be retained for two extended ma- 1979. 1989.
turity periods of 10 years each. All Se-
ries H bonds cease to earn interest (4) For Series H bonds that entered or
upon reaching final maturity. Final enter extended maturity periods on or
maturities are shown below: after March 1, 1993, the guaranteed
Life of bonds minimum investment yield is 4 percent
Issue dates—1st day Final maturity
of dates—1st day of per annum, paid semiannually, or the
yrs. mos.
investment yield in effect at the begin-
Jun. 1952–Jan. 1957 29 8 Feb. 1982–Sep. ning of such periods, including bonds
1986.
that enter into an extended maturity
Feb. 1957–Dec. 30 .......... Feb. 1987–Dec.
1979. 2009. period, as shown below:
Issue dates—1st
(b) Investment yields for outstanding Extension Entered—1st day of
day of—
bonds—General—interest rates. The in-
Mar. 1973–Dec. 2nd (final) ......... Mar. 1993–Dec.
vestment yields on outstanding Series 1979. 1999.
H bonds are as set out below:
(1) For Series H bonds that were in (c) Tables of interest payments and in-
original or extended maturity periods vestment yields. Tables of interest pay-
prior to November 1, 1982, the investments and investment yields are avail-
ment yield was 8.5 percent per annum,
able from the Bureau of Public Debt
paid semiannually, effective for the pe-
and Federal Reserve Banks and
riod from the first semiannual interest
Branches.
payment date occurring on or after
May 1, 1981, through the end of such pe- [57 FR 14281, Apr. 17, 1992, as amended at 58
riods. For bonds that entered exten- FR 60937, Nov. 18, 1993]
sions, see paragraphs (b)(2) through
(b)(4) of this section. § 332.9 Taxation.
(2) For Series H bonds that entered The income derived from Series H
extended maturity periods from No- bonds is subject to all taxes imposed
vember 1, 1982, through October 1, 1986, under the Internal Revenue Code of
the investment yield was 7.5 percent 1986, as amended. The bonds are subject
per annum, paid semiannually, for such to estate, inheritance, gift, or other ex-
periods, including bonds that entered cise taxes, whether Federal or State,
into an extended maturity period, as but are exempt from all other taxation
shown below:
now or hereafter imposed on the prin-
Issue dates—1st cipal or interest thereof by any State,
Extension Entered—1st day of
day of— or any of the possessions of the United
Nov. 1962–Oct. 2nd (final) ......... Nov. 1982–Oct. States, or by any local taxing author-
1966. 1986. ity.
255
§ 332.10 31 CFR Ch. II (7–1–11 Edition)
§ 332.10 Payment or redemption. § 332.11 Reservation as to issue of

bonds.
A Series H bond became eligible for
redemption at par at any time after six The Secretary of the Treasury re-
months from its issue date. To be reserved the right to reject any applica-
deemed, the bond must be presented tion for Series H bonds, in whole or
and surrendered, with a duly executed part, and to refuse to issue or permit to
request for payment, to a Federal Re- be issued hereunder any such bonds in
any case or any class or classes of
serve Bank or Branch referred to in
cases, if such action was deemed to be
§ 332.12, or the Bureau of the Public
in the public interest. Any action in
Debt, Parkersburg, WV 26106–1328. In any such respect was final.
any case where bonds are surrendered
for redemption in the month prior to § 332.12 Fiscal agents.
an interest payment date, redemption (a) Federal Reserve Banks and
will not be deferred but will be made in Branches referred to below, as fiscal
regular course, unless the presenter agents of the United States, are au-
specifically requests that the trans- thorized to perform such services as
action be delayed until that date. A re- may be requested of them by the Sec-
quest to defer redemption made more retary of the Treasury, or his or her
than one month preceding the interest delegate, in connection with the re-
payment date will not be accepted. issue, redemption and payment of Se-
[57 FR 14281, Apr. 17, 1992, as amended at 59
ries H bonds.
FR 10539, Mar. 4, 1994] (b)(1) The following Federal Reserve
Offices have been designated to provide
Reserve districts
served
14240.
Federal Reserve Bank, Pittsburgh Cleveland, Phila- DE, KY, (eastern half), NJ (southern half), OH, PA, WV (northern
PA 15230.
23261.
GU.
(2) Until March 1, 1996, other Federal PART 337—SUPPLEMENTAL REGU-

Reserve Offices may continue to pro- LATIONS GOVERNING FEDERAL
vide some savings bond services, but HOUSING ADMINISTRATION DE-
such services will be phased out over BENTURES
the period prior to that date.
[59 FR 10539, Mar. 4, 1994] Sec.
337.0 Scope of regulations.
§ 332.13 Reservation as to terms of of-
fering. Subpart A—Certificated Debentures
The Secretary of the Treasury may 337.1 Applicability of Treasury regulations.
at any time, or from time to time, sup- 337.2 Transportation charges and risks.
plement or amend the terms of this of- 337.3 Termination of transfers and denomi-
fering of bonds, or of any amendments national exchange transactions.
or supplements thereto. 337.4 Presentation and surrender.
337.5 Assignments.
256
337.6 Conversions to book-entry. for similar transactions and operations
337.7 Servicing transactions. in certificated debentures. To the ex-
337.8 Payment of mortgage insurance pre-
tent that the provisions in this part
miums.
337.9 Payment of final interest. differ from the provisions in part 306,
337.10 Payments. the provisions in this part shall pre-
vail.
Subpart B—Book-Entry Debentures
§ 337.2 Transportation charges and
337.11 Original issue and conversions. risks.
337.12 Applicability of TREASURY DIRECT
regulations. Debentures presented for redemption
337.13 Payment of mortgage insurance pre- at call or maturity, or for authorized
miums. prior purchase, or for conversion to
Subpart C—Additional Information book-entry form, must be delivered at
the expense and risk of the holder. De-
337.14 Address for further information. bentures bearing restricted assign-
337.15 General provisions. ments may be forwarded by registered
AUTHORITY: 5 U.S.C. 301; 31 U.S.C. 321; Sec. mail, but for the owner’s protection de-
516, Pub. L. 102–550, 106 Stat. 3790. bentures bearing unrestricted assign-
SOURCE: 59 FR 42162, Aug. 17, 1994, unless ments should be forwarded by insured
otherwise noted. registered mail.
§ 337.0 Scope of regulations. [66 FR 56432, Nov. 8, 2001]
The United States Department of the § 337.3 Termination of transfers and
Treasury is the agent of the Federal denominational exchange trans-
Housing Administration for transactions.
actions in any debentures which have
been or may be issued pursuant to the Debentures, which by their terms are
authority conferred by the National subject to call, may be called for re-
Housing Act, 12 U.S.C. 1701 et seq., as demption, in whole or in part, at par
amended from time to time, including and accrued interest, on any interest
Mutual Mortgage Insurance Fund De- date on three months’ notice. No trans-
bentures, Housing Insurance Fund De- fers or denominational exchanges in
bentures, War Housing Insurance Fund certificated debentures covered by a
Debentures, Military Housing Insur- given call will be made on the books of
ance Fund Debentures, and National the Department of the Treasury on or
Defense Housing Insurance Fund De- after the announcement of such call.
bentures. In accordance with the regu- However, this does not affect the right
lations adopted by the Federal Housing of a holder of such debenture to sell
Commissioner and approved by the and assign it on or after the announce-
Secretary of the Treasury, such trans- ment of the call date.
actions are governed by regulations of
the Department of the Treasury, so far § 337.4 Presentation and surrender.
as applicable. The Bureau of the Public (a) For redemption. To facilitate the
Debt, Office of Public Debt Accounting redemption of called or maturing de-
operates the FHA debenture computer bentures, they may be presented and
system and performs the day-to-day
surrendered in the manner prescribed
operations and transactions relating to
in this section in advance of the call or
the debentures.
maturity date, as the case may be.
[66 FR 56432, Nov. 8, 2001] Early presentation by holders will in-
sure prompt payment of principal and
Subpart A—Certificated interest when due. The debentures
Debentures must first be assigned by the registered
payee or his assignee, or by his duly
§ 337.1 Applicability of Treasury regu- constituted representative, if required,
lations. in the form and manner indicated in
The general regulations governing § 337.5, and must then be submitted to
United States securities, part 306 of the Bureau of the Public Debt at the
this chapter, apply, as the regulations address given in § 337.14, accompanied
257
§ 337.5 31 CFR Ch. II (7–1–11 Edition)
by appropriate written advice. A trans- § 337.6 Conversions to book-entry.

mittal advice for this purpose will ac-
Upon implementation of the book-
company the notice of call.
entry debenture system, to be an-
(b) For purchase. Debentures, the pur- nounced in advance by separate public
chase of which has been authorized notice, all new debentures will be
prior to call or maturity, may be as- issued only in book-entry form, and
signed as instructed in paragraph (a) of may not thereafter be converted to cer-
this section and immediately sub- tificated form.
mitted in accordance with procedures Certificated debentures may, upon
prescribed by HUD for this purpose. the owner’s request in accordance with
[59 FR 42162, Aug. 17, 1994, as amended at 66 § 337.5(c), be converted to book-entry. If
FR 56432, Nov. 8, 2001] such action is taken, the owner shall
be deemed to have irrevocably waived
§ 337.5 Assignments. the right to hold such debenture in cer-
tificated form.
(a) If the registered payee, or an as-
signee holding a certificated debenture § 337.7 Servicing transactions.
under proper assignment from the reg-
istered payee, desires that payment be Upon implementation of the book-
made to such payee or assignee, the de- entry debenture system, to be an-
benture need not be assigned. If the nounced in advance by separate public
owner desires for any reason that pay- notice, any transfer or denominational
ment be made to another, without in- exchange of certificated debentures
termediate assignment, the debentures generally will be made in book-entry
form. If certificated debentures are de-
should be assigned to ‘‘The Federal
sired, the owner should so request in
Housing Commissioner for redemption
writing, before the book-entry deben-
(or, purchase) for the account of
tures are issued.
llll,’’ inserting the name and ad-
dress of the person to whom payment is § 337.8 Payment of mortgage insurance
to be made. Proof of the authority of premiums.
the individual assigning on behalf of an
When certificated debentures are ten-
owner will be required in accordance
dered for purchase prior to maturity in
with part 306 of this chapter.
order that the proceeds thereof be ap-
(b) An assignment in blank or other plied to pay for mortgage insurance
assignment having similar effect will premiums, any difference between the
be recognized, but in that event the de- amount of the debentures purchased
benture would be, in effect, payable to and the amount of the mortgage insur-
bearer, and payment will be made in ance premium will generally be issued
accordance with the instructions re- to the owner in the form of a book-
ceived from the person surrendering entry debenture in the exact amount of
the debenture for redemption or pur- such difference, provided it is one dol-
chase. For the owner’s protection, such lar ($1.00) or more. However, if the
assignments should be avoided unless owner so requests, such difference will
the owner is willing to lose the protec- be settled with certificated deben-
tion afforded by registration. ture(s), together with a cash adjust-
(c) Debentures submitted for conver- ment, if any. Such request should be
sion to book-entry form should be as- made in writing, before the book-entry
signed to ‘‘The Federal Housing Com- debenture in the amount of the dif-
missioner for conversion to book-entry ference is issued.
debentures for the account of llll.’’
The registration on the book-entry ac- § 337.9 Payment of final interest.
count and/or the account number in Final interest on any debenture,
which the debentures should be depos- whether purchased prior to or re-
ited should be indicated. deemed on or after the call or the ma-
(d) All assignments must be made on turity date, will be paid with the prin-
the debentures themselves unless oth- cipal. In all cases the payment of prin-
erwise authorized by the Department cipal and final interest will be mailed
of Treasury. or directed to the payment address
258
given in the form of advice accom- ject to call, may be called for redemp-
panying the debenture surrendered. tion, in whole or in part, at par and ac-
crued interest, on any interest date on
§ 337.10 Payments. three months’ notice. For purposes of a
Payments on certificated debentures transaction request affecting owner-
will be made by fiscal agency check in ship and/or payment instructions with
accordance with part 355 of this chap- respect to a debenture announced for
ter, or, upon request, by direct deposit call, a proper request must be received
(electronic funds transfer) in accord- not less than twenty (20) calendar days
ance with part 370 of this chapter. In- preceding the next payment date. If the
formation as to the deposit account at twentieth day preceding a payment
the financial institution designated to date falls on a Saturday, Sunday, or a
receive a direct deposit payment shall Federal holiday, the last day set for
be provided on the appropriate form(s) the receipt of a transaction request
designated by the Department. will be the last business day preceding
that date. If a transaction request is
Subpart B—Book-Entry Debentures received less than twenty (20) calendar
days preceding a payment date, the De-
§ 337.11 Original issue and conver- partment may, in its discretion, act on
sions. such request if sufficient time remains
Upon implementation of the book- for processing. If a transaction request
entry debenture system, to be an- is received too late for completion of
nounced in advance by separate public the requested transaction, principal
notice, all new debentures will be and final interest on the called deben-
issued only in book-entry form in the tures will be paid to the owner of
exact amount payable to the owner. record and sent to the payment address
Once issued in book-entry form, a de- of record.
benture may not be converted to cer- (d) Payments. (See § 357.26 of this
tificated form. chapter.) Direct deposit (electronic
funds transfer) payments with respect
§ 337.12 Applicability of TREASURY to debentures, e.g., principal, interest
DIRECT regulations. and cash adjustments, will be made
The regulations governing the without prenotification messages.
TREASURY DIRECT Book-Entry Se- § 337.13 Payment of mortgage insur-
curities System (TREASURY DIRECT) ance premiums.
(part 357 of this chapter) apply to gov-
When book-entry debentures are
ern transactions in FHA book-entry de-
being purchased prior to maturity to
bentures, with the following excep-
pay for mortgage insurance premiums,
tions:
the difference between the amount of
(a) Securities account. (See § 357.20 of
the debentures purchased and the
this chapter.) An account in the book-
mortgage insurance premiums shall be
entry debenture system may be estab-
issued to the owner in the form of a
lished by the Department of the Treas-
book-entry debenture in the exact
ury upon receipt of the request that a
amount of such difference, provided it
new debenture be issued or that a cer- is one dollar ($1.00) or more.
tificated debenture be converted to
book-entry form. The statement of ac-
count shall contain information re- Subpart C—Additional Information
garding the account as of the date of § 337.14 Address for further informa-
such statement. It will include a tion.
unique account number, but will not
include price information. Further information regarding the
(b) Transfers. (See § 357.22 of this issuance of, transactions in, and re-
chapter.) A book-entry debenture may demption of, FHA debentures may be
be transferred only between accounts obtained from the Bureau of the Public
Debt, Office of Public Debt Accounting,
established in the FHA book-entry de-
200 Third Street, P.O. Box 396, Parkers-
benture system.
(c) Debentures announced for call. De- burg, West Virginia 26102–0396.
bentures, which by their terms are sub- [66 FR 56432, Nov. 8, 2001]
259
§ 337.15 31 CFR Ch. II (7–1–11 Edition)
§ 337.15 General provisions. EDITORIAL NOTE: The sale of U.S. Savings

Bonds, Series H, was terminated at the close
As fiscal agents of the United States, of business Dec. 31, 1979. See 44 FR 77158, Dec.
Federal Reserve Banks are authorized 31, 1979.
to perform any necessary acts under
this part. The Secretary of the Treas- § 339.1 Definitions of words and terms
ury may at any time or from time to as used in this circular.
time prescribe supplemental and Unless the context otherwise requires
amendatory regulations governing the or indicates:
matters covered by this part, notice of (a) Securities mean outstanding U.S.
which shall be communicated promptly Savings Bonds of Series E and U.S.
to the registered owners of the deben- Savings Notes (freedom shares).
tures. (b) Owner means an owner of securi-
ties, except a commercial bank in its
[66 FR 56432, Nov. 8, 2001]
own right (as distinguished from a rep-
resentative or fiduciary capacity) and a
PART 339—EXCHANGE OFFERING nonresident alien who is a resident of
OF UNITED STATES SAVINGS an area with respect to which the
BONDS, SERIES H Treasury Department restricts or regu-
lates delivery of checks drawn against
Sec. funds of the United States or any agen-
339.0 Offering of Series H bonds in exchange cy or instrumentality thereof. The
for Series E bonds and savings notes. term includes a registered owner,
339.1 Definitions of words and terms as used whether or not a natural person, either
in this circular. coowner (but only the principal coowner
339.2 Denominations.
if Series H bonds are requested in a
339.3 Exchanges with privilege of deferring
reporting of interest for Federal income form of registration different from that
tax purposes. on the securities submitted), a sur-
339.4 Exchanges without tax deferral. viving beneficiary, or any other person
339.5 Governing regulations. who would be entitled to reissue under
339.6 Fiscal agents. the regulation governing U.S. Savings
339.7 Preservation of rights. Bonds, 1 such as, but not limited to,
339.8 Reservation as to terms of offer. any person entitled to succeed to the
AUTHORITY: Secs. 18, 20, and 22 of the Sec- estate of a deceased owner.
ond Liberty Bond Act, as amended (40 Stat. (c) Commercial bank means a bank ac-
1309, 48 Stat. 343, 49 Stat. 21, 73 Stat. 621, all cepting demand deposits.
as amended; 31 U.S.C. 753, 754b, 757c), and 5 (d) Interest means the increment in
U.S.C. 301. value on Series E savings bonds and on
SOURCE: 36 FR 23856, Dec. 15, 1971, unless savings notes.
otherwise noted. (e) Principal coowner means a coowner
who purchased the securities submitted
§ 339.0 Offering of Series H bonds in for exchange with his own funds or re-
exchange for Series E bonds and ceived them as a gift, legacy or inherit-
savings notes.
ance or as a result of judicial pro-
The Secretary of the Treasury, pur- ceedings and had them reissued in co-
suant to the authority of the Second ownership form, provided he has re-
Liberty Bond Act, as amended, hereby ceived no contribution in money or
offers to the people of the United money’s worth from the other coowner
States, U.S. Savings Bonds of Series H for designating him on the securities.
in exchange for outstanding U.S. Sav-
ings Bonds of Series E and U.S. Savings § 339.2 Denominations.
Notes (freedom shares) without regard Series H bonds, available for use
to the annual limitation on holdings hereunder, are in denominations of
for the Series H bonds. The Series H $500, $1,000, $5,000 and $10,000.
bonds offered hereunder are those de-
scribed in Department Circular No. 905, 1 Department Circular No. 530, current revi-
current revision, except as otherwise sion (31 CFR part 315). Copies may be ob-
specifically provided herein. This offer- tained from any Federal Reserve Bank or
ing will continue until terminated by Branch or the Bureau of the Public Debt,
the Secretary of the Treasury. Washington, DC 20220.
260
§ 339.3 Exchanges with privilege of de- (3) The total current redemption
ferring reporting of interest for value of the securities submitted for
Federal income tax purposes. exchange in any one transaction must
(a) Tax-deferred exchanges. Pursuant amount to $500 or more. If the total
to the provisions of section 1037(a) of current redemption value is in an even
the Internal Revenue Code of 1954, the multiple of $500, Series H bonds must
be requested in that exact amount. If
Secretary of the Treasury hereby
the total current redemption value ex-
grants to owners who have not been re-
ceeds $500, but is not in an even mul-
porting the interest on their securities
tiple of $500, the owner has the option
on an accrual basis for Federal income
of furnishing cash necessary to obtain
tax purposes the privilege of exchang- Series H bonds of the next higher $500
ing such securities for Series H bonds multiple, or of receiving payment of
and of continuing to defer reporting of the difference between the total cur-
the interest on the securities ex- rent redemption value and the next
changed (except interest referred to in lower multiple of $500. For example,
paragraph (b)(5) of this section) for under the rules prescribed in this cir-
Federal income tax purposes to the cular, if the securities submitted for
taxable year in which the Series H exchange in one transaction total
bonds received in exchange are dis- $4,253.33 current redemption value, the
posed of, are redeemed, or have reached owner may elect to:
final maturity, whichever is earlier. 2 (i) Receive $4,000 in Series H bonds
(b) Rules governing the exchange. (1) and the amount of the difference,
Exchange subscription Form PD 3253, $253.33, or
completed and executed in accordance (ii) Pay the difference, $246.67, nec-
with the instructions thereon, the se- essary to obtain $4,500 in Series H
curities, any cash difference (see para- bonds. 5
graph (b)(3) of this section), and any (4) Any amount paid to the owner as
supporting evidence which may be re- a cash adjustment (as in paragraph
quired under the governing regula- (3)(i) of this section) must be treated as
tions 3 may be presented or forwarded income for Federal income tax pur-
to any authorized agency. 4 poses for the year in which it is re-
(2) A Series H bond issued upon ex- ceived up to an amount not in excess of
change will be registered in the name the total interest on the securities ex-
of the owner of the securities sub- changed. 6
mitted in any authorized form of reg- (5) Each Series H bond issued under
istration. However, the principal co- this section will be stamped ‘‘EX’’ or
owner must be named as owner or co- ‘‘EXCH’’ to show that it was issued
owner. upon exchange. Each bond also will
bear a legend showing how much of its
issue price represents interest on the
2 The interest paid semiannually by check
securities exchanged. This interest
on all Series H bonds, whether issued in ex-
must be treated as income for Federal
change under this or any other section, or
otherwise, is subject to the Federal income income tax purposes for the year in
tax for the taxable year in which it is re-
ceived. 5 If a paying agent accepts a subscription
3 For example, a beneficiary named on Se- solely for the purpose of forwarding it, or if
ries E bonds would have to submit proof of the owner forwards it direct, to a Federal
the death of the registered owner in order to Reserve Bank or Branch or to the Bureau of
exchange such bonds for Series H bonds. the Public Debt, the remittance for the dif-
4 Agents authorized to pay Series E bonds ference, by check or other form of exchange
and savings notes are authorized to accept (which will be accepted subject to collec-
and handle exchange subscriptions submitted tion), must be drawn to the order of the Fed-
by natural persons whose names are in- eral Reserve Bank or the United States
scribed on the face of the bonds and notes as Treasury, as the case may be. The remit-
owners or coowners in their own right. How- tance must accompany the subscription and
ever, as agents of subscribers they may for- the securities to be exchanged.
ward any exchange subscription to a Federal 6 The amount, if any, paid to the owner in
Reserve Bank or Branch or the Bureau of the excess of the interest is a repayment on ac-
Public Debt, Washington, DC 20226, for account of the purchase price of the securities
ceptance and handling. exchanged, not income.
261
§ 339.4 31 CFR Ch. II (7–1–11 Edition)
which the Series H bond is redeemed, is herein shall limit or restrict rights
disposed of, or finally matures, which- which owners of Series H bonds re-
ever is earlier. ceived in earlier exchanges have here-
(6) The Series H bonds will be dated tofore acquired.
as of the first day of the month in
which the securities, the exchange sub- § 339.8 Reservation as to terms of
scription, any necessary cash dif- offer.
ference and supporting evidence, if any, The Secretary of the Treasury re-
are accepted for exchange by an au- serves the right to reject any exchange
thorized agency. subscription for Series H bonds, in
whole or in part, and to refuse to issue
§ 339.4 Exchanges without tax defer- or permit to be issued hereunder any
ral. such bonds in any case or any class or
Exchanges by owners who: classes of cases if he deems such action
(a) Report the interest on all of their to be in the public interest, and his ac-
securities annually for Federal income tion in any such respect shall be final.
tax purposes, or The foregoing revision and amend-
(b) Who elect to report all such inter- ment is made for the purpose of grant-
est in the year of the exchange, or ing to owners of savings notes the same
(c) Who are tax-exempt under the privilege afforded owners of Series E
provisions of the Internal Revenue savings bonds for exchanging their se-
Code of 1954 and the regulations issued curities for Series H bonds with or
thereunder, without tax deferral. As good cause ex-
Will be handled in the same manner ists for making this change, which in-
and will be governed by the rules pre- volves public property and contracts
scribed for exchanges under § 339.3. relating to the fiscal and monetary af-
However, the Series H bonds will not fairs of the United States, I find that
bear the legend referred to in notice and public procedures are unnec-
§ 339.3(b)(5). Any part of the cash ad- essary. This action is effected under
justment received which represents in- the provisions of sections 18, 20, and 22
terest previously reported for Federal of the Second Liberty Bond Act, as
income tax purposes need not be ac- amended (40 Stat. 1309, 48 Stat. 343, 49
counted for. The Series H bonds may be Stat. 21, 73 Stat. 621, all as amended; 31
registered in the name of the owner of U.S.C. 753, 754b, 757c), and 5 U.S.C. 301.
the securities submitted in exchange in
any authorized form of registration. PART 340—REGULATIONS GOV-
ERNING THE SALE OF TREASURY
§ 339.5 Governing regulations.
BONDS THROUGH COMPETITIVE
All Series H bonds issued under this BIDDING
circular are subject to the regulations,
now or hereafter prescribed, contained Sec.
in Department Circular No. 530, cur- 340.0 Authority for sale of Treasury bonds
rent revision (part 315 of this chapter). through competitive bidding.
340.1 Public notice—description of bonds—
§ 339.6 Fiscal agents. terms of offer.
340.2 Denominations and exchanges.
Federal Reserve Banks and Branches, 340.3 Taxation.
as fiscal agents of the United States, 340.4 Acceptance as security for public de-
are authorized to perform such services posits.
as may be requested of them in connec- 340.5 Notice of intent to bid.
tion with exchanges under these regu- 340.6 Submission of bids.
lations. 340.7 Deposits—retention—return.
340.8 Acceptance of bids.
§ 339.7 Preservation of rights. 340.9 Bids—revocations—rejections—post-
ponements—reoffers.
The provisions of Treasury Depart- 340.10 Payment for and delivery of bonds.
ment Circulars Nos. 530, 653, and 905, as 340.11 Failure to complete transaction.
currently revised, are hereby modified 340.12 Reservations as to terms of circular.
and amended to the extent that they AUTHORITY: Sec. 8, 50 Stat. 481, as amended;
are not in accordance with this cir- R.S. 3706; secs. 1, 4, 18, 5, 40 Stat. 288, as
cular. However, nothing contained amended, 290, as amended, 1309, as amended,
262
290, as amended; secs. 19, 20, 48 Stat. 343, as date and closing hour for receipt of
amended; 31 U.S.C. 738a, 739, 752, 752a, 753, bids, and the date on which the bonds
754, 754a, 754b. will be delivered and payment for any
SOURCE: 27 FR 12481, Dec. 18, 1962, unless accepted bid must be completed. When
otherwise noted. so specified in the public notice, it
shall be a condition of each bid that, if
§ 340.0 Authority for sale of Treasury accepted by the Secretary of the Treas-
bonds through competitive bidding.
ury, the bidder will make a bona fide
(a) The Secretary of the Treasury reoffering to the investing public.
may, from time to time, by public no-
tice, offer Treasury bonds for sale and § 340.2 Denominations and exchanges.
invite bids therefor. The bonds so of- Bearer bonds with interest coupons
fered and the bids made will be subject attached, and bonds registered as to
to the terms and conditions and the principal and interest, will be available
rules and regulations herein set forth, in denominations of $500, $1,000, $5,000,
except as they may be modified in the $10,000, $100,000, and $1,000,000. Provi-
public notice or notices issued by the sions will be made for the interchange
Secretary in connection with par- of bonds of different denominations and
ticular offerings. 1 The bonds will be of bearer and registered bonds, and for
subject also to the general rules and the transfer of registered bonds.
regulations of the Treasury Depart-
ment, now or hereafter prescribed, gov- § 340.3 Taxation.
erning United States securities. They The income derived from the bonds
will be issued pursuant to the author- will be subject to all taxes imposed
ity of the Second Liberty Bond Act, as under the Internal Revenue Code of
amended. 1954. The bonds will be subject to es-
(b) The terms public notice, notices, or tate, inheritance, gift or other excise
announcement as used in this part mean taxes, whether Federal or State, but
the Public Notice of Invitation to Bid on will be exempt from all taxation now
Treasury bonds and any supplementary or hereafter imposed on the principal
or amendatory notices or announce- or interest thereof by any State, or any
ments with respect thereto, including, of the possessions of the United States,
but not limited to any statement re- or by any local taxing authority.
leased to the press by the Secretary of
the Treasury and notices sent to those § 340.4 Acceptance as security for pub-
who have filed notices of intent to bid lic deposits.
or who have filed bids. The bonds will be acceptable to se-
§ 340.1 Public notice—description of cure deposits of public moneys.
bonds—terms of offer.
§ 340.5 Notice of intent to bid.
When bonds are offered for sale
Any individual, or organization, syn-
through competitive bidding, bids
dicate, or other group which intends to
therefor will be invited through the
form of a public notice or notices submit a bid, must, when required by
issued by the Secretary of the Treas- the public notice, give written notice
ury. The notice or notices will either of such intent on Form PD 3555 at the
fix the coupon rate of interest to be place and within the time specified in
borne by the bonds or prescribe the the public notice. The filing of such no-
conditions under which bidders may tice will not constitute a commitment
specify the rate and will set forth the to bid.
terms and conditions of the bonds, in- § 340.6 Submission of bids.
cluding maturities, call features, if
any, and the terms and conditions of (a) General. Bids will be received only
the offer, including the amount of the at the place specified and not later
issue for which bids are invited, the than the time designated in the public
notice. Each bid must be submitted on
1 These regulations do not apply to Treas- the official form referred to in the pub-
ury bills, which are governed by Department lic notice and should be enclosed and
Circular No. 418, Revised, and do not con- sealed in the special envelope provided
stitute a specific offering of bonds. by the Treasury Department. Forms
263
§ 340.7 31 CFR Ch. II (7–1–11 Edition)
and envelopes may be obtained from (b) Method of determining accepted

any Federal Reserve Bank or Branch or bids. The lowest basis cost of money 2
the Bureau of the Public Debt, Treas- computed from the date of the bonds to
ury Department, Washington, DC 20220. the date of maturity will be used in de-
Bids shall be irrevocable. termining successful bids.
(b) Bidding. Bids, except noncompeti- (c) Acceptance of successful bid. The
tive bids when authorized, must be ex- Secretary of the Treasury, or his rep-
pressed as a percentage of the principal resentative, will notify any successful
amount in not to exceed five decimals, bidder of acceptance in the manner and
e.g., 100.01038 percent. Provisions relat- form specified in the public notice.
ing to the coupon rate of interest on
the bonds, if not set forth in the public § 340.9 Bids—revocations—rejections—
notice, will be made in a supplemental postponements—reoffers.
announcement. The public notice will The Secretary of the Treasury, in his
indicate the timing of any such an- discretion, may (a) revoke the public
nouncement. If the bidders are required notice of invitation to bid at any time
to specify the coupon rate, each bidder before opening bids, (b) return all bids
shall specify a single coupon rate of in- unopened either at or prior to the time
terest, which shall be a multiple of 1⁄8 specified for their opening, (c) reject
of 1 percent but not in excess of 41⁄4 per- any or all bids, (d) postpone the time
cent. The Secretary of the Treasury for presentation and opening of bids,
may limit the premium above or the and (e) waive any immaterial or obvi-
discount below par. ous defect in any bid. Any action the
(c) Group bids. A syndicate or other Secretary of the Treasury may take in
group submitting a bid must act these respects shall be final. In the
through a representative who must be event of a postponement, known bid-
a member of the group. The representa- ders will be advised thereof and their
tive must warrant to the Secretary of bids returned unopened.
the Treasury that he has all necessary
power and authority to act for each § 340.10 Payment for and delivery of
member and to bind the members joint- bonds.
ly and severally. In addition to what- Payment for the bonds, including ac-
ever other data may be required by the crued interest, if any, must be made in
Secretary of the Treasury, in the case immediately available funds on the
of a syndicate, the representative must date and at the place specified in the
file, within one hour after the time for invitation. Delivery of bonds under this
opening of bids, at the place specified section will be made at the risk and ex-
in the public notice for receipt of bids pense of the United States at such
a final statement of the composition of place or places in the United States as
the syndicate membership and the may be provided in the invitation. In-
amount of each member’s underwriting terim receipts, if necessary, will be
participation. issued pending delivery of the defini-
tive bonds.
§ 340.7 Deposits—retention—return.
Each bid must be accompanied by a § 340.11 Failure to complete trans-
deposit in the amount specified in the action.
public notice. The deposit of any suc- If any successful bidder shall fail to
cessful bidder will be retained as secu- pay in full for the bonds on the date
rity for the performance of his obliga-
tion and will be applied toward pay- 2 In cases where bidders are required to
ment of the bonds. All other deposits specify the coupon rate, the lowest basis cost
will be returned immediately. No inter- of money will be determined by reference to
est will be allowed on account of any a specially prepared table of bond yields, a
deposits. copy of which will be made available to all
prospective bidders upon written request to
§ 340.8 Acceptance of bids. the Federal Reserve Bank of New York, or
the Bureau of the Public Debt, Treasury De-
(a) Opening of bids. Bids will be partment, Washington, DC 20220.
opened at the time and place specified Straightline interpolation will be applied if
in the public notice. necessary.
264
and at the place specified in the invita- This offering of bonds will terminate
tion, the money deposited by or in be- on April 30, 1982.
half of such bidder shall be forfeited to [28 FR 405, Jan. 16, 1963, as amended at 47 FR
the Treasury Department. 18596, Apr. 30, 1982]
§ 340.12 Reservations as to terms of § 341.1 Description of bonds.

circular.
(a) Investment yield (interest). United
The Secretary of the Treasury re- States Retirement Plan Bonds, herein-
serves the right, at any time, or from after sometimes referred to as Retire-
time to time, to amend, repeal, supplement Plan Bonds, will be issued at par.
ment, revise or withdraw all or any of The investment yields (interest) are as
the provisions of this part. follows:
(1) Bonds with issue dates of January
PART 341—REGULATIONS GOV- 1, 1963, through May 1, 1966—3.75 per-
ERNING UNITED STATES RETIRE- cent per annum, compounded semi-
annually (see Table of Redemption Val-
MENT PLAN BONDS ues in the appendix).
(2) Bonds with issue dates of June 1,
Sec.
1966, through December 1, 1969—4.15
341.0 Offering of bonds.
341.1 Description of bonds.
percent per annum, compounded semi-
341.2 Registration. annually (see Table A in the appendix).
341.3 Purchase of bonds. (3) Bonds with issue dates of January
341.4 Proof of purchase. 1, 1970, through January 1, 1974—5 per-
341.5 Limitation on holdings. cent per annum, compounded semi-
341.6 Nontransferability. annually (see Table B).
341.7 Judicial proceedings. (4) Bonds with issue dates of Feb-
341.8 Payment or redemption during life- ruary 1, 1974, through July 1, 1979—6
time of owner. percent per annum, compounded semi-
341.9 Payment or redemption after death of annually (see Table C).
owner. (5) Bonds with issue dates of August
341.10 Reissue. 1, 1979, through October 1, 1980—6.5 per-
341.11 Use of power of attorney.
cent per annum, compounded semi-
341.12 Lost, stolen, or destroyed bonds.
annually (see Table D).
341.13 Taxation.
341.14 Certifying officers.
(6) Bonds with issue dates of Novem-
341.15 General provisions. ber 1, 1980, through September 1, 1981—
8 percent per annum, compounded
APPENDIX TO PART 341—TABLES OF REDEMP-
TION VALUES
semiannually (see Table E).
(7) Bonds with issue dates of October
AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 31 1, 1981, or thereafter—9 percent per
U.S.C. 3106 et seq., 3125, 3126. annum, compounded semiannually (see
SOURCE: 28 FR 405, Jan. 16, 1963, unless oth- Table F).
erwise noted. Interest will be paid only upon redemp-
tion of the bonds. The accrual of inter-
§ 341.0 Offering of bonds.
est will continue until the bonds are
The Secretary of the Treasury, under redeemed or have reached maturity,
the authority of the Second Liberty whichever is earlier, in accordance
Bond Act, as amended, and pursuant to with these regulations.
the Self-Employed Individuals Tax Re- (b) Term. The maturity date of any
tirement Act of 1962, offers for sale, ef- bond issued under this circular shall be
fective as of January 1, 1963, bonds of indeterminate, but unless sooner re-
the United States, designated as deemed in accordance with the regula-
United States Retirement Plan Bonds. tions in this part, its investment yield
The bonds will be available for invest- will cease on the interest accrual date
ment only to: coinciding with, or, where no such co-
(a) Bond purchase plans and incidence occurs, the interest accrual
(b) Pension and profit-sharing plans, date next preceding, the first day of
as described in sections 405 and 401, re- the sixtieth (60th) month following the
spectively, of the Internal Revenue date of death of the person in whose
Code of 1954. name it is registered.
265
§ 341.2 31 CFR Ch. II (7–1–11 Edition)
(c) Denominations—issue date. Retire- one is to be designated, will also be

ment Plan Bonds will be available only shown in the inscription.
in registered form and in denomina- [28 FR 405, Jan. 16, 1963, as amended at 71 FR
tions of $50, $100, $500, and $1,000. At the 46857, Aug. 15, 2006]
time of issue, the issuing agent will
enter in the upper right-hand portion § 341.3 Purchase of bonds.
of the bond the issue date (which shall (a) Agencies. Retirement Plan Bonds
be the first day of the month and year may be purchased over-the-counter or
in which payment of the purchase price by mail from Federal Reserve Banks
is received by an authorized issuing and Branches and the Bureau of the
agent), and will imprint the agent’s Public Debt, Washington, DC 20226.
validating stamp in the lower right- Customers of commercial banks and
hand portion. The issue date, as distin- trust companies may be able to ar-
guished from the date in the agent’s range for the purchase of the bonds
validating stamp, will determine the through such institutions, but only the
date from which interest will begin to Federal Reserve Banks and Branches
and the Bureau of the Public Debt are
accrue on the bond. A Retirement Plan
authorized to act as official agencies,
Bond shall be valid only if an author-
and the date of receipt of the applica-
ized issuing agent receives payment tion and payment by an official agency
therefor, duly inscribes, dates, stamps, will govern the dating of the bonds
and delivers it. issued.
[28 FR 405, Jan. 16, 1963, as amended at 46 FR (b) Application. Applications for the
60573, Dec. 11, 1981] purchase of Retirement Plan Bonds
should be made on Form PD 3550, ac-
§ 341.2 Registration. companied by a remittance to cover
the purchase price. Personal checks
(a) General. The registration of Re-
will be accepted, subject to collection.
tirement Plan Bonds is limited to the Checks or other forms of exchange,
names of natural persons in their own should be drawn to the Federal Reserve
right, whether adults or minors, in ei- Bank or United States Treasury, as the
ther single ownership or beneficiary case may be. Checks payable by en-
form. A bond registered in beneficiary dorsement are not acceptable.
form will be inscribed substantially as (c) Delivery. Delivery of bonds will be
follows (for example): ‘‘John A. Doe made in person, or by mail at the risk
payable on death to (or P.O.D.) Richard and expense of the United States, at
B. Roe,’’ No more than one beneficiary the address given by the purchaser, but
may be designated on a bond. only within the United States, its ter-
(b) Inscription. The inscription on the ritories and possessions, the Common-
face of each bond will show the name, wealth of Puerto Rico, and the Canal
address, and date of birth of the reg- Zone. No mail deliveries elsewhere will
istered owner, as well as information be made. If the registered owner tem-
as to whether he is a self-employed in- porarily resides abroad, the bonds will
be delivered to such address in the
dividual or an employee, and the
United States as the purchaser directs.
amount he contributed (if any) out of
his own funds toward the purchase § 341.4 Proof of purchase.
price of the bond. In the case of any
At the time a Retirement Plan Bond
self-employed individual (who is treat- is issued, the issuing agent will furnish
ed as an employee for the purpose of therewith to the purchaser, and in
sections 405 and 401 of the Internal cases where the purchaser is different
Revenue Code of 1954), this amount from the person in whose name the
would be that portion of the purchase bond is inscribed, to the registered
price he contributed (if any) as an em- owner as well, proof of the purchase on
ployee and which he will not take into Form PD 3550. The form will show the
account in determining the amount de- names and addresses of the purchaser
ductible for Federal income tax pur- and of the registered owner, the
poses. The name of the beneficiary, if latter’s date of birth, social security
account number and his classification
266
(i.e., self-employed individual or em- determined from the date of birth

ployee) the number of bonds issued, a shown on the face of the bond, pro-
description thereof by issue date, serial vided, however, that the Secretary of
numbers, denominations, and registra- the Treasury reserves the right in any
tion, together with information as to case or class of cases to require proof,
the amount of his contributions (if in the form of a duly certified copy of
any) toward the purchase price of the his birth certificate, that the owner
bonds. has attained the age of 591⁄2 years. If
such evidence is unavailable, one of the
§ 341.5 Limitation on holdings. following documents may be furnished
The limit on the amount of any Re- in lieu thereof:
tirement Plan Bonds issued during (1) Church records of birth or bap-
1974, or in any one calendar year there- tism.
after, that may be purchased in the (2) Hospital birth record or certifi-
name of any one person as registered cate.
owner is $10,000 (face value). (3) Physician’s or midwife’s birth
record.
[39 FR 36114, Oct. 8, 1974] (4) Certification of Bible or other
family record.
§ 341.6 Nontransferability.
(5) Military, naturalization or immi-
United States Retirement Plan gration records.
Bonds are not transferable, and may (6) Other evidence of probative value.
not be sold, discounted or pledged as Similar documentary evidence will
collateral for a loan or as security for also be required to support any claim
the performance of an obligation, or for made by an owner that the date of
any other purpose. birth shown on his bond is incorrect.
(b) Prior to age 591⁄2 years. A Retire-
§ 341.7 Judicial proceedings. ment Plan Bond will be paid at its then
No judicial determinations will be current redemption value upon a reg-
recognized which would give effect to istered owner’s request (or by a person
an attempted voluntary transfer inter recognized as entitled to act on his be-
vivos of a Retirement Plan Bond. Oth- half) prior to his attainment of age 591⁄2
erwise, a claim against a registered years upon submission of a physician’s
owner will be recognized when estab- statement or any similar evidence
lished by valid judicial proceedings, showing that the owner has become
but in no case will payment be made to disabled to such an extent that he is
the purchaser at a sale under a levy or unable to engage in any substantial,
to the officer authorized to levy upon gainful activity by reason of any medi-
the property of the owner under appro- cally determinable physical or mental
priate process to satisfy a money impairment which can be expected to
judgement unless or until the bond has result in death or to be of long-contin-
become eligible for redemption pursu- ued and indefinite duration. The fol-
ant to the regulations in this part. Nei- lowing are examples of impairments
ther the Treasury Department nor any which would ordinarily be considered
of its agencies will accept notices of as preventing substantial, gainful ac-
adverse claims or of pending judicial tivity:
proceedings or undertake to protect (1) Loss of use of two limbs.
the interests of litigants who do not (2) Certain progressive diseases which
have possession of the bond. have resulted in the physical loss or at-
rophy of a limb, such as diabetes, mul-
§ 341.8 Payment or redemption during tiple sclerosis, or Buerger’s disease.
lifetime of owner. (3) Diseases of the heart, lungs, or
(a) At age 591⁄2 or thereafter. A Retire- blood vessels which have resulted in
ment Plan Bond will be redeemable at major loss of heart or lung reserve as
its current redemption value upon the evidenced by X-ray, electrocardiogram,
request of the registered owner (or a or other objective findings, so that de-
person recognized as entitled to act on spite medical treatment breathless-
his behalf), provided he is 591⁄2 years of ness, pain, or fatigue is produced on
age or older. The owner’s age will be slight exertion, such as walking several
267
§ 341.8 31 CFR Ch. II (7–1–11 Edition)
blocks, using public transportation, or Bond is desired by the legal guardian,

doing small chores. committee conservator, or similar rep-
(4) Cancer which is inoperable and resentative of the owner’s estate under
progressive. paragraph (a) of this section, it should
(5) Damage to the brain or brain ab- be presented, with the request signed
normality which has resulted in severe as described below, to a Federal Re-
loss of judgment, intellect, orientation, serve Bank or Branch or to the Bureau
or memory. of the Public Debt. If payment is re-
(6) Mental diseases (e.g., psychosis or quested under paragraph (b) of this sec-
severe psychoneurosis) requiring con-
tion, the letter described therein
tinued institutionalization or constant
should accompany the bond. 1 The re-
supervision of the individual.
(7) Loss or diminution of vision to quest for payment, in either case,
the extent that the affected individual should be signed by the representative
has a central visual acuity of no better in his fiduciary capacity before an au-
than 20/200 in the better eye after best thorized certifying officer, and must be
correction, or has a limitation in the supported by a certificate or a certified
fields of vision such that the widest di- copy of the letters of the appointment
ameter of the visual fields subtends an from the court making the appoint-
angle no greater than 20 degrees. ment, under seal, or other proof of
(8) Permanent and total loss of qualification if the appointment was
speech. not made by a court. Except in the case
(9) Total deafness uncorrectible by a of corporate fiduciaries, such evidence
hearing aid. should state that the appointment is in
In any case coming under the provi- full force and should be dated not more
sions of this paragraph, the evidence than one year prior to the presentation
referred to above must be submitted to of the bond for payment.
the Bureau of the Public Debt, Division (d) Partial redemption. A Retirement
of Transactions and Rulings, Parkers- Plan Bond in a denomination greater
burg, WV 26101, for approval before any than $50 (face value) which is otherwise
bonds may be paid. If, after review of eligible for redemption may be re-
the evidence, the Secretary of the deemed in part, at current redemption
Treasury is satisfied that the owner’s value, upon the request of the reg-
disability has been established, a letter istered owner (or a person recognized
will be furnished authorizing payment
as entitled to act on his behalf), but
of his Retirement Plan Bonds. This let-
only in amounts corresponding to au-
ter must be presented each time any of
thorized denominations. In any case in
the owner’s bonds are submitted for
payment to a Federal Reserve Bank or which partial redemption is desired,
Branch or to the Bureau of the Public before the request for payment is
Debt. signed, the phrase ‘‘to the extent of
(c) Requests for payment—(1) By owner. $ll (face value) and reissue of the re-
When redemption of any Retirement mainder’’ should be appended to the re-
Plan Bond is desired by the registered quest. Upon partial redemption of the
owner under paragraph (a) of this sec- bond, the remainder will be reissued as
tion, it should be presented with the of the original issue date. No partial
request for payment on the back of the redemption of a bond will be made
bond signed and duly certified, to a
Federal Reserve Bank or Branch or to 1 In any case in which a legal representa-
the Bureau of the Public Debt, Securi-
tive has not been appointed for the estate of
ties Transactions Branch, Washington,
a registered owner who has attained the age
DC 20226, or Bureau of the Public Debt, of 591⁄2 years, or who has become disabled, a
Division of Transactions and Rulings, person seeking payment of a bond on the
Parkersburg, WV 26101. If payment is owner’s behalf should furnish a complete
requested under paragraph (b) of this statement of the circumstances to the Bu-
section, the letter described therein reau of the Public Debt, Division of Trans-
should accompany the bond. actions and Rulings, Parkersburg, WV 26101.
(2) By person other than owner. When Appropriate instructions will then be fur-
redemption of any Retirement Plan nished.
268
after the death of the owner in whose to (5) of this section will be made upon
name it is registered. receipt of applications on Form PD
[28 FR 405, Jan 16, 1963, as amended at 42 FR
3565, together with the bonds and sup-
21611, Apr. 28, 1977] porting evidence, by the Bureau of the
Public Debt.
§ 341.9 Payment or redemption after (b) Order of precedence where bene-
death of owner. ficiary survived owner. If the registered
(a) Order of precedence where owner owner of a Retirement Plan Bond dies
not survived by beneficiary. If the reg- before it has been presented and sur-
istered owner of a Retirement Plan rendered for payment, and the bene-
Bond dies before it has been presented ficiary shown thereon survived the
and surrendered for payment, and there owner, the bond shall be paid in the fol-
is no beneficiary shown thereon, or if lowing order of precedence:
the designated beneficiary predeceased (1) To the designated beneficiary
the owner, the bond shall be paid in the upon his presentation and surrender of
following order of precedence: the bond with the request for payment
(1) To the duly appointed executor or signed and duly certified, such pay-
administrator of the estate of the ment to be made to the exclusion of
owner, who should sign the request for any other person who may have been
payment on the back of the bond in his named beneficiary by the registered
representative capacity before an au- owner in a bond purchase plan, or
thorized certifying officer, such request under a pension or profit-sharing plan;
to be supported by a court certificate (2) If the designated beneficiary sur-
or a certified copy of his letters of ap- vived the registered owner but failed to
pointment, under seal of the court, present the bond for payment during
which should show that the appoint- his own lifetime, payment will be made
ment is in full force and effect, and be in the order of precedence specified in
dated within six months of its presen- paragraphs (a) (1) to (5) of this section
tation; to the legal representative, surviving
(2) If no legal representative of the spouse, children, parents, or next-of-
deceased registered owner’s estate has kin of such beneficiary, and in the
been or will be appointed, to the widow manner provided therein.
or widower of the owner; In any case coming under the provi-
(3) If none of the above, to the child sions of this paragraph, a duly certified
or children of the owner and the de- copy of the registered owner’s death
scendants of deceased children by rep- certificate will ordinarily be required.
resentation; Proof of death of the beneficiary will
(4) If none of the above, to the par- also be required where he survived the
ents of the owner, or the survivor of owner but failed to present the bond
them; for payment during his own lifetime.
(5) In none of the above, to other Payment of a bond to a designated ben-
next-of-kin of the owner, as determined eficiary will be made by Federal Re-
by the laws of the domicile of such serve Bank or Branch or by the Bureau
owner at the time of his death. In any of the Public Debt, Securities Trans-
case coming under the provisions of actions Branch, Washington, DC 20226,
this paragraph, a duly certified copy of or Bureau of the Public Debt, Division
the registered owner’s death certificate of Transactions and Rulings, Parkers-
will ordinarily be required. Proof of burg, WV 26101.
death of the beneficiary, if any, will be (c) Ownership of redemption proceeds.
required where he predeceased the The orders of precedence set forth in
owner. Payment of bonds under para- paragraphs (a) and (b) of this section,
graph (a)(1) of this section will be made except in case where redemption is
by a Federal Reserve Bank or Branch made for the account of a registered
or by the Bureau of the Public Debt, owner, are for the Department’s con-
Securities Transactions Branch, Wash- venience in discharging its obligation
ington, DC 20226, or Bureau of the Pub- on a Retirement Plan Bond. The dis-
lic Debt, Division of Transactions and charge of the obligation in accordance
Rulings, Parkersburg, WV 26101. Pay- therewith shall be final so far as the
ment of bonds under paragraphs (a)(2) Department is concerned, but those
269
§ 341.10 31 CFR Ch. II (7–1–11 Edition)
provisions do not otherwise purport to ment or reissue on behalf of the owner,

determine ownership of the redemption beneficiary, or other person entitled
proceeds of a bond. under § 341.9, other than as provided in
the regulations in this part, will be rec-
[28 FR 405, Jan 16, 1963, as amended at 42 FR
21611, Apr. 28, 1977]
ognized.
§ 341.10 Reissue. § 341.12 Lost, stolen, or destroyed

bonds.
(a) Addition or change of beneficiary. A If a Retirement Plan Bond is lost,
Retirement Plan Bond will be reissued stolen, or destroyed, a substitute may
to add a beneficiary in the case of a be issued upon identification of the
single ownership bond, or to eliminate bond and proof of its loss, theft, or de-
or substitute a beneficiary in the case struction. A description of the bond by
of a bond registered in beneficiary form denomination, serial number, issue
upon the owner’s request on Form PD date and registration should be fur-
3564. No consent will be required to nished at the time the report of loss,
support any reissue transaction from a theft, or destruction is made. Such re-
beneficiary whose name is to be reports should be sent to the Bureau of
moved from the registration of a Re- the Public Debt, Division of Trans-
tirement Plan Bond. If the registered actions and Rulings, Parkersburg, WV
owner dies after the bond has been pre- 26101. Full instructions for obtaining
sented and surrendered for reissue, substitute bonds will then be given.
upon receipt of notice thereof by the
agency to which the request for reissue [28 FR 405, Jan 16, 1963, as amended at 42 FR
21611, Apr. 28, 1977]
was submitted, such request shall be
treated as ineffective, provided the no- § 341.13 Taxation.
tice of death is received by the Federal
Reserve Bank or Branch or the Bureau The tax treatment provided under
of the Public Debt, Securities Trans- section 405 of the Internal Revenue
actions Branch, Washington, DC, 20226, Code of 1954 shall apply to all Retire-
or Bureau of the Public Debt, Division ment Plan Bonds. The bonds are sub-
of Transactions and Rulings, Parkers- ject to estate, inheritance, or other ex-
cise taxes whether Federal or State,
burg, WV 26101, to which the request
but are exempt from all taxation now
was sent, in sufficient time to withhold
or hereafter imposed on the principal
delivery, by mail or otherwise, of the
or interest thereof by any State, mu-
reissued bond.
nicipality, or any local taxing author-
(b) Error in issue—change of name. Re-
ity. Inquiries concerning the applica-
issue of a Retirement Plan Bond will be
tion of any Federal tax of these bonds
made where an error in issue has oc-
should be directed to the District Di-
curred, as well as in cases where the
rector of Internal Revenue of the tax-
owner’s name has been changed by payer’s district or to the Internal Rev-
marriage, divorce, annulment, order of enue Service, Washington, DC 20224.
court, or in any other legal manner,
upon appropriate request supported by § 341.14 Certifying officers.
satisfactory evidence. Information as
Officers authorized to certify re-
to the procedure to be followed in se-
quests for payment or for any other
curing such reissue may be obtained
transaction involving Retirement Plan
from a Federal Reserve Bank or the
Bonds include:
Bureau of the Public Debt, Securities
(a) Post offices. Any postmaster, act-
Transactions Branch, Washington, DC
ing postmaster, or inspector-in-charge,
20226, or Bureau of the Public Debt, Di-
or other post office official or clerk
vision of Transactions and Rulings,
designated for that purpose. A post of-
Parkersburg, WV 26101.
fice official or clerk, other than a post-
[28 FR 405, Jan 16, 1963, as amended at 42 FR master, acting postmaster, or inspec-
21611, Apr. 28, 1977; 42 FR 57123, Nov. 1, 1977] tor-in-charge, should certify in the
name of the postmaster or acting post-
§ 341.11 Use of power of attorney. master, followed by his own signature
No designation of an attorney, agent, and official title. Signatures of these
or other representative to request pay- officers should be authenticated by a
270
legible imprint of the post office dating regulations prescribed by the Secretary
stamp. with respect to United States securi-
(b) Banks and trust companies. Any of- ties, which are set forth in Treasury
ficer of a Federal Reserve Bank or Department Circular No. 300, current
Branch, or of a bank or trust company revision, to the extent applicable. Cop-
chartered under the laws of the United ies of the general regulations may be
States or those of any State, Common- obtained upon request from any Fed-
wealth, or Territory of the United eral Reserve Bank or Branch or the Bu-
States, as well as any employees of reau of the Public Debt.
such bank or trust company expressly (b) Reservation as to issue of bonds.
authorized to act for that purpose, who The Secretary of the Treasury reserves
should sign over the title ‘‘Designated the right to reject any application for
Employee.’’ Certifications by any of the purchase of Retirement Plan
these officers or designated employees Bonds, in whole or in part, and to
should be authenticated by either a refuse to issue or permit to be issued
legible imprint of the corporate seal, any such bonds in any case or any class
or, where the institution is an author- or classes of cases if he deems such ac-
ized issuing agent for United States tion to be in the public interest, and
Savings Bonds, Series E, by a legible his action in any such respect shall be
imprint of its dating stamp. final.
(c) Issuing agents of Series E savings (c) Additional requirements. In any
bonds. Any officer of a corporation or case or any class of cases arising under
any other organization which is an au- this part the Secretary of the Treasury
thorized issuing agent for United
may require such additional evidence
States Savings Bonds, Series E. All
as may in his judgment be necessary,
certifications by such officers must be
and may require a bond of indemnity,
authenticated by a legible imprint of
with or without surety, where he may
the issuing agent’s dating stamp.
consider such bond necessary for the
(d) Foreign countries. In a foreign
protection of the United States.
country requests may be signed in the
presence of and be certified by any (d) Waiver of requirements. The Sec-
United States diplomatic or consular retary of the Treasury reserves the
representative, or the manager or right, in his discretion, to waive or
other officer of a foreign branch of a modify any provision or provisions of
bank or trust company incorporated in this circular in any particular case or
the United States whose signature is class of cases for the convenience of
attested by an imprint of the corporate the United States, or in order to re-
seal or is certified to the Treasury De- lieve any person or persons of unneces-
partment. If such an officer is not sary hardship, if such action is not in-
available, requests may be signed in consistent with law, does not impair
the presence of and be certified by a any existing rights, and he is satisfied
notary or other officer authorized to that such action would not subject the
administer oaths, but his official char- United States to any substantial ex-
acter and jurisdiction should be cer- pense or liability.
tified by a United States diplomatic or (e) Fiscal agents. Federal Reserve
consular officer under seal of his office. Banks and Branches, as fiscal agents of
(e) Special provisions. The Commis- the United States, are authorized to
sioner of the Public Debt, the Chief of perform such services as may be re-
the Division of Securities Operations, quested of them by the Secretary of
or any Federal Reserve Bank or Branch the Treasury in connection with the
is authorized to make special provision issue, delivery, redemption, reissue,
for certification in any particular case and payment of Retirement Plan
or class of cases where none of the offi- Bonds.
cers authorized above is readily acces- (f) Reservation as to terms of circular.
sible. The Secretary of the Treasury may at
any time, or from time to time, supple-
§ 341.15 General provisions. ment or amend the terms of this part,
(a) Regulations. All Retirement Plan or any amendments or supplements
Bonds shall be subject to the general thereto.
271
APPENDIX TO PART 341—TABLES OF TABLE A—TABLE OF REDEMPTION VALUES PRO-

REDEMPTION VALUES VIDING AN INVESTMENT YIELD OF 4.15 PER-
CENT PER ANNUM FOR BONDS BEARING ISSUE
TABLE OF REDEMPTION VALUES PROVIDING AN DATES BEGINNING JUNE 1, 1966
INVESTMENT YIELD OF 33⁄4 PERCENT PER Table shows the increase in redemption value for each suc-
ANNUM FOR BONDS BEARING ISSUE DATES cessive half-year term of holding following the date of issue
on Retirement Plan Bonds bearing issue dates beginning
BEGINNING JANUARY 1, 1963 June 1, 1966. The redemption values have been deter-
Table shows how the Retirement Plan Bonds bearing issue mined to provide an investment yield of approximately 4.15
dates beginning January 1, 1963, by denomination, in- percent 1 per annum, compounded semiannually, on the
crease in redemption value during successive half-year pe- purchase price from issue date to the beginning of each
riods following issue. The redemption values have been de- half-year period. The period to maturity is indeterminate in
termined to provide an investment yield of 3.75 percent 1 accordance with the provisions of § 341.1(b) of this cir-
per annum, compounded semiannually, on the purchase cular. 2
price from issue date to the beginning of each half-year pe-
riod. The period to maturity is indeterminate in accordance Issue price
with the provisions of § 341.1(b). 2
Period after Redemption values during each half-year
Issue price issue date period (values increase on first day of pe-
(years) riod shown)
issue date period (Values increase on first day of pe- $50 $100 $500 $1,000
(years) riod shown)
First 1⁄2 ............. $0.00 $100.00 $500.00 $1,000.00
$50.00 $100.00 $500.00 $1,000.00 1⁄2 to 1 ............. 51.04 102.08 510.38 1,020.75
1 to 11⁄2 ........... 52.10 104.19 520.97 1,041.93
First 1⁄2 ............. $50.00 $100.00 $500.00 $1,000.00
1⁄2 to 1 .............
11⁄2 to 2 ........... 53.18 106.36 531.78 1,063.55
50.94 101.88 509.38 1,018.75
2 to 21⁄2 ........... 54.28 108.56 542.81 1,085.62
1 to 11⁄2 ........... 51.89 103.79 518.93 1,037.85
21⁄2 to 3 ........... 55.41 110.81 554.07 1,108.15
11⁄2 to 2 ........... 52.87 105.73 528.66 1,057.31
3 to 31⁄2 ........... 56.56 113.11 565.57 1,131.14
2 to 21⁄2 ........... 53.86 107.71 538.57 1,077.14
31⁄2 to 4 ........... 57.73 115.46 577.31 1,154.61
21⁄2 to 3 ........... 54.87 109.73 548.67 1,097.33
4 to 41⁄2 ........... 58.93 117.86 589.28 1,178.57
3 to 31⁄2 ........... 55.90 111.79 558.95 1,117.91
41⁄2 to 5 ........... 60.15 120.30 601.51 1,203.02
31⁄2 to 4 ........... 56.94 113.89 569.43 1,138.87
5 to 51⁄2 ........... 61.40 122.80 613.99 1,227.99
4 to 41⁄2 ........... 58.01 116.02 580.11 1,160.22
51⁄2 to 6 ........... 62.67 125.35 626.73 1,253.47
41⁄2 to 5 ........... 59.10 118.20 590.99 1,181.98
6 to 61⁄2 ........... 63.97 127.95 639.74 1,279.48
5 to 51⁄2 ........... 60.21 120.41 602.07 1,204.14
61⁄2 to 7 ........... 65.30 130.60 653.01 1,306.03
51⁄2 to 6 ........... 61.34 122.67 613.36 1,226.72
7 to 71⁄2 ........... 66.66 133.31 666.56 1,333.13
6 to 61⁄2 ........... 62.49 124.97 624.86 1,249.72
71⁄2 to 8 ........... 68.04 136.08 680.39 1,360.73
61⁄2 to 7 ........... 63.66 127.31 636.57 1,273.15
8 to 81⁄2 ........... 69.45 138.90 694.51 1,389.09
7 to 71⁄2 ........... 64.85 129.70 648.51 1,297.02
81⁄2 to 9 ........... 70.89 141.78 708.92 1,417.85
71⁄2 to 8 ........... 66.07 132.13 660.67 1,321.34
9 to 91⁄2 ........... 72.36 144.73 723.63 1,447.27
8 to 81⁄2 ........... 67.31 134.61 673.06 1,346.11
91⁄2 to 10 ......... 73.86 147.73 738.65 1,477.30
81⁄2 to 9 ........... 68.57 137.14 685.68 1,371.35
10 to 101⁄2 ....... 75.40 150.80 753.98 1,507.95
9 to 91⁄2 ........... 69.85 139.71 698.53 1,397.07
101⁄2 to 11 ....... 76.96 153.92 769.62 1,539.24
91⁄2 to 10 ......... 71.16 142.33 711.63 1,423.26
11 to 111⁄2 ....... 78.56 157.12 785.59 1,571.18
10 to 101⁄2 ....... 72.50 144.99 724.97 1,449.95
111⁄2 to 12 ....... 80.19 160.38 801.89 1,603.78
101⁄2 to 11 ....... 73.86 147.71 738.57 1,477.13
12 to 121⁄2 ....... 81.85 163.71 818.53 1,637.06
11 to 111⁄2 ....... 75.24 150.48 752.42 1,504.83
121⁄2 to 13 ....... 83.55 167.10 835.52 1,671.03
111⁄2 to 12 ....... 76.65 153.30 766.52 1,533.05
13 to 131⁄2 ....... 85.29 170.57 852.85 1,705.71
12 to 121⁄2 ....... 78.09 156.18 780.90 1,561.79
131⁄2 to 14 ....... 87.05 174.11 870.55 1,741.10
121⁄2 to 13 ....... 79.55 159.11 795.54 1,591.07
14 to 141⁄2 ....... 88.86 177.72 888.61 1,777.23
13 to 131⁄2 ....... 81.05 162.09 810.45 1,620.91
141⁄2 to 15 ....... 90.71 181.41 907.05 1,814.10
131⁄2 to 14 ....... 82.56 165.13 825.65 1,651.30
15 to 151⁄2 ....... 92.59 185.17 925.87 1,851.75
14 to 141⁄2 ....... 84.11 168.23 841.13 1,682.26
151⁄2 to 16 ....... 94.51 189.02 945.09 1,890.17
141⁄2 to 15 ....... 85.69 171.38 856.90 1,713.80
16 to 161⁄2 ....... 96.47 192.94 964.70 1,929.39
15 to 151⁄2 ....... 87.30 174.59 872.97 1,745.94
161⁄2 to 17 ....... 98.47 196.94 984.71 1,969.43
151⁄2 to 16 ....... 88.93 177.87 889.34 1,778.67
17 to 171⁄2 ....... 100.51 201.03 1,005.15 2,010.29
16 to 161⁄2 ....... 90.60 181.20 906.01 1,812.02
171⁄2 to 18 ....... 102.60 205.20 1,026.00 2,052.01
161⁄2 to 17 ....... 92.30 184.60 923.00 1,846.00
18 to 181⁄2 ....... 104.73 209.46 1,047.29 2,094.58
17 to 171⁄2 ....... 94.03 188.06 940.31 1,880.61
181⁄2 to 19 ....... 106.90 213.80 1,069.02 2,138.05
171⁄2 to 18 ....... 95.79 191.59 957.94 1,915.87
18 to 181⁄2 ....... 97.59 195.18 975.90 1,951.80 19 to 191⁄2 ....... 109.12 218.24 1,091.21 2,182.41
181⁄2 to 19 ....... 99.42 198.84 994.20 1,988.39 191⁄2 to 20 ....... 111.38 222.77 1,113.85 2,227.70
19 to 191⁄2 ....... 101.28 202.57 1,012.84 2,025.67 20 to 201⁄2 2 ..... 113.70 227.39 1,136.96 2,273.92
191⁄2 to 20 ....... 103.18 206.37 1,031.83 2,063.66 1 Based on redemption values of $1,000 bond.
20 to 201⁄2 ....... 105.12 210.23 1,051.17 2,102.35 2 At a future date prior to June 1, 1986 (20 years after issue
date of the first bonds), this table will be extended to show re-
1 Based on redemption values of $1,000 bond. demption values for periods of holding of 201⁄2 years and
2 At a future date prior to January 1, 1983 (20 years after beyond.
issue date of the first bonds) this table will be extended to
show redemption values for periods of holding of 201⁄2 years
and beyond.
272
TABLE B—TABLE OF REDEMPTION VALUES PRO- TABLE C—TABLE OF REDEMPTION VALUES PRO-
VIDING AN INVESTMENT YIELD OF 5.00 PER- VIDING AN INVESTMENT YIELD OF 6 PERCENT
CENT PER ANNUM FOR BONDS BEARING ISSUE PER ANNUM FOR BONDS BEARING ISSUE
DATES BEGINNING JANUARY 1, 1970 DATES BEGINNING FEBRUARY 1, 1974
Table shows the increase in redemption value for each suc- Table shows the increase in redemption value for each suc-
cessive half-year term of holding following the date of issue cessive half-year term of holding following the date of issue
on Retirement Plan Bonds bearing issue dates beginning on Retirement Plan Bonds bearing issue dates beginning
January 1, 1970. The redemption values have been deter- February 1, 1974. The redemption values have been deter-
mined to provide an investment yield of approximately 5.00 mined to provide an investment yield of approximately 6
percent 1 per annum, compounded semiannually, on the percent 1 per annum, compounded semiannually, on the
purchase price from issue date to the beginning of each purchase price from issue date to the beginning of each
half-year period. The period to maturity is indeterminate in half-year period. The period to maturity is indeterminate in
accordance with the provisions of § 341.1(b) of this cir- accordance with the provisions of § 341.1(b) of this circular.
cular. 2
Issue price
Issue price
Period after Redemption values during each half-year issue date period (values increase on first day of pe-
issue date period (values increase on first day of pe- (years) riod shown)
(years) riod shown)
$50.00 $100.00 $500.00 $1,000.00
$50 $100 $500 $1,000
First ⁄ .............
12 $50.00 $100.00 $500.00 $1,000.00
First 1⁄2 ............. $50.00 $100.00 $500.00 $1,000.00 1⁄2 to 1 ............. 51.50 103.00 51.500 1,030.00
1⁄2 to 1 ............. 51.25 102.50 512.50 1,025.00 1 to 11⁄2 ........... 53.05 106.10 530.50 1,061.00
1 to 11⁄2 ........... 52.53 105.06 525.31 1,050.62 11⁄2 to 2 ........... 54.64 109.28 546.40 1,092.80
11⁄2 to 2 ........... 53.84 107.69 538.45 1,076.89 2 to 21⁄2 ........... 56.28 112.56 562.80 1,125.60
2 to 21⁄2 ........... 55.19 110.38 551.91 1,103.81 21⁄2 to 3 ........... 57.96 115.92 579.60 1,159.20
21⁄2 to 3 ........... 56.57 113.14 565.70 1,131.41 3 to 31⁄2 ........... 59.70 119.40 597.00 1,194.00
3 to 31⁄2 ........... 57.98 115.97 579.85 1,159.69 31⁄2 to 4 ........... 61.49 122.98 614.90 1,229.80
31⁄2 to 4 ........... 59.43 118.87 594.34 1,188.69 4 to 41⁄2 ........... 63.34 126.68 633.40 1,266.80
4 to 41⁄2 ........... 60.92 121.84 609.20 1,218.40 41⁄2 to 5 ........... 65.24 130.48 652.40 1,304.80
41⁄2 to 5 ........... 62.44 124.89 624.43 1,248.86 5 to 51⁄2 ........... 67.20 134.40 672.00 1,344.00
5 to 51⁄2 ........... 64.00 128.01 640.04 1,280.08 51⁄2 to 6 ........... 69.21 138.42 692.10 1,384.20
51⁄2 to 6 ........... 65.60 131.21 656.04 1,312.09 6 to 61⁄2 ........... 71.29 142.58 712.90 1,425.80
6 to 61⁄2 ........... 67.24 134.49 672.44 1,344.89 61⁄2 to 7 ........... 73.43 146.86 734.30 1,468.60
61⁄2 to 7 ........... 68.93 137.85 689.26 1,378.51 7 to 71⁄2 ........... 75.63 151.26 756.30 1,512.60
7 to 71⁄2 ........... 70.65 141.30 706.49 1,412.97 712 to 8 ........... 77.90 155.80 779.00 1,558.00
71⁄2 to 8 ........... 72.42 144.83 724.15 1,448.30 8 to 81⁄2 ........... 80.24 160.48 802.40 1,604.80
8 to 81⁄2 ........... 74.22 148.45 742.25 1,484.51 81⁄2 to 9 ........... 82.64 165.28 826.40 1,652.80
81⁄2 to 9 ........... 76.08 152.16 760.81 1,521.62 9 to 91⁄2 ........... 85.12 170.24 851.20 1,702.40
9 to 91⁄2 ........... 77.98 155.97 779.83 1,559.66 91⁄2 to 10 ......... 87.68 175.36 876.80 1,753.60
91⁄2 to 10 ......... 79.93 159.86 799.33 1,598.65 10 to 101⁄2 ....... 90.31 180.62 903.10 1,806.20
10 to 101⁄2 ....... 81.93 163.86 819.31 1,638.62 101⁄2 to 11 ....... 93.01 186.02 930.10 1,860.20
101⁄2 to 11 ....... 83.98 167.96 839.79 1,679.58 11 to 111⁄2 ....... 95.81 191.62 958.10 1,916.20
11 to 111⁄2 ....... 86.08 172.16 860.79 1,721.57 111⁄2 to 12 ....... 98.68 197.36 986.80 1,973.60
111⁄2 to 12 ....... 88.23 176.46 882.31 1,764.61 12 to 121⁄2 ....... 101.64 203.28 1,016.40 2,032.80
12 to 121⁄2 ....... 90.44 180.87 904.36 1,808.73 121⁄2 to 13 ....... 104.69 209.38 1,046.90 2,093.80
121⁄2 to 13 ....... 92.70 185.39 926.97 1,853.94 13 to 131⁄2 ....... 107.83 215.66 1,078.30 2,156.60
13 to 131⁄2 ....... 95.02 190.03 950.15 1,900.29 131⁄2 to 14 ....... 111.06 222.12 1,110.60 2,221.20
131⁄2 to 14 ....... 97.39 194.78 973.90 1,947.80 14 to 141⁄2 ....... 114.40 228.80 1,144.00 2,288.00
14 to 141⁄2 ....... 99.82 199.65 998.25 1,996.50 141⁄2 to 15 ....... 117.83 235.66 1,178.30 2,356.60
141⁄2 to 15 ....... 102.32 204.64 1,023.20 2,046.41 15 to 151⁄2 ....... 121.36 242.72 1,213.60 2,427.20
15 to 151⁄2 ....... 104.88 209.76 1,048.78 2,097.57 151⁄2 to 16 ....... 125.00 250.00 1,250.00 2,500.00
151⁄2 to 16 ....... 107.50 215.00 1,075.00 2,150.01 16 to 161⁄2 ....... 128.75 257.50 1,287.50 2,575.00
16 to 161⁄2 ....... 110.19 220.38 1,101.88 2,203.76 161⁄2 to 17 ....... 132.62 265.24 1,326.20 2,652.40
161⁄2 to 17 ....... 112.94 225.88 1,129.43 2,258.85 17 to 171⁄2 ....... 136.60 273.20 1,366.00 2,732.00
17 to 171⁄2 ....... 115.77 231.53 1,157.66 2,315.32 171⁄2 to 18 ....... 140.69 281.38 1,406.90 2,813.80
171⁄2 to 18 ....... 118.66 237.32 1,186.60 2,373.21 18 to 181⁄2 ....... 144.91 289.82 1,449.10 2,898.20
18 to 181⁄2 ....... 121.63 243.25 1,216.27 2,432.54 181⁄2 to 19 ....... 149.26 298.52 1,492.60 2,985.20
181⁄2 to 19 ....... 124.67 249.34 1,246.67 2,493.35 19 to 191⁄2 ....... 153.74 307.48 1,537.40 3,074.80
19 to 191⁄2 ....... 127.78 255.57 1,277.84 2,555.68 191⁄2 to 20 ....... 158.35 316.70 1,583.50 3,167.00
191⁄2 to 20 ....... 130.98 261.96 1,309.79 2,619.57 20 to 201⁄2 ....... 163.10 326.20 1,631.00 3,262.00
20 to 201⁄2 ....... 134.25 268.51 1,342.53 2,685.06
1 Based on redemption values of $1,000 bond.
2 At a future date prior to January 1, 1990 (20 years after
issue date of the first bonds) this table will be extended to
show redemption values for periods of holding of 201⁄2 years
and beyond.
273
TABLE D—TABLE OF REDEMPTION VALUES PRO- TABLE E—TABLE OF REDEMPTION VALUES PRO-
VIDING AN INVESTMENT YIELD OF 6.50 PER- VIDING AN INVESTMENT YIELD OF 8.00 PER-
CENT PER ANNUM FOR BONDS BEARING ISSUE CENT PER ANNUM FOR BONDS BEARING ISSUE
DATES BEGINNING AUG. 1, 1979 DATES BEGINNING NOVEMBER 1, 1980
Table shows the increase in redemption value for each suc- NOTE: This table shows how Retirement Plan Bonds bearing
cessive half-year term of holding following the date of issue issue dates beginning November 1, 1980, by denomination,
on Retirement Plan Bonds bearing issue dates beginning increase in redemption value during successive half-year
August 1, 1979. The redemption values have been deter- periods following issue. The redemption values have been
mined to provide an investment yield of approximately 6.50 determined to provide an investment yield of 8.00 percent
percent 1 per annum, compounded semi-annually, on the per annum, compounded semiannually, on the purchase
purchase price from issue date to the beginning of each price from issue date to the beginning of each half-year pe-
half-year period. The period to maturity is indeterminate in riod. The period to maturity is indeterminate in accordance
accordance with the provisions of § 341.1(b) of this cir- with the provisions of § 341.1(b).
cular. 2
Issue price
Issue price
Period after Redemption values during each half-year issue date period (values increase on first day of pe-
issue date period (values increase on first day of pe- (years) riod shown)
(years) riod shown)
$50.00 $100.00 $500.00 $1,000.00
$50 $100 $500 $1,000
First half year .. $50.00 $100.00 $500.00 $1,000.00
First 1⁄2 ............. $50.00 $100.00 $500.00 $1,000.00 .5 to 1.0 ........... 52.00 104.00 520.00 1,040.00
1⁄2 to 1 ............. 51.62 103.24 516.20 1,032.40 1.0 to 1.5 ......... 54.08 108.16 540.80 1,081.60
1 to 11⁄2 ........... 53.30 106.60 533.00 1,066.00 1.5 to 2.0 ......... 56.24 112.48 562.40 1,124.80
11⁄2 to 2 ........... 55.04 110.08 550.40 1,100.80 2.0 to 2.5 ......... 58.50 117.00 585.00 1,170.00
2 to 21⁄2 ........... 56.82 113.64 568.20 1,136.40 2.5 to 3.0 ......... 60.84 121.68 608.40 1,216.80
21⁄2 to 3 ........... 58.68 117.36 586.80 1,173.60 3.0 to 3.5 ......... 63.26 126.52 632.60 1,265.20
3 to 31⁄2 ........... 60.58 121.16 605.80 1,211.60 3.5 to 4.0 ......... 65.80 131.60 658.00 1,316.00
31⁄2 to 4 ........... 62.54 125.08 625.40 1,250.80 4.0 to 4.5 ......... 68.42 136.84 684.20 1,368.40
4 to 41⁄2 ........... 64.58 129.16 645.80 1,291.60 4.5 to 5.0 ......... 71.16 141.32 711.60 1,423.20
41⁄2 to 5 ........... 66.68 133.36 666.80 1,333.60 5.0 to 5.5 ......... 74.02 148.04 740.20 1,480.40
5 to 51⁄2 ........... 68.84 137.68 688.40 1,376.80 5.5 to 6.0 ......... 76.98 153.96 769.80 1,539.60
51⁄2 to 6 ........... 71.08 142.16 710.80 1,421.60 6.0 to 6.5 ......... 80.06 160.12 800.60 1,601.20
6 to 61⁄2 ........... 73.40 146.80 734.00 1,468.00 6.5 to 7.0 ......... 83.26 166.52 832.60 1,665.20
61⁄2 to 7 ........... 75.78 151.56 757.80 1,515.60 7.0 to 7.5 ......... 86.58 173.16 865.80 1,731.60
7 to 71⁄2 ........... 78.24 156.48 782.40 1,564.80 7.5 to 8.0 ......... 90.04 180.08 900.40 1,800.80
71⁄2 to 8 ........... 80.78 161.56 807.80 1,615.60 8.0 to 8.5 ......... 93.64 187.28 936.40 1,872.80
8 to 81⁄2 ........... 83.40 166.80 834.00 1,668.00 8.5 to 9.0 ......... 97.40 194.80 974.00 1,948.00
81⁄2 to 9 ........... 86.12 172.24 861.20 1,722.40 9.0 to 9.5 ......... 101.30 202.60 1,013.00 2,026.00
9 to 91⁄2 ........... 88.92 177.84 889.20 1,778.40 9.5 to 10.0 ....... 105.34 210.68 1,053.40 2,106.80
91⁄2 to 10 ......... 91.80 183.60 918.00 1,836.00 10.0 to 10.5 ..... 109.56 219.12 1,095.60 2,191.20
10 to 101⁄2 ....... 94.80 189.60 948.00 1,896.00 10.5 to 11.0 ..... 113.94 227.88 1,139.40 2,278.80
101⁄2 to 11 ....... 97.88 195.76 978.80 1,957.60 11.0 to 11.5 ..... 118.50 237.00 1,185.00 2,370.00
11 to 111⁄2 ....... 101.06 202.12 1,010.60 2,021.20 11.5 to 12.0 ..... 123.24 246.48 1,232.40 2,464.80
111⁄2 to 12 ....... 104.34 208.68 1,043.40 2,086.80 12.0 to 12.5 ..... 128.16 256.32 1,281.60 2,563.20
12 to 121⁄2 ....... 107.72 215.44 1,077.20 2,154.40 12.5 to 13.0 ..... 133.30 266.60 1,333.00 2,666.00
121⁄2 to 13 ....... 111.22 222.44 1,112.20 2,224.40 13.0 to 13.5 ..... 138.62 277.24 1,386.20 2,772.40
13 to 131⁄2 ....... 114.84 229.68 1,148.40 2,296.80 13.5 to 14.0 ..... 144.16 288.32 1,441.60 2,883.20
131⁄2 to 14 ....... 118.58 237.16 1,185.80 2,371.60 14.0 to 14.5 ..... 149.94 299.88 1,499.40 2,998.80
14 to 141⁄2 ....... 122.44 244.88 1,224.40 2,448.80 14.5 to 15.0 ..... 155.94 311.88 1,559.40 3,118.80
141⁄2 to 15 ....... 126.42 252.84 1,264.20 2,528.40 15.0 to 15.5 ..... 162.16 324.32 1,621.60 3,243.20
15 to 151⁄2 ....... 130.52 261.04 1,305.20 2,610.40 15.5 to 16.0 ..... 168.66 337.32 1,686.60 3,373.20
151⁄2 to 16 ....... 134.76 269.52 1,347.60 2,695.20 16.0 to 16.5 ..... 175.40 350.80 1,754.00 3,508.00
16 to 161⁄2 ....... 139.14 278.28 1,391.40 2,782.80 16.5 to 17.0 ..... 182.42 364.84 1,824.20 3,648.40
161⁄2 to 17 ....... 143.66 287.32 1,436.60 2,873.20 17.0 to 17.5 ..... 189.72 379.44 1,897.20 3,794.40
17 to 171⁄2 ....... 148.34 296.68 1,483.40 2,966.80 17.5 to 18.0 ..... 197.30 394.60 1,973.00 3,946.00
171⁄2 to 18 ....... 153.16 306.32 1,531.60 3,063.20 18.0 to 18.5 ..... 205.20 410.40 2,052.00 4,104.00
18 to 181⁄2 ....... 158.12 316.24 1,581.20 3,162.40 18.5 to 19.0 ..... 213.40 426.80 2,134.00 4,268.00
181⁄2 to 19 ....... 163.26 326.52 1,632.60 3,265.20 19.0 to 19.5 ..... 221.94 443.88 2,219.40 4,438.80
19 to 191⁄2 ....... 168.58 337.16 1,685.80 3,371.60 19.5 to 20.0 ..... 230.82 461.64 2,308.20 4,616.40
191⁄2 to 20 ....... 174.06 348.12 1,740.60 3,481.20 20.0 to 20.5 ..... 240.06 480.12 2,400.60 4,801.20
20 to 201⁄2 ....... 179.72 359.44 1,797.20 3,594.40
2 At a future date prior to Aug. 1, 1999 (20 years after issue
date of the first bonds) this table will be extended to show re-
demption values for periods of holding of 201⁄2 years and
beyond.
274
TABLE F—TABLE OF REDEMPTION VALUES PRO- 342.1 Definition of words and terms used in
VIDING AN INVESTMENT YIELD OF 9.00 PER- this part.
CENT PER ANNUM FOR BONDS BEARING ISSUE
342.2 Description of notes.
342.3 Extended terms and yields for out-
DATES BEGINNING OCTOBER 1, 1981 standing notes.
NOTE: This table shows how Retirement Plan Bonds bearing 342.4 Purchase—registration.
issue dates beginning October 1, 1981, by denomination,
increase in redemption value during successive half-year 342.5 Limitations.
periods following issue. The redemption values have been 342.6 Taxation.
determined to provide an investment yield of 9.00 percent 342.7 Payment or redemption.
per annum, compounded semiannually, on the purchase
price from issue date to the beginning of each half-year pe- 342.8 Governing regulations.
riod. The period to maturity is indeterminate in accordance 342.9 Fiscal agents.
with the provisions of § 341.1(b). 342.10 Reservations.
Issue price AUTHORITY: 31 U.S.C. 3103, 5 U.S.C. 301.
Period after Redemption values during each half-year SOURCE: 57 FR 14282, Apr. 17, 1992, unless
issue date period (values increase on first day of pe- otherwise noted.
(years) riod shown)
$50.00 $100.00 $500.00 $1,000.00 § 342.0 Offering of notes.

First half year .. $50.00 $100.00 $500.00 $1,000.00 The Secretary of the Treasury of-
.5 to 1.0 ........... 52.24 104.48 522.40 1,044.80 fered for sale to the people of the
1.0 to 1.5 ......... 54.60 109.20 546.00 1,092.00 United States, United States Savings
1.5 to 2.0 ......... 57.06 114.12 570.60 1,141.20
2.0 to 2.5 ......... 59.62 119.24 596.20 1,192.40 Notes (also known as ‘‘Freedom
2.5 to 3.0 ......... 62.30 124.60 623.00 1,246.00 Shares’’, and generally referred to
3.0 to 3.5 ......... 65.12 130.24 651.20 1,302.40 herein as ‘‘savings notes’’ or ‘‘notes’’).
3.5 to 4.0 ......... 68.04 136.08 680.40 1,360.80
4.0 to 4.5 ......... 71.10 142.20 711.00 1,422.00
The notes could be purchased only in
4.5 to 5.0 ......... 74.30 148.60 743.00 1,486.00 combination with Series E savings
5.0 to 5.5 ......... 77.64 155.28 776.40 1,552.80 bonds of the same or greater denomina-
5.5 to 6.0 ......... 81.14 162.28 811.40 1,622.80
6.0 to 6.5 ......... 84.80 169.60 848.00 1,696.00
tion. This offering was effective from
6.5 to 7.0 ......... 88.60 177.20 886.00 1,772.00 May 1, 1967 until the close of business
7.0 to 7.5 ......... 92.60 185.20 926.00 1,852.00 October 31, 1970 when the sale of sav-
7.5 to 8.0 ......... 96.76 193.52 967.60 1,935.20 ings notes was terminated by the Sec-
8.0 to 8.5 ......... 101.12 202.24 1,011.20 2,022.40
8.5 to 9.0 ......... 105.66 211.32 1,056.60 2,113.20 retary of the Treasury.
9.0 to 9.5 ......... 110.42 220.84 1,104.20 2,208.40
9.5 to 10.0 ....... 115.40 230.80 1,154.00 2,308.00 § 342.1 Definition of words and terms
10.0 to 10.5 ..... 120.58 241.16 1,205.80 2,411.60 used in this part.
10.5 to 11.0 ..... 126.02 252.04 1,260.20 2,520.40
11.0 to 11.5 ..... 131.68 263.36 1,316.80 2,633.60 (a) Payroll savings plan refers to a vol-
11.5 to 12.0 ..... 137.60 275.20 1,376.00 2,752.00 untary program maintained by an em-
12.0 to 12.5 ..... 143.80 287.60 1,438.00 2,876.00
12.5 to 13.0 ..... 150.28 300.56 1,502.80 3,005.60
ployer whereby its participating offi-
13.0 to 13.5 ..... 157.04 314.08 1,570.40 3,140.80 cers and employees authorize regular
13.5 to 14.0 ..... 164.10 328.20 1,641.00 3,282.00 withholdings from their salaries or
14.0 to 14.5 ..... 171.48 342.96 1,714.80 3,429.60 wages for the purchase of savings
14.5 to 15.0 ..... 179.20 358.40 1,792.00 3,584.00
15.0 to 15.5 ..... 187.26 374.52 1,872.60 3,745.20 bonds.
15.5 to 16.0 ..... 195.70 391.40 1,957.00 3,914.00 (b) Quarter refers to a 3-month period
16.0 to 16.5 ..... 204.50 409.00 2,045.00 4,090.00 of a year, as follows: January-Feb-
16.5 to 17.0 ..... 213.70 427.40 2,137.00 4,274.00
17.0 to 17.5 ..... 223.32 446.64 2,233.20 4,466.40 ruary-March, April-May-June, July-
17.5 to 18.0 ..... 233.36 466.72 2,333.60 4,667.20 August-September, or October-Novem-
18.0 to 18.5 ..... 243.86 487.72 2,438.60 4,877.20 ber-December.
18.5 to 19.0 ..... 254.84 509.68 2,548.40 5,096.80
19.0 to 19.5 ..... 266.32 532.64 2,663.20 5,326.40
19.5 to 20.0 ..... 278.30 556.60 2,783.00 5,566.00
§ 342.2 Description of notes.
20.0 to 20.5 ..... 290.82 581.64 2,908.20 5,816.40 (a) General. Savings notes were issued
only in registered form and are non-
[28 FR 405, Jan. 16, 1963, as amended at 31 FR transferable.
7625, May 27, 1966; 35 FR 224, Jan. 7, 1970; 39 (b) Term. A savings note was dated as
FR 4661, Feb. 6, 1974; 45 FR 53393, Aug. 11, of the first day of the month in which
1980; 46 FR 60573, Dec. 11, 1981] payment of the purchase price was re-
ceived by an issuing agent. A note had
PART 342—OFFERING OF UNITED an original maturity period of 4 years
STATES SAVINGS NOTES and 6 months and has been granted two
10-year extensions of maturity and an
Sec. additional extension of 5 years and 6
342.0 Offering of notes. months with interest; it will reach
275
§ 342.3 31 CFR Ch. II (7–1–11 Edition)
final maturity 30 years from its issue to earn interest thereon. The term
date. A note cannot be called by the third extended maturity period refers to
Secretary of the Treasury prior to ma- the final interval of 5 years and 6
turity and was not redeemable during months during which owners may re-
the first year from issue date. There- tain notes and continue to earn inter-
after, a note may be redeemed at the est until final maturity, which occurs
option and request of the owner. 30 years after issue date. No special ac-
(c) Denominations and purchase prices. tion is required of owners to take ad-
Savings notes were issued on a dis- vantage of any extension heretofore or
count basis. The denominations and herein granted. The following table de-
purchase prices were as follows: scribes the previous and final matu-
rities of savings notes:
Purchase
Denomination price
Previous matu-
Issue dates—1st day rities Previous maturity
$25 ................................................................... $20.25 of dates—1st day of
50 ..................................................................... 40.50 yrs. mos.
75 ..................................................................... 60.75
100 ................................................................... 81.00 May 1967–Oct. 1970 24 6 Nov. 1991–Apr.
1995.
Interest is paid as a part of the redemp-
tion value. A note increased in value Additional ex-
tended matu-
one year after issue date and increases Issue dates—1st day of rity period Life of
notes—yrs.
at the beginning of each half-year pe-
yrs. mos.
riod thereafter until final maturity, at
which time interest ceases to accrue. May 1967–Oct. 1970 ............... 5 6 30
Interest on a note which is redeemed
before maturity ceases to accrue at the Final maturity dates—1st day
Issue dates—1st day of
end of the interest period next pre- of
ceding the redemption date, except
May 1967–Oct. 1970 ............. May 1997–Oct. 2000
that if the note is redeemed on a date
on which the redemption value in-
(b) Guaranteed minimum investment
creases, interest ceases to accrue on
yield—(1) General. Except as provided in
that date.
paragraph (b)(2) of this section, the
(d) Inscription and issue. At the time
guaranteed minimum investment
of issue, the authorized issuing agent:
yields for outstanding savings notes
(1) Inscribed on the face of each note
are as follows:
the name and address of the owner and
(i) For savings notes in extended ma-
the name of the beneficiary, if any, or
turity periods prior to November 1,
the names of the coowner;
1982, the guaranteed minimum invest-
(2) Entered the issue date in the
ment yield was 8.5 percent per annum,
right-hand portion of the note in the
compounded semiannually, effective
space provided for that purpose; and
for the period from the first semi-
(3) Imprinted thereunder, by use of
annual interest accrual date on or after
the agent’s validation indicia for the
May 1, 1981, through their next ex-
issue of Series E savings bonds, the
tended maturity dates on or after No-
date the note was actually inscribed. A
vember 1, 1982.
note is valid only if an authorized
issuing agent received payment there- (ii) For savings notes that entered
for and duly inscribed, dated, im- extended maturity periods during the
printed validation indicia on the note period of November 1, 1982, through Oc-
and delivered it. tober 1, 1986, the guaranteed minimum
investment yield was 7.5 percent per
§ 342.3 Extended terms and yields for annum, compounded semiannually, for
outstanding notes. such periods, including notes that en-
(a) Extended maturity periods. The tered into an extended maturity pe-
terms extended maturity period and sec- riod, as shown below:
ond extended maturity period refer to the Issue dates—1st day Extension Entered—1st day of
10-year intervals after the original ma- of—
turity dates during which owners may May 1968–Oct. 1970 2nd .............. Nov. 1982–Apr. 1985.
retain their savings notes and continue
276
(iii) For savings notes that entered (2) For notes which entered an ex-
into extended maturity periods during tended maturity period prior to May 1,
the period of November 1, 1986, through 1989, the market-based variable invest-
February 1, 1993, the guaranteed min- ment yield from the first semiannual
imum investment yield is 6 percent per interest accrual date occurring on or
annum, compounded semiannually, for after November 1, 1982 to each semi-
such periods, including notes that en- annual interest accrual date occuring
tered into an extended maturity pe- on or after November 1, 1987, will be 85
riod, as shown below: percent, rounded to the nearest one-
fourth of one percent, of the arithmetic
Issue dates—1st Extension Entered—1st day of average of the market yield averages,
day of—
as determined in accordance with para-
May 1967–Aug. 3rd (final) .......... Nov. 1991–Feb.
1968. 1993.
graph (c)(1) of this section, for the ap-
propriate number of 6-month periods
(iv) For savings notes that entered or involved, starting with the period be-
enter extended maturity periods on or ginning May 1, 1982.
after March 1, 1993, the guaranteed (3) For notes which entered an ex-
minimum investment yield is 4 percent tended maturity period on or after May
per annum, compounded semiannually, 1, 1989, the market-based variable in-
for such periods, or the investment vestment yield from the first semi-
yield in effect at the beginning of such annual interest accrual date occurring
periods, including notes that enter into on or after November 1, 1982 to each
an extended maturity period, as shown semiannual interest accrual date oc-
below: curring on or after November 1, 1989,
will be 85 percent, rounded to the near-
Issue dates—1st est one-hundredth of one percent, of
Extension Entered—1st day of
day of—
the arithmetic average of the market
Sep. 1968–Oct. 3rd (final) .......... Mar. 1993–Apr. yield averages, as determined in ac-
1970. 1995.
cordance with paragraph (c)(1) of this
section for the appropriate number of
(2) Eleven-year bonus. If a savings
6-month periods involved, starting with
note was held for the 11-year period be-
the period beginning May 1, 1982.
ginning with the first semiannual in-
terest accrual date that occurred on or (d) Determination of redemption values
after January 1, 1980, its guaranteed during any extended maturity period. The
minimum investment yield for such pe- redemption value of a note on a given
riod was increased by one-half of one interest accrual date during any ex-
percent per annum, compounded semi- tended maturity period will be the
annually. higher of the value produced by using
(c) Market-based variable investment the applicable guaranteed minimum in-
yield. In order to be eligible for the vestment yield or the value produced
market-based variable investment by using the appropriate market-based
yield, notes had to be held at least five variable investment yield. The calcula-
years beginning with the first semi- tion of these values is described below:
annual interest accrual date occurring (1) Guaranteed minimum investment
on or after November 1, 1982. The mar- yield and resulting values during an ex-
ket-based variable investment yield tended maturity period. A note has a
shall be determined by the Secretary of guaranteed minimum investment yield
the Treasury as follows: for each of its extended maturity peri-
(1) For each 6-month period, starting ods. The applicable guaranteed min-
with the period beginning May 1, 1982, imum investment yield for the current
the average market yield on out- extended maturity period and any sub-
standing marketable Treasury securi- sequent periods are specified in para-
ties with a remaining term to maturity graph (b) of this section. In order to de-
of approximately 5 years during such termine the value of a note during an
period as determined. Such determina- extended maturity period, the value of
tion by the Secretary of the Treasury the note either at the end of the next
or his or her delegate shall be final and preceding maturity period or when the
conclusive. guaranteed minimum investment yield
277
§ 342.4 31 CFR Ch. II (7–1–11 Edition)
last increased, 1 whichever occurs later, § 342.4 Purchase—registration.

is determined using the applicable (a) Purchase. Savings notes, in com-
guaranteed minimum investment bination with Series E bonds, could be
yield. This value is then used as the purchased from any authorized issuing
base upon which interest accrues dur- agent, a Federal Reserve Bank or
ing the extended maturity period at Branch, or the Bureau of the Public
the guaranteed minimum investment Debt. Payment for the notes could be
yield in effect for savings bonds at the made in the same manner as payment
beginning of that period. The resulting for Series E savings bonds. Issuing
semiannual values are then compared agents delivered the notes at the time
with the corresponding values deter- of purchase, or by mail at the risk and
mined by using the applicable market- expense of the United States, but only
based variable investment yields. within the United States, its terri-
(2) Market-based variable investment tories and possessions and the Com-
yield and resulting values during and ex- monwealth of Puerto Rico. No mail de-
tended maturity period. The market- liveries elsewhere were made.
based variable investment yield from (b) Registration. The following restric-
the first semiannual interest accrual tions applied to original issues of sav-
date occurring on or after November 1, ings notes:
1982 to each semiannual interest ac- (1) They were limited to registration
crual date occurring on or after No- in the name of a natural person
vember 1, 1987, is determined as speci- (whether adult or minor), alone, or
fied in paragraph (c) of this section. with another natural person as co-
The value of a note on its first semi- owner or beneficiary, and
annual interest accrual date occurring (2) They had to be identical in reg-
on or after November 1, 1982 is used as istration to the Series E bond pur-
the base upon which interest accrues chased in combination therewith.
during an extended maturity period at
the applicable market-based variable § 342.5 Limitations.
investment yield. If redeemed, the note (a) Purchases—(1) Payroll savings
will receive the higher of the two val- plans. Under a payroll savings plan,
ues produced by using the applicable withholdings for notes could not exceed
guaranteed minimum investment yield the ratio of $1.08 for the notes to $1 for
and the applicable market-based vari- the Series E bonds and could not ex-
able investment yield. ceed $20.25 per weekly pay period, or
(e) Market-based variable investment $40.50 per biweekly or semi-monthly
yields and tables of redemption values. pay period, or $81 per monthly pay pe-
The market-based variable investment riod.
yields for notes redeemed during each (2) Others. In combination purchases
6-month period, beginning on May 1 of notes and Series E bonds, other than
and November 1 of each year, are made under a payroll savings plan, purchases
available prior to each of those dates of notes could not exceed $350 (face
by the Bureau of the Public Debt, Par- amount) a quarter, and in no event
kersburg, West Virginia 26106–1328, ac- could the annual limitation of $1,350
companied by tables of the redemption (face amount) be exceeded.
values of notes for the following 6 (b) Holdings. The face amount of sav-
months, based on either the applicable ings notes originally issued to any one
market-based variable investment person during any one calendar year,
yields or guaranteed minimum invest- was limited to $1,350.
ment yields.
§ 342.6 Taxation.
FR 60937, 60938, Nov. 18, 1993] (a) General. For the purpose of deter-
mining taxes and tax exemptions, the
1 The 11-year bonus was the last increase in
increment in value represented by the
the guaranteed minimum investment yield
difference between the purchase price
(see paragraph (b)(2)). Savings notes which and the redemption value received for
were eligible to receive this bonus received it a savings note is considered interest.
on the first semiannual interest accrual date The interest is subject to all taxes im-
which occurred on or after January 1, 1991. posed under the Internal Revenue Code
278
of 1986, as amended. The notes are sub- the issue date upon its presentation
ject to estate, inheritance, gift, or and surrender, with a duly executed re-
other excise taxes, whether Federal or quest for payment, to any Federal Re-
State, but are exempt from all other serve Bank or Branch referred to in
taxation now or hereafter imposed on § 342.9, the Bureau of the Public Debt,
the principal or interest thereof by any or to any financial institution des-
State, or any of the possessions of the ignated as a paying agent of savings
United States, or by any local taxing bonds.
authority.
(b) Judgment creditors. Payment of a
(b) Federal income tax on notes. An
owner of savings notes who is a cash- savings note to the purchaser at a sale
basis taxpayer may use either of two under a levy, or to the officer author-
methods for reporting the increase in ized to levy upon the property of the
the redemption value of the notes for owner under appropriate process to sat-
Federal income tax purposes, as fol- isfy a money judgment, could not be
lows: made until one year after the issue
(1) Defer reporting of the increase to date of the note.
the year of final maturity, actual re-
demption, or other disposition, which- FR 10540, Mar. 4, 1994]
ever is earlier; or
(2) Elect to report the increase for § 342.8 Governing regulations.
the year in which it accrues, in which
case the election applies to all savings Savings notes are subject to the reg-
notes then owned and those subse- ulations of the Department of the
quently acquired, as well as to any Treasury, now or hereafter prescribed,
other similar obligations purchased on governing United States Savings
a discount basis. Bonds, contained in 31 CFR part 315,
If the method in paragraph (b)(1) of also published as Department of the
this section is used, the taxpayer may Treasury Circular No. 530, current revi-
change to the method in paragraph sion, except as otherwise specifically
(b)(2) of this section without obtaining provided herein.
permission from the Internal Revenue
Service. However, once the election to § 342.9 Fiscal agents.
use the method in paragraph (b)(2) of (a) Federal Reserve Banks and
this section is made, the taxpayer may Branches referred to below, as fiscal
not change the method of reporting agents of the United States, are au-
without permission from the Internal
thorized to perform such services as
Revenue Service. For further informa-
may be requested of them by the Sec-
tion on Federal income taxes, the Serv-
ice Center Director or District Direc- retary of the Treasury, or his or her
tor, Internal Revenue Service, of the delegate, in connection with the issue,
taxpayer’s district should be contacted. redemption and payment of savings
notes.
§ 342.7 Payment or redemption. (b)(1) The following Federal Reserve
(a) General. A savings note is redeem- Offices have been designated to provide
able any time one year or more after savings bond services:
Reserve districts
served
14240.
PA 15230.
23261.
279
§ 342.10 31 CFR Ch. II (7–1–11 Edition)
Reserve districts
served
GU.
(2) Until March 1, 1996, other Federal Subpart A—General Information

Reserve Offices may continue to pro-
vide some savings bond services, but § 343.0 Offering of bonds.
such services will be phased out over The Secretary of the Treasury, under
the period prior to that date. the authority of the Second Liberty
Bond Act, as amended, and pursuant to
[59 FR 10540, Mar. 4, 1994]
paragraph 832(e) of the Internal Rev-
§ 342.10 Reservations. enue Code of 1954, offers for sale only to
companies organized and engaged in
(a) Issue of notes. The Secretary of the business of writing mortgage guar-
the Treasury reserved the right to re- anty insurance within the United
ject any application for purchase of States, bonds of the United States des-
savings notes, in whole or in part, and ignated as Mortgage Guaranty Insur-
to refuse to issue or permit to be issued ance Company Tax and Loss Bonds,
hereunder any such notes in any case hereinafter referred to as tax and loss
or any class or classes of cases if such bonds. The bonds are issued in a min-
action was deemed to be in the public imum amount of $1,000 or in any larger
interest. Any action in any such re- amount, in increments of not less than
spect was final. $1.00. This offering will continue until
(b) Terms. The Secretary of the Treas- terminated by the Secretary of the
ury may at any time, or from time to Treasury.
time, supplement or amend the terms § 343.1 General provisions.
of this part, or of any amendments or
(a) Regulations. Tax and loss bonds
supplements thereto.
are subject to the general regulations
with respect to United States securi-
PART 343—REGULATIONS GOV- ties, which are set forth in the Depart-
ERNING THE OFFERING OF ment of the Treasury Circular No. 300
UNITED STATES MORTGAGE (31 CFR part 306), to the extent applica-
GUARANTY INSURANCE COM- ble. Copies of the circular may be ob-
PANY TAX AND LOSS BONDS tained from the Bureau of the Public
Debt, Division of Special Investments,
Room 309, 200 Third St., P.O. Box 396,
Parkersburg, WV 26106–0396 or
Sec. downloaded from Public Debt’s home
343.0 Offering of bonds. page on the Internet at: http://
343.1 General provisions. www.publicdebt.treas.gov/.
(b) Issuance. Tax and loss bonds are
Subpart B—Tax and Loss Bonds issued in book-entry form on the books
of the Treasury that are maintained by
343.2 Issue date and purchase. the Division of Special Investments.
343.3 Redemption. The bonds are issued with 10 or 20 year
343.4 Reissue. maturities as designated by the pur-
343.5 Taxation.
chaser. These bonds are non-interest
AUTHORITY: 5 U.S.C. 301; 26 U.S.C. 832; 31 bearing. Any transfer by sale, ex-
U.S.C. 3102. change, assignment, pledge or other-
SOURCE: 62 FR 49914, Sept. 24, 1997, unless wise, is prohibited. The bonds may be
otherwise noted. reissued as provided in § 343.4.
(c) Fiscal agents. Selected Federal Re-
serve Banks and Branches, as fiscal
agents of the United States, may be
280
designated to perform such services re- Subpart B—Tax and Loss Bonds
quested of them by the Secretary of
the Treasury in connection with the § 343.2 Issue date and purchase.
purchase, redemption and other trans- (a) Issue date. The issue date must be
actions involving these bonds. a business day. The bonds will be
(d) Debt limit contingency. The Depart- issued as of the date of receipt of Form
ment of the Treasury reserves the right PD F 3871 ‘‘Application for Issue of
to change or suspend the terms and United States Mortgage Guaranty In-
conditions of this offering, including surance Company Tax and Loss Bonds’’
provisions relating to the purchase of, and receipt of the remittance of funds
and redemption of, the bonds as well as for the full amount of the bond(s). Ap-
notices relating hereto, at any time plications under this offering must be
the Secretary determines that the submitted to the Division of Special
issuance of obligations sufficient to Investments. An application may be
conduct the orderly financing oper- submitted by fax at (304) 480–7786 or
ations of the United States cannot be (304) 480–6818, by mail, or by other car-
made without exceeding the statutory rier. Applications submitted by mail
debt limit. Announcement of such should be sent by certified or reg-
changes shall be provided by such istered mail.
means as the Secretary deems appro- (b) Purchase. Tax and loss bonds may
priate. only be purchased from the Division of
(e) General redemption provisions. A Special Investments. The purchaser
bond may not be called for redemption will instruct their financial institution
by the Secretary of the Treasury prior to submit the exact amount of funds on
to maturity. When the bond matures, the requested issue date to the Division
payment will be made of the principal of Special Investments via the Fedwire
amount due to the owner. A bond funds transfer system, with credit di-
scheduled for maturity on a non-busi- rected to the Treasury’s General Ac-
ness day will be redeemed on the next count, according to wire instructions
business day. obtained from the Division of Special
(f) Reservations. The Secretary of the Investments (see § 343.1(g)). Full pay-
Treasury may at any time, or from ment should be submitted by 3:00 P.M.
time to time, supplement or amend the Eastern time to ensure that settlement
terms of this circular or any related of the transaction occurs.
amendments or supplements. Trans-
(Approved by the Office of Management and
action requests, including purchases or Budget under control number 1535–0127)
redemptions of bonds, are not accept-
able if unsigned, inappropriately com- § 343.3 Redemption.
pleted, or not timely submitted. Any of
(a) General. Tax and loss bonds may
these actions shall be final. The au-
not be called for redemption by the
thority of the Secretary to waive regu-
Secretary of the Treasury prior to ma-
lations under 31 CFR 306.126 applies to
turity, but may be redeemed in whole
part 343.
or in part at the owner’s option at any
(g) Forms and additional information.
time after three months from issue
The application form for subscriptions,
date. The Director of the Internal Rev-
Fedwire instructions and other infor- enue Service District in which the own-
mation will be furnished by the Divi- er’s principal place of business is lo-
sion of Special Investments upon re- cated will be given notice of all re-
quest by writing to the Division of Spe- demptions. Partial redemptions of
cial Investments or by calling (304) 480– bonds may be requested in any whole
7752. Application forms may also be dollar amount; however, an account
downloaded from the Internet at Public balance of less than $1,000 will be re-
Debt’s home page at: http:// deemed in total.
www.publicdebt.treas.gov/. (b) Method of payment. Payment will
be made by the Automated Clearing
House (ACH) method for the owner’s
281
§ 343.4 31 CFR Ch. II (7–1–11 Edition)
account at a financial institution des- same issue date and maturity as the
ignated by the owner. To the extent ap- original bond.
plicable, provisions of § 357.26, Pay- (b) Correction of error. The reissue of a
ments, and provisions of 31 CFR part bond may be made to correct an error
370, shall govern ACH payments made in the original issue upon an appro-
under this offering. The Department of priate request, supported by satisfac-
the Treasury may employ alternate tory proof of the error.
payment procedures in lieu of ACH in (c) Change of name. An owner whose
any case or class of cases where oper- name is changed in any legal manner
ational considerations require such ac- after the issue of the bond should sub-
tion. mit the bond with a request for reissue,
(c) Book-entry. Bonds will be re- substituting the new name for the
deemed automatically upon maturity. name inscribed on the bond. The signa-
Payment will be made in accordance ture on the request for reissue should
with the ACH payment instructions on show the new name, the legal reason
file. Redemptions prior to maturity which caused the change to be made
will be made upon receipt of a redemp- and the former name. It must be sup-
tion request. Notice of redemption ported by satisfactory proof of the
prior to maturity must be submitted in change of name.
writing on company letterhead to the (d) Legal succession. A bond registered
Division of Special Investments, or in the name of a company which has
faxed to (304) 480–7786 or to (304) 480– been succeeded by another company as
6818. The notice must be received by the result of a merger, consolidation,
the Division of Special Investments not incorporation, reincorporation, conver-
less than three business days prior to sion, reorganization, or which has been
the requested redemption date. It must lawfully succeeded in any manner
contain the owner’s name and Tax whereby the business or activities of
Identification Number, the requested the original organization are continued
redemption date, any changed payment without substantial change, will be
routing instructions, the case num- paid to or reissued in the name of the
ber(s) to be redeemed, including origi- successor upon an appropriate request
nal issue date(s), and the amount to be on its behalf, supported by satisfactory
redeemed. evidence of successorship.
(d) Registered. To obtain redemption, (e) Conversion to book-entry. Although
a bond with the assignment for re- not required, any owner of tax and loss
demption properly completed and exe- bonds held in registered form after the
cuted must be presented to the Divi- effective date of this regulation, may
sion of Special Investments. Payment submit those bonds to the Division of
routing instructions must also be in- Special Investments, for conversion to
cluded with the bond at redemption. book-entry form.
Upon partial redemption of a registered
bond, the remaining balance will be re- Budget under control number 1535–0127)
issued in book-entry form with the
original issue and maturity date. § 343.5 Taxation.
(Approved by the Office of Management and Tax and loss bonds will be exempt
Budget under control number 1535–0127) from all taxation now or hereafter im-
posed on the principal by any state or
§ 343.4 Reissue. any possession of the United States or
(a) General. Reissue of a tax and loss of any local taxing authority.
bond may be made only under the con-
ditions specified in this paragraph. A PART 344—U.S. TREASURY SECURI-
request for reissue must be made by an TIES—STATE AND LOCAL GOV-
officer of the beneficial owner who is ERNMENT SERIES
authorized to assign the bond for re-
demption. The request must be sub- Subpart A—General Information
mitted to the Division of Special In-
vestments. A bond will only be reissued Sec.
in book-entry form and will bear the 344.0 What does this part cover?
282
344.1 What special terms do I need to know (1) Time Deposit securities—may be
to understand this part? issued as:
344.2 What general provisions apply to (i) Certificates of indebtedness;
SLGS securities?
(ii) Notes; or
LGSAFE ® SERVICE (iii) Bonds.
344.3 What provisions apply to the SLGSafe (2) Demand Deposit securities—may be
Service? issued as certificates of indebtedness.
(3) Special Zero Interest securities. Spe-
Subpart B—Time Deposit Securities cial Zero Interest securities, which
344.4 What are Time Deposit securities? were discontinued on October 28, 1996,
344.5 What other provisions apply to sub- were issued as:
scriptions for Time Deposit securities? (i) Certificates of indebtedness; or
344.6 How do I redeem a Time Deposit secu- (ii) Notes.
rity before maturity? (c) In what denominations are SLGS se-
curities issued? SLGS securities are
Subpart C—Demand Deposit Securities
issued in the following denominations:
344.7 What are Demand Deposit securities? (1) Time Deposit securities—a min-
344.8 What other provisions apply to sub- imum amount of $1,000, or in any larger
scriptions for Demand Deposit securi- whole dollar amount; and
ties?
(2) Demand Deposit securities—a min-
344.9 How do I redeem a Demand Deposit se-
curity? imum amount of $1,000, or in any larger
amount, in any increment.
Subpart D—Special Zero Interest Securities (d) How long is the offering in effect?
The offering continues until termi-
344.10 What are Special Zero Interest secu- nated by the Secretary.
rities?
344.11 How do I redeem a Special Zero Inter-
§ 344.1 What special terms do I need to
est security before maturity?
know to understand this part?
APPENDIX A TO PART 344—EARLY REDEMPTION
MARKET CHARGE FORMULAS AND EXAM- As appropriate, the definitions of
PLES FOR SUBSCRIPTIONS FROM DECEMBER terms used in this part are those found
28, 1976, THROUGH OCTOBER 27, 1996 in the relevant portions of the Internal
APPENDIX B TO PART 344—FORMULA FOR DE- Revenue Code and the Income Tax Reg-
TERMINING REDEMPTION VALUE FOR SECU- ulations.
RITIES SUBSCRIBED FOR AND EARLY-RE-
DEEMED ON OR AFTER OCTOBER 28, 1996
BPD’s Web site refers to http://
www.slgs.gov.
AUTHORITY: 26 U.S.C. 141 note; 31 U.S.C. Business day(s) means Federal busi-
3102, 3103, 3104, and 3121.
ness day(s).
SOURCE: 65 FR 55405, Sept. 13, 2000, unless Current Treasury borrowing rate means
otherwise noted. the prevailing market rate, as deter-
mined by Treasury, for a Treasury se-
Subpart A—General Information curity with the specified period to ma-
turity. In the case where SLGS rates
SOURCE: 70 FR 37911, June 30, 2005, unless are needed for maturities currently not
otherwise noted. issued by Treasury, at our discretion,
suitable proxies for Treasury securities
§ 344.0 What does this part cover? and/or a rate setting methodology, as
(a) What is the purpose of the SLGS se- determined by the Secretary, may be
curities offering? The Secretary of the used to derive a current Treasury bor-
Treasury (the Secretary) offers for sale rowing rate. At any time that the Sec-
non-marketable State and Local Gov- retary establishes such proxies or a
ernment Series (SLGS) securities to rate-setting method or determines that
provide issuers of tax-exempt securi- the methodology should be revised, we
ties with investments from any eligible will make an announcement.
source of funds (as defined in § 344.1). Day(s) means calendar day(s).
(b) What types of SLGS securities are Eligible source of funds means:
governed by this part? This part governs (1) Any amounts that constitute
the following SLGS securities: gross proceeds of a tax-exempt bond
283
§ 344.2 31 CFR Ch. II (7–1–11 Edition)
issue or are reasonably expected to be- (1) The electronic transactions and
come gross proceeds of a tax-exempt funds transfers provisions for United
bond issue; States securities, part 370 of this sub-
(2) Any amounts that formerly were chapter, ‘‘Electronic Transactions and
gross proceeds of a tax-exempt bond Funds Transfers Related to U.S. Secu-
issue, but no longer are treated as rities’; and
gross proceeds of such issue as a result (2) The appendix to subpart E to part
of the operation of the universal cap on 306 of this subchapter, for rules regard-
the maximum amount treated as gross ing computation of interest.
proceeds under 26 CFR 1.148–6(b)(2); (b) Where are SLGS securities held?
(3) Amounts held or to be held to- SLGS securities are issued in book-
gether with gross proceeds of one or entry form on the books of BPD.
more tax-exempt bond issues in a re-
(c) Besides BPD, do any other entities
funding escrow, defeasance escrow, par-
administer SLGS securities? The Sec-
ity debt service reserve fund, or com-
mingled fund (as defined in 26 CFR retary may designate selected Federal
1.148–1(b)); Reserve Banks and Branches, as fiscal
(4) Proceeds of a taxable bond issue agents of the United States, to perform
that refunds a tax-exempt bond issue services relating to SLGS securities.
or is refunded by a tax-exempt bond (d) Can SLGS securities be transferred?
issue; or No. SLGS securities issued as any one
(5) Any other amounts that are sub- type, i.e., Time Deposit, Demand De-
ject to yield limitations under the posit, or Special Zero Interest, cannot
rules applicable to tax-exempt bonds be transferred for other securities of
under the Internal Revenue Code. that type or any other type. Transfer
Issuer refers to the Government body of securities by sale, exchange, assign-
or other entity that issues state or ment, pledge, or otherwise is not per-
local government bonds described in mitted.
section 103 of the Internal Revenue (e) What certifications must the issuer
Code. or its agent provide?—(1) Agent certifi-
SLGS rate means the current Treas- cation. When a commercial bank or
ury borrowing rate, less one basis other agent submits a subscription, or
point, as released daily by Treasury in performs any other transaction, on be-
a SLGS rate table. half of the issuer, it must certify that
SLGS rate table means a compilation it is acting under the issuer’s specific
of SLGS rates available for a given authorization. Ordinarily, evidence of
day. such authority is not required.
‘‘We,’’ ‘‘us,’’ or ‘‘the Secretary’’ refers (2) Yield certifications—(i) Purchase of
to the Secretary and the Secretary’s SLGS Securities. Upon submitting a sub-
delegates at the Department of the scription for a SLGS security, a sub-
Treasury (Treasury), Bureau of the scriber must certify that:
Public Debt (BPD). The term also ex- (A) Marketable securities to SLGS secu-
tends to any fiscal or financial agent rities. If the issuer is purchasing a
acting on behalf of the United States
SLGS security with any amount re-
when designated to act by the Sec-
ceived from the sale or redemption (at
retary or the Secretary’s delegates.
the option of the holder) before matu-
Yield on an investment means
rity of any marketable security, the
‘‘yield’’ as computed under 26 CFR
1.148–5. yield on such SLGS security does not
exceed the yield at which such market-
You or your refers to a SLGS pro-
gram user or a potential SLGS pro- able security was sold or redeemed; and
gram user. (B) Time deposit securities to SLGS se-
curities. If the issuer is purchasing a
§ 344.2 What general provisions apply SLGS security with any amount re-
to SLGS securities? ceived from the redemption before ma-
(a) What other regulations apply to turity of a Time Deposit security
SLGS securities? SLGS securities are (other than a zero interest Time De-
subject to: posit security), the yield on the SLGS
284
security being purchased does not ex- the bond proceeds to purchase SLGS
ceed the yield that was used to deter- securities to fund the escrow. If, how-
mine the amount of redemption pro- ever, interest rates do not decline in
ceeds for such redeemed Time Deposit that period, the issuer plans to use the
security. bond proceeds to purchase the market-
(ii) Early redemption of SLGS securi- able securities to fund the escrow and
ties. Upon submission of a request for cancel the SLGS securities subscrip-
redemption before maturity of a Time tion. This practice violates the prohibi-
Deposit security (other than a zero in- tion on cancellation under § 344.5(c) or
terest Time Deposit security) sub- § 344.8(c), and no exception or waiver
scribed for on or after August 15, 2005, would be granted under this part be-
the subscriber must certify that no cause the ability to cancel in these cir-
amount received from the redemption cumstances would result in the SLGS
will be invested at a yield that exceeds program being used to create a cost-
the yield that is used to determine the free option. In addition, this practice is
amount of redemption proceeds for prohibited under paragraph (f)(1)(i) of
such redeemed Time Deposit security. this section.
(f) What are some practices involving (ii) Sale of marketable securities condi-
SLGS securities that are not permitted?— tioned on interest rates. The existing es-
(1) In general. For SLGS securities sub- crow for an advance refunding contains
scribed for on or after August 15, 2005, marketable securities which produce a
it is impermissible: negative arbitrage. In order to reduce
(i) To use the SLGS program to cre- or eliminate this negative arbitrage,
ate a cost-free option; the issuer subscribes for SLGS securi-
(ii) To purchase a SLGS security ties at a yield higher than the yield on
with any amount received from the the existing escrow, but less than the
sale or redemption (at the option of the permitted yield. At the same time, the
holder) before maturity of any market- issuer agrees to sell the marketable se-
able security, if the yield on such curities in the existing escrow to a
SLGS security exceeds the yield at third party and use the proceeds to
which such marketable security is sold purchase SLGS securities if interest
or redeemed; or rates decline between the date of sub-
(iii) To invest any amount received scribing for SLGS securities and the
from the redemption before maturity requested date of issuance of SLGS se-
of a Time Deposit security (other than curities. The marketable securities
a Zero Percent Time Deposit security) would be sold at a yield which is less
at a yield that exceeds the yield that is than the yield on the SLGS securities
used to determine the amount of re- purchased. The issuer and the third
demption proceeds for such Time De- party further agree that if interest
posit security. rates increase during this period, the
(2) Examples—(i) Simultaneous pur- issuer will cancel the SLGS securities
chase of marketable and SLGS securities. subscription. This practice violates the
In order to fund an escrow for an ad- prohibition on cancellation under
vance refunding, the issuer simulta- § 344.5(c) or § 344.8(c), and no exception
neously enters into a purchase con- or waiver would be granted under this
tract for marketable securities and part because the ability to cancel in
subscribes for SLGS securities, such these circumstances would result in
that either purchase is sufficient to the SLGS program being used to create
pay the cash flows on the outstanding a cost-free option. In addition, this
bonds to be refunded, but together, the practice is prohibited under paragraphs
purchases are greatly in excess of the (f)(1)(i) and (ii) of this section.
amount necessary to pay the cash (iii) Sale of marketable securities not
flows. The issuer plans that, if interest conditioned on interest rates. The facts
rates decline during the period between are the same as in paragraph (f)(2)(ii)
the date of starting a SLGS subscrip- of this section, except that in this case,
tion and the requested date of issuance the agreement entered into by the
of SLGS securities, the issuer will issuer with a third party to sell the
enter into an offsetting agreement to marketable securities in order to ob-
sell the marketable securities and use tain funds to purchase SLGS securities
285
§ 344.2 31 CFR Ch. II (7–1–11 Edition)
is not conditioned upon changes in in- year, marketable Treasury security

terest rates on Treasury securities. using the principal and interest to be
This practice violates the yield gain received at the maturity of the second
prohibition in paragraph (f)(1)(ii) of Time Deposit security. The marketable
this section and is prohibited. Treasury security has a yield of 4.02
(iv) Simultaneous subscription for SLGS percent. This transaction satisfies the
securities and sale of option to purchase yield limitation in paragraph (f)(1)(iii)
marketable securities. The issuer holds a of this section because:
portfolio of marketable securities in an (A) The yield on the second Time De-
account that produces negative arbi- posit security does not exceed the yield
trage. In order to reduce or eliminate that is used to determine the amount
this negative arbitrage, the issuer sub- of redemption proceeds for the first
scribes for SLGS securities for pur- Time Deposit security; and
chase in sixty days. At the same time, (B) The second Time Deposit security
the issuer sells an option to purchase is not redeemed before maturity and
the portfolio of marketable securities. therefore the re-investment of the prin-
If interest rates increase, the holder of cipal and interest received on the sec-
the option will not exercise its option ond Time Deposit security is not sub-
and the issuer will cancel the SLGS se- ject to the yield limitation in para-
curities subscription. On the other graph (f)(1)(iii) of this section. This
hand, if interest rates decline, the op- transaction constitutes a permissible
tion holder will exercise the option and use of the SLGS program.
the issuer will use the proceeds to pur- (vi) Early redemption of time deposit se-
chase SLGS securities. This practice curity and simultaneous purchase of mar-
violates the prohibition on cancella- ketable security. The facts are the same
tion under § 344.5(c) or § 344.8(c), and no as in paragraph (f)(2)(v) of this section,
exception or waiver would be granted except that the issuer subscribes for
under this part because the ability to the second Time Deposit security on
cancel in these circumstances would March 1, 2007, and enters into the con-
result in the SLGS program being used tract to purchase the marketable
to create a cost-free option. In addi- Treasury security on March 1, 2007.
tion, this practice is prohibited under This transaction, if permitted, would
paragraph (f)(1)(i) of this section. enable the issuer to redeem the first
(v) Early redemption of time deposit se- Time Deposit security at a yield that is
curity and subsequent purchase of mar- held constant for 12 hours based on the
ketable security. On February 6, 2006, an ‘‘current Treasury borrowing rate’’ for
issuer purchases a Time Deposit secu- March 1, 2007, and to re-invest the re-
rity using tax-exempt bond proceeds in demption proceeds based on a market
a debt service reserve fund. The Time yield that may fluctuate during that
Deposit security has a principal 12-hour period. The use of the SLGS
amount of $7 million, an interest rate program in this manner would create a
of 3.63 percent, and a maturity date of cost-free option. Accordingly, this
February 6, 2009. On March 1, 2007, the transaction is impermissible under
issuer submits a request to redeem the paragraph (f)(1)(i) of this section.
Time Deposit security on March 15, (g) When and how do I pay for SLGS
2007. The yield used to determine the securities? You must submit full pay-
amount of redemption proceeds is 3.21 ment for each subscription to BPD no
percent. On March 5, 2007, the issuer later than 4 p.m., Eastern time, on the
subscribes for the purchase, on March issue date. Submit payments by the
15, 2007, of a second Time Deposit secu- Fedwire funds transfer system with
rity. The issuer pays for the second credit directed to the Treasury’s Gen-
Time Deposit security on March 15, eral Account. For these transactions,
2007, with the redemption proceeds of BPD’s ABA Routing Number is
the first Time Deposit security. The 051036476.
second Time Deposit security has an (h) What happens if I need to make an
interest rate of 2.77 percent and a ma- untimely change or do not settle on a sub-
turity date of April 16, 2007. On April 9, scription? An untimely change to a sub-
2007, the issuer enters into a contract scription can only be made in accord-
to purchase, on April 16, 2007, a ten- ance with § 344.2(n) of this part. The
286
penalty imposed for failure to make ing (including provisions relating to

settlement on a subscription that you subscriptions for, and issuance of,
submit will be to render you ineligible SLGS securities; interest payments;
to subscribe for SLGS securities for six early redemptions; and rollovers) at
months beginning on the date the sub- any time the Secretary determines
scription is withdrawn, or the proposed that the issuance of obligations suffi-
issue date, whichever occurs first. cient to conduct the orderly financing
(1) Upon whom is the penalty imposed? operations of the United States cannot
If you are the issuer, the penalty is im- be made without exceeding the statu-
posed on you unless you provide the tory debt limit, or that a disaster situ-
Taxpayer Identification Number of the ation exists. We will announce such
conduit borrower that is the actual changes by any means that the Sec-
party failing to make settlement of a retary deems appropriate.
subscription. If you provide the Tax- (m) What are some of the rights that
payer Identification Number for the Treasury reserves in administering the
conduit borrower, the six-month pen- SLGS program? We may decide, in our
alty will be imposed on the conduit sole discretion, to take any of the fol-
borrower. lowing actions. Such actions are final.
(2) What occurs if Treasury exercises Specifically, Treasury reserves the
the option to waive the penalty? If you right:
settle after the proposed issue date and (1) To reject any SLGSafe Applica-
we determine that settlement is action for Internet Access;
ceptable on an exception basis, we will
(2) To reject any electronic message
waive, under § 344.2(n), the six-month
or other message or request, including
penalty under paragraph (h) of this sec-
requests for subscription and redemp-
tion. You shall be charged a late pay-
tion, that is inappropriately completed
ment assessment. The late payment as-
or untimely submitted;
sessment equals the amount of interest
that would have accrued on the SLGS (3) To refuse to issue any SLGS secu-
securities from the proposed issue date rities in any case or class of cases;
to the date of settlement plus an ad- (4) To revoke the issuance of any
ministrative fee of $100 per subscrip- SLGS securities and to declare the sub-
tion, or such other amount as we may scriber or the issuer ineligible there-
publish in the FEDERAL REGISTER. We after to subscribe for securities under
will not issue SLGS securities until we the offering if the Secretary deems
receive the late payment assessment, that such action is in the public inter-
which is due on demand. est and any security is issued on the
(i) What happens at maturity? Upon basis of an improper certification or
the maturity of a security, we will pay other misrepresentation (other than as
the owner the principal amount and in- the result of an inadvertent error) or
terest due. A security scheduled for there is an impermissible transaction
maturity on a non-business day will be under § 344.2(f); or
redeemed on the next business day. (5) To review any transaction for
(j) How will I receive payment? We will compliance with this part, including
make payment by the Automated requiring a subscriber or the issuer to
Clearing House (ACH) method for the provide additional information, and to
owner’s account at a financial institu- determine an appropriate remedy
tion as designated by the owner. We under the circumstances.
may use substitute payment proce- (n) Are there any situations in which
dures, instead of ACH, if we consider it Treasury may waive these regulations?
to be necessary. Any such action is We reserve the right, at our discretion,
final. to waive or modify any provision of
(k) How do I contact BPD? BPD’s con- these regulations in any case or class
tact information is posted on BPD’s of cases. We may do so if such action is
Web site. not inconsistent with law and will not
(l) Will the offering be changed during subject the United States to substan-
a debt limit or disaster contingency? We tial expense or liability.
reserve the right to change or suspend (o) Are SLGS securities callable by
the terms and conditions of the offer- Treasury? No. Treasury cannot call a
287
§ 344.3 31 CFR Ch. II (7–1–11 Edition)
SLGS security for redemption before submit such subscriptions and requests
maturity. by other means; and
(4) Agree to submit transactions
SLGSAFE ® SERVICE manually if we notify you that due to
problems with hardware, software, data
§ 344.3 What provisions apply to the
SLGSafe Service? transmission, or any other reason, we
are unable to send or receive electronic
(a) What is the SLGSafe Service? messages through SLGSafe.
SLGSafe is a secure Internet site on
(g) When is the SLGSafe window open?
the World Wide Web through which
All SLGSafe subscriptions, requests for
subscribers submit SLGS securities
early redemption of Time Deposit secu-
transactions. SLGSafe Internet trans-
rities, and requests for redemption of
actions constitute electronic messages
under 31 CFR part 370. Demand Deposit securities must be re-
(b) Is SLGSafe use mandatory? Yes. Ex- ceived by BPD on business days no ear-
cept as provided in paragraph (f)(3) or lier than 10 a.m. and no later than 10
(f)(4) of this section, you must submit p.m., Eastern time. The official time is
all transactions through SLGSafe. the date and time as shown on BPD’s
(c) What terms and conditions apply to application server. Except as otherwise
SLGSafe? The terms and conditions provided in §§ 344.5(d) and 344.8(d), all
contained in the following documents, other functions may be performed dur-
which may be downloaded from BPD’s ing the extended SLGSafe hours, from
Web site and which may change from 8 a.m. until 10 p.m., Eastern time.
time to time, apply to SLGSafe trans-
actions: Subpart B—Time Deposit Securities
(1) SLGSafe Application for Internet
Access and SLGSafe User Acknowledg- SOURCE: 70 FR 37911, June 30, 2005, unless
ment; and otherwise noted.
(2) SLGSafe User’s Manual.
(d) Who can apply for SLGSafe access? § 344.4 What are Time Deposit securi-
If you are an owner or a potential ties?
owner of SLGS securities, or act as a Time Deposit securities are issued as
trustee or other agent of the owner, certificates of indebtedness, notes, or
you can apply to BPD for SLGSafe ac- bonds.
cess. Other potential users of SLGSafe
(a) What are the maturity periods? The
include, but are not limited to, under-
issuer must fix the maturity periods
writers, financial advisors, and bond
for Time Deposit securities, which are
counsel.
issued as follows:
(e) How do I apply for SLGSafe access?
Submit to BPD a completed SLGSafe (1) Certificates of indebtedness that do
Application for Internet Access. The not bear interest. For certificates of in-
form is found on BPD’s Web site. debtedness that do not bear interest,
(f) What are the conditions of SLGSafe the issuer can fix a maturity period of
use? If you are designated as an author- not less than fifteen days and not more
ized user, on a SLGSafe application than one year.
that we’ve approved, you must: (2) Certificates of indebtedness that bear
(1) Assume the sole responsibility interest. For certificates of indebted-
and the entire risk of use and operation ness that bear interest, the issuer can
of your electronic connection; fix a maturity period of not less than
(2) Agree that we may act on any thirty days and not more than one
electronic message to the same extent year.
as if we had received a written instruc- (3) Notes. For notes, the issuer can fix
tion bearing the signature of your duly a maturity period of not less than one
authorized officer; year and one day, and not more than
(3) Submit electronic messages and ten years.
other transaction requests exclusively (4) Bonds. For bonds, the issuer can
through SLGSafe, except to the extent fix a maturity period of not less than
you establish to the satisfaction of ten years and one day, and not more
BPD that good cause exists for you to than forty years.
288
(b) How do I select the SLGS rate? For subscription at least seven days before
each security, the issuer shall des- the issue date.
ignate an interest rate that does not Example to paragraph (a): If SLGS securi-
exceed the maximum interest rate ties totaling $10 million or less will be issued
shown in the daily SLGS rate table as on November 16th, BPD must receive the
defined in § 344.1. subscription no later than November 11th. If
(1) When is the SLGS rate table re- SLGS securities totaling more than $10 mil-
leased? We release the SLGS rate table lion will be issued on November 16th, BPD
to the public by 10 a.m., Eastern time, must receive the subscription no later than
November 9th. In all cases, if SLGS securi-
each business day. If the SLGS rate ties will be issued on November 16th, BPD
table is not available at that time on will not accept the subscription before Sep-
any given business day, the SLGS rate tember 17th.
table for the preceding business day ap-
plies. (b) How do I start the subscription proc-
ess? A subscriber starts the subscrip-
(2) How do I lock-in a SLGS rate? The
tion process by entering into SLGSafe
applicable daily SLGS rate table for a
the following information:
SLGSafe subscription is the one in ef-
(1) The issue date;
fect on the business day that you start
(2) The total principal amount;
the subscription process. This table is
(3) The issuer’s name and Taxpayer
shown on BPD’s Application server.
Identification Number;
(3) Where can I find the SLGS rate (4) The title of an official authorized
table? The SLGS rate table can be ob- to purchase SLGS securities; ]
tained at BPD’s Web site. (5) A description of the tax-exempt
(c) How are interest computation and bond issue; and ]
payment dates determined? Interest on a (6) The certification required by
certificate of indebtedness is computed § 344.2(e)(1), if the subscription is sub-
on an annual basis and is paid at matu- mitted by an agent of the issuer.
rity with the principal. Interest on a (c) Under what circumstances can I
note or bond is paid semi-annually. The cancel a subscription? You cannot cancel
issuer specifies the first interest pay- a subscription unless you establish, to
ment date, which must be at least thir- the satisfaction of Treasury, that the
ty days and less than or equal to one cancellation is required for reasons un-
year from the date of issue. The final related to the use of the SLGS program
interest payment date must coincide to create a cost-free option.
with the maturity date of the security. (d) How do I change a subscription?
Interest for other than a full interest You can change a subscription on or
period is computed on the basis of a before 3 p.m., Eastern time, on the
365-day or 366-day year (for certificates issue date. Changes to a subscription
of indebtedness) and on the basis of the are acceptable with the following ex-
exact number of days in the half-year ceptions:
(for notes and bonds). See the appendix (1) You cannot change the issue date
to subpart E to part 306 of this sub- to require issuance earlier or later
chapter for rules regarding computa- than the issue date originally specified;
tion of interest. provided, however, you may change the
issue date up to seven days after the
§ 344.5 What other provisions apply to original issue date if you establish to
subscriptions for Time Deposit se- the satisfaction of Treasury that such
curities?
change is required as a result of cir-
(a) When is my subscription due? The cumstances that were unforeseen at
subscriber must fix the issue date of the time of the subscription and are be-
each security in the subscription. The yond the issuer’s control (for example,
issue date must be a business day. The a natural disaster);
issue date cannot be more than sixty (2) You cannot change the aggregate
days after the date BPD receives the principal amount originally specified
subscription. If the subscription is for in the subscription by more than ten
$10 million or less, BPD must receive a percent; and
subscription at least five days before (3) You cannot change an interest
the issue date. If the subscription is for rate to exceed the maximum interest
over $10 million, BPD must receive the rate in the SLGS rate table that was in
289
§ 344.6 31 CFR Ch. II (7–1–11 Edition)
effect for a security of comparable ma- fore maturity must submit an elec-
turity on the business day that you tronic request in SLGSafe. The request
began the subscription process. must show the Taxpayer Identification
(e) How do I complete the subscription Number of the issuer, the security
process? The completed subscription number, and the dollar amount of the
must: securities to be redeemed. Upon sub-
(1) Be dated and submitted electroni- mission of a request for redemption be-
cally by an official authorized to make fore maturity of a security subscribed
the purchase; for on or after August 15, 2005, the re-
(2) Separately itemize securities by quest must include a yield certification
the various maturities, interest rates, under § 344.2(e)(2)(ii). BPD must receive
and first interest payment dates (in the the request no less than 14 days and no
case of notes and bonds); more than 60 days before the requested
(3) Not be more than ten percent redemption date. You cannot submit a
above or below the aggregate principal request for early redemption for a secu-
amount originally specified in the sub- rity which has not yet been issued and
scription; you cannot cancel a request once it has
(4) Not be paid with proceeds that are been submitted.
derived, directly or indirectly, from (d) How do I calculate the amount of re-
the redemption before maturity of demption proceeds for subscriptions on or
SLGS securities subscribed for on or after October 28, 1996? For securities
before December 27, 1976; subscribed for on or after October 28,
(5) Include the certifications required 1996, the amount of the redemption
by § 344.2(e)(2)(i) (relating to yield); and proceeds is calculated as follows:
(6) Include the information required (1) Interest. If a security is redeemed
under paragraph (b), if not already pro- before maturity on a date other than a
vided. scheduled interest payment date,
(f) When must I complete the subscrip- Treasury pays interest for the frac-
tion? BPD must receive a completed tional interest period since the last in-
subscription on or before 3:00 p.m., terest payment date.
Eastern time, on the issue date. (2) Redemption value. The remaining
interest and principal payments are
§ 344.6 How do I redeem a Time De- discounted by the current Treasury
posit security before maturity? borrowing rate for the remaining term
(a) What is the minimum time a security to maturity of the security redeemed.
must be held? (1) Zero percent certifi- This may result in a premium or dis-
cates of indebtedness of 16 to 29 days. A count to the issuer depending on
zero percent certificate of indebtedness whether the current Treasury bor-
of 16 to 29 days can be redeemed, at the rowing rate is unchanged, lower, or
owner’s option, no earlier than 15 days higher than the stated interest rate of
after the issue date. the early-redeemed SLGS securities.
(2) Certificates of indebtedness of 30 There is no market charge for the re-
days or more. A certificate of indebted- demption of zero interest Time Deposit
ness of 30 days or more can be re- securities subscribed for on or after Oc-
deemed, at the owner’s option, no ear- tober 28, 1996. Redemption proceeds in
lier than 25 days after the issue date. the case of a zero-interest security are
(3) Notes or bonds. A note or bond can a return of the principal invested. The
be redeemed, at the owner’s option, no formulas for calculating the redemp-
earlier than 30 days after the issue tion value under this paragraph, in-
date. cluding examples of the determination
(b) Can I request partial redemption of of premiums and discounts, are set
a security balance? You may request forth in appendix B of this part.
partial redemptions in any whole dol- (e) How do I calculate the amount of re-
lar amount; however, a security bal- demption proceeds for subscriptions from
ance of less than $1,000 must be re- September 1, 1989, through October 27,
deemed in total. 1996? For securities subscribed for from
(c) Do I have to submit a request for September 1, 1989, through October 27,
early redemption? Yes. An official au- 1996, the amount of the redemption
thorized to redeem the securities be- proceeds is calculated as follows:
290
(1) Interest. If a security is redeemed to the initial subscription had the term
before maturity on a date other than a of the security been for the shorter pe-
scheduled interest payment date, riod. If a bond is redeemed before ma-
Treasury pays interest for the frac- turity on a date other than a scheduled
tional interest period since the last in- interest payment date, no interest is
terest payment date. paid for the fractional interest period
(2) Market charge. An amount shall be since the last interest payment date.
deducted from the redemption proceeds (2) Market charge. An amount shall be
if the current Treasury borrowing rate deducted from the redemption proceeds
for the remaining period to original in all cases where the current Treasury
maturity exceeds the rate of interest borrowing rate for the remaining pe-
originally fixed for such security. The riod to original maturity of the secu-
amount shall be the present value of rity prematurely redeemed exceeds the
the future increased borrowing cost to rate of interest originally fixed for
the Treasury. The annual increased such security. You can compute the
borrowing cost for each interest period market charge under this paragraph by
is determined by multiplying the prin- using the formulas in appendix A of
cipal by the difference between the two this part.
rates. For notes and bonds, the in- (g) How do I calculate the amount of re-
creased borrowing cost for each redemption proceeds for subscriptions on or
maining interest period to original ma- before December 27, 1976? For bonds sub-
turity is determined by dividing the scribed for on or before December 27,
annual cost by two. Present value is 1976, the amount of the redemption
determined by using the current Treas- proceeds is calculated as follows:
ury borrowing rate as the discount fac- (1) Interest. The interest for the en-
tor. When you request a redemption tire period the bond was outstanding
date that is less than thirty days be- shall be recalculated if the original in-
fore the original maturity date, we will terest rate at which the bond was
apply the rate of a one month security issued is higher than an adjusted inter-
as listed on the SLGS rate table issued est rate reflecting both the shorter pe-
on the day you make a redemption re- riod during which the bond was actu-
quest. The market charge under this ally outstanding and a penalty. The ad-
paragraph can be computed by using justed interest rate is the Treasury
the formulas in appendix A of this part. rate which would have been in effect on
(f) How do I calculate the amount of re- the date of issue for a marketable
demption proceeds for subscriptions from Treasury bond maturing on the semi-
December 28, 1976, through August 31, annual maturity period before redemp-
1989? For securities subscribed for from tion reduced by a penalty which must
December 28, 1976, through August 31, be the lesser of:
1989, the amount of the redemption (i) One-eighth of one percent times
proceeds is calculated as follows: the number of months from the date of
(1) Interest. Interest for the entire pe- issuance to original maturity, divided
riod the security was outstanding shall by the number of full months elapsed
be recalculated if the original interest from the date of issue to redemption;
rate of the security is higher than the or
interest rate that would have been set (ii) One-fourth of one percent.
at the time of the initial subscription (2) Deduction. We will deduct from
had the term of the security been for the redemption proceeds, if necessary,
the shorter period. If this results in an any overpayment of interest resulting
overpayment of interest, we will de- from previous payments made at a
duct from the redemption proceeds the higher rate based on the original
aggregate amount of such overpay- longer period to maturity.
ments, plus interest, compounded semi-
annually thereon, from the date of
each overpayment to the date of re- Subpart C—Demand Deposit
demption. The rate used in calculating Securities
the interest on the overpayment will
be one-eighth of one percent above the SOURCE: 70 FR 37911, June 30, 2005, unless
maximum rate that would have applied otherwise noted.
291
§ 344.7 31 CFR Ch. II (7–1–11 Edition)
§ 344.7 What are Demand Deposit secu- time, will be published in the FEDERAL
rities? REGISTER.
Demand Deposit securities are one- (b) What happens to Demand Deposit
day certificates of indebtedness that securities during a Debt Limit Contin-
are automatically rolled over each day gency? At any time the Secretary de-
until you request redemption. termines that issuance of obligations
(a) How are the SLGS rates for Demand sufficient to conduct the orderly fi-
Deposit securities determined? Each secu- nancing operations of the United
rity shall bear a variable rate of inter- States cannot be made without exceed-
est based on an adjustment of the aver- ing the statutory debt limit, we will in-
age yield for three-month Treasury vest any unredeemed Demand Deposit
bills at the most recent auction. A new securities in special ninety-day certifi-
rate is effective on the first business cates of indebtedness. Funds invested
day following the regular auction of in the ninety-day certificates of in-
three-month Treasury bills and is debtedness earn simple interest equal
shown in the SLGS rate table. Interest to the daily factor in effect at the time
is accrued and added to the principal
Demand Deposit security issuance is
daily. Interest is computed on the bal-
suspended, multiplied by the number of
ance of the principal, plus interest ac-
days outstanding. When regular Treas-
crued through the preceding day.
(1) How is the interest rate calculated? ury borrowing operations resume, the
(i) First, you calculate the annualized ninety-day certificates of indebtedness,
effective Demand Deposit rate in deci- at the owner’s option, are:
mals, designated ‘‘I’’ in Equation 1, as (1) Payable at maturity;
follows: (2) Redeemable before maturity, pro-
vided funds are available for redemp-
⎡ 100 ⎞ Y / DTM
⎤ tion; or
I = ⎢⎛ − 1⎥ × (1 − MTR ) − TAC (3) Reinvested in Demand Deposit se-
⎝ ⎠
⎣ P ⎦ curities.
(Equation 1) § 344.8 What other provisions apply to

Where:
subscriptions for Demand Deposit
securities?
I = Annualized effective Demand Deposit
rate in decimals. (a) When is my subscription due? The
P = Average auction price for the most re- subscriber must fix the issue date of
cently auctioned 13-week Treasury bill, per each security in the subscription. You
hundred, to six decimals.
Y = 365 (if the year following issue date does
cannot change the issue date to require
not contain a leap year day) or 366 (if the issuance earlier or later than the issue
year following issue date does contain a date originally specified; provided,
leap year day). however, you may change the issue
DTM = The number of days from date of date up to seven days after the original
issue to maturity for the most recently issue date if you establish to the satis-
auctioned 13-week Treasury bill.
MTR = Estimated marginal tax rate, in deci- faction of Treasury that such change is
mals, of purchasers of tax-exempt bonds. required as a result of circumstances
TAC = Treasury administrative costs, in that were unforeseen at the time of the
decimals. subscription and are beyond the
(ii) Then, you calculate the daily fac- issuer’s control (for example, a natural
tor for the Demand Deposit rate as fol- disaster). The issue date must be a
lows: business day. The issue date cannot be
DDR = (1 + I)1/Y ¥1 more than sixty days after the date
BPD receives the subscription. If the
(Equation 2) subscription is for $10 million or less,
(2) Where can I find additional informa- BPD must receive the subscription at
tion? Information on the estimated av- least five days before the issue date. If
erage marginal tax rate and Treasury the subscription is for more than $10
administrative costs for administering million, BPD must receive the sub-
Demand Deposit securities, both to be scription at least seven days before the
determined by Treasury from time to issue date.
292
ER30JN05.001</MATH>
Fiscal Service, Treasury Pt. 344, App. A
(b) How do I start the subscription proc- partial redemptions in any amount. If
ess? A subscriber starts the subscrip- your account balance is less than
tion process by entering into SLGSafe $1,000, it must be redeemed in total.
the following information: (c) Do I have to submit a request for re-
(1) The issue date; demption? Yes. An official authorized to
(2) The total principal amount; redeem the securities must submit an
(3) The issuer’s name and Taxpayer electronic request through SLGSafe.
Identification Number; The request must show the Taxpayer
(4) The title of an official authorized Identification Number of the issuer,
to purchase SLGS securities; the security number, and the dollar
(5) A description of the tax-exempt amount of the securities to be re-
bond issue; and deemed. BPD must receive the request
(6) The certification required by by 3 p.m., Eastern time on the required
§ 344.2(e)(1), if the subscription is sub- day. You cannot cancel the request.
mitted by an agent of the issuer.
(c) Under what circumstances can I
cancel a subscription? You cannot cancel Subpart D—Special Zero Interest
a subscription unless you establish, to Securities
the satisfaction of Treasury, that the
cancellation is required for reasons un- SOURCE: 70 FR 37911, June 30, 2005, unless
related to the use of the SLGS program otherwise noted.
to create a cost-free option.
(d) How do I change a subscription? § 344.10 What are Special Zero Interest
You can change a subscription on or securities?
before 3 p.m., Eastern time, on the Special zero interest securities were
issue date. You may change the aggre- issued as certificates of indebtedness
gate principal amount specified in the and notes. The provisions of subpart B
subscription by no more than ten per- of this part (Time Deposit securities)
cent, above or below the amount origi- apply except as specified in subpart D
nally specified in the subscription. of this part. Special Zero Interest secu-
(e) How do I complete the subscription
rities were discontinued on October 28,
process? The subscription must:
1996. The only zero interest securities
(1) Be dated and submitted electroni-
available after October 28, 1996, are
cally by an official authorized to make
zero interest Time Deposit securities
the purchase;
that are subject to subpart B of this
(2) Include the certifications required
part.
by § 344.2(e)(2)(i) (relating to yield); and
(3) Include the information required § 344.11 How do I redeem a Special
under paragraph (b) of this section, if Zero Interest Security before matu-
not already provided. rity?
§ 344.9 How do I redeem a Demand De- Follow the provisions of § 344.6(a)
posit security? through (g), except that no market
(a) When must I notify BPD to redeem charge or penalty will apply when you
a security? A Demand Deposit security redeem a special zero interest security
can be redeemed at the owner’s option, before maturity.
if BPD receives a request for redemp-
tion not less than: APPENDIX A TO PART 344—EARLY RE-
(1) One business day before the re- DEMPTION MARKET CHARGE FOR-
quested redemption date for redemp- MULAS AND EXAMPLES FOR SUB-
tions of $10 million or less; and SCRIPTIONS FROM DECEMBER 28, 1976,
(2) Three business days before the re- THROUGH OCTOBER 27, 1996
quested redemption date for redemp- (a) The amount of the market charge for
tions of more than $10 million. bonds and notes subscribed for before Octo-
(b) Can I request partial redemption of ber 28, 1996 can be determined by the fol-
a security balance? You may request lowing formula:
293
Pt. 344, App. A 31 CFR Ch. II (7–1–11 Edition)
(b) The application of this formula can be rowing rate for Treasury at that time for the
illustrated by the following example: remaining period of 6 years and 150 days is
(1) Assume that a $600,000 note is issued on 11%.
July 1, 1985, to mature on July 1, 1995. Inter- (3) The increased annual borrowing cost is
est is payable at a rate of 8% on January 1 $18,000. ($600,000)x(11%-8%)
and July 1. (4) The market charge is computed as fol-
(2) Assume that the note is redeemed on
lows:
February 1, 1989, and that the current bor-
294
ER13SE00.002</GPH>
(c) The amount of the market charge for before October 28, 1996 can be determined by
certificates of indebtedness subscribed for the following formula:
ER13SE00.004</GPH>
295
ER13SE00.003</GPH>
Pt. 344, App. B 31 CFR Ch. II (7–1–11 Edition)
(d) The application of this formula can be

illustrated by the following example:
(1) Assume that a $50,000 certificate of in-
debtedness is issued on March 1, 1987, to ma-
ture on November 1, 1987. Interest is payable
at a rate of 10%.
(2) Assume that the certificate of indebted-
ness is redeemed on July 1, 1987, and that the
current borrowing cost to Treasury for the
123-day period from July 1, 1987, to November
1, 1987, is 11.8%.
(3) The increased annual borrowing cost is
$900. ($50,000)×(11.8%¥10%)
(4) The market charge is computed as fol-
lows:
APPENDIX B TO PART 344—FORMULA FOR

DETERMINING REDEMPTION VALUE
FOR SECURITIES SUBSCRIBED FOR
AND EARLY-REDEEMED ON OR AFTER
OCTOBER 28, 1996
(a) This formula results in a premium or
discount to the issuer depending on whether
ER13SE00.006</GPH>
the current Treasury borrowing rate at the

time of early redemption is lower or higher
296
ER13SE00.005</GPH>
Fiscal Service, Treasury Pt. 344, App. B
than the stated interest rate of the early-re-
deemed SLGS security. The total redemp-
tion value for bonds and notes can be deter-
mined by the following two steps. First, cal-
culate accrued interest payable in accord-
ance with § 344.6(d)(1) using the following for-
mula:
Second, calculate the redemption value per

§ 344.6(d)(2) using the following formula:
(b) The application of this formula can be (ii) Assume that the note is redeemed on
illustrated by the following examples: October 21, 1997, and that the current bor-
(1) The first example is for a redemption at rowing rate for Treasury at that time for the
a premium. remaining period of 1 year and 50 days is
(i) Assume that an $800,000 2-year note is 6.25%.
issued on December 10, 1996, to mature on (iii) The redemption value is computed as
ER13SE00.008</GPH>
December 10, 1998. Interest is payable at a follows. First, the accrued interest payable
rate of 7% on June 10 and December 10. is calculated as:
297
ER13SE00.007</GPH>
Then, the redemption value is calculated

as:
ER13SE00.010</GPH>
298
ER13SE00.009</GPH>
(2) The second example is for a redemption December 10, 1998. Interest is payable at a
at a discount and it uses the same assump- rate of 7% on June 10 and December 10.
tions as the first example, except the current (ii) Assume that the note is redeemed on
Treasury borrowing cost is assumed to be October 21, 1997, and that the current bor-
8.00%: rowing rate for Treasury at that time for the
(i) Assume that an $800,000 2-year note is remaining period of 1 year and 50 days is
issued on December 10, 1996, to mature on 8.00%.
299
ER13SE00.011</GPH>
(iii) The redemption value is computed as Then, the redemption value is calculated
follows. as:
First, the accrued interest payable is cal-
culated as:
ER13SE00.013</GPH>
300
ER13SE00.012</GPH>
(c) The total redemption value for certifi- Second, calculate the redemption value per
cates of indebtedness can be determined by § 344.6(d)(2) using the following equation:
the following two steps. First, calculate ac-
crued interest payable in accordance with
§ 344.6(d)(1) using the following formula:
ER13SE00.015</GPH>
301
ER13SE00.014</GPH>
302
ER13SE00.016</GPH>
(d) The application of this formula can be Then, the redemption value is calculated
illustrated by the following examples. as:
(1) First, for a redemption at a premium:
(i) Assume that a $300,000 security is issued
on December 5, 1996, to mature in 151 days on
May 5, 1997. Interest at a rate of 5% is pay-
able at maturity.
(ii) Assume that the security is redeemed
on April 9, 1997, and that the current bor-
rowing rate for Treasury at that time for the
remaining period of 26 days is 4.00%.
(iii) The redemption value is computed as
follows.
First, the accrued interest payable is cal-
culated as:
303
ER13SE00.017</GPH>
(2) Secondly, for a redemption at a dis- rowing rate for Treasury at that time for the
count: remaining period of 26 days is 6.25%.
(i) Assume that a $300,000 security is issued (iii) The redemption value is computed as
on December 5, 1996, to mature in 151 days on follows.
May 5, 1997. Interest at a rate of 5% is pay- First, the accrued interest payable is cal-
able at maturity. culated as:
(ii) Assume that the security is redeemed
ER13SE00.019</GPH>
on April 9, 1997, and that the current bor-
304
ER13se00.018</GPH>
Then, the redemption value is calculated
as:
305
ER13SE00.020</GPH>
306
ER13se00.021</GPH>
PART 345—REGULATIONS GOV- § 345.2 Subscription for purchase.

ERNING 5 PERCENT TREASURY The recipient of a 5 percent loan from
CERTIFICATES OF INDEBTED- the Rural Electrification Administra-
NESS—R.E.A. SERIES tion or Rural Telephone Bank may sub-
scribe for certificates under this offer-
Sec. ing, up to the amount of the unex-
345.0 Offering of certificates. pended portion of the loan, by submit-
345.1 Description of certificates. ting a subscription, together with the
345.2 Subscription for purchase. remittance, to the Federal Reserve
345.3 Issue date and payment.
345.4 Redemption/reinvestment.
Bank or Branch of the district in which
345.5 Taxation. the subscriber is located. The subscrip-
345.6 General provisions. tion form must show the amount of
certificates desired, and give the title
AUTHORITY: 31 U.S.C. 754 and 754b; 5 U.S.C.
301. of the designated official of the sub-
scriber authorized to redeem them.
SOURCE: 38 FR 35306, Dec. 27, 1973, unless
otherwise noted. [40 FR 29846, July 16, 1975]
§ 345.0 Offering of certificates. § 345.3 Issue date and payment.

The Secretary of the Treasury, under The issue date of a certificate shall
the authority of the Second Liberty be the date on which the subscription
Bond Act, as amended, offers to bor- form, and funds in full payment there-
rowers from the Rural Electrification for, are received by the office described
Administration and Rural Telephone in § 345.2. A confirmation of the
Bank, U.S. Department of Agriculture, issuance, in the form of a written ad-
5 Percent Treasury Certificates of In- vice, which shall specify the amount
debtedness—R.E.A. Series. This offer- and describe the certificates by title
ing will continue until terminated by and maturity date, shall be issued to
the Secretary of the Treasury. the subscriber.
§ 345.1 Description of certificates. § 345.4 Redemption/reinvestment.
(a) General. The certificates of in- (a) At maturity. A certificate may not
debtedness will be issued in book-entry be called for redemption by the Sec-
form on the books of the Department retary of the Treasury prior to matu-
of the Treasury, Bureau of the Public rity except when the amount of the un-
Debt, Washington, DC 20226. They may expended portion of the loan from the
not be transferred by sale, exchange, Rural Electrification Administration
assignment or pledge, or otherwise. or Rural Telephone Bank is less than
(b) Terms and rates of interest. The cer- the face amount of the certificate. Un-
tificates, bearing interest at the rate of less the Treasury has received from the
5 percent per annum, will be issued in owner, at least one week prior to the
multiples of $1,000 and will mature one maturity date of a certificate, a writ-
year from issue date. Interest on the ten request for payment at maturity, it
certificates will be computed on an an- shall automatically redeem the same
nual basis and, unless redeemed prior at maturity, and reinvest in the own-
to maturity, will be payable six er’s name the principal amount in a
months from issue date and at matu- new certificate having the same de-
rity. Interest may be paid to an owner scription in all material respects as the
by having the amount thereof credited one redeemed. No such automatic rein-
by a Federal Reserve Bank or Branch, vestment shall be made, however, in
acting as fiscal agent of the United excess of the amount of the unexpended
States, to the reserve account of a portion of the loan from the Rural
member bank servicing such owner and Electrification Administration or the
for the latter’s account. Such action Rural Telephone Bank.
will be taken at the owner’s option. If (b) Prior to maturity. A certificate
not exercised, payment of interest will may be redeemed prior to maturity at
be made by Treasury check. par and accrued interest at the owner’s
[38 FR 35306, Dec. 27, 1973, as amended at 40 option on one week’s notice in writing
FR 29846, July 16, 1975] after one month from the issue date. A
307
§ 345.5 31 CFR Ch. II (7–1–11 Edition)
certificate issued upon reinvestment, PART 346—REGULATIONS GOV-

as provided in paragraph (a) of this sec- ERNING UNITED STATES INDI-
tion, shall not be subject to the one- VIDUAL RETIREMENT BONDS
month holding period. A notice to re-
deem a certificate prior to its maturity Sec.
date must be given by the official au- 346.0 Offering of bonds.
thorized to redeem it, as shown in the 346.1 Description of bonds.
subscription for purchase, to the Bu- 346.2 Registration.
reau of the Public Debt, Division of Se- 346.3 Purchase of bonds.
curities Operations, Washington, DC 346.4 Proof of purchase.
346.5 Limitation on holdings.
20226, by letter or wire. 346.6 Nontransferability.
346.7 Judicial proceedings.
§ 345.5 Taxation. 346.8 Payment or redemption during life-
The income derived from the certifi- time of owner.
346.9 Payment or redemption after death of
cates is subject to all taxes imposed
owner.
under the Internal Revenue Code of 346.10 Reissue.
1954. The certificates are subject to es- 346.11 Use of power of attorney.
tate, inheritance, gift or other excise 346.12 Lost, stolen, or destroyed bonds.
taxes, whether Federal or State, but 346.13 Taxation.
are exempt from all taxation now or 346.14 Certifying officers.
346.15 General provisions.
hereafter imposed on the principal or
interest thereof by any State or any of APPENDIX TO PART 346—TABLES
the possessions of the United States, or AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 31
by any local taxing authority. U.S.C. 3106 et seq., 3125, 3126.
[40 FR 29846, July 16, 1975] SOURCE: 40 FR 4240, Jan. 28, 1975, unless
otherwise noted.
§ 345.6 General provisions. § 346.0 Offering of bonds.
(a) Regulations. Five Percent Treas- The Secretary of the Treasury, under
ury Certificates of Indebtedness— the authority of the Second Liberty
R.E.A. Series shall be subject to the Bond Act, as amended, and pursuant to
general regulations with respect to the Employee Retirement Income Se-
United States securities, which are set curity Act of 1974, offers for sale, begin-
forth in the Department of the Treas- ning January 1, 1975, bonds of the
ury Circular No. 300, current revision United States, designated as United
(31 CFR part 306), to the extent applica- States Individual Retirement Bonds.
ble. Copies of the circular may be ob- The bonds will be available for invest-
tained from the Bureau of the Public ment only to individuals eligible to
Debt, Department of the Treasury, make deductions on their Federal in-
Washington, DC 20226, or a Federal Re- come tax returns for retirement sav-
serve Bank or Branch. ings, as provided in section 2002 of the
(b) Reservations. The Secretary of the latter Act. This offering of bonds will
Treasury reserves the right to reject terminate on April 30, 1982.
any application for the purchase of cer-
tificates hereunder, in whole or in part, FR 18596, Apr. 30, 1982]
and to refuse to issue or permit to be
issued any such certificates in any case § 346.1 Description of bonds.
or any class or classes of cases if he (a) Investment yield (interest). United
deems such action to be in the public States Individual Retirement Bonds,
interest, and his action in any such re- hereinafter sometimes referred to as
spect shall be final. The Secretary of Individual Retirement Bonds, will be
the Treasury may also at any time, or issued at par. The investment yields
from time to time, supplement or (interest) are as follows:
amend the terms of these regulations, (1) Bonds with issue dates of January
or of any amendments or supplements 1, 1975, through July 1, 1979—6 percent
thereto. per annum, compounded semiannually
[38 FR 35306, Dec. 27, 1973. Redesignated at 40 (see Table of Redemption Values in the
FR 29846, July 16, 1975] appendix).
308
(2) Bonds with issue dates of August mine the date from which interest will
1, 1979, through October 1, 1980—6.5. begin to accrue on the bond. An Indi-
percent per annum, compounded semi- vidual Retirement Bond shall be valid
annually (see Table A in the appendix). only if an authorized issuing agent re-
(3) Bonds with issue dates of Novem- ceives payment therefor, duly in-
ber 1, 1980, through September 1, 1981— scribes, dates, stamps, and delivers it.
8 percent per annum, compounded
semiannually (see Table B).
FR 37520, July 21, 1977; 46 FR 60577, Dec. 11,
(4) Bonds with issue dates of October 1981]
1, 1981, or thereafter—9 percent per
annum, compounded semiannually (see § 346.2 Registration.
Table C).
(a) General. The registration of Indi-
Interest will be paid only upon redemp- vidual Retirement Bonds is limited to
tion of the bonds. The accrual of inter- the names of natural persons in their
est will continue until the bonds are own right, whether adults or minors, in
redeemed or have reached maturity, either single ownership or beneficiary
whichever is earlier, in accordance form. A bond registered in the bene-
with these regulations. ficiary form will be inscribed substan-
(b) Term. The maturity date of any tially as follows (for example): ‘‘John
bond issued under this circular shall be A. Doe payable on death to (or P.O.D.)
the first day of the month in which the Richard B. Roe.’’ No more than one
registered owner thereof has attained beneficiary may be designated on a
the age of 701⁄2 years, or five years after bond.
the date of his death, but no later than (b) Inscription. The inscription on the
the first day of the month in which he face of each bond will show the name,
would have attained the age of 701⁄2 address, and date of birth of the reg-
years, if he had lived. Unless sooner re- istered owner. The name of the bene-
deemed in accordance with these regu- ficiary, if one is to be designated, will
lations, the investment yield on a bond also be shown in the inscription.
will cease on the interest accrual date
coinciding with, or, where no such co- [40 FR 4240, Jan. 28, 1975, as amended at 71
incidence occurs, the interest accrual FR 46857, Aug. 15, 2006]
date next preceding:
(1) The first day of the seventh (7th) § 346.3 Purchase of bonds.
month following the 70th anniversary (a) Agencies. Individual Retirement
of the birth of the person in whose Bonds may be purchased over-the-
name it is registered, or counter or by mail from Federal Re-
(2) The first day of the sixtieth (60th) serve Banks and Branches and the Bu-
month following the date of death of reau of the Public Debt, Securities
the person in whose name it is reg- Transactions Branch, Washington, DC
istered, except that such date shall be 20226. Customers of commercial banks
no later than the date on which he and trust companies may be able to ar-
would have attained the age of 701⁄2 range for the purchase of the bonds
years, had he lived. through such institutions, but only the
(c) Denominations—issue date. Indi- Federal Reserve Banks and Branches,
vidual Retirement Bonds will be avail- and the Department of the Treasury
able only in registered form and in de- itself, are authorized to issue the secu-
nominations of $50, $75, $100 and $500. rities. The date of receipt of the appli-
At the time of issue, the issuing agent cation and payment by such issuing
will enter in the upper right-hand por- agencies will govern the dating of the
tion of the bond the issue date (which bonds issued.
shall be the first day of the month and (b) Applications. Applications for the
year in which payment of the purchase purchase of Individual Retirement
price is received by an authorized Bonds should be made on Form PD
issuing agent), and will imprint the 4345, accompanied by a remittance to
agent’s validating stamp in the lower cover the purchase price. Personal
right-hand portion. The issue date, as checks will be accepted, subject to col-
distinguished from the date in the lection. Checks, or other forms of ex-
agent’s validating stamp, will deter- change, should be drawn to the order of
309
§ 346.4 31 CFR Ch. II (7–1–11 Edition)
the Federal Reserve Bank or the U.S. or her nonworking spouse, may not ex-
Treasury, as the case may be. Checks ceed 15 percent of the working spouse’s
payable by endorsement are not ac- earned income for that year or $1,750,
ceptable. whichever is less. 2
(c) Delivery. Delivery of bonds will be (b) The above limitations do not
made in person, or by mail at the risk apply to rollover bond purchases, as de-
and expense of the United States at the scribed in sections 402(a)(5), 403(a)(4), or
address given by the purchaser, but 408(d)(3) of the Internal Revenue Code.
only within the United States, its ter- (26 U.S.C. 220 and 31 U.S.C. 757)
ritories and possessions, the Common-
wealth of Puerto Rico, and the Canal [42 FR 37520, July 21, 1977]
Zone. No mail deliveries elsewhere will
§ 346.6 Nontransferability.
be made. If the registered owner tem-
porarily resides abroad, the bonds will United States Individual Retirement
be delivered to such address in the Bonds are not transferable, and may
United States as the purchaser directs. not be sold, discounted or pledged as
collateral for a loan or as security for
§ 346.4 Proof of purchase. the performance of an obligation, or for
At the time an Individual Retirement any other purpose.
Bond is issued, the issuing agent will § 346.7 Judicial proceedings.
furnish therewith to the purchaser a
copy of Form PD 4345 for the pur- No judicial determination will be rec-
chaser’s personal records. The form ognized which would give effect to an
will show the name and address of the attempted voluntary transfer inter
registered owner, his date of birth, so- vivos of an Individual Retirement
cial security account number, the num- Bond. Otherwise, a claim against a reg-
ber of bonds issued, a description there- istered owner will be recognized when
of by issue date, serial numbers, de- established by valid judicial pro-
nominations, and registration. ceedings, but in no case will payment
be made to the purchaser at a sale
§ 346.5 Limitation on holdings. under a levy or to the officer author-
(a) Except as provided in paragraph ized to levy upon the property of the
(b) of this section, the amount of Indi- owner under appropriate process to sat-
vidual Retirement Bonds which may be isfy a money judgment unless or until
registered in any one individual’s name the bond has become eligible for au-
is limited to the amount for which an thorized redemption pursuant to these
annual deduction may be taken under regulations. Neither the Department of
either section 219 or 220 of the Internal the Treasury nor any of its agencies
Revenue Code. 1 These limitations are will accept notices of adverse claims or
as follows: of pending judicial proceedings or un-
(1) In the case of an individual elect- dertake to protect the interests of liti-
ing to deduct his or her bond purchase gants who do not have possession of the
under section 219, the face amount of bond.
bonds purchased for tax deduction in § 346.8 Payment or redemption during
any given year may not exceed 15 per- lifetime of owner.
cent of the individual’s earned income
for that year or $1,500, whichever is (a) During first 12 months of issue date.
less. An Individual Retirement Bond is re-
(2) In the case of an individual elect- deemable at any time during the first
ing to deduct his or her bond purchases
2 NOTE: Code section 220 requires, in effect,
under section 220, the total face
amount of bonds purchased for tax de- that the total IRA contributions in each
spouse’s name to be deducted in any one year
duction in any given year in the name be in equal amounts. While it is permissible
of the individual and in the name of his for an eligible married couple to utilize sev-
eral different forms of IRA investments
1 NOTE: Under the Internal Revenue Code, within the same year, this means that cou-
bonds issued during any given year or within ples investing solely in bonds must purchase
45 days thereafter may be deducted in that equal amounts of bonds in each spouse’s
year. name.
310
twelve (12) months of its issue date. No (vi) Mental diseases (e.g., psychosis
interest will be paid on any bond so re- or severe psychoneurosis) requiring
deemed. continued institutionalization or con-
(b) Prior to age 591⁄2—(1) With penalty. stant supervision of the individual.
Unless redeemed within twelve months (vii) Loss or diminution of vision to
of its issue, or except as provided under the extent that the effected individual
paragraphs (b)(2) and (c)(2) of this sec- has a central visual acuity of not bet-
tion, if an Individual Retirement Bond ter than 20/200 in the better eye after
is cashed by its owner before he attains best correction, or has a limitation in
age 591⁄2, he must include on his Fed- the fields of vision such that the widest
eral income tax return for the year of diameter of the visual fields subtends
redemption the value of the bond. In an angle no greater than 20 degrees.
addition, there is an additional income (viii) Permanent and total loss of
tax equal to 10 percent of the value of speech.
the bond imposed by section 409(c) of (ix) Total deafness uncorrectible by a
the Internal Revenue Code of 1954. hearing aid.
(2) In case of disability. An Individual In any case coming under the provi-
Retirement Bond will be paid at its sions hereof, the evidence referred to
then current redemption value upon a above must be submitted to the Bureau
registered owner’s request (or by a per- of the Public Debt, Division of Trans-
son recognized as entitled to act on his actions and Rulings, Parkersburg, WV
behalf) prior to his attainment of age 26101, for approval before any bonds
591⁄2 years upon submission of a physi- may be paid. If, after review of the evi-
cian’s statement or any similar evidence, the Secretary of the Treasury is
dence showing that the owner has be- satisfied that the owner’s disability
come disabled to such an extent that has been established a letter will be
he is unable to engage in any substan- furnished authorizing payment of his
tial, gainful activity by reason of any Individual Retirement Bonds. This let-
medically determinable physical or ter must be presented each time any of
mental impairment which can be ex- the owner’s bonds are submitted for
pected to result in death or to be of payment to a Federal Reserve Bank or
long-continued and indefinite duration. Branch or to the Department of the
The following are examples of impair- Treasury.
ments which would ordinarily be con- (c) Prior to age 701⁄2—(1) General. An
sidered as preventing substantial, gain- Individual Retirement Bond will be re-
ful activity: deemable at its current redemption
(i) Loss of use of two limbs. value upon the request of the reg-
(ii) Certain progressive diseases istered owner (or a person recognized
which have resulted in the physical as entitled to act on his behalf), pro-
loss or atrophy of a limb, such as dia- vided he is 591⁄2 years of age or older.
betes, multiple sclerosis, or Buerger’s The owner’s age will be determined
disease. from the date of birth shown on the
(iii) Disease of the heart, lungs, or face of the bond, provided, however,
blood vessels which have resulted in that the Secretary of the Treasury re-
major loss of heart or lung reserve as serves the right in any case or class of
evidenced by X-ray, electrocardiogram, cases to require proof, in the form of a
or other objective findings, so that de- duly certified copy of his birth certifi-
spite medical treatment breathless- cate, that the owner has attained the
ness, pain, or fatigue is produced on age of 591⁄2 years. If such evidence is un-
slight exertion, such as walking several available, one of the following docu-
blocks, using public transportation, or ments may be furnished in lieu thereof:
doing small chores. (i) Church records of birth or baptism
(iv) Cancer which is inoperable and (ii) Hospital birth record or certifi-
progressive. cate
(v) Damage to the brain or brain ab- (iii) Physician’s or midwife’s birth
normality which has resulted in severe record
loss of judgment, intellect, orientation, (iv) Certification of Bible or other
or memory. family records
311
§ 346.9 31 CFR Ch. II (7–1–11 Edition)
(v) Military, naturalization or immi- the Department of the Treasury. If

gration records payment is requested on account of dis-
(vi) Other evidence of probative ability, the letter described in para-
value. graph (b) (2) of this section should ac-
Similar documentary evidence will company the bond. 3 The request for
also be required to support any claim payment, in either case, should be
made by an owner that the date of signed by the representative in his fi-
birth shown on his bond is incorrect. duciary capacity before an authorized
(2) For change of investment. Under certifying officer, and must be sup-
section 409(b)(3)(c) of the Internal Rev- ported by a certificate or a certified
enue Code, if an Individual Retirement copy of the letters of appointment from
Plan Bond is cashed at any time before the court making the appointment,
the end of the taxable year in which under seal, or other proof of qualifica-
the owner attains age 701⁄2, and the en- tion if the appointment was not made
tire redemption proceeds are trans- by a court. Except in the case of cor-
ferred to an individual retirement ac- porate fiduciaries, such evidence
count, an individual annuity, an em- should state that the appointment is in
ployees’ trust, or annuity plan, as de- full force and should be dated not more
scribed in sections 408(a), 408(b), 401(a) than one year prior to the presentation
and 403(a), respectively, of the Internal of the bond for payment.
Revenue Code, on or before the 60th (e) Partial redemption. An Individual
day after receipt of such proceeds, they Retirement Bond in a denomination
shall be excluded from gross income greater than $50 (face value), which is
and the transfer shall be treated as a otherwise eligible for redemption, may
rollover contribution described in sec- be redeemed in part, at current re-
tion 408(d)(3) of the Internal Revenue demption value, upon the request of
Code. the registered owner (or a person rec-
(d) Requests for payment—(1) By ognized as entitled to act on his be-
owner. When redemption of any Indi- half), but only in amounts cor-
vidual Retirement Bond is desired by responding to authorized denomina-
the registered owner, it should be pre- tions. In any case in which partial re-
sented, with the request for payment demption is desired, before the request
on the back of the bond signed and for payment is signed, the phrase ‘‘to
duly certified, to a Federal Reserve the extent of $ll (face value) and re-
Bank or Branch or to the Bureau of the issue of the remainder’’ should be ap-
Public Debt, Securities Transactions pended to the request. Upon partial re-
Branch, Washington, DC 20226. If pay- demption of the bond, the remainder
ment is requested on account of dis- will be reissued as of the original issue
ability, the letter described in para- date. No partial redemption of a bond
graph (b)(2) of this section should ac- will be made after the death of the
company the bond. 3 owner in whose name it is registered.
(2) By person other than owner. When (26 U.S.C. 220 and 31 U.S.C. 757)
redemption of any Individual Retire- [40 FR 4240, Jan. 28, 1975, as amended at 42
ment Bond is desired by the legal FR 37520, July 21, 1977]
guardian, committee, conservator, or
similar representative of the owner’s § 346.9 Payment or redemption after
estate, it should be presented, with the death of owner.
request signed as described below, to a (a) Order of precedence where owner
Federal Reserve Bank or Branch or to not survived by beneficiary. If the reg-
istered owner of an Individual Retire-
3 In any case in which a legal representa-
ment Bond dies before it has been pre-
tive has not been appointed for the estate of sented and surrendered for payment,
a registered owner who has attained the age and there is no beneficiary shown
of 591⁄2 years, or who has become disabled, a thereon, or if the designated bene-
person seeking payment of a bond on the
owner’s behalf should furnish a complete
ficiary predeceased the owner, the bond
statement of the circumstances to the Bu- shall be paid in the following order of
reau of the Public Debt, Division of Securi- precedence:
ties Operations, Washington, DC 20226. Ap- (1) To the duly appointed executor or
propriate instructions will then be furnished. administrator of the estate of the
312
owner, who should sign the request for present the bond for payment during
payment on the back of the bond in his his own lifetime, payment will be made
representative capacity before an au- in the order of precedence specified in
thorized certifying officer, such request paragraphs (a) (1) through (5) of this
to be supported by a court certificate section to the legal representative, sur-
or a certified copy of his letters of ap- viving spouse, children, parents, or
pointment, under seal of the court, next-of-kin of such beneficiary, and in
which should show that the appoint- the manner provided therein.
ment is in full force and effect, and be In any case coming under the provi-
dated within six months of its presen- sions of this subsection, a duly cer-
tation; tified copy of the registered owner’s
(2) If no legal representative of the death certificate will ordinarily be re-
deceased registered owner’s estate has quired. Proof of death of the bene-
been or will be appointed, to the widow ficiary will also be required where he
or widower of the owner; survived the owner but failed to
(3) If none of the above, to the child present the bond for payment during
or children of the owner and the de- his own lifetime. Payment of a bond to
scendants of deceased children by rep- a designated beneficiary will be made
resentation; by a Federal Reserve Bank or by the
(4) If none of the above, to the par- Bureau of the Public Debt, Securities
ents of the owner, or the survivor of Transactions Branch, Washington, DC
them; 20226.
(5) If none of the above, to other (c) Ownership of redemption proceeds.
next-of-kin of the owner, as determined The orders of precedence set forth in
by the laws of the domicile of such paragraphs (a) and (b) of this section,
owner at the time of his death. except in cases where redemption is
In any case coming under the provi- made for the account of a registered
sions of this paragraph, a duly certified owner, are for the Department’s con-
copy of the registered owner’s death venience in discharging its obligation
certificate will ordinarily be required. on an Individual Retirement Bond. The
Proof of death of the beneficiary, if discharge of the obligation in accord-
any, will be required where he pre- ance therewith shall be final so far as
deceased the owner. Payment of bonds the Department is concerned, but those
under paragraph (a)(1) of this section provisions do not otherwise purport to
will be made by a Federal Reserve determine ownership of the redemption
Bank or by the Bureau of the Public proceeds of a bond.
Debt, Securities Transactions Branch,
(26 U.S.C. 220 and 31 U.S.C. 757)
Washington, DC 20226. Payment of
bonds under paragraphs (a) (2) through [40 FR 4240, Jan. 28, 1975, as amended at 42
(5) of this section will be made upon re- FR 37520, July 21, 1977]
ceipt of applications on Form PD 3565–
1, together with the bonds and sup- § 346.10 Reissue.
porting evidence, by the Bureau of the (a) Addition or change of beneficiary.
Public Debt, Division Transactions and An Individual Retirement Bond will be
Rulings, Parkersburg, WV 26101. reissued to add a beneficiary in the
(b) Order of precedence where bene- case of a single ownership bond, or to
ficiary survived owner. If the registered eliminate or substitute a beneficiary in
owner of an Individual Retirement the case of a bond registered in bene-
Bond dies before it has been presented ficiary form upon the owner’s request
and surrendered for payment, and the on Form PD 3564. No consent will be re-
beneficiary shown thereon survived the quired to support any reissue trans-
owner, the bond shall be paid in the fol- action from a beneficiary whose name
lowing order of precedence: is to be removed from the registration
(1) To the designated beneficiary of an Individual Retirement Bond. If
upon his presentation and surrender of the registered owner dies after the
the bond with the request for payment bond has been presented and surren-
signed and duly certified; dered for reissue, upon receipt of notice
(2) If the designated beneficiary sur- thereof by the agency to which the re-
vived the registered owner but failed to quest for reissue was submitted, such
313
§ 346.11 31 CFR Ch. II (7–1–11 Edition)
request shall be treated as ineffective, § 346.13 Taxation.

provided the notice of death is received The tax treatment provided under
by the Federal Reserve Bank or the Bu- section 409 of the Internal Revenue
reau of the Public Debt, Division of Code of 1954, as amended, shall apply to
Transactions and Rulings, Parkers- all Individual Retirement Bonds. The
burg, WV 26101, to which the request bonds are subject to estate, inherit-
was sent, in sufficient time to withhold ance, or other excise taxes, whether
delivery, by mail or otherwise, of the Federal or State, but are exempt from
reissued bond. all taxation now or hereafter imposed
(b) Error in issue—change of name. Re- on the principal or interest thereof by
issue of an Individual Retirement Bond any State, municipality, or any local
will be made where an error in issue taxing authority. Inquiry concerning
has occurred, as well as in cases where the application of any Federal tax to
the owner’s name has been changed by these bonds should be directed to the
marriage, divorce, annulment, order of District Director of Internal Revenue
for the district in which the taxpayer
court, or in any other legal manner
resides.
upon an appropriate request. Informa-
tion as to the procedure to be followed § 346.14 Certifying officers.
in securing such reissue may be ob-
Officers authorized to certify re-
tained from a Federal Reserve Bank or quests for payment or for any other
the Bureau of the Public Debt, Division transaction involving Individual Re-
of Transactions and Rulings, Parkers- tirement Bonds include:
burg, WV 26101. (a) Post offices. Any postmaster, act-
(26 U.S.C. 220 and 31 U.S.C. 757) ing postmaster, or inspector-in-charge,
or other post office official or clerk
[40 FR 4240, Jan. 28, 1975, as amended at 42 designated for that purpose. A post of-
FR 37520, July 21, 1977] fice official or clerk, other than a post-
master, acting postmaster, or inspec-
§ 346.11 Use of power of attorney. tor-in-charge, should certify in the
No designation of an attorney, agent, name of the postmaster or acting post-
or other representative to request pay- master, followed by his own signature
ment or reissue on behalf of the owner, and official title. Signatures of these
beneficiary, or other person entitled officers should be authenticated by a
under § 346.9, other than as provided in legible imprint of the post office dating
these regulations, will be recognized. stamp.
(b) Banks and trust companies. Any of-
§ 346.12 Lost, stolen, or destroyed ficer of a Federal Reserve Bank or
bonds. Branch, or of a bank or trust company
chartered under the laws of the United
If an Individual Retirement Bond is States or those of any State, Common-
lost, stolen, or destroyed, relief will be wealth, or Territory of the United
granted upon identification of the bond States, as well as any employees of
and proof of its loss, theft, or destruc- such bank or trust company expressly
tion. A description of the bond by de- authorized to act for that purpose, who
nomination, serial number, issue date should sign over the title ‘‘Designated
and registration should be furnished at Employee.’’ Certifications by any of
the time the report of loss, theft, or de- these officers or designated employees
struction is made. Such reports should should be authenticated by either a
be sent to the Bureau of the Public legible imprint of the corporate seal,
Debt, Division of Transactions and or, where the institution is an author-
Rulings, Parkersburg, WV 26101. Full ized issuing agent for United States
instructions for obtaining substitute Savings Bonds, Series E, by a legible
bonds, or payment, in appropriate imprint of its dating stamp.
cases, will then be given. (c) Issuing agents of Series E savings
bonds. Any officer of a corporation or
(26 U.S.C. 220 and 31 U.S.C. 757) any other organization which is an au-
[40 FR 4240, Jan. 28, 1975, as amended at 42 thorized issuing agent for United
FR 37520, July 21, 1977] States Savings Bonds, Series E. All
314
certifications by such officers must be indemnity, with or without surety,

authenticated by a legible imprint of where he may consider such bond nec-
the issuing agent’s dating stamp. essary for the protection of the United
(d) Foreign countries. In a foreign States.
country requests may be signed in the (d) Waiver of requirements. The Sec-
presence of and be certified by any retary of the Treasury reserves the
United States diplomatic or consular right, in his discretion, to waive or
representative, or the manager or modify any provision or provisions of
other officer of a foreign branch of a this circular in any particular case or
bank or trust company incorporated in class of cases for the convenience of
the United States whose signature is the United States, or in order to re-
attested by an imprint of the corporate lieve any person or persons of unneces-
seal or is certified to the Department sary hardship, if such action is not in-
of the Treasury. If such an officer is consistent with law, does not impair
not available, requests may be signed any existing rights, and he is satisfied
in the presence of and be certified by a that such action would not subject the
notary or other officer authorized to United States to any substantial ex-
administer oaths, but his official char- pense or liability.
acter and jurisdiction should be cer- (e) Fiscal agents. Federal Reserve
tified by a United States diplomatic or Banks and Branches, as fiscal agents of
consular officer under seal of his office. the United States, are authorized to
(e) Special provisions. The Commis- perform such services as may be re-
sioner of the Public Debt, or his dele- quested of them by the Secretary of
gate, or any Federal Reserve Bank or the Treasury in connection with the
Branch is authorized to make special issue, delivery, redemption, reissue,
provision for certification in any par- and payment of Individual Retirement
ticular case or class of cases where Bonds.
none of the officers authorized above is (f) Reservation as to terms of circular.
readily accessible. The Secretary of the Treasury may at
any time, or from time to time, supple-
§ 346.15 General provisions. ment or amend the terms of this cir-
(a) Regulations. All Individual Retire- cular, or any amendments or supple-
ment Bonds shall be subject to the gen- ments thereto.
eral regulations prescribed by the Sec-
retary with respect to United States APPENDIX TO PART 346—TABLES
securities, which are set forth in De-
partment of the Treasury Circular No. TABLE OF REDEMPTION VALUES PROVIDING AN
300, current revision, to the extent ap- INVESTMENT YIELD OF 6 PERCENT PER ANNUM
FOR BONDS BEARING ISSUE DATES BEGINNING
plicable. Copies of the general regula-
tions may be obtained upon request JANUARY 1, 1975
NOTE: This table shows how Individual Retirement Bonds
from any Federal Reserve Bank or the bearing issue dates on or after January 1, 1975, by denomi-
Department of the Treasury. nation, increase in redemption value during the successive
half-year periods following issue. The redemption values
(b) Reservation as to issue of bonds. provide an investment yield of approximately 6 pct/annum,
The Secretary of the Treasury reserves compounded semiannually, on the purchase price from
issue date to the beginning of each half-year period. No in-
the right to reject any application for crease in redemption value is shown, however, until 1 year
the purchase of Individual Retirement after issue date since no interest may be paid on bonds re-
deemed before that time. The period to maturity is fixed in
Bonds, in whole or in part, and to accordance with the provisions of § 346.1(b) of this circular.
refuse to issue or permit to be issued
any such bonds in any case or any class Issue price
or classes of cases if he deems such ac- Period after Redemption values during each half-year
tion to be in the public interest, and issue date period (values increase on first day of pe-
(years) riod shown)
his action in any such respect shall be
final. $50.00 $75.00 $100.00 $500.00
(c) Additional requirements. In any 1st .................... $50.00 $75.00 $100.00 $500.00
case or any class of cases arising under 1 to 11⁄2 ........... 53.05 79.57 106.10 530.50
this circular, the Secretary of the 11⁄2 to 2 ........... 54.64 81.95 109.28 546.40
2 to 21⁄2 ........... 56.28 84.41 112.56 562.80
Treasury may require such additional 21⁄2 to 3 ........... 57.96 86.95 115.92 579.60
evidence as may in his judgment be 3 to 31⁄2 ........... 59.70 89.55 119.40 597.00
necessary, and may require a bond of 31⁄2 to 4 ........... 61.49 92.24 122.98 614.90
315
TABLE OF REDEMPTION VALUES PROVIDING AN TABLE A—TABLE OF REDEMPTION VALUES PRO-

INVESTMENT YIELD OF 6 PERCENT PER ANNUM VIDING AN INVESTMENT YIELD OF 6.50 PER-
FOR BONDS BEARING ISSUE DATES BEGINNING CENT PER ANNUM FOR BONDS BEARING ISSUE
JANUARY 1, 1975—Continued DATES BEGINNING AUG. 1, 1979
NOTE: This table shows how Individual Retirement Bonds NOTE: This table shows how Individual Retirement Bonds
bearing issue dates on or after January 1, 1975, by denomi- bearing issue dates on or after August 1, 1979, by denomi-
nation, increase in redemption value during the successive nation, increase in redemption value during the successive
half-year periods following issue. The redemption values half-year periods following issue. The redemption values
provide an investment yield of approximately 6 pct/annum, provide an investment yield of approximately 6.50 percent
compounded semiannually, on the purchase price from per annum, compounded semiannually, on the purchase
issue date to the beginning of each half-year period. No in- price from issue date to the beginning of each half-year pe-
crease in redemption value is shown, however, until 1 year riod. No increase in redemption value is shown, however,
after issue date since no interest may be paid on bonds re- until 1 year after issue date since no interest may be paid
deemed before that time. The period to maturity is fixed in on bonds redeemed before that time. The period to maturity
accordance with the provisions of § 346.1(b) of this circular. is fixed in accordance with the provisions of § 346.1(b) of
this circular.
Issue price
Issue price
issue date period (values increase on first day of pe- Period after Redemption values during each half-year
(years) riod shown) issue date period (values increase on first day of pe-
(years) riod shown)
$50.00 $75.00 $100.00 $500.00
$50 $75 $100 $500
4 to 4 ⁄ ...........
12 63.34 95.01 126.68 633.40
41⁄2 to 5 ........... 65.24 97.86 130.48 652.40 1st .................... $50.00 $75.00 $100.00 $500.00
5 to 51⁄2 ........... 67.20 100.79 134.40 672.00 1 to 11⁄2 ........... 53.30 79.95 106.60 533.00
51⁄2 to 6 ........... 69.21 103.82 138.42 692.10 11⁄2 to 2 ........... 55.04 82.56 110.08 550.40
6 to 61⁄2 ........... 71.29 106.93 142.58 712.90 2 to 21⁄2 ........... 56.82 85.23 113.64 568.20
61⁄2 to 7 ........... 73.43 110.14 146.86 734.30 21⁄2 to 3 ........... 58.68 88.02 117.36 586.80
7 to 71⁄2 ........... 75.63 113.44 151.26 756.30 3 to 31⁄2 ........... 60.58 90.87 121.16 605.80
71⁄2 to 8 ........... 77.90 116.85 155.80 779.00 31⁄2 to 4 ........... 62.54 93.81 125.08 625.40
8 to 81⁄2 ........... 80.24 120.35 160.48 802.40 4 to 41⁄2 ........... 64.58 96.87 129.16 645.80
81⁄2 to 9 ........... 82.64 123.96 165.28 826.40 41⁄2 to 5 ........... 66.68 100.02 133.36 666.80
9 to 91⁄2 ........... 85.12 127.68 170.24 851.20 5 to 51⁄2 ........... 68.84 103.26 137.68 688.40
91⁄2 to 10 ......... 87.68 131.51 175.36 876.80 51⁄2 to 6 ........... 71.08 106.62 142.16 710.80
10 to 101⁄2 ....... 90.31 135.46 180.62 903.10 6 to 61⁄2 ........... 73.40 110.10 146.80 734.00
101⁄2 to 11 ....... 93.01 139.52 186.02 930.10 61⁄2 to 7 ........... 75.78 113.67 151.56 757.80
11 to 111⁄2 ....... 95.81 143.71 191.62 958.10 7 to 71⁄2 ........... 78.24 117.36 156.48 782.40
111⁄2 to 12 ....... 98.68 148.02 197.36 986.80 71⁄2 to 8 ........... 80.78 121.17 161.56 807.80
12 to 121⁄2 ....... 101.64 152.46 203.28 1,016.40 8 to 81⁄2 ........... 83.40 125.10 166.80 834.00
121⁄2 to 13 ....... 104.69 157.03 209.38 1,046.90 81⁄2 to 9 ........... 86.12 129.18 172.24 861.20
13 to 131⁄2 ....... 107.83 161.74 215.66 1,078.30 9 to 91⁄2 ........... 88.92 133.38 177.84 889.20
131⁄2 to 14 ....... 111.06 166.60 222.12 1,110.60 91⁄2 to 10 ......... 91.80 137.70 183.60 918.00
14 to 141⁄2 ....... 114.40 171.59 228.80 1,144.00 10 to 101⁄2 ....... 94.80 142.20 189.60 948.00
141⁄2 to 15 ....... 117.83 176.74 235.66 1,178.30 101⁄2 to 11 ....... 97.88 146.82 195.76 978.80
15 to 151⁄2 ....... 121.36 182.04 242.72 1,213.60 11 to 111⁄2 ....... 101.06 151.59 202.12 1,010.60
151⁄2 to 16 ....... 125.00 187.51 250.00 1,250.00 111⁄2 to 12 ....... 104.34 156.51 208.68 1,043.40
16 to 161⁄2 ....... 128.75 193.13 257.50 1,287.50 12 to 121⁄2 ....... 107.72 161.58 215.44 1,077.20
161⁄2 to 17 ....... 132.62 198.93 265.24 1,326.20 121⁄2 to 13 ....... 111.22 166.83 222.44 1,112.20
17 to 171⁄2 ....... 136.60 204.89 273.20 1,366.00 13 to 131⁄2 ....... 114.84 172.26 229.68 1,148.40
171⁄2 to 18 ....... 140.69 211.04 281.38 1,406.90 131⁄2 to 14 ....... 118.58 177.87 237.16 1,185.80
18 to 181⁄2 ....... 144.91 217.37 289.82 1,449.10 14 to 141⁄2 ....... 122.44 183.66 244.88 1,224.40
181⁄2 to 19 ....... 149.26 223.89 298.52 1,492.60 141⁄2 to 15 ....... 126.42 189.63 252.84 1,264.20
19 to 191⁄2 ....... 153.74 230.61 307.48 1,537.40 15 to 151⁄2 ....... 130.52 195.78 261.04 1,305.20
191⁄2 to 20 ....... 158.35 237.53 316.70 1,583.50 151⁄2 to 16 ....... 134.76 202.14 269.52 1,347.60
20 to 201⁄2 ....... 163.10 244.65 326.20 1,631.00 16 to 161⁄2 ....... 139.14 208.71 278.28 1,391.40
161⁄2 to 17 ....... 143.66 215.49 287.32 1,436.60
17 to 171⁄2 ....... 148.34 222.51 296.68 1,483.40
171⁄2 to 18 ....... 153.16 229.74 306.32 1,531.60
18 to 181⁄2 ....... 158.12 237.18 316.24 1,581.20
181⁄2 to 19 ....... 163.26 244.89 326.52 1,632.60
19 to 191⁄2 ....... 168.58 252.87 337.16 1,685.80
191⁄2 to 20 ....... 174.06 261.09 348.12 1,740.60
20 to 201⁄2 ....... 179.72 269.58 359.44 1,797.20
316
TABLE B—TABLE OF REDEMPTION VALUES PRO- TABLE C—TABLE OF REDEMPTION VALUES PRO-
VIDING AN INVESTMENT YIELD OF 8.00 PER- VIDING AN INVESTMENT YIELD OF 9.00 PER-
CENT PER ANNUM FOR BONDS BEARING ISSUE CENT PER ANNUM FOR BONDS BEARING ISSUE
DATES BEGINNING NOVEMBER 1, 1980 DATES BEGINNING OCTOBER 1, 1981
NOTE: This table shows how Individual Retirement Bonds NOTE: This table shows how Individual Retirement Bonds
bearing issue dates on or after November 1, 1980, by de- bearing issue dates on or after October 1, 1981, by denomi-
nomination, increase in redemption value during the suc- nation, increase in redemption value during the successive
cessive half-year periods following issue. The redemption half-year periods following issue. The redemption values
values provide an investment yield of approximately 8.00 provide an investment yield of approximately 9.00 percent
percent per annum, compounded semiannually, on the pur- per annum, compounded semiannually, on the purchase
chase price from issue date to the beginning of each half- price from issue date to the beginning of each half-year pe-
year period. No increase in redemption value is shown, riod. No increase in redemption value is shown, however,
however, until 1 year after issue date since no interest may until 1 year after issue date since no interest may be paid
be paid on bonds redeemed before that time. The period to on bonds redeemed before that time. The period to maturity
maturity is fixed in accordance with the provisions of is fixed in acordance with the provisions of § 346.1(b) of this
§ 346.1(b) of this circular. circular.
Issue price Issue price
Period after Redemption values during each half-year Period after Redemption values during each half-year
issue date period (values increase on first day of pe- issue date period (values increase on first day of pe-
(years) riod shown) (years) riod shown)
$50.00 $75.00 $100.00 $500.00 $50.00 $75.00 $100.00 $500.00
First half year .. $50.00 $75.00 $100.00 $500.00 First half ........... $50.00 $75.00 $100.00 $500.00
1.0 to 1.5 ......... 54.08 81.12 108.16 540.80 1.0 to 1.5 ......... 54.60 81.90 109.20 546.00
1.5 to 2.0 ......... 56.24 84.36 112.48 562.40 1.5 to 2.0 ......... 57.06 85.59 114.12 570.60
2.0 to 2.5 ......... 58.50 87.75 117.00 585.00 2.0 to 2.5 ......... 59.62 89.43 119.24 596.20
2.5 to 3.0 ......... 62.30 93.45 124.60 623.00
2.5 to 3.0 ......... 60.84 91.26 121.68 608.40
3.0 to 3.5 ......... 65.12 97.68 130.24 651.20
3.0 to 3.5 ......... 63.26 94.89 126.52 632.60
3.5 to 4.0 ......... 68.04 102.06 136.08 680.40
3.5 to 4.0 ......... 65.80 98.70 131.60 658.00
4.0 to 4.5 ......... 71.10 106.65 142.20 711.00
4.0 to 4.5 ......... 68.42 102.63 136.84 684.20 4.5 to 5.0 ......... 74.30 111.45 148.60 743.00
4.5 to 5.0 ......... 71.16 106.74 142.32 711.60 5.0 to 5.5 ......... 77.64 116.46 155.28 776.40
5.0 to 5.5 ......... 74.02 111.03 148.04 740.20 5.5 to 6.0 ......... 81.14 121.71 162.28 811.40
5.5 to 6.0 ......... 76.98 115.47 153.96 769.80 6.0 to 6.5 ......... 84.80 127.20 169.60 848.00
6.0 to 6.5 ......... 80.06 120.09 160.12 800.60 6.5 to 7.0 ......... 88.60 132.90 177.20 886.00
6.5 to 7.0 ......... 83.26 124.89 166.52 832.60 7.0 to 7.5 ......... 92.60 138.90 185.20 926.00
7.0 to 7.5 ......... 86.58 129.87 173.16 865.80 7.5 to 8.0 ......... 96.76 145.14 193.52 967.60
7.5 to 8.0 ......... 90.04 135.06 180.08 900.40 8.0 to 8.5 ......... 101.12 151.68 202.24 1,011.20
8.0 to 8.5 ......... 93.64 140.46 187.28 936.40 8.5 to 9.0 ......... 105.66 158.49 211.32 1,056.60
8.5 to 9.0 ......... 97.40 146.10 194.80 974.00 9.0 to 9.5 ......... 110.42 165.63 220.84 1,104.20
9.0 to 9.5 ......... 101.30 151.95 202.60 1,013.00 9.5 to 10.0 ....... 115.40 173.10 230.80 1,154.00
9.5 to 10.0 ....... 105.34 158.01 210.68 1,053.40 10.0 to 10.5 ..... 120.58 180.87 241.16 1,205.80
10.5 to 11.0 ..... 126.02 189.03 252.04 1,260.20
10.0 to 10.5 ..... 109.56 164.34 219.12 1,095.60
11.0 to 11.5 ..... 131.68 197.52 263.36 1,316.80
10.5 to 11.0 ..... 113.94 170.91 227.88 1,139.40
11.5 to 12.0 ..... 137.60 206.40 275.20 1,376.00
11.0 to 11.5 ..... 118.50 177.75 237.00 1,185.00 12.0 to 12.5 ..... 143.80 215.70 287.60 1,438.00
11.5 to 12.0 ..... 123.24 184.86 246.48 1,232.40 12.5 to 13.0 ..... 150.28 225.42 300.56 1,502.80
12.0 to 12.5 ..... 128.16 192.24 256.32 1,281.60 13.0 to 13.5 ..... 157.04 235.56 314.08 1,570.40
12.5 to 13.0 ..... 133.30 199.95 266.60 1,333.00 13.5 to 14.0 ..... 164.10 246.15 328.20 1,641.00
13.0 to 13.5 ..... 138.62 207.93 277.24 1,386.20 14.0 to 14.5 ..... 171.48 257.22 342.96 1,714.80
13.5 to 14.0 ..... 144.16 216.24 288.32 1,441.60 14.5 to 15.0 ..... 179.20 268.80 358.40 1,792.00
14.0 to 14.5 ..... 149.94 224.91 299.88 1,499.40 15.0 to 15.5 ..... 187.26 280.89 374.52 1,872.60
14.5 to 15.0 ..... 155.94 233.91 311.88 1,559.40 15.5 to 16.0 ..... 195.70 293.55 391.40 1,957.00
15.0 to 15.5 ..... 162.16 243.24 324.32 1,621.60 16.0 to 16.5 ..... 204.50 306.75 409.00 2,045.00
15.5 to 16.0 ..... 168.66 252.99 337.32 1,686.60 16.5 to 17.0 ..... 213.70 320.55 427.40 2,137.00
17.0 to 17.5 ..... 223.32 334.98 446.64 2,233.20
16.0 to 16.5 ..... 175.40 263.10 350.80 1,754.00
17.5 to 18.0 ..... 233.36 350.04 466.72 2,333.60
16.5 to 17.0 ..... 182.42 273.63 364.84 1,824.20
18.0 to 18.5 ..... 243.86 365.79 487.72 2,438.60
17.0 to 17.5 ..... 189.72 284.58 379.44 1,897.20 18.5 to 19.0 ..... 254.84 382.26 509.68 2,548.40
17.5 to 18.0 ..... 197.30 295.95 394.60 1,973.00 19.0 to 19.5 ..... 266.32 399.48 532.64 2,663.20
18.0 to 18.5 ..... 205.20 307.80 410.40 2,052.00 19.5 to 20.0 ..... 278.30 417.45 556.60 2,783.00
18.5 to 19.0 ..... 213.40 320.10 426.80 2,134.00 20.0 to 20.5 ..... 290.82 436.23 581.64 2,908.20
19.0 to 19.5 ..... 221.94 332.91 443.88 2,219.40
19.5 to 20.0 ..... 230.82 346.23 461.64 2,308.20
20.0 to 20.5 ..... 240.06 360.09 480.12 2,400.60 (26 U.S.C. 220, and 31 U.S.C. 757; 40 Stat. 288,
48 Stat. 343, as amended; 31 U.S.C. 752, 7546;
5 U.S.C. 301)
FR 37521, July 21, 1977; 45 FR 53397, Aug. 11,
1980; 45 FR 55178, Aug. 19, 1980; 46 FR 60577,
Dec. 11, 1981]
317
PART 348—REGULATIONS GOV- retary. The Secretary will set a given

ERNING DEPOSITARY COM- rate of interest that will apply to all
PENSATION SECURITIES securities issued while the rate is in ef-
fect. The interest will be payable on a
Sec. monthly basis. The securities will be
348.0 Offering of securities. issued in a minimum of $1,000 each.
348.1 Description of securities. (c) Nontransferability. The securities
348.2 Redemption/call/reinvestment. are not transferable, but they will be
348.3 Reservations. acceptable to secure compensating bal-
AUTHORITY: 31 U.S.C. 3121; 5 U.S.C. 301. ances with financial agents (as de-
SOURCE: 68 FR 41267, July 11, 2003 unless
scribed in § 348.0) and may not be used
otherwise noted. for any other purpose.
§ 348.0 Offering of securities. § 348.2 Redemption/call/reinvestment.

The Secretary of the Treasury (the (a) Redemption by financial agents.
Secretary) under authority of Title 31, The securities may be redeemed prior
Chapter 31, offers, at par, Depositary to maturity by financial agents only
Compensation Securities (securities) to under such terms and conditions as set
financial agents of the Department of forth in agreements between the finan-
the Treasury. The securities are offered cial agents and the Department of the
to financial agents of the Department Treasury, Financial Management Serv-
of the Treasury designated under fed- ice, Washington, DC.
eral law (including, but not limited to: (b) Call by the Treasury. The securi-
12 U.S.C. 90, 265–266, 1464(k), and 1789a; ties are subject to call before maturity.
31 U.S.C. 3303) which have executed a The Secretary will announce such call
Depositary, Financial Agency, and Col- by any means the Secretary deems ap-
lateral Agreement satisfactory to the propriate.
Secretary, and are authorized to pro- (c) Reinvestment at maturity. The secu-
vide essential banking services to the rities shall be automatically redeemed
Department of the Treasury. The secu- at maturity and the principal amount
rities will be issued in an amount not reinvested in new securities having the
to exceed, in any case, the amount for same description in all material re-
which the financial agents are author- spects as the ones redeemed, except
ized. The securities are non-market- that the Secretary shall have the au-
able Treasury securities that will be thority to modify the rate of interest
utilized to compensate financial
for the re-issued securities. The securi-
agents, in whole or in part, for services
ties shall be automatically redeemed
performed on behalf of the Department
and re-invested unless the agent cer-
of the Treasury. The financial agents
tifies in writing, to the Treasury, Fi-
will be compensated from the interest
nancial Management Service, Wash-
earned on the securities. This offering
will continue until terminated by the ington, DC, that it declines automatic
Secretary. The Fiscal Assistant Sec- reinvestment within seven calendar
retary is authorized to act on behalf of days prior to maturity date.
the Secretary upon all matters con-
§ 348.3 Reservations.
tained in these regulations.
The Secretary reserves the right to
§ 348.1 Description of securities. reject any application for the purchase
(a) General. The securities will be of securities hereunder, in whole or in
issued in book-entry form on the books part, and to refuse to issue or permit to
of the Department of the Treasury, Bu- be issued any such securities in any
reau of the Public Debt, Parkersburg, case if the Secretary deems such action
WV. to be in the public interest, and the
(b) Terms and rate of interest. The se- Secretary’s action in any such respect
curities will be issued as notes or shall be final. The Secretary may also
bonds, depending on their maturity, at any time, supplement or amend the
under such terms and at such rates as terms of these regulations, or of any
determined and announced by the Sec- amendments or supplements thereto.
318
PART 351—OFFERING OF UNITED 351.21 How are redemption values deter-

mined during any extended maturity pe-
STATES SAVINGS BONDS, SERIES EE riod of Series EE savings bonds with
issue dates prior to May 1, 1995?
Sec. 351.22 When does the redemption value in-
crease for bonds issued prior to May 1,
Subpart A—General Information 1995?
351.23 Are tables of redemption values avail-
351.0 What does this part cover? able for bonds issued prior to May 1, 1995?
351.1 What regulations govern Series EE
savings bonds? SERIES EE SAVINGS BONDS WITH ISSUE DATES
351.2 How do I contact Public Debt? FROM MAY 1, 1995, THROUGH APRIL 1, 1997
351.3 What special terms do I need to know
to understand this part? 351.24 What are the maturity periods of
351.4 In what form are Series EE savings bonds with issue dates from May 1, 1995,
bonds issued? through April 1, 1997?
351.25 What were the interest rates and re-
Subpart B—Maturities, Redemption Values, demption values for bonds with issue
and Investment Yields of Series EE Sav- dates from May 1, 1995, through April 1,
1997, during semiannual rate periods in
ings Bonds
the first 5 years after issue date?
GENERAL PROVISIONS 351.26 What are the interest rates and re-
demption values for bonds with issue
351.5 What is the maturity period of a Se- dates from May 1, 1995 through April 1,
ries EE savings bond? 1997, during semiannual rate periods that
351.6 When may I redeem my Series EE sav- begin 5 years or more after issue date?
ings bond? 351.27 What are the interest rates and re-
351.7 May Series EE savings bonds be called demption values for bonds with issue
for redemption prior to final maturity? dates from May 1, 1995 through April 1,
351.8 When is interest payable on Series EE 1997, during an extended maturity pe-
savings bonds? riod?
351.9 When will I receive the redemption 351.28 How are redemption values calculated
value of my Series EE savings bonds? for bonds with issue dates from May 1,
351.10 What do I need to know about market 1995, through April 1, 1997?
yields, or market bid yields, to under-
stand redemption value calculations in SERIES EE SAVINGS BONDS WITH ISSUE DATES
this subpart? OF MAY 1, 1997, THROUGH APRIL 1, 2005
351.11 What do I need to know about the
short-term savings bond rate, to under- 351.29 What are the maturity periods of
stand redemption value calculations in bonds with issue dates of May 1, 1997,
this subpart? through April 1, 2005?
351.12 What do I need to know about the 351.30 What are interest rates and monthly
long-term savings bond rate, to under- accruals for Series EE bonds with issue
stand redemption value calculations in dates of May 1, 1997, through April 1,
this subpart? 2005, during the original maturity pe-
351.13 What do I need to know about the riod?
savings bond rate to understand redemp- 351.31 What is the interest penalty for Se-
tion value calculations in this subpart? ries EE bonds with issue dates of May 1,
351.14 When are rate announcements appli- 1997, through April 1, 2005, that are re-
cable to Series EE savings bonds an- deemed less than 5 years after the issue
nounced? date?
351.15 Is the determination of the Secretary 351.32 How are redemption values calculated
on rates and values final? for Series EE bonds with issue dates of
351.16 What do I need to know about the May 1, 1997, through April 1, 2005?
base denomination for redemption value 351.33 What are interest rates and redemp-
calculations? tion values for Series EE bonds issued
351.17–351.18 [Reserved] May 1, 1997, through April 1, 2005, during
an extended maturity period?
SERIES EE SAVINGS BONDS WITH ISSUE DATES
PRIOR TO MAY 1, 1995 SERIES EE SAVINGS BONDS WITH ISSUE DATES
OF MAY 1, 2005, OR THEREAFTER
351.19 What are maturity periods of Series
EE savings bonds with issue dates prior 351.34 What are the maturity periods of Se-
to May 1, 1995? ries EE bonds with issue dates of May 1,
351.20 What is the investment yield (inter- 2005, or thereafter?
est) during the original maturity period 351.35 What do I need to know about inter-
of Series EE savings bonds with issue est rates, penalties, and redemption val-
dates January 1, 1980, through April 1, ues for Series EE bonds with issue dates
1995? of May 1, 2005, or thereafter?
319
§ 351.0 31 CFR Ch. II (7–1–11 Edition)
351.36–351.39 [Reserved] 351.72–351.80 [Reserved]
Subpart C—Definitive Series EE Savings Subpart E—Miscellaneous Provisions

Bonds
351.81 Is the Education Savings Bond Pro-
351.40 What are the denominations and gram available for Series EE savings
prices of definitive Series EE savings bonds?
bonds? 351.82 Does Public Debt prohibit the
351.41 When are definitive Series EE savings issuance of Series EE savings bonds in a
bonds validly issued? chain letter scheme?
351.42 What is the issue date of a definitive 351.83 May Public Debt issue Series EE sav-
Series EE savings bond? ings bonds only in book-entry form?
351.43 Are taxpayer identification numbers 351.84 Does Public Debt make any reserva-
(TINs) required for the registration of a tions as to issue of Series EE savings
definitive Series EE savings bond? bonds?
351.44 What amount of definitive Series EE 351.85 May Public Debt waive any provision
savings bonds may I purchase per year? in this part?
351.45 What happens if I purchase definitive 351.86 What is the role of Federal Reserve
Series EE savings bonds in excess of the Banks and Branches?
maximum annual amount? 351.87 May Public Debt revise, supplement
351.46 May I purchase definitive Series EE or amend the terms of this offering?
savings bonds over-the-counter? APPENDIX TO PART 351—TAX CONSIDERATIONS
351.47 May I purchase definitive Series EE AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 31
savings bonds through a payroll savings U.S.C. 3105.
plan?
351.48 May I purchase definitive Series EE SOURCE: 68 FR 24796, May 8, 2003, unless
savings bonds through employee thrift, otherwise noted.
savings, vacation, and similar plans?
351.49 How are definitive Series EE savings Subpart A—General Information
bonds delivered?
351.50 How is payment made when definitive § 351.0 What does this part cover?
Series EE savings bonds are redeemed?
351.51 How can I find out what my definitive This part is the offering of United
Series EE savings bonds are worth? States Savings Bonds of Series EE (re-
351.52–351.59 [Reserved] ferred to as Series EE bonds or bonds)
for sale to the people of the United
Subpart D Book—Entry Series EE Savings States by the Secretary of the Treas-
Bonds ury (Secretary). Series EE bonds have
351.60 How are book-entry Series EE sav- been offered since 1980. The current
ings bonds purchased and held? offer was effective May 1, 2005, and will
351.61 What are the denominations and continue until terminated by the Sec-
prices of book-entry Series EE savings retary.
bonds?
351.62 How is payment made for purchases [68 FR 24796, May 8, 2003, as amended at 70
of book-entry Series EE savings bonds? FR 17288, Apr. 5, 2005]
351.63 How are redemption payments made
for my redeemed book-entry Series EE § 351.1 What regulations govern Series
savings bonds? EE savings bonds?
351.64 What is the issue date of a book-entry (a) The regulations in 31 CFR part 353
Series EE savings bond? apply to definitive (paper) Series EE
351.65 What amount of book-entry Series savings bonds that have not been con-
EE savings bonds may I acquire per year?
351.66 What book-entry Series EE savings
verted to book-entry bonds through
bonds are included in the computation? New Treasury Direct.
351.67 What happens if any person purchases (b) The regulations in 31 CFR part 363
book-entry Series EE savings bonds in apply to:
excess of the maximum annual amount? (1) Book-entry Series EE savings
351.68 Are taxpayer identification numbers bonds that were originally issued as
(TINs) required for registration of book- book-entry bonds in New Treasury Di-
entry Series EE savings bonds? rect; and
351.69 When is a book-entry Series EE sav-
(2) Definitive Series EE savings bonds
ings bond validly issued?
351.70 How are redemption values calculated that have been converted to book-entry
for book-entry Series EE savings bonds? bonds through New Treasury Direct.
351.71 How can I find out what my book- (c) The regulations in 31 CFR part 370
entry Series EE savings bonds are worth? apply to transactions for the purchase
320
of savings bonds issued through the Bu- to be maintained by Treasury solely as

reau of the Public Debt, but do not a computer record.
apply to transactions purchased Coowner means either the first or the
through issuing agents generally. second individual named in the reg-
(d) We expressly disclaim any rep- istration of a definitive Series EE sav-
resentations or warranties regarding ings bond registered ‘‘John Doe SSN
Series EE savings bonds that in any 123–45–6789 or Joseph Doe.’’ In this ex-
way conflict with these regulations and ample, John Doe and Joseph Doe are
other applicable law. coowners.
[68 FR 24796, May 8, 2003, as amended at 70 Definitive bond means a Series EE
FR 14941, Mar. 23, 2005] savings bond issued in paper form.
Extended maturity period, second ex-
§ 351.2 How do I contact Public Debt? tended maturity period, and extended ma-
You may contact Public Debt by e- turity refer to periods after the original
mail at savbonds@bpd.treas.gov, or by maturity dates of the bonds during
writing to the following address: Bu- which owners may retain them and
reau of the Public Debt, Parkersburg, continue to earn interest.
West Virginia 26106–1328. Our website Face amount refers to the nominal
address is www.savingsbonds.gov. amount of a Series EE savings bond.
The face amount of a definitive Series
§ 351.3 What special terms do I need to EE bond is imprinted on the front of
know to understand this part?
the bond. The face amount of a book-
Accrual date is the first day of any entry Series EE bond is the amount of
month on which earnings on a Series the original investment. (See principal
EE bond accrue. The redemption value amount.)
of a bond does not change between Fiduciary means the court-appointed
these accrual dates. or otherwise qualified person, regard-
Automated Clearing House (ACH) less of title, who is legally authorized
means a funds transfer system gov- to act for another. Fiduciary does not
erned by the Rules of the National include an attorney-in-fact.
Automated Clearing House Association Final maturity refers to the date that
(NACHA). NACHA provides for the a bond ceases to earn interest.
interbank clearing of electronic entries
Individual means a natural person.
for participating financial institutions.
Individual does not mean an organiza-
Bank account means your account at
tion, representative, or fiduciary.
a United States depository financial in-
stitution (whether a bank or other fi- Inscription means the information
nancial institution) to which you have that is printed on the face of the bond.
directed that ACH debits and payments Interest, as used in this part, is the
be made. difference between the principal
Beneficiary refers to the second indi- amount and the redemption value of
vidual named in the registration of a the bond.
security held in definitive form reg- Issue date is the first day of the
istered ‘‘John Doe SSN 123–45–6789 POD month in which an authorized issuing
(payable on death to) Joseph Doe.’’ In agent receives payment of the issue
the New Treasury Direct system, bene- price of the bond.
ficiary refers to the second individual Issuing agent means an organization
named in the registration of a security that has been qualified under 31 CFR
registered ‘‘John Doe SSN 123–45–6789 part 317, and any other entity that is
POD (payable on death to) Joseph Doe otherwise authorized to issue bonds.
SSN 987–65–4321.’’ In these examples, New Treasury Direct system (New
Joseph Doe is the beneficiary. Treasury Direct) is an online account
Book-entry bond means a Series EE system in which you may hold and con-
savings bond maintained by Treasury duct transactions in eligible book-
solely as a computer record. entry Treasury securities.
Converted bond means a savings bond Original maturity period or original ma-
originally issued as a definitive bond turity refers to the initial maturity pe-
that has been surrendered to us and riod of a bond prior to any extensions
converted to a book-entry savings bond of maturity; this period varies from 8
321
§ 351.4 31 CFR Ch. II (7–1–11 Edition)
to 20 years, depending on the issue date of the owner, first-named coowner, or

of the bond. purchaser of a gift bond are maintained
Owner is either a single owner, the on our records.
first individual named in the registra- Secondary owner means the second in-
tion of a bond held in the owner with dividual named in the registration of a
beneficiary form of registration, or the book-entry bond held in New Treasury
primary owner of a book-entry bond Direct registered ‘‘John Doe SSN 123–
held in the primary owner with sec- 45–6789 with Joseph Doe SSN 987–65–
ondary owner form of registration. 4321.’’ In this example, Joseph Doe is
Par means the face amount of a Se- the secondary owner.
ries EE savings bond. Semiannual rate periods or semiannual
Paying agent means a financial insti- earnings periods are the six-month peri-
tution that has been qualified under 31 ods beginning on the issue date and on
CFR part 321. each semiannual anniversary of the
Person means an entity including an issue date to final maturity.
individual, trust, estate, corporation,
Series EE savings bond is an accrual-
government entity, association, part-
type savings bond, offered at a dis-
nership, and any other similar organi-
zation. Person does not mean a Federal count, either in definitive (paper) form
Reserve Bank. or in book-entry form, that pays inter-
Primary owner means the first indi- est on the principal based on rates de-
vidual named in the registration of a termined by Treasury.
book-entry bond held in New Treasury Single owner means the person named
Direct registered ‘‘John Doe SSN 123– in the registration of a savings bond
45–6789 with Joseph Doe SSN 987–65– without a coowner, beneficiary or sec-
4321.’’ In this example, John Doe is the ondary owner.
primary owner. Taxpayer identification number (TIN)
Principal amount means the amount means the identifying number required
of the original investment. Principal on tax returns and other documents
amount does not include any interest submitted to the Internal Revenue
earned. Service; for example, an individual’s
Redemption of a book-entry Series EE social security account number (SSN)
savings bond refers to payment of prin- or an employer identification number
cipal and accrued interest on the bond (EIN). A SSN is composed of nine digits
at final maturity, or, at the option of separated by two hyphens, for example,
the owner, prior to final maturity. The 123–45–6789. An EIN is composed of nine
owner of a book-entry savings bond digits separated by one hyphen, for ex-
held in New Treasury Direct may re- ample, 12–3456789. The hyphens are an
deem all principal and interest or a essential part of the numbers.
portion of the principal and the propor- We, us, or our refers to the agency,
tionate amount of interest. the Bureau of the Public Debt. The
Redemption of a definitive Series EE term extends to the Secretary of the
savings bond refers to the payment of Treasury and the Secretary’s delegates
principal and accrued interest when at the Treasury Department and Bu-
the owner presents the bond for pay- reau of the Public Debt. The term also
ment. extends to any fiscal or financial agent
Redemption value means principal we designate to act on behalf of the
plus accrued interest of a Series EE United States.
savings bond, as of the date of poten-
You or your refers to an owner of a
tial or actual redemption. In the case
Series EE savings bond.
of a book-entry Series EE savings
bond, it also refers to a portion of the [68 FR 24796, May 8, 2003, as amended at 70
principal amount plus a proportionate FR 14941, Mar. 23, 2005; 71 FR 46857, Aug. 15,
amount of accrued interest of a bond, 2006]
as of the date of potential or actual re-
demption. § 351.4 In what form are Series EE sav-
Registration means that the names of ings bonds issued?
all persons named on the bond and the Series EE savings bonds are issued in
taxpayer identification number (TIN) either book-entry or definitive form.
322
Subpart B—Maturities, Redemption § 351.10 What do I need to know about

Values, and Investment Yields market yields, or market bid yields,
to understand redemption value
of Series EE Savings Bonds calculations in this subpart?
GENERAL PROVISIONS We use market yields, or market bid
yields, derived from Treasury bills,
§ 351.5 What is the maturity period of notes, and bonds, to create a yield
a Series EE savings bond? curve based on the most actively trad-
Series EE savings bonds have a total ed Treasury securities. This curve re-
maturity period of 30 years from the lates the yield on a security to its time
issue date, consisting of an original to maturity. Yields at particular
maturity period and one or two periods points on the curve are referred to as
of extended maturity, which vary de- ‘‘constant maturity yields’’ and are de-
pending on the issue date of the bond. termined by the Treasury from this
The interest on an outstanding bond daily yield curve. Six-month and 5-year
ceases to accrue 30 years after its issue Treasury securities rates are derived
from these yield curves.
date.
§ 351.11 What do I need to know about
§ 351.6 When may I redeem my Series
the short-term savings bond rate, to
EE savings bond? understand redemption value cal-
(a) Bonds with issue dates on or before culations in this subpart?
January 1, 2003. You may redeem your We determine this rate by compiling
Series EE savings bond at any time be- 6-month Treasury securities rates as of
ginning six months after its issue date. the close of business for each day of the
(b) Bonds with issue dates on or after previous three months and calculating
February 1, 2003. You may redeem your the monthly average for each month,
Series EE savings bond at any time be- rounding each monthly average to the
ginning twelve months after its issue nearest one-hundredth of one percent.
date. We then determine the short-term sav-
ings bond rate by taking 85 percent of
§ 351.7 May Series EE savings bonds the three-month average and rounding
be called for redemption prior to the result to the nearest one-hundredth
final maturity?
of one percent. For bonds entitled to
The Secretary of the Treasury may interest accruals at the short-term sav-
not call Series EE bonds for redemp- ings bond rate, that rate applies to the
tion prior to final maturity. bond’s first full semiannual interest ac-
crual period following each announce-
§ 351.8 When is interest payable on Se- ment of the rate.
ries EE savings bonds?
Interest on a bond accrues and be- § 351.12 What do I need to know about
the long-term savings bond rate, to
comes part of the redemption value. In- understand redemption value cal-
terest earnings are payable upon re- culations in this subpart?
demption.
We determine this rate by compiling
§ 351.9 When will I receive the redemp- 5-year Treasury securities rates as of
tion value of my Series EE savings the close of business for each day of the
bonds? previous six months and calculating
the monthly average for each month,
(a) You will be paid the redemption
rounding each monthly average to the
value of your definitive bond when you
nearest one-hundredth of one percent.
surrender the bond for payment as pro-
We then determine the long-term sav-
vided in these regulations and in 31
ings bond rate by taking 85 percent of
CFR part 353. the 6-month average and rounding the
(b) You will be paid the redemption result to the nearest one-hundredth of
value of your book-entry bond when it one percent. For bonds entitled to in-
reaches final maturity, if you have not terest accruals at the long-term sav-
redeemed the bond previously. ings bond rate, that rate applies to the
323
§ 351.13 31 CFR Ch. II (7–1–11 Edition)
bond’s first full semiannual interest ac- § 351.16 What do I need to know about
crual period following each announce- the base denomination for redemp-
ment of the rate. tion value calculations?
§ 351.13 What do I need to know about We base all calculations of interest
the savings bond rate to under- on a unit with a principal amount of
stand redemption value calcula- $12.50. We use this unit value to deter-
tions in this subpart? mine the value of bonds in higher de-
We determine the savings bond rate nominations. The effect of rounding off
by compiling 5-year Treasury securi- the value of the $12.50 unit increases at
ties yields as of the close of business higher denominations. This can work
for each day of the previous six months to your slight advantage or disadvan-
and calculating the monthly average to tage, depending on whether the value is
the nearest one-hundredth of one per- rounded up or down.
cent. We then determine the savings
bonds rate by taking 90 percent of the Example. The following hypothetical exam-
6-month average and rounding the re- ple illustrates the calculation: A rate of
3.25% will result in a newly purchased $12.50
sult to the nearest one-hundredth of
unit increasing in value after six months to
one percent. $12.70, when rounded to the nearest cent.
Therefore, a $5,000 definitive Series EE bond
§ 351.14 When are rate announcements
that apply to Series EE savings (with a principal amount of $2,500) will be
bonds announced? worth $2,540 after six months ([$2,500 divided
by $12.50] × $12.70 = $2,540.) In contrast, if ap-
(a) The Secretary will furnish rates plied directly to a $2,500 principal amount,
that apply to Series EE savings bonds the rate would render a value of $2,540.63
in announcements published each May after six months, a difference of 63 cents.
1 and November 1. (This example does not account for any in-
(b) If the regularly scheduled date for terest penalty that might apply if you re-
the announcement is a day when we deem a bond less than five years after its
are not open for business, then the Sec- issue date.)
retary will make the announcement on
the next business day. However, the ef- §§ 351.17–351.18 [Reserved]
fective date of the rate remains the
first day of the month of the announce- SERIES EE SAVINGS BONDS WITH ISSUE
ment. DATES PRIOR TO MAY 1, 1995
(c) The Secretary may announce
§ 351.19 What are maturity periods of
rates at any other time.
Series EE savings bonds with issue
§ 351.15 Is the determination of the dates prior to May 1, 1995?
Secretary on rates and values final? Bonds with issue dates from January
The Secretary’s determination of 1, 1980, through May 1, 1995 have an
rates of return and savings bond re- original maturity period and two ex-
demption values is final and conclu- tended maturity periods, as shown by
sive. the following table:
First extended Second ex-
Original term
Issue dates—1st day of term tended term Final maturity dates
(in years) (in years) (in years)
Jan. 1980–Oct. 1980 ............................... 11 10 9 Jan. 2010–Oct. 2010.

Nov. 1980–Apr. 1981 .............................. 9 10 11 Nov. 2010–Apr. 2011.
May 1981–Oct. 1982 ............................... 8 10 12 May 2011–Oct. 2012.
Nov. 1982–Oct. 1986 .............................. 10 10 10 Nov. 2012–Oct. 2016.
Nov. 1986–Feb. 1993 ............................. 12 10 8 Nov. 2016–Feb. 2023.
Mar. 1993–Apr. 1995 .............................. 18 10 2 Mar. 2023–Apr. 2025.
324
§ 351.20 What is the investment yield (1) For each 6-month period, starting
(interest) during the original matu- with the period beginning on May 1,
rity period of Series EE savings 1982, we will determine the average
bonds with issue dates from Janu- market yield on outstanding market-
ary 1, 1980, through April 1, 1995? able Treasury securities with a remain-
The redemption value of a bond on a ing term to maturity of approximately
given interest accrual date during 5 years during such period.
original maturity will be the higher of (2) For bonds bearing an issue date
the value produced using the applicable prior to May 1, 1989, the market-based
guaranteed minimum investment yield variable investment yield from its first
or the value produced using the appro- semiannual interest accrual date oc-
priate market-based variable invest- curring on or after November 1, 1982, or
ment yield. its issue date, whichever is later, to its
(a) Guaranteed minimum investment first semiannual interest accrual date 5
yield—(1) Bonds bearing issue dates prior years thereafter will be 85 percent,
to November 1, 1982. You may obtain the rounded to the nearest one-fourth of 1
guaranteed minimum investment percent, of the arithmetic average of
yields on bonds bearing issue dates the market yield averages for the ten
prior to November 1, 1982, by 6-month periods starting with the 6-
downloading from our website at month period that most recently ended
www.savingsbonds.gov, contacting us by before such issue date, whichever is
email at savbonds@bpd.treas.gov, or by later.
writing us at the following address: Bu- (3) For bonds bearing issue dates of
reau of the Public Debt, Parkersburg, May 1, 1989, through April 1, 1995, the
West Virginia 26106–1328. market-based variable investment
(2) Bonds bearing issue dates of Novem- yield from the issue date to the semi-
ber 1, 1982, through April 1, 1995—(i)
annual interest accrual date 5 years
Prior to 5 years from issue date. You may
thereafter will be 85 percent, rounded
download the guaranteed minimum in-
to the nearest one-hundredth of 1 per-
vestment yields prior to 5 years from
cent, of the arithmetic average of the
issue date at our website at
market yield averages for the ten 6-
www.savingsbonds.gov, by contacting us
month periods starting with the 6-
by email at savbonds@bpd.treas.gov, or
month period that most recently ended
writing to the following address: Bu-
before such issue date.
reau of the Public Debt, Parkersburg,
West Virginia 26106–1328. (4) In determining the market-based
(ii) On or after 5 years from issue date. variable investment yield for a bond
The guaranteed minimum investment from its first semiannual interest ac-
yield of a bond from its issue date to crual date occurring on or after No-
each semiannual interest accrual date vember 1, 1982, or its issue date, which-
occurring on or after 5 years from issue ever is later, to each successive semi-
up to original maturity will be as fol- annual interest accrual date occurring
lows, compounded semiannually: after 5 years from issue up to original
maturity, the average market yield for
Issue dates of bonds Percent each additional 6-month period will be
Nov. 1, 1982–October 1, 1986 ............................ 7.5
included in the computation.
Nov. 1, 1986–Feb. 1, 1993 ................................. 6
Mar. 1, 1993–Apr. 1, 1995 .................................. 4 § 351.21 How are redemption values
determined during any extended
(b) Market-based variable investment maturity period of Series EE sav-
yield. If a bond is held for a period of 5 ings bonds with issue dates prior to
years after its first semiannual inter- May 1, 1995?
est accrual period, occurring on or The redemption value of a bond on a
after November 1, 1982, or its issue given interest accrual date during an
date, whichever is later, its market- extended maturity period or periods
based variable investment yield for will be the higher of the values pro-
such period, and to each successive duced using either the applicable guar-
semiannual interest accrual date up to anteed minimum investment yield or
its original maturity, will be deter- the appropriate market-based variable
mined as follows: investment yield. The calculation of
325
§ 351.22 31 CFR Ch. II (7–1–11 Edition)
these yields and the resulting redemp- yield from its first semiannual interest
tion values are described below: accrual date occurring on or after No-
(a) Guaranteed minimum investment vember 1, 1982, or its issue date, which-
yield and resulting values during an ex- ever is later, to each semiannual inter-
tended maturity period. A bond may be est accrual date occurring on or after
subject to one guaranteed minimum in- November 1, 1989, will be 85 percent,
vestment yield during its original ma- rounded to the nearest one-hundredth
turity period and to another such yield of one percent, of the arithmetic aver-
during each of its extended maturity age of the market yield averages for
periods. the appropriate number of 6-month pe-
(1) Bonds entering an extended matu- riods involved, beginning with the pe-
rity period from May 1, 1989, through Feb- riod from May 1, 1982, or the 6-month
ruary 1, 1993. Bonds that entered an ex- period that most recently ended before
tended maturity period from May 1, the issue date, whichever period occurs
1989, through February 1, 1993, had a later. We use the value of a bond on its
guaranteed minimum investment yield first semiannual interest accrual date
of 6 percent per annum, compounded occurring on or after November 1, 1982,
semiannually, during that extended or its issue date, whichever is later, as
maturity period. the base upon which interest accrues
(2) Bonds entering an extended matu- during the extended maturity period at
rity period on or after March 1, 1993. the applicable market-based variable
Bonds that entered or enter an ex- investment yield. As described above,
tended maturity period on or after the bond will receive the higher of the
March 1, 1993, have a guaranteed min- two values: One value produced using
imum investment yield of 4 percent per the applicable market-based variable
annum, compounded semiannually, investment yield; and, the other value
during that extended maturity period, produced using the guaranteed min-
or the guaranteed minimum invest- imum investment yield.
ment yield in effect at the beginning of
that period. § 351.22 When does the redemption
(3) Determination of values for a bond value increase for bonds issued
during extended maturity periods. In prior to May 1, 1995?
order to determine values for a bond (a) Bonds with issue dates from Janu-
during its first extended maturity pe- ary 1, 1980, through October 1, 1980. For
riod, we determine the value of the bonds with issue dates from January 1,
bond at the end of its original maturity 1980, through October 1, 1980, the re-
period using the guaranteed minimum demption value increases on the first
investment yield applicable to that pe- day of each month from the third
riod. This value is then used as the through the thirtieth month after
base upon which interest accrues dur- issue, and thereafter on the first day of
ing the first extended maturity period each successive 6-month period.
at the applicable guaranteed minimum (b) Bonds with issue dates from Novem-
investment yield for that period. We ber 1, 1980, through October 1, 1986. For
use the value thus attained at first ex- bonds with issue dates from November
tended maturity as the base upon 1, 1980, through October 1, 1986, the re-
which interest accrues during the sec- demption value increases on the first
ond extended maturity period at the day of each month from the third
applicable guaranteed minimum in- through the eighteenth month after
vestment yield for that period. We then issue, and thereafter on the first day of
compare the resulting semiannual val- each successive 6-month period.
ues with the corresponding values de- (c) Bonds with issue dates from Novem-
termined using only the applicable ber 1, 1986, through February 1, 1993. For
market-based variable investment bonds with issue dates from November
yields. 1, 1986, through February 1, 1993, the re-
(b) Market-based variable investment demption values increase on the first
yield and resulting values during an ex- day of each month from the third
tended maturity period. For a bond be- through the thirtieth month after
ginning an extended maturity period, issue, and thereafter on the first day of
the market-based variable investment each successive 6-month period.
326
(d) Bonds with issue dates of March 1, curring on or before 5 years from issue
1993, through April 1, 1995. For bonds date are calculated in accordance with
with issue dates of March 1, 1993, § 351.28.
through April 1, 1995, the redemption
values increase on the first day of each § 351.26 What are the interest rates
month from the third through the six- and redemption values for bonds
with issue dates from May 1, 1995
tieth month after issue, and thereafter through April 1, 1997, during semi-
either on the first day of each month annual rate periods that begin 5
or on the first day of each successive 6- years or more after issue date?
month period, whichever accrual sched-
(a) Interest rates. The interest rate for
ule ensures that the actual yield from
a Series EE bond bearing an issue date
issue date to redemption date is in no
of May 1, 1995, through April 1, 1997, for
case less than 4 percent per annum,
semiannual earning periods beginning 5
compounded semiannually.
years from issue date through original
§ 351.23 Are tables of redemption val- maturity, is the long-term savings
ues available for bonds issued prior bond rate as defined in § 351.12.
to May 1, 1995? (b) Redemption values. We calculate
You may obtain the appropriate redemption values for semiannual ac-
yields and tables by downloading from crual dates occurring after 5 years
our website at www.savingsbonds.gov, from issue date, through original ma-
contacting us by email at turity, in accordance with § 351.28, ex-
savbonds@bpd.treas.gov, or by writing cept that the redemption value at the
us at the following address: Bureau of date of original maturity shall not be
the Public Debt, Parkersburg, West less than the denomination (face
Virginia 26106–1328. amount or face value).
SERIES EE SAVINGS BONDS WITH ISSUE § 351.27 What are the interest rates
DATES FROM MAY 1, 1995, THROUGH and redemption values for bonds
with issue dates from May 1, 1995,
APRIL 1, 1997 through April 1, 1997, during an ex-
tended maturity period?
§ 351.24 What are the maturity periods
of bonds with issue dates from May During an extended maturity period
1, 1995, through April 1, 1997? the bond will be subject to the terms
(a) Original maturity. Bonds reach and conditions in effect when it is
original maturity at 17 years after issued, and will continue to earn inter-
issue date. est as described in paragraph § 351.26,
(b) Final maturity. Series EE savings unless the terms and conditions appli-
bonds have an extended maturity pe- cable to an extended maturity period
riod of 13 years, and reach final matu- are expressly amended prior to the be-
rity at 30 years after the issue date. ginning of such period.
Bonds cease to earn interest at final
§ 351.28 How are redemption values
maturity. calculated for bonds with issue
dates from May 1, 1995, through
§ 351.25 What were the interest rates April 1, 1997?
and redemption values for bonds
with issue dates from May 1, 1995, We determine the redemption value
through April 1, 1997, during semi- of a bond on the accrual date imme-
annual rate periods in the first 5 diately following each semiannual
years after issue date? earning period as follows:
(a) Interest rates. The interest rate for (a) We convert the applicable long-
a Series EE bond bearing an issue date term or short-term savings bond rate
of May 1, 1995, through April 1, 1997, for for the semiannual earning period to
semiannual earning periods during the decimal form by dividing by 100, and
first 5 years from issue date, was the adjust it to a semiannual rate by divid-
short-term savings bond rate (see ing by 2.
§ 351.11 for a description of the short- (b) Using redemption values for the
term savings bond rate.) base denomination, as defined in
(b) Redemption values. Redemption § 351.16, we then multiply this rate by
values for semiannual accrual dates oc- the redemption value of the bond at
327
§ 351.29 31 CFR Ch. II (7–1–11 Edition)
the beginning of the semiannual earn- § 351.30 What are interest rates and
ing period. monthly accruals for Series EE
(c) We add the resulting interest bonds with issue dates of May 1,
amount, rounded to the nearest cent, 1997, through April 1, 2005, during
to the redemption value of the bond at the original maturity period?
the beginning of the earning period to Savings bond rates (defined in
produce the redemption value at the § 351.13) apply to earnings during the
next semiannual accrual date. The re- first semiannual rate period beginning
demption value of a bond remains con-
on or after the effective date of the
stant between accrual dates.
rate. Interest is credited on the first
SERIES EE SAVINGS BONDS WITH ISSUE day of each month and compounded
DATES OF MAY 1, 1997, THROUGH APRIL semiannually. Interest accrues begin-
1, 2005 ning with the fourth month from the
issue date. For example, a bond issued
§ 351.29 What are the maturity periods in January has interest first credited
of bonds with issue dates of May 1,
1997, through April 1, 2005? on May 1, which represents one month
of interest because of the 3-month in-
(a) Original maturity—(1) Bonds with terest penalty. The following table
issue dates from May 1, 1997, to May 1, shows, for any given month of issue
2003. Bonds reach original maturity at
with rates announced each May and
17 years after issue date.
November, the months making up the
(2) Bonds with issue dates of June 1,
2003, through April 1, 2005. Bonds reach semiannual rate period during which
original maturity at 20 years after interest is earned at the announced
issue date. rate (disregarding the penalty for
(b) Final maturity. Bonds reach final bonds redeemed prior to 5 years after
maturity at 30 years after the issue the issue date) and the months in
date. Bonds cease to earn interest at which the bonds increase in value. This
final maturity. rate is an annual rate compounded
[68 FR 24796, May 8, 2003, as amended at 70
semiannually.
FR 17288, Apr. 5, 2005]
And rate announce- Then, semiannual rate periods in And bonds increase in value
If issue month is— ment/effective date which interest is earned include on 1st day of months of—
is— months of—
Jan. or Jul ....................................... May 1 ...................... Jul. through Dec ............................ Aug. through Jan.
Feb. or Aug ..................................... May 1 ...................... Aug. through Jan ........................... Sep. through Feb.
Mar. or Sep ..................................... May 1 ...................... Sep. through Feb ........................... Oct. through Mar.
Apr. or Oct ....................................... May 1 ...................... Oct. through Mar ............................ Nov. through Apr.
May or Nov ...................................... May 1 ...................... May through Oct ............................ Jun. through Nov.
Jun. or Dec ...................................... May 1 ...................... Jun. through Nov ........................... Jul. through Dec.
Jan. or Jul ....................................... Nov. 1 ...................... Jan. through Jun ............................ Feb. through Jul.
Feb. or Aug ..................................... Nov. 1 ...................... Feb. through Jul ............................. Mar. through Aug.
Mar. or Sep ..................................... Nov. 1 ...................... Mar. through Aug ........................... Apr. through Sep.
Apr. or Oct ....................................... Nov. 1 ...................... Apr. through Sep ........................... May through Oct.
May or Nov ...................................... Nov. 1 ...................... Nov. through Apr ........................... Dec. through May.
Jun. or Dec ...................................... Nov. 1 ...................... Dec. through May .......................... Jan. through Jun.
§ 351.31 What is the interest penalty January 1, 1998, 9 months later on Oc-
for Series EE bonds with issue tober 1, 1998, we will determine the re-
dates of May 1, 1997, through April demption value by applying the re-
1, 2005, that are redeemed less than demption value calculation formula de-
5 years after the issue date?
scribed in § 351.32 and the savings bonds
If you redeem a Series EE savings rate for that bond at 6 months after the
bond with an issue date of May 1, 1997, issue date on July 1, 1998. The redemp-
through April 1, 2005, less than five tion value of a bond subject to the 3-
years following the issue date, we re-
duce the overall earning period from
the issue date by three months. For ex-
ample, if you redeem a bond issued
328
month interest penalty shall not be re- (b) Value of bonds at original matu-
duced below the issue price. This pen- rity—(1) Definitive bond. At original ma-
alty does not apply to bonds redeemed turity, the redemption value of a defin-
5 years or more after the issue date. itive bond shall not be less than the
face amount/denomination of the bond.
FR 17288, Apr. 5, 2005] (2) Book-entry bond. At original matu-
rity, the redemption value of a book-
§ 351.32 How are redemption values entry bond shall not be less than dou-
calculated for Series EE bonds with ble the purchase price of the bond.
issue dates of May 1, 1997, through
April 1, 2005? § 351.33 What are interest rates and re-
(a) Formula for redemption value. We demption values for Series EE
bonds issued May 1, 1997, through
determine the redemption value of a April 1, 2005, during an extended
bond for the accrual date (the first day maturity period?
of each month beginning with the
During an extended maturity period
fourth month from the issue date) in
the bond will be subject to the terms
accordance with this section and the
and conditions in effect when it is
following formula:
issued and will continue to earn inter-
FV = PV × {[1+(i ÷ 2)] (m/6)} est as described in § 351.30, unless the
where terms and conditions applicable to an
FV (future value) = redemption value on re-
extended maturity period are expressly
demption date rounded to the nearest cent. amended prior to the beginning of such
PV (present value) = redemption value at the period.
beginning of the semiannual rate period
i = savings bonds rate converted to decimal SERIES EE SAVINGS BONDS WITH ISSUE
form by dividing by 100. DATES OF MAY 1, 2005, OR THEREAFTER
m = number of full calendar months out-
standing during the semiannual rate pe- § 351.34 What are the maturity periods
riod. 1 of Series EE bonds with issue dates
of May 1, 2005, or thereafter?
1 The following hypothetical example illus- (a) Original maturity. Bonds reach
trates how this formula is applied: original maturity at 20 years after the
Example, assume a hypothetical savings issue date.
bonds rate of 5.00% effective May 1, 2002, for (b) Final maturity. Bonds reach final
a bond denominated at $25, with an issue
maturity at 30 years after the issue
date of September 1, 1997 and a redemption
value of $16.00 as of September 1, 2002. The date. Bonds cease to earn interest at
February 1, 2003, redemption value is cal- final maturity.
culated as follows: Bonds issue dated in Sep- [70 FR 17288, Apr. 9, 2005]
tember have semiannual rate periods begin-
ning each March 1 and September 1. The first § 351.35 What do I need to know about
semiannual rate period to begin on or after interest rates, penalties, and re-
the effective date of the May 1, 2002, rate demption values for Series EE
would be the period beginning September 1, bonds with issue dates of May 1,
2002. PV, the present value, would be the 2005, or thereafter?
value of the bond at the beginning of the
semiannual rate period, on September 1, 2002. (a) Fixed rate or fixed rate of interest.
The savings bonds rate of 5.00% converted to Fixed rate or fixed rate of interest
a decimal would be 0.05. The number of means the rate of interest for a Series
months, m, is 5 since 5 full calendar months EE savings bond with an issue date of
(September through January) have lapsed May 1, 2005, or thereafter, established
since the beginning of the rate period. FV is by the Secretary or the Secretary’s
then the result of the formula:
designee.
FV = $16.00 × {[1 + (0.05 ÷ 2)] (5/6)} = $16.33 (b) Determination of fixed rate of inter-
after rounding to the nearest cent.
est. (1) The Secretary or the Sec-
Using the example, the FV of a savings retary’s designee determines the fixed
bond with a $50 or larger denomination can
be determined by applying the appropriate
rate of interest, which is established
multiple, for example: $16.33 × ($50.00/$25.00) for the life of the bond, including the
for a bond with a $50.00 face amount; or $16.33 extended maturity period, unless, prior
× ($100.00/$25.00) for a bond with a $100.00 face to the beginning of such maturity pe-
amount. riod, the Secretary either announces a
329
§§ 351.36–351.39 31 CFR Ch. II (7–1–11 Edition)
different fixed rate applicable to the (2) Book-entry bond. At original matu-
extended maturity period, or we ex- rity, the redemption value of a book-
pressly amend the terms and condi- entry bond shall not be less than dou-
tions applicable to the extended matu- ble the purchase price of the bond.
rity period. [70 FR 17289, Apr. 9, 2005]
(2) The Secretary’s determination of
rates of interest and savings bond re- §§ 351.36–351.39 [Reserved]
demption values is final and conclu-
sive. Subpart C—Definitive Series EE
(c) Announcement of fixed rate. (1) The Savings Bonds
Secretary or the Secretary’s designee
will furnish a fixed rate of interest in § 351.40 What are the denominations
announcements published each May 1 and prices of definitive Series EE
and November 1. The effective date of savings bonds?
the rates will be the first day of the We issue definitive bonds in denomi-
month of the announcement. nations of $50, $75, $100, $200, $500,
(2) If the regularly scheduled date for $1,000, $5,000, and $10,000. The purchase
the announcement is a day when the price is one-half the amount of the de-
Treasury is not open for business, then nomination.
the Secretary will make the announce-
§ 351.41 When are definitive Series EE
ment on the next business day; how- savings bonds validly issued?
ever, the effective date of the rates re-
mains the first day of the month of the A definitive bond is validly issued
announcement. when it is registered as provided in 31
(3) The Secretary may announce CFR part 353, and when it bears an
issue date and the validation indicia of
rates at any other time.
an authorized issuing agent.
(4) The most recently announced
fixed rate applies only to bonds pur- § 351.42 What is the issue date of a de-
chased during the six months following finitive Series EE savings bond?
the announcement, or for any other pe- The issue date of a definitive bond is
riod of time announced by the Sec- the first day of the month in which an
retary. authorized issuing agent receives pay-
(d) Monthly accruals. Interest accrues ment of the issue price.
on the first day of each month; that is,
we add the interest earned on a bond § 351.43 Are taxpayer identification
during any given month to its value at numbers (TINs) required for the
the beginning of the following month. registration of a definitive Series
The accrued interest compounds semi- EE savings bond?
annually. The registration of a definitive Se-
(e) Interest penalty for Series EE bonds ries EE savings bond must include the
redeemed less than 5 years after issue TIN of the owner or first-named co-
date. If you redeem a bond with an owner. The TIN of the second-named
issue date of May 1, 2005, or thereafter, coowner or beneficiary is not required
less than five years following the issue but its inclusion is desirable. If the
date, we reduce the overall earning pe- bond is being purchased as a gift or
riod from the issue date by three award and the owner’s TIN is not
months. However, the redemption known, the TIN of the purchaser must
value of a bond subject to the 3-month be included in the registration of the
interest penalty shall not be reduced bond.
below the issue price. This penalty does [71 FR 46857, Aug. 15, 2006]
not apply to bonds redeemed 5 years or
more after the issue date. § 351.44 What amount of definitive Se-
(f) Redemption value of Series EE bonds ries EE savings bonds may I pur-
at original maturity—(1) Definitive bond. chase per year?
At original maturity, the redemption The principal amount of definitive
value of a definitive bond shall not be Series EE savings bonds that may be
less than the face amount/denomina- purchased in the name and TIN of any
tion of the bond. person in any calendar year is limited
330
to $5,000. See 31 CFR 353.10 and 353.11 of § 351.48 May I purchase definitive Se-
this Chapter for rules governing the ries EE savings bonds through em-
computation of amounts and the spe- ployee thrift, savings, vacation, and
cial limitation for employee plans. similar plans?

You may purchase bonds registered
FR 67853, Dec. 3, 2007] in the names of trustees of employee
plans in book-entry form in multiples
§ 351.45 What happens if I purchase of $100 through a designated Federal
definitive Series EE savings bonds Reserve Bank, after we have approved
in excess of the maximum annual the plan as eligible for the special limi-
amount? tation under § 353.13 of this chapter.
If you have bonds issued during any
§ 351.49 How are definitive Series EE
one calendar year in excess of the pre- savings bonds delivered?
scribed maximum annual amount, we
reserve the right to take any action we We deliver definitive bonds by mail
deem necessary to adjust the excess. to your address. If your address is with-
You should obtain instructions for ad- in the United States, its territories or
justment of the excess from us at the possessions, or the Commonwealth of
Puerto Rico, we will deliver bonds at
following address: email at
our risk. Bonds delivered elsewhere
savbonds@bpd.treas.gov, or writing to
will be delivered at your risk; however,
Bureau of the Public Debt, Parkers-
at our discretion, we may require deliv-
burg, WV 26106–1328. ery to an address within the United
§ 351.46 May I purchase definitive Se- States, or refuse delivery to addresses
ries EE savings bonds over-the- in countries referred to in part 211 of
counter? this chapter.
You may purchase definitive bonds § 351.50 How is payment made when
over-the-counter through any issuing definitive Series EE savings bonds
agent qualified under 31 CFR part 317. are redeemed?
To purchase over-the-counter, you (a) Payment in general. A financial in-
must submit a purchase application, stitution qualified as a paying agent
along with payment in the amount of under the provisions of 31 CFR part 321
the issue price to an issuing agent. You will pay the current redemption value
may use any means of payment accept- of a definitive Series EE bond pre-
able to the issuing agent. You may au- sented for payment. The bond must
thorize purchases on a recurring basis meet the requirements for payment
in your application. The issuing agent specified in 31 CFR part 353. You must
bears the burden of collection and the establish your identity and entitle-
risk of loss for non-collection or return ment to redemption to the satisfaction
of the payment. of the agent, in accordance with our in-
structions and identification guide-
lines, and must sign and complete the
FR 52460, Aug. 26, 2010]
request for payment.
§ 351.47 May I purchase definitive Se- (b) Payment to beneficiary or legal rep-
ries EE savings bonds through a resentative. A paying agent may, but is
payroll savings plan? not required to, pay the current re-
demption value of a definitive Series
Treasury discontinued the issuance EE savings bond upon the request of a
of definitive Series EE savings bonds beneficiary if he or she survives the
through a payroll savings plan: owner, or a legal representative des-
(a) Effective October 1, 2010, for ignated in the bond registration by
United States government employees, name and capacity, or a court-ap-
and pointed legal representative of the
(b) Effective January 1, 2011, for all last-deceased registrant’s estate pro-
other employees. vided:
[75 FR 52460, Aug. 26, 2010]
(1) The bond is in order for payment;
and
331
§ 351.51 31 CFR Ch. II (7–1–11 Edition)
(2) The presenter establishes his or § 351.62 How is payment made for pur-
her identity to the satisfaction of the chases of book-entry Series EE sav-
agent in accordance with our instruc- ings bonds?
tions and identification guidelines, and You may only purchase book-entry
signs and completes the request for Series EE savings bonds online through
payment. your New Treasury Direct account.
You may pay for your securities
§ 351.51 How can I find out what my through a debit to your designated ac-
definitive Series EE savings bonds count at a United States depository fi-
are worth? nancial institution, or by applying the
(a) Redemption values. We make re- redemption proceeds of a certificate of
demption values available for defini- indebtedness held in your New Treas-
tive bonds in various formats and ury Direct account.
media. [69 FR 50308, Aug. 16, 2004]
(1) You may determine the redemp-
tion value for definitive bonds on the § 351.63 How are redemption payments
made for my redeemed book-entry
Internet at <http:// Series EE savings bonds?
www.savingsbonds.gov>.
We will make payments electroni-
(2) You may download savings bond
cally by direct deposit, using the ACH
calculators from the Internet at <http:// method, to your designated account at
www.savingsbonds.gov>. a United States depository financial in-
(3) You may obtain paper tables from stitution. You may also direct that a
the Bureau of the Public Debt, Par- payment be used to purchase a certifi-
kersburg, West Virginia 26106–1328. We cate of indebtedness to be held in your
reserve the right to cease making New Treasury Direct account.
paper tables of redemption values
[69 FR 50308, Aug. 16, 2004]
available.
(b) Redemption penalty. For bonds § 351.64 What is the issue date of a
issued after May 1, 1997, redemption book-entry Series EE savings bond?
values published in the tables reflect The issue date of a book-entry Series
the three-month interest penalty ap- EE savings bond is the first day of the
plied to bonds redeemed prior to five month in which the security posts to
years from the issue date. the current holdings of the account
owner.
§§ 351.52–351.59 [Reserved]
[69 FR 50308, Aug. 16, 2004]
Subpart D—Book-Entry Series EE § 351.65 What amount of book-entry

Savings Bonds Series EE savings bonds may I ac-
quire per year?
§ 351.60 How are book-entry Series EE The principal amount of book-entry
savings bonds purchased and held? Series EE savings bonds that you may
Book-entry bonds must be purchased acquire in your name and TIN per cal-
and held online through your New endar year is limited to $5,000.
Treasury Direct account. We provide [72 FR 67853, Dec. 3, 2007]
instructions for opening an account on-
line at <http:// § 351.66 What book-entry Series EE
savings bonds are included in the
www.publicdebt.treas.gov>. computation?
§ 351.61 What are the denominations (a) We include all bonds that you pur-
and prices of book-entry Series EE chased in that calendar year.
savings bonds? (b) Bonds purchased as gifts or in a
fiduciary capacity are not included in
Book-entry bonds are issued in a
the computation for the purchaser.
minimum amount of $25, with addi-
(c) Bonds transferred or delivered
tional increments of one cent. from one New Treasury Direct account
to another New Treasury Direct ac-
count are included in the computation
332
for the recipient, unless the recipient § 351.71 How can I find out what my
has become entitled to the transferred book-entry Series EE savings bonds
bonds due to the death of the reg- are worth?
istered owner. (a) Redemption values. You may ac-
cess redemption values for your book-
§ 351.67 What happens if any person
entry bonds through your New Treas-
purchases book-entry Series EE
savings bonds in excess of the max- ury Direct account.
imum annual amount? (b) Redemption penalty. Redemption
values shown in your New Treasury Di-
We reserve the right to take any ac-
rect account for bonds that are within
tion we deem necessary to adjust the
5 years from issue date reflect the
excess, including the right to remove
three-month interest penalty applied
the excess bonds from your New Treas-
to bonds redeemed prior to five years
ury Direct account and refund the pay-
from the issue date.
ment price to your bank account of
record using the ACH method of pay- §§ 351.72–351.80 [Reserved]
ment.
§ 351.68 Are taxpayer identification Subpart E—Miscellaneous

numbers (TINs) required for reg- Provisions
istration of book-entry Series EE
savings bonds? § 351.81 Is the Education Savings Bond
Program available for Series EE
The TIN of each person named in the savings bonds?
registration is required to purchase a
book-entry bond. You may be able to exclude from in-
come for Federal income tax purposes
§ 351.69 When is a book-entry Series all or part of the interest received on
EE savings bond validly issued? the redemption of qualified bonds dur-
A book-entry bond is validly issued ing the year. To qualify for the pro-
when it is posted to your New Treasury gram, you or the coowner (in the case
Direct account. of definitive savings bonds) must have
paid qualified higher education ex-
§ 351.70 How are redemption values penses during the same year. You also
calculated for book-entry Series EE must have satisfied certain other con-
savings bonds? ditions. This exclusion is known as the
We base current redemption values Education Savings Bond Program. In-
(CRV) for book-entry Series EE savings formation about the program can be
bonds on the definitive savings bond found in Internal Revenue Service Pub-
CRV. We use the CRV for a $100 prin- lications. (For example, see Publica-
cipal amount as calculated in § 351.16 to tion 17, ‘‘Your Federal Income Tax,’’
calculate a CRV prorated to the book- Publication 550, ‘‘Investment Income
entry principal investment amount for and Expenses,’’ and Publication 970,
the corresponding issue and redemp- ‘‘Tax Benefits for Higher Education.’’)
tion dates. Calculated book-entry CRV These publications are available on the
will be rounded to the nearest one IRS Web site at http://www.irs.gov.
cent. 2 The formula is as follows:
§ 351.82 Does Public Debt prohibit the
[Book-entry principal investment ÷ issuance of Series EE savings bonds
$100] × [CRV value for $100 principal in a chain letter scheme?
amount]. We do not permit bonds to be issued
[68 FR 24796, May 8, 2003, as amended at 75 in a chain letter or pyramid scheme.
FR 52460, Aug. 26, 2010] We authorize an issuing agent to refuse
to issue a bond or accept a purchase
order if there is reason to believe that
2 Example:
a purchase is connected with a chain
Calculated value of $25.044
rounds to $25.04; calculated value of $25.045 letter. The agent’s decision is final.
rounds to $25.05.
333
§ 351.83 31 CFR Ch. II (7–1–11 Edition)
§ 351.83 May Public Debt issue Series any person or persons of unnecessary
EE savings bonds only in book- hardship:
entry form? (a) If such action would not be incon-
We reserve the right to issue bonds sistent with law or equity;
only in book-entry form. (b) If it does not impair any material
existing rights; and
§ 351.84 Does Public Debt make any (c) If we are satisfied that such ac-
reservations as to issue of Series EE tion would not subject the United
savings bonds? States to any substantial expense or li-
We may reject any application for ability.
Series EE bonds, in whole or in part.
We may refuse to issue, or permit to be § 351.86 What is the role of Federal Re-
issued, any bonds in any case or class serve Banks and Branches?
of cases, if we deem the action to be in (a) Federal Reserve Banks and
the public interest. Our action in any Branches are fiscal agents of the
such respect is final. United States. They are authorized to
perform such services as we may re-
§ 351.85 May Public Debt waive any quest of them, in connection with the
provision in this part? issue, servicing and redemption of Se-
We may waive or modify any provi- ries EE bonds.
sion of this part in any particular case (b) We have currently designated the
or class of cases for the convenience of following Federal Reserve Offices to
the United States or in order to relieve provide savings bond services:
Servicing site Reserve district served Geographic area served
Federal Reserve Bank, Buffalo Branch, 160 Dela- New York, Boston ......... Connecticut, Maine, Massachusetts, New Hamp-
ware Avenue, Buffalo, NY 14202. shire, New Jersey (northern half), New York,
Rhode Island, Vermont, Puerto Rico, Virgin Is-
lands.
Federal Reserve Bank, Pittsburgh Branch, 717 Cleveland, Philadelphia Delaware, Kentucky (eastern half), New Jersey,
Grant Street, Pittsburgh, PA 15219. (southern half), Ohio, Pennsylvania, West Vir-
ginia (northern panhandle only).
Federal Reserve Bank of Richmond, 701 East Richmond, Atlanta ......... Alabama, District of Columbia, Florida, Georgia,
Byrd Street, Richmond, VA 23219. Louisiana (southern half), Maryland, Mis-
sissippi (southern half), North Carolina, South
Carolina, Tennessee (eastern half), Virginia,
West Virginia (except northern panhandle).
Federal Reserve Bank of Minneapolis, 90 Hen- Minneapolis, Chicago. ... Illinois (northern half), Indiana (northern half),
nepin Avenue, Minneapolis, MN 55401. Iowa, Michigan, Minnesota, Montana, North
Dakota, South Dakota, Wisconsin.
Federal Reserve Bank of Kansas City, 925 Grand Dallas, San Francisco, Alaska, Arizona, Arkansas, California, Colorado,
Boulevard, Kansas City, MO 64106. Kansas City, St. Louis. Hawaii, Idaho, Illinois (southern half), Indiana
(southern half), Indiana (southern half), Kan-
sas, Kentucky (western half), Louisiana (north-
ern half), Mississippi (northern half), Missouri,
Nebraska, Nevada, New Mexico, Oklahoma,
Oregon, Tennessee (western half), Texas,
Utah, Washington, Wyoming, Guam.
§ 351.87 May Public Debt revise, sup- political subdivision of a State, except for
plement or amend the terms of this estate or inheritance taxes. (See 31 U.S.C.
offering? 3124.)
2. What reporting methods are available for
We may revise, supplement or amend savings bonds?
the terms of this offering at any time. (a) Reporting methods. You may use either
of the following two methods for reporting
APPENDIX TO PART 351—TAX the increase in the redemption value of the
CONSIDERATIONS bond for Federal income tax purposes:
(1) Cash basis method. You may defer re-
1. What are some general tax considerations? porting the increase to the year of final ma-
General. Interest on savings bonds is sub- turity, redemption, or other disposition,
ject to taxes imposed under the Internal whichever is earliest; or
Revenue Code of 1986, as amended. The bonds (2) Accrual basis method. You may elect to
are exempt from taxation by any State or report the increase each year, in which case
334
the election applies to all Series EE bonds § 352.0 Offering of bonds.
that you then own, those subsequently ac-
quired, and to any other obligations pur- The Secretary of the Treasury of-
chased on a discount basis. fered to the people of the United
(b) Changing methods. If you use the cash States, United States Savings Bonds of
basis method, you may change to the accrual Series HH in exchange for eligible
basis method without obtaining permission United States Savings Bonds of Series
from the Internal Revenue Service. However, E and EE and United States Savings
once you elect to use the accrual basis meth- Notes (Freedom Shares). This offering
od in paragraph (a)(2), you may change the is being withdrawn and will terminate
method of reporting the increase only by fol- at the close of business on August 31,
lowing the specific procedures prescribed by
2004.
the Internal Revenue Service for making a
method change. For further information, you [69 FR 40318, July 2, 2004]
may contact the Internal Revenue Service
director for your area, or the Internal Rev- § 352.1 Governing regulations.
enue Service, Washington, DC 20224.
Series HH bonds are subject to the
3. What transactions have potential tax con-
regulations of the Department of the
sequences?
Treasury, now or hereafter prescribed,
The following types of transactions, among
others, may have potential tax con- governing United States Savings Bonds
sequences: of Series EE and HH contained in De-
(a) A reissue that affects the rights of any partment of the Treasury Circular,
of the persons named on a definitive Series Public Debt Series No. 3–80, as amend-
EE savings bond may have tax consequences ed (31 CFR part 353), hereinafter re-
for the owner. ferred to as Circular No. 3–80.
(b) The transfer of a book-entry Series EE
savings bond from one owner to another may § 352.2 Description of bonds.
have tax consequences for the transferor. (a) General. Series HH bonds were
(c) The redemption of a book-entry Series issued only in registered form and are
EE savings bond by the secondary owner
nontransferable. The bonds are distin-
may have tax consequences for the primary
owner.
guishable by the portraits, color, bor-
(d) The purchase of a Series EE savings der design, tax-deferral legend, and
bond as a gift may have gift tax context material.
sequences. (b) Denominations and prices. Series
HH bonds were issued at face amount
and are in denominations of $500, $1,000,
PART 352—OFFERING OF UNITED $5,000 and $10,000.
STATES SAVINGS BONDS, SERIES HH (c) Term. Each bond bears an issue
date which is the date from which in-
Sec. terest is earned. The date was estab-
352.0 Offering of bonds. lished as provided in § 352.7(f). Series
352.1 Governing regulations. HH bonds have an original maturity
352.2 Description of bonds. period of 10 years and have been grant-
352.3 Registration and issue. ed an extended maturity period of 10
352.4 Limitation on purchases. years; they will reach final maturity 20
352.5 Authorized issuing and paying agents. years from their issue dates.
352.6 [Reserved] (d) Redemption. A Series HH bond
352.7 Issues on exchange.
may be redeemed after six months from
352.8 Reinvestment of matured Series H
its issue date. The Secretary of the
bonds.
Treasury may not call Series HH bonds
352.10 Taxation.
for redemption prior to maturity. In
352.11 Reservation as to issue of bonds.
any case where Series HH bonds are
352.12 Waiver.
surrendered to an authorized paying
352.13 Fiscal agents. agent for redemption in the month
352.14 Reservation as to terms of offer. prior to an interest payment date, re-
demption will not be deferred but will
AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 31 be made in regular course, unless the
U.S.C. 3105. presenter specifically requests that the
SOURCE: 54 FR 40249, Sept. 29, 1989, unless transaction be delayed until that date.
otherwise noted. A request to defer redemption made
335
§ 352.2 31 CFR Ch. II (7–1–11 Edition)
more than one month preceding the in- HH bonds with issue dates of January
terest payment date will not be accept- 1, 1980, through October 1, 1980, were
ed. originally offered to yield 6.5 percent
(e) Investment yield (interest). (1) Dur- per annum, paid semiannually. The
ing original maturity. Interest pay- yield to original maturity was in-
ments on Series HH bonds will produce creased by 1 percent, effective with the
the investment yields specified below first full semiannual interest accrual
during their original maturity period: period beginning on or after November
(i) Bonds with issue dates of January 1, 1, 1980, and an additional 1 percent, ef-
2003, and thereafter. The investment fective with the first full semiannual
yield applicable to Series HH bonds interest accrual period beginning on or
issued on or after January 1, 2003, will after May 1, 1981.
be furnished in rate announcements by (2) During extended maturity. The in-
the Secretary or the Secretary’s des- vestment yields for Series HH bonds
ignee. The rate announced will apply to during their extended maturity periods
bonds issued during the period covered are as specified in paragraphs (e)(2)(i),
by the announcement. (ii), and (iii) of this section.
(ii) Bonds with issue dates of March 1, (i) Bonds that enter an extended matu-
1993, through December 1, 2002. Series rity period on or after January 1, 2003.
HH bonds with issue dates of March 1, The investment yield applicable to Se-
1993, through December 1, 2002, yield 4 ries HH bonds that enter an extended
percent per annum, paid semiannually, maturity period on or after January 1,
to original maturity. 2003, will be furnished in rate an-
(iii) Bonds with issue dates of November nouncements by the Secretary or the
1, 1986, through February 1, 1993. Series Secretary’s designee. The rate an-
HH bonds with issue dates of November nounced will apply to bonds that enter
1, 1986, through February 1, 1993, yield an extended maturity period during the
6 percent per annum, paid semiannu-
period covered by the announcement.
ally, to original maturity.
(ii) Bonds that entered an extended ma-
(iv) Bonds with issue dates of November
turity period from March 1, 1993, through
1, 1986, through September 1, 1989. Series
HH bonds with issue dates of November December 1, 2002. The investment yield
1, 1986, through September 1, 1989, will applicable to Series HH bonds that en-
yield 6 percent per annum, paid semi- tered an extended maturity period
annually, to original maturity. from March 1, 1993, through December
(v) Bonds with issue dates of November 1, 2002, is 4 percent per annum, paid
1, 1982, through October 1, 1986. Series semiannually.
HH bonds with issue dates of November (iii) Bonds that entered an extended
1, 1982, through October 1, 1986, will maturity period from January 1, 1990,
yield 7.5 percent per annum, paid semi- through February 1, 1993. The invest-
annually, to original maturity. ment yield applicable to Series HH
(vi) Bonds with issue dates of May 1, bonds that entered into an extended
1981, through October 1, 1982. Series HH maturity period from January 1, 1990,
bonds with issue dates of May 1, 1981, through February 1, 1993, is 6 percent
through October 1, 1982, will yield 8.5 per annum, paid semiannually.
percent per annum, paid semiannually, (f) Payment of interest. The interest on
to original maturity. a Series HH bond is paid semiannually
(vii) Bonds with issue dates of Novem- beginning six months from the issue
ber 1, 1980, through April 1, 1981. Series date. Interest ceases at final maturity
HH bonds with issue dates of November or, if the bond is redeemed before final
1, 1980, through April 1, 1981, were origi- maturity, as of the end of the interest
nally offered to yield 7.5 percent per period preceding the date of redemp-
annum, paid semiannually. The yield tion. If the redemption date falls on an
to original maturity was increased by 1 interest payment date, interest ceases
percent, effective with the first full on that date.
semiannual interest accrual period be- (1) Bonds issued on or after October 1,
ginning on or after May 1, 1981. 1989. Interest on Series HH bonds issued
(viii) Bonds with issue dates of January on or after October 1, 1989, will be paid
1, 1980, through October 1, 1980. Series by the automated clearing house (ACH)
336
method to the registered owner or co- 31 CFR part 353, also published as De-
owner’s account at a financial institu- partment of the Treasury Circular,
tion, unless the Bureau of the Public Public Debt Series No. 3–80, and bears
Debt determines that extraordinary an issue date and appropriate valida-
circumstances warrant payment by tion indicia.
check or other means. (c) Taxpayer identifying number. The
(2) Bonds issued prior to October 1, registration of a bond must include the
1989. Interest on Series HH bonds issued taxpayer identifying number of the
prior to October 1, 1989, will be paid as owner or first-named co-owner. The
follows: taxpayer identifying number of the sec-
(i) By check drawn to the order of the ond-named coowner or beneficiary is
registered owner or both coowners; or not required but its inclusion is desir-
(ii) Upon request, by the ACH method able.
to the owner or coowner’s account at a [54 FR 40249, Sept. 29, 1989, as amended at 57
financial institution. FR 14286, Apr. 17, 1992; 71 FR 46857, Aug. 15,
(g) Rules governing payment of interest 2006]
by the ACH method. Provisions con-
tained in § 353.31 of Department of the § 352.4 Limitation on purchases.
Treasury Circular, Public Debt Series Series HH bonds issued under the
No. 3–80, as amended (31 CFR part 353), terms of this Circular were not subject
apply to the submission of deposit ac- to a purchase limitation.
count information for Series HH inter-
est payments made on and after Octo- [54 FR 40249, Sept. 29, 1989, as amended at 69
ber 1, 1989, for which ACH payment: FR 40318, July 2, 2004]
(1) Is required under paragraph (f)(1) § 352.5 Authorized issuing and paying
of this section; agents.
(2) Is requested by an owner or co-
owner on or after October 1, 1989, pur- Series HH bonds were issued and may
suant to paragraph (f)(2) of this sec- be redeemed only by Federal Reserve
tion; or Banks (see § 352.13) and the Bureau of
(3) Was requested by an owner or co- the Public Debt.
owner prior to October 1, 1989. [69 FR 40318, July 2, 2004]
Interest payments made by the ACH
method on and after October 1, 1989, § 352.6 [Reserved]
will be processed in accordance with 31
CFR part 370. § 352.7 Issues on exchange.
(a) Securities eligible for exchange.
Budget under control number 1535–0094) Prior to the close of business on Au-
gust 31, 2004, owners were permitted to
(h) Tables of interest payments and re- exchange United States Savings Bonds
demption values. Tables showing the in- of Series E and EE and United States
terest payments and redemption values Savings Notes (Freedom Shares) at
of bonds issued under previous revi- their current redemption values for Se-
sions of this Circular will be available ries HH bonds. Series E bonds and sav-
from the Bureau of the Public Debt and ings notes remained eligible for ex-
designated Federal Reserve Banks. change for a period of one year from
[54 FR 40249, Sept. 29, 1989, as amended at 58 the month in which they reached final
FR 60947, Nov. 18, 1993; 59 FR 10540, Mar. 4, maturity. Series EE bonds issued on
1994; 67 FR 79384, Dec. 24, 2002; 69 FR 40318, January 1, 2003, or earlier, became eli-
July 2, 2004] gible for exchange six months after
their issue dates. Series EE bonds
§ 352.3 Registration and issue. issued on February 1, 2003, or there-
(a) Registration. Series HH bonds may after, became eligible for exchange 12
be registered as set forth in subpart B months after their issue dates.
of 31 CFR part 353, also published as (b) Basis for issue. Series HH bonds
Department of the Treasury Circular, were issued on exchange by an author-
Public Debt Series No. 3–80. ized issuing agent upon receipt of a
(b) Validity of issue. A bond is validly properly executed exchange application
issued when it is registered as provided with eligible securities, and additional
337
§ 352.7 31 CFR Ch. II (7–1–11 Edition)
cash, if any, and any supporting evi- owner on the Series HH bonds. A co-
dence that was required under the reg- owner or beneficiary was also per-
ulations. If eligible securities were submitted to be named. The ‘‘principal co-
mitted directly to a Federal Reserve owner’’ was the coowner who purchased
Bank referred to in § 351.13, each was the securities presented for exchange
required to bear a properly signed and with his or her own funds, or received
certified request for payment. Checks them as a gift, inheritance or legacy,
in payment of additional cash needed or as a result of judicial proceedings,
to complete a transaction (see para- and had them reissued in coownership
graph (d) of this section) were required form, provided he or she had received
to be drawn to the order of the Federal no contribution in money or money’s
Reserve Bank. worth for designating the other co-
(c) Role of financial institutions. De- owner on the securities.
partment of the Treasury Circular No. (3) If the securities presented for ex-
750, current revision (31 CFR part 321), change were in coownership form, and
authorizes financial institutions quali- both coowners shared in their purchase
fied as paying agents for savings bonds or received them jointly as a gift, in-
and notes to redeem eligible securities heritance, or legacy or as a result of ju-
presented for exchange and to forward dicial proceedings, both persons were
an exchange application and full pay- required to be named as coowners on
ment to a Federal Reserve Bank re- the Series HH bonds.
ferred to in § 351.13 for the issue of Se- (4) If the securities presented for ex-
ries HH bonds. The securities redeemed
change were in beneficiary form, the
on exchange by such an institution
owner was required to be named on the
were required to be securities that it is
Series HH bonds as owner or first-
authorized to redeem for cash.
named coowner. If the owner was de-
(d) Computation of issue price. The
ceased, a surviving beneficiary was re-
total current redemption value of the
quired to be named as owner or first-
eligible securities submitted for ex-
named coowner. In either case, a co-
change in any one transaction was re-
owner or beneficiary was permitted to
quired to be $500 or more. If the current
be named.
redemption value was an even multiple
of $500, Series HH bonds were required (f) Issue date. Series HH bonds issued
to be issued in that exact amount. If on exchange were dated as of the first
the current redemption value exceeded, day of the month in which the eligible
but was not an even multiple of $500, securities presented for exchange were
the owner had the option either: redeemed by an authorized paying
(1) To add the cash necessary to bring agent, as evidenced in the payment
the amount of the application to the stamp on the securities and the ex-
next higher multiple of $500, or change application.
(2) To receive a payment to reduce (g) Tax-deferred exchanges. (1) Con-
the amount of the application to the tinuation of tax deferral. Pursuant to
next lower multiple of $500. the provisions of the Internal Revenue
(e) Registration. A Series HH bond Code of 1954, as amended, an owner who
issued on exchange was permitted to be had not been reporting the interest on
registered in any form authorized in his or her Series E or EE bonds and
subpart B of Circular No. 3–80, subject savings notes on an accrual basis for
to the following restrictions: Federal income tax purposes, and who
(1) If the securities submitted for ex- exchanged those securities for Series
change were in single ownership form, HH bonds, was permitted to continue
the owner was required to be named as to defer reporting the interest on the
owner or first-named coowner on the securities exchanged until the taxable
Series HH bonds. A coowner or bene- year in which the Series HH bonds re-
ficiary was permitted to be named. ceived in the exchange reach final ma-
(2) If the securities submitted for ex- turity, are redeemed, or are otherwise
change were in coownership form, and disposed of, whichever is earlier. A re-
one coowner was the ‘‘principal co- issue transaction that affects any of
owner’’, that person was required to be the persons required to be named on
named as owner or first-named co- the Series HH bonds, as set forth in
338
paragraph (e) of this section, may re- bonds. Tax deferral granted to interest
sult in termination of the tax deferral earned on securities exchanged for Se-
privilege. ries H bonds was not permitted to be
(2) Tax deferral legend. Each bond continued when the Series H bonds
issued in a tax-deferred exchange bore reached final maturity and their pro-
a legend showing how much of its issue ceeds were reinvested in Series HH
price represented interest on the secu- bonds. The amount appearing in the
rities exchanged. This interest must be legend on a matured Series H bond on
treated as income for Federal income which tax deferral was granted must be
tax purposes and reported in accord- reported for Federal income tax pur-
ance with paragraph (g)(1) of this sec- poses for the year of such final matu-
tion. rity.
(3) Reporting of interest paid to owner. (b) Rules. The reinvestment trans-
To the extent that it represented inter- action were subject to the rules gov-
est earned on the securities presented erning exchanges, as set forth in § 352.7
for exchange, an amount paid to an of this Circular, and the Series HH
owner in accordance with paragraph (d) bonds issued on reinvestment were
of this section was reportable as in- identical in all respects with those
come for Federal income tax purposes issued in a non-tax-deferred exchange.
for the year in which it was paid. Pur-
suant to 26 CFR 1.6049.4, a paying agent [54 FR 40249, Sept. 29, 1989, as amended at 69
was required to report interest income FR 40319, July 2, 2004]
of $10 or more included in any amount § 352.9 Delivery of bonds.
paid in an exchange transaction to the
payee and to the Internal Revenue Authorized issuing agents delivered
Service on Form 1099–INT or an ap- Series HH bonds by mail at the risk
proved substitute. A separate report and expense of the United States to the
was permitted to be made for each ex- address given by the applicant, if it is
change transaction in which interest in within the United States, one of its
the amount of $10 or more was paid, or territories or possessions, or the Com-
all interest paid in both cash redemp- monwealth of Puerto Rico. No mail de-
tion and exchange transactions was liveries elsewhere were made. Bonds
permitted to be aggregated and re- acquired by a citizen of the United
ported annually should the total States residing abroad were delivered
amount be $10 or more. only to such address in the United
(h) Exchanges without tax deferral. The States as the applicant directs.
rules prescribed for exchanges under [54 FR 40249, Sept. 29, 1989, as amended at 69
paragraphs (a) through (f) of this sec- FR 40319, July 2, 2004]
tion also applied to exchanges by own-
ers who report the interest earned on § 352.10 Taxation.
their bonds of Series E and EE and sav- The interest paid on Series HH bonds
ings notes annually for Federal income is subject to all taxes imposed under
tax purposes, or elect to report all such the Internal Revenue Code of 1954, as
interest that was not previously re- amended. The bonds are subject to es-
ported for the taxable year of the ex- tate, inheritance, gift, or other excise
change. Series HH bonds issued in a taxes, whether Federal or State, but
nontax-deferred exchange were re- are exempt from all taxation now or
quired to show a ‘‘0’’ in the tax-deferral hereafter imposed on the principal or
legend. interest by any State or any local tax-
[69 FR 40318, July 2, 2004] ing authority.
§ 352.8 Reinvestment of matured Se- § 352.11 Reservation as to issue of

ries H bonds. bonds.
(a) General. Prior to the close of busi- The Commissioner of the Public
ness on August 31, 2004, the proceeds of Debt, as delegate of the Secretary of
matured Series H and HH bonds, the Treasury, reserved the right to re-
whether purchased for cash or issued in ject any application for Series HH
exchange for other securities, were per- bonds, in whole or in part, and to
mitted to be reinvested in Series HH refuse to issue or permit to be issued
339
§ 352.12 31 CFR Ch. II (7–1–11 Edition)
any bonds in any case or class of cases, (c) The Commissioner is satisfied
if the action was deemed to be in the that such action would not subject the
public interest. The Commissioner’s United States to any substantial ex-
action in such respect was final. pense or liability.
FR 40319, July 2, 2004] § 352.13 Fiscal agents.
(a) Federal Reserve Banks and
§ 352.12 Waiver. Branches, referred to below, as fiscal
The Commissioner of the Public agents of the United States, are au-
Debt, as delegate of the Secretary of thorized to perform such services as
the Treasury, may waive or modify any may be requested of them by the Sec-
provision of this Circular in any par- retary of the Treasury, or his or her
ticular case or class of cases for the delegate, in connection with the issue,
convenience of the United States or in
servicing, and redemption of Series HH
order to relieve any person or persons
bonds.
of unnecessary hardship if:
(a) Such action would not be incon- (b)(1) The following Federal Reserve
sistent with law or equity; Offices have been designated to provide
(b) It does not impair any existing savings bond services:
rights; and
Reserve districts
served
14240.
PA 15230.
23261.
GU.
(2) Until March 1, 1996, other Federal PART 353—REGULATIONS GOV-

Reserve Offices may continue to pro- ERNING DEFINITIVE UNITED
vide some savings bond services, but STATES SAVINGS BONDS, SERIES
such services will be phased out over
the period prior to that date.
EE AND HH
[59 FR 10541, Mar. 4, 1994] Subpart A—General Information
§ 352.14 Reservation as to terms of Sec.

offer. 353.0 Applicability.
353.1 Official agencies.
The Secretary of the Treasury may 353.2 Definitions.
at any time or from time to time sup- 353.3 Converting definitive savings bonds to
plement or amend the terms of this of- book-entry bonds in New Treasury Di-
fering of bonds. rect.
Subpart B—Registration
353.5 General rules.
353.6 Restrictions on registration.
353.7 Authorized forms of registration.
353.8 Chain letters prohibited.
340
Subpart C—Limitations on Annual 353.51 Requests for reissue.

Purchases
Subpart J—Certifying Officers
353.10 Amounts which may be purchased.
353.11 Computation of amount. 353.55 Individuals authorized to certify.
353.12 Disposition of excess. 353.56 General instructions and liability.
353.13 Employee plans—Conditions of eligi- 353.57 When a certifying officer may not
bility. certify.
353.58 Forms to be certified.
Subpart D—Limitations on Transfer or
Pledge Subpart K—Minors, Incompetents, Aged
Persons, Absentees, et al.
353.15 Transfer.
353.16 Pledge. 353.60 Payment to representative of an es-
tate.
Subpart E—Judicial Proceedings 353.61 Payment after death.
353.62 Payment to minors.
353.20 General. 353.63 Payment to a parent or other person
353.21 Payment to judgment creditors. on behalf of a minor.
353.22 Payment or reissue pursuant to judg- 353.64 Payment, reinvestment, or ex-
ment. change—voluntary guardian of an inca-
353.23 Evidence. pacitated person.
353.24 Payment pursuant to judicial or ad- 353.65 Reissue.
ministrative forfeiture.
Subpart L—Deceased Owner, Coowner or
Subpart F—Relief for Loss, Theft, Destruc-
Beneficiary
tion, Mutilation, Defacement, or Non-
receipt of Bonds 353.70 General rules governing entitlement.
353.71 Decedent’s estate
353.25 General. 353.72 [Reserved]
353.26 Application for relief—After receipt
of bond. Subpart M—Fiduciaries
353.27 Application for relief—Nonreceipt of
bond. 353.75 Payment or reissue during the exist-
353.28 Recovery or receipt of bond before or ence of the fiduciary estate.
after relief is granted. 353.76 Payment or reissue after termination
353.29 Adjudication of claims. of the fiduciary estate.
353.77 Exchanges by fiduciaries.
Subpart G—Interest
353.30 Series EE bonds.
Subpart N—Private Organizations (Cor-
353.31 Series HH bonds. porations, Associations, Partnerships,
et cetera) and Governmental Agen-
Subpart H—General Provisions for Payment cies, Units and Officers
353.35 Payment (redemption). 353.80 Payment to corporations or unincor-
353.36 Payment during life of sole owner. porated associations.
353.37 Payment during lives of both co- 353.81 Payment to partnerships.
owners. 353.82 Reissue or payment to successors of
353.38 Payment during lifetime of owner of corporations, unincorporated associa-
beneficiary bond. tions, or partnerships.
353.39 Surrender for payment. 353.83 Reissue or payment on dissolution of
353.40 Special provisions for payment. corporation or partnership.
353.41 Partial redemption. 353.84 Payment to certain institutions.
353.42 Nonreceipt or loss of check issued in 353.85 Reissue in name of trustee or agent
payment. for reinvestment purposes.
353.43 Effective date of request for payment. 353.86 Reissue upon termination of invest-
353.44 Withdrawal of request for payment. ment agency.
353.87 Payment to governmental agencies,
Subpart I—Reissue and Denominational units, or their officers.
Exchange
Subpart O—Miscellaneous Provisions
353.45 General.
353.46 Effective date of request for reissue. 353.90 Waiver of regulations.
353.47 Authorized reissue—during lifetime. 353.91 Additional requirements; bond of in-
353.48 Restrictions on reissue. demnity.
353.49 Correction of errors. 353.92 Supplements, amendments, or revi-
353.50 Change of name. sions.
341
§ 353.0 31 CFR Ch. II (7–1–11 Edition)
AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 31 verted to book-entry bonds through
U.S.C. 3105, 3125. New Treasury Direct.
SOURCE: 44 FR 76441, Dec. 26, 1979, unless [68 FR 24805, May 8, 2003, as amended at 70
otherwise noted. FR 14941, Mar. 23, 2005]
Subpart A—General Information § 353.1 Official agencies.

§ 353.0 Applicability. the Department of the Treasury is re-
(a) The regulations in this part gov- sponsible for administering the Savings
ern definitive (paper) Series EE savings Bonds Program. Authority to process
bonds that have not been converted to transactions has been delegated to Fed-
eral Reserve Banks and Branches in
book-entry bonds through New Treas-
the list in paragraph (b) of this section,
ury Direct and definitive Series HH
as fiscal agents of the United States.
savings bonds. These bonds bear issue (b) Communications concerning
dates of January 1, 1980, or thereafter. transactions and requests for forms
(b) The regulations in 31 CFR part 315 should be addressed to:
govern all other definitive United (1) A Federal Reserve Bank or Branch
States Savings Bonds and Savings in the list below; the Bureau of the
Notes. Public Debt, 200 Third Street, Parkers-
(c) The regulations in 31 CFR part 363 burg, WV 26101; or the Bureau of the
govern Series EE savings bonds that Public Debt, Washington, DC 20226.
were originally issued as book-entry (2)(i) The following Federal Reserve
bonds in New Treasury Direct and Se- Offices have been designated to provide
ries EE savings bonds that were con- savings bond services:
Reserve districts
served
14240.
PA 15230.
23261.
City, 925 Grand Avenue, Kansas cisco, Kansas KS, KY (western half), LA (northern half), MO, NE, NM, NV, OK,
City, MO 64198. City, St. Louis. OR, TN (western half), TX, WA, WY, UT and GU.
(ii) Until March 1, 1996, other Federal finitive United States Savings Bond of
Reserve Offices may continue to pro- Series EE or HH.
vide some savings bond services, but (b) Converted bond means a savings
such services will be phased out over bond originally issued as a definitive
the period prior to that date. bond that has been surrendered to us
(c) Notices and documents must be and converted to a book-entry savings
filed with the agencies referred to bond to be maintained by Treasury
above and as indicated in these regula- solely as a computer record.
tions. (c) Incompetent means an individual
who is incapable of handling his or her
[44 FR 76441, Dec. 26, 1979, as amended at 59
business affairs because of a legal,
FR 10541, Mar. 4, 1994]
mental or medical disability, except
§ 353.2 Definitions. that a minor is not an incompetent
solely because of age.
(a) Bond, or Series EE or HH savings (d) Inscription means the information
bond, as used in this part, means a de- that is printed on the face of the bond.
342
(e) Issuing agent means an organiza- (o) Voluntary guardian means an indi-
tion that has been qualified under the vidual who is recognized as authorized
provisions of Department of the Treas- to act for an incompetent, as provided
ury Circular, Public Debt Series No. 4– by § 353.64.
67, current revision (31 CFR part 317), (p) Voluntary representative means the
to issue savings bonds. person qualified by the Department of
(f) Paying agent means a financial in- the Treasury to request payment or
stitution that has been qualified under distribution of a decedent’s savings
the provisions of Department of the bonds pursuant to § 353.71.
sion (31 CFR part 321), to make pay- FR 24805, May 8, 2003; 70 FR 14941, Mar. 23,
ment of savings bonds. 2005; 70 FR 57430, Sept. 30, 2005; 71 FR 46857,
(g) Payment means redemption, un- Aug. 15, 2006]
less otherwise indicated by context.
(h) Person means any legal entity in- § 353.3 Converting definitive savings
cluding, but without limitation, an in- bonds to book-entry bonds in New
dividual, corporation (public or pri- Treasury Direct.
vate), partnership, unincorporated as- Series EE savings bonds that were
sociation, or fiduciary estate. originally issued as definitive bonds
(i) Personal trust estates means trust may be converted to book-entry bonds
estates established by natural persons through New Treasury Direct, an on-
in their own right for the benefit of line system for holding Treasury secu-
themselves or other natural persons in rities. The Web address for New Treas-
whole or in part, and common trust ury Direct is http://
funds comprised in whole or in part of www.treasurydirect.gov. Bond owners
such trust estates. who wish to convert their definitive
(j) Registration means that the names savings bonds should follow online in-
of all persons named on the bond and structions for conversion. Regulations
the taxpayer identification number governing converted bonds are found at
(TIN) of the owner, first-named co- 31 CFR part 363.
owner, or purchaser of a gift bond are
[70 FR 14941, Mar. 23, 2005]
maintained on our records.
(k) Reissue means the cancellation
and retirement of a bond and the Subpart B—Registration
issuance of a new bond or bonds of the
same series, same issue date, and same § 353.5 General rules.
total face amount. (a) Registration is conclusive of owner-
(l) Representative of the estate of a ship. Savings bonds are issued only in
minor, incompetent, aged person, absen- registered form. The registration must
tee, et al. means the court-appointed or express the actual ownership of, and in-
otherwise qualified person, regardless terest in, the bond. The registration is
of title, who is legally authorized to conclusive of ownership, except as pro-
act for the individual. The term does vided in § 353.49.
not include parents in their own right, (b) Requests for registration. Registra-
voluntary or natural guardians, or the tions requested must be clear, accurate
executors or administrators of dece- and complete, conform substantially
dents’ estates. with one of the forms set forth in this
(m) Surrender means the actual re- subpart, and include the taxpayer iden-
ceipt of a bond with an appropriate re- tifying number of the owner or first-
quest for payment or reissue by either named coowner. The taxpayer identi-
a Federal Reserve Bank or Branch, the fying number of the second-named co-
Bureau of the Public Debt, or, if a pay- owner or beneficiary is not required
ing agent is authorized to handle the but its inclusion is desirable. The reg-
transaction, the actual receipt of the istration of all bonds owned by the
bond and the request for payment by same person, organization, or fiduciary
the paying agent. should be uniform with respect to the
(n) Taxpayer identifying number means name of the owner and any description
a social security account number or an of the fiduciary capacity. An individual
employer identification number. should be designated by the name he or
343
§ 353.6 31 CFR Ch. II (7–1–11 Edition)
she is ordinarily known by or uses in beneficiary or, on authorized reissue,

business, including at least one full owner, unless the nonresident alien is a
given name. The name may be preceded resident of an area with respect to
or followed by any applicable title, which the Department of the Treasury
such as Miss, Mr., Mrs., Ms., Dr., Rev., restricts or regulates the delivery of
M.D., or D.D.. A suffix, such as Sr. or checks drawn against funds of the
Jr., must be included when ordinarily United States or its agencies or instru-
used or when necessary to distinguish mentalities. See Department of the
the owner from another member of his Treasury Circular No. 655, current revi-
family. A married woman’s own given sion (31 CFR part 211). Registration is
name, not that of her husband, must be not permitted in any form which in-
used; for example, Mary A. Jones or cludes the name of any alien who is a
Mrs. Mary A. Jones, NOT Mrs. Frank B. resident of any restricted area.
Jones. The address must include, where (d) Minors. (1) Minors may purchase
appropriate, the number and street, with their wages, earnings, or other
route, or any other local feature, city, funds belonging to them and under
State, and ZIP Code. their control bonds registered in their
(c) Registration of bonds purchased as
names alone or with a coowner or bene-
gifts. If the bonds are purchased as
ficiary.
gifts, awards, prizes, etc., and the tax-
payer identifying number of the in- (2) Bonds purchased by another per-
tended owners is not known, the pur- son with funds belonging to a minor
chaser’s number must be furnished. not under legal guardianship or similar
Bonds so inscribed will not be associ- fiduciary estate must be registered,
ated with the purchaser’s own hold- without a coowner or beneficiary, in
ings. Bonds so registered will not be as- the name of the minor or a natural
sociated with the purchaser’s own hold- guardian on behalf of a minor.
ings. If the purchaser so requests, a (3) Bonds purchased with funds of an-
bond may be inscribed to provide a other may be registered to name the
‘‘Mail to’’ instruction, followed by a minor as owner, coowner, or bene-
delivery name and address. No rights of ficiary. If the minor is under legal
ownership are conferred on such des- guardianship or similar fiduciary es-
ignee. tate, the registration must include an
appropriate reference to it.
FR 575, Jan. 5, 1990; 71 FR 46857, Aug. 15, 2006] (4) Bonds purchased as a gift to a
minor under a gift-to-minors statute
§ 353.6 Restrictions on registration. must be registered as prescribed by the
(a) Natural persons. Only an indi- statute and no coowner or beneficiary
vidual in his or her own right may be may be named.
designated as coowner or beneficiary (5) Bonds purchased by a representa-
along with any other individual, tive of a minor’s estate must be reg-
whether on original issue or reissue, istered in the name of the minor and
except as provided in § 353.7(f). must include in the registration an ap-
(b) Residence. The designation of an propriate reference to the guardianship
owner or first-named coowner is re- or similar fiduciary estate. Bonds pur-
stricted, on original issue only, to per- chased by a representative of the es-
sons (whether individuals or others) tates of two or more minors, even
who are: though appointed in a single pro-
(1) Residents of the United States, its ceeding, must be registered in the
territories or possessions, or the Com- name of each minor separately with ap-
monwealth of Puerto Rico; propriate reference to the guardianship
(2) Citizens of the United States re- or similar fiduciary estate.
siding abroad; (e) Incompetents. Bonds may be reg-
(3) Civilian employees of the United istered to name as owner, coowner, or
States or members of its armed forces, beneficiary an incompetent for whose
regardless of their residence or citizen- estate a guardian or similar represent-
ship; and ative has been appointed, except that a
(c) Nonresident aliens. A nonresident coowner or beneficiary may not be
alien may be designated co-owner or named on bonds purchased with funds
344
belonging to the incompetent. The reg- name of any person or persons or any
istration must include appropriate ref- organization acting as fiduciary of a
erence to the guardianship or similar single fiduciary estate, but not where
fiduciary estate. Bonds should not be the fiduciary will hold the bond merely
registered in the name of an incom- or principally as security for the per-
petent unless there is a representative formance of a duty, obligation, or serv-
for his or her estate, except as provided ice. Registration should conform to a
in § 353.64. form authorized by this paragraph. A
coowner or beneficiary may be named
FR 64551, Nov. 20, 1998; 75 FR 52460, Aug. 26,
only in accordance with the applicable
2010] provisions of § 353.6 (c) and (d). A com-
mon trust fund established and main-
§ 353.7 Authorized forms of registra- tained by a financial institution au-
tion. thorized to act as a fiduciary will be
Subject to any limitations or restric- considered a single fiduciary estate
tions contained in these regulations on within the meaning of these regula-
the right of any person to be named as tions.
owner, coowner, or beneficiary, bonds (2) Legal guardians, conservators, simi-
should be registered as indicated lar representatives, certain custodians. A
below. A savings bond registered in a bond may be registered in the name
form not substantially in agreement and title or capacity of the legally ap-
with one of the forms authorized by pointed or authorized representative of
this subpart is not considered validly the estate of a minor, incompetent,
aged or infirm person, absentee, et al.,
issued.
or in the name of that individual fol-
(a) Natural persons. A bond may be
lowed by an appropriate reference to
registered in the names of individuals
the estate. Examples:
in their own right, but only in one of
the forms authorized by this para- Tenth National Bank, guardian (or conser-
graph. vator, trustee, etc.) of the estate of George
(1) Single ownership form. A bond may N. Brown 123–45–6789, a minor (or an incom-
petent, aged person, infirm person, or ab-
be registered in the name of one indi-
sentee).
vidual. Example: Henry C. Smith, conservator of the estate of
John A. Jones 123–45–6789. John R. White 123–45–6789, an adult, pursu-
ant to Sec. 633.572 of the Iowa Code.
(2) Coownership form. A bond may be John F. Green 123–45–6789, a minor (or an in-
registered in the names of two individ- competent) under custodianship by des-
uals in the alternative as coowners. ignation of the Veterans Administration.
The form of registration ‘‘A and B’’ is Frank M. Redd 123–45–6789, an incompetent
not authorized. Examples: for whom Eric A. Redd has been designated
trustee by the Department of the Army
John A. Jones 123–45–6789 or Ella S. Jones pursuant to 37 U.S.C. 602.
987–65–4321. Arnold A. Ames, as custodian for Barry B.
John A. Jones 123–45–6789 or (Miss, Ms. or Bryan 123–45–6789, under the California
Mrs.) Ella S. Jones. Uniform Gifts to Minors Act.
Ella S. Jones 987–65–4321 or John A. Jones. Thomas J. Reed, as custodian for Lawrence
W. Reed 123–45–6789, a minor, under laws of
(3) Beneficiary form. A bond may be Georgia.
registered in the name of one indi- Richard A. Rowe 123–45–6789, for whom Reba
vidual payable on death to another. L. Rowe is representative payee for social
‘‘Payable on death to’’ may be abbre- security benefits (or black lung benefits, as
viated to ‘‘P.O.D.’’ Examples: the case may be). (If the beneficiary is a
minor, the words ‘‘a minor’’ should appear
John A. Jones 123–45–6789 payable on death immediately after the social security num-
to Mrs. Ella S. Jones. ber.)
John A. Jones 123–45–6789 P.O.D. Ella S. Henry L. Green 123–45–6789 or George M.
Jones 987–65–4321. Brown, a minor under legal guardianship of
the Tenth National Bank.
(b) Fiduciaries (including legal guard-
Henry L. Green 123–45–6789 P.O.D. George M.
ians and similar representatives, certain Brown, a minor under legal guardianship of
custodians, natural guardians, executors, the Tenth National Bank.
administrators, and trustees)—(1) Gen- Redd State Hospital and School, selected
eral. A bond may be registered in the payee for John A. Jones 123–45–6789, a Civil
345
§ 353.7 31 CFR Ch. II (7–1–11 Edition)
Service annuitant, pursuant to 5 U.S.C. Paul E. White, trustee under declaration of
8345(e). trust dated 2/1/80, 12–3456789.
(3) Natural guardians. A bond may be (i) If the trust instrument designates
registered in the name of either parent by title only an officer of a board or an
(natural and adoptive) of a minor, as organization as trustee, only the title
natural guardian. The registration of a of the officer should be used. Example:
bond in this form is considered as es-
Chairman, Board of Trustees, First Church
tablishing a fiduciary relationship. A of Christ, Scientist, of Chicago, Illinois, in
coowner or beneficiary may be named trust under the will of Robert J. Smith, de-
but only if the funds used to purchase ceased, 12–3456789.
the bonds do not belong to the minor.
Examples: (ii) The names of all trustees, in the
form used in the trust instrument,
John A. Jones, as natural guardian for Henry must be included in the registration,
M. Jones 123–45–6789. except as follows:
Melba Smith, as natural guardian for Thel- (A) If there are several trustees des-
ma Smith 123–45–6789 P.O.D. Bartholomew
Smith.
ignated as a board or they are required
to act as a unit, their names may be
(4) Executors and administrators. A omitted and the words ‘‘Board of
bond may be registered in the name of Trustees’’ substituted for the word
the representative appointed by a court ‘‘trustee’’. Example:
to act for an estate of a decedent, or in
Board of Trustees of Immediate Relief Trust
the name of an executor authorized to
of Federal Aid Association, under trust in-
administer a trust under the terms of a denture dated 2/1/80, 12–3456789.
will although not named trustee. The
name and capacity of all the represent- (B) If the trustees do not constitute a
atives as shown in the letters of ap- board or are not required to act as a
pointment must be included in the reg- unit, and are too numerous to be des-
istration and be followed by an ade- ignated in the registration by names
quate indentifying reference to the es- and title, some or all the names may be
tate. Examples: omitted. Examples:
John H. Smith and Calvin N. Jones, execu- John A. Smith, Henry B. Jones, et al., trust-
tors of the will (or administrators of the ees under the will of Edwin O. Mann, de-
estate) of Robert J. Smith, deceased, 12– ceased, 12–3456789.
3456789. Trustees under the will of Edwin O. Mann,
John H. Smith, executor of the will of Rob- deceased, 12–3456789.
ert J. Smith, deceased, in trust for Mrs.
Jane L. Smith, with remainder over, 12– (6) Employee thrift, savings, vacation
3456789. and similar plans. A bond may be reg-
(5) Trustees or life tenants under wills, alone, of the trustee of an eligible em-
deeds of trust, agreements, or similar in- ployee thrift, savings, vacation or simi-
struments. A bond may be registered in lar plan, as defined in § 353.13(a). If the
the name and title of the trustee of a instrument creating the trust provides
trust estate, or in the name of a life that the trustees shall serve for a lim-
tenant, followed by an adequate identi- ited term, their names may be omitted.
fying reference to the authority gov- Examples:
erning the trust or life tenancy. Exam-
ples: Tenth National Bank, trustee of Pension
Fund of Safety Manufacturing Company,
Thomas J. White and Tenth National Bank, U/A with the company, dated March 31,
trustees under the will of Robert J. Smith, 1980, 12–3456789.
deceased, 12–3456789. Trustees of Retirement Fund of Safety Man-
Jane N. Black 123–45–6789, life tenant under ufacturing Company, under directors’ reso-
the will of Robert J. Black, deceased. lution adopted March 31, 1980, 12–3456789.
Tenth National Bank, trustee under agree- County Trust company, trustee of the Em-
ment with Paul E. White, dated 2/1/80, 12– ployee Savings Plan of Jones Company,
3456789. Inc., U/A dated January 17, 1980, 12–3456789.
Carl A. Black and Henry B. Green, trustees Trustee of the Employee Savings Plan of
under agreement with Paul E. White, dated Brown Brothers, Inc., U/A dated January
2/1/80, 12–3456789. 20, 1980, 12–3456789.
346
(7) Funds of lodges, churches, societies, istered in the name of a public corpora-
or similar organizations. A bond may be tion or a public body, or in the title of
registered in the title of the trustees, a public officer, acting as trustee under
or a board of trustees, holding funds in express authority of law, followed by
trust for a lodge, church, or society, or an appropriate reference to the statute
similar organization, whether or not creating the trust. Examples:
incorporated. Examples: Rhode Island Investment Commission, trust-
Trustees of the First Baptist Church, Akron, ee of the General Sinking Fund under Title
OH, acting as a Board under section 15 of 35, Ch. 8, Gen. Laws of Rhode Island.
its bylaws, 12–3456789. Superintendent of the Austin State Hos-
Trustees of Jamestown Lodge No. 1000, Be- pital Annex, in trust for the Benefit Fund
nevolent and Protective Order of Elks, under Article 3183C, Vernon’s Civ. Stat. of
under section 10 of its bylaws, 12–3456789. Texas Ann.
Board of Trustees of Lotus Club, Wash-
ington, IN, under Article 10 of its constitu-
(c) Private organizations (corporations,
tion, 12–3456789. associations, partnerships)—(1) General.
A bond may be registered in the name
(8) Investment agents for religious, edu- of any private organization in its own
cational, charitable and non-profit orga- right. The full legal name of the orga-
nizations. A bond may be registered in nization as set forth in its charter, ar-
the name of a bank, trust company, or ticles of incorporation, constitution,
other financial institution, or an indi- partnership agreement, or other au-
vidual, as agent under an agreement thority from which its powers are de-
with a religious, educational, chari- rived, must be included in the registra-
table or non-profit organization, tion and may be followed by a par-
whether or not incorporated, if the enthetical reference to a particular ac-
agent holds funds for the sole purpose count other than a trust account.
of investing them and paying the in- (2) Corporations. A bond may be reg-
come to the organization. The name istered in the name of a business, fra-
and designation of the agent must be ternal, religious, non-profit, or other
followed by an adequate reference to private corporation. The words ‘‘a cor-
the agreement. Examples: poration’’ must be included in he reg-
Tenth National Bank, fiscal agent U/A with istration unless the fact of incorpora-
the Evangelical Lutheran Church of the tion is shown in the name. Examples:
Holy Trinity, dated 12/28/80, 12–3456789.
Smith Manufacturing Company, a corpora-
Sixth Trust Company, Investment Agent
U/A dated September 16, 1980, with Central tion, 12–3456789.
City Post, Department of Illinois, Amer- Green and Redd, Inc., 12–3456789 (Deprecia-
ican Legion, 12–3456789. tion Acct.)
John Jones, Investment Agent U/A dated (3) Unincorporated associations. A bond
September 16, 1980, with Central City Post, may be registered in the name of a
Department of Illinois, American Legion,
club, lodge, society, or a similar self-
12–3456789.
governing association which is unin-
(9) Funds of school groups or activities. corporated. The words ‘‘an unincor-
A bond may be registered in the title of porated association’’ must be included
the principal or other officer of a pub- in the registration. This form of reg-
lic, private, or parochial school holding istration must not be used for a trust
funds in trust for a student body fund fund, board of trustees, a partnership,
or for a class, group, or activity. If the or a sole proprietorship. If the associa-
amount purchased for any one fund tion is chartered by or affiliated with a
does not exceed $2,500 (face amount), no parent organization, the name or des-
reference need be made to a trust in- ignation of the subordinate or local or-
strument. Examples: ganization must be given first, followed
Principal, Western High School, in trust for by the name of the parent organiza-
the Class of 1980 Library Fund, 12–3456789. tion. The name of the parent organiza-
Director of Athletics, Western High School, tion may be placed in parentheses and,
in trust for Student Activities Association, if well known, may be abbreviated. Ex-
under resolution adopted 5/12/80, 12–3456789. amples:
(10) Public corporations, bodies, or offi- The Lotus Club, an unincorporated associa-
cers as trustees. A bond may be reg- tion, 12–3456789.
347
§ 353.8 31 CFR Ch. II (7–1–11 Edition)
Local 447, Brotherhood of Railroad Train- (f) The United States Treasury. A per-
men, an unincorporated association, 12– son who desires to have a bond become
3456789. the property of the United States upon
Eureka Lodge 317 (A.F. and A.M.), an unin- his or her death may designate the
corporated association, 12–3456789.
United States Treasury as coowner or
(4) Partnerships. A bond may be reg- beneficiary. Examples:
istered in the name of a partnership. George T. Jones 123–45–6789 or the United
The words ‘‘a partnership’’ must be in- States Treasury.
cluded in the registration. Examples: George T. Jones 123–45–6789 P.O.D. the United
States Treasury.
Smith & Jones, a partnership, 12–3456789.
Acme Novelty Company, a partnership, 12– [44 FR 76441, Dec. 26, 1979, as amended at 71
3456789. FR 46857, Aug. 15, 2006]
(5) Sole Proprietorships. A bond may be § 353.8 Chain letters prohibited.

registered in the name of an individual The issuance of bonds in the further-
who is doing business as a sole propri- ance of a chain letter or pyramid
etor. A reference may be made to the scheme is considered to be against the
trade name under which the business is public interest and is prohibited.
conducted. Example:
John Jones DBA Jones Roofing Company Subpart C—Limitations on Annual
123–45–6789. Purchases
(d) Institutions (churches, hospitals,
§ 353.10 Amounts which may be pur-
homes, schools, etc.). A bond may be reg- chased.
istered in the name of a church, hos-
pital, home, school, or similar institu- The amount of savings bonds of Se-
tion conducted by a private organiza- ries EE and HH which may be pur-
tion or by private trustees, regardless chased and held, in the name of any
of the manner in which it is organized one person in any one calendar year, is
or governed or title to its property is computed according to the provisions
held. Descriptive words, such as ‘‘a cor- of § 353.11 and is limited as follows:
poration’’ or ‘‘an unincorporated asso- (a) Series EE—(1) General annual limi-
ciation’’, must not be included in the tation. $5,000 (principal amount).
registration. Examples: (2) Special limitation. $4,000 (face
amount) multiplied by the highest
Shriners’ Hospital for Crippled Children, St. number of employees participating in
Louis, MO, 12–3456789. an eligible employee plan, as defined in
St. Mary’s Roman Catholic Church, Albany, § 353.13, at any time during the cal-
NY, 12–3456789.
endar year in which the bonds are
Rodeph Shalom Sunday School, Philadel-
issued.
phia, PA, 12–3456789.
(b) Series HH—(1) General annual limi-
(e) States, public bodies and corpora- tation. $20,000 (face amount).
tions, and public officers. A bond may be (2) Special limitation. $200,000 (face
registered in the name of a State, amount) for bonds received in a cal-
county, city, town, village, school dis- endar year as gifts by an organization
trict, or other political entity, public which at the time of purchase was an
body, or corporation established by law exempt organization under the terms
(including a board, commission, admin- of 26 CFR 1.501(c)(3)–1.
istration, authority, or agency) which
is the owner or official custodian of FR 24805, May 8, 2003; 72 FR 67853, Dec. 3,
public funds, other than trust funds, or 2007]
in the full legal title of the public offi-
cer having custody of the funds. Exam- § 353.11 Computation of amount.
ples: (a) General. The purchases of bonds in
State of Maine. the name of any person in an indi-
Town of Rye, NY (Street Improvement vidual capacity are computed sepa-
Fund). rately from purchases in a fiduciary ca-
Maryland State Highway Administration. pacity. A pension or retirement fund,
Treasurer, City of Chicago. or an investment, insurance, annuity,
348
or similar fund or trust is regarded as sive and irrevocable benefit of its em-
an entity, regardless of the number of ployees or their beneficiaries. Each
beneficiaries or the manner in which plan must afford employees the means
their shares or interests are estab- of making regular savings from their
lished, determined, or segregated. wages through payroll deductions and
(b) Bonds included in computation. In provide for employer contributions to
computing the purchases for each per- be added to these savings.
son, the following outstanding bonds (b) Definition of terms used in this sec-
are included: tion. (1) The term assets means all the
(1) All bonds registered in the name employees’ contributions and assets
of that person alone; purchased with them and the employ-
(2) All bonds registered in the name er’s contributions and assets purchased
of the representative of the estate of with them, as well as accretions, such
that person; and as dividends on stock, the increment in
(3) All bonds registered in the name value on bonds and all other income;
of that person as first-named coowner. but, notwithstanding any other provi-
(c) Bonds excluded from computation. sion of this section, the right to de-
In computing the purchases for each mand and receive all assets credited to
person, the following are excluded: the account of an employee shall not
(1) Bonds on which that person is be construed to require the distribu-
named beneficiary; tion of assets in kind when it would
(2) Bonds to which that person has not be possible or practicable to make
become entitled— such a distribution; for example, Series
(i) Under § 353.70 as surviving bene- EE bonds may not be reissued in unau-
ficiary upon the death of the registered thorized denominations.
owner; (2) The word beneficiary means: (i)
(ii) As an heir or a legatee of the de- The person or persons, if any, des-
ceased owner; ignated by the employee in accordance
(iii) By virtue of the termination of a with the terms of the plan to receive
trust or the happening of a similar the benefits of the plan upon the em-
event; ployee’s death or (ii) the estate of the
(3) Bonds issued in an authorized ex- employee.
change or reinvestment; and (c) Conditions of eligibility. An em-
(4) Bonds that are purchased and re- ployee plan must conform to the fol-
deemed within the same calendar year. lowing rules in order to be eligible for
the special limitation provided in
§ 353.10.
FR 24805, May 8, 2003]
(1) Crediting of assets. All assets of a
§ 353.12 Disposition of excess. plan must be credited to the individual
accounts of participating employees
If any person at any time has savings and may be distributed only to them or
bonds issued during any one calendar their beneficiaries, except as provided
year in excess of the prescribed in paragraph (c)(3) of this section.
amount, the Bureau of the Public Debt (2) Purchase of bonds. Bonds may be
reserves the right to take any action purchased only with assets credited to
that it deems necessary to adjust the the accounts of participating employ-
excess. Instructions for adjustment of ees and only if the amount taken from
the excess can be obtained by email at any account at any time for that pur-
savbonds@bpd.treas.gov or by writing to pose is equal to the purchase price of a
Bureau of the Public Debt, Parkers- bond or bonds in an authorized denomi-
burg, WV 26106–1328. nation or denominations, and shares in
[68 FR 24805, May 8, 2003] the bonds are credited to the accounts
of the individuals from which the pur-
§ 353.13 Employee plans—Conditions chase price was derived, in amounts
of eligibility. corresponding with their shares. For
(a) Definition of plan. Employee example, if $50 credited to the account
thrift, savings, vacation and similar of John Jones is commingled with
plans are contributory plans estab- funds credited to the accounts of other
lished by the employer for the exclu- employees to make a total of $5,000
349
§ 353.15 31 CFR Ch. II (7–1–11 Edition)
with which a Series EE bond in the de- ment, in order to establish the plan’s
nomination of $10,000 (face amount) is eligibility.
purchased in December 1980 and reg- (e) Vacation plans. Savings bonds may
istered in the name and title of the be purchased under certain vacation
trustee, the plan must provide, in ef- plans. Questions concerning the eligi-
fect, that John Jones’ account be cred- bility of these plans to purchase bonds
ited to show that he is the owner of a in excess of the general limitation
Series EE bond in the denomination of should be addressed to the Bureau of
$100 (face amount) bearing an issue the Public Debt, Parkersburg, WV
date of December 1, 1980. 26101.
(3) Irrevocable right of withdrawal. (31 U.S.C. 3105 and 3121)
Each participating employee has an ir- [44 FR 76441, Dec. 26, 1979, as amended at 48
revocable right to request and receive FR 55458, Dec. 13, 1983; 59 FR 10541, Mar. 4,
from the trustee all assets credited to 1994; 63 FR 64551, Nov. 20, 1998]
the employee’s account (or their value,
if the employee prefers) without regard Subpart D—Limitations on Transfer
to any conditions other than the loss or Pledge
or suspension of the privilege of par-
ticipating further in the plan. A plan § 353.15 Transfer.
may limit or modify such right in any
Savings bonds are not transferable
manner required for qualification of and are payable only to the owners
the plan under section 401 of the Inter- named on the bonds, except as specifi-
nal Revenue Code of 1954, as amended cally provided in these regulations and
(26 U.S.C. section 401). then only in the manner and to the ex-
(4) Rights of beneficiary. Upon the tent so provided.
death of an employee, his or her bene-
ficiary shall have the absolute and un- § 353.16 Pledge.
conditional right to demand and re- A savings bond may not be hypoth-
ceive from the trustee all assets cred- ecated, pledged, or used as security for
ited to the account of the employee or the performance of an obligation.
their value, if he or she so prefers.
(5) Reissue or payment upon distribu- Subpart E—Judicial Proceedings
tion. When settlement is made with an
employee or his or her beneficiary with § 353.20 General.
respect to any bond registered in the (a) The Department of the Treasury
name and title of the plan trustee in will not recognize a judicial determina-
which the employee has a share, the tion that gives effect to an attempted
bond must be paid or reissued to the voluntary transfer inter vivos of a
extent of the share. If an employee or bond, or a judicial determination that
the beneficiary is to receive distribu- impairs the rights of survivorship con-
tion in kind, bonds bearing the same ferred by these regulations upon a co-
issue dates as those credited to the em- owner or beneficiary. All provisions of
ployee’s account will be reissued in the this subpart are subject to these re-
name of the employee or the employ- strictions.
ee’s beneficiary to the extent entitled, (b) The Department of the Treasury
in authorized denominations, in any will recognize a claim against an owner
authorized form of registration, upon of a savings bond and conflicting
the request and certification of the claims of ownership of, or interest in, a
trustee. bond between coowners or between the
(d) Application for special limitation. A registered owner and the beneficiary, if
trustee of an employee plan who de- established by valid judicial pro-
sires to purchase bonds under the spe- ceedings, but only as specifically pro-
cial limitation should submit to the vided in this subpart. Section 353.23
designated Federal Reserve Bank or specifies the evidence required to es-
Branch a copy of: tablish the validity of the judicial pro-
(1) The plan, (2) any instructions ceedings.
issued under the plan that concern Se- (c) The Department of the Treasury
ries EE bonds, and (3) the trust agree- and the agencies that issue, reissue, or
350
redeem savings bonds will not accept a substitute the name of one spouse for
notice of an adverse claim or notice of that of the other spouse as owner, co-
pending judicial proceedings, nor un- owner, or beneficiary pursuant to the
dertake to protect the interests of a decree. However, if the bond is reg-
litigant not in possession of a savings istered in the name of one spouse with
bond. another person as coowner, there must
be submitted either:
§ 353.21 Payment to judgment credi- (1) A request for reissue by the other
tors. person or (2) a certified copy of a judg-
(a) Purchaser or officer under levy. The ment, decree, or court order entered in
Department of the Treasury will pay proceedings to which the other person
(but not reissue) a savings bond to the and the spouse named on the bond are
purchaser at a sale under a levy or to parties, determining the extent of the
the officer authorized under appro- interest of that spouse in the bond. Re-
priate process to levy upon property of issue will be permitted only to the ex-
the registered owner or coowner to sat- tent of that spouse’s interest. The evi-
isfy a money judgment. Payment will dence required under § 353.23 must be
be made only to the extent necessary submitted in every case. When the di-
to satisfy the money judgment. The vorce decree does not set out the terms
amount paid is limited to the redemp- of the property settlement agreement,
tion value 60 days after the termi- a certified copy of the agreement must
nation of the judicial proceedings. Ex- be submitted. Payment, rather than re-
cept in a case of a levy by the Internal issue, will be made if requested.
Revenue Service, payment of a bond (b) Gift causa mortis. A savings bond
registered in coownership form pursu- belonging solely to one individual will
ant to a judgment or a levy against be paid or reissued at the request of the
only one coowner is limited to the ex- person found by a court to be entitled
tent of that coowner’s interest in the by reason of a gift causa mortis from
bond. That interest must be estab- the sole owner.
lished by an agreement between the co- (c) Date for determining rights. When
owners by judgment, decree, or order of payment or reissue under this section
a court in a proceeding to which both is to be made, the rights of the parties
coowners are parties. Payment of a will be those existing under the regula-
bond registered in coownership form tions current at the time of the entry
pursuant to levy by the Internal Rev- of the final judgment, decree, or court
enue Service will be made if the levy is order.
against either coowner on the bond.
(b) Trustee in bankruptcy, receiver, or § 353.23 Evidence.
similar court officer. The Department of (a) General. To establish the validity
the Treasury will pay, at current re- of judicial proceedings, certified copies
demption value, a savings bond to a of the final judgment, decree, or court
trustee in bankruptcy, a receiver of an order, and of any necessary supple-
insolvent’s estate, a receiver in equity, mentary proceedings, must be sub-
or a similar court officer under the pro- mitted. If the judgment, decree, or
visions of paragraph (a) of this section. court order was rendered more than six
[44 FR 76441, Dec. 26, 1979, as amended at 63 months prior to the presentation of the
FR 64551, Nov. 20, 1998] bond, there must also be submitted a
certification from the clerk of the
§ 353.22 Payment or reissue pursuant court, under court seal, dated within
to judgment. six months of the presentation of the
(a) Divorce. The Department of the bond, showing that the judgment, de-
Treasury will recognize a divorce decree, or court order is in full force.
cree that ratifies or confirms a prop- (b) Trustee in bankruptcy or receiver of
erty settlement agreement disposing of an insolvent’s estate. A request for pay-
bonds or that otherwise settles the in- ment by a trustee in bankruptcy or a
terests of the parties in a bond. Reissue receiver of an insolvent’s estate must
of a savings bond may be made to be supported by appropriate evidence of
eliminate the name of one spouse as appointment and qualification. The
owner, coowner, or beneficiary or to evidence must be certified by the clerk
351
§ 353.24 31 CFR Ch. II (7–1–11 Edition)
of the court, under court seal, as being the Treasury, Bureau of the Public
in full force on a date that is not more Debt, Parkersburg, WV 26106–1328.
than six months prior to the presen- (b) Forfeiture of bond. (1) Upon receipt
tation of the bond. and review of the Public Debt Form
(c) Receiver in equity or similar court 1522, as described in (a)(4) above, the
officer. A request for payment by a re- Bureau of the Public Debt will make
ceiver in equity or a similar court offi- payment to the forfeiture fund speci-
cer, other than a receiver of an fied on the form.
insolvent’s estate, must be supported (2) The Bureau of the Public Debt
by a copy of an order that authorizes will record the forfeiture, the for-
the presentation of the bond for re- feiture fund into which the proceeds
demption, certified by the clerk of the were paid, the contact point, and any
court, under court seal, as being in full related information.
force on a date that is not more than (3) The Bureau of the Public Debt
six months prior to the presentation of will rely exclusively upon the informa-
the bond. tion provided by the Federal agency in
the Public Debt Form 1522 and will not
§ 353.24 Payment pursuant to judicial make any independent evaluation of
or administrative forfeiture. the validity of the forfeiture order, the
request for payment, or the authority
(a) Definitions. As used in this part:
of the individual signing the request
(1) Contact point means the individual
for payment.
designated to receive referrals from the (4) The amount paid is limited to the
Bureau of the Public Debt, as provided redemption value of the savings bonds
for in this section, by the Federal in- as of the date of forfeiture specified in
vestigative agency, United States At- the Public Debt Form 1522.
torney’s Office, or forfeiting agency (c) Inquiry from previous owner. (1)
specified in Public Debt Form 1522. Upon payment made pursuant to (b),
(2) Forfeiting agency means the fed- all inquiries from the previous owner,
eral law enforcement agency respon- including requests for payment, re-
sible for the forfeiture. issue, or applications for relief, related
(3) Forfeiture—(i) Administrative for- to forfeited savings bonds will be re-
feiture means the process by which ferred by the Bureau of the Public Debt
property may be forfeited by a Federal to the contact point named in the Pub-
agency rather than through judicial lic Debt Form 1522.
proceedings. (2) The Bureau of the Public Debt
(ii) Judicial forfeiture means either a will notify the submitter of the inquiry
civil or a criminal proceeding in a of the referral to the contact point.
United States District Court that may (3) The Bureau of the Public Debt
result in a final judgment and order of will not investigate the inquiry and
forfeiture. will defer to the forfeiting agency’s de-
(4) Public Debt Form 1522 means the termination of the appropriate course
written notification of the forfeiture of action, including settlement where
provided by the forfeiting agency to appropriate. Any settlement will be
the Bureau of the Public Debt on a paid from the forfeiture fund into
Public Debt Form 1522 Special Form of which the proceeds were deposited.
Request for Payment of United States [61 FR 53822, Oct. 15, 1996]
Savings and Retirement Securities
Where Use of a Detached Request Is
Authorized. Public Debt Form 1522 Subpart F—Relief for Loss, Theft,
must specify: the contact point; the Destruction, Mutilation, De-
issue date of each bond; the serial num- facement, or Nonreceipt of
ber for each bond; the date of for- Bonds
feiture; the forfeiture fund to which
payment is to be made; and be signed § 353.25 General.
by an individual authorized by the for- Relief, by the issue of a substitute
feiting agency. The forfeited bonds and bond or by payment, is authorized for
the completed Public Debt Form 1522 the loss, theft, destruction, mutilation,
are to be mailed to the Department of or defacement of a bond after receipt
352
by the owner or his or her representa- § 353.27 Application for relief—Non-re-

tive. As a condition for granting relief, ceipt of bond.
the Commissioner of the Public Debt, If a bond issued on any transaction is
as designee of the Secretary of the not received, the issuing agent must be
Treasury, may require a bond of indem- notified as promptly as possible and
nity, in the form, and with the surety, given all information about the non-re-
or security, he considers necessary to
ceipt. An appropriate form and instruc-
protect the interests of the United
tions will be provided. If the applica-
States. In all cases the savings bond
tion is approved, relief will be granted
must be identified by serial number
by the issuance of a bond bearing the
and the applicant must submit satis-
same issue date as the bond that was
factory evidence of the loss, theft, or
not received. Also, relief is authorized
destruction, or a satisfactory expla-
for the issuance of bonds for which the
nation of the mutilation or deface-
Secretary has not received payment, in
ment.
order to preserve public confidence in
§ 353.26 Application for relief—After dealing with issuing agents.
receipt of bond. [63 FR 64551, Nov. 20, 1998]
(a) If the serial numbers of the lost,
stolen, or destroyed bonds are known, § 353.28 Recovery or receipt of bond
the claimant should execute an appli- before or after relief is granted.
cation for relief on the appropriate (a) If a bond reported lost, stolen, de-
form and submit it to the Bureau of stroyed, or not received, is recovered or
the Public Debt, Parkersburg, WV received before relief is granted, the
26101. Bureau of the Public Debt, Parkers-
(b) If the bond serial number is not burg, WV 26101, must be notified
known, the claimant must provide suf- promptly.
ficient information to enable the Bu- (b) A bond for which relief has been
reau of the Public Debt to identify the granted is the property of the United
bond by serial number. See § 353.29(c). States and, if recovered, must be
The Bureau will furnish the proper ap- promptly submitted to the Bureau of
plication form and instructions. the Public Debt, Parkersburg, WV
(c) If applicable, a defaced bond and 26101, for cancellation.
all available fragments of a mutilated
bond should be submitted to the Bu- § 353.29 Adjudication of claims.
reau. (a) General. The Bureau of the Public
(d) The application must be made by Debt will adjudicate claims for lost,
the person or persons (including both stolen or destroyed bonds on the basis
coowners, if living) authorized under of records created and regularly main-
these regulations to request payment tained in the ordinary course of busi-
of the bond. In addition: ness.
(1) If the bond is in beneficiary form (b) Claims filed 10 years after payment.
and the owner and beneficiary are both A bond for which no claim has been
living, both will ordinarily be required filed within 10 years of the recorded
to join in the application.
date of redemption will be presumed to
(2) If a minor named on a bond as have been properly paid. If a claim is
owner, coowner, or beneficiary is not of
subsequently filed, a photographic copy
sufficient competency and under-
of the bond will not be available to sup-
standing to request payment, both par-
port the disallowance.
ents will ordinarily be required to join
(c) Claims filed six years after final ma-
in the application.
turity. No claim filed six years or more
after the final maturity of a savings
lief will be granted either by the
bond will be entertained unless the
issuance of a bond bearing the same
claimant supplies the serial number of
issue date as the bond for which the
claim was filed or by the issuance of a the bond.
check in payment.
353
§ 353.30 31 CFR Ch. II (7–1–11 Edition)
Subpart G—Interest method are governed by the regula-

tions at 31 CFR part 370.
§ 353.30 Series EE bonds.
Series EE bonds are issued at a dis- Budget under control number 1535–0094)
count. The accrued interest is added to
the issue price at stated intervals and (c) Delivery of interest. Notices affect-
is payable only at redemption as part ing the delivery of interest payments.
of the redemption value. Information To ensure appropriate action, notices
regarding interest rates and redemp- affecting the delivery of interest pay-
tion values is found in Department of ments on Series HH bonds must be re-
the Treasury Circular, Public Debt Se- ceived by the Bureau of the Public
ries No. 1–80 (31 CFR part 351). Debt, Parkersburg, WV 26102–1328, at
least one month prior to the interest
§ 353.31 Series HH bonds. payment date. Each notice must in-
(a) General. Series HH bonds are cur- clude the owner or coowner’s name and
rent income bonds issued at par (face the taxpayer identifying number ap-
amount). Interest on a Series HH bond pearing on the account under which
is paid semiannually beginning six records of the bonds are maintained.
months from the issue date. Interest (d) Reissue during interest period.
ceases at final maturity, or, if the bond Physical reissue of a Series HH bond
is redeemed prior to final maturity, as may be made without regard to inter-
of the end of the interest period last est payment dates. The Series HH in-
preceding the date of redemption. For terest accounts maintained by the Bu-
example, if a bond on which interest is reau of the Public Debt will be closed
payable on January 1 and July 1 is rein the first week of the month pre-
deemed on September 1, interest ceases ceding each interest payment date, and
as of the preceding July 1, and no in- payments will be made pursuant to the
terest will be paid for the period from information contained in the accounts
July 1 to September 1. However, if the as of the date they are closed.
redemption date falls on an interest (e) Endorsement of checks. Interest
payment date, interest ceases on that
checks must be endorsed in accordance
date. Information regarding interest
with the regulations governing the
rates is found in Department of the
payment of fiscal agency checks, as
Treasury Circular, Public Debt Series
contained in 31 CFR part 355.
No. 2–80, current revision (31 CFR part
352). (f) Payment of interest by the ACH
(b) Payment of interest. Series HH method—(1) Submission of deposit account
bond interest accounts are maintained information. Payments on all Series HH
by the Bureau of the Public Debt, Par- bonds assigned to the same account
kersburg, WV. Interest on bonds issued maintained by the Bureau must be
on or after October 1, 1989 will be paid made to the same deposit account at a
on each interest due date by the Auto- financial institution.
mated Clearing House (ACH) method to (2) Deposit account held by individuals
the owner or coowner’s account at a fi- in their own right. Where the Series HH
nancial institution, unless the Bureau bonds are registered in the name of in-
determines that extraordinary cir- dividual(s) as sole owner, or as owner
cumstances warrant payment by check and beneficiary, and the deposit ac-
or other means. Interest on bonds count at the financial institution is
issued prior to October 1, 1989, is pay- held in the name of individual(s) in
able by check drawn to the order of the their own right, the owner’s name must
owner or both coowners or, upon re- appear on the deposit account. Where
quest, by the ACH method to the owner the bonds are registered in the names
or coowner’s account at a financial in- of two individuals as coowners and the
stitution. Checks will be mailed to the deposit account is held in the name of
delivery address provided to the Bu- individual(s) in their own right, the
reau. Deposit account information for registration of the bonds and the title
ACH payments shall be provided on the of the account must contain at least
form designated by the Bureau. Series one name that is common to both. The
H interest payments made by the ACH deposit account to which the interest
354
payments are directed should pref- (7) Nonreceipt or loss of interest pay-
erably be established in a form iden- ment. The Bureau of the Public Debt,
tical to the registration of the bonds to Parkersburg, WV 26102 should be noti-
ensure that rights of ownership and fied if:
survivorship can be more easily identi- (i) An interest check is not received
fied and preserved. Neither the United or is lost after receipt or
States nor any Federal Reserve Bank (ii) An ACH payment is not credited
shall be liable for any loss sustained to the designated account and the fi-
because the interest of the holder(s) of nancial institution has no record of re-
a deposit account to which payments ceiving it. The notice should include
are made are not the same as the the owner or coowner’s name and tax-
owner(s) of the bonds. payer identifying number and the in-
(3) Deposit account held by organiza- terest payment date.
tion. Where the deposit account to [54 FR 40254, Sept. 29, 1989, as amended at 59
which interest payments are to be di- FR 10541, Mar. 4, 1994; 64 FR 40487, July 26,
rected is held in the name of the finan- 1999]
cial institution itself acting as sole
trustee, or as co-trustee, or is the name Subpart H—General Provisions for
of a commercially-managed investment Payment
fund, the owner or coowner should in-
quire whether the financial institution § 353.35 Payment (redemption).
is able to receive ACH payments; if (a) General. Payment of a savings
not, the owner or coowner should make bond will be made to the person or per-
alternative arrangements. sons entitled under the provisions of
(4) Financial institution cannot accept these regulations, except that checks
ACH payments. If after submission of in payment will not be delivered to ad-
deposit account information, it is de- dresses in areas with respect to which
termined that ACH payments cannot the Department of the Treasury re-
be accepted by the designated financial stricts or regulates the delivery of
institution, pending receipt of new de- checks drawn against funds of the
posit account information, payment United States. See Department of the
will be made by check drawn to the Treasury Circular No. 655, current revi-
registered owner or both coowners and sion (31 CFR part 211). Payment will be
mailed to the address of record. made without regard to any notice of
(5) Cancellation of ACH arrangement. adverse claims to a bond and no stop-
(i) Bonds issued on or after October 1, page or caveat against payment of a
1989. As set forth in paragraph (b) of bond will be entered.
(b) A Series EE bond issued on Janu-
this section and in the Series HH offer-
ary 1, 2003, or earlier, will be paid at
ing contained in Circular No. 2–80, in-
any time after 6 months from its issue
terest on Series HH bonds issued on or
date. A Series EE bond issued on Feb-
after October 1, 1989, will be paid by the
ruary 1, 2003, or thereafter, will be paid
ACH method. In the absence of extraor-
at any time after 12 months from its
dinary circumstances, a request to dis- issue date. Bonds will be paid at the
continue payment by the ACH method current redemption value shown in De-
in favor of payment by check will not partment of the Treasury Circular,
be accepted. Public Debt Series No. 1–80 (31 CFR
(ii) Bonds issued prior to October 1, part 351).
1989. An ACH arrangement established (c) Series HH. A Series HH bond will
for Series HH bonds issued prior to Oc- be paid at any time after six months
tober 1, 1989, shall remain in effect from issue date. A Series HH bond
until it is terminated by a request from issued in an authorized exchange or re-
the owner or coowner submitted to the investment transaction will be paid at
Bureau of the Public Debt, Parkers- face value. A Series HH bond issued for
burg, WV 26102–1328. cash will be paid at the current re-
(6) Rules. Series HH interest pay- demption value shown in Department
ments made by the ACH method are of the Treasury Circular, Public Debt
governed by the regulations at 31 CFR Series No. 2–80, Second Revision (31
part 370. CFR part 352). If the bond is redeemed
355
§ 353.36 31 CFR Ch. II (7–1–11 Edition)
at less than face value, the difference paying agent for redemption. The pre-
represents an adjustment of interest. senter must be prepared to establish
In any case where Series HH bonds are his or her identity in accordance with
surrendered to a designated Federal Treasury instructions and identifica-
Reserve Bank or Branch or the Bureau tion guidelines. The owner or coowner
of the Public Debt, Parkersburg, WV must sign the request for payment on
26106–1328, for redemption in the month the bond or, if authorized, on a sepa-
prior to an interest payment date, re- rate detached request, and add his or
demption will not be deferred but will her address. If the request for payment
be made in regular course, unless the has been signed, or signed and cer-
presenter specifically requests that the tified, before presentation of the bond,
transaction be delayed until that date. the paying agent must be satisfied that
A request to defer redemption made the person presenting the bond for pay-
more than one month preceding the in-
ment is the owner or coowner and may
terest payment date will not be accept-
require the person to sign the request
ed.
for payment again. If the bond is in
[44 FR 76441, Dec. 26, 1979, as amended at 51 order for payment, the paying agent
FR 23754, July 1, 1986; 59 FR 10541, Mar. 4, will make immediate payment at the
1994; 68 FR 2667, Jan. 17, 2003; 68 FR 7427, Feb.
current redemption value without
14, 2003]
charge to the presenter. Paying agents
§ 353.36 Payment during life of sole are not authorized to process any case
owner. involving partial redemption or any
A savings bond registered in single case in which supporting evidence is re-
ownership form (i.e., without a co- quired.
owner or beneficiary) will be paid to (b) Procedure for all other cases. In the
the owner during his or her lifetime case of bonds to which the procedure in
upon surrender with an appropriate re- paragraph (a) of this section, does not
quest. apply, or if otherwise preferred, the
owner or coowner, or other person enti-
§ 353.37 Payment during lives of both tled to payment, should appear before
coowners. an officer authorized to certify re-
A savings bond registered in co- quests for payment, establish his or her
ownership form will be paid to either identity, sign the request for payment,
coowner upon surrender with an appro- and provide information as to the ad-
priate request, and upon payment (as dress to which the check in payment is
determined in § 353.43), the other co- to be mailed. The bond must be for-
owner will cease to have any interest warded to a designated Federal Reserve
in the bond. If both coowners request Bank or Branch or the Bureau of the
payment, payment will be made by Public Debt. Usually, payment will be
check drawn in the form, ‘‘John A. expedited by submission to a des-
Jones AND Mary C. Jones’’. ignated Federal Reserve Bank or
Branch. In all cases, the cost and risk
§ 353.38 Payment during lifetime of
owner of beneficiary bond. of presentation of a bond will be borne
by the owner. Payment will be made by
A savings bond registered in bene- check drawn to the order of the reg-
ficiary form will be paid to the registered owner or other person entitled
istered owner during his or her lifetime and will be mailed to the address re-
upon surrender with an appropriate requested.
quest. Upon payment (as determined in
(c) Date of request. Requests executed
§ 353.43) the beneficiary will cease to
more than six months before the date
have any interest in the bond.
of receipt of a bond for payment will
§ 353.39 Surrender for payment. not be accepted. Neither will a bond be
accepted if payment is requested as of
(a) Procedure for bonds of Series EE, in
a date more than three months in the
the names of individual owners or co-
future.
owners only. An individual who is the
owner or coowner of a Series EE bond [44 FR 76441, Dec. 26, 1979, as amended at 59
may present the bond to an authorized FR 10541, Mar. 4, 1994]
356
§ 353.40 Special provisions for pay- proof of the grantor’s condition may be
ment. required in any case.
(a) Owner’s signature not required. A [45 FR 64091, Sept. 26, 1980, as amended at 57
bond may be paid by a paying agent or FR 39602, Sept. 1, 1992; 59 FR 10541, Mar. 4,
a designated Federal Reserve Bank 1994]
without the owner’s signature to the
§ 353.41 Partial redemption.
request for payment, if the bond bears
the special endorsement of a paying A bond of Series EE or HH may be re-
agent specifically qualified to place deemed in part at current redemption
such an endorsement on savings bonds. value, but only in amounts cor-
(b) Signature by mark. A signature by responding to authorized denomina-
mark (X) must be witnessed by at least tions, upon surrender of the bond to a
one disinterested person and a certi- designated Federal Reserve Bank or
fying officer. See subpart J. The wit- Branch or to the Bureau of the Public
ness must attest to the signature by Debt in accordance with § 353.39(b). In
mark substantially as follows: ‘‘Wit- any case in which partial redemption is
ness to signature by mark’’, followed requested, the phrase ‘‘to the extent of
by his or her signature and address. $ll (face amount) and reissue of the
remainder’’ should be added to the re-
(c) Name change. If the name of the
quest. Upon partial redemption of the
owner, coowner, or other person enti- bond, the remainder will be reissued as
tled to payment, as it appears in the of the original issue date, as provided
registration or in evidence on file in in subpart I.
the Bureau of the Public Debt, has
been changed in any legal manner, the [44 FR 76441, Dec. 26, 1979, as amended at 59
signature to the request for payment FR 10541, Mar. 4, 1994]
must show both names and the manner
§ 353.42 Nonreceipt or loss of check
in which the change was made; for ex- issued in payment.
ample, ‘‘Mary T. Jones Smith (Mary T.
J. Smith or Mary T. Smith) changed by If a check in payment of a bond sur-
marriage from Mary T. Jones’’, or rendered for redemption is not received
‘‘John R. Young, changed by order of within a reasonable time or is lost
court from Hans R. Jung’’. See § 353.50. after receipt, notice should be given to
the same agency to which the bond was
(d) Attorneys-in-fact. A request for
surrendered for payment. The notice
payment, reinvestment, or exchange
should give the date the bond was sur-
executed by an attorney-in-fact will be
rendered for payment and describe the
recognized if it is accompanied by a
bond by series, denomination, serial
copy of the power of attorney which
number, and registration, including the
meets the following requirements:
taxpayer identifying number of the
(1) The power of attorney must bear owner.
the grantor’s signature, properly cer-
tified or notarized, in accordance with § 353.43 Effective date of request for
applicable State law; payment.
(2) The power of attorney must grant, The Department of the Treasury will
by its terms, authority for the attor- treat the receipt of a bond with an ap-
ney-in-fact to sell or redeem the propriate request for payment by:
grantor’s securities, sell his or her per- (a) A Federal Reserve Bank or
sonal property, or, otherwise contain Branch,
similar authority; and (b) The Bureau of the Public Debt, or
(3) In the case of a grantor who has (c) A paying agent authorized to pay
become incapacitated, the power of at- that bond, as the date upon which the
torney must conform with pertinent rights of the parties are fixed for the
provisions of State law concerning its purpose of payment.
durability. Generally, in such cir-
cumstances, the power of attorney § 353.44 Withdrawal of request for pay-
should provide that the authority ment.
granted will not be affected by the sub- (a) Withdrawal by owner or coowner.
sequent incompetence or incapacity of An owner or coowner, who has surren-
the grantor. Medical evidence or other dered a bond to a Federal Reserve Bank
357
§ 353.45 31 CFR Ch. II (7–1–11 Edition)
or Branch or to the Bureau of the Pub- § 353.47 Authorized reissue—during

lic Debt or to an authorized paying lifetime.
agent with an appropriate request for A bond belonging to an individual
payment, may withdraw the request if may be reissued in any authorized form
notice of intent to withdraw is received of registration upon an appropriate re-
by the same agency prior to payment quest for the purposes outlined below.
either in cash or through the issuance (a) Single ownership. A bond reg-
of the redemption check. istered in single ownership form may
(b) Withdrawal on behalf of deceased be reissued—
owner or incompetent. A request for pay- (1) To add a coowner or beneficiary;
ment may be withdrawn under the or
same conditions as in paragraph (a) of (2) To name a new owner, with or
this section by the executor or admin- without a coowner or beneficiary, but
istrator of the estate of a deceased only if:
owner or by the person or persons who (i) The new owner is related to the
could have been entitled to the bond previous owner by blood (including
under subpart L, or by the legal rep- legal adoption) or marriage;
resentative of the estate of a person (ii) The previous owner and the new
under legal disability, unless surrender owner are parties to a divorce or annul-
of the bond for payment has eliminated ment; or
the interest of a surviving coowner or (iii) The new sole owner is the trust-
beneficiary. See § 353.70 (b) and (c). ee of a personal trust estate which was
created by the previous owner or which
designates as beneficiary either the
Subpart I—Reissue and previous owner or a person related to
Denominational Exchange him or her by blood (including legal
adoption) or marriage.
§ 353.45 General.
(b) Coownership—(1) Reissue—to name
Reissue of a bond may be made only a related individual as owner or coowner.
under the conditions specified in these During the lifetime of both coowners, a
regulations, and only at: coownership bond may be reissued in
(a) A Federal Reserve Bank or the name of another individual related
Branch, or by blood (including legal adoption) or
(b) The Bureau of the Public Debt. marriage to either coowner:
(i) As single owner,
Reissue will not be made if the request
is received less than one full calendar (ii) As owner with one of the original
coowners as beneficiary, or
month before the final maturity date
(iii) As a new coowner with one of the
of a bond. The request, however, will be
original coowners.
effective to establish ownership as
(2) Reissue—to name either coowner
though the requested reissue had been
alone or with another individual as co-
made.
owner or beneficiary. During the life-
§ 353.46 Effective date of request for time of both coowners, a coownership
reissue. bond may be reissued in the name of ei-
ther coowner alone or with another in-
The Department of the Treasury will dividual as coowner or beneficiary if:
treat the receipt by: (a) A Federal Re- (i) After issue of the submitted bond,
serve Bank or Branch or (b) the Bureau either coowner named thereon marries,
of the Public Debt of a bond and an ac- or the coowners are divorced or legally
ceptable request for reissue as deter- separated from each other, or their
mining the date upon which the rights marriage is annulled; or
of the parties are fixed for the purpose (ii) Both coowners on the submitted
of reissue. For example, if the owner or bond are related by blood (including
either coowner of a bond dies after the legal adoption) or marriage to each
bond has been surrendered for reissue, other.
the bond will be regarded as having (3) Reissue—to name the trustee of a
been reissued in the decedent’s life- personal trust estate. A bond registered
time. in coownership form may be reissued to
358
name a trustee of a personal trust es- Subpart J—Certifying Officers

tate created by either coowner or by
some other person if: § 353.55 Individuals authorized to cer-
(i) Either coowner is a beneficiary of tify.
the trust, or (ii) a beneficiary of the The following individuals are author-
trust is related by blood or marriage to ized to act as certifying officers for the
either coowner. purpose of certifying a request for pay-
(c) Beneficiary. A bond registered in ment, reissue, or a signature to a Pub-
beneficiary form may be reissued: lic Debt form:
(1) To name the beneficiary as co- (a) Officers generally authorized—(1) At
owner; banks, trust companies, and member orga-
(2) To substitute another individual nizations of the Federal Home Loan Bank
System. (i) Any officer of a bank incor-
as beneficiary; or
porated in the United States, the terri-
(3) To eliminate the beneficiary, and,
tories or possessions of the United
if the beneficiary is eliminated, to ef- States, or the Commonwealth of Puer-
fect any of the reissues authorized by to Rico.
paragraph (a) of this section. (ii) Any officer of a trust company in-
corporated in the United States, the
§ 353.48 Restrictions on reissue.
territories or possessions of the United
(a) Denominational exchange. Reissue States, or the Commonwealth of Puer-
is not permitted solely to change de- to Rico.
nominations. (iii) Any officer of an organization
(b) United States Treasury. Reissue that is a member of the Federal Home
may not be made to eliminate the Loan Bank System. This includes Fed-
United States Treasury as coowner. eral savings and loan associations.
(iv) Any officer of a foreign branch or
§ 353.49 Correction of errors. a domestic branch of an institution in-
dicated in paragraphs (a)(1)(i) through
A bond may be reissued to correct an
(iii) of this section.
error in registration upon appropriate
(v) Any officer of a Federal Reserve
request supported by satisfactory proof Bank, a Federal Land Bank, or a Fed-
of the error. eral Home Loan Bank.
(vi) Any employee of an institution
§ 353.50 Change of name.
in paragraphs (a)(1)(i) through (v) of
An owner, coowner, or beneficiary this section, who is expressly author-
whose name is changed by marriage, ized to certify by the institution.
divorce, annulment, order of court, or
in any other legal manner after the Certification by these officers or des-
issue of the bond should submit the ignated employees must be authenti-
bond with a request for reissue to sub- cated by a legible imprint of either the
corporate seal of the institution or of
stitute the new name for the name in-
the issuing or paying agent’s stamp.
scribed on the bond. Documentary evi-
The employee expressly authorized to
dence may be required in any appro- certify by an institution must sign his
priate case. or her name over the title ‘‘Designated
Employee’’.
§ 353.51 Requests for reissue.
(2) At issuing agents that are not banks
A request for reissue of bonds in co- or trust companies. Any officer of an or-
ownership form must be signed by both ganization, not a bank or a trust com-
coowners, except that a request solely pany, that is qualified as an issuing
to eliminate the name of one coowner agent for bonds of Series EE. The
may be signed by that coowner only. A agent’s stamp must be imprinted in the
bond registered in beneficiary form certification.
may be reissued upon the request of (3) By United States officials. Any
the owner, without the consent of the judge, clerk, or deputy clerk of a
beneficiary. Public Debt forms are United States court, including United
available for requesting reissue. States courts for the territories and
possessions of the United States and
359
§ 353.56 31 CFR Ch. II (7–1–11 Edition)
the Commonwealth of Puerto Rico; any Director of Finance of Guam; the Gov-
United States Commissioner, United ernor and the Director of Administra-
States Attorney, or United States Col- tive Services of American Samoa; or
lector of Customs, including their dep- designated officers of the Panama
uties; in the Internal Revenue Service, Canal Commission.
any Regional Commissioner, District (e) Special provisions. If no certifying
Director, Service Center Director, or officer is readily accessible, the Com-
Internal Revenue agent. missioner of the Public Debt, Deputy
(b) Officers with limited authority—(1) Commissioner, any Assistant Commis-
In the Armed Forces. Any commissioned sioner, or other designated official of
officer or warrant officer of the Armed
the Bureau or of a Federal Reserve
Forces of the United States, but only
Bank or Branch is authorized to make
for members of the respective services,
their families, and civilian employees special provision for any particular
at posts, bases, or stations. The certi- case.
fying officer must indicate his or her
§ 353.56 General instructions and li-
rank and state that the individual ability.
signing the request is one of the class
whose request the certifying officer is (a) The certifying officer must: (1)
authorized to certify. Require the person presenting a bond,
(2) At the Veterans Administration, or an appropriate Public Debt trans-
Federal penal institutions, and United action form, to establish his or her
States Public Health Service hospitals. identity in accordance with Depart-
Any officer in charge of a home, hos- ment of the Treasury instructions and
pital, or other facility of the Veterans identification guidelines;
Administration, but only for the pa- (2) Place a notation on the back of
tients, or employees of the facility; any the bond or on the appropriate Public
officer of a Federal penal institution or Debt transaction form, or in a separate
a United States Public Health Service record, showing exactly how identifica-
hospital expressly authorized to certify tion was established; and
by the Secretary of the Treasury or his
(3) Affix, as part of the certification,
designee, but only for the inmates, pa-
his or her official signature, title, seal
tients or employees of the institution
involved. Officers of Veterans Adminis- or issuing or paying agent’s stamp, ad-
tration facilities, Federal penal insti- dress, and the date of execution.
tutions, and Public Health Service hos- (b) The certifying officer and, if such
pitals must use the stamp or seal of the person is an officer or an employee of
particular institution or service. an organization, the organization will
(c) Authorized officers in foreign coun- be held fully responsible for the ade-
tries. Any United States diplomatic or quacy of the identification.
consular representative, or the officer
of a foreign branch of a bank or trust § 353.57 When a certifying officer may
company incorporated in the United not certify.
States whose signature is attested by Certifying officers may not certify
an imprint of the corporate seal or is the requests for payment of bonds, or
certified to the Department of the appropriate Public Debt transaction
Treasury. If none of these individuals forms if, in their own right or in a rep-
is available, a notary public or other resentative capacity, they—
officer authorized to administer oaths (a) Have an interest in the bonds, or
may certify, but his or her official (b) Will, by virtue of the requests
character and jurisdiction must be cer-
being certified, acquire an interest in
tified by a United States diplomatic or
the bonds.
consular officer under seal of his or her
office. § 353.58 Forms to be certified.
(d) Authorized officers in particular lo-
calities. The Governor and the Treas- When required in the instructions on
urer of Puerto Rico; the Governor and a Public Debt transaction form, the
the Commissioner of Finance of the form must be signed before an author-
Virgin Islands; the Governor and the ized certifying officer.
360
Subpart K—Minors, Incompetents, proof of competency and under-

Aged Persons, Absentees, et al. standing.
§ 353.60 Payment to representative of § 353.63 Payment to a parent or other

an estate. person on behalf of a minor.
If the owner of a savings bond is a
(a) The representative of an estate of
minor and the form of registration does
an owner who is a minor, an aged per-
not indicate that there is a representa-
son, incompetent, absentee, et al., may
tive of his or her estate, and if the
receive payment upon request:
minor is not of sufficient competency
(1) If the registration shows the name to sign the request for payment and to
and capacity of the representative; understand the nature of the trans-
(2) If the registration shows the ca- action, payment will be made to either
pacity but not the name of the rep- parent with whom the minor resides or
resentative and the request is accom- to whom legal custody has been grant-
panied by appropriate evidence; or ed. If the minor does not reside with ei-
(3) If the registration includes neither parent, payment will be made to
ther the name of the representative nor the person who furnishes the chief sup-
his or her capacity but the request is port for the minor. The request must
accompained by appropriate evidence. appear on the back of the bond in one
(b) Appropriate evidence for para- of the following forms:
graphs (a) (2) and (3) of this section in- (a) Request by parent.
cludes a certified copy of the letters of
I certify that I am the mother of John C.
appointment or, if the representative is
Jones (with whom he resides) (to whom
not appointed by a court, other proof of legal custody has been granted). He is
qualification. Except in the case of cor- lll years of age and is not of sufficient
porate fiduciaries, the evidence must understanding to make this request.
show that the appointment is in full Mary Jones on behalf of John C. Jones
force and be dated not more than one
year prior to the presentation of the (b) Request by other person.
bond for payment. The request for pay- I certify that John C. Jones does not reside
ment appearing on the back of a bond with either parent and that I furnish his
must be signed by the representative as chief support. He is lll years of age and is
such, for example, ‘‘John S. Jones, not of sufficient understanding to make this
request.
guardian (committee) of the estate of
Henry W. Smith, a minor (an incom- Alice Brown, grandmother,
petent)’’. On behalf of John C. Jones
§ 353.61 Payment after death. § 353.64 Payment, reinvestment, or ex-

change—voluntary guardian of an
After the death of the ward, and at incapacitated person.
any time prior to the representative’s (a) Payment of bonds. When an adult
discharge, the representative of the es- owner of bonds is incapable of request-
tate will be entitled to obtain payment ing payment as a result of incapacity
of a bond to which the ward was solely and there is no other person legally
entitled. qualified to do so, the relative, or other
person, responsible for the owner’s care
§ 353.62 Payment to minors. and support may submit an application
If the owner of a savings bond is a for recognition as voluntary guardian
minor and the form of registration does for the purpose of redeeming the own-
not indicate that there is a representa- er’s bonds, if the total redemption
tive of the minor’s estate, payment value of all of the owner’s bonds does
will be made to the minor upon his or not exceed $20,000. The redemption
her request, provided the minor is of value of the bonds shall be determined
sufficient competency to sign the re- as of the date the bonds are received,
quest for payment and to understand accompanied by an appropriate request
the nature of the transaction. In gen- for payment. If the total redemption
eral, the fact that the request for pay- value exceeds $20,000, a legal represent-
ment has been signed by a minor and ative must be appointed, as set forth in
certified will be accepted as sufficient § 315.60.
361
§ 353.65 31 CFR Ch. II (7–1–11 Edition)
(b) Reinvestment of bonds. If the tate a legal representative has been ap-
bonds have finally matured and it is pointed is permitted only if supported
desired to redeem them and reinvest by evidence that a court has authorized
the proceeds in other savings bonds, the representative of the minor’s or
the new bonds must be registered in incompetent’s estate to request the re-
the name of the incapacitated person, issue. See § 353.23.
followed by words showing that he or Except to the extent provided in para-
she is under voluntary guardianship; graphs (a) through (d) of this section,
for example, ‘‘John Jones 123–45–6789, reissue will be restricted to a form of
under voluntary guardianship’’. A liv- registration which does not adversely
ing coowner or beneficiary named on affect the existing ownership or inter-
the matured bonds must be designated est of a minor who is not of sufficient
on the new bonds, unless such person understanding to make a request, or
furnishes a certified statement con- other person under legal disability. Re-
senting to omission of his or her name. quests for reissue should be executed
If an amount insufficient to purchase by the person authorized to request
an additional bond of any authorized payment under §§ 353.60 and 353.63, or
denomination of either series remains the person who may request
after the reinvestment, the voluntary
recognization as voluntary guardian
guardian may furnish additional funds
under § 353.64.
sufficient to purchase another bond of
either series of the lowest available de- [44 FR 76441, Dec. 26, 1979. Redesignated at 57
nomination. If additional funds are not FR 39602, Sept. 1, 1992]
furnished, the remaining amount will
be paid to the voluntary guardian for Subpart L—Deceased Owner,
the use and benefit of the incapacitated Coowner or Beneficiary
person.
(c) Exchange of bonds. The provisions § 353.70 General rules governing enti-
for reinvestment of the proceeds of ma- tlement.
tured bonds are equally applicable to The following rules govern ownership
any authorized exchange of bonds of or entitlement where one or both of the
one series for those of another. persons named on a bond have died
[57 FR 39602, Sept. 1, 1992] without the bond having been surren-
dered for payment or reissue:
§ 353.65 Reissue. (a) Single owner bond. If the owner of
A bond on which a minor or other a bond registered in single ownership
person under legal disability is named form has died, the bond becomes the
as the owner or coowner, or in which he property of that decedent’s estate, and
or she has an interest, may be reissued payment or reissue will be made as pro-
under the following conditions: vided in this subpart.
(a) A minor for whose estate no rep- (b) Coowner bond—(1) One coowner de-
resentative has been appointed may re- ceased. If one of the coowners named on
quest reissue if the minor is of suffi- a bond has died, the surviving coowner
cient competency to sign his or her will be recognized as the sole and abso-
name to the request and to understand lute owner, and payment or reissue will
the nature of the transaction. be made as though the bond were reg-
(b) A bond on which a minor is named istered in the name of the survivor
as beneficiary or coowner may be re- alone. Any request for reissue by the
issued in the name of a custodian for surviving coowner must be supported
the minor under a statute authorizing by proof of death of the other coowner.
gifts to minor upon the request of the (2) Both coowners deceased. If both co-
adult whose name appears on the bond owners named on a bond have died, the
as owner or coowner. bond becomes the property of the es-
(c) A minor coowner for whose estate tate of the coowner who died last, and
no representative has been appointed, payment or reissue will be made as if
may be named sole owner upon the re- the bond were registered in the name of
quest of the competent coowner. the last deceased coowner alone. Proof
(d) Reissue to eliminate the name of of death of both coowners will be re-
a minor or incompetent for whose es- quired to establish the order of death.
362
(3) Simultaneously death of both co- sons entitled may request payment or
owners. If both coowners die under con- reissue of savings bonds. A certified
ditions where it cannot be established, copy of the court-approved final ac-
either by presumption of law or other- counting for the estate, the court’s de-
wise, which coowner died first, the cree of distribution, or other appro-
bond becomes the property of both priate evidence is required.
equally, and payment or reissue will be (c) Special provisions under the law of
made accordingly. the jurisdiction of the decedent’s domicile.
(c) Beneficiary bond—(1) Owner de- If there is no formal or regular admin-
ceased. If the owner of a bond registration and no representative of the
istered in beneficiary form has died and estate is to be appointed, the person
is survived by the beneficiary, upon appointed to receive or distribute the
proof of death of the owner, the bene- assets of a decedent’s estate without
ficiary will be recognized as the sole regular administration under applica-
and absolute owner of the bond. Pay- ble local law summary or small estates
ment or reissue will be made as though procedures may request payment or re-
the bond were registered in the sur- issue of savings bonds. Appropriate evi-
vivor’s name alone. A request for pay- dence is required.
ment or reissue by the beneficiary (d) When administration is required. If
must be supported by proof of death of the total redemption value of the
the owner. Treasury securities and undelivered
(2) Beneficiary deceased. If the bene- payments, if any, held directly on our
ficiary’s death occurs before, or simul- records that are the property of the de-
taneously with, that of the registered cedent’s estate is greater than $100,000,
owner, payment or reissue will be made administration of the decedent’s estate
as though the bond were registered in will be required. The redemption value
the owner’s name alone. Proof of death of savings bonds and the principal
of the owner and beneficiary is re- amount of marketable securities will
quired to establish the order of death. be used to determine the value of secu-
(d) Nonresident aliens. If the person rities, and will be determined as of the
who becomes entitled to a bond be- date of death. Administration may also
cause of the death of an owner is an be required at the discretion of the De-
alien who is a resident of an area with partment for any case.
respect to which the Department of the (e) Voluntary representative for small
Treasury restricts or regulates the de- estates that are not being otherwise ad-
livery of checks drawn against funds of ministered—(1) General. A voluntary
the United States or its agencies or in- representative is a person qualified ac-
strumentalities, delivery of the recording to paragraph (e)(3) of this sec-
demption check will not be made so tion, to redeem or distribute a dece-
long as the restriction applies. See De- dent’s savings bonds. The voluntary
partment of the Treasury Circular No. representative procedures are for the
655, current revision (31 CFR part 211). convenience of the Department; enti-
tlement to the decedent’s savings
§ 353.71 Decedent’s estate. bonds and held payments, if any, is de-
(a) Estate is being administered. (1) A termined by the law of the jurisdiction
legal representative of a deceased own- in which the decedent was domiciled at
er’s estate may request payment of the date of death. Voluntary represent-
savings bonds to the estate, or may dis- ative procedures may be used only if:
tribute the savings bonds to the per- (i) There has been no administration,
sons entitled. no administration is contemplated, and
(2) Appropriate proof of appointment no summary or small estate procedures
for the legal representative of the es- under applicable local law have been
tate is required. Letters of appoint- used;
ment must be dated not more than one (ii) The total redemption value of the
year prior to the date of submission of Treasury securities and held payments,
the letters of appointment. if any, held directly on our records
(b) Estate has been settled previously. If that are the property of the decedent’s
the estate has been settled previously estate is $100,000 or less as of the date
through judicial proceedings, the per- of death; and
363
§ 353.72 31 CFR Ch. II (7–1–11 Edition)
(iii) There is a person eligible to United States and all creditors and per-
serve as the voluntary representative sons entitled to the estate of the dece-
according to paragraph (e)(3) of this dent. The amount of the indemnifica-
section. tion is limited to an amount no greater
(2) Authority of voluntary representa- than the value received by the vol-
tive. A voluntary representative may: untary representative.
(i) Redeem the decedent’s savings (f) Creditor. If there has been no ad-
bonds that are eligible for redemption ministration, no administration is con-
on behalf of the persons entitled by the templated, no summary or small estate
law of the jurisdiction in which the de- procedures under applicable local law
cedent was domiciled at the date of have been used, and there is no person
death; eligible to serve as a voluntary rep-
(ii) Distribute the decedent’s savings resentative pursuant to paragraph (e)
bonds to the persons entitled by the of this section, then a creditor may
law of the jurisdiction in which the de- make a claim for the amount of the
cedent was domiciled at the date of debt, providing the debt has not been
death. barred by applicable local law.
(3) Order of precedence for voluntary
[70 FR 57430, Sept. 30, 2005]
representative. An individual eighteen
years of age or older may act as a vol- § 353.72 [Reserved]
untary representative according to the
following order of precedence: A sur-
viving spouse; if there is no surviving Subpart M—Fiduciaries
spouse, then a child of the decedent; if
there are none of the above, then a de- § 353.75 Payment or reissue during the
existence of the fiduciary estate.
scendant of a deceased child of the de-
cedent; if there are none of the above, (a) Payment or reissue before matu-
then a parent of the decedent; if there rity—(1) Request from the fiduciary
are none of the above, then a brother named in the registration. A request for
or sister of the decedent; if there are reissue or payment prior to maturity
none of the above, then a descendant of must be signed by all of the fiduciaries
a deceased brother or sister of the dece- unless by statute, decree of court, or
dent; if there are none of the above, the terms of the governing instrument,
then a next of kin of the decedent, as any lesser number may properly exe-
determined by the law of the jurisdic- cute the request. If the fiduciaries
tion in which the decedent was domi- named in the registration are still act-
ciled at the date of death. As used in ing, no further evidence will be re-
this order of precedence, child means a quired. In other cases, evidence to sup-
natural or adopted child of the dece- port the request will be required, as
dent. specified:
(4) Liability. By serving, the vol- (i) Fiduciaries by title only. If the bond
untary representative warrants that is registered only in the titles, without
the distribution of payments or savings the names, of fiduciaries not acting as
bonds is to the persons entitled by the a board, satisfactory evidence of their
law of the jurisdiction in which the de- incumbency must be furnished, except
cedent was domiciled at the date of in the case of bonds registered in the
death. The United States is not liable title of public officers as trustees.
to any person for the improper dis- (ii) Boards, committees, commission, etc.
tribution of payments or securities. If a bond is registered in the name of a
Upon payment or transfer of the secu- governing body which is empowered to
rities at the request of the voluntary act as a unit, and which holds title to
representative, the United States is re- the property of a religious, edu-
leased to the same extent as if it had cational, charitable or nonprofit orga-
paid or delivered to a representative of nization or a public corporation, the
the estate appointed pursuant to the request should be signed in the name of
law of the jurisdiction in which the de- the body by an authorized person. Ordi-
cedent was domiciled at the date of narily, a signed and certified request
death. The voluntary representative will be accepted without further evi-
shall indemnify and hold harmless the dence.
364
(iii) Corporate fiduciaries. If a bond is in exchange may be retained in the

registered in the name of a public or same capacity on the new bonds.
private corporation or a governmental
body as fiduciary, the request must be Subpart N—Private Organizations
signed by an authorized officer in the (Corporations, Associations,
name of the organization as fiduciary.
Partnerships, et cetera) and
Ordinarily, a signed and certified re-
quest will be accepted without further
Governmental Agencies, Units
evidence. and Officers
(2) Trustee of a common trust fund. A § 353.80 Payment to corporations or
bond held by a financial institution in unincorporated associations.
a fiduciary capacity may be reissued in
the name of the institution as trustee A bond registered in the name of a
of its common trust fund to the extent private corporation or an unincor-
that participation in the common trust porated association will be paid to the
fund is authorized by law or regulation. corporation or unincorporated associa-
The request for reissue should be exe- tion upon a request for payment on its
cuted by the institution and any co- behalf by an authorized officer. The
fiduciary. signature to the request should be in
the form, for example, ‘‘The Jones Coal
(3) Successor fiduciary. If the fiduciary
Company, a corporation, by John
in whose name the bond is registered
Jones, President’’, or ‘‘The Lotus Club,
has been replaced by another fiduciary,
an unincorporated association, by Wil-
satisfactory evidence of successorship
liam A. Smith, Treasurer’’. A request
must be furnished.
for payment so signed and certified will
(b) Payment at or after final maturity. ordinarily be accepted without further
At or after final maturity, a request evidence of the officer’s authority.
for payment signed by any one or more
of the fiduciaries will be accepted. Pay- § 353.81 Payment to partnerships.
ment will be made by check drawn as
the bond is registered. A bond registered in the name of an
existing partnership will be paid upon a
§ 353.76 Payment or reissue after ter- request for payment signed by a gen-
mination of the fiduciary estate. eral partner. The signature to the re-
quest should be in the form, for exam-
A bond registered in the name or ple, ‘‘Smith and Jones, a partnership,
title of a fiduciary may be paid or re- by John Jones, a general partner’’. A
issued to the person who has become request for payment so signed and cer-
entitled by reason of the termination tified will ordinarily be accepted as
of a fiduciary estate. Requests for re- sufficient evidence that the partner-
issue made by a fiduciary pursuant to ship is still in existence and that the
the termination of a fiduciary estate person signing the request is author-
should be made on the appropriate ized.
form. Requests for payment or reissue
by other than the fiduciary must be ac- § 353.82 Reissue or payment to succes-
companied by evidence to show that sors of corporations, unincor-
the person has become entitled in ac- porated associations, or partner-
cordance with applicable State law or ships.
otherwise. When two or more persons A bond registered in the name of a
have become entitled, the request for private corporation, an unincorporated
payment or reissue must be signed by association, or a partnership which has
each of them. been succeeded by another corporation,
unincorporated association, or partner-
§ 353.77 Exchanges by fiduciaries. ship by operation of law or otherwise,
Fiduciaries are authorized to request in any manner whereby the business or
an exchange of bonds of one series for activities of the original organization
those of another, pursuant to any ap- are continued without substantial
plicable Department of the Treasury change, will be paid to or reissued in
offering. A living coowner of bene- the name of the succeeding organiza-
ficiary named on the bonds submitted tion upon appropriate request on its
365
§ 353.83 31 CFR Ch. II (7–1–11 Edition)
behalf, supported by satisfactory evi- which it is organized or governed or to

dence of successorship. The appropriate the manner in which title to its prop-
form should be used. erty is held, will be paid upon a request
for payment signed on behalf of such
§ 353.83 Reissue or payment on dis- institution by an authorized represent-
solution of corporation or partner- ative. A request for payment signed by
ship.
a pastor of a church, superintendent of
(a) Corporations. A bond registered in a hospital, president of a college, or by
the name of a private corporation any official generally recognized as
which is in the process of dissolution having authority to conduct the finan-
will be paid to the authorized rep- cial affairs of the particular institution
resentative of the corporation upon a will ordinarily be accepted without fur-
request for payment, supported by sat- ther proof of authority. The signature
isfactory evidence of the representa- to the request should be in the form,
tive’s authority. At the termination of for example, ‘‘Shriners’ Hospital for
dissolution proceedings, the bond may Crippled Children, St. Louis, MO, by
be reissued upon the request of the au- William A. Smith, Superintendent’’, or
thorized representative in the names of ‘‘St. Mary’s Roman Catholic Church,
those persons, other than creditors, en- Albany, NY, by the Rev. John Smyth,
titled to the assets of the corporation, Pastor’’.
to the extent of their respective inter-
ests. Proof will be required that all § 353.85 Reissue in name of trustee or
statutory provisions governing the dis- agent for reinvestment purposes.
solution of the corporation have been
A bond registered in the name of a
complied with and that the persons in
religious, educational, charitable or
whose names reissue is requested are
entitled and have agreed to the reissue. nonprofit organization, whether or not
If the dissolution proceedings are under incorporated, may be reissued in the
the direction of a court, a certified name of a financial institution, or an
copy of an order of the court, showing individual, as trustee or agent. There
the authority of the representative to must be an agreement between the or-
make the distribution requested must ganization and the trustee or agent
be furnished. holding funds of the organization, in
(b) Partnerships. A bond registered in whole or in part, for the purpose of in-
the name of a partnership which has vesting and reinvesting the principal
been dissolved by death or withdrawal and paying the income to the organiza-
of a partner, or in any other manner: tion. Reissue should be requested on
(1) Will be paid upon a request for behalf of the organization by an au-
payment by any partner or partners thorized officer using the appropriate
authorized by law to act on behalf of form.
the dissolved partnership, or
§ 353.86 Reissue upon termination of
(2) Will be paid to or reissued in the investment agency.
names of the persons entitled as the re-
sult of such dissolution to the extent of A bond registered in the name of a fi-
their respective interests, except that nancial institution, or individual, as
reissue will not be made in the names agent for investment purposes only,
of creditors. The request must be sup- under an agreement with a religious,
ported by satisfactory evidence of enti- an educational, a charitable, or a non-
tlement, including proof that the debts profit organization, may be reissued in
of the partnership have been paid or the name of the organization upon ter-
properly provided for. The appropriate mination of the agency. The former
form should be used. agent should request such reissue and
should certify that the organization is
§ 353.84 Payment to certain institu- entitled by reason of the termination
tions. of the agency. If such request and cer-
A bond registered in the name of a tification are not obtainable, the bond
church, hospital, home, school, or simi- will be reissued in the name of the or-
lar institution, without reference in ganization upon its own request, sup-
the registration to the manner in ported by satisfactory evidence of the
366
termination of the agency. The appro- § 353.92 Supplements, amendments, or

priate form should be used. revisions.
The Secretary of the Treasury may
§ 353.87 Payment to governmental
agencies, units, or their officers. at any time, or from time to time, pre-
scribe additional, supplemental,
(a) Agencies and units. A bond reg- amendatory, or revised rules and regu-
istered in the name of a State, county, lations governing United States Sav-
city, town, village, or in the name of a ings Bonds of Series EE and HH.
Federal, State, or local governmental
agency, such as a board, commission,
or corporation, will be paid upon a re-
PART 354—REGULATIONS GOV-
quest signed in the name of the govern- ERNING BOOK-ENTRY SECURITIES
mental agency or unit or by an author- OF THE STUDENT LOAN MAR-
ized officer. A request for payment so KETING ASSOCIATION (SALLIE
signed and certified will ordinarily be MAE)
accepted without further proof of the
officer’s authority. Sec.
(b) Officers. A bond registered in the 354.0 Applicability; maintenance of Sallie
official title of an officer of a govern- Mae Securities.
mental agency or unit will be paid 354.1 Definitions of terms.
upon a request for payment signed by 354.2 Law governing rights and obligations
of Federal Reserve Banks, and Sallie
the officer. The request for payment so Mae; rights of any Person against Fed-
signed and certified will ordinarily be eral Reserve Bank, and Sallie Mae.
accepted as proof that the person sign- 354.3 Law governing other interests.
ing is the incumbent of the office. 354.4 Creation of Participant’s Security En-
titlement; security interests.
Subpart O—Miscellaneous 354.5 Obligations of Sallie Mae; no adverse
claims.
Provisions 354.6 Authority of Federal Reserve Banks.
354.7 Withdrawal of eligible Book-entry Sal-
§ 353.90 Waiver of regulations. lie Mae Securities for conversion to de-
The Commissioner of the Public finitive form.
Debt, as designee of the Secretary of 354.8 Waiver of regulations.
the Treasury, may waive or modify any 354.9 Liability of Sallie Mae and Federal
provision or provisions of these regula- Reserve Banks.
tions. He may do so in any particular 354.10 Additional provisions.
case or class of cases for the conven- AUTHORITY: 12 U.S.C. 391; 20 U.S.C. 1087–
ience of the United States or in order 2(m).
to relieve any person or persons of un- SOURCE: 62 FR 622, Jan. 6, 1997, unless oth-
necessary hardship: erwise noted.
(a) If such action would not be incon-
sistent with law or equity, (b) if it does § 354.0 Applicability; maintenance of
not impair any existing rights, and (c) Sallie Mae Securities.
if he is satisfied that such action would (a) A Sallie Mae Security may be
not subject the United States to any maintained in the form of a Definitive
substantial expense or liability. Sallie Mae Security or a Book-entry
Sallie Mae Security. A Book-entry Sal-
§ 353.91 Additional requirements; bond lie Mae Security shall be maintained in
of indemnity. the Book-entry System.
The Commissioner of the Public (b) The Sallie Mae Securities to
Debt, as designee of the Secretary of which the regulations in this part
the Treasury, may require: apply are obligations which, by the
(a) Such additional evidence as he terms of their issue, are available ex-
may consider necessary or advisable, or clusively as Book-entry Sallie Mae Se-
(b) a bond of indemnity, with or with- curities or which, pursuant to the secu-
out surety, in any case in which he rities documentation, are convertible
may consider such a bond necessary for from Book-entry Sallie Mae Securities
the protection of the interests of the to Definitive Sallie Mae Securities or
United States. vice versa.
367
§ 354.1 31 CFR Ch. II (7–1–11 Edition)
§ 354.1 Definitions of terms. rities held for a Participant are or may

(a) Adverse claim means a claim that be credited.
a claimant has a property interest in a (l) Person means and includes an indi-
Security and that it is a violation of vidual, corporation, company, govern-
the rights of the claimant for another mental entity, association, firm, part-
Person to hold, transfer, or deal with nership, trust, estate, representative,
the Security. and any other similar organization, but
(b) Book-entry Sallie Mae Security does not mean or include the United
means a Sallie Mae Security issued or States, Sallie Mae, or a Federal Re-
maintained in the Book-entry System. serve Bank.
(c) Book-entry System means the auto- (m) Revised Article 8 means Uniform
mated book-entry system operated by Commercial Code, Revised Article 8,
the Federal Reserve Banks acting as Investment Securities (with Con-
the fiscal agent for Sallie Mae, on forming and Miscellaneous Amend-
which Book-entry Sallie Mae Securi-
ments to Articles 1, 3, 4, 5, 9, and 10)
ties are issued, recorded, transferred
1994 Official Text. Revised Article 8 of
and maintained in book-entry form.
(d) Definitive Sallie Mae Security the Uniform Commercial Code is incor-
means a Sallie Mae Security in en- porated by reference in this part pursu-
graved or printed form, or that is oth- ant to 5 U.S.C. 552(a) and 1 CFR part 51.
erwise represented by a certificate. Article 8 was adopted by the American
(e) Eligible Book-entry Sallie Mae Secu- Law Institute and the National Con-
rity means a Book-entry Sallie Mae Se- ference of Commissioners on Uniform
curity issued or maintained in the State laws and approved by the Amer-
Book-entry System which by the terms ican Bar Association on February 14,
of its Security Documentation is avail- 1995. Copies of this publication are
able in either definitive or book-entry available from the Executive Office of
form. the American Law Institute, 4025
(f) Entitlement holder means a Person Chestnut Street, Philadelphia, PA
to whose account an interest in a 19104, and the National Conference of
Book-entry Sallie Mae Security is Commissioners on Uniform State Laws,
credited on the records of a Securities 676 North St. Clair Street, Suite 1700,
Intermediary. Chicago, IL 60611. Copies are also avail-
(g) Federal Reserve Bank means a Fed- able for public inspection at the De-
eral Reserve Bank or Branch.
partment of the Treasury Library,
(h) Federal Reserve Bank Operating
Room 5030, main Treasury Building,
Circular means the publication issued
by each Federal Reserve Bank that sets 1500 Pennsylvania Avenue, N.W., Wash-
forth the terms and conditions under ington D.C. 20220, and at the National
which the Federal Reserve Bank main- Archives and Records Administration
tains book-entry Securities accounts (NARA). For information on the avail-
(including Book-entry Sallie Mae Secu- ability of this material at NARA, call
rities) and transfers book-entry Securi- 202–741–6030, or go to: http://
ties (including Book-entry Sallie Mae www.archives.gov/federallregister/
Securities). codeloflfederallregulations/
(i) Funds account means a reserve ibrllocations.html.
and/or clearing account at a Federal (n) Sallie Mae means the Student
Reserve Bank to which debits or cred- Loan Marketing Association, a stock
its are posted for transfers against pay- holder-owned corporation and govern-
ment, book-entry securities trans- ment-sponsored enterprise established
action fees, or principal and interest in 1972 by, and operating pursuant to,
payments. section 439 of the Higher Education Act
(j) Participant means a Person that of 1965, as amended, 20 U.S.C. 1087–2.
maintains a Participant’s Securities (o) Sallie Mae security means any se-
Account with a Federal Reserve Bank.
curity or obligation of Sallie Mae
(k) Participant’s securities account
issued in the form of a Definitive Sallie
means an account in the name of a
Participant at a Federal Reserve Bank Mae Security or a Book-entry Sallie
to which Book-entry Sallie Mae Secu- Mae Security.
368
(p) Securities documentation means the governed solely by the book-entry reg-
applicable statement of terms and con- ulations contained in this part 354, the
ditions or other documents estab- Securities Documentation (to the ex-
lishing the terms of a Book-entry Sal- tent not inconsistent with these regu-
lie Mae Security. lations) and Federal Reserve Bank Op-
(q) Securities intermediary means: erating Circulars:
(1) A Person that is registered as a (1) The rights and obligations of Sal-
‘‘clearing agency’’ under the federal se- lie Mae and the Federal Reserve Banks
curities laws; a Federal Reserve Bank; with respect to:
any other Person that provides clear- (i) A Book-entry Sallie Mae Security
ance or settlement services with re- or Security Entitlement; and
spect to a Book-entry Security that (ii) The operation of the Book-entry
would require it to register as a clear-
System as it applies to Sallie Mae Se-
ing agency under the federal securities
curities; and
laws but for an exclusion or exemption
from the registration requirement, if (2) The rights of any Person, includ-
its activities as a clearing corporation, ing a Participant, against Sallie Mae
including promulgation of rules, are and the Federal Reserve Banks with re-
subject to regulation by a federal or spect to:
state governmental authority; or (i) A Book-entry Sallie Mae Security
(2) A Person (other than an indi- or Security Entitlement; and
vidual, unless such individual is reg- (ii) The operation of the Book-entry
istered as a broker or dealer under the System as it applies to Sallie Mae Se-
federal securities laws) including a curities.
bank or broker, that in the ordinary (b) A security interest in a Security
course of its business maintains securi- Entitlement that is in favor of a Fed-
ties accounts for others and is acting eral Reserve Bank from a Participant
in that capacity. and that is not recorded on the books
(r) Security means any note, bond, de- of a Federal Reserve Bank pursuant to
benture, evidence of indebtedness, or, § 354.4(c)(1), is governed by the law (not
in general, any interest or instrument including the conflict-of-law rules) of
commonly known as a ‘‘security.’’ the jurisdiction where the head office
(s) Security entitlement means the of the Federal Reserve Bank maintain-
rights and property interest of an Enti- ing the Participant’s Securities Ac-
tlement Holder with respect to a Book- count is located. A security interest in
entry Sallie Mae Security. a Security Entitlement that is in favor
(t) State means any state of the of a Federal Reserve Bank from a Per-
United States, the District of Colum- son that is not a Participant, and that
bia, Puerto Rico, the Virgin Islands, or is not recorded on the books of a Fed-
any other territory or possession of the eral Reserve Bank pursuant to
United States. § 354.14(c)(1), is governed by the law de-
(u) Transfer message means an in- termined in the manner specified in
struction of a Participant to a Federal § 354.3.
Reserve Bank to effect a transfer of a
(c) If the jurisdiction specified in the
Book-entry Security (including a
first sentence of paragraph (b) of this
Book-entry Sallie Mae Security) main-
section is a State that has not adopted
tained in the Book-entry System, as
Revised Article 8 (incorporated by ref-
set forth in Federal Reserve Bank Op-
erence, see § 354.1), then the law speci-
erating Circulars.
fied in paragraph (b) shall be the law of
[62 FR 622, Jan. 6, 1997, as amended at 69 FR that State as though Revised Article 8
18803, Apr. 9, 2004] had been adopted by that State.
§ 354.2 Law governing rights and obli- § 354.3 Law governing other interests.
gations of Federal Reserve Banks,
and Sallie Mae; rights of any Person (a) To the extent not inconsistent
against Federal Reserve Banks and with the regulations in this part, the
Sallie Mae. law (not including the conflict-of-law
(a) Except as provided in paragraph rules) of a Securities Intermediary’s
(b) of this section, the following are jurisdiction governs:
369
§ 354.4 31 CFR Ch. II (7–1–11 Edition)
(1) The acquisition of a Security En- Intermediary’s jurisdiction is the juris-

titlement from the Securities Inter- diction in which is located the chief ex-
mediary; ecutive office of the Securities Inter-
(2) The rights and duties of the Secu- mediary.
rities Intermediary and Entitlement (c) Notwithstanding the general rule
Holder arising out of a Security Enti- in paragraph (a)(5) of this section, the
tlement; law (but not the conflict-of-law rules)
(3) Whether the Securities Inter- of the jurisdiction in which the Person
mediary owes any duties to an adverse creating a security interest is located
claimant to a Security Entitlement; governs whether and how the security
(4) Whether an Adverse Claim can be interest may be perfected automati-
asserted against a Person who acquires cally or by filing a financing state-
a Security Entitlement from the Secu- ment.
rities Intermediary or a Person who (d) If the jurisdiction specified in
purchases a Security Entitlement or paragraph (b) of this section is a State
interest therein from an Entitlement that has not adopted Revised Article 8
Holder; and (incorporated by reference, see § 354.1),
(5) Except as otherwise provided in then the law for the matters specified
paragraph (c) of this section, the per- in paragraph (a) of this section shall be
fection, effect of perfection or non-per- the law of that State as though Re-
fection and priority of a security inter- vised Article 8 had been adopted by
est in a Security Entitlement. that State. For purposes of the applica-
(b) The following rules determine a tion of the matters specified in para-
‘‘Securities Intermediary’s jurisdic- graph (a) of this section, the Federal
tion’’ for purposes of this section: Reserve Bank maintaining the Partici-
(1) If an agreement between the Secu- pant’s Securities Account is a clearing
rities Intermediary and its Entitle- corporation, and the Participant’s in-
ment Holder specifies that it is gov- terest in a Book-entry Security is a Se-
erned by the law of a particular juris- curity Entitlement.
diction, that jurisdiction is the Securi-
ties Intermediary’s jurisdiction. § 354.4 Creation of Participant’s Secu-
(2) If an agreement between the Secu- rity Entitlement; security interests.
rities Intermediary and its Entitle- (a) A Participant’s Security Entitle-
ment Holder does not specify the gov- ment is created when a Federal Re-
erning law as provided in paragraph serve Bank indicates by book-entry
(b)(1) of this section, but expressly that a Book-entry Sallie Mae Security
specifies that the securities account is has been credited to a Participant’s Se-
maintained at an office in a particular curities Account.
jurisdiction, that jurisdiction is the Se- (b) A security interest in a Security
curities Intermediary’s jurisdiction. Entitlement of a Participant in favor
(3) If an agreement between the Secu- of the United States to secure deposits
rities Intermediary and its Entitle- of public money, including without
ment Holder does not specify a juris- limitation deposits to the Treasury tax
diction as provided in paragraph (b)(1) and loan accounts, or other security in-
or (b)(2) of this section, the Securities terest in favor of the United States
Intermediary’s jurisdiction is the juris- that is required by Federal statute,
diction in which is located the office regulation, or agreement, and that is
identified in an account statement as marked on the books of a Federal Re-
the office serving the Entitlement serve Bank is thereby effected and per-
Holder’s account. fected, and has priority over any other
(4) If an agreement between the Secu- interest in the securities. Where a se-
rities Intermediary and its Entitle- curity interest in favor of the United
ment Holder does not specify a juris- States in a Security Entitlement of a
diction as provided in paragraph (b)(1) Participant is marked on the books of
or (b)(2) of this section and an account a Federal Reserve Bank, such Federal
statement does not identify an office Reserve Bank may rely, and is pro-
serving the Entitlement Holder’s ac- tected in relying, exclusively on the
count as provided in paragraph (b)(3) of order of an authorized representative
this section, the Securities of the United States directing the
370
transfer of the security. For purposes § 354.5 Obligations of Sallie Mae; no

of this paragraph, an ‘‘authorized rep- adverse claims.
resentative of the United States’’ is the (a) Except in the case of a security
official designated in the applicable interest in favor of the United States
regulations or agreement to which a or a Federal Reserve Bank or otherwise
Federal Reserve Bank is a party, gov- as provided in § 354.4(c)(1), for the pur-
erning the security interest. poses of this part 354, Sallie Mae and
(c)(1) Sallie Mae and the Federal Re- the Federal Reserve Banks shall treat
serve Banks have no obligation to the Participant to whose Securities Ac-
agree to act on behalf of any Person or count an interest in a Book-entry Sal-
to recognize the interest of any trans- lie Mae Security has been credited as
feree of a security interest or other the person exclusively entitled to issue
limited interest in favor of any Person a Transfer Message, to receive interest
except to the extent of any specific re- and other payments with respect there-
quirement of Federal law or regulation of and otherwise to exercise all the
or to the extent set forth in any spe- rights and powers with respect to such
cific agreement with the Federal Re- Security, notwithstanding any infor-
serve Bank on whose books the interest mation or notice to the contrary. Nei-
of the Participant is recorded. To the ther the Federal Reserve Banks nor
extent required by such law or regula- Sallie Mae is liable to a Person assert-
tion or set forth in an agreement with ing or having an Adverse Claim to a
a Federal Reserve Bank, or the Federal Security Entitlement or to a Book-
Reserve Bank Operating Circular, a se- entry Sallie Mae Security in a Partici-
curity interest in a Security Entitle- pant’s Securities Account, including
ment that is in favor of a Federal Re- any such claim arising as a result of
serve Bank, Sallie Mae, or a Person the transfer or disposition of a Book-
may be created and perfected by a Fed- entry Sallie Mae Security by a Federal
eral Reserve Bank marking its books Reserve Bank pursuant to a Transfer
to record the security interest. Except Message that the Federal Reserve Bank
as provided in paragraph (b) of this sec- reasonably believes to be genuine.
tion, a security interest in a Security (b) The obligation of Sallie Mae to
Entitlement marked on the books of a make payments of interest and prin-
Federal Reserve Bank shall have pri- cipal with respect to Book-entry Sallie
ority over any other interest in the se- Mae Securities is discharged at the
curities. time payment in the appropriate
(2) In addition to the method pro- amount is made as follows:
vided in paragraph (c)(1) of this sec- (1) Interest on Book-entry Sallie Mae
tion, a security interest, including a Securities is either credited by a Fed-
security interest in favor of a Federal eral Reserve Bank to a Funds Account
Reserve Bank, may be perfected by any maintained at such Bank or otherwise
method by which a security interest paid as directed by the Participant.
may be perfected under applicable law (2) Book-entry Sallie Mae Securities
as described in § 354.2(b) or § 354.3. The are redeemed at maturity or pursuant
perfection, effect of perfection or non- to a call for redemption in accordance
perfection and priority of a security in- with their terms by a Federal Reserve
terest are governed by such applicable Bank withdrawing the securities from
law. A security interest in favor of a the Participant’s Securities Account in
Federal Reserve Bank shall be treated which they are maintained and by ei-
as a security interest in favor of a ther crediting the amount of the re-
clearing corporation in all respects demption proceeds, including both
under such law, including with respect principal and interest where applica-
to the effect of perfection and priority ble, to a Funds Account at such Bank
of such security interest. A Federal Re- or otherwise paying such principal and
serve Bank Operating Circular shall be interest, as directed by the Partici-
treated as a rule adopted by a clearing pant.
corporation for such purposes.
371
§ 354.6 31 CFR Ch. II (7–1–11 Edition)
§ 354.6 Authority of Federal Reserve (d) Sallie Mae Securities which are to
Banks. be delivered upon withdrawal may be
issued in either registered or bearer
(a) Each Federal Reserve Bank is
form, to the extent permitted by the
hereby authorized as fiscal agent of
applicable Securities Documentation.
Sallie Mae to perform functions with
respect to the issuance of Book-entry § 354.8 Waiver of regulations.
Sallie Mae Securities offered and sold
The Secretary reserves the right, in
by Sallie Mae, in accordance with the
the Secretary’s discretion, to waive
Securities Documentation, and Federal
any provision(s) of the regulations in
Reserve Bank Operating Circulars; to
this part in any case or class of cases
service and maintain Book-entry Sallie
for the convenience of Sallie Mae, or in
Mae Securities in accounts established
order to relieve any person or entity of
for such purposes; to make payments of
unnecessary hardship, if such action is
principal and interest with respect to not inconsistent with law, does not ad-
such Book-entry Sallie Mae Securities versely affect substantial existing
as directed by Sallie Mae; to effect rights, and the Secretary is satisfied
transfer of Book-entry Sallie Mae Se- that such action will not subject Sallie
curities between Participants’ Securi- Mae to any substantial expense or li-
ties Account as directed by the Partici- ability.
pants; to effect conversions between
Book-entry Sallie Mae securities and § 354.9 Liability of Sallie Mae and Fed-
Definitive Sallie Mae Securities with eral Reserve Banks.
respect to those securities as to which Sallie Mae and the Federal Reserve
conversion rights are available pursu- Banks may rely on the information
ant to the applicable Securities Docu- provided in a Transfer Message, and are
mentation; and to perform such other not required to verify the information.
duties as fiscal agent as may be re- Sallie Mae and the Federal Reserve
quested by Sallie Mae. Banks shall not be liable for any action
(b) Each Federal Reserve Bank may taken in accordance with the informa-
issue Operating Circulars not incon- tion set out in a Transfer Message or
sistent with this part, governing the evidence submitted in support thereof.
details of its handling of Book-entry
Sallie Mae Securities, Security Enti- § 354.10 Additional provisions.
tlements, and the operation of the (a) Additional requirements. In any
Book-entry System under this part. case or any class of cases arising under
these regulations, Sallie Mae may re-
§ 354.7 Withdrawal of eligible Book- quire such additional evidence and a
entry Sallie Mae Securities for con-
version to definitive form. bond of indemnity, with or without
surety, as may in the judgment of Sal-
(a) Eligible Book-entry Sallie Mae lie Mae be necessary for the protection
Securities may be withdrawn from the of the interests of Sallie Mae.
Book-entry System by requesting de- (b) Notice of attachment for Sallie Mae
livery of like Definitive Sallie Mae Se- Securities in Book-entry System. The in-
curities. terest of a debtor in a Security Entitle-
(b) A Federal Reserve Bank shall, ment may be reached by a creditor
upon receipt of appropriate instruc- only by legal process upon the Securi-
tions to withdraw Eligible Book-entry ties Intermediary with whom the debt-
Sallie Mae Securities from book-entry or’s securities account is maintained,
in the Book-entry System, convert except where a Security Entitlement is
such securities into Definitive Sallie maintained in the name of a secured
Mae Securities and deliver them in ac- party, in which case the debtor’s inter-
cordance with such instructions. No est may be reached by legal process
such conversion shall affect existing upon the secured party. The regula-
interests in such Sallie Mae Securities. tions in this part do not purport to es-
(c) All requests for withdrawal of Eli- tablish whether a Federal Reserve
gible Book-entry Sallie Mae Securities Bank is required to honor an order or
must be made prior to the maturity or other notice of attachment in any par-
date of call of such securities. ticular case or class of cases.
372
PART 355—REGULATIONS GOV- ignated depositories of the United

ERNING FISCAL AGENCY States do not apply to fiscal agency
CHECKS checks, unless a statute specifically
provides differently, or unless we state
Sec.
differently in this part. If a definition
355.0 What does this part cover? or matter pertaining to fiscal agency
355.1 Do any other regulations cover fiscal checks is not specifically covered in
agency checks? this part, we will apply the provisions
355.2 What special terms do I need to know of Regulations J of the Board of Gov-
to understand this part? ernors of the Federal Reserve System,
355.3 Where can I cash my fiscal agency at 12 CFR part 210. To the extent not
check?
355.4 Is there a time limit on cashing a fis- otherwise covered by this part or by
cal agency check? Regulation J, we will apply the provi-
355.5 What warranties does a presenting sions of the Uniform Commercial Code
bank make? (U.C.C.)
355.6 What happens if the presenting bank
breaches its warranty? § 355.2 What special terms do I need to
355.7 What notice should I give if I do not know to understand this part?
receive my check or if a check is lost,
stolen, or destroyed? Depository institution means:
355.8 How can I get a replacement fiscal (1) Any insured bank, mutual savings
agency check? bank or savings bank as defined in 12
355.9 What should I do if I recover a check U.S.C. 1813, or any institution eligible
reported as lost, stolen, destroyed, or not to become an insured bank under 12
received?
355.10 What happens if I present my check
U.S.C. 1815;
to the payor Reserve Bank more than six (2) Any insured credit union as de-
months after the issue date of the check? fined in 12 U.S.C. 1752, or any credit
355.11 What should I do if the endorsement union eligible to become an insured
on my check is forged or unauthorized? credit union under 12 U.S.C. 1781;
355.12 What requirements apply if the check (3) Any member as defined in 12
is payable to two or more persons?
355.13 Are there any additional require-
U.S.C. 1422; and
ments related to fiscal agency checks? (4) Any savings association as defined
355.14 Can these regulations be waived? in 12 U.S.C. that is an insured deposi-
355.15 Can these regulations be amended? tory institution as defined in the Fed-
AUTHORITY: 12 U.S.C. 391; 31 U.S.C. Ch. 31. eral Deposit Insurance Act, 12 U.S.C.
1811 et seq., or is eligible to become an
SOURCE: 65 FR 65700, Nov. 1, 2000, unless
insured depository institution under
otherwise noted.
that Act.
§ 355.0 What does this part cover? Fiscal agency check means a check for
This part governs checks issued for a payment in connection with a United
payments in connection with United States security drawn upon a Reserve
States securities. These checks, re- Bank and issued on our behalf by the
ferred to as ‘‘fiscal agency checks,’’ are Reserve Bank in its capacity as fiscal
issued by a designated Federal Reserve agent of the United States.
Bank in its capacity as fiscal agent of Payee (or ‘‘you’’) means the person or
the United States. The checks are persons to whom a fiscal agency check
drawn on the payor Federal Reserve is made payable.
Bank in its banking capacity. The Payor Reserve Bank means the Re-
drawer of a fiscal agency check is the serve Bank on which a fiscal agency
United States, and the drawee is a Fed- check is drawn.
eral Reserve Bank. The rights and li- Presenting bank means a depository
abilities of the United States, the Fed- institution that sends a fiscal agency
eral Reserve Banks, and others are set check directly to a Reserve Bank for
out in this part. payment or collection.
Reserve Bank or Federal Reserve Bank
§ 355.1 Do any other regulations cover means any Federal Reserve Bank or
fiscal agency checks? any branch of a Federal Reserve Bank.
The regulations governing checks Security, for the purpose of this part,
drawn on the United States and on des- means a direct obligation of the United
373
§ 355.3 31 CFR Ch. II (7–1–11 Edition)
States, including a Treasury bill, note, (4) Our employee fraudulently caused
bond or savings bond/note. the issuance of a fiscal agency check in
We (or ‘‘us’’) refers to the Secretary the name of any existing payee.
of the Treasury and the Secretary’s
delegates at the Treasury Department § 355.6 What happens if the presenting
bank breaches its warranty?
and the Bureau of the Public Debt. The
term also extends to any fiscal or fi- If the presenting bank breaches its
nancial agency acting on behalf of the warranty, the payor Reserve Bank may
United States when designated to act either return the check to the pre-
by the Secretary or the Secretary’s senting bank or send notice of the
delegates. The term does not refer to a breach to the presenting bank. If the
United States Savings Bond issuing or presenting bank does not make prompt
paying agent. restitution when it receives the re-
turned check or notice of breach, we
§ 355.3 Where can I cash my fiscal may begin appropriate collection pro-
agency check? cedures.
Presentment of a fiscal agency check § 355.7 What notice should I give if I
must be made to the payor Reserve do not receive my check or if a
Bank. The payor Reserve Bank will check is lost, stolen, or destroyed?
only cash a fiscal agency check pre- If a fiscal agency check is not re-
sented by the payee who can be identi- ceived within a reasonable time after a
fied to the satisfaction of the Reserve payment is due, or if a check is lost,
Bank. Otherwise, a fiscal agency check stolen, or destroyed, you must provide
must be presented through banking prompt written notification. Your
channels. A refusal to accept or to pay written notice may be sent to us or to
fiscal agency check presented by a per- the payor Reserve Bank. You may give
son other than the payee, or by a payee notice by telephone, but we will not
who is not reasonably identified, does issue a replacement check until you
not constitute dishonor. confirm the notice in writing. The
written notice must provide enough in-
§ 355.4 Is there a time limit on cashing formation for us to identify the ac-
a fiscal agency check? count and the security to which the
A payor Reserve Bank may refuse to payment relates. We will stop payment
pay a fiscal agency check presented on the fiscal agency check if we have a
more than six (6) months after the reasonable time to act before final pay-
issue date of the check. If the check is ment.
not presented within this time, you
must follow the procedures in § 355.10. § 355.8 How can I get a replacement
fiscal agency check?
§ 355.5 What warranties does a pre- The payor Federal Reserve Bank will
senting bank make? issue a replacement fiscal agency
(a) A presenting bank makes the war- check if:
ranties required of a sender under sub- (a) You submit written notice:
part A of regulation J (12 CFR part (b) The check is unpaid;
210). This paragraph does not limit any (c) We determine that recovery of the
warranty by a presenter or other party original check is unlikely; and
arising under State law. (d) The payee and endorsee, if any, of
the check execute the required indem-
(b) We are not barred from recovering
nification agreement.
on a breach of warranty solely because:
(1) Our negligence contributed to a § 355.9 What should I do if I recover a
fraudulent endorsement or material al- check reported as lost, stolen, de-
teration; stroyed, or not received?
(2) We did not promptly discover an If you recover the original check you
unauthorized signature or alteration; must notify us in writing. If we have
(3) An impostor fraudulently caused not yet issued a replacement check, we
the issuance of a fiscal agency check in will remove the stop payment order
the name of any existing payee; or against the original check. If we have
374
already issued a replacement check, will not subject the United States to
you must return the original check to substantial expense or liability.
us.
§ 355.15 Can these regulations be
§ 355.10 What happens if I present my amended?
check to the payor Reserve Bank We may, at any time, supplement,
more than six months after the amend, or revise the regulations in this
issue date of the check?
part.
If the payor Reserve Bank refuses
payment on a fiscal agency check sole- PART 356—SALE AND ISSUE OF
ly because it is presented more than six MARKETABLE BOOK-ENTRY
(6) months after the issue date of the
check, a replacement check will be
TREASURY BILLS, NOTES, AND
issued if you: BONDS (DEPARTMENT OF THE
(a) Surrender the original check; and TREASURY CIRCULAR, PUBLIC
(b) Executive the required indem- DEBT SERIES NO. 1–93)
nification agreement.
§ 355.11 What should I do if the en-
Sec.
dorsement on my check is forged or
356.0 What authority does the Treasury
unauthorized?
have to sell and issue securities?
If we verify the existence or a forged 356.1 To which securities does this circular
or unauthorized endorsement on a paid apply?
fiscal agency check, the payor Reserve 356.2 What definitions do I need to know to
Bank will issue a replacement check to understand this part?
356.3 What is the role of the Federal Re-
the person entitled. The payee or en- serve Banks in this process?
dorsee must execute an affidavit that 356.4 What are the book-entry systems in
there has been a forged or unauthorized which auctioned Treasury securities may
endorsement. We may also require an be issued or maintained?
indemnification agreement. 356.5 What types of securities does the
Treasury auction?
§ 355.12 What requirements apply if
the check is payable to two or more Subpart B—Bidding, Certifications, and
persons? Payment
If the fiscal agency check is payable 356.10 What is the purpose of an auction an-
to two or more persons, the require- nouncement?
ments of this part apply to all des- 356.11 How are bids submitted in an auc-
ignated payees. tion?
356.12 What are the different types of bids
§ 355.13 Are there any additional re- and do they have specific requirements
quirements related to fiscal agency or restrictions?
checks? 356.13 When must I report my net long posi-
tion and how do I calculate it?
We may require an indemnification 356.14 What are the requirements for sub-
agreement, with or without surety. mitting bids for customers?
You must provide any additional evi- 356.15 What rules apply to bids submitted
dence we consider necessary. We will by investment advisers?
require any information necessary for 356.16 Do I have to make any certifications?
the protection of the interests of the 356.17 How and when do I pay for securities
awarded in an auction?
United States.
Subpart C—Determination of Auction
§ 355.14 Can these regulations be
waived? Awards; Settlement
We reserve the right, in our discre- 356.20 How does the Treasury determine
tion, to waive any provision of the reg- auction awards?
356.21 How are awards at the high yield or
ulations in this part in any case or
discount rate calculated?
class of cases for the convenience of 356.22 Does the Treasury have any limita-
the United States, or to relieve any tions on auction awards?
person of unnecessary hardship, if the 356.23 How are the auction results an-
waiver is not inconsistent with law and nounced?
375
§ 356.0 31 CFR Ch. II (7–1–11 Edition)
356.24 Will I be notified directly of my § 356.2 What definitions do I need to
awards and, if I am submitting bids for know to understand this part?
others, do I have to provide confirma-
tions? Accrued interest means an amount
356.25 How does the settlement process that bidders must pay to us for interest
work? income as part of the settlement
amount. Accrued interest compensates
Subpart D—Miscellaneous Provisions us up front for interest that bidders
will be paid but did not earn because it
356.30 When does the Treasury pay principal
and interest on securities? is attributable to a period of time prior
356.31 How does the STRIPS program work? to the issue date. (See appendix B, sec-
356.32 What tax rules apply? tion I, paragraph C of this part for ad-
356.33 Does the Treasury have any discre- ditional explanation and examples.)
tion in the auction process? Adjusted value means, for an interest
356.34 What could happen if someone does component stripped from an inflation-
not fully comply with the auction rules protected security, an amount derived
or fails to pay for securities? by:
356.35 Who approved the information collec-
(1) Multiplying the semiannual inter-
tions?
est rate by the par amount, and then
APPENDIX A TO PART 356—BIDDER CATEGORIES (2) Multiplying this value by: 100 di-
APPENDIX B TO PART 356—FORMULAS AND TA-
BLES
vided by the Reference CPI of the origi-
APPENDIX C TO PART 356—INVESTMENT CON- nal issue date (or dated date, when the
SIDERATIONS dated date is different from the origi-
APPENDIX D TO PART 356—DESCRIPTION OF nal issue date). (See appendix B, sec-
THE CONSUMER PRICE INDEX tion IV of this part for an example of
AUTHORITY: 5 U.S.C. 301; 31 U.S.C. 3102, et how to calculate the adjusted value.)
seq.; 12 U.S.C. 391. Auction means a bidding process by
which we sell marketable Treasury se-
SOURCE: 69 FR 45202, July 28, 2004, unless
curities to the public.
otherwise noted.
Autocharge agreement means an agree-
EDITORIAL NOTE: Nomenclature changes to ment in a format acceptable to Treas-
part 356 appear at 70 FR 57439, Sept. 30, 2005. ury between a submitter or clearing
corporation and a depository institu-
Subpart A—General Information tion that authorizes us to:
(1) Deliver awarded securities to the
§ 356.0 What authority does the Treas- book-entry securities account of a des-
ury have to sell and issue securi- ignated depository institution in the
ties?
commercial book-entry system, and
Chapter 31 of Title 31 of the United (2) Charge a funds account of a des-
States Code authorizes the Secretary ignated depository institution for the
of the Treasury to issue United States settlement amount of the securities.
obligations, and to offer them for sale Bid means an offer to purchase a
with the terms and conditions that the stated par amount of securities, either
Secretary prescribes. competitively or noncompetitively, in
an auction.
§ 356.1 To which securities does this Bid-to-cover ratio means the total par
circular apply? amount of securities bid for in an auc-
The provisions in this part, including tion divided by the total par amount of
the appendices, and each individual securities awarded. It excludes bids by,
auction announcement govern the sale and awards to, the Federal Reserve for
and issuance of marketable Treasury its own account.
securities issued on or after March 1, Bidder, as further defined in appendix
1993. This part also governs all securi- A, means a person or an entity that of-
ties eligible for the STRIPS (Separate fers to purchase Treasury securities in
Trading of Registered Interest and an auction either directly or through a
Principal of Securities) Program (See depository institution or dealer. We
§ 356.31.). In addition, these provisions may consider two or more persons or
and the auction announcements govern entities to be one bidder based on their
any other types of securities we may relationship or their actions in partici-
issue under this part. pating in an auction. We consider a
376
controlled account to be a bidder when CUSIP is an acronym for Committee on

an investment adviser bids in the name Uniform Securities Identification Pro-
of the controlled account (See § 356.15.). cedures.
Bidder Identification Number means a Customer means a bidder that directs
number we assign to each institutional a depository institution or dealer to
submitter and to certain other bidders. submit or forward a bid for a specific
We assign such numbers either to iden- amount of securities in a specific auc-
tify certain bidders or to grant sepa- tion on the bidder’s behalf. Only depos-
rate bidder status to different parts of itory institutions and dealers may sub-
the same corporate or partnership mit bids for customers directly to us,
structure. or forward them to another depository
Book-entry security means a security institution or dealer.
that is issued or maintained as an ac- Dated date means the date from
counting entry or electronic record in which interest accrues for notes and
either the commercial book-entry sys- bonds. The dated date and issue date
tem or in one of Treasury’s two direct- are usually the same. In those cases
hold systems—TreasuryDirect® or Leg- where interest begins accruing prior to
acy Treasury Direct®. (See § 356.4.) the issue date, however, the dated date
Business day means any day on which will be prior to the issue date. An ex-
the Federal Reserve Banks are open for ample is when the dated date is a Sat-
business. urday and the issue date is the fol-
Call means the redemption of a secu- lowing Monday.
rity prior to maturity under the terms Dealer means an entity that is reg-
specified in its auction announcement. istered or has given notice of its status
Certificate of indebtedness means a as a government securities broker or
one-day non-interest-bearing security government securities dealer under
that may be held in TreasuryDirect Section 15C(a)(1) of the Securities Ex-
and that automatically matures and is change Act of 1934.
rolled over each day until its owner re-
Delivery and payment agreement means
quests that it be redeemed.
a written agreement between a clear-
Clearing corporation means a clearing
ing corporation and a submitter, ac-
agency as defined in section 3 of the
knowledged by a Federal Reserve
Securities Exchange Act of 1934 (15
Bank, regarding securities awarded to
U.S.C. 78c(a)(23)). A clearing corpora-
the submitter for its own account. It
tion must be registered with the Secu-
authorizes us to deliver such securities
rities and Exchange Commission under
to, and accept payment from, a deposi-
section 17A of the Securities Exchange
tory institution acting on behalf of the
Act of 1934 and its rules.
clearing corporation under an acknowl-
Competitive bid means a bid to pur-
edged autocharge agreement.
chase a stated par amount of securities
Depository institution means:
at a specified yield or discount rate.
Consumer Price Index (CPI) means the (1) An entity described in Section
monthly non-seasonally adjusted U.S. 19(b)(1)(A), excluding subparagraph
City Average All Items Consumer Price (vii), of the Federal Reserve Act (12
Index for All Urban Consumers, pub- U.S.C. 461(b)(1)(A)).
lished by the Bureau of Labor Statis- (2) Any agency or branch of a foreign
tics of the Department of Labor. We bank as defined by the International
use the CPI as the basis for adjusting Banking Act of 1978, as amended (12
the principal amounts of inflation-pro- U.S.C. 3101).
tected securities. (See appendix D.) Discount means the difference be-
Corpus means the principal compo- tween par and the price of the security,
nent of a security that has been when the price is less than par. (See ap-
stripped of its interest components. pendix B for formulas and examples.)
CUSIP number means the unique iden- Discount amount means the discount
tifying number assigned to each sepa- divided by 100 and multiplied by the
rate security issue and each separate par amount. (See appendix B for for-
STRIPS component. CUSIP numbers mulas and examples.)
are provided by the CUSIP Service Bu- Discount rate means a rate of return,
reau of Standard & Poor’s Corporation. on an annual basis, on bills held until
377
§ 356.2 31 CFR Ch. II (7–1–11 Edition)
they mature. The discount rate is ex- for in an auction as stated in the auc-
pressed in percentage terms and based tion announcement.
on a 360-day year. It is also referred to Multiple to bid means the smallest ad-
as the ‘‘bank discount rate.’’ (See ap- ditional amount of a security that may
pendix B for formulas and examples.) be bid for in an auction as stated in the
Funds account means a cash account auction announcement.
maintained by a depository institution Multiple-price auction means an auc-
at a Federal Reserve Bank. tion in which each successful competi-
Index means the Consumer Price tive bidder pays the price equivalent to
Index. the yield or rate that it bid.
Index ratio means, for an inflation- Noncompetitive bid means, for a sin-
protected security, the Reference CPI gle-price auction, a bid to purchase a
of a particular date divided by the Ref- stated par amount of securities at the
erence CPI of the original issue date. highest yield or discount rate awarded
(When the dated date is different from to competitive bidders. For a multiple-
the original issue date, the denomi- price auction, a noncompetitive bid
nator of the index ratio is the Ref- means a bid to purchase securities at
erence CPI of the dated date rather the weighted average yield or discount
than that of the original issue date.) rate of awards to competitive bidders.
Inflation-adjusted principal means, for Offering amount means the par
an inflation-protected security, the amount of securities we are offering to
value of the security derived by multi- the public for purchase in an auction,
plying the par amount by the applica- as specified in the auction announce-
ble index ratio as described in appendix ment.
B, section I, paragraph B. Par means a price of 100. (See appen-
Interest rate means the annual per- dix B.)
centage rate of interest paid on the par
Par amount means the stated value of
amount (or the inflation-adjusted prin-
a security at original issuance.
cipal) of a specific issue of notes or
Person means a natural person.
bonds. (See appendix B for methods and
examples of interest calculations on Premium means the difference be-
notes and bonds.) tween par and the price of the security,
Intermediary means a depository in- when the price is greater than par.
stitution or dealer that forwards bids Premium amount means the premium
for customers to another depository in- divided by 100 and multiplied by the
stitution or dealer. An intermediary par amount.
does not submit bids directly to us. Price means the price of a security
Issue date means the date specified in per 100 dollars of its stated value as
the auction announcement on which we calculated using the formulas in appen-
issue a security as an obligation of the dix B.
United States. Interest normally be- Real yield means, for an inflation-pro-
gins to accrue on a security’s issue tected security, the yield based on the
date. payment stream in constant dollars. In
Legacy Treasury Direct means a non- other words, the real yield is the yield
Internet-based book-entry system in the absence of inflation.
maintained by Treasury for purchasing Reference CPI (Ref CPI) means, for an
and holding marketable Treasury secu- inflation-protected security, the index
rities directly with Treasury. (See 31 number applicable to a given date. (See
CFR part 357.) appendix B, section I, paragraph B.)
Marketable security means a security Reopening means the auction of an
that may be bought, sold and trans- additional amount of an outstanding
ferred in the secondary market. security.
Maturity date means the date on Security means a Treasury bill, note,
which a security becomes due and pay- or bond, each as described in this part.
able, and ceases to earn interest. The Security also means any other obliga-
maturity date is specified in the auction we issue that is subject to this
tion announcement. part according to its auction announce-
Minimum to bid means the smallest ment. Security includes an interest or
amount of a security that may be bid principal component under the STRIPS
378
program, as well as a certificate of in- curities allotted at each yield or dis-

debtedness in an investor’s count rate.
TreasuryDirect account. Yield means the annualized rate of re-
Settlement means final and complete turn to maturity on a fixed-principal
payment for securities awarded in an security. Yield is expressed as a per-
auction and delivery of those securi- centage. For an inflation-protected se-
ties. curity, yield means the real yield.
Settlement amount means the total of Yield is also referred to as ‘‘yield to
the par amount of securities awarded, maturity.’’ (See appendix B.)
less any discount amount or plus any You means a prospective bidder in an
premium amount, and plus any accrued auction.
interest. For inflation-protected secu-
[69 FR 45202, July 28, 2004, as amended at 70
rities, the settlement amount also in- FR 57439, Sept. 30, 2005; 73 FR 14938, Mar. 20,
cludes any inflation adjustment when 2008; 76 FR 18063, Apr. 1, 2011]
such securities are reopened or when
the dated date is different from the § 356.3 What is the role of the Federal
issue date. Reserve Banks in this process?
Single-price auction means an auction The Treasury Department authorizes
in which all successful bidders pay the Federal Reserve Banks, as fiscal agents
same price regardless of the yields or of the United States, to perform all ac-
rates they each bid. tivities necessary to carry out the pro-
STRIPS (Separate Trading of Reg- visions of this part, any auction an-
istered Interest and Principal of Secu- nouncements, and applicable regula-
rities) means our program under which tions.
eligible securities are authorized to be
separated into principal and interest § 356.4 What are the book-entry sys-
components, and transferred sepa- tems in which auctioned Treasury
rately. These components are main- securities may be issued or main-
tained and transferred in the commer- tained?
cial book-entry system. There are three book-entry securities
Submitter means a person or entity systems—the commercial book-entry
submitting bids directly to us for its system, TreasuryDirect®, and Legacy
own account, for customer accounts, or Treasury Direct®—into which we issue
both. Only depository institutions and marketable Treasury securities. We
dealers are permitted to submit bids maintain and transfer securities in
for customer accounts. We permit in- these three book-entry systems (except
vestment advisers to submit bids on be- that securities may not be transferred
half of controlled accounts. into the Legacy Treasury Direct sys-
TINT means an interest component tem) at their par amount. Par amounts
from a stripped security. of Treasury inflation-protected securi-
TreasuryDirect means the book-entry, ties do not include adjustments for in-
online system maintained by Treasury flation. Securities may be transferred
for purchasing and holding marketable from one system to the other (except
Treasury securities, nonmarketable that securities may not be transferred
savings bonds, and certificates of in- into the Legacy Treasury Direct sys-
debtedness directly with Treasury. (See tem), unless the securities are not eli-
31 CFR part 363.) gible to be held in the receiving sys-
We (or ‘‘us’’) means the Secretary of tem. Securities may be transferred
the Treasury and his or her delegates, from one system to the other, unless
including the Department of the Treas- the securities are not eligible to be
ury, Bureau of the Public Debt, and held in the receiving system. See De-
their representatives. The term also in- partment of the Treasury Circular,
cludes Federal Reserve Banks acting as Public Debt Series No. 2–86, as amend-
fiscal agents of the United States. ed (part 357 of this chapter) and part
Weighted-average means the average 363 of this chapter.
of the yields or discount rates at which (a) The commercial book-entry system.
we award securities to competitive bid- When depository institutions or dealers
ders weighted by the par amount of se- submit bids for Treasury securities in
379
§ 356.5 31 CFR Ch. II (7–1–11 Edition)
an auction, securities awarded as a re- ties, we consider them to be the same

sult of those bids are generally held in securities as the outstanding securi-
the commercial book-entry system. ties.
Specifically, we maintain book-entry (a) Treasury bills. (1) Are issued at a
accounts in the National Book-Entry discount or at par, depending upon the
System ® (‘‘NBES’’) for Federal Reserve auction results;
Banks, depository institutions, and (2) Are redeemed at their par amount
other authorized entities, such as gov- at maturity; and
ernment and international agencies (3) Have maturities of not more than
and foreign central banks. In their ac- one year.
counts, depository institutions main- (b) Treasury notes—(1) Treasury fixed-
tain securities held for their own ac- principal 1 notes.
count and for the accounts of others. (i) Are issued with a stated rate of in-
The accounts held for others include terest to be applied to the par amount;
those of other depository institutions
(ii) Have interest payable semiannu-
and dealers, which may, in turn, main-
ally;
tain accounts for others.
(b) TreasuryDirect. In this system, ac- (iii) Are redeemed at their par
count holders maintain accounts in a amount at maturity;
book-entry, online system directly on (iv) Are sold at discount, par, or pre-
the records of the Bureau of the Public mium, depending upon the auction re-
Debt, Department of the Treasury. sults; and
Bids for securities to be held in (v) Have maturities of at least one
TreasuryDirect are submitted through year, but of not more than ten years.
the Internet. (2) Treasury inflation-protected notes.
(c) Legacy Treasury Direct. In this sys- (i) Are issued with a stated rate of in-
tem, we maintain the book-entry secu- terest to be applied to the inflation-ad-
rities of account holders directly on justed principal on each interest pay-
the records of the Bureau of the Public ment date;
Debt, Department of the Treasury. (ii) Have interest payable semiannu-
Bids for securities to be held in Legacy ally;
Treasury Direct are submitted directly (iii) Are redeemed at maturity at
to us. From time to time, Treasury their inflation-adjusted principal, or at
may announce that certain securities their par amount, whichever is greater;
to be offered will not be eligible for (iv) Are sold at discount, par, or pre-
purchase or holding in Legacy Treas- mium, depending on the auction re-
ury Direct. sults (See appendix B for price and in-
[69 FR 45202, July 28, 2004, as amended at 70 terest payment calculations and appen-
FR 57439, Sept. 30, 2005; 72 FR 2193, Jan. 18, dix C for Investment Considerations.);
2007; 71 FR 2928, Jan. 23, 2007; 73 FR 14938, and
Mar. 20, 2008; 76 FR 18063, Apr. 1, 2011] (v) Have maturities of at least one
year, but not more than ten years.
§ 356.5 What types of securities does
the Treasury auction? (c) Treasury bonds—(1) Treasury
fixed-principal bonds. (i) Are issued
We offer securities under this part with a stated rate of interest to be ap-
exclusively in book-entry form and as plied to the par amount;
direct obligations of the United States (ii) Have interest payable semiannu-
issued under Chapter 31 of Title 31 of ally;
the United States Code. The securities (iii) Are redeemed at their par
are subject to the terms and conditions amount at maturity;
in this part, the regulations in 31 CFR
part 363 (for securities held in
1 We use the term ‘‘fixed-principal’’ in this
TreasuryDirect), the regulations in 31
CFR part 357 (for securities held in the part to distinguish such securities from ‘‘in-
flation-protected’’ securities. We refer to
commercial book-entry system and fixed-principal notes and fixed-principal
Legacy Treasury Direct), and the auc- bonds as ‘‘notes’’ and ‘‘bonds’’ in official
tion announcements. When we issue ad- Treasury publications, such as auction an-
ditional securities with the same nouncements and auction results press re-
CUSIP number as outstanding securi- leases, as well as in auction systems.
380
(iv) Are sold at discount, par, or pre- this section. A bidder must provide its
mium, depending on the auction re- assigned bidder identification numbers
sults; and if it has been assigned one. We have the
(v) Have maturities of more than ten option of accepting or rejecting incom-
years. plete bids.
(2) Treasury inflation-protected bonds. (2) We must receive competitive and
(i) Are issued with a stated rate of in- noncompetitive bids prior to their re-
terest to be applied to the inflation-ad- spective closing times, which are stat-
justed principal on each interest pay- ed in the auction announcement. We
ment date; will not include late bids in the auc-
(ii) Have interest payable semiannu- tion. For bids other than those sub-
ally; mitted on paper forms, our computer
(iii) Are redeemed at maturity at time stamp will establish the receipt
their inflation-adjusted principal, or at time. You are bound by your bids after
their par amount, whichever is greater; the closing time.
(iv) Are sold at discount, par, or pre- (3) We are not responsible for any
mium, depending on the auction re- delays, errors, or omissions. We are not
sults; and responsible for any failures or disrup-
(v) Have maturities of more than ten tions of equipment or communications
years. (See appendix B for price and in- facilities used for participating in
terest payment calculations and appen- Treasury auctions.
dix C for Investment Considerations.) (4) Submitters are responsible for
[69 FR 45202, July 28, 2004, as amended at 70 bids submitted using computer equip-
FR 57439, Sept. 30, 2005; 74 FR 26086, June 1, ment on their premises, whether or not
2009] such bids are authorized.
(b) Commercial book-entry system. (1) If
Subpart B—Bidding, Certifications, you are a submitter and the awarded
and Payment securities are to be issued in the com-
mercial book-entry system, you must
§ 356.10 What is the purpose of an auc- submit bids using one of our approved
tion announcement? electronic methods except for contin-
By issuing an auction announcement, gency situations.
we provide public notice of the sale of (2) You must have an agreement on
bills, notes, and bonds. The auction an- file with us under which you agree to
nouncement lists the specifics of each our terms and conditions for access to
auction, e.g., offering amount, term our system for participating in our
and type of security, CUSIP number, auctions.
and issue and maturity dates. The auc- (3) In contingency situations, such as
tion announcement and this part, in- a power outage, we may accept bids by
cluding the Appendices, specify the a telephone call to designated Treasury
terms and conditions of sale. If any- employees if you submit them prior to
thing in the auction announcement dif- the relevant bidding deadline.
fers from this part, the auction an- (c) TreasuryDirect. You must submit
nouncement will control. If you intend your bids through your established
to bid, you should read the applicable book-entry, online TreasuryDirect ac-
auction announcement along with this count. You may reinvest the proceeds
part. of maturing securities held in
TreasuryDirect by directing that the
§ 356.11 How are bids submitted in an proceeds be used to purchase a certifi-
auction? cate of indebtedness in your
(a) General. (1) All bids must be sub- TreasuryDirect account and by using
mitted using an approved method, the proceeds of your certificate of in-
which depends on whether you are re- debtedness to pay for the securities.
questing us to issue the awarded secu- (d) Legacy Treasury Direct. (1) If you
rities in the commercial book-entry are a submitter and the awarded secu-
system, in TreasuryDirect ®, or in Leg- rities are to be issued in Legacy Treas-
acy Treasury Direct ® (See § 356.4). The ury Direct, you may submit bids by
approved submission methods for these using one of our approved methods,
respective systems are explained in e.g., computer, automated telephone
381
§ 356.12 31 CFR Ch. II (7–1–11 Edition)
service, or paper forms. You may also tively if, in the security being auc-
reinvest the proceeds of maturing secu- tioned, you hold a position in when-
rities into new securities through the issued trading or in futures or forward
same methods. contracts at any time between the date
(2) If you are submitting bids by of the auction announcement and the
paper form, you must use forms au- time we announce the auction results.
thorized by the Bureau of the Public During this same timeframe, a non-
Debt and provide the requested infor- competitive bidder may not enter into
mation. We have the option of accept- any agreement to purchase or sell or
ing or rejecting bids on any other form. otherwise dispose of the securities it is
You are responsible for ensuring that acquiring in the auction. For this para-
we receive bids in paper form on time. graph, futures contracts include those:
A noncompetitive bid is on time if: (i) That require delivery of the spe-
(i) We receive it on or before the cific security being auctioned;
issue date, and (ii) For which the security being auc-
(ii) The envelope it arrived in bears tioned is one of several securities that
evidence, such as a U.S. Postal Service may be delivered; or
cancellation, that it was mailed prior
(iii) That are cash-settled.
to the auction date.
(3) If you are submitting a bid by (c) Competitive bids—(1) Bid format—(i)
computer or automated telephone serv- Treasury bills. A competitive bid must
ice you must be an established Legacy show the discount rate bid, expressed
Treasury Direct account holder with a with three decimals in .005 increments.
Taxpayer Identification Number. The third decimal must be either a zero
(4) In contingency situations, such as or a five, for example, 5.320 or 5.325. We
a power outage, we may accept bids by will treat any missing decimals as zero,
other means, provided, that in all cases for example, a bid of 5.32 will be treated
the bids are submitted prior to the rel- as 5.320. The rate bid may be a positive
evant bidding deadline by an estab- number or zero.
lished Legacy Treasury Direct account (ii) Treasury fixed-principal securities.
holder. A competitive bid must show the yield
bid, expressed with three decimals, for
example, 4.170. We will treat any miss-
FR 57440, Sept. 30, 2005]
ing decimals as zero, for example, a bid
§ 356.12 What are the different types of of 4.1 will be treated as 4.100. The yield
bids and do they have specific re- bid may be a positive number or zero.
quirements or restrictions? (iii) Treasury inflation-protected securi-
(a) General. All bids must state the ties. A competitive bid must show the
par amount of securities bid for and real yield bid, expressed with three
must equal or exceed the minimum to decimals, for example, 3.070. We will
bid amount stated in the auction an- treat any missing decimals as zero, for
nouncement. Bids in larger amounts example, a bid of 3 will be treated as
must be in the multiple stated in the 3.000. The real yield may be a positive
auction announcement. number, a negative number, or zero.
(b) Noncompetitive bids—(1) Maximum (2) Maximum recognized bid. There is
bid. You may not bid noncompetitively no limit on the maximum dollar
for more than $5 million. The max- amount that you may bid for competi-
imum bid limitation does not apply if tively, either at a single yield or dis-
you are bidding solely through either a count rate, or at different yields or dis-
TreasuryDirect ® or a Legacy Treasury count rates. However, a competitive
Direct ® reinvestment request. A re- bid at a single yield or discount rate
quest for reinvestment of securities that exceeds 35 percent of the offering
maturing in either TreasuryDirect or amount will be reduced to that
Legacy Treasury Direct is a non- amount. For example, if the offering
competitive bid. amount is $10 billion, the maximum bid
(2) Additional restrictions. You may amount we will recognize at any one
not bid noncompetitively in an auction yield or discount rate from any bidder
in which you are bidding competi- is $3.5 billion. (See § 356.22 for award
tively. You may not bid noncompeti- limitations.)
382
(3) Additional restrictions. You may in an auction, you must report your
not bid competitively in an auction in net long position when the total of
which you are bidding noncompeti- your bids plus your net long position in
tively. You may not bid competitively the security being auctioned equals or
for securities to be bought through ei- exceeds the net long position reporting
ther TreasuryDirect or Legacy Treas- threshold (See table.). We will specify
ury Direct. this threshold in the auction announce-
[69 FR 45202, July 28, 2004, as amended at 69 ment for each security (See § 356.10.).
FR 53621, Sept. 2, 2004; 70 FR 57440, Sept. 30, The threshold is typically 35 percent of
2005; 74 FR 26086, June 1, 2009] the offering amount, but we may state
a different threshold in the auction an-
§ 356.13 When must I report my net
long position and how do I cal- nouncement. To see whether you must
culate it? report your net long position, follow
(a) Net long position reporting thresh- this table:
old. (1) If you are bidding competitively
If . . . And if . . . Then . . .
(i) the total of your bids and your net long you must report your net long position
position in the security being auctioned (which does not include your bids).
equals or exceeds the reporting thresh-
old.
(ii) the total of your bids in the auction you have no position or a net short posi- you must report a zero.
equals or exceeds the reporting thresh- tion in the security being auctioned.
old.
(iii) the total of your bids and your net you may either report nothing (leave the
long position in the security being auc- field blank) or report your net long po-
tioned is less than the reporting thresh- sition.
old.
(2) Also, if you have more than one (ii) Futures contracts that require
bid in an auction and you must report delivery of the specific security being
either your net long position or a zero, auctioned (but not futures contracts
you must report that figure only once. for which the security being auctioned
Finally, if you are a customer and is one of several securities that may be
must report either your net long posi- delivered, and not futures contracts
tion or a zero, you must report that that are cash-settled); and
figure through only one depository in- (iii) Forward contracts that require
stitution or dealer. (See § 356.14(d).) delivery of the specific security being
(b) ‘‘As of’’ time for calculating net long auctioned or of the STRIPS principal
position. You must calculate your net component of that security.
long position as of one half-hour prior (d) Calculating the net long position in
to the closing time for receipt of com- a reopening. In a reopening (additional
petitive bids. issue) of an outstanding security, you
(c) Components of the net long position. may subtract the exclusion amount
Except as modified in paragragh (d) of stated in the auction announcement
this section, your net long position is from:
the sum total of the par amounts of: (1) Your holdings of the outstanding
(1) Your holdings of outstanding se- securities (paragraph (c)(1) of this sec-
curities with the same CUSIP number tion) combined with
as the security being auctioned; (2) Your holdings of STRIPS prin-
(2) Your holdings of STRIPS principal components of the security being
cipal components of the security being auctioned (paragraph (c)(2) of this sec-
auctioned, and; tion). We will specify the amount of
(3) Your positions, in the security holdings that you may exclude from
being auctioned, in: the net long position calculation in the
(i) When-issued trading, including auction announcement. You may not
when-issued trading positions of the take the exclusion if your combined
STRIPS principal components; holdings are zero or less. The exclusion
383
§ 356.14 31 CFR Ch. II (7–1–11 Edition)
is optional, but if you take the exclu- vides it. The submitter must inform a
sion, you must include any holdings customer of the net long position re-
that exceed the exclusion amount in porting requirement (See § 356.13.) if
calculating your net long position. If the customer is bidding for $100 million
the exclusion amount is greater than or more of securities. If the submitter’s
your combined holdings (paragraphs or intermediary’s personnel know that
(c)(1) and (2) of this section), you may the customer’s position information is
calculate the combined holdings as not correct, the submitter or inter-
zero, but they cannot be included in mediary may not submit the cus-
the calculation as a negative number. tomer’s bid.
(e) Noncompetitive customer bids. For
§ 356.14 What are the requirements for each noncompetitive bid, the submitter
submitting bids for customers?
must provide the customer’s name and
(a) Institutions that may submit bids for the amount bid. Submitters may either
customers. Only depository institutions provide the customer’s name with the
or dealers may submit bids for cus- bid or, if the list of customers is
tomers (see definitions at § 356.2), or for lengthy, the submitter may provide a
customers of intermediaries, under the summary bid amount covering all non-
requirements set out in this section. competitive customers. If it provides a
(b) Payment. Submitters must remit summary bid amount, the submitter
payment for bids they submit on behalf must transmit the list of individual
of customers, including customers of customers and their bid amounts by
intermediaries, that result in awards of close of business on the auction day.
securities in the auction. However, the submitter must be able to
(c) Identifying customers. Submitters provide the customer list details by the
must provide the names of customers noncompetitive bidding deadline if re-
whenever they submit bids for them. quested.
Submitters must provide the names of
their direct customers as well as cus- [69 FR 45202, July 28, 2004, as amended at 74
tomers of any intermediaries who are FR 26086, June 1, 2009]
forwarding customer bids. For individ-
§ 356.15 What rules apply to bids sub-
uals, submitters must provide the cus- mitted by investment advisers?
tomer’s full name (first and last). For
institutional customers, submitters (a) General. The auction rules that
must provide the name of the institu- apply to investment advisers are deter-
tion, and the bidder identification mined by the relationship between
number if the customer provides it. For ‘‘investment advisers’’ and ‘‘controlled
trusts or other fiduciary estates (See accounts.’’ An investment adviser
appendix A.), submitters must provide means any person or entity that has in-
on the customer list: vestment discretion for the bids or po-
(1) The full name or title of the trust- sitions of a different person or entity (a
ee or fiduciary; controlled account). A person or entity
(2) A reference to the document cre- has investment discretion if it deter-
ating the trust or fiduciary estate with mines what, how many, and when secu-
date of execution; and rities will be purchased or sold on be-
(3) The employer identification num- half of another person or entity. We
ber (not social security number) of the consider a person that is employed or
trust or fiduciary estate. We do not supervised by an investment adviser to
consider trusts to be a separate bidder be part of that investment adviser. We
that have not been assigned, or that do also consider the bids or positions of
not provide, an employer identification controlled accounts to be separate
number. from the bids or positions of the person
(d) Competitive customer bids. For each or entity with which they would other-
customer competitive bid, the sub- wise be associated under the bidder
mitter must provide the customer’s categories in appendix A of this part.
name, the amount bid, and the yield or (b) Bidding options. (1) An investment
discount rate. The submitter or inter- adviser has two options for whose name
mediary must also report the net long to use when bidding on behalf of con-
position amount if the customer pro- trolled accounts.
384
An investment adviser may bid for a controlled account . . . In such cases, we consider the bidder to be . . .
(i) in the investment adviser’s own name ................................... the investment adviser.
(ii) in the name of the controlled account ................................... the controlled account.
(2) Using the first option (paragraph its bids and positions for purposes of
(b)(1)(i)), an investment advisor could the net long position reporting require-
bid noncompetitively up to the non- ment found in § 356.13(a). In addition to
competitive bidding limit only for its own competitive bids and positions,
itself, as a single bidder. Using the sec- the investment adviser must also in-
ond option (paragraph (b)(1)(ii)), an include in the calculation all other com-
vestment adviser could bid non- petitive bids and positions that it con-
competitively for each separately trols. If the net long position is report-
named controlled account up to the able, the investment adviser must re-
noncompetitive bidding limit. The in- port it as a total in connection with
vestment adviser could also bid non-
only one bid as stated in § 356.13(a).
competitively in its own name in the
This requirement applies regardless of
same auction up to the noncompetitive
whether the investment adviser bids in
bidding limit. An investment adviser
may not bid for a controlled account its own name or in the name of its con-
both noncompetitively and competi- trolled accounts. The following table
tively in the same auction. If an in- shows which positions an investment
vestment adviser is bidding competi- adviser must include to determine
tively in the name of a controlled ac- whether it meets the net long position
count, the controlled account is sub- reporting threshold in § 356.13(a). If an
ject to the award limitations of investment adviser does meet the re-
§ 356.22(b). porting threshold, the table also shows
(c) Reporting net long positions. If it is which positions must be included in,
bidding competitively, an investment and which may be excluded from, the
adviser must calculate the amount of net long position calculation.
If an investment adviser is bidding competitively, and . . . Then . . .
(1) the investment adviser has a net long position for its own that position must be included in the investment adviser’s net
account. long position calculation.
(2) the investment adviser’s competitive bid is for a controlled any net long position of that account must be included in the
account. investment adviser’s net long position calculation.
(3) the investment adviser is not bidding competitively for a
controlled account and . . ..
(i) the controlled account has a net long position of $100 mil- that position must be included in the investment adviser’s net
lion or more. long position calculation.
(ii) the controlled account has a net long position that is less that position may be excluded from the investment adviser’s
than $100 million. net long position calculation.
(iii) any net long position is excluded under paragraph (b)(3)(ii) all net short positions of controlled accounts under $100 million
of this table. must also be excluded.
(d) Certifications. When an investment the highest accepted yield or discount

adviser bids for a controlled account, rate using the same percentage that we
we deem the investment adviser to announce. See § 356.21 for examples of
have certified that it is complying with how to prorate.
this part and the auction announce-
ment for the security. Further, we § 356.16 Do I have to make any certifi-
deem the investment adviser to have cations?
certified that the information it pro- (a) Submitters. If you submit bids or
vided about bids for controlled ac- other information in an auction, we
counts is accurate and complete. deem you to have certified that:
(e) Proration of awards. Investment (1) You are in compliance with this
advisers that submit competitive bids part and the auction announcement;
in the names of controlled accounts are
responsible for prorating any awards at
385
§ 356.17 31 CFR Ch. II (7–1–11 Edition)
(2) The information provided with re- ment date for the actual settlement
gard to any bids for your own account amount due. (See § 356.25.) If you are
is accurate and complete; and paying with a check or with maturing
(3) The information provided with re- securities, you must pay separately for
gard to any bids for customers accu- any premium, accrued interest, or in-
rately and completely reflects informa- flation adjustment as soon as you re-
tion provided by your customers or ceive your Payment Due Notice.
intermediaries. (1) Bidding and payment by computer
(b) Intermediaries. If you forward bids or by telephone. If you are bidding by
in an auction, we deem you to have computer or by telephone, you must
certified that: pay for any securities awarded to you
(1) You are in compliance with this by debit entry to a deposit account.
part and the applicable auction an- (2) Bidding and payment by paper form.
nouncement; and If you are mailing bids to us on a paper
(2) That the information you pro- form, you may either enclose your pay-
vided to a submitter or other inter- ment with the form or pay for any se-
mediary with regard to bids for cus- curities awarded to you by debit entry
tomers accurately and completely re- to a deposit account. For bills, you
flects information provided by those may pay by depository institution
customers or intermediaries. (cashier’s or teller’s) check, certified
(c) Customers. By bidding for a secu- check, or currently dated Treasury or
rity as a customer we deem you to fiscal agency check made payable to
have certified that: you. For notes or bonds, in addition to
(1) You are in compliance with this the payment options for bills, you may
part and the auction announcement also pay by personal check. If you sub-
and; mit a personal check, make it payable
(2) The information you provided to to Legacy Treasury Direct and mail it
the submitter or intermediary in con- with the bid to the Federal Reserve
nection with the bid is accurate and Bank handling your account. In your
complete. payment amount you must include the
[69 FR 45202, July 28, 2004, as amended at 72 par amount and any announced ac-
FR 14938, Mar. 20, 2008] crued interest and/or inflation adjust-
ment.
§ 356.17 How and when do I pay for se- (3) Payment by maturing securities.
curities awarded in an auction? You may use maturing securities held
(a) General. By bidding in an auction, in Legacy Treasury Direct as payment
you agree to pay the settlement for reinvestments into new securities
amount for any securities awarded to that we are offering, as long as we re-
you. (See § 356.25.) For notes and bonds, ceive the appropriate transaction re-
the settlement amount may include a quest on time.
premium amount, accrued interest, (d) Commercial book-entry system. Un-
and, for inflation-protected securities, less you make other provisions, pay-
an inflation adjustment. ment of the settlement amount must
(b) TreasuryDirect ®. You must pay for be by charge to the funds account of a
your awarded securities by a debit depository institution at a Federal Re-
entry to a deposit account that you are serve Bank.
authorized to debit or by using the re- (1) A submitter that does not have a
demption proceeds of your certificate funds account at a Federal Reserve
of indebtedness held in your Bank or that chooses not to pay by
TreasuryDirect account. Payment by charge to its own funds account must
debit entry occurs on the settlement have an approved autocharge agree-
date for the actual settlement amount ment on file with us before submitting
due. (See § 356.25.) any bids. Any depository institution
(c) Legacy Treasury Direct ®. Unless whose funds account will be charged
you make other provisions, you must under an autocharge agreement will re-
pay by debit entry to a deposit account ceive advance notice from us of the
that you are authorized to debit or sub- total par amount of, and price to be
mit payment with your bids. Payment charged for, securities awarded as a re-
by debit entry occurs on the settle- sult of the submitter’s bids.
386
(2) A submitter that is a member of a (2) Accepting bids at the high yield or
clearing corporation may instruct that discount rate. Generally, the total
delivery and payment be made through amount of bids at the highest accepted
the clearing corporation for securities yield or discount rate exceeds the of-
awarded to the submitter for its own fering amount remaining after we ac-
account. To do this, the following re- cept the noncompetitive bids and the
quirements must be met prior to sub- competitive bids at the lower yields or
mitting any bids: discount rates. In order to keep the
(i) We must have acknowledged and total amount of awards as close as pos-
have on file an autocharge agreement sible to the announced offering
between the clearing corporation and a amount, we award a percentage of the
depository institution. By entering bids at the highest accepted yield or
into such an agreement, the clearing discount rate. We derive the percentage
corporation authorizes us to provide by dividing the remaining par amount
aggregate par and price information to needed to fill the offering amount by
the depository institution whose funds the par amount of the bids at the high
account will be charged under the yield or discount rate and rounding up
agreement. The clearing corporation is to the next hundredth of a whole per-
responsible for remitting payment for centage point, for example, 17.13%.
auction awards of the clearing corpora- (b) Determining the interest rate for
tion member. new note and bond issues. We set the in-
(ii) We must have acknowledged and terest rate at a 1⁄8 of one percent incre-
have on file a delivery and payment ment. If a Treasury note or bond auc-
agreement between the submitter and tion results in a yield lower than 0.125
the clearing corporation. By entering percent, the interest rate will be set at
into such an agreement, the submitter 1⁄8 of one percent, and successful bid-
authorizes us to provide award and ders’ award prices will be calculated
payment information to the clearing accordingly (see appendix B to this
corporation. part for formulas).
[69 FR 45202, July 28, 2004, as amended at 70 (1) Single-price auctions. The interest
FR 57440, Sept. 30, 2005; 70 FR 71401, Nov. 29, rate we establish produces the price
2005; 73 FR 14938, Mar. 20, 2008] closest to, but not above, par when
evaluated at the yield of awards to suc-
Subpart C—Determination of cessful competitive bidders.
Auction Awards; Settlement (2) Multiple-price auctions. The inter-
est rate we establish produces the price
§ 356.20 How does the Treasury deter- closest to, but not above, par when
mine auction awards? evaluated at the weighted-average
(a) Determining the range and amount yield of awards to successful competi-
of accepted competitive bids—(1) Accept- tive bidders.
ing bids. First we accept in full all non- (c) Determining purchase prices for
competitive bids that were submitted awarded securities. We round price cal-
by the noncompetitive bidding dead- culations to six decimal places on the
line. After the closing time for receipt basis of price per hundred, for example,
of competitive bids we start accepting 99.954321 (See appendix B to this part).
those at the lowest yields or discount (1) Single-price auctions. We award se-
rates through successively higher curities to both noncompetitive and
yields or discount rates, up to the competitive bidders at the price equiv-
amount required to meet the offering alent to the highest accepted discount
amount. When necessary, we prorate rate or yield at which bids were accept-
bids at the highest accepted yield or ed. For inflation-protected securities,
discount rate as described below. If the the price for awarded securities is the
amount of noncompetitive bids would price equivalent to the highest accept-
absorb most or all of the offering ed real yield.
amount, we will accept competitive (2) Multiple-price auctions—(i) Competi-
bids in an amount sufficient to provide tive bids. We award securities to com-
a fair determination of the yield or dis- petitive bidders at the price equivalent
count rate for the securities we are to each yield or discount rate at which
auctioning. their bids were accepted.
387
§ 356.21 31 CFR Ch. II (7–1–11 Edition)
(ii) Noncompetitive bids. We award se- competitive bidder is $5 million. This

curities to noncompetitive bidders at limit does not apply to bidders bidding
the price equivalent to the weighted solely through TreasuryDirect ® or
average yield or discount rate of ac- Legacy Treasury Direct ® reinvestment
cepted competitive bids. requests.
[69 FR 45202, July 28, 2004, as amended at 69 (b) Awards to competitive bidders. The
FR 53621, Sept. 2, 2004; 76 FR 11080, Mar. 1, maximum award is 35 percent of the of-
2011] fering amount less the bidder’s net
long position as reportable under
§ 356.21 How are awards at the high
yield or discount rate calculated? § 356.13. For example, in a note auction
with a $10 billion offering amount, and
(a) Awards to submitters. We generally
therefore a maximum award of $3.5 bil-
prorate bids at the highest accepted
lion, a bidder with a reported net long
yield or discount rate under
§ 356.20(a)(2) of this part. For example, position of $1 billion could receive a
if 80.15% is the announced percentage maximum auction award of $2.5 billion.
at the highest yield or discount rate, When the bids and net long positions of
we award 80.15% of the amount of each more than one person or entity must
bid at that yield or rate. A bid for $100 be combined, as is the case with invest-
million at the highest accepted yield or ment advisers and controlled accounts
discount rate would be awarded (See § 356.15(c).), we will use this com-
$80,150,000 in this example. We always bined amount for the purpose of this 35
make awards for at least the minimum percent award limit.
to bid, and above that amount we make
awards in the appropriate multiple to
FR 53622, Sept. 2, 2004; 70 FR 57440, Sept. 30,
bid. For example, Treasury bills may
2005]
be issued with a minimum to bid of $100
and multiples to bid of $100. Say we ac- § 356.23 How are the auction results
cept an $18,000 bid at the high discount announced?
rate, and the percent awarded at the
high discount rate is 88.27%. We would (a) After the conclusion of the auc-
award $15,900 to that bidder, which is tion, we will announce the auction re-
an upward adjustment from $15,888.60 sults through a press release that is
($18,000 × .8827) to the nearest multiple available on our Web site at http://
of $100. If we were to award 4.65% of www.treasurydirect.gov.
bids at the highest accepted rate, for (b) The press release will include
example, the award for a $100 bid at such information as:
that rate would be $100, rather than (1) The amounts of bids we accepted
$4.65, in order to meet the minimum to and the amount of securities we award-
bid for a bill issue. ed;
(b) Awards to customers. The same (2) The range of accepted yields or
prorating rules apply to customers as
discount rates;
apply to submitters. Depository insti-
tutions and dealers, whether submit- (3) The proration percentage;
ters or intermediaries, are responsible (4) The interest rate for a note or
for prorating awards for their cus- bond;
tomers at the same percentage that we (5) A breakdown of the amounts of
announce. For example, if 80.15% is the noncompetitive and competitive bids
announced percentage at the highest we accepted from, and awarded to, the
yield or discount rate, then each cus- public;
tomer bid at that yield or rate must be (6) The amounts of bids tendered and
awarded 80.15%. accepted from the Federal Reserve
[69 FR 45202, July 28, 2004, as amended at 74 Banks for their own accounts;
FR 26086, June 1, 2009] (7) The bid-to-cover ratio; and
(8) Other information that we may
§ 356.22 Does the Treasury have any decide to include.
limitations on auction awards?
(a) Awards to noncompetitive bidders.
FR 26086, June 1, 2009]
The maximum award to any non-
388
§ 356.24 Will I be notified directly of (ii) What must the customer include in
my awards and, if I am submitting its confirmation? The information the
bids for others, do I have to provide customer must provide is:
confirmations? (A) A confirmation of the awarded
(a) Notice of awards—(1) Notice to sub- bid(s), including the name of each sub-
mitters. We will provide notice to all mitter that submitted the bid(s) on the
submitters letting them know whether customer’s behalf, and
their bids were successful or not. (B) A statement indicating whether
(2) Notice to clearing corporations. If we the customer had a reportable net long
are to deliver awarded securities under position as defined in § 356.13. If a posi-
a delivery and payment agreement, we tion had to be reported, the statement
will provide notice of the awards to the must provide the amount of the posi-
clearing corporation that is a party to tion and the name of the submitter
the agreement. that the customer requested to report
(b) Notification of awards to customers. the position.
If you are a submitter for customers, (2) Submitter or intermediary require-
you are responsible for notifying them ments. A submitter or intermediary
of their awards. You are also respon- submitting or forwarding bids for a
sible for notifying any intermediaries customer must notify the customer of
that forwarded successful bids to you. the customer confirmation reporting
Similarly, an intermediary is respon- requirement if we award the customer
sible for providing notification of any $2 billion or more as a result of those
awards to its customers and any inter- bids.
mediaries from whom it received bids. [69 FR 45202, July 28, 2004, as amended at 71
(c) Notification of awards and settle- FR 76151, Dec. 20, 2006; 74 FR 26086, June 1,
ment amounts to a depository institution 2009; 74 FR 47100, Sept. 15, 2009]
having an autocharge agreement with a
submitter or a clearing corporation. We § 356.25 How does the settlement proc-
will provide notice to each depository ess work?
institution that has entered into an Securities bought in the auction
autocharge agreement with a sub- must be paid for by the issue date. The
mitter or a clearing corporation of the payment amount for awarded securi-
amount to be charged, on the issue ties will be the settlement amount as
date, to the institution’s funds account defined in § 356.2. (See formulas in ap-
at the Federal Reserve Bank servicing pendix B.) There are several ways to
the institution. We will provide this pay for securities:
notification no later than the day after (a) Payment by debit entry to a deposit
the auction. account. If you are paying by debit
(d) Customer confirmation—(1) Cus- entry to a deposit account as provided
tomer requirements—(i) When and how for in § 356.17 (b) and (c), we will charge
must a customer confirm its awards? Any the settlement amount to the specified
customer awarded a par amount of $2 account on the issue date.
billion or more in an auction must send (b) Payment by authorized charge to a
us a confirmation in written form or funds account. Where the submitter’s
via e-mail containing the information method of payment is an authorized
in paragraph (d)(1)(ii) of this section. charge to the funds account of a depos-
The confirmation must be sent no later itory institution as provided for in
than 10 a.m. Eastern Time on the next § 356.17 (d), we will charge the settle-
business day following the auction. If ment amount to the specified funds ac-
sent in written form, the confirmation count on the issue date.
must be signed by the customer or au- (c) Payment through a certificate of in-
thorized representative. Confirmations debtedness. If you are paying with the
sent by e-mail must be sent by the cus- redemption proceeds of your certificate
tomer or authorized representative. of indebtedness as provided for in
Confirmations signed or sent by an au- § 356.17(b), we will redeem the certifi-
thorized representative must include cate of indebtedness for the settlement
the capacity in which the representa- amount of the security and apply the
tive is acting. proceeds on the issue date.
389
§ 356.30 31 CFR Ch. II (7–1–11 Edition)
(d) Payment with bids. If you paid the Subpart D—Miscellaneous

par amount with your bids as provided Provisions
for in § 356.17 (c)(2), you may have to
pay an additional amount, or we may § 356.30 When does the Treasury pay
have to pay an amount to you, as fol- principal and interest on securi-
lows: ties?
(1) When we owe an amount to you. If
the amount you paid is more than the (a) General. We will pay principal on
settlement amount, we will refund the bills, notes, and bonds on the maturity
balance to you after the auction. This date as specified in the auction an-
will generally occur if you submit pay- nouncement. Interest on bills consists
ment with your bids. A typical example of the difference between the dis-
would be an auction where the price is counted amount paid by the investor at
a discount from par and there is no ac- original issue and the par value we pay
crued interest. to the investor at maturity. Interest
(2) When you must remit an additional on notes and bonds accrues from the
amount. If the settlement amount is dated date. Interest is payable on a
more than the amount you paid, we semiannual basis on the interest pay-
will notify you of the additional ment dates specified in the auction an-
amount due. You may owe us such an nouncement through the maturity
additional amount if the auction cal- date. If any principal or interest pay-
culations result in a premium or if ac- ment date is a Saturday, Sunday, or
crued interest or an inflation adjust-
other day on which the Federal Re-
ment is due. If your securities are to be
serve System is not open for business,
held in TreasuryDirect ®, we will col-
lect this amount through the same we will make the payment (without ad-
payment method that you previously ditional interest) on the next business
authorized for the transaction. If your day. If a bond is callable, we will pay
securities are to be held in Legacy the principal prior to maturity if we
Treasury Direct ®, you will be respon- call it under its terms, which include
sible for remitting this additional providing appropriate public notice.
amount immediately. (b) Treasury inflation-protected securi-
ties. (1) This table explains the amount
FR 57440, Sept. 30, 2005; 73 FR 14938, Mar. 20, that we will pay to holders of inflation-
2008] protected securities at maturity.
At maturity, if . . . then . . .
(i) the inflation-adjusted principal is equal to or more than the we will pay the inflation-adjusted principal.
par amount of the security..
(ii) the inflation-adjusted principal is less than the par amount we will pay an additional amount so that the additional amount
of the security, and the security has not been stripped.. plus the inflation-adjusted principal equals the par amount.
(iii) the inflation-adjusted principal is less than the par amount to holders of principal components only we will pay an addi-
of the security, and the security has been stripped.. tional amount so that the additional amount plus the infla-
tion-adjusted principal equals the par amount.
(2) Regardless of whether or not we obligations to any person or entity

pay an additional amount, we will base that does not have an account with a
the final interest payment on the infla- Federal Reserve Bank. We also will not
tion-adjusted principal at maturity. recognize the claims of any person or
(c) Discharge of payment obligations— entity:
(1) The commercial book-entry system. We (i) That does not have an account at
discharge our payment obligations a Federal Reserve Bank, or
when we credit payment to the account (ii) With respect to any accounts not
maintained at a Federal Reserve Bank maintained at a Federal Reserve Bank.
for a depository institution or other (2) TreasuryDirect ®. We discharge our
authorized entity, or when we make payment obligations when we make
payment according to the instructions payment to a depository institution for
of the person or entity maintaining the credit to the account specified by the
account. Further, we do not have any owner of the security, when we make
390
payment for a certificate of indebted- (ii) Their interest payment date be-
ness to be issued and held in the own- comes the maturity date for the com-
er’s account, or when we make pay- ponent;
ment according to the instructions of (iii) All interest components with the
the security’s owner or the owner’s same maturity date have the same
legal representative. CUSIP number, regardless of the un-
(3) Legacy Treasury Direct ®. We dis- derlying security from which the inter-
charge our payment obligations when est payments were stripped, and there-
we make payment to a depository in- fore are fungible (interchangeable).
stitution for credit to the account (iv) the CUSIP numbers of interest
specified by the owner of the security, components are different from the
or when we make payment according CUSIP numbers of principal compo-
to the instructions of the security’s nents and fully constituted securities,
owner or the owner’s legal representa- even if they have the same maturity
tive. date, and therefore are not fungible.
(c) Treasury inflation-protected securi-
[69 FR 45202, July 28, 2004, as amended at 70 ties—(1) Minimum par amounts required
FR 57441, Sept. 30, 2005]
for STRIPS. The minimum par amount
§ 356.31 How does the STRIPS proof an inflation-protected security that
gram work? may be stripped is $100. Any par
amount to be stripped above $100 must
(a) General. Notes or bonds may be be in a multiple of $100.
‘‘stripped’’—divided into separate prin- (2) Principal components. Principal
cipal and interest components. These components stripped from inflation-
components must be maintained in the protected securities are maintained in
commercial book-entry system. Strip- accounts, and transferred, at their par
ping is done at the option of the holder, amount. At maturity, the holder will
and may occur at any time from receive the inflation-adjusted principal
issuance until maturity. We provide or the par amount, whichever is great-
the CUSIP numbers and payment dates er. (See § 356.30.) A principal component
for the principal and interest compo- has a CUSIP number that is different
nents in auction announcements and from the CUSIP number of the fully
on our Web site at http:// constituted (unstripped) security.
www.treasurydirect.gov. (3) Interest components—(i) Adjusted
(b) Treasury fixed-principal securities value. Interest components stripped
(notes and bonds other than Treasury in- from inflation-protected securities are
flation-protected securities—(1) Minimum maintained in accounts, and trans-
par amounts required for STRIPS. The ferred, at their adjusted value. This
minimum par amount of a fixed-prin- value is derived by multiplying the
cipal security that may be stripped is semiannual interest rate by the par
$100. Any par amount to be stripped amount and then multiplying this
above $100 must be in a multiple of value by: 100 divided by the Reference
$100. CPI of the original issue date. (The
(2) Principal components. Principal dated date is used instead of the origi-
components stripped from fixed-prin- nal issue date when the dates are dif-
cipal securities are maintained in ac- ferent.) See appendix B, section IV of
counts, and transferred, at their par this part for an example of how to do
amount. They have a CUSIP number this calculation.
that is different from the CUSIP num- (ii) CUSIP numbers. When an interest
ber of the fully constituted payment is stripped from an inflation-
(unstripped) security. protected security, the interest pay-
(3) Interest components. Interest comment date becomes the maturity date
ponents stripped from fixed-principal for the component. All interest compo-
securities have the following features: nents with the same maturity date
(i) They are maintained in accounts, have the same CUSIP number, regard-
and transferred, at their original pay- less of the underlying security from
ment value, which is derived by multi- which the interest payments were
plying the semiannual interest rate stripped. Such interest components are
and the par amount; fungible (interchangeable). The CUSIP
391
§ 356.32 31 CFR Ch. II (7–1–11 Edition)
numbers of interest components are from taxation by a State or political

different from the CUSIP numbers of subdivision of a State, except for State
principal components and fully con- estate or inheritance taxes and other
stituted securities, even if they have exceptions as provided in that section.
the same maturity date. (b) Treasury inflation-protected securi-
(iii) Payment at maturity. At matu- ties. Special federal income tax rules
rity, the payment to the holder will be for inflation-protected securities, in-
derived by multiplying the adjusted cluding stripped inflation-protected
value of the interest component by the
principal and interest components, are
Reference CPI of the maturity date, di-
vided by 100. See appendix B, section IV set forth in Internal Revenue Service
of this part for an example of how to do regulations.
this calculation.
§ 356.33 Does the Treasury have any
(iv) Rebasing of the CPI. If the CPI is
discretion in the auction process?
rebased to a different time base ref-
erence period (See appendix D.), the ad- (a) We have the discretion to:
justed values of all outstanding infla- (1) Accept, reject, or refuse to recog-
tion-protected interest components nize any bids submitted in an auction;
will be converted to adjusted values (2) Award more or less than the
based on the new base reference period. amount of securities specified in the
At that time, we will publish informa- auction announcement;
tion that describes how this conversion (3) Waive any provision of this part
will occur. After rebasing, any interest for any bidder or submitter; and
components created from a security
(4) Change the terms and conditions
that was issued during a prior base ref-
of an auction.
erence period will be issued with ad-
justed values calculated using ref- (b) Our decisions under this part are
erence CPIs under the most-recent base final. We will provide a public notice if
reference period. we change any auction provision, term,
(d) Reconstituting a security. Stripped or condition.
interest and principal components may (c) We reserve the right to modify the
be reconstituted, that is, put back to- terms and conditions of new securities
gether into their fully constituted and to depart from the customary pat-
form. A principal component and all re- tern of securities offerings at any time.
lated unmatured interest components,
in the appropriate minimum or mul- § 356.34 What could happen if someone
tiple amounts or adjusted values, must does not fully comply with the auc-
be submitted together for reconstitu- tion rules or fails to pay for securi-
tion. Because inflation-protected inter- ties?
est components are different from (a) General. If a person or entity fails
fixed-principal interest components, to comply with any of the auction
they are not interchangeable for recon- rules in this part, we will consider the
stitution purposes. circumstances and take what we deem
(e) Applicable regulations. Subparts A, to be appropriate action. This could in-
B, and D of part 357 of this chapter gov- clude barring the person or entity from
ern notes and bonds stripped into their participating in future auctions under
STRIPS components, unless we state this part. We also may refer the matter
differently in this part. to an appropriate regulatory agency.
[69 FR 45202, July 28, 2004, as amended at 73 (b) Liquidated damages. If you fail to
FR 14939, Mar. 20, 2008; 74 FR 26086, June 1, pay for awarded securities in a timely
2009]
manner, we may require you to pay liq-
§ 356.32 What tax rules apply? uidated damages of up to one percent
of the par amount of securities we
(a) General. Securities issued under
awarded to you. Our use of this liq-
this part are subject to all applicable
uidated damages remedy does not pre-
taxes imposed under the Internal Rev-
enue Code of 1986, or its successor. clude us from using any other appro-
Under section 3124 of title 31, United priate remedy.
States Code, the securities are exempt
392
§ 356.35 Who approved the information • The owner does not routinely exercise
collections? operational or management control over the
entity;
The Office of Management and Budg- • The owner does not exercise any control
et approved the collections of informa- over investment decisions of the entity re-
tion contained in §§ 356.11, 356.12, 356.13, garding U.S. Treasury securities;
356.14, and 356.15 and in appendix A of • The corporation has written policies or
this part under control number 1535– procedures, including ongoing compliance
0112. monitoring processes, that are designed to
prevent it from acting together with the en-
APPENDIX A TO PART 356—BIDDER tity regarding participation in Treasury auc-
CATEGORIES tions or investment strategies regarding
Treasury securities being auctioned; and
I. CATEGORIES OF ELIGIBLE BIDDERS • The corporation submits notice and cer-
tification to us, as provided in this appendix
We describe below various categories of
A.
bidders eligible to bid in Treasury auctions.
A corporation that plans to make use of
You may use them to determine whether we
this exception to the definition of ‘‘affiliate’’
consider you and other persons or entities to
must inform us of this fact in writing and
be one bidder or more than one bidder for
provide the following certification:
auction bidding and compliance purposes.
For example, we use these definitions to [Name of corporation] hereby certifies
apply the competitive and noncompetitive that, with regard to any entity of which it
award limitations and for other require- owns more than 50 percent as defined in ap-
ments. Notwithstanding these definitions, pendix A to 31 CFR part 356, but for which
we consider any persons or entities that in- the purpose of such ownership is to seek a re-
tentionally act together with respect to bid- turn on investment and not to engage in the
ding in a Treasury auction to collectively be business of the entity:
one bidder. Even if an auction participant • We do not routinely exercise operational
does not fall under any of the categories list- or management control over the entity;
ed below, it is our intent that no auction • We do not exercise any control over in-
participant receives a larger auction award vestment decisions of the entity regarding
by acquiring securities through others than U.S. Treasury securities;
it could have received had it been considered • We have written policies or procedures,
one of these types of bidders. including ongoing compliance monitoring
(a) Corporation—We consider a corporation processes, that are designed to prevent the
to be one bidder. A corporation includes all corporation from acting together with the
of its affiliates, which may be persons, part- entity regarding participation in Treasury
nerships, or other entities. We consider a auctions or investment strategies regarding
business trust, such as a Massachusetts or Treasury securities being auctioned; and
Delaware business trust, to be a corporation. • We will continue to meet the terms of
We use the term ‘‘corporate structure’’ to this certification until we notify the Treas-
refer to the collection of affiliates that we ury of a change.
consider collectively to be one bidder. An af- (b) Partnership—We consider a partnership
filiate is any: to be one bidder if it is a partnership for
• Entity that is more than 50-percent which the Internal Revenue Service has as-
owned, directly or indirectly, by the corpora- signed a tax-identification number. A part-
tion; nership includes all of its affiliates, which
• Entity that is more than 50-percent may be persons, corporations, general part-
owned, directly or indirectly, by any other ners acting on behalf of the partnership, or
affiliate of the corporation; other entities. We use the term ‘‘partnership
• Person or entity that owns, directly or structure’’ to refer to the collection of affili-
indirectly, more than 50 percent of the cor- ates that we consider collectively to be one
poration; bidder. We may consider a partnership struc-
• Person or entity that owns, directly or ture that contains one or more corporations
indirectly, more than 50 percent of any other as a ‘‘partnership’’ or a ‘‘corporation,’’ but
affiliate of the corporation; or not both.
• Entity, a majority of whose board of di- An affiliate is any:
rectors or a majority of whose general part- • Entity that is more than 50-percent
ners are directors or officers of the corpora- owned, directly or indirectly, by the partner-
tion, or of any affiliate of the corporation. ship;
An entity that is more than 50-percent • Entity that is more than 50-percent
owned as described in this definition is not owned, directly or indirectly, by any other
an affiliate, however, if: affiliate of the partnership;
• The purpose of such ownership is to seek • Person or entity that owns, directly or
a return on investment and not to engage in indirectly, more than 50 percent of the part-
the business of the entity; nership;
393
• Person or entity that owns, directly or (3) A commonwealth, territory, or posses-
indirectly, more than 50 percent of any other sion of the United States.
affiliate of the partnership; or (4) A governmental entity, body, or cor-
• Entity, a majority of whose general part- poration established under Federal, State, or
ners or a majority of whose board of direc- local law.
tors are general partners or directors of the (5) A foreign central bank, the government
partnership or of any affiliate of the partner- of a foreign state, or an international organi-
ship. zation in which the United States holds
An entity that is more than 50-percent membership. This type of entity applies only
owned as described in this definition is not when such entity is not using an account at
an affiliate, however, if: the Federal Reserve Bank of New York (See
• The purpose of such ownership is to seek paragraph (f).).
a return on investment and not to engage in We generally consider an investment, re-
the business of the entity; serve, or other fund of one of the above gov-
• The owner does not routinely exercise ernment-related entities as part of that enti-
operational or management control over the ty and not a separate bidder. We will con-
entity; sider a government-related entity’s fund to
• The owner does not exercise any control be a separate bidder if it meets the definition
over investment decisions of the entity re- of the ‘‘trust or other fiduciary estate’’ cat-
garding U.S. Treasury securities; egory, or if applicable law requires that the
• The partnership has written policies or investments of such fund be made sepa-
rately.
procedures, including ongoing compliance
(d) Trust or other fiduciary estate—We con-
monitoring processes, that are designed to
sider a legal entity created under a valid
prevent it from acting together with the en-
trust instrument, court order, or other legal
tity regarding participation in Treasury auc-
authority that designates a trustee or fidu-
tions or investment strategies regarding
ciary to act for the benefit of a named bene-
Treasury securities being auctioned; and
ficiary to be one bidder. The following condi-
• The partnership submits notice and cer- tions must also be met for us to consider a
tification to us, as provided in this appendix trust entity to be one bidder:
A. • The legal entity must be able to be iden-
A partnership that plans to make use of tified by:
this exception to the definition of ‘‘affiliate’’ 1. The name or title of the trustee or fidu-
must inform us of this fact in writing and ciary;
provide the following certification: 2. Specific reference to the trust instru-
[Name of partnership] hereby certifies ment, court order, or legal authority under
that, with regard to any entity of which it which the trustee or fiduciary is acting; and
owns more than 50 percent as defined in ap- 3. The unique IRS-assigned employer iden-
pendix A to 31 CFR part 356, but for which tification number (not social security num-
the purpose of such ownership is to seek a re- ber) for the entity.
turn on investment and not to engage in the • The trustee or fiduciary must make the
business of the entity: decisions on participating in auctions on be-
• We do not routinely exercise operational half of the trust or fiduciary estate.
or management control over the entity; (e) Individual—We consider a person to be
• We do not exercise any control over in- one bidder, regardless of whether he or she is
vestment decisions of the entity regarding acting as an individual, a sole proprietor, or
U.S. Treasury securities; for any entity not otherwise defined as a bid-
• We have written policies or procedures, der. If a person meets the definition of an af-
including ongoing compliance monitoring filiate within a corporate or partnership
processes, that are designed to prevent the structure, we will consider him or her to be
partnership from acting together with the a bidder in this ‘‘individual’’ category if the
entity regarding participation in Treasury corporation or partnership is not bidding in
auctions or investment strategies regarding the same auction. We do not consider a per-
Treasury securities being auctioned; and son acting in an official capacity as an em-
• We will continue to meet the terms of ployee or other representative of a bidder de-
this certification until we notify the Treas- fined in any other category to be an ‘‘indi-
ury of a change. vidual’’ bidder. We consider a person, his or
(c) Government-related entity—We consider her spouse, and any children under the age of
each of the following entities to be one bid- 21 having a common household to be one
der: ‘‘individual’’ bidder.
(1) A state government or the government (f) Foreign and International Monetary Au-
of the District of Columbia thority (‘‘FIMA’’)—We consider one or more
(2) A unit of local government, including parties making up a foreign or international
any county, city, municipality, or township, monetary organization that is not private in
or other unit of general government as de- nature to be a bidder called a FIMA entity if
fined by the Bureau of the Census for statis- at least one of the parties is a foreign or
tical purposes. international entity that is (i) financial in
394
nature, or (ii) not financial in nature but is in specific auctions must be made by em-
authorized to open an account at the Federal ployees of such component(s). Employees of
Reserve Bank of New York. We consider each such component(s) that make decisions to
of the following entities to be a single FIMA purchase or dispose of Treasury securities
entity: must not perform the same function for
(1) A foreign central bank or regional cen- other components within the corporate or
tral bank. partnership structure; and
(2) A foreign governmental monetary or fi- (d) The records of such component(s) re-
nance entity. lated to the bidding for, acquisition of, and
(3) A non-governmental international fi- disposition of Treasury securities must be
nancial organization that is not private in maintained by such component(s). Those
nature (for example, the International Mone- records must be identifiable—separate and
tary Fund, the World Bank, the Inter-Amer- apart from similar records for other compo-
ican Development Bank, and the Asian De- nents within the corporate or partnership
velopment Bank). structure. To obtain recognition as a sepa-
(4) A non-financial international organiza- rate bidder, each component or group of
tion that the United States participates in components must request such recognition
(for example, the United Nations). from us, provide a description of the compo-
(5) A multi-party arrangement of a govern- nent or group and its position within the cor-
mental ministry and/or a foreign central porate or partnership structure, and provide
bank or monetary authority with a United the following certification:
States Government Department and/or the [Name of the bidder] hereby certifies that
Federal Reserve Bank of New York. to the best of its knowledge and belief it
(6) A foreign or international monetary en- meets the criteria for a separate bidder as
tity or an entity authorized by statute or by described in appendix A to 31 CFR part 356.
us to open accounts at the Federal Reserve The above-named bidder also certifies that it
Bank of New York. has established written policies or proce-
(g) Other Bidder—We do not consider a bid- dures, including ongoing compliance moni-
der defined by any of the above categories to
toring processes, that are designed to pre-
be a bidder in this category. For purposes of
vent the component or group of components
this definition, ‘‘other bidder’’ means an in-
from:
stitution or organization with a unique IRS-
(1) Exchanging any of the following infor-
assigned employer identification number.
mation with any other part of the corporate
This definition includes such entities as an
[partnership] structure: (a) yields or rates at
association, church, university, union, or
which it plans to bid; (b) amounts of securi-
club. This category does not include any per-
ties for which it plans to bid; (c) positions
son or entity acting in a fiduciary or invest-
that it holds or plans to acquire in a security
ment management capacity, a sole propri-
etorship, an investment account, an invest- being auctioned; and (d) investment strate-
ment fund, a form of registration, or invest- gies that it plans to follow regarding the se-
ment ownership designation. curity being auctioned, or
(2) In any way intentionally acting to-
II. HOW TO OBTAIN SEPARATE BIDDER gether with any other part of the corporate
RECOGNITION [partnership] structure with respect to for-
mulating or entering bids in a Treasury auc-
Under certain circumstances, we may rec- tion.
ognize a major organizational component The above-named bidder agrees that it will
(e.g., the parent or a subsidiary) in a cor- promptly notify the Department in writing
porate or partnership structure as a bidder
when any of the information provided to ob-
separate from the larger corporate or part-
tain separate bidder status changes or when
nership structure. We also may recognize
this certification is no longer valid.
two or more major organizational compo-
nents collectively as one bidder. All of the [69 FR 45202, July 28, 2004, as amended at 70
following criteria must be met for such com- FR 29456, May 23, 2005]
ponent(s) to qualify for recognition as a sep-
arate bidder: APPENDIX B TO PART 356—FORMULAS
(a) Such component(s) must be prohibited AND TABLES
by law or regulation from exchanging, or
must have established written internal pro- I. Computation of Interest on Treasury
cedures designed to prevent the exchange of, Bonds and Notes.
information related to bidding in Treasury II. Formulas for Conversion of Fixed-Prin-
auctions with any other component in the cipal Security Yields to Equivalent Prices.
corporate or partnership structure; III. Formulas for Conversion of Inflation-
(b) Such component(s) must not be created Protected Security Yields to Equivalent
for the purpose of circumventing our bidding Prices.
and award limitations; IV. Computation of Adjusted Values and
(c) Decisions related to purchasing Treas- Payment Amounts for Stripped Inflation-
ury securities at auction and participation Protected Interest Components.
395
V. Computation of Purchase Price, Discount cipal securities on a semiannual basis. The
Rate, and Investment Rate (Coupon-Equiv- regular interest payment period is a full
alent Yield) for Treasury Bills. half-year of six calendar months. Examples
The examples in this appendix are given of half-year periods are: (1) February 15 to
for illustrative purposes only and are in no August 15, (2) May 31 to November 30, and (3)
way a prediction of interest rates on any February 29 to August 31 (in a leap year).
bills, notes, or bonds issued under this part. Calculation of an interest payment for a
In some of the following examples, we use in-
fixed-principal note with a par amount of
termediate rounding for ease in following
$1,000 and an interest rate of 8% is made in
the calculations. In actual practice, we gen-
erally do not round prior to determining the this manner: ($1,000 × .08)/2 = $40. Specifi-
final result. cally, a semiannual interest payment rep-
If you use a multi-decimal calculator, we resents one half of one year’s interest, and is
recommend setting your calculator to at computed on this basis regardless of the ac-
least 13 decimals and then applying normal tual number of days in the half-year.
rounding procedures. This should be suffi- 2. Daily Interest Decimal. We compute a
cient to obtain the same final results. How- daily interest decimal in cases where an in-
ever, in the case of any discrepancies, our de- terest payment period for a fixed-principal
terminations will be final. security is shorter or longer than six months
or where accrued interest is payable by an
I. COMPUTATION OF INTEREST ON TREASURY
investor. We base the daily interest decimal
BONDS AND NOTES
on the actual number of calendar days in the
A. Treasury Fixed-Principal Securities half-year or half-years involved. The number
of days in any half-year period is shown in
1. Regular Half-Year Payment Period. We pay
Table 1.
interest on marketable Treasury fixed-prin-
TABLE 1
Beginning and ending days are Beginning and ending days are
1st or 15th of the months listed the last days of the months
under interest period listed under interest period
Interest period (number of days) (number of days)
Regular year Leap year Regular year Leap year
January to July ...................................................................... 181 182 181 182

February to August ............................................................... 181 182 184 184
March to September ............................................................. 184 184 183 183
April to October ..................................................................... 183 183 184 184
May to November .................................................................. 184 184 183 183
June to December ................................................................. 183 183 184 184
July to January ...................................................................... 184 184 184 184
August to February ............................................................... 184 184 181 182
September to March ............................................................. 181 182 182 183
October to April ..................................................................... 182 183 181 182
November to May .................................................................. 181 182 182 183
December to June ................................................................. 182 183 181 182
Table 2 below shows the daily interest ⁄ , 1⁄183, or 1⁄184 of a full semiannual interest
1 182
decimals covering interest from 1⁄8% to 20% payment, depending on which half-year is ap-
on $1,000 for one day in increments of 1⁄8 of plicable.
one percent. These decimals represent 1⁄181,
TABLE 2
[Decimal for one day’s interest on $1,000 at various rates of interest, payable semiannually or on a semiannual basis, in regular
years of 365 days and in years of 366 days (to determine applicable number of days, see table 1.)]
Half-year of Half-year of Half-year of Half-year of

Rate per annum (percent) 184 days 183 days 182 days 181 days
⁄ ...........................................................................................
18 0.003396739 0.003415301 0.003434066 0.003453039
⁄ ...........................................................................................
14 0.006793478 0.006830601 0.006868132 0.006906077
⁄ ...........................................................................................
38 0.010190217 0.010245902 0.010302198 0.010359116
1⁄2 ........................................................................................... 0.013586957 0.013661202 0.013736264 0.013812155
5⁄8 ........................................................................................... 0.016983696 0.017076503 0.017170330 0.017265193
3⁄4 ........................................................................................... 0.020380435 0.020491803 0.020604396 0.020718232
7⁄8 ........................................................................................... 0.023777174 0.023907104 0.024038462 0.024171271
1 ............................................................................................ 0.027173913 0.027322404 0.027472527 0.027624309
11⁄8 ......................................................................................... 0.030570652 0.030737705 0.030906593 0.031077348
11⁄4 ......................................................................................... 0.033967391 0.034153005 0.034340659 0.034530387
396
TABLE 2—Continued

13⁄8 ......................................................................................... 0.037364130 0.037568306 0.037774725 0.037983425

11⁄2 ......................................................................................... 0.040760870 0.040983607 0.041208791 0.041436464
15⁄8 ......................................................................................... 0.044157609 0.044398907 0.044642857 0.044889503
13⁄4 ......................................................................................... 0.047554348 0.047814208 0.048076923 0.048342541
17⁄8 ......................................................................................... 0.050951087 0.051229508 0.051510989 0.051795580
2 ............................................................................................ 0.054347826 0.054644809 0.054945055 0.055248619
21⁄8 ......................................................................................... 0.057744565 0.058060109 0.058379121 0.058701657
21⁄4 ......................................................................................... 0.061141304 0.061475410 0.061813187 0.062154696
23⁄8 ......................................................................................... 0.064538043 0.064890710 0.065247253 0.065607735
21⁄2 ......................................................................................... 0.067934783 0.068306011 0.068681319 0.069060773
25⁄8 ......................................................................................... 0.071331522 0.071721311 0.072115385 0.072513812
23⁄4 ......................................................................................... 0.074728261 0.075136612 0.075549451 0.075966851
27⁄8 ......................................................................................... 0.078125000 0.078551913 0.078983516 0.079419890
3 ............................................................................................ 0.081521739 0.081967213 0.082417582 0.082872928
31⁄8 ......................................................................................... 0.084918478 0.085382514 0.085851648 0.086325967
31⁄4 ......................................................................................... 0.088315217 0.088797814 0.089285714 0.089779006
33⁄8 ......................................................................................... 0.091711957 0.092213115 0.092719780 0.093232044
31⁄2 ......................................................................................... 0.095108696 0.095628415 0.096153846 0.096685083
35⁄8 ......................................................................................... 0.098505435 0.099043716 0.099587912 0.100138122
33⁄4 ......................................................................................... 0.101902174 0.102459016 0.103021978 0.103591160
37⁄8 ......................................................................................... 0.105298913 0.105874317 0.106456044 0.107044199
4 ............................................................................................ 0.108695652 0.109289617 0.109890110 0.110497238
41⁄8 ......................................................................................... 0.112092391 0.112704918 0.113324176 0.113950276
41⁄4 ......................................................................................... 0.115489130 0.116120219 0.116758242 0.117403315
43⁄8 ......................................................................................... 0.118885870 0.119535519 0.120192308 0.120856354
41⁄2 ......................................................................................... 0.122282609 0.122950820 0.123626374 0.124309392
45⁄8 ......................................................................................... 0.125679348 0.126366120 0.127060440 0.127762431
43⁄4 ......................................................................................... 0.129076087 0.129781421 0.130494505 0.131215470
47⁄8 ......................................................................................... 0.132472826 0.133196721 0.133928571 0.134668508
5 ............................................................................................ 0.135869565 0.136612022 0.137362637 0.138121547
51⁄8 ......................................................................................... 0.139266304 0.140027322 0.140796703 0.141574586
51⁄4 ......................................................................................... 0.142663043 0.143442623 0.144230769 0.145027624
53⁄8 ......................................................................................... 0.146059783 0.146857923 0.147664835 0.148480663
51⁄2 ......................................................................................... 0.149456522 0.150273224 0.151098901 0.151933702
55⁄8 ......................................................................................... 0.152853261 0.153688525 0.154532967 0.155386740
53⁄4 ......................................................................................... 0.156250000 0.157103825 0.157967033 0.158839779
57⁄8 ......................................................................................... 0.159646739 0.160519126 0.161401099 0.162292818
6 ............................................................................................ 0.163043478 0.163934426 0.164835165 0.165745856
61⁄8 ......................................................................................... 0.166440217 0.167349727 0.168269231 0.169198895
61⁄4 ......................................................................................... 0.169836957 0.170765027 0.171703297 0.172651934
63⁄8 ......................................................................................... 0.173233696 0.174180328 0.175137363 0.176104972
61⁄2 ......................................................................................... 0.176630435 0.177595628 0.178571429 0.179558011
65⁄8 ......................................................................................... 0.180027174 0.181010929 0.182005495 0.183011050
63⁄4 ......................................................................................... 0.183423913 0.184426230 0.185439560 0.186464088
67⁄8 ......................................................................................... 0.186820652 0.187841530 0.188873626 0.189917127
7 ............................................................................................ 0.190217391 0.191256831 0.192307692 0.193370166
71⁄8 ......................................................................................... 0.193614130 0.194672131 0.195741758 0.196823204
71⁄4 ......................................................................................... 0.197010870 0.198087432 0.199175824 0.200276243
73⁄8 ......................................................................................... 0.200407609 0.201502732 0.202609890 0.203729282
71⁄2 ......................................................................................... 0.203804348 0.204918033 0.206043956 0.207182320
75⁄8 ......................................................................................... 0.207201087 0.208333333 0.209478022 0.210635359
73⁄4 ......................................................................................... 0.210597826 0.211748634 0.212912088 0.214088398
77⁄8 ......................................................................................... 0.213994565 0.215163934 0.216346154 0.217541436
8 ............................................................................................ 0.217391304 0.218579235 0.219780220 0.220994475
81⁄8 ......................................................................................... 0.220788043 0.221994536 0.223214286 0.224447514
81⁄4 ......................................................................................... 0.224184783 0.225409836 0.226648352 0.227900552
83⁄8 ......................................................................................... 0.227581522 0.228825137 0.230082418 0.231353591
81⁄2 ......................................................................................... 0.230978261 0.232240437 0.233516484 0.234806630
85⁄8 ......................................................................................... 0.234375000 0.235655738 0.236950549 0.238259669
83⁄4 ......................................................................................... 0.237771739 0.239071038 0.240384615 0.241712707
87⁄8 ......................................................................................... 0.241168478 0.242486339 0.243818681 0.245165746
9 ............................................................................................ 0.244565217 0.245901639 0.247252747 0.248618785
91⁄8 ......................................................................................... 0.247961957 0.249316940 0.250686813 0.252071823
91⁄4 ......................................................................................... 0.251358696 0.252732240 0.254120879 0.255524862
93⁄8 ......................................................................................... 0.254755435 0.256147541 0.257554945 0.258977901
91⁄2 ......................................................................................... 0.258152174 0.259562842 0.260989011 0.262430939
95⁄8 ......................................................................................... 0.261548913 0.262978142 0.264423077 0.265883978
93⁄4 ......................................................................................... 0.264945652 0.266393443 0.267857143 0.269337017
97⁄8 ......................................................................................... 0.268342391 0.269808743 0.271291209 0.272790055
397
TABLE 2—Continued

10 .......................................................................................... 0.271739130 0.273224044 0.274725275 0.276243094

101⁄8 ....................................................................................... 0.275135870 0.276639344 0.278159341 0.279696133
101⁄4 ....................................................................................... 0.278532609 0.280054645 0.281593407 0.283149171
103⁄8 ....................................................................................... 0.281929348 0.283469945 0.285027473 0.286602210
101⁄2 ....................................................................................... 0.285326087 0.286885246 0.288461538 0.290055249
105⁄8 ....................................................................................... 0.288722826 0.290300546 0.291895604 0.293508287
103⁄4 ....................................................................................... 0.292119565 0.293715847 0.295329670 0.296961326
107⁄8 ....................................................................................... 0.295516304 0.297131148 0.298763736 0.300414365
11 .......................................................................................... 0.298913043 0.300546448 0.302197802 0.303867403
111⁄8 ....................................................................................... 0.302309783 0.303961749 0.305631868 0.307320442
111⁄4 ....................................................................................... 0.305706522 0.307377049 0.309065934 0.310773481
113⁄8 ....................................................................................... 0.309103261 0.310792350 0.312500000 0.314226519
111⁄2 ....................................................................................... 0.312500000 0.314207650 0.315934066 0.317679558
115⁄8 ....................................................................................... 0.315896739 0.317622951 0.319368132 0.321132597
113⁄4 ....................................................................................... 0.319293478 0.321038251 0.322802198 0.324585635
117⁄8 ....................................................................................... 0.322690217 0.324453552 0.326236264 0.328038674
12 .......................................................................................... 0.326086957 0.327868852 0.329670330 0.331491713
121⁄8 ....................................................................................... 0.329483696 0.331284153 0.333104396 0.334944751
121⁄4 ....................................................................................... 0.332880435 0.334699454 0.336538462 0.338397790
123⁄8 ....................................................................................... 0.336277174 0.338114754 0.339972527 0.341850829
121⁄2 ....................................................................................... 0.339673913 0.341530055 0.343406593 0.345303867
125⁄8 ....................................................................................... 0.343070652 0.344945355 0.346840659 0.348756906
123⁄4 ....................................................................................... 0.346467391 0.348360656 0.350274725 0.352209945
127⁄8 ....................................................................................... 0.349864130 0.351775956 0.353708791 0.355662983
13 .......................................................................................... 0.353260870 0.355191257 0.357142857 0.359116022
131⁄8 ....................................................................................... 0.356657609 0.358606557 0.360576923 0.362569061
131⁄4 ....................................................................................... 0.360054348 0.362021858 0.364010989 0.366022099
133⁄8 ....................................................................................... 0.363451087 0.365437158 0.367445055 0.369475138
131⁄2 ....................................................................................... 0.366847826 0.368852459 0.370879121 0.372928177
135⁄8 ....................................................................................... 0.370244565 0.372267760 0.374313187 0.376381215
133⁄4 ....................................................................................... 0.373641304 0.375683060 0.377747253 0.379834254
137⁄8 ....................................................................................... 0.377038043 0.379098361 0.381181319 0.383287293
14 .......................................................................................... 0.380434783 0.382513661 0.384615385 0.386740331
141⁄8 ....................................................................................... 0.383831522 0.385928962 0.388049451 0.390193370
141⁄4 ....................................................................................... 0.387228261 0.389344262 0.391483516 0.393646409
143⁄8 ....................................................................................... 0.390625000 0.392759563 0.394917582 0.397099448
141⁄2 ....................................................................................... 0.394021739 0.396174863 0.398351648 0.400552486
145⁄8 ....................................................................................... 0.397418478 0.399590164 0.401785714 0.404005525
143⁄4 ....................................................................................... 0.400815217 0.403005464 0.405219780 0.407458564
147⁄8 ....................................................................................... 0.404211957 0.406420765 0.408653846 0.410911602
15 .......................................................................................... 0.407608696 0.409836066 0.412087912 0.414364641
151⁄8 ....................................................................................... 0.411005435 0.413251366 0.415521978 0.417817680
151⁄4 ....................................................................................... 0.414402174 0.416666667 0.418956044 0.421270718
153⁄8 ....................................................................................... 0.417798913 0.420081967 0.422390110 0.424723757
151⁄2 ....................................................................................... 0.421195652 0.423497268 0.425824176 0.428176796
155⁄8 ....................................................................................... 0.424592391 0.426912568 0.429258242 0.431629834
153⁄4 ....................................................................................... 0.427989130 0.430327869 0.432692308 0.435082873
157⁄8 ....................................................................................... 0.431385870 0.433743169 0.436126374 0.438535912
16 .......................................................................................... 0.434782609 0.437158470 0.439560440 0.441988950
161⁄8 ....................................................................................... 0.438179348 0.440573770 0.442994505 0.445441989
161⁄4 ....................................................................................... 0.441576087 0.443989071 0.446428571 0.448895028
163⁄8 ....................................................................................... 0.444972826 0.447404372 0.449862637 0.452348066
161⁄2 ....................................................................................... 0.448369565 0.450819672 0.453296703 0.455801105
165⁄8 ....................................................................................... 0.451766304 0.454234973 0.456730769 0.459254144
163⁄4 ....................................................................................... 0.455163043 0.457650273 0.460164835 0.462707182
167⁄8 ....................................................................................... 0.458559783 0.461065574 0.463598901 0.466160221
17 .......................................................................................... 0.461956522 0.464480874 0.467032967 0.469613260
171⁄8 ....................................................................................... 0.465353261 0.467896175 0.470467033 0.473066298
171⁄4 ....................................................................................... 0.468750000 0.471311475 0.473901099 0.476519337
173⁄8 ....................................................................................... 0.472146739 0.474726776 0.477335165 0.479972376
171⁄2 ....................................................................................... 0.475543478 0.478142077 0.480769231 0.483425414
175⁄8 ....................................................................................... 0.478940217 0.481557377 0.484203297 0.486878453
173⁄4 ....................................................................................... 0.482336957 0.484972678 0.487637363 0.490331492
177⁄8 ....................................................................................... 0.485733696 0.488387978 0.491071429 0.493784530
18 .......................................................................................... 0.489130435 0.491803279 0.494505495 0.497237569
181⁄8 ....................................................................................... 0.492527174 0.495218579 0.497939560 0.500690608
181⁄4 ....................................................................................... 0.495923913 0.498633880 0.501373626 0.504143646
183⁄8 ....................................................................................... 0.499320652 0.502049180 0.504807692 0.507596685
181⁄2 ....................................................................................... 0.502717391 0.505464481 0.508241758 0.511049724
398
TABLE 2—Continued

185⁄8 ....................................................................................... 0.506114130 0.508879781 0.511675824 0.514502762

183⁄4 ....................................................................................... 0.509510870 0.512295082 0.515109890 0.517955801
187⁄8 ....................................................................................... 0.512907609 0.515710383 0.518543956 0.521408840
19 .......................................................................................... 0.516304348 0.519125683 0.521978022 0.524861878
191⁄8 ....................................................................................... 0.519701087 0.522540984 0.525412088 0.528314917
191⁄4 ....................................................................................... 0.523097826 0.525956284 0.528846154 0.531767956
193⁄8 ....................................................................................... 0.526494565 0.529371585 0.532280220 0.535220994
191⁄2 ....................................................................................... 0.529891304 0.532786885 0.535714286 0.538674033
195⁄8 ....................................................................................... 0.533288043 0.536202186 0.539148352 0.542127072
193⁄4 ....................................................................................... 0.536684783 0.539617486 0.542582418 0.545580110
197⁄8 ....................................................................................... 0.540081522 0.543032787 0.546016484 0.549033149
20 .......................................................................................... 0.543478261 0.546448087 0.549450549 0.552486188
3. Short First Payment Period. In cases plied to the unrounded interest payment
where the first interest payment period for a amount per $1,000 par amount.
Treasury fixed-principal security covers less
than a full half-year period (a ‘‘short cou- Example
pon’’), we multiply the daily interest dec- A 5-year 2-month note paying 77⁄8% interest
imal by the number of days from, but not in-
was issued on December 3, 1990, with the first
cluding, the issue date to, and including, the
interest payment due on August 15, 1991. In-
first interest payment date. This calculation
terest for the regular half-year portion of the
results in the amount of the interest payable
payment was computed to be $39.375 per
per $1,000 par amount. In cases where the par
$1,000 par amount. The fractional portion of
amount of securities is a multiple of $1,000,
the payment, from December 3 to February
we multiply the appropriate multiple by the
15, fell in a 184-day half-year (August 15, 1990,
unrounded interest payment amount per
to February 15, 1991). Accordingly, the daily
$1,000 par amount.
interest decimal for 77⁄8% was $0.213994565.
Example This decimal, multiplied by 74 (the number
of days from but not including December 3,
A 2-year note paying 83⁄8% interest was 1990, to and including February 15), resulted
issued on July 2, 1990, with the first interest in interest for the fractional portion of
payment on December 31, 1990. The number $15.835597810. When added to $39.375 (the nor-
of days in the full half-year period of June 30 mal interest payment portion ending on Au-
to December 31, 1990, was 184 (See Table 1.). gust 15, 1991), this produced a first interest
The number of days for which interest actu- payment of $55.210597810, or $55.21 per $1,000
ally accrued was 182 (not including July 2, par amount. For $7,000 par amount of these
but including December 31). The daily inter- notes, $55.210597810 would be multiplied by 7,
est decimal, $0.227581522 (See Table 2, line for resulting in an interest payment of
83⁄8%, under the column for half-year of 184 $386.474184670 ($386.47).
days.), was multiplied by 182, resulting in a
payment of $41.419837004 per $1,000. For B. Treasury Inflation-Protected Securities
$20,000 of these notes, $41.419837004 would be
multiplied by 20, resulting in a payment of 1. Indexing Process. We pay interest on mar-
$828.39674008 ($828.40). ketable Treasury inflation-protected securi-
4. Long First Payment Period. In cases where ties on a semiannual basis. We issue infla-
the first interest payment period for a bond tion-protected securities with a stated rate
or note covers more than a full half-year pe- of interest that remains constant until ma-
riod (a ‘‘long coupon’’), we multiply the daily turity. Interest payments are based on the
interest decimal by the number of days from, security’s inflation-adjusted principal at the
but not including, the issue date to, and in- time we pay interest. We make this adjust-
cluding, the last day of the fractional period ment by multiplying the par amount of the
that ends one full half-year before the inter- security by the applicable Index Ratio.
est payment date. We add that amount to 2. Index Ratio. The numerator of the Index
the regular interest amount for the full half- Ratio, the Ref CPIDate, is the index number
year ending on the first interest payment applicable for a specific day. The denomi-
date, resulting in the amount of interest nator of the Index Ratio is the Ref CPI appli-
payable for $1,000 par amount. In cases where cable for the original issue date. However,
the par amount of securities is a multiple of when the dated date is different from the
$1,000, the appropriate multiple should be ap- original issue date, the denominator is the
399
Ref CPI applicable for the dated date. The interpolation between the Ref CPI applicable
formula for calculating the Index Ratio is: to the first day of the month in which the
day falls (in the example, January) and the
Re f CPI Date Ref CPI applicable to the first day of the
Index Ratio Date = next month (in the example, February). For
Ref CPI Issue Date interpolation purposes, we truncate calcula-
Where Date = valuation date tions with regard to the Ref CPI and the
3. Reference CPI. The Ref CPI for the first Index Ratio for a specific date to six decimal
day of any calendar month is the CPI for the places, and round to five decimal places.
third preceding calendar month. For exam- Therefore the Ref CPI and the Index Ratio
ple, the Ref CPI applicable to April 1 in any for a particular date will be expressed to five
year is the CPI for January, which is re- decimal places.
ported in February. We determine the Ref (i) The formula for the Ref CPI for a spe-
CPI for any other day of a month by a linear cific date is:
t −1
Ref CPI Date = Ref CPI M +
D
[Ref CPI M+1 − Ref CPI M ]
Where Date = valuation date Ref CPIM = Ref CPI for the first day of the
D = the number of days in the month in calendar month in which Date falls, e.g.,
which Date falls Ref CPIApril1 is the CPIJanuary
Ref CPIM∂1 = Ref CPI for the first day of the
t = the calendar day corresponding to Date
calendar month immediately following
CPIM = CPI reported for the calendar month Date
M by the Bureau of Labor Statistics
(ii) For example, the Ref CPI for April 15,
1996 is calculated as follows:
Re f CPI April 15, 1996 = Ref CPI April 1, 1996 +

14
30
[
Re f CPI May 1, 1996 − Re f CPI April 1, 1996 ]
where D = 30, t = 15 Ref CPIMay 1, 1996 = 154.90, the non-seasonally
Ref CPIApril 1, 1996 = 154.40, the non-seasonally adjusted CPI-U for February 1996.
adjusted CPI-U for January 1996. (iii) Putting these values in the equation
in paragraph (ii) above:
14
Re f CPI April 15, 1996 = 154.40 + [154.90 − 154.40]
30
Re f CPI April 15, 1996 = 154.633333333
ER28JY04.003</MATH>
This value truncated to six decimals is This value truncated to six decimals is
154.633333; rounded to five decimals it is 1.000107; rounded to five decimals it is 1.00011.
154.63333. 4. Index Contingencies.
(iv) To calculate the Index Ratio for April (i) If a previously reported CPI is revised,
ER28JY04.002</MATH>
16, 1996, for an inflation-protected security we will continue to use the previously re-
issued on April 15, 1996, the Ref CPIApril 16, 1996 ported (unrevised) CPI in calculating the
must first be calculated. Using the same val- principal value and interest payments.
ues in the equation above except that t=16, If the CPI is rebased to a different year, we
the Ref CPIApril 16, 1996 is 154.65000. will continue to use the CPI based on the
The Index Ratio for April 16, 1996 is: base reference period in effect when the secu-
ER28JY04.001</MATH>
Index RatioApril 16, 1996 = 154.65000/154.63333 = rity was first issued, as long as that CPI con-
1.000107803. tinues to be published.
400
ER28JY04.000</MATH>
(ii) We will replace the CPI with an appro- one-half of the specified annual interest rate
priate alternative index if, while an infla- for the inflation-protected securities by the
tion-protected security is outstanding, the inflation-adjusted principal for the interest
applicable CPI is: payment date.
• Discontinued, Specifically, we compute a semiannual in-
• In the judgment of the Secretary, fun- terest payment on the basis of one-half of
damentally altered in a manner materially one year’s interest regardless of the actual
adverse to the interests of an investor in the number of days in the half-year.
security, or
• In the judgment of the Secretary, altered Example
by legislation or Executive Order in a man- A 10-year inflation-protected note paying
ner materially adverse to the interests of an 37⁄8% interest was issued on January 15, 1999,
investor in the security. with the first interest payment on July 15,
(iii) If we decide to substitute an alter- 1999. The Ref CPI on January 15, 1999 (Ref
native index we will consult with the Bureau CPIIssueDate) was 164, and the Ref CPI on July
of Labor Statistics or any successor agency. 15, 1999 (Ref CPIDate) was 166.2. For a par
We will then notify the public of the sub-
amount of $100,000, the inflation-adjusted
stitute index and how we will apply it. De-
principal on July 15, 1999, was (166.2/164) ×
terminations of the Secretary in this regard
$100,000, or $101,341. This amount was multi-
will be final.
plied by .03875/2, or .019375, resulting in a pay-
(iv) If the CPI for a particular month is not
ment of $1,963.48.
reported by the last day of the following
month, we will announce an index number C. Accrued Interest
based on the last available twelve-month
change in the CPI. We will base our calcula- 1. You will have to pay accrued interest on
tions of our payment obligations that rely a Treasury bond or note when interest ac-
on that month’s CPI on the index number we crues prior to the issue date of the security.
announce. Because you receive a full interest payment
(a) For example, if the CPI for month M is despite having held the security for only a
not reported timely, the formula for calcu- portion of the interest payment period, you
lating the index number to be used is: must compensate us through the payment of
accrued interest at settlement.
1/12 2. For a Treasury fixed-principal security,
⎡ CPI M-1 ⎤ if accrued interest covers a fractional por-
CPI M = CPI M-1 × ⎢ ⎥ tion of a full half-year period, the number of
⎣ CPI M-13 ⎦ days in the full half-year period and the stat-
(b) Generalizing for the last reported CPI ed interest rate will determine the daily in-
issued N months prior to month M: terest decimal to use in computing the ac-
crued interest. We multiply the decimal by
N /12 the number of days for which interest has ac-
⎡ CPI M-N ⎤ crued.
CPI M = CPI M-N × ⎢ ⎥ 3. If a reopened bond or note has a long
⎣ CPI M-N-12 ⎦ first interest payment period (a ‘‘long cou-
(c) If it is necessary to use these formulas pon’’), and the dated date for the reopened
to calculate an index number, we will use issue is less than six full months before the
that number for all subsequent calculations first interest payment, the accrued interest
that rely on the month’s index number. We will fall into two separate half-year periods.
will not replace it with the actual CPI when A separate daily interest decimal must be
it is reported, except for use in the above for- multiplied by the respective number of days
mulas. If it becomes necessary to use the in each half-year period during which inter-
above formulas to derive an index number, est has accrued.
we will use the last CPI that has been re- 4. We round all accrued interest computa-
ported to calculate CPI numbers for months tions to five decimal places for a $1,000 par
for which the CPI has not been reported amount, using normal rounding procedures.
timely. We calculate accrued interest for a par
5. Computation of Interest for a Regular Half- amount of securities greater than $1,000 by
Year Payment Period. Interest on marketable applying the appropriate multiple to accrued
Treasury inflation-protected securities is interest payable for a $1,000 par amount,
payable on a semiannual basis. The regular rounded to five decimal places. We calculate
interest payment period is a full half-year or accrued interest for a par amount of securi-
six calendar months. Examples of half-year ties less than $1,000 by applying the appro-
periods are January 15 to July 15, and April priate fraction to accrued interest payable
15 to October 15. An interest payment will be for a $1,000 par amount, rounded to five dec-
a fixed percentage of the value of the infla- imal places.
ER28JY04.005</MATH>
tion-adjusted principal, in current dollars, 5. For an inflation-protected security, we

for the date on which it is paid. We will cal- calculate accrued interest as shown in sec-
culate interest payments by multiplying tion III, paragraphs A and B of this appendix.
401
ER28JY04.004</MATH>
Examples—(1) Treasury Fixed-Principal Secu- days in fractional portion (or ‘‘initial short
rities—(i) Involving One Half-Year: A note pay- period’’) of long first payment period.
ing interest at a rate of 63⁄4%, originally s = (1) number of days in the full semiannual
issued on May 15, 2000, as a 5-year note with period ending on the first interest payment
a first interest payment date of November 15, date (regular or short first payment pe-
2000, was reopened as a 4-year 9-month note riod), or (2) number of days in the full
on August 15, 2000. Interest had accrued for semiannual period in which the fractional
92 days, from May 15 to August 15. The reg- portion of a long first payment period falls,
ular interest period from May 15 to Novem- ending at the onset of the regular portion
ber 15, 2000, covered 184 days. Accordingly, of the first interest payment.
the daily interest decimal, $0.183423913, mul- vn = 1 / [1 + (i/2)] n = present value of 1 due
tiplied by 92, resulted in accrued interest at the end of n periods.
payable of $16.874999996, or $16.87500, for each an = (1 ¥ vn) / (i/2) = v + v2 + v3 + ... + vn =
$1,000 note purchased. If the notes have a par present value of 1 per period for n periods
amount of $150,000, then 150 is multiplied by
Special Case: If i = 0, then an⎤ = n. Further-
$16.87500, resulting in an amount payable of
more, when i = 0, an⎤ cannot be calculated
$2,531.25.
using the formula: (1 ¥ vn)/(i/2). In the spe-
(2) Involving Two Half-Years: cial case where i = 0, an⎤ must be calculated
A 103⁄4% bond, originally issued on July 2, as the summation of the individual present
1985, as a 20-year 1-month bond, with a first values (i.e., v + v2 + v3 + ... + vn). Using the
interest payment date of February 15, 1986, summation method will always confirm that
was reopened as a 19-year 10-month bond on an⎤ = n when i = 0.
November 4, 1985. Interest had accrued for 44
days, from July 2 to August 15, 1985, during A = accrued interest.
a 181-day half-year (February 15 to August A. For fixed-principal securities with a reg-
15); and for 81 days, from August 15 to No- ular first interest payment period:
vember 4, during a 184-day half-year (August Formula:
15, 1985, to February 15, 1986). Accordingly, P[1 + (r/s)(i/2)] = (C/2)(r/s) + (C/2)an⎤ + 100vn.
$0.296961326 was multiplied by 44, and
Example:
$0.292119565 was multiplied by 81, resulting in
products of $13.066298344 and $23.661684765 For an 83⁄4% 30-year bond issued May 15,
which, added together, resulted in accrued 1990, due May 15, 2020, with interest pay-
interest payable of $36.727983109, or $36.72798, ments on November 15 and May 15, solve for
for each $1,000 bond purchased. If the bonds the price per 100 (P) at a yield of 8.84%.
have a par amount of $11,000, then 11 is mul- Definitions:
tiplied by $36.72798, resulting in an amount C = 8.75.
payable of $404.00778 ($404.01). i = .0884.
r = 184 (May 15 to November 15, 1990).
II. FORMULAS FOR CONVERSION OF FIXED-
s = 184 (May 15 to November 15, 1990).
PRINCIPAL SECURITY YIELDS TO EQUIVALENT
n = 59 (There are 60 full semiannual periods,
PRICES
but n is reduced by 1 because the issue date
Definitions is a coupon frequency date.)
vn = 1 / [(1 + .0884 / 2)]59, or .0779403508.
P = price per 100 (dollars), rounded to six an⎤ = (1 ¥ .0779403508) / .0442, or 20.8610780353.
places, using normal rounding procedures. Resolution:
C = the regular annual interest per $100, pay-
able semiannually, e.g., 6.125 (the decimal P[1 + (r/s)(i/2)] = (C/2)(r/s) + (C/2)an⎤ + 100vn
equivalent of a 61⁄8% interest rate). or
i = nominal annual rate of return or yield to P[1 + (184/184)(.0884/2)] = (8.75/2)(184/184) + (8.75/
maturity, based on semiannual interest 2)(20.8610780353) + 100(.0779403508).
payments and expressed in decimals, e.g., (1) P[1 + .0442] = 4.375 + 91.2672164044 +
.0719. 7.7940350840.
(2) P[1.0442] = 103.4362514884.
n = number of full semiannual periods from
(3) P = 103.4362514884 / 1.0442.
the issue date to maturity, except that, if
(4) P = 99.057893.
the issue date is a coupon frequency date,
n will be one less than the number of full B. For fixed-principal securities with a short
semiannual periods remaining to maturity. first interest payment period:
Coupon frequency dates are the two semi- Formula:
annual dates based on the maturity date of P[1 + (r/s)(i/2)] = (C/2)(r/s) + (C/2)an⎤ + 100vn.
each note or bond issue. For example, a se-
Example:
curity maturing on November 15, 2015,
would have coupon frequency dates of May For an 81⁄2% 2-year note issued April 2, 1990,
15 and November 15. due March 31, 1992, with interest payments
r = (1) number of days from the issue date to on September 30 and March 31, solve for the
the first interest payment (regular or short price per 100 (P) at a yield of 8.59%.
first payment period), or (2) number of Definitions:
402
C = 8.50. For a 91⁄2% 10-year note with interest ac-
i = .0859. cruing from November 15, 1985, issued No-
n = 3. vember 29, 1985, due November 15, 1995, and
r = 181 (April 2 to September 30, 1990). interest payments on May 15 and November
s = 183 (March 31 to September 30, 1990). 15, solve for the price per 100 (P) at a yield of
vn = 1 / [(1 + .0859 / 2)]3, or .8814740565. 9.54%. Accrued interest is from November 15
an⎤ = (1 ¥ .8814740565) / .04295, or 2.7596261590. to November 29 (14 days).
Resolution: Definitions:
P[1 + (r/s)(i/2)] = (C/2)(r/s) + (C/2)an⎤ + 100vn or C = 9.50.
P[1 + (181/183)(.0859/2)] = (8.50/2)(181/183) + (8.50/ i = .0954.
2)(2.7596261590) + 100(.8814740565). n = 19.
(1) P[1 + .042480601] = 4.2035519126 + r = 167 (November 29, 1985, to May 15, 1986).
11.7284111757 + 88.14740565. s = 181 (November 15, 1985, to May 15, 1986).
(2) P[1.042480601] = 104.0793687354. vn = 1 / [(1 + .0954/2)]19, or .4125703996.
(3) P = 104.0793687354 / 1.042480601. an⎤ = (1 ¥ .4125703996) / .0477, or 12.3150859630.
(4) P = 99.838183. A = [(181 ¥ 167) / 181](9.50/2), or .367403.
C. For fixed-principal securities with a long Resolution:
first interest payment period: (P+A)[1 + (r/s)(i/2)] = C/2 + (C/2)an⎤ + 100vn or
Formula: (P + .367403)[1 + (167/181)(.0954/2)] = (9.50/2) +
P[1 + (r/s)(i/2)] = [(C/2)(r/s)]v + (C/2)an⎤ + 100vn. (9.50/2)(12.3150859630) + 100(.4125703996).
(1) (P + .367403)[1 + .044010497] = 4.75 +
Example: 58.4966583243 + 41.25703996.
For an 81⁄2% 5-year 2-month note issued (2) (P + .367403)[1.044010497] = 104.5036982843.
March 1, 1990, due May 15, 1995, with interest (3) (P + .367403) = 104.5036982843 / 1.044010497.
payments on November 15 and May 15 (first (4) (P + .367403) = 100.098321.
payment on November 15, 1990), solve for the (5) P = 100.098321 ¥.367403.
price per 100 (P) at a yield of 8.53%. (6) P = 99.730918.
Definitions: E. For fixed-principal securities reopened dur-
C = 8.50. ing the regular portion of a long first payment
i = .0853. period:
n = 10. Formula:
r = 75 (March 1 to May 15, 1990, which is the (P + A)[1 + (r/s)(i/2)] = (r′s″)(C/2) + C/2 + (C/
fractional portion of the first interest pay- 2)an⎤ + 100vn.
ment).
Where:
s = 181 (November 15, 1989, to May 15, 1990).
v = 1 / (1 + .0853/2), or .9590946147. A = AI′ + AI,
vn = 1 / (1+.0853/2)10, or .658589 AI′ = (r′/s″)(C/2),
an⎤ = (1¥.658589)/.04265, or 8.0049454082. AI = [(s¥r) / s](C/2), and
Resolution: r = number of days from the reopening date
to the first interest payment date,
P[1 + (r/s)(i/2)] = [(C/2)(r/s)]v + (C/2)an⎤ + 100vn s = number of days in the semiannual period
or for the regular portion of the first interest
P[1 + (75/181)(.0853/2)] = [(8.50/2)(75/ payment period,
181)].9590946147 + (8.50/2)(8.0049454082) + r′ = number of days in the fractional portion
100(.6585890783). (or ‘‘initial short period’’) of the first in-
(1) P[1 + .017672652] = 1.6890133062 + terest payment period,
34.0210179850 + 65.8589078339. s″ = number of days in the semiannual period
(2) P[1.017672652] = 101.5689391251. ending with the commencement date of the
(3) P = 101.5689391251 / 1.017672652. regular portion of the first interest pay-
(4) P = 99.805118. ment period.
D. (1) For fixed-principal securities reopened Example:
during a regular interest period where the pur-
A 103⁄4% 19-year 9-month bond due August
chase price includes predetermined accrued in-
15, 2005, is issued on July 2, 1985, and re-
terest.
opened on November 4, 1985, with interest
(2) For new fixed-principal securities accruing
payments on February 15 and August 15 (first
interest from the coupon frequency date imme-
payment on February 15, 1986), solve for the
diately preceding the issue date, with the inter-
price per 100 (P) at a yield of 10.47%. Accrued
est rate established in the auction being used to
interest is calculated from July 2 to Novem-
determine the accrued interest payable on the
ber 4.
issue date.
Definitions:
Formula:
C = 10.75.
(P + A)[1 + (r/s)(i/2)] = C/2 + (C/2)an⎤ + 100vn.
i = .1047.
Where:
n = 39.
A = [(s¥r)/s](C/2). r = 103 (November 4, 1985, to February 15,
Example: 1986).
403
s = 184 (August 15, 1985, to February 15, 1986). G. For fixed-principal securities reopened dur-
r′ = 44 (July 2 to August 15, 1985). ing the fractional portion (initial short period)
s″ = 181 (February 15 to August 15, 1985). of a long first payment period:
vn = 1 / [(1 + .1047 / 2)]39, or .1366947986. Formula:
an⎤ = (1 ¥ .1366947986) / .05235, or 16.4910258142. (P + A)[1 + (r/s)(i/2)] = [(r′/s)(C/2)]v + (C/2)an⎤
AI′ = (44 / 181)(10.75 / 2), or 1.306630. + 100v n.
AI = [(184 ¥ 103) / 184](10.75 / 2), or 2.366168.
Where:
A = AI′ + AI, or 3.672798.
A = [(r′ ¥ r)/s](C/2), and
Resolution: r = number of days from the reopening date
(P + A)[1 + (r/s)(i/2)] = (r′/s″)(C/2) + C/2 + (C/ to the end of the short period.
2)an⎤ + 100vn or r′ = number of days in the short period.
(P + 3.672798)[1 + (103/184)(.1047/2)] = (44/ s = number of days in the semiannual period
181)(10.75/2) +10.75/2 + (10.75/2)(16.4910258142) ending with the end of the short period.
+ 100(.1366947986). Example:
(1) (P + 3.672798)[1 + .02930462] = 1.3066298343
For a 93⁄4% 6-year 2-month note due Decem-
+ 5.375 + 88.6392637512 + 13.6694798628. ber 15, 1994, originally issued on October 15,
(2) (P + 3.672798)[1.02930462] = 108.9903734482. 1988, and reopened on November 15, 1988, with
(3) (P + 3.672798) = 108.9903734482 / 1.02930462. interest payments on June 15 and December
(4) (P + 3.672798) = 105.887384. 15 (first payment on June 15, 1989), solve for
(5) P = 105.887384 ¥3.672798. the price per 100 (P) at a yield of 9.79%. Ac-
(6) P = 102.214586. crued interest is calculated from October 15
F. For fixed-principal securities reopened dur- to November 15.
ing a short first payment period: Definitions:
Formula: C = 9.75.
(P + A)[1 + (r/s)(i/2)] = (r′/s)(C/2) + (C/2)an⎤ + i = .0979.
100v n. n = 12.
r = 30 (November 15, 1988, to December 15,
Where:
1988).
A = [(r′ ¥ r)/s](C/2) and s = 183 (June 15, 1988, to December 15, 1988).
r′ = number of days from the original issue r′ = 61 (October 15, 1988, to December 15, 1988).
date to the first interest payment date. v = 1 / (1 + .0979/2), or .9533342867.
Example: v n = [1 / (1 + .0979/2)]12, or .5635631040.
an⎤ = (1 ¥ .5635631040)/.04895, or 8.9159733613.
For a 101⁄2% 8-year note due May 15, 1991, A = [(61 ¥ 30)/183](9.75/2), or .825820.
originally issued on May 16, 1983, and re-
Resolution:
opened on August 15, 1983, with interest pay-
ments on November 15 and May 15 (first pay- (P + A)[1 + (r/s)(i/2)] = [(r′/s)(C/2)]v + (C/2)an⎤
ment on November 15, 1983), solve for the + 100v n or
price per 100 (P) at a yield of 10.53%. Accrued (P + .825820)[1 + (30/183)(.0979/2)] = [(61/
interest is calculated from May 16 to August 183)(9.75/2)](.9533342867) + (9.75/
15. 2)(8.9159733613) + 100(.5635631040).
(1) (P + .825820)[1+ .00802459] = 1.549168216 +
Definitions: 43.4653701362 + 56.35631040.
C = 10.50. (2) (P + .825820)[1.00802459] = 101.3708487520.
i = .1053. (3) (P + .825820) = 101.3708487520 / 1.00802459.
n = 15. (4) (P + .825820) = 100.563865.
r = 92 (August 15, 1983, to November 15, 1983). (5) P = 100.563865 ¥. 825820.
s = 184 (May 15, 1983, to November 15, 1983). (6) P = 99.738045.
r′ = 183 (May 16, 1983, to November 15, 1983).
v n = 1/[(1 + .1053/2)]15, or .4631696332. III. FORMULAS FOR CONVERSION OF INFLATION-
INDEXED SECURITY YIELDS TO EQUIVALENT
an⎤ = (1 ¥ .4631696332) / .05265, or 10.1962082956.
PRICES
A = [(183 ¥ 92) / 184](10.50 / 2), or 2.596467.
Resolution: Definitions
(P + A)[1 + (r/s)(i/2)] = (r′/s)(C/2) + (C/2)an⎤ + P = unadjusted or real price per 100 (dollars).
100v n or Padj = inflation adjusted price; P × Index
(P + 2.596467)[1+(92/184)(.1053/2)] = (183/ RatioDate.
184)(10.50/2) + (10.50/2)(10.1962082956) + A = unadjusted accrued interest per $100
100(.4631696332). original principal.
(1) (P + 2.596467)[1 + .026325] = 5.2214673913 + Aadj = inflation adjusted accrued interest; A×
53.5300935520 + 46.31696332. Index RatioDate.
(2) (P + 2.596467)[1.026325] = 105.0685242633. SA = settlement amount including accrued
(3) (P + 2.596467) = 105.0685242633 / 1.026325. interest in current dollars per $100 original
(4) (P + 2.596467) = 102.373541. principal; Padj + Aadj.
(5) P = 102.373541 ¥ 2.596467. r = days from settlement date to next coupon
(6) P = 99.777074. date.
404
s = days in current semiannual period. NOTE: When the Issue Date is different
i = real yield, expressed in decimals (e.g., from the Dated Date, the denominator is the
0.0325). Ref CPIDatedDate.
C = real annual coupon, payable semiannu- A. For inflation-indexed securities with a reg-
ally, in terms of real dollars paid on $100 ular first interest payment period:
initial, or real, principal of the security. Formulas:
n = number of full semiannual periods from
issue date to maturity date, except that, if
(C/2) + (C/2)a n ⎤ + 100 v n
the issue date is a coupon frequency date, P= − [(s − r )/s](C/2)
n will be one less than the number of full 1 + ( r/s)(i/2)
semiannual periods remaining until matu- Padj = P × Index RatioDate.
rity. Coupon frequency dates are the two
A = [(s¥r)/s] × (C/2).
semiannual dates based on the maturity
Aadj = A × Index RatioDate.
date of each note or bond issue. For exam-
ple, a security maturing on July 15, 2026 SA = Padj + Aadj
would have coupon frequency dates of Jan- Index RatioDate = Ref CPIDate/Ref CPIIssueDate.
uary 15 and July 15. Example:
v = 1/(1 + i/2)n = present value of 1 due at the
n
We issued a 10-year inflation-indexed note
end of n periods. on January 15, 1999. The note was issued at a
an⎤ = (1 ¥ v n) /(i/2) = v + v 2 + v 3 + ... + v n = discount to yield of 3.898% (real). The note
present value of 1 per period for n periods. bears a 37⁄8% real coupon, payable on July 15
Special Case: If i = 0, then an⎤ = n. Further- and January 15 of each year. The base CPI
more, when i = 0, an⎤ cannot be calculated index applicable to this note is 164. (We nor-
using the formula: (1 ¥ v n)/(i/2). In the spe- mally derive this number using the inter-
cial case where i = 0, an⎤ must be calculated polative process described in appendix B, sec-
as the summation of the individual present tion I, paragraph B.)
values (i.e., v + v 2 + v 3 + ... + v n). Using the
Definitions:
summation method will always confirm that
an⎤ = n when i = 0. C = 3.875.
Date = valuation date. i = 0.03898.
D = the number of days in the month in n = 19 (There are 20 full semiannual periods
which Date falls. but n is reduced by 1 because the issue date
t = calendar day corresponding to Date. is a coupon frequency date.).
CPI = Consumer Price Index number. r = 181 (January 15, 1999 to July 15, 1999).
CPIM = CPI reported for the calendar month s = 181 (January 15, 1999 to July 15, 1999).
M by the Bureau of Labor Statistics. Ref CPIDate = 164.
Ref CPIM = reference CPI for the first day of Ref CPIIssueDate = 164.
the calendar month in which Date falls Resolution:
(also equal to the CPI for the third pre-
Index RatioDate = Ref CPIDate / Ref CPIIssueDate =
ceding calendar month), e.g., Ref CPIApril 1
164/164 = 1.
is the CPIJanuary.
A = [(181 ¥ 181)/181] × 3.875/2 = 0.
Ref CPIM∂1 = reference CPI for the first day
of the calendar month immediately fol- Aadj = 0 × 1 = 0.
lowing Date. vn = 1/(1 + i/2)n = 1/(1 + .03898/2)19 = 0.692984572.
Ref CPIDate = Ref CPIM ¥ [(t ¥ 1)/D][Ref an⎤ = (1 ¥ vn)/(i/2) = (1–0.692984572) / (.03898/2) =
CPIM∂1–Ref CPIM]. 15.752459107.
Index RatioDate = Ref CPIDate / Ref CPIIssueDate. Formula:
(C/2) + (C/2)a n ⎤ + 100 v n

P= − [(s − r ) /s](C/2)
1 + ( r/s)(i/2)
(3.875/2) + (3.875/2)(15.752459107) +100(0.692984572)
P= − [(181 − 181) /181](3.875/2)
1+ (181/181)(0.03898/2)
52038952 + 69.29845720
1.9375 + 30.52038952
P= −0
1.01949000
101.75634672
P=
1.01949000
P = 99.811030. NOTE: For the real price (P), we have

Padj = P × Index RatioDate. rounded to six places. These amounts are
Padj = 99.811030 × 1 = 99.811030. based on 100 par value.
SA = Padj × Aadj.
ER02SE04.006</MATH>
B. (1) For inflation-indexed securities re-

SA = 99.811030 + 0 = 99.811030. opened during a regular interest period where
405
ER02SE04.005</MATH>
the purchase price includes predetermined ac- ments on July 15 and January 15. For a re-
crued interest. opening on October 15, 1998, with inflation
(2) For new inflation-indexed securities accru- compensation accruing from January 15, 1998
ing interest from the coupon frequency date im- to October 15, 1998, and accrued interest ac-
mediately preceding the issue date, with the in- cruing from July 15, 1998 to October 15, 1998
terest rate established in the auction being used (92 days), solve for the price per 100 (P) at a
to determine the accrued interest payable on the real yield, as determined in the reopening
issue date. auction, of 3.65%. The base index applicable
Bidding: The dollar amount of each bid is to the issue date of this note is 161.55484 and
in terms of the par amount. For example, if the reference CPI applicable to October 15,
the Ref CPI applicable to the issue date of 1998, is 163.29032.
the note is 120, and the reference CPI appli-
Definitions:
cable to the reopening issue date is 132, a bid
of $10,000 will in effect be a bid of $10,000 × C = 3.625.
(132/120), or $11,000. i = 0.0365.
Formulas: n = 18.
r = 92 (October 15, 1998 to January 15, 1999).
(C/2) + (C/2)a n ⎤ + 100 v n s = 184 (July 15, 1998 to January 15, 1999).
P= − [(s − r )/s](C/2) Ref CPIDate = 163.29032.
1 + ( r/s)(i/2)
Ref CPIIssueDate = 161.55484.
Padj = P × Index RatioDate.
A = [(s¥r)/s] × (C/2). Resolution:
Aadj = A × Index RatioDate. Index RatioDate = Ref CPIDate/Ref CPIIssueDate =
SA = Padj + Aadj. 163.29032/161.55484 = 1.01074.
Index RatioDate = Ref CPIDate/Ref CPIIssueDate. vn = 1/(1 + i/2)n = 1/(1 + .0365/2)18 = 0.722138438.
Example: an⎤ = (1¥vn)/(i/2) = (1 ¥ 0.722138438)/(.0365/2) =
We issued a 35⁄8% 10-year inflation-indexed 15.225291068.
note on January 15, 1998, with interest pay- Formula:
(C/2) + (C/2)a n ⎤ + 100 v n

P= − [(s − r ) /s](C/2)
1 + ( r/s)(i/2)
(3.625/2) + (3.625/2)(15.225291068) +100(0.722138438)
P= − [(184 − 92) /184](3.625/2)
1+ (92/184)(0.0365/2)
59584006 + 72.21384380
1.8125 + 27.59584006
P= − (92/184)(1.8125)
1.009125
101.62218386
P= − 0.906250
1.009125
P = 100.703267 ¥ 0.906250. with other interest components that have

P = 99.797017. the same maturity date, regardless of the
Padj = P × Index RatioDate. underlying inflation-protected security from
Padj = 99.797017 × 1.01074 = 100.86883696. which the interest components were
Padj = 100.868837. stripped. The adjusted value provides for
A = [(184¥92)/184] × 3.625/2 = 0.906250. fungibility of these various interest compo-
Aadj = A × Index RatioDate. nents when buying, selling, or transferring
Aadj = 0.906250 × 1.01074 = 0.91598313. them or when reconstituting an inflation-
Aadj = 0.915983. protected security.
SA = Padj + Aadj = 100.868837 + 0.915983. Definitions:
SA = 101.784820.
c = C/100 = the regular annual interest rate,
NOTE: For the real price (P), and the infla-
payable semiannually, e.g., .03625 (the dec-
tion-adjusted price (Padj), we have rounded to
six places. For accrued interest (A) and the imal equivalent of a 35⁄8% interest rate)
adjusted accrued interest (Aadj), we have Par = par amount of the security to be
rounded to six places. These amounts are stripped
based on 100 par value. Ref CPIIssueDate = reference CPI for the origi-
nal issue date (or dated date, when the
IV. COMPUTATION OF ADJUSTED VALUES AND dated date is different from the original
PAYMENT AMOUNTS FOR STRIPPED INFLA- issue date) of the underlying (unstripped)
TION-PROTECTED INTEREST COMPONENTS security
NOTE: Valuing an interest component Ref CPIDate = reference CPI for the maturity
ER02se04.008</MATH>
stripped from an inflation-protected security date of the interest component

at its adjusted value enables this interest AV = adjusted value of the interest compo-
component to be interchangeable (fungible) nent
406
ER02SE04.007</MATH>
PA = payment amount at maturity by Treas- B. Computation of purchase prices and dis-
ury count amounts based on price per $100, for
Formulas: Treasury bills of all maturities:
AV = Par(C/2)(100/Ref CPIIssueDate) (rounded to 1. To determine the purchase price of any
2 decimals with no intermediate rounding) bill, divide the par amount by 100 and mul-
tiply the resulting quotient by the price per
PA = AV(Ref CPIDate/100) (rounded to 2 deci-
$100.
mals with no intermediate rounding)
Example: Example:
A 10-year inflation-protected note paying To compute the purchase price of a $10,000
37⁄8% interest was issued on January 15, 13-week bill sold at a price of $98.098000 per
1999, with the second interest payment on $100, divide the par amount ($10,000) by 100 to
January 15, 2000. The Ref CPI of January obtain the multiple (100). That multiple
15, 1999 (Ref CPIIssueDate) was 164.00000, and times 98.098000 results in a purchase price of
the Ref CPI on January 15, 2000 (Ref $9,809.80.
CPIDate) was 168.24516. Calculate the ad- 2. To determine the discount amount for
justed value and the payment amount at any bill, subtract the purchase price from
maturity of the interest component. the par amount of the bill.
Definitions: Example:
c = .03875 For a $10,000 bill with a purchase price of
Par = $1,000,000 $9,809.80, the discount amount would be
Ref CPIIssueDate = 164.00000 $190.20, or $10,000 ¥ $9,809.80.
Ref CPIDate = 168.24516 C. Conversion of prices to discount rates for
Resolution: Treasury bills of all maturities:
For a par amount of $1 million, the adjusted Formula:
value of each stripped interest component
was $1,000,000(.03875/2)(100/164.00000), or ⎡ 100 − P 360 ⎤
d=⎢ ×
$11,814.02 (no intermediate rounding).
⎣ 100 r ⎥⎦
For an interest component that matured on
January 15, 2000, the payment amount was Where:
$11,814.02 (168.24516/100), or $19,876.52 (no in- P = price per 100 (dollars).
termediate rounding). d = discount rate.
V. COMPUTATION OF PURCHASE PRICE, DIS- r = number of days remaining to maturity.
COUNT RATE, AND INVESTMENT RATE (COU- Example:
PON-EQUIVALENT YIELD) FOR TREASURY For a 26-week bill issued December 30, 1982,
BILLS due June 30, 1983, with a price of $95.934567,
A. Conversion of the discount rate to a pur- solve for the discount rate (d).
chase price for Treasury bills of all maturities: Definitions:
Formula: P = 95.934567.
P = 100 (1 ¥ dr / 360). r = 182 (December 30, 1982, to June 30, 1983).
Where: Resolution:
d = discount rate, in decimals.
r = number of days remaining to maturity. ⎡ 100 − P 360 ⎤
d=⎢ ×
P = price per 100 (dollars). ⎣ 100 r ⎥⎦
Example:
⎡ 100 − 95.934567 360 ⎤
d=⎢ ×
182 ⎥⎦
For a bill issued November 24, 1989, due
February 22, 1990, at a discount rate of ⎣ 100
7.610%, solve for price per 100 (P). (2) d = [.04065433 × 1.978021978].
Definitions: (3) d = .080415158.
d = .07610. (4) d = 8.042%.
r = 90 (November 24, 1989 to February 22, NOTE: Prior to April 18, 1983, we sold all
1990). bills in price-basis auctions, in which dis-
Resolution: count rates calculated from prices were
rounded to three places, using normal round-
P = 100 (1 ¥ dr / 360).
ing procedures. Since that time, we have sold
(1) P = 100 [1 ¥ (.07610)(90) / 360].
bills only on a discount rate basis.
(2) P = 100 (1 ¥ .019025).
(3) P = 100 (.980975). D. Calculation of investment rate (coupon-
(4) P = 98.097500. equivalent yield) for Treasury bills:
ER02SE04.010</MATH>
NOTE: Purchase prices per $100 are rounded 1. For bills of not more than one half-year to
to six decimal places, using normal rounding maturity:
procedures. Formula:
407
ER02SE04.009</MATH>
Pt. 356, App. C 31 CFR Ch. II (7–1–11 Edition)
ax 2 + bx + c = 0.
⎡ 100 − P y ⎤
i=⎢ × ⎥ Therefore, rewriting the bill formula in the
⎣ P r⎦ quadratic equation form gives:
Where:
i = investment rate, in decimals. ⎡ r ⎤ 2 ⎛ r⎞ ⎛ P − 100 ⎞
⎢ − .25⎥ i + ⎜ ⎟ i + ⎜⎝ ⎟ =0
P = price per 100 (dollars).
⎣ 2 y ⎦ ⎝ y ⎠ P ⎠
r = number of days remaining to maturity.
y = number of days in year following the and solving for ‘‘i’’ produces:
issue date; normally 365 but, if the year
following the issue date includes February − b + b 2 − 4ac
29, then y is 366. i=
2a
Example:
Where:
For a cash management bill issued June 1,
1990, due June 21, 1990, with a price of i = investment rate in decimals.
$99.559444 (computed from a discount rate of b = r/y.
7.930%), solve for the investment rate (i). a = (r/2y) ¥ .25.
Definitions: c = (P¥100)/P.
P = 99.559444. P = price per 100 (dollars).
r = 20 (June 1, 1990, to June 21, 1990). r = number of days remaining to maturity.
y = 365. y = number of days in year following the
Resolution: issue date; normally 365, but if the year
following the issue date includes February
⎡ 100 − P y ⎤ 29, then y is 366.
i=⎢ × ⎥ Example:
⎣ P r⎦
For a 52-week bill issued June 7, 1990, due
⎡ 100 − 99.559444 365 ⎤
(1) i = ⎢ × June 6, 1991, with a price of $92.265000 (com-
⎣ 99.559444 20 ⎥⎦ puted from a discount rate of 7.65%), solve
(2) i = [.004425 × 18.25]. for the investment rate (i).
(3) i = .080756. Definitions:
(4) i = 8.076%. r = 364 (June 7, 1990, to June 6, 1991).
2. For bills of more than one half-year to y = 365.
maturity: P = 92.265000.
Formula: b = 364 / 365, or .997260274.
P [1 + (r ¥ y/2)(i/y)] (1 + i/2) = 100. a = (364 / 730) ¥ .25, or .248630137.
This formula must be solved by using the c = (92.265 ¥ 100) / 92.265, or ¥.083834607.
quadratic equation, which is: Resolution:
− b + b 2 − 4ac
i=
2a
−.997260274 + (.997260274)2 − 4[(.248630137)( −.083834607)]
ER02SE04.015</MATH>
(1) i =
2(.248630137)
−.997260274 + .994528054 + .083375239
(2) i =
.497260274
ER02SE04.014</MATH>
(3) i = (¥.997260274 + 1.038221216) / .497260274. APPENDIX C TO PART 356—INVESTMENT
(4) i = .040960942 / .497260274. CONSIDERATIONS
(5) i = .082373244 or
(6) i = 8.237%. I. INFLATION-PROTECTED SECURITIES
[69 FR 45202, July 28, 2004, as amended at 69 A. Principal and Interest Variability
FR 52967, Aug. 30, 2004; 69 FR 53622, Sept. 2,
ER02SE04.013</MATH>
2004; 73 FR 14939, Mar. 20, 2008] An investment in securities with principal

or interest determined by reference to an in-
flation index involves factors not associated
with an investment in a fixed-principal secu-
rity. Such factors include the possibility
that:
ER02SE04.012</MATH>
• The inflation index may be subject to

significant changes,
408
ER02SE04.011</MATH>
Fiscal Service, Treasury Pt. 356, App. D
• changes in the index may or may not cor- periods of significant, rapid changes in the
relate to changes in interest rates generally index.
or with changes in other indices, The CPI is reported by the Bureau of Labor
• the resulting interest may be greater or Statistics, a bureau within the Department
less than that payable on other securities of of Labor. The Bureau of Labor Statistics op-
similar maturities, and erates independently of Treasury and, there-
• in the event of sustained deflation, the fore, we have no control over the determina-
amount of the semiannual interest pay- tion, calculation, or publication of the index.
ments, the inflation-adjusted principal of the For a discussion of how we will apply the
security, and the value of stripped compo- CPI in various situations, see appendix B,
nents will decrease. However, if at maturity section I, paragraph B of this part. In addi-
the inflation-adjusted principal is less than a
tion, for a discussion of actions that we
security’s par amount, we will pay an addi-
would take in the event the CPI is: discon-
tional amount so that the additional amount
tinued; in the judgment of the Secretary,
plus the inflation-adjusted principal equals
the par amount. Regardless of whether or fundamentally altered in a manner materi-
not we pay such an additional amount, we ally adverse to the interests of an investor in
will always base interest payments on the the security; or, in the judgment of the Sec-
inflation-adjusted principal as of the interest retary, altered by legislation or Executive
payment date. If a security has been Order in a manner materially adverse to the
stripped, we will pay any such additional interests of an investor in the security, see
amount at maturity to holders of principal appendix B, section I, paragraph B.4 of this
components only. (See § 356.30.) part.
B. Trading in the Secondary Market APPENDIX D TO PART 356—DESCRIPTION

The Treasury securities market is the larg- OF THE CONSUMER PRICE INDEX
est and most liquid securities market in the
world. The market for Treasury inflation- The Consumer Price Index (‘‘CPI’’) for pur-
protected securities, however, may not be as poses of inflation-protected securities is the
active or liquid as the market for Treasury non-seasonally adjusted U.S. City Average
fixed-principal securities. In addition, Treas- All Items Consumer Price Index for All
ury inflation-protected securities may not be Urban Consumers. It is published monthly by
as widely traded or as well understood as the Bureau of Labor Statistics (BLS), a bu-
Treasury fixed-principal securities. Lesser li- reau within the Department of Labor. The
quidity and fewer market participants may CPI is a measure of the average change in
result in larger spreads between bid and consumer prices over time in a fixed market
asked prices for inflation-protected securi- basket of goods and services. This market
ties than the bid-asked spreads for fixed- basket includes food, clothing, shelter, fuels,
principal securities with the same time to transportation, charges for doctors’ and den-
maturity. Larger bid-asked spreads normally tists’ services, and drugs.
result in higher transaction costs and/or In calculating the index, price changes for
lower overall returns. The liquidity of an in- the various items are averaged together with
flation-protected security may be enhanced
weights that represent their importance in
over time as we issue additional amounts or
the spending of urban households in the
more entities participate in the market.
United States. The BLS periodically updates
C. Tax Considerations the contents of the market basket of goods
and services, and the weights assigned to the
Treasury inflation-protected securities and various items, to take into account changes
the stripped interest and principal compo- in consumer expenditure patterns.
nents of these securities are subject to spe-
The CPI is expressed in relative terms in
cific tax rules provided by Treasury regula-
relation to a time base reference period for
tions issued under sections 1275(d) and 1286 of
the Internal Revenue Code of 1986, as amend- which the level is set at 100. For example, if
ed. the CPI for the 1982–84 reference period is
100.0, an increase of 16.5 percent from that
D. Indexing Issues period would be shown as 116.5. The CPI for
a particular month is released and published
While the Consumer Price Index (‘‘CPI’’)
during the following month. From time to
measures changes in prices for goods and
time, the CPI is rebased to a more recent
services, movements in the CPI that have oc-
base reference period. We provide the base
curred in the past do not necessarily indicate
changes that may occur in the future. reference period for a particular inflation-
The calculation of the index ratio incor- protected security on the auction announce-
porates an approximate three-month lag, ment for that security.
which may have an impact on the trading Further details about the CPI may be ob-
price of the securities, particularly during tained by contacting the BLS.
409
PART 357—REGULATIONS GOV- 357.43 Liability for transfers to and from

Legacy Treasury Direct ®.
ERNING BOOK–ENTRY TREASURY 357.44 [Reserved]
BONDS, NOTES AND BILLS HELD 357.45 Supplements, amendments, or revi-
IN TREASURY/RESERVE AUTO- sions.
MATED DEBT ENTRY SYSTEM APPENDIX A TO PART 357—DISCUSSION OF
(TRADES) AND LEGACY TREAS- FINAL RULE
URY DIRECT APPENDIX B TO PART 357—TRADES COM-
MENTARY
Subpart A—General Information AUTHORITY: 31 U.S.C. chapter 31; 5 U.S.C.
301; 12 U.S.C. 391.
Sec.
357.0 Book-entry systems. SOURCE: 51 FR 18265, May 16, 1986, unless
357.1 Effective date. otherwise noted.
357.2 Definitions.
EDITORIAL NOTE: Nomenclature changes to
Subpart B—Treasury/Reserve Automated part 357 appear at 70 FR 57431, Sept. 30, 2005.
Debt Entry System (TRADES)
357.10 Laws governing a Treasury book- Subpart A—General Information
entry security, TRADES, and security
interests or entitlements. § 357.0 Book-entry systems.
357.11 Laws governing other interests in (a) Treasury securities. Treasury secu-
Treasury securities. rities are maintained in one of the fol-
357.12 A Participant’s Security Entitle-
ment. lowing book-entry systems:
357.13 Obligations of the United States and (1) Commercial book-entry system. The
the Federal Reserve Banks with respect commercial book-entry system is the
to Book-entry Securities and security in- book-entry system in which Treasury
terests. securities are held in a tiered system
357.14 What authority does a Federal Re- through securities intermediaries such
serve Bank have?
357.15 How can a debtor’s interest in a Secu- as financial institutions or brokerage
rity Entitlement be reached by credi- firms. A Treasury security is main-
tors? tained in the commercial book-entry
system if it is credited by a Federal Re-
Subpart C—Legacy Treasury Direct Book- serve Bank to a Participant’s Securi-
Entry Securities System (Legacy Treas- ties Account. The regulations gov-
ury Direct) erning the commercial book-entry sys-
357.20 Securities account in Legacy Treas- tem are found at subpart B of this part,
ury Direct ®. and are referred to as Treasury/Reserve
357.21 Registration. Automated Debt Entry System
357.22 Transfers. (TRADES).
357.23 Judicial proceedings—sovereign im- (2) Legacy Treasury Direct ®. The Leg-
munity. acy Treasury Direct system is a non-
357.24 Availability and disclosure of Legacy
Treasury Direct ® records.
Internet-based book-entry system
357.25 Security interests. maintained by Treasury for purchasing
357.26 Direct Deposit. and holding marketable Treasury secu-
357.27 Reinvestment. rities as book-entry products. A Treas-
357.28 Transaction requests. ury security is maintained in Legacy
357.29 Time required for processing trans- Treasury Direct if it is credited to a
action request. Legacy Treasury Direct account as de-
357.30 Cases of delay or suspension of pay-
ment.
scribed in § 357.20 of this part. Treasury
357.31 Certifying individuals. securities are held directly by the De-
357.32 Submission of transaction requests; partment of the Treasury in accounts
further information. maintained in the investor’s name. A
Legacy Treasury Direct account may
Subpart D—Additional Provisions be accessed through a designated Fed-
357.40 Additional requirements. eral Reserve Bank or the Bureau of the
357.41 Waiver of regulations. Public Debt. See subpart C of this part
357.42 Liability of Department and Federal for rules pertaining to Legacy Treas-
Reserve Banks. ury Direct.
410
(3) TreasuryDirect ®. TreasuryDirect is than ten years, issued under chapter 31

a book-entry, online system main- of title 31 of the United States Code, in
tained by the Department of the Treas- book-entry form.
ury for purchasing and holding eligible Book-entry security means a Treasury
marketable Treasury securities, United security maintained as a computer
States Savings Bonds, and certificates record in the commercial book-entry
of indebtedness in electronic form as a system, Legacy Treasury Direct ®, or
computer record on the books of Treas- TreasuryDirect ®.
ury. The regulations governing Business day means any day other
TreasuryDirect are found at 31 CFR than a Saturday, Sunday, or other day
part 363. on which the Federal Reserve Banks
(b) Transferability between Legacy are not open for business.
Treasury Direct and other systems. A Department means the United States
Treasury security maintained in Leg- Department of the Treasury, and,
acy Treasury Direct may be trans- where appropriate, the Federal Reserve
ferred to an account in TRADES or to Banks acting as fiscal agents of the
an account in TreasuryDirect in ac- United States.
cordance with § 357.22(a). Securities Depository institution means an entity
may not be transferred to Legacy described in section 19(b)(1)(A)(i)–(vi) of
Treasury Direct from other systems. the Federal Reserve Act (12 U.S.C.
461(b)(1)(A)(i)–(vi). Under section 19(b)
[67 FR 64278, Oct. 17, 2002, as amended at 70
FR 57431, Sept. 30, 2005; 70 FR 57441, Sept. 30, of the Federal Reserve Act, the term
2005; 76 FR 18063, Apr. 1, 2011] depository institution includes:
(1) Any insured bank as defined in 12
§ 357.1 Effective date. U.S.C. 1813 or any bank which is eligi-
Subpart B of this part, the defini- ble to make application to become an
tions of Adverse Claim, Book-entry Secu- insured bank under 12 U.S.C. 1815;
rity, Entitlement Holder, Federal Reserve (2) Any mutual savings bank as de-
Bank Operating Circular, Funds Account, fined in 12 U.S.C. 1813 or any bank
Issue, Participant, Participant’s Securities which is eligible to make application
Account, Person, Revised Article 8, Secu- to become an insured bank under 12
rities Intermediary, Security Entitlement, U.S.C. 1815;
State, and Transfer Message and revi- (3) Any savings bank as defined in 12
sions to the definitions of Security and U.S.C. 1813 or any bank which is eligi-
TRADES, and §§ 357.42 and 357.44 and the ble to make application to become an
revisions to § 357.41 are effective Janu- insured bank under 12 U.S.C. 1815;
ary 1, 1997. All other provisions in ef- (4) Any insured credit union as de-
fect prior to January 1, 1997, remain in fined in 12 U.S.C. 1752 or any credit
effect. union which is eligible to make appli-
cation to become an insured credit
[61 FR 43628, Aug. 23, 1996] union under 12 U.S.C. 1781;
(5) Any member as defined in 12
§ 357.2 Definitions. U.S.C. 1422; and
In this part, unless the context indi- (6) Any savings association (as de-
cates otherwise: fined in 12 U.S.C. 1813) which is an in-
Adverse claim means a claim that a sured depository institution, as defined
claimant has a property interest in a in the Federal Deposit Insurance Act,
Security and that it is a violation of 12 U.S.C. 1811, et seq., or is eligible to
the rights of the claimant for another apply to become an insured depository
Person to hold, transfer, or deal with institution under such Act.
the Security. Entitlement holder means a Person to
Bill means an obligation of the whose account an interest in a Book-
United States, with a term of not more entry Security is credited on the
than one year, issued at a discount, records of a Securities Intermediary.
under chapter 31 of title 31 of the Federal Reserve Bank or Reserve Bank
United States Code, in book-entry means a Federal Reserve Bank or
form. Branch.
Bond means an obligation of the Federal Reserve Bank Operating Cir-
United States, with a term of more cular means the publication issued by
411
§ 357.2 31 CFR Ch. II (7–1–11 Edition)
each Federal Reserve Bank that sets make a transaction request on a secu-
forth the terms and conditions under rity held in Legacy Treasury Direct.
which the Reserve Bank maintains Participant means a Person that
Book-entry Securities accounts and maintains a Participant’s Securities
transfers Book-entry Securities. Account with a Federal Reserve Bank.
Financial institution means, for pur- Participant’s Securities Account means
poses of direct deposit, an institution an account in the name of a Partici-
which has agreed to receive credit pay- pant at a Federal Reserve Bank to
ments under 31 CFR part 210, as amend- which Book-entry Securities held for a
ed from time to time, and has not with- Participant are or may be credited.
drawn its participation in a direct de- Person means and includes an indi-
posit program under part 210, or an in- vidual, corporation, company, govern-
stitution which is willing to agree to mental entity, association, firm, part-
receive credit payments under 31 CFR nership, trust, estate, representative
part 210 and has enrolled with its Fed- and any other similar organization, but
eral Reserve Bank. does not mean or include the United
Funds account means a reserve and/or States or a Federal Reserve Bank.
clearing account at a Federal Reserve Redemption means payment of a secu-
Bank to which debits or credits are rity at maturity, or pursuant to a call
posted for transfers against payment, for redumption in accordance with the
book-entry securities transaction fees, terms of a security.
or principal and interest payments. Representative includes an executor,
Incompetent means an individual who administrator, legal guardian, com-
is legally, medically or mentally in- mittee, conservator, and any similar
capable of handling his or her business person or entity appointed by a court
affairs, except that a minor is not an to represent the estate of a decedent,
incompetent solely because of age. minor, or incompetent, as well as a
Issue means a group of securities, as trustee, whether appointed by a court
defined in this section, that is identi- or otherwise.
fied by the same CUSIP (Committee on Revised Article 8 means Uniform Com-
Uniform Securities Identification Prac- mercial Code, Revised Article 8, Invest-
tices) number. ment Securities (with Conforming and
Legacy Treasury Direct is the Legacy Miscellaneous Amendments to Articles
Treasury Direct Book-Entry Securities 1, 3, 4, 5, 9 and 10) 1994 Official Text.
System. The Director of the Federal Register
Maturity value is the amount that the approves the incorporation by ref-
Department is obligated to pay when a erence of Revised Article 8 of the Uni-
security matures. form Commercial Code in this part,
Minor means an individual who is pursuant to 5 U.S.C. 552(a) and 1 CFR
under the age of majority, as deter- part 51. Revised Article 8 was adopted
mined by applicable state law. by the American Law Institute and the
Note means an obligation of the National Conference of Commissioners
United States, with a term of at least On Uniform State Laws and approved
one year, but of not more than ten by the American Bar Association on
years, issued under chapter 31 of title February 14, 1995. Copies of Revised Ar-
31 of the United States Code, in book- ticle 8 are available from the Executive
entry form. Office of the American Law Institute,
Original issue means Treasury’s offer- 4025 Chestnut Street, Philadelphia, PA
ing of a marketable Treasury security 19104, and the National Conference of
to the public and its issuance in book- Commissioners on Uniform State Laws,
entry form. 211 East Ontario Street, Suite 1300,
Owner, as used in subpart C, means Chicago, IL 60611. Copies are also avail-
the individual(s) or entity in whose able for public inspection at the De-
name a security is registered. If a secu- partment of the Treasury Library,
rity is registered in more than one Room 1428, Main Treasury Building,
name, the term owner incudes all those 1500 Pennsylvania Avenue, NW, Wash-
whose names appear on the registra- ington, DC 20220 or at the National Ar-
tion and are authorized by this part to chives and Records Administration
412
(NARA). For information on the avail- bank or broker, that in the ordinary
ability of this material at NARA, call course of its business maintains securi-
202–741–6030, or go to: http:// ties accounts for others and is acting
www.archives.gov/federallregister/ in that capacity.
codeloflfederallregulations/ Security means a bill, note, or bond,
ibrllocations.html. each as defined in this section. It also
Revised Article 9 means Uniform Com- means any other obligation issued by
mercial Code, Revised Article 9, Se- the Department that, by the terms of
cured Transactions (with conforming the applicable offering circular or an-
amendments to Articles 1, 2, 2A, 4, 5, 6, nouncement, is made subject to this
7, and 8), 1999 official text. The Direc- part. Solely for purposes of this part, it
tor of the Federal Register approves also means:
the incorporation by reference of Re- (1) The interest and principal compo-
vised Article 9 of the Uniform Commer- nents of a security eligible for Sepa-
cial Code in this part, pursuant to 5 rate Trading of Registered Interest and
U.S.C. 552(a) and 1 CFR part 51. Revised Principal of Securities (‘‘STRIPS’’), if
Article 9 was approved by the Amer- such security has been divided into
ican Law Institute and the National such components as authorized by the
Conference of Commissioners On Uni- express terms of the offering circular
form State Laws in 1998. Copies of Re- under which the security was issued
vised Article 9 are available from the and the components are maintained
Executive Office of the American Law separately on the books of one or more
Institute, 4025 Chestnut Street, Phila- Federal Reserve Banks; and
delphia, PA 19104, and the National
(2) The interest coupons that have
Conference of Commissioners on Uni-
been converted to book-entry form
form State Laws, 211 East Ontario
under the Treasury’s Coupons Under
Street, Suite 1300, Chicago, IL 60611.
Book-Entry Safekeeping Program
Copies are also available for public in-
(‘‘CUBES’’), pursuant to agreement and
spection at the Department of the
the regulations in 31 CFR part 358.
Treasury Library, Room 1428, Main
Treasury Building, 1500 Pennsylvania Security Entitlement means the rights
Avenue, NW., Washington, DC 20220,or and property interest of an Entitle-
at the National Archives and Records ment Holder with respect to a Book-
Administration (NARA). For informa- entry Security.
tion on the availability of this mate- Signature guarantee program means a
rial at NARA, call 202–741–6030, or go signature guarantee program estab-
to: http://www.archives.gov/ lished in response to Rule 17 Ad–15 (17
federallregister/ CFR 240.17Ad–15), issued under author-
codeloflfederallregulations/ ity of the Securities Exchange Act of
ibrllocations.html. 1934. For the purpose of the regulations
Securities Intermediary means: in this part, the Securities Transfer
(1) A Person that is registered as a Agents Medallion Program (STAMP),
‘‘clearing agency’’ under the federal se- the Stock Exchanges Medallion Pro-
curities laws; a Federal Reserve Bank; gram (SEMP), and the New York Stock
any other person that provides clear- Exchange, Inc. Medallion Signature
ance or settlement services with re- Program (MSP) are recognized by
spect to a Book-entry Security that Treasury as such signature guarantee
would require it to register as a clear- programs.
ing agency under the federal securities State means any State of the United
laws but for an exclusion or exemption States, the District of Columbia, Puer-
from the registration requirement, if to Rico, the Virgin Islands, or any
its activities as a clearing corporation, other territory or possession of the
including promulgation of rules, are United States.
subject to regulation by a federal or Taxpayer identifying number or TIN
state governmental authority; or means a social security account num-
(2) A Person (other than an indi- ber or an employer identification num-
vidual, unless such individual is reg- ber, as appropriate.
istered as a broker or dealer under the TRADES is the Treasury/Reserve
federal securities laws) including a Automated Debt Entry System, also
413
§ 357.10 31 CFR Ch. II (7–1–11 Edition)
referred to as the commercial book- § 357.10 Laws governing a Treasury

entry system. book-entry security, TRADES, and
Transaction request means a request security interests or entitlements.
to effect a change in an account master (a) What law governs the rights and ob-
record or securities portfolio main-
ligations of the United States and the
tained in Legacy Treasury Direct.
Transaction request form means a form Federal Reserve Banks; and the rights of
or series of forms prescribed for use by any Person against the United States and
the Department to request a trans- the Federal Reserve Banks? Except as we
action in Legacy Treasury Direct. provide in paragraph (b) of this section,
(This term includes a document that the following are governed solely by
the Department has determined con- Treasury regulations, including the
tains all of the elements required by regulations of this part, the applicable
the transaction request form.) offering circular (which is 31 CFR part
Transfer Message means an instruc- 356, in the case of securities issued on
tion of a Participant to a Federal Re- and after March 1, 1993), the announce-
serve Bank to effect a transfer of a ment of the offering, and Federal Re-
Book-entry Security maintained in serve Bank Operating Circulars:
TRADES, as set forth in Federal Re- (1) The rights and obligations of the
serve Bank Operating Circulars. United States and the Federal Reserve
Voluntary representative means the Banks with respect to a Book-entry Se-
person qualified by the Department of
curity or Security Entitlement and the
the Treasury to accept payment or di-
operation of TRADES, and
rect distribution of a decedent’s securi-
ties pursuant to § 357.28. (2) The rights of any Person, includ-
ing a Participant, against the United
[51 FR 18265, May 16, 1986, as amended at 59 States and the Federal Reserve Banks
FR 59038, Nov. 15, 1994. Redesignated and
amended at 61 FR 43628, Aug. 23, 1996; 62 FR
with respect to a Book-entry Security
18694, Apr. 16, 1997; 62 FR 33548, June 20, 1997; or Security Entitlement and the oper-
67 FR 7079, Feb. 15, 2002; 69 FR 18803, Apr. 9, ation of TRADES.
2004; 70 FR 57431, Sept. 30, 2005; 70 FR 57441, (b) What law governs security interests
Sept. 30, 2005; 76 FR 18063, Apr. 1, 2011] in Security Entitlements that are not re-
corded on a Federal Reserve Bank’s
Subpart B—Treasury/Reserve books? See the following table:
Automated Debt Entry System
(TRADES)
SOURCE: 67 FR 7080, Feb. 15, 2002, unless
otherwise noted.
If a security interest in a security entitle- And it is— Then it is governed by—

ment is—
(1) in favor of a Federal Reserve Bank not recorded on the books of a Federal the law (not including the conflict-of-law
from a Participant. Reserve Bank pursuant to rules) of the jurisdiction where the
§ 357.12(e)(2). head office of the Federal Reserve
Bank maintaining the Participant’s Se-
curities Account is located.
(2) in favor of a Federal Reserve Bank not recorded on the books of a Federal the law determined in the manner speci-
from a Person that is not a Participant. Reserve Bank pursuant to fied in § 357.11.
§ 357.12(e)(2).
(c) What law governs if the jurisdiction State as though that State adopted Re-
in paragraph (b)(1) of this section did not vised Article 8.
adopt Revised Article 8, or Revised Article
8 as amended by Revised Article 9 (both § 357.11 Laws governing other inter-
incorporated by reference, see Sec. 357.2)? ests in Treasury securities.
The law specified in paragraph (b)(1) of (a) What does the law (not including
this section shall be the law of that the conflict-of-law rules) of a Securities
Intermediary’s jurisdiction govern? To
414
the extent not inconsistent with these (4) Whether a Person may assert an
regulations, the law (not including the Adverse Claim against a Person who
conflict-of-law rules) of a Security acquires a Security Entitlement from
Intermediary’s jurisdiction governs the the Securities Intermediary or against
following: a Person who purchases a Security En-
(1) When a Person acquires a Secu- titlement or interest therein from an
rity Entitlement from the Securities Entitlement Holder; and
Intermediary; (5) The perfection, effect of perfec-
(2) The rights and duties of the Secu- tion or non-perfection and priority of a
rities Intermediary and Entitlement security interest in a Security Entitle-
Holder that arise out of a Security En- ment (except as otherwise provided in
titlement; paragraph (c) of this section).
(3) Whether the Securities Inter- (b) What is the ‘‘Securities
mediary owes any duties to an adverse Intermediary’s jurisdiction’’ for purposes
claimant to a Security Entitlement; of this section? See the following table:
Then the securities
If . . . intermediary’s jurisdiction
is . . .
(1) An agreement between the Securities Intermediary and its Entitlement Holder governing the the jurisdiction agreed upon.
securities account expressly provides that a particular jurisdiction is the Securities
Intermediary’s jurisdiction for purposes of Part 1 of Article 8 of the Uniform Commercial
Code, Article 8 of the Uniform Commercial Code, or the Uniform Commercial Code.
(2) An agreement between the Securities Intermediary and its Entitlement Holder governing the the jurisdiction agreed upon.
securities account expressly provides that it is governed by the law of a particular jurisdiction.
(3) The statements in paragraphs (b)(1) and (2) of this table do not apply, but the agreement the jurisdiction where the office
expressly specifies that the securities account is maintained at an office in a particular juris- is located.
diction.
(4) The statements in paragraphs (b)(1) through (3) of this table do not apply and an account the jurisdiction where the office
statement identifies the office serving the Entitlement Holder’s account. is located.
(5) None of the statements in paragraphs (b)(1) through (4) of this table apply ........................... the jurisdiction in which the
chief executive office of the
Securities Intermediary is lo-
cated.
(c) What law governs the perfection of a (a) of this section shall be the law of
security interest automatically or by fil- that State as though the State adopted
ing? The law (but not the conflict-of- Revised Article 8.
law rules) of the jurisdiction in which (f) What other rules apply? For pur-
the Person creating a security interest poses of the matters specified in para-
is located governs whether and how the graph (a) of this section, the Federal
security interest may be perfected Reserve Bank maintaining the Securi-
automatically or by filing a financing ties Account is a clearing corporation
statement. (This is despite the general and the Participant’s interest in a
rule in (a)(5) of this section).
Book-entry Security is a Security En-
(d) Where is a Person located, for pur-
titlement.
poses of paragraph (c) of this section? A
Person’s location is determined under § 357.12 A Participant’s Security Enti-
state law, including Revised Article 9 tlement.
(incorporated by reference, see § 357.2),
as it may be amended from time to (a) How is a Participant’s Security En-
time. titlement created? A Federal Reserve
(e) What law governs if the jurisdiction Bank indicates by book entry that a
in table (b) of this section did not adopt Book-entry Security has been credited
Revised Article 8 or Revised Article 8 as to a Participant’s Securities Account.
amended by Revised Article 9 (both incor- (b) What else do I need to know about
porated by reference, see § 357.2)? The law a Participant’s Security Entitlement? See
for the matters specified in paragraph the following table:
If a security interest in a security entitlement of a participant . . . Then . . .
(1) Meets all of the following criteria:
415
§ 357.13 31 CFR Ch. II (7–1–11 Edition)
If a security interest in a security entitlement of a participant . . . Then . . .
(i) is in favor of the United States it is created; it is perfected;

(ii) is marked on the books of a Federal Reserve Bank .................................................. and it has priority over any
(iii) is to secure deposits of public money (including without limitation deposits to the other interest in the securi-
Treasury tax and loan accounts, or other security interested required by Federal ties.
statute, regulation, or agreement).
(c) What is the effect of the marking of serve Bank has priority over any other
a security interest in favor of the United interest in the securities, except a se-
States in a Security Entitlement of a Par- curity in favor of the United States, as
ticipant on the books of a Federal Reserve provided in table (b) of this section.
Bank? Where a security interest in (4) In addition to the method provided
favor of the United States in a Secu- in paragraph (e)(2) of this section, may a
rity Entitlement of a Participant is security interest, including a security in-
marked on the books of a Federal Re- terest in favor of a Federal Reserve Bank,
serve Bank, such Reserve Bank may be perfected in another way? Yes, a secu-
rely, and is protected in relying, exclu- rity interest may be perfected by any
sively on the order of an authorized method under applicable law as de-
Representative of the United States di- scribed in § 357.10(b) or § 357.11.
recting the transfer of the Security. (i) The applicable law governs the
(d) Who is an authorized Representative perfection, effect of perfection or non-
of the United States, for purposes of para- perfection and priority of a security in-
graph (c) in this section? The official terest.
designated in the applicable regula- (ii) A security interest in favor of a
tions or in an agreement to which a Federal Reserve Bank shall be treated
Federal Reserve Bank is a party, gov- as a security interest in favor of a
erning the security interest. clearing corporation in all respects
(e)(1) Must the United States and the under that law.
Federal Reserve Banks agree to act on be- (iii) A Federal Reserve Bank Oper-
half of any Person or to recognize the in- ating Circular shall be treated as a rule
terest of any transferee of a security inter- adopted by a clearing corporation for
est or other limited interest in favor of these purposes.
any Person? No, they need not agree to
act or recognize any party’s interest, § 357.13 Obligations of the United
except: States and the Federal Reserve
(i) To the extent of any specific re- Banks with respect to Book-entry
Securities and security interests.
quirement of Federal law or regulation,
or (a) Who is entitled to deal with an in-
(ii) To the extent set forth in any terest in a Book-entry Security that has
specific agreement with the Federal been credited to a Participant’s Security
Reserve Bank on whose books the in- Account? Except in the case of a secu-
terest of the Participant is recorded. rity interest in favor of the United
(2) May a security interest be created States or a Federal Reserve Bank or
and perfected by a Federal Reserve Bank otherwise as provided in § 357.12 (e), for
marking its books? Yes, a security inter- the purposes of this subpart B, the
est in a Security Entitlement that is in United States and the Federal Reserve
favor of a Federal Reserve Bank or a Banks treat the Participant as exclu-
Person may be created and perfected sively entitled to perform the following
by a Federal Reserve Bank marking its functions, even if the Treasury or a
books to record the security interest to Federal Reserve Bank has any informa-
the extent required by law, regulation, tion or notice to the contrary:
or an agreement with a Federal Re- (1) Issue a Transfer Message,
serve Bank or the Federal Reserve (2) Receive interest and other pay-
Bank Operating Circular. ments with respect thereof, and
(3) Does this security interest have pri- (3) Exercise all the rights and powers
ority over other interests? A security in- with respect to the Security,
terest in a Security Entitlement (b) Are the Federal Reserve Banks and
marked on the books of a Federal Re- Treasury liable for Adverse Claims? The
416
Federal Reserve Banks and Treasury ties Accounts as directed by the Par-
are not liable to a Person asserting or ticipants; and
having an Adverse Claim to a Security (5) Perform such other duties as fis-
Entitlement or to a Book-entry Secu- cal agent that the Department may re-
rity in a Participant’s Securities Ac- quest.
count. This includes any such claim (b) Each Federal Reserve Bank may
arising as a result of the transfer or issue Operating Circulars that are con-
disposition of a Book-entry Security by sistent with this part, governing the
a Federal Reserve Bank, pursuant to a details of its handling of Book-entry
Transfer Message that the Federal Re- Securities, Security Entitlements, and
serve Bank reasonably believes to be the operation of the book-entry system
genuine. under this part.
(c) When is the obligation of the United
States to pay interest and principal with § 357.15 How can a debtor’s interest in
a Security Entitlement be reached
respect to Book-entry Securities dis- by creditors?
charged? The obligation is discharged
once payment is made as follows: (a) The interest of a debtor may be
(1) A Federal Reserve Bank credits reached by creditors only by legal proc-
the appropriate amount of interest on ess upon the Securities Intermediary
Book-entry Securities to a Funds Ac- with whom the debtor’s securities ac-
count maintained at the Bank, or pays count is maintained. Exception: If a
it as directed by the Participant. Security Entitlement is maintained in
(2) Book-entry Securities are re- the name of a secured party, the debt-
deemed according to their terms, a or’s interest may be reached by legal
Federal Reserve Bank withdraws the process upon the secured party.
securities from the Participant’s Secu- (b) These regulations do not state
rities Account in which they are main- whether a Federal Reserve Bank is re-
tained, and either: quired to honor an order or other no-
(i) Credits the amount of the Re- tice of attachment in any particular
demption proceeds, including both case or class of cases.
principal and interest, where applica-
ble, to a Funds Account at the Bank, or Subpart C—Legacy Treasury Di-
(ii) Pays such principal and interest rect Book-Entry Securities Sys-
as directed by the Participant. tem (Legacy Treasury Direct)
(d) What does a Participant need to do
in connection with the Redemption of a § 357.20 Securities account in Legacy
Book-entry Security? No action by the Treasury Direct ®.
Participant is required. (a) Account. A securities account con-
sists of:
§ 357.14 What authority does a Federal (1) An account master record, and
Reserve Bank have? (2) A securities portfolio.
(a) Each Federal Reserve Bank has (b) Security. A security in Legacy
the authority as fiscal agent of the Treasury Direct is evidenced by the ac-
United States to: count master record and a description
(1) Perform functions with respect to of the security as set out in the securi-
the issuance of Book-entry Securities ties portfolio associated with an ac-
offered and sold by the Department to count master record.
which this subpart applies, in accord- (c) Account master record. In order for
ance with the terms of the applicable a security to be maintained in Legacy
offering circular and with procedures Treasury Direct, the account owner
established by the Department; must have previously established an
(2) Service and maintain Book-entry account master record, except that a
Securities in accounts established for new account may be established for the
such purposes; conversion of a definitive security pur-
(3) Make payments of principal and suant to 31 CFR 306.23. The account
interest, as directed by the Depart- master record includes, but is not lim-
ment; ited to, the following data:
(4) Effect transfer of Book-entry Se- (1) The exact form of registration in
curities between Participants’ Securi- which the securities are held;
417
§ 357.20 31 CFR Ch. II (7–1–11 Edition)
(2) The Legacy Treasury Direct ac- to the correspondence address des-
count number; ignated in the account master record,
(3) The correspondence address for or may be sent by electronic means.
the account; When the statement is issued as a re-
(4) The TIN of the owner, or in the sult of a change in ownership of a secu-
case of ownership by two individuals, rity, statements will be sent, where ap-
of the first-named owner; and propriate, to both the former and cur-
(5) Payment instructions. (See rent owners. Other information regard-
§ 357.26.) ing the account may be obtained in ac-
(d) Securities portfolio. The securities cordance with § 357.24.
portfolio contains a description of each (f) Confirmation notice. The Depart-
security and is the aggregate of all se- ment shall send a confirmation notice
curities in the securities account. (notice):
(e) Statement of account. The Depart- (1) Upon a change in an account mas-
ment shall send a statement of account ter record;
(statement): (2) Upon scheduling or canceling a re-
(1) Upon the establishment of an ac- investment; or
count master record; (3) To confirm the interest earned on
(2) Upon a change in the securities a Treasury Inflation Indexed Security.
portfolio; The notice shall contain information
(3) At an owner’s request; or regarding the account as of the date of
(4) Upon the determination on De- such confirmation. The notice may be
cember 31 that an owner has not re- sent to the correspondence address des-
ceived a statement of account for that ignated in the account master record,
current calendar year. or may be sent by electronic means.
The statement shall contain informa- All changes reflected in paragraph (f)
tion regarding the account as of the (1) and (2) of this section will be in-
date of such statement. The price asso- cluded in the next regularly scheduled
ciated with each security in the securi- statement of account. See paragraph
ties portfolio will also appear on the (e) of this section for the statement
statement. 1 The statement may be sent schedule.
(g) Account maintenance fees. An an-
1 IRS regulations require reporting of in- nual maintenance fee shall be charged
come information on a security. for each Legacy Treasury Direct secu-
(1) If the security is a bill, the price infor- rities account holding securities that
mation will be used to comply with this rein the aggregate exceed a stipulated
quirement. The earnings reported to IRS for par amount. The amount of the fee will
the year of a bill’s maturity will be the dif-
ference between the par value of the bill and
be published by notice in the FEDERAL
its price. REGISTER.
(a) If a bill was deposited in Legacy Treas-
ury Direct at original issue, the price shown erage price at original issue of the bill with
will be the issue price. that term.
(b) If a bill was transferred to Legacy (2) If the security is a note or bond, the
Treasury Direct from TRADES, the price earnings reported to IRS for a year will be
shown will be that included in the transfer the periodic interest payments made during
wire or supplied subsequently by the bill that year. If a note or bond is transferred to
owner. If a price was not furnished, the price a Legacy Treasury Direct account between
shown will be the weighted average price of interest payment dates, the earnings re-
the bill of the longest maturity having the ported to IRS for the transferee will show
identical CUSIP number. the interest for the entire interest payment
(c) If a bill is transferred from one Legacy period. The price for notes and bonds will be
Treasury Direct account to another, the shown on the statement of account for the
price shown in the receiving (transferee’s) account owner’s information. The price
account will be that shown on the transfer shown will be determined following the pro-
instructions or supplied subsequently by the cedures described above for bills.
transferee. If a price is not furnished, the (3) The security owner should report di-
price shown will be the weighted average rectly to the IRS (a) adjustments to annual
price at original issue of the bill of the long- earnings amounts arising from acquisition of
est maturity having the identical CUSIP notes and bonds between interest payment
number, unless the term of the bill can be periods and (b) price corrections for bills re-
determined from the account record in which ported after preparation of the reports to the
case the price shown will be the weighted av- IRS.
418
(h) Closing an account. If a Legacy name may include a reference to the

Treasury Direct account has no hold- trade name.
ings, we reserve the right to close the
Example: John A. Doe, doing business as
account. Doe’s Home Appliance Store.
(2) Ownership by two individuals—(i)
‘‘And’’ form—Joint Ownership—(A) With-
[51 FR 18265, May 16, 1986, as amended at 60 out right of survivorship. In the names of
FR 4377, Jan. 23, 1995; 62 FR 18004, Apr. 11, two individuals, joined by the word
1997; 62 FR 32033, June 12, 1997; 76 FR 18063,
Apr. 1, 2011] ‘‘and’’, and followed by the words
‘‘without right of survivorship’’. A se-
§ 357.21 Registration. curity so registered shall conclusively
confer on each owner an undivided in-
(a) General. (1) Registration of a secu-
rity conclusively establishes owner- terest in the security.
ship, except in the case of partnership Example: Elizabeth Black and Jane Brown,
nominees, in which case the Depart- without right of survivorship.
ment reserves the right to treat the
registration as conclusive of owner- Any registration which purports, by its
ship. The registration may not, except terms, to preclude the right of survi-
as provided in this subpart, include any vorship, or any registration in the
restriction on the authority of an names of two persons without indi-
owner to change the data in the ac- cating whether survivorship rights at-
count master record, transfer the secu- tach (other than a registration under
rity, or effect any other change in the paragraph (b)(2)(ii) of this section), will
securities portfolio. be presumed to be ownership without
(2) The registration of all securities right of survivorship. If a security is
held by an owner should be uniform registered in this form, a transaction
with respect to the owner’s name. An request, other than a request by one
owner must be identified by the name owner to transfer the security to the
by which the owner is ordinarily other owner, and other than a request
known, preferably including at least for reinvestment, must be executed by
one full given name. A suffix, such as both owners.
Sr. or Jr., must be included when ordi- (B) With right of survivorship. In the
narily used, or when necessary to dis- names of two individuals, joined by the
tinguish members of the same family. word ‘‘and’’, and followed by the words
(3) If an additional security is depos- ‘‘with right of survivorship’’. A secu-
ited in an existing account, the security so registered shall confer on each
rity will be registered in the same owner an undivided interest in the se-
name and form of registration that ap- curity and shall create a conclusive
pears in the designated account master right of survivorship.
record. One who holds a security as
John Allen Doe should use that name Example: Mark A. Doe and Mary B. Doe,
when depositing another security rath- with right of survivorship.
er than J. Allen Doe, or John A. Doe’. If a security is registered in this form,
Minor variations in names used in acquir- a transaction request, other than a re-
ing a security to be deposited in an estab-
quest by one owner to transfer the se-
lished account may be resolved by the De-
curity to the other owner, and other
partment.
than a request for reinvestment, must
(b) Natural persons. A security may be
be executed by both owners.
registered in the names of one or two
individuals, but only in one of the fol- (ii) ‘‘Or’’ form—‘‘Coownership’’. In the
lowing forms: names of two individuals, joined by the
(1) Single ownership. In the name of word ‘‘or’’. A security so registered
one individual. shall confer on each owner an undi-
vided interest in the security and shall
Example: Robert W. Woods create a conclusive right of survivor-
ship.
An individual who is sole proprietor of
a business conducted under a trade Example: Robert Woods or Laura Woods.
419
§ 357.21 31 CFR Ch. II (7–1–11 Edition)
If a security is registered in this form, ment may recognize the person who
either coowner may make a trans- furnishes the minor’s chief support as
action request, but if the Department the natural guardian.
receives conflicting requests at or Examples: Michael Jones, as natural guard-
about the same time, it may refuse to ian of Alice Jones, a minor.
process them. Michael Jones and Evelyn Jones, as nat-
(iii) Beneficiary. In the name of one ural guardians of Alice Jones, a minor.
individual followed by the words ‘‘Pay-
able on death to’’ (or ‘‘P.O.D.’’) another The security may also be registered in
individual. one of the forms authorized under para-
graph (b)(2) of this section.
Example: Jack S. Jones, payable on death
to Marie Jones. Examples: James Green, as natural guard-
ian of William Green, a minor, and Anne
If a minor or an incompetent is named Green, without right of survivorship.
as a beneficiary, the status of the bene- James Green, as natural guardian of Wil-
ficiary must be identified in the reg- liam Green, a minor, POD Lynne Green.
istration. A minor or an incompetent (iii) Custodian under statute author-
may not be designated as an owner. See izing gifts to minors. A security may be
paragraphs (b)(3) and (4) of this section. registered as provided under an appli-
Example: John Perry, P.O.D. John Perry, cable gift to minors statute.
Jr., a minor.
Example: Virginia McDonald, as custodian
Registration in this form shall create for Lynne Gorman, under the New York Uni-
form Gifts to Minors Act.
ownership rights in the beneficiary
only if the beneficiary survives the Any request to alter the rights of own-
owner. During an owner’s lifetime, a ership of the security must be made as
transaction request may be executed provided in the applicable statute.
by the owner without the consent of (4) Incompetents—(i) General. A secu-
the beneficiary. If the beneficiary dies rity may not be registered in the name
before the owner, the security will be of an individual in his or her own right
deemed to be registered in the owner’s as an owner if that individual is incom-
name alone. petent. If a security is so registered, or
(3) Minors—(i) General. A security if the owner subsequently becomes in-
may not be registered in the name of a competent after the security is pur-
minor in his or her own right as an chased, and the Department receives
owner. If a security is so registered and evidence or information of that fact,
the Department thereafter receives the Department may suspend any
evidence or information of that fact, transaction with respect to the secu-
the Department may suspend proc- rity until a legal guardian, conser-
essing of any transaction request with vator, or other representative of the
respect to the security until either a incompetent’s estate has been ap-
legal guardian has been appointed or a pointed, or a voluntary guardian, as
natural guardian, as provided in para- provided in paragraph (b)(3)(ii) of this
graph (b)(3)(ii) of this section, has been section, has been recognized. Where a
recognized. Where a legal guardian is legal guardian, conservator, or other
appointed, the Department will require representative is appointed, the De-
a certified copy of the court order mak- partment will require a certified copy
ing such appointment. See § 357.28(c). of the court order making such ap-
(ii) Natural guardians of minors. A se- pointment. See § 357.28(c).
curity may be registered in the name (ii) Voluntary guardian of incompetent.
of a natural guardian of a minor for If a legal guardian has not been ap-
whose estate no legal representative pointed, and the face amount of the se-
has been appointed. The parent with curities held in one or more accounts
whom the minor resides will be recog- in Legacy Treasury Direct ® by an
nized as the natural guardian. If the owner who had become incompetent
minor resides with both parents, either does not exceed, in the aggregate,
or both may be recognized as natural $20,000 (par amount), upon submission
guardian(s). If the minor does not re- to, and approval by, the Department of
side with either parent, the Depart- an appropriate form, a relative or other
420
person responsible for an incompetent’s and the words, ‘‘Board of Trustees’’

care and support will be recognized as substituted.
voluntary guardian for purpose of mak- Example: Board of Trustees of Super Co.
ing a transaction request under Retirement Fund, under collective bar-
§ 357.28(b)(4). All persons known by the gaining agreement, dated March 18, 1969.
Department to have an interest in the
incompetent’s estate, as required by An organization (other than a bank) or
the application form, must agree to the individual seeking to act as trustee or
designation of the voluntary guardian. custodian of an Individual Retirement
The security may be re-registered in Account (‘‘IRA’’), must be authorized
the name of the voluntary guardian. to so act by the Internal Revenue Serv-
ice. As appropriate, registration of the
Example: Richard Melrose, as voluntary
guardian for James W. Brundige.
security should be in the form shown
below:
(c) Representatives. A security may be
Examples: ABC Bank, trustee for John Doe
registered in the name of a representa- IRA, under agreement dated December 21,
tive of an estate. If there is more than 1990.
one representative, the names of some EFG Broker, Inc., custodian for Mary
representatives may be omitted if fol- Smith IRA, under agreement dated Sep-
lowed by language that indicates the tember 4, 1991.
existence of other representatives. In
(d) Private organizations (corporations,
such cases, those named in the reg-
unincorporated associations and partner-
istration shall be conclusively pre-
ships). A security may be registered in
sumed by the Department to have au-
the name of a private corporation, un-
thority to make a transaction request
incorporated association, or partner-
on behalf of all the representatives.
ship. The full legal name of the organi-
The form of registration must identify
zation, as set forth in its charter, arti-
the specific capacity of the representa-
cles of incorporation, constitution,
tive(s) and the estate represented.
partnership agreement, or other docu-
Examples: ABC National Bank of Chicago, ments from which its powers are de-
Illinois and Harold Smith, co-executors of rived, must be included in the registra-
the will (or administrators of the estate) of tion. The name may be followed by a
Charles Johnson, deceased.
reference to a particular account or
William Brown, guardian of the estate of
fund, other than a trust fund, such as
Henry Jones, a minor.
Robert Smith, Richard Smith, et al., execu- an escrow account.
tors of the will of Lorraine Smith, deceased. (1) A corporation. The legal name of a
business, fraternal, religious, or other
If the representative is a trustee, the private corporation must be followed
form of registration must identify spe- by descriptive words indicating the
cifically the authority or document corporate status unless the term cor-
creating the trust. poration or the abbreviation Inc. is part
Examples: Sarah Jones and XYZ Trust Co., of the name or the name is that of a
trustees under the will of Matthew Smith, corporation or association organized
deceased. under Federal law, such as a national
Cynthia Doe and Margaret Jones, trustees bank or Federal savings and loan asso-
under agreement with Martha Roe, dated ciation.
April 13, 1979.
Examples: Brown Manufacturing Co., a cor-
Cynthia Doe, trustee under declaration of
poration (Education Fund).
trust, dated April 13, 1979.
Richard Smith, James Jones, and Frank The Apex Manufacturing Corporation.
Brown, trustees under the will of Henry K. XYZ National Bank of El Paso, TX.
James, deceased. Goodworks, Unlimited, a not-for-profit cor-
ABC Corporation, Myrna Banker, et al., poration.
trustees of Profit-Sharing Plan of Ace Manu-
(2) An unincorporated association. Un-
facturing Co., under B/D resolution, dated
May 18, 1975. less the name of a lodge, club, labor
union, veterans or religious organiza-
If there are several trustees designated tion, or similar organization which is
as a board or authorized to act as a not incorporated (whether or not it is
unit, their names should be omitted chartered by or affiliated with a parent
421
§ 357.22 31 CFR Ch. II (7–1–11 Edition)
organization which is incorporated) in- Gleason County Cemetery Commission,

cludes the words an unincorporated as- trustee under Md. Code Ann. Sec. 310.29.
sociation, the registration must include (f) The United States Treasury. A secu-
descriptive words indicating the orga- rity may be registered in the name of
nization’s unincorporated status. A se- an individual, with the United States
curity may not be registered in the Treasury as beneficiary, provided a ref-
name of an unincorporated association erence to the statute which authorizes
if the legal title to its property or the gifts to be made to the United States
legal title to the funds with which the to reduce the public debt, is included.
security is to be purchased is held by
trustees. In such a case, the security Example: John S. Green, payable on death
[or P.O.D.] to U.S. Treasury to reduce the
should be registered in the name of the
public debt (31 U.S.C. 3113).
trustees in accordance with paragraph
(c) of this section. The term unincor- (Approved by the Office of Management and
porated association should not be used Budget under control number 1535–0068)
to describe a trust fund, a partnership [51 FR 18265, May 16, 1986, as amended at 57
or a business conducted under a trade FR 38774, Aug. 27, 1992; 76 FR 18063, Apr. 1,
name. 2011]
Examples: Local Union No. 13, Brotherhood § 357.22 Transfers.

of Operating Engineers, an unincorporated
association. (a) General. A security may be trans-
The Simpson Society, an unincorporated ferred only as authorized by this part.
association. A security may be transferred from an
account in Legacy Treasury Direct® to
(3) Partnership. Unless the name of a an account in the commercial book-
partnership includes the word partner- entry system or to an account in
ship, the registration must include de- TreasuryDirect®. A security may also
scriptive words indicating partnership be transferred between accounts in Leg-
status. acy Treasury Direct. The Department
Examples: Red & Blue, a partnership. may delay transfer of a newly pur-
Abco and Co., a nominee partnership. chased security from a Legacy Treas-
ury Direct account to an account in
(e) Governmental entities and officers. commercial book entry or
A security may be registered in the TreasuryDirect for a period not to ex-
name of a State, county, city, town, ceed (30) calendar days from the date of
village, school district, or other gov- issue. This provides time for the inves-
ernmental entity, body, or corporation tor to become aware of any unauthor-
established by law. If a governmental ized debits.
officer is authorized to act as a trustee (1) Identification of securities to be
or custodian, a security may be reg- transferred. The owner must identify
istered in the title, or name and title, the securities to be transferred, in the
of the governmental officer. The form manner required by the transaction re-
of registration should reflect the ca- quest. If such identification is not pro-
pacity in which the governmental enti- vided, the request will not be processed
ty or officer is authorized to hold prop- and will be returned.
erty (e.g., it may be authorized to hold (2) Denominational amounts. A secu-
property in its own name or as trustee rity may be transferred from an ac-
or custodian). count only in a denominational
Examples: Laura Woods, Treasurer, City of amount authorized by the offering
Twin Falls, Mo. under which the security was issued.
State of Michigan. Any security remaining in the securi-
Village of Gaithersburg, Md. ties portfolio after the transfer must
Pennsylvania State Highway Administra- also be in an authorized denomina-
tion (Highway Road Repair Fund). tional amount.
Insurance Commissioner of Florida, trust- (3) When transfer effective—(i) Transfer
ee for benefit of policy holders of Sunshine within Legacy Treasury Direct. A trans-
Insurance Co. under F.S.A. Sec. 629.104. fer of a security within Legacy Treas-
Commonwealth of Virginia, in trust for ury Direct is effective when an appro-
Virginia Surplus Property Agency. priate entry is made in the name of the
422
transferee on the Legacy Treasury Di- law and the terms of the documents by
rect records. which the dissolution, merger, or con-
(ii) Transfer from Legacy Treasury Di- solidation was effected.
rect to the commercial book-entry system. (2) Partnership. If a partnership is dis-
A transfer of a security from Legacy solved or terminated, succession shall
Treasury Direct to the commercial be determined in accordance with ap-
book-entry system is effective as pro- plicable law and the terms of the part-
vided in subpart B. If a transfer cannot nership agreement.
be completed, and the security is sent (e) Succession of governmental officer.
back to Legacy Treasury Direct, the If a security is registered in the name
Department will redeposit the security and title of a governmental officer who
in the original account. has died, resigned, or has been re-
(iii) Transfer from Legacy Treasury Di- moved, succession shall be determined
rect to TreasuryDirect. A transfer of a in accordance with applicable law.
security from Legacy Treasury Direct (Approved by the Office of Management and
to TreasuryDirect is effective as pro- Budget under control number 1535–0068)
vided in 31 CFR part 363. If the transfer
[51 FR 18265, May 16, 1986; 51 FR 18884, May
cannot be completed, the Department
23, 1986, as amended at 53 FR 10074, Mar. 29,
will redeposit the security in the origi- 1988; 62 FR 46861, Sept. 4, 1997; 64 FR 6527,
nal account. Feb. 10, 1999; 70 FR 57441, Sept. 30, 2005; 75 FR
(b) Transfer upon death of an owner— 78901, Dec. 17, 2010; 76 FR 18064, Apr. 1, 2011]
(1) Right of survivorship. If a security is
registered in beneficiary form or a § 357.23 Judicial proceedings—sov-
form which provides for a right of sur- ereign immunity.
vivorship, upon the death of an owner, (a) Department and Federal Reserve
the beneficiary or survivor shall be the Banks not proper parties. The Depart-
sole and absolute owner, notwith- ment and the Federal Reserve Banks
standing any purported testamentary are not proper defendants in a judicial
disposition by the decedent and not- proceeding involving competing claims
withstanding any State or other law to to a security held in Legacy Treasury
the contrary. The Department will Direct ® nor are they subject to any in-
honor a transaction request by a bene- junction or restraining order issued
ficiary or a survivor (in the case of a with respect to a security. The Depart-
security registered in the form de- ment will not recognize a notice of a
scribed in § 357.21(b)(2)(i)(B)) only upon pending or contemplated judicial or ad-
proof of death of an owner. ministrative proceeding affecting a se-
(2) Succession under law of domicile. If curity in Legacy Treasury Direct.
a security is registered in a form that (b) Orders—(1) Ownership rights. The
does not provide for a right of survivor- Department will recognize a final order
ship, succession shall be determined in entered by a court that affects owner-
accordance with the applicable law of ship rights in a security in Legacy
the deceased owner’s domicile at the Treasury Direct if:
time of death. (i) The order is consistent with the
(c) Representative succession. If a secu- provisions of this subpart and the
rity is registered in the name of a rep- terms and conditions of the security;
resentative who has died, resigned, or and
been removed, succession shall be de- (ii) The Department has received evi-
termined in accordance with applicable dence of the order, as provided in para-
law and the terms of the document graph (c) of this section.
under which the representative was (2) Transaction request. The Depart-
acting. ment will honor a transaction request
(d) Organizational succession—(1) Cor- submitted by a person appointed by a
poration and unincorporated association. court and having authority under an
If a security is registered in the name order of a court to dispose of the secu-
of a corporation or an unincorporated rity or payment with respect thereto
association that has been dissolved, if:
merged or consolidated into another (i) The ordered disposition of the se-
organization, succession shall be deter- curity or payments with respect there-
mined in accordance with applicable to is consistent with the provisions of
423
§ 357.24 31 CFR Ch. II (7–1–11 Edition)
this subpart and the terms and condi- right of the requester to the informa-
tions of the security; and tion have been established.
(ii) The Department has received evi- [51 FR 18265, May 16, 1986; 51 FR 18884, May
dence of the appointment and order, as 23, 1986]
provided in paragraph (c) of this sec-
tion. § 357.25 Security interests.
(c) Evidence required. Before the De- (a) General. The Department will not
partment will recognize an order or de- recognize any notice or claim of a lien,
termination entered by a court, the De- encumbrance, or security interest of
partment must have received a cer- any kind, including a pledge, in a secu-
tified copy of the judgment, decree, or rity in Legacy Treasury Direct ® except
order and any additional documents as provided in § 357.23 and in paragraph
deemed necessary by the Department. (b) of this section.
A certificate from the clerk of the (b) Security for the performance of duty
or obligation under Federal law. The De-
court, bearing the seal of the court,
partment will accept and hold pursuant
must also be submitted stating that
to the provisions of 31 U.S.C. 9303,
the judgment, decree, or order is still book-entry bonds, notes or bills sub-
in full force and has not been stayed or mitted in lieu of a surety bond as secu-
appealed, and that the time for filing rity for the performance of a duty or
an appeal has passed. Before the De- obligation required by Federal law in
partment will honor a transaction re- accordance with said section.
quest submitted by a person appointed
by a court, the Department must re- § 357.26 Direct Deposit.
ceive a certified copy of the order mak- (a) General. A payment by the De-
ing the appointment and describing partment with respect to a security
specifically the person’s authority, and shall be by direct deposit unless it is
any additional documents deemed nec- deemed necessary by the Department
essary by the Department. to make payment by another means.
Direct Deposit payments are governed
by the regulations at 31 CFR part 370.
(b) Names on account. Where the Leg-
§ 357.24 Availability and disclosure of acy Treasury Direct ® securities ac-
Legacy Treasury Direct ® records. count is in the name of individual(s) in
their own right, and the deposit ac-
(a) General. All records with respect count at the financial institution is in
to a Legacy Treasury Direct account the name of individual(s) in their own
are held confidential. Consistent with right, the two accounts must contain
the Privacy Act (5 U.S.C. 552a), infor- at least one name that is common to
mation relating to those accounts will both.
be released only to the owner except: (c) Inquiry to financial institution.
(1) As provided in these regulations; Where the deposit account to which
(2) As provided in Treasury regula- payments are to be directed is held in
tions contained in 31 CFR part 323; or the name of the financial institution
(3) As otherwise provided by law. itself acting as sole trustee, or as co-
(b) Inquiries by owners. Information trustee, or is in the name of a commer-
requested will be disclosed to an owner cially-managed investment fund, par-
ticular inquiry should first be made of
provided that:
the financial institution to make cer-
(1) Sufficient information is provided
tain that the direct deposit payments
to identify the owner; and can be received, and alternate arrange-
(2) Sufficient information is provided ments made if it cannot do so.
to identify the Legacy Treasury Direct (d) Payments to master account. All
account. payments relating to a single account
(c) Conditions for release. A request for master record must be made to the
information will be honored only if, in same designated account at a financial
the sole judgment of the Department institution.
or the Federal Reserve Bank to which (e) Deposit account. The deposit ac-
the inquiry is made, the identity and count to which payments are directed
424
should preferably be established in a its discretion act on such request if

form identical to the registration of sufficient time remains for processing.
the securities account, particularly (c) Issue date not coincidental with ma-
where the securities are registered turity date. If the date on which a secu-
jointly or with right of survivorship, to rity matures or is called does not coin-
assure that the rights of ownership and cide with the issue date of the security
of survivorship can be more easily being purchased through reinvestment,
identified and preserved. Neither the the Department may, at its option,
United States nor any Federal Reserve hold the redemption proceeds in the
Bank shall be liable for any loss sus- same form of registration as the ma-
tained because the interests of the turing or called security, but no inter-
holder(s) of a deposit account to which est shall accrue or be paid on such
payments are made are not the same as funds.
the interests of the owner(s) of the se-
curity.
(Approved by the Office of Management and [51 FR 18265, May 16, 1986, as amended at 62
Budget under control number 1535–0068) FR 18694, Apr. 16, 1997]
FR 38774, Aug. 27, 1992; 61 FR 6113, Feb. 16, § 357.28 Transaction requests.
1996; 64 FR 40487, July 26, 1999] (a) General. Unless otherwise author-
ized by the Department, a transaction
§ 357.27 Reinvestment.
request must be submitted on a trans-
(a) General. Upon the request of an action request form. In the case of cer-
owner, the redemption proceeds of a se- tain transactions specified by the De-
curity may be reinvested at maturity partment, the owner’s signature on the
in a new security in the same form of form must be certified or guaranteed,
registration, provided a new security is as provided in § 357.31. If the trans-
then being offered by the Department action request form is received more
and provision for reinvestment is made than six (6) months after its execution,
in the offering. The new security must it will not be honored by the Depart-
be in an authorized denominational ment and will be returned to the sender
amount and will be issued in accord- for further instructions.
ance with the terms of the offering. If (b) Individuals—(1) General. A trans-
the new security is issued at a pre- action request must be signed by the
mium or with accrued interest, an ad- owner of the security. In addition to
ditional payment will be required from any required certification, a trans-
the investor. If the new security is action request form executed by a per-
issued at a discount, the difference will son by mark, e.g., ‘‘(X)’’, must be wit-
be remitted to the owner. nessed by a disinterested person. The
(b) Treasury bills. A request by an following language should be added to
owner for a single or successive rein- the form and be signed by the witness:
vestment of a Treasury bill must be
Witness to signature by mark
made in accordance with the terms pre-
llllllllllllllllllllllll
scribed on the tender form submitted
Signature of witness
at the time of purchase of the original
llllllllllllllllllllllll
bill, or by a subsequent transaction re- Address of witness
quest received not less than ten (10)
business days prior to the maturity (2) Change of name. If an individual’s
date of the bill. A request to revoke a name has been changed from that ap-
direction to reinvest the proceeds of a pearing in the registration, the indi-
bill must be received by the Depart- vidual should sign both names to the
ment not less than ten (10) business transaction request form and state the
days prior to the maturity date of the manner in which the change occurred.
bill. If either a request for reinvest- Example: Deborah L. Gains, changed by
ment or revocation of a reinvestment order of court from Deborah G. O’Brien.
request is received less than ten (10)
business days prior to maturity of the The individual must provide evidence,
original bill, the Department may in such as a certified copy of a court
425
§ 357.28 31 CFR Ch. II (7–1–11 Edition)
order, which confirms the change, un- final accounting for the estate, the
less it is indicated that the change of court’s decree of distribution, or other
name resulted from marriage. appropriate evidence will be required.
Example: Catherine M. Cole, changed by (3) Special provisions under the law of
marriage from Catherine T. Murray. the jurisdiction of the decedent’s domicile.
If there is no formal or regular admin-
(3) Natural guardians. A transaction istration and no representative of the
request involving a security registered decedent’s estate is to be appointed,
in the name of a natural guardian of a the person appointed to receive or dis-
minor may be executed by the natural tribute the assets of a decedent’s estate
guardian. If a security is registered in
without regular administration under
the names of both parents as natural
applicable local law summary or small
guardians of a minor, both must exe-
estates procedures may make a trans-
cute a transaction request. However,
action request. Appropriate evidence
the Department will not honor a trans-
will be required.
action request by the natural guard-
(4) When administration is required. If
ian(s):
the total redemption value of the
(i) Which would transfer the security
Treasury securities and undelivered
to a natural guardian in his or her own
right; or payments, if any, held directly on our
(ii) After the Department receives records that are the property of the de-
notice of the minor’s attainment of cedent’s estate is greater than $100,000,
majority, the qualification of a legal administration of the decedent’s estate
guardian or similar representative, or will be required. The redemption value
the death of the minor. of savings bonds and the principal
(4) Voluntary guardians. A transaction amount of marketable securities will
request involving a security belonging be used to determine the value of secu-
to an owner who has become incom- rities, and will be determined as of the
petent may be executed by a voluntary date of death. Administration may also
guardian, but only after approval by be required at the discretion of the De-
the Department of the voluntary partment for any case.
guardian’s application for such des- (5) Voluntary representative for small
ignation. However, the Department estates of decedents that are not being
will not honor a transaction request by otherwise administered—(i) General. A
the voluntary guardian: voluntary representative is a person
(i) Which would transfer the security qualified according to paragraph
to a voluntary guardian in his or her (c)(5)(iii) of this section, to make a
own right; or transaction request. The voluntary
(ii) After the Department receives representative procedures are for the
notice of the ward’s restoration to convenience of the Department; enti-
competency, the qualification of a tlement to the decedent’s securities
legal guardian or similar representa- and held payments, if any, is deter-
tive, or the death of the ward. See mined by the law of the jurisdiction in
§ 357.21(b)(4). which the decedent was domiciled at
(c) Representatives—(1) General. Any the date of death. Voluntary represent-
representative of an owner’s estate, ative procedures may be used only if:
other than a trustee, may execute a (A) There has been no administra-
transaction request form if the rep- tion, no administration is con-
resentative submits to the Department templated, and no summary or small
properly authenticated evidence of the estate procedures under applicable
authority to act. The evidence will not local law have been used;
be accepted if dated more than one (B) The total redemption value of the
year prior to the date of submission of Treasury securities and held payments,
the transaction request. if any, that are the property of the de-
(2) Decedent’s estate has been settled cedent’s estate is $100,000 or less as of
previously. If a decedent’s estate has the date of death; and
been settled previously through judi- (C) There is a person eligible to serve
cial proceedings, the persons entitled as the voluntary representative accord-
may make a transaction request. A ing to paragraph (c)(5)(iii) of this sec-
certified copy of the court-approved tion.
426
(ii) Authority of voluntary representa- have been used, and there is no person
tive. A voluntary representative may eligible to serve as a voluntary rep-
make a transaction request to dis- resentative pursuant to paragraph (e)
tribute the securities to or for the ben- of this section, then a creditor may
efit of the persons entitled by laws of make a claim for payment of the
the jurisdiction in which the decedent amount of the debt, providing the debt
was domiciled at the date of death. has not been barred by applicable local
(iii) Order of precedence for voluntary law.
representative. An individual eighteen (d) Private organizations—(1) Corpora-
years of age or older may act as a vol- tions and unincorporated associations. A
untary representative according to the transaction request involving a secu-
following order of precedence: A sur- rity registered in the name of a cor-
viving spouse; if there is no surviving poration or an unincorporated associa-
spouse, then a child of the decedent; if tion (either in its own right or in a rep-
there are none of the above, then a de- resentative capacity), may be executed
scendant of a deceased child of the de- by an authorized person on its behalf.
cedent; if there are none of the above, The request must be supported by evi-
then a parent of the decedent; if there dence of the person’s authority to act.
are none of the above, then a brother (2) Partnerships. A transaction re-
or sister of the decedent; if there are quest involving a security registered in
none of the above, then a descendant of the name of a partnership must be exe-
a deceased brother or sister of the dece- cuted by a general partner.
dent; if there are none of the above,
(e) Government entities. A transaction
then a next of kin of the decedent, as
request involving a security registered
determined by the law of the jurisdic-
in the name of a State, county, city,
tion in which the decedent was domi-
school district, or other governmental
ciled at the date of death. As used in
entity, public body or corporation,
this order of precedence, child means a
must be executed by an authorized offi-
natural or adopted child of the dece-
cer of the entity. The request must be
dent.
supported by evidence of the officer’s
(iv) Liability. By serving, the vol-
untary representative warrants that authority to act.
the distribution of securities or pro- (f) Public officers. A transaction re-
ceeds is to or on behalf of the persons quest involving a security registered in
entitled by the law of the jurisdiction the title of a public officer must be ex-
in which the decedent was domiciled at ecuted by the officer. The request must
the date of death. The United States is be supported by evidence of incum-
not liable to any person for the im- bency.
proper distribution of securities or pro- (g) Attorneys-in-fact. A transaction re-
ceeds. Upon distribution of the securi- quest made by an attorney-in-fact
ties or proceeds at the request of the must be accompanied by the original
voluntary representative, the United power of attorney or a properly au-
States is released to the same extent as thenticated copy. A power of attorney
if it had paid or delivered to a rep- must be executed in the presence of a
resentative of the estate appointed pur- notary public or a certifying indi-
suant to the law of the jurisdiction in vidual. See § 357.31. The power of attor-
which the decedent was domiciled at ney will not be accepted if it was exe-
the date of death. The voluntary rep- cuted more than two (2) years before
resentative shall indemnify and hold the date the transaction request was
harmless the United States and all executed, unless the power provides
creditors and persons entitled to the that the authority of the attorney-in-
estate of the decedent. The amount of fact continues notwithstanding the in-
the indemnification is limited to an capacity of the principal. If two or
amount no greater than the value re- more attorneys-in-fact are named, all
ceived by the voluntary representative. must execute the transaction request
(v) Creditor. If there has been no ad- unless the power authorizes fewer than
ministration, no administration is con- all to act. A transaction request exe-
templated, no summary or small estate cuted by an attorney-in-fact seeking
procedures under applicable local law transfer of a security to the attorney-
427
§ 357.29 31 CFR Ch. II (7–1–11 Edition)
in-fact will not be accepted unless ex- ture guarantee programs who have
pressly authorized by the document ap- been authorized:
pointing the attorney-in-fact. (i) Generally to bind their respective
institutions by their acts;
Budget under control number 1535–0068) (ii) Unqualifiedly to guarantee signa-
tures to assignments of securities; or
[51 FR 18265, May 16, 1986; 51 FR 18884, May
(iii) To certify assignments of securi-
23, 1986, as amended at 70 FR 57431, Sept. 30,
2006] ties.
(2) Officers and authorized employees
§ 357.29 Time required for processing of Federal Reserve Banks.
transaction request. (3) Officers of Federal Land Banks,
For purposes of a transaction request Federal Intermediate Credit Banks and
affecting payment instructions with re- Banks for Cooperatives, the Central
spect to a security, a proper request Bank for Cooperatives, and Federal
must be received not less than ten (10) Home Loan Banks.
business days preceding the next pay- (4) Commissioned officers and war-
ment date. If a transaction request is rant officers of the Armed Forces of
received less than ten (10) business the United States but only with re-
days preceding a payment date, the De- spect to signatures executed by Armed
partment may in its discretion act on Forces personnel, civilian field employ-
such request if sufficient time remains ees, and members of their families.
for processing. If a transaction request (5) Such other persons as the Com-
is received too late for completion of missioner of the Public Debt or his des-
the requested transaction, the trans- ignee may authorize.
action request will be acted upon with (b) Foreign countries. The following
respect to future payments only. individuals are authorized to certify
signatures on transaction request
forms executed in a foreign country:
(1) United States diplomatic or con-
[51 FR 18265, May 16, 1986, as amended at 62 sular officials.
FR 18694, Apr. 16, 1997] (2) Managers and officers of foreign
§ 357.30 Cases of delay or suspension branches of depository institutions and
of payment. institutions that are members of
Treasury-recognized signature guar-
If evidence required by the Depart- antee programs.
ment in support of a transaction re-
(3) Notaries public and other officers
quest is not received by the Depart-
authorized to administer oaths, pro-
ment at least ten (10) business days be-
vided their official position and au-
fore the maturity date of the security,
thority are certified by a United States
or if payment at maturity has been
diplomatic or consular official under
suspended pursuant to 31 CFR 370.10, in
seal of the office.
cases of reinvestment, the Department
(c) Duties and liabilities of certifying
will redeem the security and hold the
individuals—(1) General. Except as spec-
redemption proceeds in the same form
ified in paragraph (c)(2) of this section,
of registration as the security re-
a certifying individual shall require
deemed, pending further disposition.
that the transaction request form be
No other interest shall accrue or be
signed in the certifying individual’s
paid on such proceeds after the secu-
presence after he or she has established
rity is redeemed.
the identity of the person seeking the
[64 FR 40487, July 26, 1999] certification. An employee who is not
an officer should insert the words ‘‘Au-
§ 357.31 Certifying individuals. thorized signature’’ in the space pro-
(a) General. The following individuals vided for the title. A certifying indi-
may certify signatures on transaction vidual and the organization for which
request forms: he or she is acting are jointly and sev-
(1) Officers and employees of deposi- erally liable for any loss the United
tory institutions, corporate central States may incur as a result of the in-
credit unions, and institutions that are dividual’s negligence in making the
members of Treasury-recognized signa- certification.
428
(2) Signature guaranteed. The trans- changes Medallion Program, or the

action request form need not be exe- New York Stock Exchange Incor-
cuted in the presence of a certifying in- porated Medallion Signature Program,
dividual if he or she unqualifiedly respectively.
guarantees the signature, in which case (3) Officers and authorized employees of
the certifying individual shall, after Federal Reserve Banks. Whatever is pre-
the signature, add the following en- scribed in procedures established by
dorsement: ‘‘Signature guaranteed, the Department.
First National Bank of Smithville, (4) Officers and employees of corporate
Smithville, NH, by A.B. Doe, Presi- central credit unions and other entities
dent’’, and add the date. In guaran- listed in paragraph (a)(3) of this section.
teeing a signature, the certifying indi- The entity’s seal.
vidual and the organization for which (5) Notaries public, diplomatic or con-
he or she is acting warrant to the De- sular officials. The official seal or stamp
partment that the signature is genuine of the office. If the certifying indi-
and that the signer had the legal ca- vidual has no seal or stamp, then the
pacity to execute the transaction re- official’s position must be certified by
quest. some other authorized individual,
(3) Absence of signature guaranteed by under seal or stamp, or otherwise
depository institution. A transaction re- proved to the satisfaction of the De-
quest form need not be actually signed partment.
by the owner in any case where a certi- (6) Commissioned or warrant officers of
fying individual associated with a de- the United States Armed Forces. A state-
pository institution has placed an en- ment which sets out the officer’s rank
dorsement on the form reading sub- and the fact that the person executing
stantially as follows: ‘‘Absence of sig- the transaction request is one whose
nature by owner and validity of trans- signature the officer is authorized to
action guaranteed, Second State Bank certify under the regulations in this
of Jonesville, Jonesville, NC, by B.R. part.
Butler, Vice President’’. The endorse- (7) Such other persons as the Commis-
ment should be dated, and the seal of sioner of the Public Debt or his designee
the institution should be added. This may authorize. The evidence specified
form of endorsement is an uncondi- by the Commissioner or his designee.
tional guarantee to the Department (e) Interested persons not to act as certi-
that the institution is acting for the fying individual. Neither the transferor,
owner under proper authorization. the transferee, nor any person having
(d) Evidence of certifying individual’s an interest in a security involved in
authority. The authority of a certifying the transaction may act as a certifying
individual to act is evidenced by individual. However, an authorized offi-
affixing to the certification the fol- cer or employee of a depository institu-
lowing: tion or of an institution that is a mem-
(1) Officers and employees of depository ber of a Treasury-recognized signature
institutions. The institution’s seal or guarantee program may act as a certi-
signature guarantee stamp; if the insti- fying individual on a transaction re-
tution is an authorized paying agent quest for transfer of a security to the
for U.S. Savings Bonds, a legible im- institution, or any request executed by
print of the paying agent’s stamp; or, if another individual on behalf of the in-
the institution is a member of the Se- stitution.
curity Transfer Agents Medallion Pro-
gram (STAMP), a legible imprint of the [59 FR 59038, Nov. 15, 1994]
STAMP signature guarantee stamp.
(2) Officers and authorized employees of § 357.32 Submission of transaction re-
institutions that are members of Treasury- quests; further information.
recognized signature guarantee programs. Transaction requests and requests for
A legible imprint of the program’s sig- forms and information may be sub-
nature guarantee stamp, e.g., the mitted to any Federal Reserve Bank
STAMP, SEMP, MSP stamp for mem- currently serving as a Treasury Retail
bers of the Securities Transfer Agents Securities Site or to the Bureau of the
Medallion Program, the Stock Ex- Public Debt, Legacy Treasury Direct®,
429
§ 357.40 31 CFR Ch. II (7–1–11 Edition)
P.O. Box 426, Parkersburg, West Vir- § 357.43 Liability for transfers to and
ginia 26106–0426. A list of the Federal from Legacy Treasury Direct ®.
Reserve Banks currently serving as A depository institution or other en-
Treasury Retail Securities Sites is tity that transfers to, or receives, a se-
available upon request to the Bureau. curity from Legacy Treasury Direct is
The Federal Reserve Banks, as fiscal deemed to be acting as agent for its
agents of the United States, are au- customer and agrees thereby to indem-
thorized to perform such functions as nify the United States and the Federal
may be delegated to them by the De- Reserve Banks for any claim, liability,
partment in order to carry out the pro- or loss resulting from the transaction.
visions of this part.
[51 FR 18265, May 16, 1986, as amended at 76 § 357.44 [Reserved]
FR 18064, Apr. 1, 2011]
§ 357.45 Supplements, amendments, or
revisions.
Subpart D—Additional Provisions The Secretary may, at any time, pre-
§ 357.40 Additional requirements. scribe additional supplemental, amend-
atory or revised regulations with re-
In any case or any class of cases aris- spect to securities, including charges
ing under these regulations, the Sec- and fees for the maintenance and serv-
retary of the Treasury (‘‘Secretary’’) icing of securities in book-entry form.
may require such additional evidence
and a bond of indemnity, with or with- APPENDIX A TO PART 357—DISCUSSION
out surety, as may in the judgment of OF FINAL RULE
the Secretary be necessary for the pro-
tection of the interests of the United BACKGROUND
States. Twenty-four written comments were re-
ceived to the notice of proposed rulemaking
§ 357.41 Waiver of regulations. from various sources, including Federal
The Secretary reserves the right, in agencies, trade associations, as well as finan-
cial and commercial investment institu-
the Secretary’s discretion, to waive tions. With the exception of one bank, all
any provision(s) of these regulations in commentators endorsed the concept of a
any case or class of cases for the con- certificateless security.
venience of the United States or in The grouping and identification of the
order to relieve any person(s) of unnec- comments received have been made on a sec-
essary hardship, if such action is not tion-by-section basis, with an explanation of
inconsistent with law, does not ad- the action taken with respect thereto. As
versely affect any substantial existing circumstances necessitated the publication
of the rule in two segments, in order to make
rights, and the Secretary is satisfied each part more understandable, certain defi-
that such action will not subject the nitions, such as those for ‘‘Department’’ and
United States to any substantial ex- ‘‘securities’’, have appeared in the proposed
pense or liability. rule for both Legacy Treasury Direct ® and
TRADES, and were slightly modified in the
[61 FR 43630, Aug. 23, 1996]
proposed rules on TRADES. Because these
modifications represent non-substantive
§ 357.42 Liability of Department and clarifications, and to avoid confusion as be-
Federal Reserve Banks. tween the two portions of the rules, the defi-
The Department and the Federal Re- nitions as used in TRADES have been adopt-
serve Banks may rely on the informa- ed.
tion provided in a tender, transaction SECTION-BY-SECTION ANALYSIS
request form, or Transfer Message, and
are not required to verify the informa- Section 357.21 Registration.
tion. The Department and the Federal The forms of registrations provided for se-
Reserve Banks shall not be liable for curities to be held in Legacy Treasury Direct
any action taken in accordance with have different legal effect from those cur-
the information set out in a tender, rently provided for in the case of definitive
transaction request form, or Transfer Treasury securities and for the Treasury’s
Message, or evidence submitted in sup- book-entry Treasury bill system. A comment
port thereof. was received that, as a result, this could lead
to some confusion, and that the Treasury
[61 FR 43630, Aug. 23, 1996] bill forms of recordation currently offered
430
should be changed, particularly since Treas- quest of both, the joint form of registration
ury bills will be phased into Legacy Treasury will be appropriate. This form of registra-
Direct gradually. The Bureau believes that tion, i.e., ‘‘A and B, with [without] the right
the benefits of uniformity of rights and in- of survivorship,’’ will require the agreement
terests that Legacy Treasury Direct inves- of both parties to conduct any authorized
tors will derive far outweigh any possible transaction.
confusion. As for confusion with the current ‘‘Beneficiary form. The beneficiary form,
Treasury bill book-entry system, given the i.e., ‘‘A payable on death to (POD) B,’’ will
fact that Treasury bills have a term of not permit the owner to have sole control of the
more than a year, it is believed that the account during his/her lifetime, but in the
problem, if any, will be short-lived. event of death, the account will pass by right
Given the importance of the change that of survivorship to the beneficiary.’’
Legacy Treasury Direct provides as to reg- One commentator questioned the ‘‘natural
istration, the discussion thereof that accom- guardian’’ and ‘‘voluntary guardian’’ forms
panied the Notice of Proposed Rulemaking is of registration provided in the regulations,
re-published below. pointing out that financial institutions are
‘‘Forms of Registration. The proposed rule reluctant to establish an account in the
provides the investor with a variety of reg- name of a natural guardian of a minor be-
istration options. They are essentially simi- cause of the uncertainties as to who might
lar to those provided for registered, defini- be entitled to the funds on the death of the
tive marketable Treasury securities. Inves- natural guardian or minor, or when the
tors should be particularly aware that, minor reached majority. It was mentioned
where the security is held in the names of that a bank would be reluctant to open an
two individuals, the registration chosen may account in the name of a voluntary guard-
establish rights of survivorship. ian, or to release funds from an existing ac-
‘‘The reason for establishing the rights of count to a voluntary guardian because of the
ownership for securities held in Legacy potential risk in the event of a claim from a
Treasury Direct is that it will give investors court-appointed guardian. It seems apparent
the assurance that the forms of registration that the comment was prompted by the pro-
they select will establish conclusively the vision that appeared in the proposed rule
rights to their book-entry securities. It will that the account held in Legacy Treasury
also serve to eliminate some of the uncer- Direct and the deposit account to which pay-
tainties, as well as possible conflicts, be- ments are to be directed should be in the
tween the varying laws of the several States. same form. As hereafter pointed out in the
‘‘A Federal rule of ownership is being discussion under the payment section, this is
adopted by the Treasury for Legacy Treas- not a requirement.
ury Direct securities. This regulatory ap- While parents are universally recognized as
proach is consistent with the one previously the natural guardians of the person of mi-
taken in the case of United States Savings nors, they have generally not been recog-
Bonds. It will have the effect of overriding nized as entitled to control the estates of
inconsistent State laws. See, Free v. Bland, these minors, except perhaps in the case of
369 U.S. 663 (1962). small amounts. Traditionally, the guardian
‘‘In the case of individuals (who are likely of the estate of a minor involves judicial ap-
to be by far the majority of holders of securi- pointment and supervision. In order to pro-
ties in Legacy Treasury Direct), the options vide a means of dealing with the problem of
offered will permit virtually all the preferred disposing of securities inadvertently reg-
forms of ownership. At the investor’s option, istered in the name of minors without re-
it will be possible to provide for the disposi- quiring the appointment of a legal guardian
tion of the securities upon death through and to provide a means for investing funds of
rights of survivorship. a minor, which did not technically qualify
‘‘Coownership registration. One option is the for investment under the Uniform Gifts to
coownership form of registration, i.e., ‘‘A or Minors Act, the Department decided to pro-
B.’’ Unlike the current Treasury bill book- vide recognition for natural guardians.
entry system being administered by the Bu- The voluntary guardianship procedure is
reau of the Public Debt, a security held in wholly a creature of the Department’s regu-
Legacy Treasury Direct registered in this lations. It was established in recognition of
form will be transferable upon the written the burden placed on an incompetent’s estate
request of either coowner. Other changes in and his/her family by requiring the appoint-
the account may also be made upon the re- ment of a legal guardian to receive the inter-
quest of either party. While this form of reg- est on, or to redeem securities for, the ac-
istration will facilitate the receipt of pay- count of an individual who has become in-
ments and provide ease in conducting trans- competent, at least where the incompetent’s
actions, care should obviously be exercised estate is relatively modest. This form of reg-
in designating a coowner. istration is not available on original issue
‘‘Joint ownership. For those who would pre- and is limited to an aggregate of $20,000 (par
fer to have the transferability of a security amount) of Legacy Treasury Direct securi-
held in two names contingent upon the re- ties. The $20,000 limit in connection with the
431
use of the voluntary guardianship procedure (also known as the electronic funds transfer
is in keeping with the limits used in connec- or ACH method). Checks will be issued only
tion with the summary administration of de- under extraordinary circumstances. A num-
cedents’ estates under the laws of many ber of comments endorsed the concept of
States. payment by direct deposit as an improve-
ment given the difficulties associated with
Section 357.23 Judicial proceedings. checks.
No comments were received regarding the One comment expressed concern as to who
provisions on judicial proceedings. Given would have the burden of resolving errors in
their importance, the discussion that accom- cases where a receiving financial institution
panied the publication thereof in proposed fails to properly credit a payment. The De-
form is included here. partment has concluded that while the direct
Judicial proceedings. Under the principle of deposit payment method is not without
sovereign immunity, neither the Department risks, it is far superior to the use of checks,
nor a Federal Reserve Bank, acting as fiscal in terms of the risks, potential losses, and
agent of the United States, will recognize a costs. In a case where a receiving institution
court order that attempts to restrain or en- fails to act in accordance with the instruc-
join the Department or a Federal Reserve tions given it, the Bureau intends to use its
Bank from making payment on a security or best efforts to assist investors in rectifying
from disposing of a security in accordance the error.
with instructions of the owner as shown on (b) Direct deposit. A number of comments
the Department’s records. expressed the view that the Legacy Treasury
‘‘The Department will recognize a final Direct payment system should adopt either
court order affecting ownership rights in the rules governing the direct deposit of
Legacy Treasury Direct securities provided Government payments (31 CFR part 210), or
that the order is consistent with the provi- the rules of the National Automated Clear-
sions of subpart C and the terms and condi- ing House Association (‘‘NACHA Rules’’), but
tions of the security, and the appropriate not separate rules. The final rules have
evidence, as described in § 357.23(c), is sup- adopted some of the existing practices appli-
plied to the Department. For example, the cable to commercial ACH payments, but it is
Department may recognize final orders aris- not possible for the Department of the Treas-
ing from divorce or dissolution of marriage, ury to conform to all of these rules. For ex-
creditor or probate proceedings, or cases in- ample, the Treasury has no authority to in-
volving application of a State slayer’s act. demnify recipients of direct deposit pay-
The Department will also recognize a trans- ments, although such indemnification by a
action request submitted by a person ap- sender is contemplated in the NACHA rules
pointed by a court and having authority and was advocated in several comments. It
under an order of a court to dispose of the se- should also be noted that the rules applica-
curity or payment with respect thereto, pro- ble to Legacy Treasury Direct payments are
vided conditions similar to those above are modeled, to some extent, on the rules for
met.’’ Government direct deposit payments in
Section 357.25 Security interests. order to take advantage of the large number
of entities that are a part of the Government
Legacy Treasury Direct is not designed to direct deposit network. See the discussion
reflect or handle the various types of secu- under paragraph (b)(2). Where there are
rity interests that may arise in connection unique rules applicable to Legacy Treasury
with a Treasury bond, note or bill. However, Direct, however, they are explained here.
the Treasury has from time to time and to a Given the variance between the procedures
limited extent held in safekeeping, for such set out in the proposed rules and existing
agencies as the Customs Service and Immi- practice, and the increased burdens resulting
gration and Naturalization Service, Treasury therefrom, several clearing house associa-
securities submitted in lieu of surety bonds tions and financial institutions requested
in accordance with 31 U.S.C. 9303. While the that the implementation of Legacy Treasury
Federal Reserve Banks handle the majority Direct be delayed from July 1986 to July 1987.
of such pledges and will continue to do so, as The Treasury is satisfied that the added bur-
this statute requires the Treasury to accept dens that would have been imposed on finan-
these Government obligations so pledged, a cial institutions to receive Legacy Treasury
provision has been added for accepting and Direct payments under the proposed rules
holding book-entry securities submitted for have been effectively eliminated in the final
such purposes. rule. Thus, Treasury plans to implement the
system on or about the original target date.
Section 357.26 Payments.
The final rules are being published, however,
(a) General. Most comments focused on the in advance of actual implementation so as to
provisions on payments. A key feature of give financial institutions an opportunity to
Legacy Treasury Direct will be the making make whatever remaining, minor procedural
of payments by the direct deposit method changes as may be necessary.
432
(b)(1) Information on deposit account at fi- well as to trust accounts, since it appears
nancial institution. The proposed regulations that there is a question as to the capability
provided that the owner of a security in Leg- of some receiving institutions to handle such
acy Treasury Direct, or in the case of owner- payments, investors are strongly urged to
ship by two individuals, the first-named consult their financial institution before re-
owner, must be an owner of, and so des- questing such payment arrangements. See
ignated, on the account at the receiving fi- paragraph (b)(1)(iii).
nancial institution. The regulations also pro- It should be emphasized that any payments
vided that in any case in which a security is that must be made by check will be made in
held jointly or with right of survivorship, the form in which the Legacy Treasury Di-
the account at the financial institution rect account is held, which may be different
should be established in a form that assures than the form of the deposit account. Inves-
that the rights of each joint owner or sur- tors should be aware that this may result in
vivor will be preserved. checks being issued, and thus payment being
The rule requiring the naming of the first- made, in a form different than they intended
named owner on the receiving financial in- the direct deposit payments to be made. For
stitution account was based on tax reporting example, if Investor A purchases a security
considerations. It has now been determined in his or her name alone with instructions
that the first-named security owner need not that payments be directed to a financial in-
be named on the receiving deposit account. stitution for the account of a money market
The rule relating to establishment of the fund, any checks that must be issued will be
receiving account in joint ownership cases in drawn in the name of Investor A. This could
the same form as the registration of the se- happen if Investor A furnishes erroneous
curity was intended to be a notice to inves- payment instructions and the problem can-
tors of a potential problem, rather than a re- not be resolved before a payment date, in
quirement. In cases where an investor in-
which case a check would be issued.
tends a beneficiary, joint owner or coowner
to receive securities after the investor’s The one restriction on the form of the de-
death, this intention may be defeated if the posit account that appears in paragraph
recipient is not also named on the receiving (b)(1)(ii) of the final regulations is a rule
deposit account. It is up to the investor to that where the Legacy Treasury Direct ac-
examine his or her particular circumstances count is in the name of individual(s), and the
and determine whether the form in which receiving deposit account is also in the name
the deposit account will be held is satisfac- of individual(s), one of the individuals on the
tory. This matter has been clarified in para- Legacy Treasury Direct account must be
graph (b)(1)(v) of the final rule. Except for named on the deposit account. This rule is
the restriction described in paragraph intended to provide a means to determine
(b)(1)(ii) (see below), the Treasury does not the disposition of the payment, if necessary.
intend to establish any limitations on how The Treasury does not expect financial insti-
the receiving deposit account is held. tutions to monitor this rule.
Several comments addressed the issue of Provision has been made in paragraph
the registration of the security versus the (b)(1)(vii) to permit financial institutions to
title of the deposit account. Two comments request ‘‘mass changes’’ of deposit account
pointed out that if the deposit account must numbers without the submission of indi-
be in the same form as the registration of vidual requests from investors to Legacy
the security, then existing traditional forms Treasury Direct. This procedure is intended
of ownership for bank accounts, which do not for use where an institution changes all or
include all the forms of registration for secu- an entire group of its account numbers, typi-
rities held in Legacy Treasury Direct, would cally as a result of an organizational change.
not suffice. Concerns were also expressed Legacy Treasury Direct will honor requests
that with multiple forms of ownership, fi- from a financial institution to change de-
nancial institutions could become involved posit account numbers under such cir-
in disputes with investors. As noted above, cumstances, with the understanding that the
there is no requirement that the Legacy institution agrees to indemnify the Treasury
Treasury Direct account and the deposit ac- and the security owners for any losses re-
count be identical. The responsibility to sulting from errors made by the institution.
choose the title of the deposit account rests If the institutions does not wish to use the
with the investor. ‘‘mass change’’ procedure, then the change
Another comment objected to the rule that in account number must be requested by the
the first-named security owner be named on investor, using the authorized transaction
the receiving deposit account because the request form. See § 357.28.
rule would eliminate the possibility of pay- Some institutions voiced concern in gen-
ment to an account at a financial institution eral about investor errors in furnishing the
in the name of a mutual fund, security deal- Legacy Treasury Direct a deposit account
er, or insurance company. Although the number and the financial institution’s rout-
change in the tax reporting rule described ing number. Although the Treasury plans to
above permits payment to such accounts, as provide as much assistance to investors as
433
possible, the investor must bear the respon- basis for this comment was the perception
sibility for securing accurate payment infor- that the receipt of Legacy Treasury Direct
mation. Investors are urged to consult with payments would require the implementation
their receiving institution to verify the ac- of special procedures by the financial insti-
curacy of the payment information, since tution and expose it to additional risks. As
neither the Treasury nor the receiving finan- explained earlier, the Treasury has signifi-
cial institution would be responsible for pay- cantly modified the procedures and reduced
ment errors resulting from erroneous infor- the requirements imposed upon a financial
mation provided by investors. institution in order to receive Legacy Treas-
The proposed rule provided in ury Direct payments, and decreased as well
§ 357.26(b)(1)(iii) that the designation of a fi- the risks an institution will incur in the re-
nancial institution by a security owner to ceipt of such payments. Thus, the proposed
receive payments from Legacy Treasury Di- rule on eligibility of receiving institutions
rect would constitute the appointment of the has been retained in the final rule in essen-
financial institution as agent for the owner tially the same form.
for the receipt of payments. The crediting of Two other comments were made to the ef-
a payment to the financial institution for defect that the category of institutions receiv-
posit to the owner’s account, in accordance ing payments should be broadened. In decid-
with the owner’s instructions, would dis- ing to authorize payments to all institutions
charge the United States of any further re- receiving part 210 payments, the Treasury
sponsibility for the payment. One comment considered the fact that many more institu-
noted that, in contrast, the rule in 31 CFR tions are designated endpoints for Govern-
210.13 for Federal recurring payments is that ment (direct deposit) payments than for
the United States is not acquitted until the commercial ACH payments. In order to af-
payment is credited to the account of the re- ford investors the widest choice of recipient
cipient on the books of a financial institu- institutions, all institutions that had agreed
tion. to accept part 210 payments were designated
Although, in principle, the same rules as authorized recipients. Treasury has now
should apply to all Government payments, broadened the rule further to also authorize
the proposed Legacy Treasury Direct rule those financial institutions that are willing
has been retained in the final regulations on to agree to accept part 210 payments in the
the basis of the major differences in the pro- future. This rule will permit investors to
cedures to be used in Legacy Treasury Di- designate institutions that are not now re-
rect. Most significantly, the Treasury will ceiving Government direct deposit payments
not be securing any written verification (i.e., as the recipients of their Legacy Treasury
an enrollment form) from a financial institu- Direct payments if the institutions make ap-
tion as to the accuracy of the deposit ac- propriate arrangements with the Federal Re-
count number and other payment informa- serve Bank of their District.
tion, as is now the practice in the case of (b)(3) Pre-notification. A significant feature
payments under 31 CFR part 210. Under these of the Legacy Treasury Direct payment pro-
circumstances, the Treasury cannot, in ef- cedure will be the use of a pre-notification
fect, guarantee that a payment will be cred- message sent to the receiving financial insti-
ited by a financial institution to the correct tution in advance of the first payment. This
account. It should also be noted that this procedure, already in use for commercial
rule on acquittance of the United States is ACH payments, alerts the institution that a
consistent with the provision in § 357.10(c) of payment will be made and provides an oppor-
the proposed regulations on TRADES. In tunity for verification of the accuracy of the
practice, however, the Treasury plans to par- account information.
ticipate actively in seeking to locate and re- The proposed regulations provided that the
cover any payments that have been mis- financial institution would be required to re-
directed. ject the pre-notification message within four
(b)(2) Agreement of financial institution. The calendar days after the date of receipt if the
proposed rule provided, in § 357.26(b)(2), that information contained in the message did
a financial institution which has agreed to not agree with the records of the institution
accept payments under 31 CFR part 210 shall or if for any other reason the institution
be deemed to have agreed to accept pay- would not be able to credit the payment. The
ments from Legacy Treasury Direct. The rules also stated that a failure to reject the
rule further provided that an institution message within the specified time period
could not be designated to receive Legacy would be deemed an acceptance of the pre-
Treasury Direct payments unless it had notification and a warranty that the infor-
agreed to accept direct deposit payments mation in the message was accurate.
under 31 CFR part 210. Because there was some confusion over
One financial institution commented that when the pre-notification message woud be
a receiving institution that has already sent, the final rules clarify, in paragraph
agreed to accept part 210 payments should (b)(3)(i), that in most cases, this will occur
have the choice as to whether to accept pay- shortly after establishment of a Legacy
ments from Legacy Treasury Direct. The Treasury Direct account. The Treasury has
434
under consideration a system change that as the deletion of the first-named owner of
would permit a second pre-notification to be the security from the title of the account, or
sent closer to the time of the payment if the when the institution is on notice of the
first payment is to occur a substantial death or incompetency of the owner of the
length of time after account establishment. deposit account.
One of the items of information contained Several financial institutions objected to
in a pre-notification message is the name the this requirement on the grounds that it
investor has indicated appears on the deposit would be burdensome and would require the
account. Comments were received that exist- development of new procedures to monitor
ing procedures and software do not permit the changes in deposit accounts. Specifi-
automatic verification of the account name. cally, several institutions indicated they
Although there is apparently some variation would be unable to relate the receipt of Leg-
in practice, and some institutions undertake acy Treasury Direct payments, which would
to verify the account name information be handled in a centralized area of the insti-
manually, the Treasury has decided to drop tution, to the changes being made in a de-
the account name verification requirement posit account, which are handled in another
in the final rules. This means that under operational area of the institution. These in-
paragraph (b)(3)(ii), a financial institution stitutions said they would not necessarily be
need only verify the account number and aware of who is the first-named owner of the
type designations on the pre-notification security in Legacy Treasury Direct, and that
message. However, the Treasury urges insti- more responsibility should be placed on the
tutions which are able to verify account security owner in reporting changes.
names to do so and encourages the develop- In response to these comments, the Treas-
ment of software that would have this capa- ury has narrowed the notification rule, in
bility. paragraph (b)(5)(ii) of the final rule, to re-
A number of comments urged that the quire a financial institution to notify Legacy
four-day period provided for an institution to Treasury Direct only in cases where it is on
reject a pre-notification message be length- notice of the death or legal incapacity of an
ened. After consideration of the various al- individual named on the deposit account, or
ternatives proposed, the Treasury has con- where it is on notice of the dissolution of a
cluded that an eight-day period will meet the corporation named in the deposit account.
needs of most institutions. See paragraph Upon receipt of notice by the area of the in-
(b)(3)(ii) of the final rule. In responding to a stitution that receives credit payments, the
pre-notification message, an institution may institution will be required to return any
use the NACHA’s ‘‘notification of change’’ Legacy Treasury Direct payments received
procedure, standardized automated rejection thereafter.
codes, or any other similar standard proce- (b)(6) Payments in error/duplicate payments.
dure. Upon receipt of such notification, the The proposed regulations, in § 357.26(b)(6), set
Treasury will either make the necessary out rules describing the procedure that
changes in the Legacy Treasury Direct ac- would be followed in cases where the Treas-
count or contact the investor, depending on ury or a Federal Reserve Bank has made a
the circumstances. duplicate payment or a payment in error.
One commentator objected to the warranty First, the financial institution to which the
by the receiving institution as to the accu- payment was directed would be provided
racy of the pre-notification information, par- with a notice asking for the return of the
ticularly in view of the manual verification amount of the payment remaining in the de-
or changes in procedures that would be re- posit account. If the financial institution
quired, and the resulting possibility of error. were unable to return any part of the pay-
As previously noted, the requirement to ment, it would be required to notify the
verify an account name has been eliminated. Treasury or its Federal Reserve Bank, and
In addition, language has been added to provide the names and addresses of the per-
make it clear that the verification is limited sons who withdrew funds from the deposit
to the time of pre-notification. The Treasury account after the date of the duplicate pay-
is of the view that the warranty is a useful ment or the payment in error. If the finan-
concept in encouraging institutions to re- cial institution did not respond to the notice
spond to pre-notification messages and will within 30 days, the financial institution’s ac-
benefit all concerned by increasing the like- count at its Federal Reserve Bank could be
lihood that payments will be made accu- debited in the amount of the duplicate or im-
rately and to the appropriate party. proper payment.
(b)(5) Responsibility of financial institution. Several institutions raised objections
The proposed regulations provided, in about various aspects of the above proce-
§ 357.26(b)(5)(ii), that a financial institution dures. One stated that 30 days was an insuffi-
that receives a Legacy Treasury Direct pay- cient time to respond and urged conformity
ment on behalf of a customer would be re- with the rules in 31 CFR part 210 permitting
quired to promptly notify the Treasury when a 60-day response time. Some objected to fur-
it has made a change in the status or owner- nishing information about the persons who
ship of the customer’s deposit account, such withdrew money from an account. Several
435
objected in principle to the provision author- Section 357.42 Preservation of existing rights.
izing the debiting of their accounts. Several
This section has been deleted. The same
comments indicated that if a payment is re-
subject-matter will be covered in § 357.1, as
turned by a financial institution using an
finally adopted.
automated payment reversal procedure, then
only the full amount of the payment (not a Section 357.43 Liability of Department and
partial amount) can be reversed. Federal Reserve Banks.
In the final rule, the Treasury has clarified
the procedures. The requirement to provide This section was published as § 357.42 in the
the names of persons who withdrew funds notice of proposed rulemaking for TRADES.
from an account has been changed. In para- The final version will be published after all
graph (b)(6)(i), financial institutions are the comments on the rulemaking for
asked to provide only such information as TRADES have been reviewed and considered.
they have about the matter. The debiting of
Section 357.46 Supplements, amendments, or
an institution’s account at a Federal Reserve
revisions.
Bank is intended to be simply a last resort if
the institution fails totally to respond to the Provision for ‘‘charges and fees for services
notice of a duplicate payment or payment and maintenance of book-entry Treasury se-
made in error. See paragraph (b)(6)(iii). The curities’’ has been added in the event cir-
time provided for response to this notice has cumstances should dictate their imposition.
been lengthened to 60 days.
[51 FR 18260, May 16, 1986; 51 FR 18884, May
The final rule has also been clarified in 23, 1986]
paragraph (b)(6)(i) to provide that the
amount that should be returned is an
APPENDIX B TO PART 357—TRADES
amount equal to the payment. The Treasury
reserves the right, however, to request the COMMENTARY
return by other than automated means of a INTRODUCTION
partial amount of a payment made in error.
It is anticipated that such a procedure would The adoption of regulations for the Treas-
occur only if the notice of a payment made ury/Reserve Automated Debt Entry System
in error is not issued immediately after the (‘‘TRADES’’) is the culmination of a multi-
payment was made. year Treasury process of moving from
(d) Handling of payments by Federal Reserve issuing securities only in definitive (phys-
Banks. Some of the comments raised a ques- ical/certificated/paper) form to issuing secu-
tion about the liability of the Federal Re- rities exclusively in book-entry form. The
serve Banks in making payments. The pro- TRADES regulations provide the legal
posed rule, in § 357.26(d)(2), provided that framework for all commercially-maintained
each Federal Reserve Bank would be respon- Treasury book-entry securities. For a more
sible only to the Department and would not detailed explanation of the procedural and
be liable to any other party for any loss re- legal development of book-entry and the
sulting from its handling of payments. This TRADES regulations, see the preamble to
rule was taken from the existing regulations the rule proposed March 4, 1996 (61 FR 8420),
in 31 CFR part 210 (see § 210.3(f)), and is sim- as well as the earlier proposals cited therein
ply a restatement of existing law. 51 FR 8846 (March 14, 1986); 51 FR 43027 (No-
vember 28, 1986); 57 FR 12244 (April 9, 1992).
In making payments, the Federal Reserve
Banks are acting in the capacity as fiscal COMPARISON OF TRADES AND LEGACY
agents of the United States, pursuant to 12 TREASURY DIRECT
U.S.C. 391. They are not acting in an indi-
vidual (banking) capacity. If a Federal Re- A person may hold interests in Treasury
serve Bank misdirects a payment contrary book-entry securities either in TRADES 1 or
to instructions provided by the investor, the Legacy Treasury Direct. The following sum-
United States, as principal, may remain lia- marizes the major differences between the
ble to the investor for the payment. The two systems.
United States could seek to recover any loss
from its agent, the Fedeal Reserve Bank. 1 In TRADES a Person’s interest in a
However, because the proposed rule simply
Treasury book-entry security is a Security
stated a legal conclusion and tended to cre-
Entitlement, as described in TRADES. A
ate the impression that the rule was broader
Participant’s interest in a marketable Treas-
than intended, it has been omitted from the
ury book-entry security also is a Security
final regulations.
Entitlement. A Participant’s Security Enti-
Section 357.31 Certifying individuals. tlement is different than a Security Entitle-
ment as described in Revised Article 8, with
For clarity, the warranties which accom- respect to the Participant’s rights against
pany the use of a ‘‘Signature guaranteed’’ the issuer. A non-Participant’s Security En-
stamp have been set out. titlement is described in Revised Article 8.
436
Persons holding Treasury book-entry secu- book-entry securities held in Legacy Treas-
rities in TRADES hold their interests in ury Direct generally recognized. Accord-
such securities in a tiered system of owner- ingly, Legacy Treasury Direct is suited for
ship accounts. In TRADES, Treasury, persons who plan to hold their Treasury se-
through its fiscal agents, the Federal Re- curities until maturity, and provides an al-
serve Banks, recognizes the identity only of ternative for investors who are concerned
Participants (persons with a direct account about holding securities through inter-
relationship with a Federal Reserve Bank). mediaries and who do not wish to hold their
While Participants may be beneficial owners interests in Treasury securities indirectly in
of interests in Treasury book-entry securi- TRADES.
ties, there are many beneficial owners of
such interests that are not Participants. SCOPE OF REGULATION
Such beneficial owners hold their interests Just as the scope of Revised Article 8 is
through one or more Securities Inter- limited, 2 the scope of this regulation is lim-
mediaries such as banks, brokerage firms or ited. It is not a comprehensive codification
securities clearing organizations. of the law governing securities, transactions
In TRADES, the rights of non-Participant in securities or the law of contracts for the
beneficial owners may be exercised only purchase or sale of securities. Similarly, it is
through their Securities Intermediaries. Nei- not a codification of all laws that could af-
ther Treasury nor the Federal Reserve Banks fect a person’s interest in a Treasury book-
have any obligation to a non-Participant entry security. For example, state laws re-
beneficial owner of an interest in a Treasury garding divorce or intestate succession could
book-entry security. Two examples illustrate well affect which persons have rights in the
this principle. First, except where a pledge interest in a Treasury book-entry security.
has been recorded directly on the books of a Moreover, the regulations deal with certain
Federal Reserve Bank pursuant to aspects of transactions in Treasury securi-
§ 357.12(c)(1), Federal Reserve Banks, as ties, such as perfection of a security interest
Treasury’s fiscal agents, will act only on in- and its effects and not other aspects, such as
structions of the Participant in whose Secu- the contractual relationship between a debt-
rities Account the Treasury book-entry secu- or and its secured party, which are left to ap-
rity is maintained in recording transfers of plicable law 3. See the discussion under
an interest in a Treasury book-entry secu- § 357.10 of the Section-by-Section Analysis.
rity. A beneficial owner of the interest that
is a non-Participant has no ability to direct SECTION-BY-SECTION ANALYSIS
a transfer on the books of a Federal Reserve
Bank. Second, Treasury discharges its pay- Section 357.0 Dual book-entry systems.
ment obligation with respect to a Treasury Section 357.0 sets forth that Treasury pro-
book-entry security when payment is cred- vides two systems for maintaining Treasury
ited to a Participant’s account or paid in ac- book-entry securities—TRADES and Legacy
cordance with the Participant’s instructions. Treasury Direct. Subpart A of part 357 of 31
Neither Treasury nor a Federal Reserve
CFR contains general information about
Bank has any payment obligation to a non-
TRADES and Legacy Treasury Direct. Sub-
Participant beneficial owner of an interest
part B contains the TRADES regulations.
in a Treasury book-entry security. A non-
Participant beneficial owner receives its
2 U.C.C. Revised Article 8, Prefatory Note
payment when its Securities Intermediary
credits the owner’s account. at 12.
Persons holding Treasury book-entry secu- 3 The regulations in 31 CFR 306.118(b),
rities in Legacy Treasury Direct, on the which are being supplanted by TRADES,
other hand, hold their securities accounts on state that ‘‘applicable law’’ covers how a
records maintained by Treasury through its transfer or pledge is ‘‘effected’’ as well as
fiscal agents, the Federal Reserve Banks. perfected. Except with respect to security in-
The primary characteristic of Legacy Treas- terests marked on the books of a Federal Re-
ury Direct is a direct account relationship serve Bank, TRADES does not address how a
between the beneficial owner of a Treasury security interest in a Treasury book-entry
book-entry security and Treasury. In Legacy security is created or what law governs the
Treasury Direct, Treasury discharges its creation of a security interest. Section
payment obligation when payment is cred- 357.11(a) of TRADES, which establishes the
ited to the depository institution specified choice of law for interests other than those
by the beneficial owner of the Treasury covered by § 357.10, addresses the choice of
book-entry security, paid directly to the law with respect to the perfection, effect of
beneficial owner by check, or paid in accord- perfection or non-perfection, and priority of
ance with the beneficial owner’s instruc- security interests, but does not address the
tions. Unlike TRADES, Legacy Treasury Di- law governing creation or attachment of a
rect does not provide a mechanism for the security interest. This is consistent with the
exchange of cash to settle a secondary mar- scope and choice of law provisions of Revised
ket transaction, nor are pledges of Treasury Article 8.
437
Subpart C contains the Legacy Treasury Di- its name with a Federal Reserve Bank. Ac-
rect regulations. Subpart D contains mis- cordingly, the Federal Reserve Bank and
cellaneous provisions. Thus, in its totality, Treasury know both the identity of the per-
part 357 sets forth in one place the complete sons maintaining these accounts and the
set of governing rules for Treasury securities Treasury book-entry securities held in these
issued in book-entry form. accounts.
(b) Securities Intermediary. Securities Inter-
Section 357.1 Effective date. mediaries are persons (other than individ-
Section 357.1 establishes the effective date uals, except as described below) that are in
for TRADES. TRADES applies to out- the business of holding interests in Treasury
standing securities formerly governed by 31 book-entry securities for others. Partici-
CFR part 306, subpart O. Conforming changes pants can be, and usually are, Securities
to parts 306, 356, and 358 are being made to Intermediaries.
coincide with the publication of TRADES in In addition, entities such as clearing cor-
final form. Consistent with the approach set porations, banks, brokers and dealers can be
forth in Revised Article 8 (see § 8–603 and the Securities Intermediaries in a single chain of
official comment thereto), on and after the ownership of a Treasury security. An indi-
effective date these regulations will apply to vidual, unless registered as a broker or deal-
all transactions, including transactions com- er under the federal securities laws, cannot
menced prior to the effective date. Revised be a Securities Intermediary. As an illustra-
Article 8, in Section 8–603, gave secured par- tion of a possible chain of ownership, in the
ties four months after the effective date to following chart, the Federal Reserve Bank,
take action to continue the perfection of Participant and Broker-Dealer are all Secu-
their security interests. TRADES, through rities Intermediaries.
its delayed effectiveness, provides a similar Treasury
period. In TRADES, January 1, 1997, becomes
the date by which such actions must be com- Federal Reserve Bank
pleted.
The effective date for TRADES is January
|
1, 1997. While TRADES is based in large part Participant
on Revised Article 8 that has received wide- |
spread attention in the financial community Broker-Dealer
and already has been adopted in 28 states, 4 |
Treasury has determined that TRADES will Individual Holder
be effective on January 1, 1997, to ensure a
smooth transition to TRADES. In making (c) Entitlement Holder. An Entitlement
that determination, Treasury has taken into Holder is any person for whom a Securities
account the time required by other Govern- Intermediary holds an interest in a Treasury
ment-Sponsored Enterprises (GSEs) to pro- book-entry security. In the above example
mulgate similar regulations for their securi- Individual Holder, Broker-Dealer and Partic-
ties. Such an effective date, when combined ipant are all Entitlement Holders. Thus, a
with TRADES having been published in pro- person can be both a Securities Intermediary
posed form with a 60-day comment period, and an Entitlement Holder. See also the
should provide sufficient time for an orderly commentary on ‘‘Security Entitlement.’’
transition to the new TRADES rules. (d) Security Entitlement. A Security Entitle-
ment is the interest that an Entitlement
Section 357.2 Definitions. Holder has in a Treasury book-entry secu-
rity. In the example, Participant, Broker-
Section 357.2 contains definitions for use in Dealer and Individual Holder all hold Secu-
subparts B and C. While most of the defini- rity Entitlements. The rights and property
tions are straightforward, four terms—Par- interests associated with a Security Entitle-
ticipant, Entitlement Holder, Security Enti- ment of a Participant held on the books of a
tlement and Securities Intermediary—are Federal Reserve Bank (‘‘Participant’s Secu-
critical to an understanding of the proposed rity Entitlement’’) are, however, different
TRADES regulations. from the rights and property interests asso-
(a) Participant. A Participant is a person
ciated with other Security Entitlements. As
that has a securities account relationship in
provided in § 357.10(a), Federal law defines
the scope and nature of a Participant’s Secu-
4 As of August 1, 1996, those states are: Ala- rity Entitlement. While TRADES is based in
bama, Alaska, Arizona, Arkansas, Colorado, large part on Revised Article 8, the meaning
Idaho, Illinois, Indiana, Iowa, Kansas, Ken- of Security Entitlement under federal law is
tucky, Louisiana, Maryland, Massachusetts, different than under Revised Article 8. For
Minnesota, Mississippi, Nebraska, New Mex- example, Participants have a direct claim
ico, Oklahoma, Oregon, Pennsylvania, Texas, against the United States for interest and
Utah, Vermont, Virginia, Washington, West principal even though, under state law, an
Virginia and Wyoming. See discussion ac- Entitlement Holder would only have a claim
companying footnote 11. against its Securities Intermediary for such
438
payment. To the extent not inconsistent applicable to either the United States or
with this regulation, the scope and nature of Federal Reserve Banks. 7 In addition, neither
a Security Entitlement of an Entitlement the United States nor Federal Reserve Banks
Holder below the level of a Participant, have any obligations to persons holding their
(Broker-dealer and Individual Holder in the interests in a Treasury book-entry security
example above), is defined by applicable at levels below the level of a Participant or
state law, as determined pursuant to § 357.11. to any other person claiming an interest in
It should also be noted that while a Partici- a Treasury book-entry security (with the
pant’s rights have Federal law components limited exception set out in § 357.12(c)(1)).
under § 357.10(a), the nature of a Security En- Thus, there are no derivative rights against
titlement held by a lower tier intermediary either the United States or the Federal Re-
on the books of a Participant is determined serve Banks.
pursuant to applicable law as provided in In interpreting this section, it is important
§ 357.11. to note that the scope of TRADES, like that
Section 357.10 Law governing the United States of Revised Article 8, is limited. Accordingly,
and Reserve Banks. the governing law set forth in § 357.10(a) is
applicable only to the matters set forth in
Section 357.10(a) provides that the rights § 357.10(a). Other laws remain applicable and
and obligations of the United States and the could affect the holders of book-entry securi-
Federal Reserve Banks (with one exception ties.
detailed below), with respect to both the For example, the tax treatment of Securi-
TRADES system and Treasury book-entry
ties Entitlements is outside the scope of
securities maintained in TRADES are gov-
TRADES and other law (the Federal income
erned solely and exclusively by Federal law.
tax code) is applicable in determining such
Thus, claims against the United States and
tax treatment. Similarly, nothing in
Federal Reserve Banks of both Participants
§ 357.10(a) limits the applicability of other
and all other persons with an interest (or
laws to matters such as whether the activi-
claiming an interest) in a Treasury book-
ties of Participants or Securities Inter-
entry security maintained in TRADES are
mediaries with respect to interests in Treas-
governed by Federal law. Federal law is de-
fined to include TRADES, the offering circu- ury book-entry securities are subject to
lars pursuant to which the Treasury securi- banking or securities laws.
ties are sold, the offering announcements While TRADES in § 357.10(a) defines what
and Federal Reserve Bank Operating Circu- law governs the contract between the United
lars. 5 Prior to March 1, 1993, the terms of States, as issuer, and the holder of a Secu-
each offering of Treasury securities, except rity Entitlement, it is not a complete state-
for Treasury bills were set forth in an offer- ment of the contract law applicable to the
ing circular published in the FEDERAL REG- United States or Federal Reserve Banks. For
ISTER. 6 Since March 1, 1993, all Treasury example, if a Participant obtains a discount
book-entry securities have been offered pur- window loan from a Federal Reserve Bank
suant to a uniform offering circular set forth and agrees to pledge collateral, including
at 31 CFR part 356. Treasury book-entry securities, to the Fed-
While TRADES is based in large measure eral Reserve Bank as security for the loan,
on Revised Article 8, a fundamental principle § 357.10(a) does not establish the law for de-
of these regulations (and a divergence from termining the validity or enforceability of
Revised Article 8) is that the obligations of the contract or the law applicable to the cre-
the issuer (the United States) and the Fed- ation and perfection of security interests in
eral Reserve Banks, as well as all claims property that is not a Treasury book-entry
with respect to TRADES or a Treasury book- security. Section 357.10(a) does provide the
entry security against Treasury or a Federal law applicable for how a security interest in
Reserve Bank, are governed solely by Fed- Treasury book-entry securities is perfected,
eral law. Thus, for example, those parts of the priority of such interest and, if
Revised Article 8 that detail obligations of § 357.12(c)(1) is applicable, how such security
issuers (or their agents) of securities are not interest is created. Similarly, nothing in
§ 357.10(a) affects the continuing applicability
5 A ‘‘Federal Reserve Bank Operating Cir-
or enforceability of Federal Reserve Bank
operating circulars such as the circular set-
cular’’ is defined in § 357.2 as the publication ting forth provisions regarding electronic ac-
issued by each Federal Reserve Bank that cess to services provided by Federal Reserve
sets forth the terms and conditions under
which the Reserve Bank maintains Book-
entry Securities Accounts and transfers 7 The regulations in subpart C of this part
Book-entry Securities. set out other obligations of the United

6 Treasury bills were issued pursuant to States and the Federal Reserve Banks for se-
one master offering circular (31 CFR part 349, curities held in Legacy Treasury Direct.
removed, and replaced by 31 CFR part 356) ef- These regulations preempt applicable state
fective March 1, 1993. (58 FR 412) law.
439
Banks and agreements executed in connec- adopted Revised Article 8, jurisdiction would
tion with such circulars. be deemed to have adopted Revised Article
The law applicable with respect to inter- 8. 8
ests granted to a Federal Reserve Bank de- For purposes of applying the state law cho-
pends on the manner in which the security sen under the rules of § 357.10(b), Federal Re-
interest is granted. serve Banks are treated as clearing corpora-
Where a security interest in favor of a Fed-
tions. As a result, a security interest in a Se-
eral Reserve Bank is marked on the books of
curities Entitlement of a Participant in
the Federal Reserve Bank under Section
357.12(c)(1), § 357.10(a) establishes the applica- favor of a Federal Reserve Bank under
ble law. A security interest in favor of a Fed- § 357.12(c)(2) has the same priority as security
eral Reserve Bank would be recorded on the interests granted to other clearing corpora-
Federal Reserve Bank’s books where, for ex- tions under state law. This is consistent with
ample, the Federal Reserve Bank made a dis- the treatment accorded to Federal Reserve
count window loan to a depository institu- Banks generally under Revised Article 8.
tion and any Treasury book-entry securities
provided by the depository institution as col- Section 357.11 Law governing other interests.
lateral have been deposited to a pledge ac- (a) Law governing the rights and obligation of
count on the books of the Federal Reserve
Participants and third parties. Section 357.11 is
Bank. For a borrowing depository institu-
a choice of law rule. The substantive matters
tion that is not a Participant, the book-
entry securities used as collateral generally subject to this choice of law rule are set
would be deposited to the Federal Reserve forth in § 357.11(a). The matters set forth in
Bank pledge account by the borrowing insti- § 357.11(a) are meant to be coextensive with
tution’s Securities Intermediary. See Hypo- those matters covered by Revised Article 8
thetical 5. with respect to a person’s interest in a
Section 357.10(b) sets forth law applicable Treasury book-entry security (other than
with respect to security interests in favor of those related to a person’s relationship to
a Federal Reserve Bank that have not been Treasury or a Federal Reserve Bank which
marked on the books of a Federal Reserve are governed solely by federal law). For pur-
Bank. A security interest in the Securities poses of these choice of law rules Partici-
Entitlement of a Participant in favor of a pants are Securities Intermediaries.
Federal Reserve Bank that is not marked on Section 357.11(b) adopts Revised Article 8’s
the books of the Federal Reserve Bank is general choice of law rule. Section 357.11(c)
governed by the law of the state in which the
sets forth a special choice of law rule with
head office of the Federal Reserve Bank is
respect to security interests perfected auto-
located. Such a security interest could arise,
for example, where the delivery of book- matically or by filing, which also is included
entry securities to the securities account of in Revised Article 8. Generally, the law ap-
the Participant results in an overdraft in the plicable to the Securities Intermediary will
Participant’s Funds Account. The extent to govern matters involving an interest in a
which the Federal Reserve Bank has an in- book-entry security held through that inter-
terest in the Participant’s book-entry securi- mediary. This approach is not followed with
ties to secure the overdraft therefore would respect to perfection of security interests
be determined under the law of the state in automatically or by filing. In those cases,
which the Reserve Bank’s head office is lo- the law of the jurisdiction in which the debt-
cated. If the State in which the head office of or is located is the governing law. Since fil-
the Federal Reserve Bank is located has not ing systems are based on the location of the
adopted Revised Article 8, under § 357.10(c) debtor, this approach should reduce uncer-
that State is deemed to have adopted Re- tainty and preserve the normal practice of
vised Article 8.
In certain very limited circumstances, a
Federal Reserve Bank also may have a secu-
rity interest in the book-entry securities of 8 An interest in book-entry securities of a
a non-Participant that is not marked on the non-Participant that is not marked on the
books of the Federal Reserve Bank. Section
books of the Federal Reserve Bank, while un-
357.10(b) provides a separate rule for such a
common, could arise where the Federal Re-
security interest, which would be governed
by the law of the non-Participant’s Securi- serve Bank lends to a non-Participant depos-
ties Intermediary, as determined under itory institution and enters into a triparty
§ 357.11. Under § 357.11, the perfection, effect agreement with the depository institution
of perfection, and priority of a security in- and its Securities Intermediary rather than
terest created under such an agreement requiring the deposit of the book-entry secu-
would be governed by the law of the Securi- rities in a pledge account on the books of the
ties Intermediary’s jurisdiction, as deter- Federal Reserve Bank through an instruc-
mined under § 357.11(b). Under § 357.11(d), if tion given by the non-Participant depository
the jurisdiction specified in § 357.11(b) has not institution to its Securities Intermediary.
440
searching records based on the debtor’s loca- able delays in the state-by-state adoption
tion. 9 The language ‘‘person creating a secu- process of Revised Article 8, Treasury is pro-
rity interest’’ is used in lieu of the term mulgating regulations with a limited form of
‘‘debtor’’ in this provision to avoid any con- preemption. As provided in both §§ 357.10(c)
fusion. The word ‘‘debtor’’ has two meanings and 357.11(d), if the choice of law rules set
in the Uniform Commercial Code and the ex- forth in TRADES would lead to the applica-
pression ‘‘person creating a security inter- tion of the law of a State that has not yet
est’’ provides clarity with respect to who is adopted Revised Article 8, TRADES will
covered by this section. The term does not apply Revised Article 8 (with conforming and
refer to a creditor. The language ‘‘is located’’ miscellaneous amendments to other Arti-
is intended to conform to its meaning under cles) in the form approved by the ALI and
applicable law, as it may be amended from NCCUSL. Treasury expects that these provi-
time to time. See, e.g., U.C.C. section 9–
sions will be operative only during the state-
103(3)(d). Section 357.11(d) provides for the
by-state adoption process and would plan to
application of Revised Article 8 if the choice
amend TRADES to delete reference to these
of law analysis required by § 357.11(b) results
provisions once the adoption process has
in the choice of the law of a State that has
not yet adopted Revised Article 8. As noted been completed.
elsewhere, in such a situation, the State’s While Revised Article 8 is defined to mean
law is viewed as if it had adopted Revised Ar- the official text of Article 8 as approved by
ticle 8. This section also provides that, for the ALI and NCCUSL, Treasury recognizes
purposes of applying state law, the Federal that states may make minor changes in that
Reserve Banks are clearing corporations and text when adopting Article 8. Treasury has
Participants’ interests in book-entry securi- concluded that minor changes should not
ties are Security Entitlements. prevent Revised Article 8, as adopted by a
(b) Limited scope of Federal preemption. In an state, from being the appropriate law. In
earlier TRADES proposal Treasury con- other words, if a state passes a version of Ar-
templated adopting a comprehensive regula- ticle 8 that is substantially identical to Re-
tion governing the rights of all persons in vised Article 8, reference to Revised Article
Treasury book-entry securities held in 8 (as defined) would no longer be required.
TRADES. Such an approach was proposed be- Treasury has determined that the versions of
cause Treasury believed that a uniform rule Article 8 passed by 50 11 states that have en-
was necessary to preserve the efficiency and acted Article 8 meet this standard. Accord-
liquidity of the market for Treasury securi- ingly, §§ 357.10(c) and 357.11(d) would not be
ties—the most liquid and efficient market in applicable if the choice of law provisions of
the world. Treasury believed then, and be- TRADES directed a person to one of those
lieves now, that the material rights of a states. As additional states adopt Revised
holder in the United States of an interest in Article 8, Treasury will provide notice in the
a Treasury security should not vary solely
FEDERAL REGISTER as to whether the enact-
by virtue of such holder’s geographic loca-
ments are ‘‘substantially identical’’ to the
tion or the location of the financial institu-
uniform version for purposes of these regula-
tion through which it holds its interest in
tions and on an annual basis, the Com-
Treasury securities. In light of Revised Arti-
cle 8, Treasury has determined that it is pos- mentary will be amended to reflect subse-
sible to achieve this uniformity without de- quent enactments. This approach represents
veloping an independent system of Federal a significantly reduced form of preemption
commercial law. 10 The questions inherent in of state law from former versions of
a tiered system of ownership have been ana- TRADES and preserves Treasury’s pre-
lyzed, and, in Treasury’s view, satisfactorily eminent interest in a uniform system of
addressed by Revised Article 8. rules applicable to all holders of interests in
As of August 1, 1996, 28 states have adopted Treasury book-entry securities.
Revised Article 8 and Treasury understands
that it will soon be adopted in additional 11 Alabama, Alaska, Arizona, Arkansas,
states. As with all uniform laws, the adop- California, Colorado, Connecticut, Delaware,
tion process takes several years. In order to District of Columbia, Florida, Georgia, Ha-
assure uniformity, in light of the unavoid- waii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Mas-
9 The substantive effect of filing is limited sachusetts, Michigan, Minnesota, Mis-
and applies only in states which have adopt- sissippi, Missouri, Montana, Nebraska, Ne-
ed Revised Article 8. Since the effect of filing vada, New Hampshire, New Jersey, New Mex-
is a unique state law matter, in this one ico, New York, North Carolina, North Da-
area, Treasury has determined that possible kota, Ohio, Oklahoma, Oregon, Pennsyl-
lack of uniformity does not justify altering vania, Puerto Rico, South Dakota, Ten-
state law. nessee, Texas, Utah, Vermont, Virginia,
10 As noted previously, the substantive Washington, West Virginia, Wisconsin and
scope of this regulation is limited. Wyoming.
441
Section 357.12 Obtaining an interest in a book- institutions; and securities pledged in lieu of
entry security. surety by contractors and others. The pri-
(a) Creation of a Participant’s Security Enti- ority provided the United States in these sit-
tlement. A Participant’s interest in a Treas- uations is consistent with existing law.
ury book-entry security is a Securities Enti- In addition, Federal Reserve Banks do rec-
tlement. Section 357.12(a) provides that a ognize on their books and records security
Participant’s Securities Entitlement is cre- interests in favor of the United States. In
ated when a Federal Reserve Bank indicates that situation, the Federal Reserve Bank
by book entry that a Book-entry Security will not transfer the security without the
has been credited to a Participant’s Securi- permission of the United States. This section
ties Account. Instead of the concept of ini- provides that a Federal Reserve Bank may
tial credit and transfer of a Treasury book- rely exclusively on the directions of an au-
entry security, as set forth in the existing thorized representative of the United States
regulations, this proposal focuses on the cre- to transfer a security and is protected in so
ation of a Participant’s Securities Entitle- relying. Ordinarily, an authorized represent-
ment and, in this way, is similar to Section ative of the United States would take such
8–501 of Revised Article 8. action under circumstances such as the de-
The regulation focuses on the creation of a fault or insolvency of the pledgor.
Participant’s Security Entitlement because (ii) Security Interests on the books of a Re-
Security Entitlement is the term used to de- serve Bank. Where required by Federal law or
scribe the Participant’s interest in a Treas- regulation or pursuant to a specific agree-
ury book-entry security. Once a Participant ment with a Federal Reserve Bank, a secu-
obtains that interest, the regulation sets rity interest in favor of a Federal Reserve
forth what that interest is. Thus, as provided Bank or other person may be created or per-
in § 357.10, federal law describes a Partici- fected by a Federal Reserve Bank marking
pant’s rights against the United States and its books to record the security interest
the Federal Reserve Bank where it main- under § 357.12(c)(1). An example of a security
tains its Securities Account. To the extent interest that is marked on the books of a
not inconsistent with § 357.10, § 357.11 de- Federal Reserve Bank would be the pledge in
scribes the applicable law to determine Par- favor of a Federal Reserve Bank of a Partici-
ticipants’ rights and obligations with respect pant’s book-entry securities as collateral for
to all other persons. Under these regulations, a discount window loan. 12 For limited cat-
Participants can still transfer their interests egories of pledges, Federal Reserve Banks
in a Treasury book-entry security as they may agree to record a security interest in
did before—by issuing a Transfer Message to favor of a third party on their books. For ex-
the Federal Reserve Bank where they hold ample, in some circumstances a Federal Re-
such interest. Transfer of interests between serve Bank may permit the establishment of
Participants can occur by a Participant a pledge account to hold book-entry securi-
holding such interest issuing a Transfer Mes- ties pledged to governmental entities other
sage. As a result of such message, the Fed- than the United States government. It is im-
eral Reserve Bank will make a book entry in portant to note that there is no obligation
favor of the receiving Participant (thereby for either Treasury or a Federal Reserve
creating a Security Entitlement in favor of Bank to agree to record a security interest
such Participant) and also will make a book on the books of a Federal Reserve Bank, ex-
entry deleting the initiator Participant’s in- cept as required by Federal law or regula-
terest in such Treasury book-entry security tion. If they do so, the security interest is
(thereby eliminating that Participant’s Se- perfected when the Federal Reserve Bank
curity Entitlement). In addition, if author- records a security interest on its books. In
ized under applicable state law, Participants addition, the security interest has priority
may enter into agreements with other Par- over all other interests in the Treasury
ticipants that, as to the Participants, con- book-entry security except an interest of the
stitute a transfer. Such action is without ef- United States.
fect to either the United States or a Federal (iii) Other security interests. As provided in
Reserve Bank. § 357.12(c)(2), a security interest in a book-
(b) Creation and priority of a Security Inter- entry security may be perfected by any
est. (i) Security Interests of the United States. method available under applicable state law,
Section 357.12(b) provides that a security in-
terest in favor of the United States has pri-
ority over the interests of any other person 12 Book-entry securities pledged by a non-
in a Treasury book-entry security. The Participant to a Federal Reserve Bank gen-

United States obtains security interests in erally would be deposited by the non-Partici-
Treasury securities as collateral to secure pant’s Securities Intermediary to a pledge
funds in a variety of situations such as account at the Federal Reserve Bank, and
Treasury Tax and Loan accounts; govern- therefore also would be marked on the books
ment agency funds or funds under the con- of the Federal Reserve Bank. See the discus-
trol of the Federal Courts held at financial sion under D. (§ 357.10).
442
as determined under § 357.10(b) or § 357.11. 13 eral Reserve Bank will recognize the claims
The perfection and priority of such interests of any other person asserting a claim in a
shall be governed by applicable law. Security Treasury book-entry security. Persons at
interests under this section may include se- levels below the Participant level must
curity interests in favor of a Federal Reserve present their claims to their Securities
Bank, such as a clearing lien or pledge by a Intermediary.
non-participant of book-entry securities held (b) Payment obligations. Section 357.13(b)
through a Securities Intermediary where the contains a corollary to the rule set forth in
securities have not been deposited to a Fed- § 357.13(a). This section provides that Treas-
eral Reserve Bank pledge account. Con- ury discharges its payment responsibility
sistent with Revised Article 8, a Federal Re- with respect to a security that it has issued
serve Bank would be treated as a clearing when a Federal Reserve Bank credits the
corporation under the applicable state law. funds account of a Participant with amounts
If a Person perfects a security interest pur- due on that security or makes payment in
suant to § 357.12(c)(2), obligations of the some other manner specified by the Partici-
Treasury and the Federal Reserve Banks pant. This is consistent with existing law
with respect to that security interest are and the first TRADES proposal. 14 In Revised
limited. Specifically, unless special arrange- Article 8, the issuer discharges its obliga-
ments are agreed to by the United States or tions when it makes payment to an owner
a Federal Reserve Bank pursuant to registered on its books. Under common com-
§ 357.12(c)(1), neither the Federal Reserve mercial practice, the registered owner in the
Bank nor the United States will recognize indirect system may be a clearing corpora-
the interests of any person other than the tion or the clearing corporation’s nominee.
person in whose securities account the inter- Although the Federal Reserve Banks are
est in a Treasury book-entry security is treated as clearing corporations under both
maintained. This does not mean that such a Revised Article 8 and TRADES, Treasury re-
security interest is invalid. Rather, it means mains liable until payment is made to, or in
that the creditor’s recourse will be solely accordance with the instructions of, a Par-
against the debtor Participant or other third ticipant. Section 357.13(b)(2) establishes the
party. mechanism of how Treasury book-entry se-
curities are paid at maturity. It is intended
Section 357.13 Rights and obligations of
to cover a variety of procedures, including
Treasury and the Reserve Banks.
where the proceeds of pledged securities are
(a) Adverse claims. Section 357.13(a) sets credited to a suspense account pending sub-
forth the general rule that, with limited ex- stitution or release. This paragraph makes
ceptions, Treasury and the Federal Reserve clear that the payment takes place auto-
Banks will recognize only the interest of a matically and that, unlike with physical cer-
Participant in a Treasury book-entry secu- tificates, there is no act of presentment re-
rity in whose Securities Account such inter- quired by the Participant.
est is maintained.
As noted previously, Treasury book-entry Section 357.14 Authority of Reserve Banks.
securities maintained in TRADES are held in Section 357.14 provides that Federal Re-
a tiered system of ownership. The records of serve Banks are authorized, as fiscal agents
a Federal Reserve Bank reflect only the own- of Treasury, to operate the commercial
ership at the top tier. Institutions maintain- book-entry system for Treasury.
ing a Securities Account with a Federal Re-
serve Bank frequently will hold interests in Section 357.44 Notices.
Treasury book-entry securities for their cus-
tomers (which can include broker-dealers Section 357.44 contains a revised version of
and other Securities Intermediaries) and in a provision that appeared in earlier TRADES
certain cases those customers will hold in- proposals. Similar to the rule in Revised Ar-
terests in securities for their customers. Ac- ticle 8 (see section 8–112), it provides where
cordingly, neither Treasury nor a Federal certain legal process should be directed.
Reserve Bank will know the identity or rec- While providing instructions on where notice
ognize a claim of a Participant’s customer if should be directed, it makes clear that the
that customer were to present it to Treasury regulations do not establish whether a Fed-
or a Federal Reserve Bank. eral Reserve Bank is required to honor any
In addition, except in the limited case such order or notice.
where a security interest is marked on the J. HYPOTHETICALS
books of a Federal Reserve Bank pursuant to
§ 357.12(c)(1), neither the Treasury nor a Fed- Hypothetical 1
TREASURY
13 Under both of these sections, if the state
has not yet adopted Revised Article 8, the

applicable law would be that state’s law as it
would be amended by Revised Article 8. 14 51 FR 8846, 8848 (March 14, 1986).
443
FEDERAL RESERVE BANK Revised Article 8, the law of Participant’s ju-

| risdiction, as it would be amended by Re-
PARTICIPANT vised Article 8, applies. Similarly, as be-
tween Dealer and Investor, Dealer is a Secu-
| rities Intermediary, with respect to the mat-
DEALER ters in § 357.11(a), the law of Dealer’s jurisdic-
| tion applies as between Dealer and Investor.
INVESTOR If Dealer’s jurisdiction has not adopted Re-
The first hypothetical is designed to show vised Article 8, the law of Dealer’s jurisdic-
what law applies at different levels of the tion, as it would be amended by Article 8, ap-
tiered book-entry system. TRADES provides plies.
that federal law, and only federal law (de-
Hypothetical 2
fined in § 357.10(a)), governs the rights and
obligations of the United States and the Fed- Assume that Dealer A sells its interest in
eral Reserve Banks (except for those matters a Treasury book-entry security to Dealer B.
involving Federal Reserve Banks set forth in The transaction likely would take the fol-
§ 357.10(b)). Thus, for example, Treasury dis- lowing form. Dealer A will instruct Partici-
charges its payment obligations with respect pant A to transfer its interest in a Treasury
to a security it has issued in the manner de- security to Participant B against cash pay-
scribed in § 357.13(b). Federal law both defines ment. Dealer B will instruct Participant B to
the payment obligation and describes how transfer cash to Participant A against deliv-
Treasury fulfills that obligation. Those por- ery of an interest in the specified securities.
tions of Revised Article 8 dealing with issuer Participant A will instruct the Federal Re-
obligations are not applicable to Treasury or serve Bank to transfer its interest in the
the Federal Reserve Banks. 15 Similarly, with Treasury security to Participant B against
certain limited exceptions as set forth in simultaneous credit of cash. The Federal Re-
§ 357.12(c)(1), Treasury and the Federal Re- serve Bank will debit Participant A’s secu-
serve Banks will recognize only the interest rity account and credit Participant B’s secu-
of a Participant in a Treasury book-entry se- rity account and simultaneously credit Par-
curity in whose Security Account the inter- ticipant A’s cash account and debit Partici-
est is maintained. Accordingly, as a matter pant B’s cash account. Participant A will
of federal law, neither Treasury nor a Fed- mark its books to show that it has debited
eral Reserve Bank will recognize any claim Dealer A’s securities account and credited
by Dealer or Investor. 16 Dealer A’s cash account. Participant B will
In the hypothetical above, as between Par- mark its books to show the Security Entitle-
ticipant and Dealer, Participant is the Secu- ment in the Treasury security in favor of
rities Intermediary. With respect to the mat- Dealer B and a debit against Dealer B’s cash
ters set forth in § 357.11(a), the law of the Se- account. Federal law, set forth in § 357.12(a)
curities Intermediary’s jurisdiction governs. provides that Participant B acquires its in-
Thus, with respect to the matters in terest in the Treasury book-entry security
§ 357.11(a), the law of Participant’s jurisdic- when the Federal Reserve Bank indicates by
tion applies as between Participant and book-entry that the interest in the security
Dealer. 17 If Participant’s jurisdiction, as de- has been credited to Participant B’s Securi-
termined under § 357.11(b), has not adopted ties Account. Pursuant to § 357.11(a), but sub-
ject to § 357.11(d), Participant B’s jurisdiction
15 As provided in § 357.14, Federal Reserve governs Dealer B’s acquisition of a Securi-
Banks, among other things, effect transfers ties Entitlement from Participant B.
of book-entry securities between Partici-
pants’ Security Accounts. Hypothetical 3
16 One comment questioned whether similar TREASURY
language in the March 4, 1996 release implied
that, under Revised Article 8, in the above FEDERAL RESERVE BANK
example Investor could have a claim against |
Participant. No such implication was in-
tended. The only point of the language is to
PARTICIPANT
make it clear that Federal, not state, law Assume Participant wishes to obtain a
governs the rights and obligations of Treas- loan from Federal Reserve Bank and, as part
ury and the Federal Reserve Banks. of the transaction, will grant Federal Re-
17 As described in the March 4 Release, the serve Bank a security interest in its Securi-
scope of TRADES is limited. As a general ties Entitlement with respect to Treasury
rule, if a matter is not covered in § 357.11(a), book-entry securities. The transaction can
TRADES is not applicable. One comment be accomplished in one of two ways. Pursu-
questioned whether TRADES covered the ant to § 357.12(c)(1), the Federal Reserve Bank
creation and attachment of a security inter- can mark its books to reflect the security in-
est. The omission of creation and attach- terest. As a matter of federal law, that ac-
ment in § 357.11(a) is intentional. tion creates and perfects the Federal Reserve
444
Bank’s security interest and grants the Fed- FEDERAL RESERVE BANK
eral Reserve Bank priority over all other
|
claimants (other than the United States pur-
suant to § 357.12(b)). 18 A second method for PARTICIPANT A
completing the transaction, as set forth in |
§ 357.12(c)(2), would be to take whatever ac- DEALER A
tions are authorized by applicable law. In |
that case, applicable law is the law of the ju- BANK A
risdiction of the head office of the Federal
Reserve Bank. If that jurisdiction had adopt- Assume that Bank A wishes to borrow
ed Revised Article 8, it would be the law of from the Federal Reserve Bank and will
pledge its interest in Treasury book-entry
that jurisdiction. If that jurisdiction had not
securities held at Dealer A to collateralize
adopted Revised Article 8, it would be the
that loan. The transaction could be accom-
law of that jurisdiction as if the jurisdiction
plished in two ways. Pursuant to
had adopted Revised Article 8. Under Revised § 357.12(c)(1), the interest could be created
Article 8, the Federal Reserve Bank’s inter- and perfected on the books of a Federal Re-
est would be that of a clearing corporation. serve Bank. Such a transaction would take
place in the following fashion. Bank A could
Hypothetical 4
have Dealer A instruct Participant A to de-
TREASURY posit securities to a pledge account specified
by the Federal Reserve Bank. The Federal
Reserve Bank likely would create an account
FEDERAL RESERVE BANK on its books and specify that account to
| | Bank A as the account to receive Bank A’s
PARTICIPANT PARTICIPANT interest in Treasury book-entry securities.
A B Participant A, upon receiving Dealer A’s in-
structions, would then instruct the Federal
Assume that Participant A wishes to bor- Reserve Bank to debit its account at the
row from Participant B and grant Partici- Federal Reserve Bank and credit the account
pant B a security interest in its Security En- created by the Federal Reserve Bank. The
titlement in Treasury book-entry securities. second way the transaction could take place
As provided in § 357.12(c)(2), the transaction is by any method permitted by the law of
would be completed pursuant to applicable Dealer A’s (Bank A’s Securities Inter-
law determined in accordance with 357.11. Al- mediary) jurisdiction. This could involve a
though such an interest could be recorded on tri-party agreement among the Federal Re-
the books of a Federal Reserve Bank under serve Bank, Dealer A, and Bank A. As set
§ 357.12(c)(1), Federal Reserve Banks gen- forth in § 357.11(b)(1), that agreement likely
erally do not mark their books to record this would specify which jurisdiction’s law is to
type of security interest for Participants. govern the transaction and could specify
that such choice of law supersedes any other
Hypothetical 5 choice of law agreement previously entered
into by Dealer A and Bank A. If Dealer A’s
TREASURY jurisdiction has not adopted Revised Article
8, the applicable law would be the law of
Dealer A’s jurisdiction as it would be amend-
ed by Revised Article 8.
[61 FR 43631, Aug. 23, 1996, as amended at 62
FR 43284, Aug. 13, 1997; 63 FR 69191, Dec. 16,
18 In certain limited circumstances, a Fed- 1998]
eral Reserve Bank may enter into an agree-
ment under which it agrees to record on its
books an interest in Participant’s book-
PART 358—REGULATIONS GOV-
entry securities in favor of a non-Partici- ERNING BOOK-ENTRY CONVER-
pant, such as a governmental entity. Under SION OF BEARER CORPORA AND
these circumstances, the non-Participant DETACHED BEARER COUPONS
would have a perfected security interest with
priority over other claimants (other than the Sec.
United States under § 357.12(b)). It should be 358.0 What does this part cover?
noted that, as set forth in § 357.12(c)(1), there 358.1 What special terms apply to this part?
is no requirement that either the United 358.2 What regulations cover these securi-
States or a Federal Reserve Bank agree to ties?
creation and perfection of a security interest 358.3 Are there any bearer corpora or de-
in this way, except as provided in tached bearer coupons that are not eligi-
§ 357.12(c)(1). ble for conversion?
445
§ 358.0 31 CFR Ch. II (7–1–11 Edition)
358.4 Which bearer corpora or detached ‘‘Agreements to the Terms and Condi-
bearer coupons are eligible for conver- tions Governing CUBES’’ signed by de-
sion to transferable BECCS or CUBES se- pository institutions that previously
curities?
358.5 Which bearer corpora or detached
participated in the CUBES program.
bearer coupons are eligible for conver- (2) Depository institutions that sub-
sion to non-transferable BECCS or mit bearer corpora and detached bearer
CUBES securities? coupons are deemed to agree to the
358.6 What is the procedure for converting terms and conditions in this part and
bearer corpora and detached bearer cou- any other requirements we may pre-
pons to book-entry? scribe.
358.7 Where do I send my bearer corpora and
detached bearer coupons to be converted? § 358.1 What special terms apply to
358.8 Are there fees for the conversion of
this part?
bearer corpora or detached bearer cou-
pons? Bearer security means a definitive se-
358.9 Who is responsible for the cost and curity payable to the bearer on its face
risks associated with the shipment of se- at maturity or when called for redemp-
curities? tion before maturity in accordance
358.10 How are amounts of less than one dol-
lar credited? with its terms. Ownership of a bearer
358.11 What is required to establish the au- security is not recorded. Title to the
thority of a depository institution to re- security may pass by delivery without
quest conversion? endorsement or notice. The only re-
358.12 What is Treasury’s liability if the de- maining unmatured bearer securities
pository institution does not have au- are bearer bonds.
thority to convert securities? BECCS means the Treasury’s Bearer
358.13 What is Treasury’s liability if the de-
pository institution incurs a loss because
Corpora Conversion System.
it does not follow required procedures? BECCS security means a United
358.14 What happens when securities are ac- States Treasury bearer security con-
cepted for conversion? verted to book-entry form and held in
358.15 What happens if securities are ad- BECCS.
justed? Callable means a United States Treas-
358.16 Are BECCS and CUBES accounts ury security subject to call before ma-
maintained separately from the STRIPS
turity.
program?
358.17 Can BECCS and CUBES securities be Callable Coupons means the coupons
reconstituted to physical form? associated with a callable security that
358.18 What limitations exist on liability? are due after the date the security is
358.19 Who is responsible for any loss result- subject to call.
ing from the conversion of a bearer cor- Conversion, as used in this part,
pus missing callable coupons? means a change in the form of a secu-
358.20 Can these regulations be waived?
rity from definitive form to book-entry
358.21 Can these regulations be amended?
form.
AUTHORITY: 12 U.S.C. 391, 31 U.S.C. Ch. 31. Corpus (plural corpora) means the
SOURCE: 65 FR 65701, Nov. 1, 2000, unless principal portion of a United States
otherwise noted. Treasury bearer security.
Coupon means a definitive bearer in-
§ 358.0 What does this part cover? terest instrument associated with a
(a) This part applies to the conver- United States Treasury bearer secu-
sion to book-entry of United States rity.
Treasury bearer corpora and detached CUBES means the Treasury’s Coupon
bearer coupons. Under Book-Entry Safekeeping pro-
(b) These instruments are accepted gram.
from depository institutions for con- CUBES security means a definitive
version under the Bearer Corpora Con- coupon detached from a United States
version System (BECCS) and Coupons Treasury security and held in CUBES.
Under Book Entry Safekeeping Definitive security means a security
(CUBES) programs. held in paper form.
(1) For coupons converted after No- Depository institution means:
vember 1, 2000, these regulations super- (1) Any insured bank, mutual savings
sede the terms and conditions gov- bank, or savings bank as defined in 12
erning CUBES set forth in the written U.S.C. 1813, or any institution eligible
446
to become an insured bank under 12 § 358.4 Which bearer corpora or de-

U.S.C. 1815; tached bearer coupons are eligible
(2) Any insured credit union as de- for conversion to transferable
fined in 12 U.S.C. 1752, or any credit BECCS or CUBES securities?
union eligible to become an insured (a) For a callable corpus to be eligi-
credit union under 12 U.S.C. 1781; ble for conversion to a transferable
(3) Any member as defined in 12 BECCS security, all associated callable
U.S.C. 1422; and
coupons must be submitted with the
(4) Any savings association as defined
corpus. These callable coupons will be
in 12 U.S.C. that is an insured deposi-
linked with the corpus within BECCS
tory institution as defined in the Fed-
eral Deposit Insurance Act, 12 U.S.C. when converted. Once the coupons are
1811 et seq., or is eligible to become an linked to the corpus, they may not be
insured depository institution under transferred separately.
that Act. (b) A corpus that is not subject to
Non-callable means a United States call will be converted to a transferable
Treasury bearer security not subject to BECCS security.
call before maturity. (c) Non-callable coupons will be con-
Non-callable coupons means coupons verted to transferable CUBES securi-
associated with a non-callable bearer ties.
security or coupons associated with a
callable bearer security that are due on § 358.5 Which bearer corpora or de-
or before the date on which the callable tached bearer coupons are eligible
bearer security is subject to call. for conversion to non-transferable
Non-transferable means the ownership BECCS or CUBES securities?
of a security held in BECCS or CUBES If all of the callable coupons associ-
may not be transferred. See § 358.5. ated with the corpus are not submitted
Transferable means the ownership of a with the corpus, the corpus will be con-
security held in BECCS or CUBES may verted to a non-transferable BECCS se-
be transferred. See § 358.4 of this part. curity. Any remaining callable coupons
We (or ‘‘us’’) refers to the Secretary submitted with the corpus will be con-
of the Treasury and the Secretary’s verted to individual non-transferable
delegates at the Treasury Department CUBES securities.
and the Bureau of the Public Debt. The
term also extends to any fiscal or fi- § 358.6 What is the procedure for con-
nancial agent we designate to act on verting bearer corpora and de-
behalf of the United States. tached bearer coupons to book-
entry?
§ 358.2 What regulations cover these
securities? Bearer corpora and detached bearer
coupons must be submitted in accord-
BECCS and CUBES securities are
ance with our procedures. They must
deemed to be securities for the pur-
be accompanied by an approved form
poses of 31 CFR part 357, subparts A, B,
and D, and are governed by that part. executed by an authorized officer of the
Notwithstanding the provisions of 31 submitting depository institution.
CFR part 357, certain BECCS and Until we verify the submission, the
CUBES securities are non-transferable. bearer corpora and detached bearer
See § 358.5. coupons are subject to rejection or ad-
justment.
§ 358.3 Are there any bearer corpora
or detached bearer coupons that § 358.7 Where do I send my bearer
are not eligible for conversion? corpora and detached bearer cou-
Bearer corpora and detached bearer pons to be converted?
coupons will not be accepted if they are Send bearer corpora and detached
submitted: bearer coupons to be converted to: Bu-
(a) Within 30 days of their maturity reau of the Public Debt, Division of
date; or Customer Service, P. O. Box 426, Par-
(b) If the call provision has been in- kersburg, WV 26106–0426.
voked, within 30 days of their call date.
447
§ 358.8 31 CFR Ch. II (7–1–11 Edition)
§ 358.8 Are there fees for the conver- other actions in respect to book-entry
sion of bearer corpora or detached accounts in BECCS and CUBES.
bearer coupons?
We do not charge fees for the conver- § 358.13 What is Treasury’s liability if
sion of bearer corpora or detached the depository institution incurs a
loss because it does not follow re-
bearer coupons to BECCS or CUBES se- quired procedures?
curities.
We are not liable for any loss in-
§ 358.9 Who is responsible for the cost curred by the depository institution as
and risks associated with the ship- a result of its failure to properly follow
ment of securities? our procedures.
The following guidelines apply to the
transportation of bearer corpora and § 358.14 What happens when securities
detached bearer coupons: are accepted for conversion?
(a) Shipment from the depository in- (a) After processing and initial
stitution is at the risk and expense of verification, we will transfer the secu-
the depository institution; rities accepted to the depository insti-
(b) Shipment between our designated tution’s book-entry account, estab-
agent and the Department, if required, lishing a securities entitlement in
is at our risk and expense; and TRADES according to 31 CFR part 357
(c) Shipment of securities that are
subpart B.
returned to the depository institution
is at the risk and expense of the deposi- (b) We will do the final verification
tory institution. within twenty (20) business days of ini-
tial receipt of the bearer corpora and
§ 358.10 How are amounts of less than detached bearer coupons.
one dollar credited? (c) If at any time after this twenty
Only full dollar amounts can be held (20) day period we determine that the
in CUBES; principal amounts that in- security was improperly credited to the
clude cents cannot be held in CUBES. BECCS or CUBES account of the depos-
Upon the conversion of coupons to itory institution, such as in the case of
CUBES, amounts of less than one dol- a previously undetected, counterfeit
lar in aggregate per CUBES CUSIP will security, we reserve the right to adjust
not be credited to the account of the the BECCS or CUBES account.
depository institution.
§ 358.15 What happens if securities are
Example: A depository institution submits adjusted?
five coupons with face amount of $346.88
each, and a total dollar amount of $1,734.40. (a) If we make an adjustment to all
Upon conversion of these coupons to CUBES, or part of the submitted securities, we
only $1,734.00 will be credited to the deposi- will instruct the depository institution
tory institution’s account. to transfer BECCS or CUBES securities
§ 358.11 What is required to establish of the same payment date and face
the authority of a depository insti- amount from the depository institu-
tution to request conversion? tion’s account to an account that we
designate.
By submitting bearer corpora and de-
tached bearer coupons for conversion (b) If no such BECCS or CUBES secu-
to BECCS and CUBES securities, a de- rities exist in the depository institu-
pository institution represents that it tion’s account, we will instruct the de-
has the authority to request the con- pository institution as to how the ad-
version. justment will be made.
(c) If the depository institution fails
§ 358.12 What is Treasury’s liability if to comply with our instructions within
the depository institution does not five (5) business days of receipt of the
have authority to convert securi- instructions, we reserve the right to
ties? debit the master account of the deposi-
We are not liable if the depository in- tory institution for the face value of
stitution has no authority to convert the adjusted bearer corpora and de-
the bearer corpora and detached bearer tached bearer coupons. By the submis-
coupons to book-entry form or to take sion of the bearer corpora and detached
448
bearer coupons, the depository institu- United States or to relieve any person
tion is deemed to agree to this debit. of unnecessary hardship, if such action
is not inconsistent with law, does not
§ 358.16 Are BECCS and CUBES ac- impair existing rights, and does not
counts maintained separately from subject the United States to any sub-
the STRIPS program?
stantial expense or liability.
BECCS and CUBES accounts are
maintained separately from accounts § 358.21 Can these regulations be
maintained in Treasury’s STRIPS amended?
(Separate Trading of Registered Inter- We may at any time supplement,
est and Principal of Securities) pro- amend, or revise the regulations in this
gram. part.
§ 358.17 Can BECCS and CUBES secu-
rities be reconstituted to physical PART 359—OFFERING OF UNITED
form? STATES SAVINGS BONDS, SERIES I
After bearer corpora and detached
bearer coupons have been converted to Subpart A—General Information
book-entry form, reconversion to phys- Sec.
ical form is prohibited. The reconstitu- 359.0 What does this part cover?
tion of a BECCS security with CUBES 359.1 What regulations govern Series I sav-
securities or any combination of Treas- ings bonds?
ury obligations is prohibited. 359.2 [Reserved]
§ 358.18 What limitations exist on li- to understand this part?
ability? 359.4 In what form are Series I savings
bonds issued?
(a) Except as otherwise provided by 359.5 What is the maturity period of a Se-
regulation, circular, or written agree- ries I savings bonds?
ment, any fiscal agent designated to 359.6 When may I redeem my Series I bond?
act on our behalf is liable for its action 359.7 If I redeem a Series I savings bonds be-
or omission only if it failed to exercise fore five years after the issue date, is
ordinary care. there an interest penalty?
359.8 How does interest accrue on Series I
(b) We do not assume any responsi- savings bonds?
bility to any party except the sending 359.9 When are interest rates for Series I
and receiving depository institutions savings bonds announced?
involved in a BECCS or CUBES trans- 359.10 What is the fixed rate of return?
action. 359.11 What is the semiannual inflation
(c) We do not assume any responsi- rate?
bility in connection with a BECCS or 359.12 What happens in deflationary condi-
CUBES transaction for the insolvency, tions?
359.13 What are composite rates?
neglect, misconduct, mistake, or de- 359.14 How are composite rates determined?
fault of another bank or person, includ- 359.15 When is the composite rate applied to
ing the immediate participants. Series I savings bonds?
359.16 When does interest accrue on Series I
§ 358.19 Who is responsible for any loss savings bonds?
resulting from the conversion of a 359.17 When is interest payable on Series I
bearer corpus missing callable cou- savings bonds?
pons? 359.18 Is the determination of the Secretary
The submitting depository institu- on rates and values final?
359.19 How is interest calculated?
tion shall indemnify the United States 359.20–359.24 [Reserved]
against any loss resulting from the
conversion of a bearer corpus that is Subpart B—Definitive Series I Savings
missing one or more associated call- Bonds
able coupons.
359.25 What are the denominations and
§ 358.20 Can these regulations be prices of definitive Series I savings
waived? bonds?
359.26 When are definitive Series I savings
We reserve the right to waive or mod- bonds validly issued?
ify any provision of the regulations in 359.27 What is the issue date of a definitive
this part for the convenience of the Series I savings bonds?
449
§ 359.0 31 CFR Ch. II (7–1–11 Edition)
359.28 Are taxpayer identification numbers Subpart D—Miscellaneous Provisions
(TINs) required for the registration of de-
finitive Series I savings bonds? 359.65 [Reserved]
359.29 What amount of definitive Series I 359.66 Is the Education Savings Bonds Pro-
savings bonds may I purchase per year? gram available for Series I savings
359.30 Are definitive Series I savings bonds bonds?
purchased in the name of an individual 359.67 Does Public Debt prohibit the
computed separately from bonds pur- issuance of Series I savings bonds in a
chased in a fiduciary capacity? chain letter scheme?
359.31 What definitive Series I savings bonds 359.68 May Public Debt issue Series I sav-
are included in the computation? ings bonds only in book-entry form?
359.32 What definitive Series I savings bonds 359.69 Does Public Debt make any reserva-
are excluded from the computation? tions as to issue of Series I savings
bonds?
359.33 What happens if I purchase definitive
359.70 May Public Debt waive any provision
Series I savings bonds in excess of the
in this part?
maximum amount?
359.71 What is the role of Federal Reserve
359.34 May I purchase definitive Series I
Banks and Branches?
savings bonds over-the-counter? 359.72 May the United States supplement or
359.35 May I purchase definitive Series I amend the offering of Series I savings
savings bonds through a payroll savings bonds?
plan?
359.36 May I purchase definitive Series I APPENDIX A TO PART 359—REDEMPTION VALUE
CALCULATIONS
savings bonds through employee thrift,
APPENDIX B TO PART 359—COMPOSITE SEMI-
savings, vacation, and similar plans?
ANNUAL RATE PERIOD TABLE
359.37 How are definitive Series I savings
APPENDIX C TO PART 359—INVESTMENT CON-
bonds delivered?
SIDERATIONS
359.38 How is payment made when definitive APPENDIX D TO PART 359—TAX CONSIDER-
Series I savings bonds are redeemed? ATIONS
359.39 How are redemption values calculated
for definitive Series I savings bonds? AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 31
359.40 How can I find out what my definitive U.S.C. 3105.
Series I savings bonds are worth? SOURCE: 67 FR 64278, Oct. 17, 2002, unless
359.41–359.44 [Reserved] otherwise noted.
Subpart C—Book-Entry Series I Savings

Bonds Subpart A—General Information
359.45 How are book-entry Series I savings § 359.0 What does this part cover?
bonds purchased and held? This part is the offering of United
359.46 What are the denominations and States Savings Bonds of Series I (re-
prices of book-entry Series I savings
bonds?
ferred to as Series I bonds or bonds) for
359.47 How is payment made for purchases sale to the people of the United States
of book-entry Series I savings bonds? by the Secretary of the Treasury (Sec-
359.48 How are redemption payments made retary). This offer was effective Sep-
for my redeemed book-entry Series I sav- tember 1, 1998, and will continue until
ings bonds? terminated by the Secretary.
359.49 What is the issue date of a book-entry
Series I savings bonds? § 359.1 What regulations govern Series
359.50 What amount of book-entry Series I I savings bonds?
savings bonds may I purchase per year?
359.51 What book-entry Series I savings
(a) The regulations in 31 CFR part 360
bonds are included in the computation? apply to definitive (paper) Series I sav-
359.52 What happens if any person purchases ings bonds that have not been con-
book-entry Series I savings bonds in ex- verted to book-entry bonds through
cess of the maximum amount? New Treasury Direct.
359.53 Are taxpayer identification numbers (b) The regulations in 31 CFR part 363
(TINs) required for the registration of apply to:
book-entry Series I savings bonds? (1) book-entry Series I savings bonds
359.54 When is a book-entry Series I savings that were originally issued as book-
bonds validly issued?
359.55 How are redemption values calculated
entry bonds in New Treasury Direct;
for book-entry Series I savings bonds? and
359.56 How can I find out what my book- (2) definitive Series I savings bonds
entry Series I savings bonds are worth? that have been converted to book-entry
359.57–359.64 [Reserved] bonds through New Treasury Direct.
450
(c) We expressly disclaim any rep- 123–45–6789 or Joseph Doe.’’ In this ex-
resentations or warranties regarding ample, John Doe and Joseph Doe are
Series I savings bonds that in any way coowners.
conflict with these regulations and CPI-U, or U.S. City Average All Items
other applicable law. Consumer Price Index for All Urban Con-
[67 FR 64278, Oct. 17, 2002, as amended at 70 sumers (non seasonally adjusted) is a
FR 14942, Mar. 23, 2005] monthly index of the prices paid by
consumers for consumer goods and
§ 359.2 [Reserved] services, maintained by the Bureau of
Labor Statistics of the U.S. Depart-
§ 359.3 What special terms do I need to ment of Labor.
know to understand this part? Definitive bond means a Series I sav-
Accrual date is the first day of any ings bonds issued in paper form.
month on which earnings on a Series I Deflation means a decrease in the
bond accrue. The redemption value of a CPI-U from one month to another.
bond does not change between these ac- Face amount refers to the amount in-
crual dates. scribed on the front of a definitive Se-
Automated Clearing House (ACH) ries I savings bonds.
means a funds transfer system gov- Fiduciary means the court-appointed
erned by the Rules of the National or otherwise qualified person, regard-
Automated Clearing House Association less of title, who is legally authorized
(NACHA). NACHA provides for the to act for another.
interbank clearing of electronic entries Fixed rate or fixed rate of return is a
for participating financial institutions. component of the composite annual
Bank account means your account at rate for a Series I savings bonds that is
a United States depository financial in- established by the Secretary of the
stitution (whether a bank or other fi- Treasury for the life of the bond.
nancial institution) to which you have Individual means a natural person.
directed that ACH debits and payments Individual does not mean an organiza-
be made. tion, representative, or fiduciary.
Beneficiary refers to the second indi-
Inflation means an increase in the
vidual named in the registration of a
CPI-U from one month to another.
security held in definitive form reg-
istered ‘‘John Doe SSN 123–45–6789 POD Inscription means the information
(payable on death to) Joseph Doe.’’ In that is printed on the face of the bond.
the New Treasury Direct system, bene- Interest, as used in this part, is the
ficiary refers to the second individual difference between the principal
named in the registration of a security amount and the redemption value of
registered ‘‘John Doe SSN 123–45–6789 the bond.
POD (payable on death to) Joseph Doe Issue date is the first day of the
SSN 987–65–4321.’’ In these examples, month in which an authorized issuing
Joseph Doe is the beneficiary. agent receives payment of the issue
Book-entry bond means a Series I sav- price of the bond.
ings bonds maintained by Treasury Issuing agent means an organization
solely as a computer record. that has been qualified under part 317.
Composite annual rate means an an- New Treasury Direct system (New
nual interest rate that combines an an- Treasury Direct) is an online account
nual fixed rate of return and a semi- system in which you may hold and con-
annual inflation rate. duct transactions in eligible book-
Converted bond means a savings bond entry Treasury securities.
originally issued as a definitive bond Owner is either a single owner, the
that has been surrendered to us and first individual named in the registra-
converted to a book-entry savings bond tion of a bond held in the owner with
to be maintained by Treasury solely as beneficiary form of registration, or the
a computer record. primary owner of a book-entry bond
Coowner means either the first or the held in the primary owner with sec-
second individual named in the reg- ondary owner form of registration.
istration of a definitive Series I sav- Par means the principal amount of a
ings bonds registered ‘‘John Doe SSN Series I savings bond; for definitive
451
§ 359.4 31 CFR Ch. II (7–1–11 Edition)
bonds, par is the same as the face owner are inscribed on the face of the
amount. bond.
Paying agent means a financial insti- Secondary owner means the second in-
tution that has been qualified under dividual named in the registration of a
part 321. book-entry bond held in New Treasury
Person means an entity including an Direct registered ‘‘John Doe SSN 123–
individual, trust, estate, corporation, 45–6789 with Joseph Doe SSN 987–65–
government entity, association, part- 4321.’’ In this example, Joseph Doe is
nership, and any other similar organi- the secondary owner.
zation. Person does not mean a Federal Semiannual inflation rate means a
Reserve Bank. component of the composite annual
Primary owner means the first indi- rate that is based on the six-month
vidual named in the registration of a percentage change in the CPI-U.
book-entry bond held in New Treasury Semiannual rate periods are the six-
Direct registered ‘‘John Doe SSN 123– month periods beginning on the date of
45–6789 with Joseph Doe SSN 987–65– issue and on each semiannual anniver-
4321.’’ In this example, John Doe is the sary of the date of issue to maturity.
primary owner. Series I savings bond means a savings
Principal amount means the amount bonds, whether definitive or book-
of the original investment. Principal entry, that is purchased at par and
amount does not include any interest pays interest based on a formula that
earned. incorporates both an annual fixed rate
Redemption of a book-entry Series I sav- and a semiannual inflation rate.
ings bonds refers to payment of prin- Single owner means the person named
cipal and accrued interest on the bond in the registration of a savings bonds
at final maturity, or, at the option of without a coowner, beneficiary or sec-
the owner, prior to final maturity. The ondary owner.
owner of a book-entry savings bonds Taxpayer identification number (TIN)
held in New Treasury Direct may re- means the identifying number required
deem all principal and interest or a on tax returns and other documents
portion of the principal and the propor- submitted to the Internal Revenue
tionate amount of interest. Service; that is, an individual’s social
Redemption of a definitive Series I sav- security account number (SSN) or an
ings bonds refers to the payment of employer identification number (EIN).
principal and accrued interest when A SSN is composed of nine digits sepa-
the owner presents the bond for pay- rated by two hyphens, for example, 123–
ment. 45–6789. An EIN is composed of nine
Redemption value means principal digits separated by one hyphen, for ex-
plus accrued interest of a Series I sav- ample, 12–3456789. The hyphens are an
ings bonds, as of the date of redemp- essential part of the numbers.
tion. In the case of book-entry Series I We, us, or our refers to the agency,
savings bonds, it also refers to a por- the Bureau of the Public Debt. The
tion of the principal amount plus a pro- term extends to the Secretary of the
portionate amount of accrued interest Treasury and the Secretary’s delegates
of a bond, as of the date of redemption. at the Treasury Department and Bu-
Registration means that the names of reau of the Public Debt. The term also
all persons named on the bond and the extends to any fiscal or financial agent
taxpayer identification number (TIN) we designate to act on behalf of the
of the owner, first-named coowner, or United States.
purchaser of a gift bond are maintained You or your refers to an owner of a
on our records. Series I savings bonds.
Registration of a book-entry Series I [67 FR 64278, Oct. 17, 2002, as amended at 70
savings bonds means that the name and FR 14942, Mar. 23, 2005; 71 FR 46857, Aug. 15,
Taxpayer Identification Number (TIN) 2006]
of all registrants are maintained on
our records for a book-entry bond. § 359.4 In what form are Series I sav-
Registration of a definitive Series I savings bonds issued?
ings bonds means that the name and Series I savings bonds are issued in
TIN of the owner or first-named co- either book-entry or definitive form.
452
§ 359.5 What is the maturity period of § 359.9 When are interest rates for Se-
a Series I savings bonds? ries I savings bonds announced?
Series I savings bonds have a total (a) The Secretary will furnish fixed
maturity period of 30 years from the rates, semiannual inflation rates, and
issue date, consisting of an original composite rates for Series I savings
maturity period of 20 years and an ex- bonds in announcements published
tension period of 10 years. each May 1 and November 1.
(b) If the regularly scheduled date for
§ 359.6 When may I redeem my Series I the announcement is a day when the
bond? Treasury is not open for business, then
(a) Bonds issued on December 1, 2002, or the Secretary will make the announce-
earlier. You may redeem your Series I ment on the next business day. How-
savings bond issued on January 1, 2003, ever, the effective date of the rates re-
or earlier, at any time after six months mains the first day of the month of the
from its issue date. announcement.
(b) Bonds issued on February 1, 2003, (c) The Secretary may announce
or thereafter. You may redeem your rates at any other time.
Series I savings bond issued on Feb-
ruary 1, 2003, or thereafter, at any time § 359.10 What is the fixed rate of re-
turn?
after 12 months from its issue date.
The Secretary, or the Secretary’s
designee, determines the fixed rate of
FR 7427, Feb. 14, 2003]
return. The fixed rate is established for
§ 359.7 If I redeem a Series I savings the life of the bond. The fixed rate will
bonds before five years after the always be greater than or equal to
issue date, is there an interest pen- 0.00%. 1 The most recently announced
alty? fixed rate is only for bonds purchased
during the six months following the an-
If you redeem a bond less than five
nouncement, or for any other period of
years after the issue date, we will re-
time announced by the Secretary.
duce the overall earning period by
three months. For example, if you re- [73 FR 65543, Nov. 4, 1008]
deem a bond issued January 1, 2002,
nine months later on October 1, 2002, § 359.11 What is the semiannual infla-
the redemption value will be deter- tion rate?
mined by applying the value calcula- The index used to determine the
tion procedures and composite rate for semiannual inflation rate is the non-
that bond as if the redemption date seasonally adjusted CPI-U (the Con-
were three months earlier (July 1, sumer Price Index for All Urban Con-
2002). However, we will not reduce the sumers for the U.S. City Average for
redemption value of a bond subject to All Items, 1982–84=100) published by the
the three-month interest penalty below Bureau of Labor Statistics of the U.S.
the issue price (par). This penalty does Department of Labor. (For further in-
not apply to bonds redeemed five years formation on CPI-U considerations, see
or more after the issue date. appendix C to part 359 at section 1.)
The semiannual inflation rate reflects
§ 359.8 How does interest accrue on the percentage change, if any, in the
Series I savings bonds? CPI-U over a six-month period. We an-
A bond accrues interest based on nounce this rate twice a year, in May
both a fixed rate of return and a semi-
1 However, the fixed rate is not a guaran-
annual inflation rate. A single, annual
rate called the composite rate reflects teed minimum rate. The composite rate is
composed of both the fixed rate and a semi-
the combined effects of the fixed rate
annual inflation rate, which could possibly
and the semiannual inflation rate. For be less than the fixed rate or negative in de-
more information, see appendix B of flationary situations. In all cases, however,
part 359. the composite rate will always be greater
than or equal to 0.00%.
453
§ 359.12 31 CFR Ch. II (7–1–11 Edition)
and November. The semiannual infla- § 359.15 When is the composite rate ap-
tion rate we announced in May 2002 re- plied to Series I savings bonds?
flects the percentage change between The most recently announced com-
the CPI-U figures from the preceding posite rate applies to a bond during its
March 2002 and September 2001. The next semiannual rate period. A bond’s
rate of change over the six-month pe- semiannual rate periods are consecu-
riod, if any, will be expressed as a per- tive six-month periods, the first of
centage, rounded to the nearest one- which begins with the bond’s issue
hundredth of one percent. More specifi- date. This means that there can be a
cally, the semiannual inflation rate delay of several months from the time
will be determined by the following of a composite rate announcement to
formula (the resulting rate will be the time that rate determines interest
rounded to the nearest one-hundredth earnings for a bond. For example, if
of one percent): you purchased a bond in April, its
Semiannual inflation rate = (CPI ¥ semiannual rate periods begin every
UCurrent ¥ CPI ¥ UPrior) ÷ CPI ¥UPrior April and October. At the beginning of
the semiannual rate period in April,
§ 359.12 What happens in deflationary the most recently announced com-
conditions? posite rate would have been the rate we
In certain deflationary situations, announced the previous November.
the semiannual inflation rate may be This rate will determine interest earn-
negative. Negative semiannual infla- ings for your bond for the next six
tion rates will be used in the same way months, through the end of September.
as positive semiannual inflation rates. At the beginning of the semiannual
However, if the semiannual inflation rate period in October, the most re-
rate is negative to the extent that it cently announced composite rate would
completely offsets the fixed rate of re- be the rate announced the previous
turn, the redemption value of a Series May. This rate will determine interest
I bond for any particular month will earnings for your bond through the end
not be less than the value for the pre- of the following March. However, if you
ceding month. purchased a bond instead in May, its
semiannual rate periods begin in May
§ 359.13 What are composite rates? and November. Therefore, the com-
Composite rates are single, annual posite rates announced in May and No-
interest rates that reflect the com- vember will apply immediately to this
bined effects of the fixed rate and the bond. (See appendix C to part 359 at § 2
semiannual inflation rate. The com- for a discussion of rate lag.)
posite rate will always be greater than § 359.16 When does interest accrue on
or equal to 0.00%. Series I savings bonds?
[73 FR 65544, Nov. 4, 1008] (a) Interest, if any, accrues on the
first day of each month; that is, we add
§ 359.14 How are composite rates de- the interest earned on a bond during
termined?
any given month to its value at the be-
Composite rates are set according to ginning of the following month.
the following formula (See appendix A (b) The accrued interest compounds
to part 359 for examples of calculations semiannually.
involving composite interest rates.):
Composite rate = {(Fixed rate ÷ 2) + § 359.17 When is interest payable on
Series I savings bonds?
Semiannual inflation rate + [Semi-
annual inflation rate × (Fixed rate ÷ Interest earnings are payable upon
2)]} × 2. 2 redemption.
2 Example for I bonds issued May 2002–Octo- Composite rate = [0.0100 + 0.0028 + 0.000028]
ber 2002: ×2
Fixed rate = 2.00% Composite rate = 0.012828 × 2
Inflation rate = 0.28% Composite rate = 0.025656
Composite rate = [0.0200 ÷ 2 + 0.0028 + Composite rate = 0.0257 (rounded)
(0.0028 × 0.0200 ÷ 2)] ×2 Composite rate = 2.57% (rounded)
454
§ 359.18 Is the determination of the § 359.27 What is the issue date of a de-
Secretary on rates and values final? finitive Series I savings bonds?
The Secretary’s determination of The issue date of a definitive bond is
fixed rates of return, semiannual infla- the first day of the month in which an
tion rates, composite rates, and sav- authorized issuing agent receives pay-
ings bonds redemption values is final ment of the issue price.
and conclusive.
§ 359.28 Are taxpayer identification
§ 359.19 How is interest calculated? numbers (TINs) required for the
registration of definitive Series I
We base all calculations of interest savings bonds?
on a $25 unit. We use the value of this The registration of a definitive Se-
unit to determine the value of bonds in ries I savings bond must include the
higher denominations. The effect of TIN of the owner or first-named co-
rounding off the value of the $25 unit owner. If the bond is being purchased
increases at higher denominations. as a gift or award and the owner’s TIN
This can work to your slight advantage is not known, the TIN of the purchaser
or disadvantage, depending on whether must be included in the registration of
we round the value up or down. 3 the bond.
§§ 359.20–359.24 [Reserved] [71 FR 46857, Aug. 15, 2006]
§ 359.29 What amount of definitive Se-

Subpart B—Definitive Series I ries I savings bonds may I purchase
Savings Bonds per year?
The principal amount of definitive
§ 359.25 What are the denominations
and prices of definitive Series I sav- Series I savings bonds that may be pur-
ings bonds? chased in the name and TIN of any per-
son in any calendar year is limited to
Definitive Series I saving bonds are $5,000.
issued in denominations of $50, $75,
$100, $200, $500, $1,000, and $5,000. These [72 FR 67853, Dec. 3, 2007]
bonds are sold at par; that is, the pur-
chase price is the same as the denomi- § 359.30 Are definitive Series I savings
bonds purchased in the name of an
nation (face value). individual computed separately
[67 FR 64278, Oct. 17, 2002, as amended at 72 from bonds purchased in a fidu-
FR 67853, Dec. 3, 2007] ciary capacity?
We compute the purchases of bonds
§ 359.26 When are definitive Series I in the name of any person in an indi-
savings bonds validly issued? vidual capacity separately from pur-
A definitive bond is validly issued chases in a fiduciary capacity (for in-
when it is registered as provided in stance, as representative for the estate
part 360, and when it bears an issue of an individual).
date and the validation indicia of an
authorized issuing agent. § 359.31 What definitive Series I sav-
ings bonds are included in the com-
putation?
3 For example: A composite rate of 2.57%
will result in a newly purchased $25 unit in-

In computing the purchases for each
creasing in value after six months to $25.32, person, we include the following out-
when rounded to the nearest cent. Thus, a standing definitive bonds purchased in
$5,000 bond purchased at the same time as that calendar year:
the $25 unit will be worth $5,064 after six (a) All bonds registered in the name
months ([$5,000 divided by $25] × $25.32 = of and bearing the taxpayer identifica-
$5,064.) In contrast, if it applied directly to a tion number (TIN) of that person alone
$5,000 bond, the rate would render a value of
or as co-owner;
$5,064.25 after six months, a difference of 25
cents. (This example does not include any (b) All bonds registered in the name
discussion of the three-month interest pen- of the representative of the estate of
alty that applies if you redeem a bond less that person and bearing that person’s
than five years after its issue date.) TIN; and
455
§ 359.32 31 CFR Ch. II (7–1–11 Edition)
(c) All gift bonds registered in the § 359.35 May I purchase definitive Se-
name of that person but bearing the ries I savings bonds through a pay-
TIN of the purchaser. roll savings plan?
Treasury discontinued the issuance
§ 359.32 What definitive Series I sav-
of definitive Series I savings bonds
ings bonds are excluded from the
computation? through a payroll savings plan:
(a) Effective October 1, 2010, for
In computing the purchases for each United States government employees,
person, the following are excluded: and
(a) Bonds on which that person is (b) Effective January 1, 2011, for all
named as beneficiary; other employees.
(b) Bonds to which that person has
become entitled upon the death of the [75 FR 52461, Aug. 26, 2010]
registered owner;
§ 359.36 May I purchase definitive Se-
(c) Bonds to which that person has ries I savings bonds through em-
become entitled by virtue of the termi- ployee thrift, savings, vacation, and
nation of a trust or the occurrence of a similar plans?
similar event; and
You may purchase bonds registered
(d) Bonds that are purchased and re-
in the names of employee plans in au-
deemed within the same calendar year.
thorized denominations through a des-
§ 359.33 What happens if I purchase ignated Federal Reserve Bank, as pro-
definitive Series I savings bonds in vided in part 360 of this chapter.
excess of the maximum amount?
§ 359.37 How are definitive Series I
If you have bonds issued during any savings bonds delivered?
one calendar year in excess of the pre-
scribed maximum amount, we reserve We deliver definitive bonds by mail
the right to take any action we deem to your address. If your address is with-
necessary to adjust the excess. You in the United States, its territories or
should obtain instructions for adjust- possessions, or the Commonwealth of
ment of the excess from the Bureau of Puerto Rico, we will deliver bonds at
the Public Debt, Parkersburg, WV our risk. Bonds delivered elsewhere
26106–1328, or e-mail at will be delivered at your risk; however,
savbonds@bpd.treas.gov. at our discretion, we may require deliv-
ery to an address within the United
§ 359.34 May I purchase definitive Se- States, or refuse delivery to addresses
ries I savings bonds over-the- in countries referred to in part 211 of
counter? this chapter.
You may purchase definitive bonds
§ 359.38 How is payment made when
over-the-counter through any partici- definitive Series I savings bonds
pating issuing agent. To purchase over- are redeemed?
the-counter, you must submit a pur-
chase application, along with payment A financial institution qualified as a
in the amount of the issue price to an paying agent under the provisions of
issuing agent. You may use any means part 321 will pay the current redemp-
of payment acceptable to the issuing tion value of a definitive Series I bond
agent. You may authorize purchases on presented for payment. The bond must
a recurring basis in your application. meet the requirements for payment
The issuing agent bears the burden of specified in part 360. You must estab-
collection and the risk of loss for non- lish your identity and entitlement to
collection or return of the payment. redemption to the satisfaction of the
agent, in accordance with our instruc-
[67 FR 64278, Oct. 17, 2002, as amended at 75 tions and identification guidelines, and
FR 52461, Aug. 26, 2010] must sign and complete the request for
payment.
456
§ 359.39 How are redemption values § 359.41–359.44 [Reserved]

calculated for definitive Series I
savings bonds? Subpart C—Book-Entry Series I
We determine the redemption value Savings Bonds
of a definitive savings bonds for the ac-
crual date (the first day of each month) § 359.45 How are book-entry Series I
by first determining the composite rate savings bonds purchased and held?
as defined in § 359.13. If the result of the Book-entry bonds must be purchased
composite rate calculation is a nega- and held online through your New
tive value, zero will be the assumed Treasury Direct account. We provide
composite rate in the redemption value instructions for opening an account on-
calculation. Redemption values are line at http://www.publicdebt.treas.gov.
calculated using the following formula
§ 359.46 What are the denominations
(For examples of the calculation, see and prices of book-entry Series I
appendix A to part 359): savings bonds?
FV = PV × {[1 + (CR ÷ 2)] (m÷6)} Book-entry bonds are issued in a
Where:
minimum amount of $25, with addi-
tional increments of one cent. Book-
FV (future value) = redemption value on the
entry bonds are sold at par value.
accrual date rounded to the nearest cent
without consideration of penalty. § 359.47 How is payment made for pur-
PV (present value) = redemption value at the chases of book-entry Series I sav-
beginning of the semiannual rate period ings bonds?
calculated without consideration of pen-
alty. For bonds that are older than five You may only purchase book-entry
years, PV will equal the redemption value Series I savings bonds online through
at the start of the semiannual rate period. your New Treasury Direct account.
CR = composite rate converted to decimal You may pay for your securities
form by dividing by 100. through a debit to your designated ac-
m = number of full calendar months elapsed count at a United States depository fi-
during the semiannual rate period. nancial institution, or by applying the
redemption proceeds of a certificate of
§ 359.40 How can I find out what my indebtedness held in your New Treas-
definitive Series I savings bonds ury Direct account.
are worth?
[69 FR 50308, Aug. 16, 2004]
(a) Redemption values. Redemption
values are available for definitive § 359.48 How are redemption payments
bonds in various formats and media. made for my redeemed book-entry
(1) You may determine the redemp- Series I savings bonds?
tion value for definitive bonds on the We will make payments electroni-
Internet at www.savingsbonds.gov. cally by direct deposit, using the ACH
(2) You may download savings bonds method, to your designated account at
calculators from the Internet at a United States depository financial in-
www.savingsbonds.gov. stitution. You may also direct that a
(3) You may obtain paper tables from payment be used to purchase a certifi-
the Bureau of the Public Debt, Par- cate of indebtedness to be held in your
kersburg, West Virginia 26106–1328. We New Treasury Direct account.
reserve the right to cease making [69 FR 50308, Aug. 16, 2004]
paper tables of redemption values
available. § 359.49 What is the issue date of a
(b) Redemption penalty. Redemption book-entry Series I savings bond?
values published in the tables reflect The issue date of a book-entry Series
the three-month interest penalty ap- I savings bond is the first day of the
plied to bonds redeemed prior to five month in which the security posts to
years from the date of issue. the current holdings of the account
owner.
[69 FR 50308, Aug. 16, 2004]
457
§ 359.50 31 CFR Ch. II (7–1–11 Edition)
§ 359.50 What amount of book-entry bonds on the definitive savings bonds

Series I savings bonds may I ac- CRV. To calculate the book-entry val-
quire per year? ues, we use the CRV for the $100 de-
The principal amount of book-entry nomination Series I savings bonds and
Series I savings bonds that you may calculate a CRV prorated to the book-
acquire in your name and TIN in any entry par investment amount for the
calendar year is limited to $5,000. corresponding issue and redemption
dates. Calculated book-entry CRV will
[72 FR 67853, Dec. 3, 2007]
be rounded to the nearest one cent. 4
§ 359.51 What book-entry Series I sav- The formula is as follows (Examples of
ings bonds are included in the com- the calculation are given in appendix A
putation? to part 359.):
(a) We include all bonds that you pur- [Book-entry par investment ÷ 100] ×
chased in that calendar year. [CRV value for $100 bond].
(b) Bonds purchased as gifts or in a [67 FR 64278, Oct. 17, 2002, as amended at 75
fiduciary capacity are not included in FR 52461, Aug. 26, 2010]
the computation for the purchaser.
(c) Bonds transferred or delivered § 359.56 How can I find out what my
from one New Treasury Direct account book-entry Series I savings bonds
to another New Treasury Direct ac- are worth?
count are included in the computation (a) Redemption values. You may ac-
for the recipient, unless you have be- cess redemption values for your book-
come entitled to the transferred bonds entry bonds through your New Treas-
due to the death of the registered ury Direct account.
owner.
(b) Redemption penalty. Redemption
[68 FR 24806, May 8, 2003] values shown in your New Treasury Di-
rect account reflect the three-month
§ 359.52 What happens if any person interest penalty applied to bonds re-
purchases book-entry Series I sav- deemed prior to five years from the
ings bonds in excess of the max-
imum amount? date of issue.
We reserve the right to take any ac- §§ 359.57–359.64 [Reserved]
tion we deem necessary to adjust the
excess, including the right to remove
the excess bonds from your New Treas-
Subpart D—Miscellaneous
ury Direct account and refund the pay- Provisions
ment price to your bank account of § 359.65 [Reserved]
record using the ACH method of pay-
ment. § 359.66 Is the Education Savings
Bonds Program available for Series
§ 359.53 Are taxpayer identification I savings bonds?
numbers (TINs) required for reg-
istration of book-entry Series I sav- You may be able to exclude from in-
ings bonds? come for Federal income tax purposes
The TIN of each person named in the all or part of the interest received on
registration is required to purchase a the redemption of qualified bonds dur-
book-entry bond. ing the year. To qualify for the pro-
gram, you or the co-owner (in the case
§ 359.54 When is a book-entry Series I of definitive savings bonds) must have
savings bonds validly issued? paid qualified higher education ex-
A book-entry bond is validly issued penses during the same year. You also
when it is posted to your New Treasury must have satisfied certain other con-
Direct account. ditions. This exclusion is known as the
Education Savings Bonds Program. In-
§ 359.55 How are redemption values formation about the program can be
calculated for book-entry Series I
savings bonds? 4 Example: Calculated value of $25.044
We base current redemption values rounds to $25.04; calculated value of $25.045
(CRV) for book-entry Series I savings rounds to $25.05.
458
found in Internal Revenue Service Pub- the public interest. Our action in any
lications. (For example, see Publica- such respect is final.
tion 17, ‘‘Your Federal Income Tax,’’
Publication 550, ‘‘Investment Income § 359.70 May Public Debt waive any
and Expenses,’’ and Publication 970, provision in this part?
‘‘Tax Benefits of Higher Education.’’) We may waive or modify any provi-
sion of this part in any particular case
§ 359.67 Does Public Debt prohibit the or class of cases for the convenience of
issuance of Series I savings bonds the United States or in order to relieve
in a chain letter scheme? any person or persons of unnecessary
We do not permit bonds to be issued hardship:
in a chain letter or pyramid scheme. (a) If such action would not be incon-
We authorize an issuing agent to refuse sistent with law or equity;
to issue a bond or accept a purchase (b) If it does not impair any material
order if there is reason to believe that existing rights; and
a purchase is connected with a chain (c) If we are satisfied that such ac-
letter. The agent’s decision is final. tion would not subject the United
States to any substantial expense or li-
§ 359.68 May Public Debt issue Series I ability.
savings bonds only in book-entry
form? § 359.71 What is the role of Federal Re-
We reserve the right to issue bonds serve Banks and Branches?
only in book-entry form. (a) Federal Reserve Banks and
Branches are fiscal agents of the
§ 359.69 Does Public Debt make any United States. They are authorized to
reservations as to issue of Series I perform such services as we may re-
savings bonds? quest of them, in connection with the
We may reject any application for issue, servicing and redemption of Se-
Series I bonds, in whole or in part. We ries I bonds.
may refuse to issue, or permit to be (b) We have currently designated the
issued, any bonds in any case or class following Federal Reserve Offices to
of cases, if we deem the action to be in provide savings bonds services:
Servicing site Reserve district served Geographic area served
Federal Reserve Bank, Buffalo Branch, New York, Boston .................................... Connecticut, Maine, Massachusetts, New
160 Delaware Avenue, Buffalo, NY Hampshire, New Jersey (Northern
14202. half), New York, Rhode Island,
Vermont, Puerto Rico, Virgin Islands.
Federal Reserve Bank, Pittsburgh Cleveland, Philadelphia ........................... Delaware, Kentucky (eastern half), New
Branch, 717 Grant Street, Pittsburgh, Jersey, (southern half), Ohio, Pennsyl-
PA 15219. vania, West Virginia (northern pan-
handle).
Federal Reserve Bank of Richmond, 701 Richmond, Atlanta .................................... Alabama, District of Columbia, Florida,
East Byrd Street, Richmond, VA 23219. Georgia, Louisiana (southern half),
Maryland, Mississippi (southern half),
North Carolina, South Carolina, Ten-
nessee (eastern half), Virginia, West
Virginia (except northern panhandle).
Federal Reserve Bank of Minneapolis, 90 Minneapolis, Chicago ............................... Illinois (northern half), Indiana (northern
Hennepin Avenue, Minneapolis, MN half), Iowa, Michigan, Minnesota, Mon-
55401. tana, North Dakota, South Dakota,
Wisconsin.
Federal Reserve Bank of Kansas City, Dallas, San Francisco, Kansas City, St. Alaska, Arizona, Arkansas, California,
925 Grand Boulevard, Kansas City, Louis. Colorado, Hawaii, Idaho, Illinois
MO 64106. (southern half), Indiana (southern half),
Kansas, Kentucky (western half), Lou-
isiana (northern half), Mississippi
(northern half), Missouri, Nebraska,
Nevada, New Mexico, Oklahoma, Or-
egon, Tennessee (western half),
Texas, Utah, Washington, Wyoming,
Guam.
459
§ 359.72 31 CFR Ch. II (7–1–11 Edition)
§ 359.72 May the United States supple- ings bonds of $34.59, with an issue date of
ment or amend the offering of Se- May, 2001, and a redemption date of Decem-
ries I savings bonds? ber, 2001. The published CRV for a definitive
$100 Series I savings bonds issued May, 2001
We may supplement or amend the and redeemed December, 2001 = $101.96.
terms of this offering of Series I bonds
at any time. Calculation:
[(Book-entry par investment) ÷ (100)] × CRV
APPENDIX A TO PART 359—REDEMPTION value for $100 bond
VALUE CALCULATIONS [(34.59 ÷ 100)] × 101.96
[0.3459] × 101.96
1. What are some general tax considerations? 35.267964
Interest on savings bonds is subject to = $35.27
taxes imposed under the Internal Revenue
Code of 1986, as amended. The bonds are ex- APPENDIX B TO PART 359—COMPOSITE
empt from taxation by any State or political SEMIANNUAL RATE PERIOD TABLE
subdivision of a State, except for estate or
inheritance taxes. (See 31 U.S.C. 3124.) 1. What months make up the composite semi-
annual rate period?
2. What is an example of a book-entry Series I You may use the following table to find
savings bonds redemption value calculation? when a bond’s semiannual rate period begins
Assume a New Treasury Direct par invest- and when we’ll announce the rate that ap-
ment amount in a book-entry Series I sav- plies during each period.
If your Bond has an issue date Then its semiannual rate period We announce the rate that applies during a rate period
of— begins— in—
January ....................................... January 1 ................................... November 1 (of the previous year).

July 1 ......................................... May 1.
February ..................................... February 1 ................................. November 1 (of the previous year).
August 1 .................................... May 1.
March .......................................... March 1 ...................................... November 1 (of the previous year).
September 1 .............................. May 1.
April ............................................. April 1 ........................................ November 1 (of the previous year).
October 1 ................................... May 1.
May ............................................. May 1 ......................................... May 1.
November 1 ............................... November 1.
June ............................................ June 1 ........................................ May 1.
December 1 ............................... November 1.
July ............................................. July 1 ......................................... May 1.
January 1 ................................... November 1 (of the previous year).
August ......................................... August 1 .................................... May 1.
February 1 ................................. November 1 (of the previous year).
September .................................. September 1 .............................. May 1
March 1 ...................................... November 1 (of the previous year).
October ....................................... October 1 ................................... May 1.
April 1 ........................................ November 1 (of the previous year).
November ................................... November 1 ............................... November 1.
May 1 ......................................... May 1.
December ................................... December 1 ............................... November 1.
June 1 ........................................ May 1.
APPENDIX C TO PART 359—INVESTMENT retary, fundamentally altered in a manner

CONSIDERATIONS materially adverse to the interests of an in-
vestor in the security, or, in the judgment of
1. What are some index contingencies? the Secretary, altered by legislation or Exec-
(a) If a previously reported CPI-U is re- utive Order in a manner materially adverse
vised, we will continue to use the previously to the interests of an investor in the secu-
reported CPI-U in calculating redemption rity, Treasury, after consulting with the Bu-
values. reau of Labor Statistics or any successor
(b) If the CPI-U is rebased to a different agency, will substitute an appropriate alter-
year, we will continue to use the CPI-U native index. Treasury will then notify the
based on the base reference period in effect public of the substitute index and how it will
when the security was first issued, as long as be applied. The Secretary’s determinations
that CPI-U continues to be published. in this regard will be final.
(c) If, while an inflation-indexed savings (d) If the CPI-U for a particular month is
bonds is outstanding, the applicable CPI-U is not reported by the last day of the following
discontinued or, in the judgment of the Sec- month, we will announce an index number
460
Fiscal Service, Treasury Pt. 359, App. D
based on the last 12-month change in the APPENDIX D TO PART 359—TAX
CPI-U available. Any calculations of our CONSIDERATIONS
payment obligations on the inflation-indexed
savings bonds that rely on that month’s CPI- 1. What are some general tax considerations?
U will be based on the index number that we General. Interest is subject to all taxes im-
have announced. posed under the Internal Revenue Code of
2. How will inflation lag affect my Series I 1986, as amended. The bonds are also subject
savings bonds? to Federal and State estate, inheritance,
The inflation rate component of investor gift, or other excise taxes. The bonds are ex-
earnings will be determined twice each year. empt from all other taxation by any State or
This rate will be the percentage change in local taxing authority.
the CPI-U for the six months ending each 2. What reporting methods are available for
March and September. The rate will be in- savings bonds?
cluded in the composite rate that is an- (a) Reporting methods. You may use either
nounced each May and November. For Series of the following two methods for reporting
I bonds offered from September 1, 1998, the increase in the redemption value of the
through October 31, 1998, the inflation rate bond for Federal income tax purposes:
component of investor earnings will be the (1) Cash basis method. You may defer re-
percentage change in the CPI-U for the six porting the increase to the year of final ma-
months ending March 31, 1998. This rate will turity, redemption, or other disposition,
be included in the composite rate that is an- whichever is earliest; or
nounced for Series I bonds offered effective (2) Accrual basis method. You may elect to
from September 1, 1998, through October 31, report the increase each year, in which case
1998. In the event the Secretary, or the Sec- the election applies to all Series I bonds that
retary’s designee, announces a composite you then own, those subsequently acquired,
rate at an effective date other than May 1 or and to any other obligations purchased on a
November 1, the announcement will specify discount basis, such as savings bonds of Se-
the period to be used to calculate the semi- ries E or EE.
annual inflation rate. Each composite rate (b) Changing methods. If you use the cash
will be effective for the entirety of the appli- basis method, you may change to the accrual
cable rate period that begins while the rate basis method without obtaining permission
is in effect. Thus, an inflation rate may af- from the Internal Revenue Service. However,
fect interest accruals from 3 to 13 months once you elect to use the accrual basis meth-
from the date that the CPI-U is measured. od in paragraph (a)(2), you may change the
Example 1. The inflation rate determined method of reporting the increase only by fol-
from the CPI-U for the six-month period lowing the specific procedures prescribed by
from October, 2003, through March, 2004, will the Internal Revenue Service for making an
be included in the composite rate announced automatic method change. For further infor-
in May, 2004. For a bond purchased in May mation, you may contact the Internal Rev-
1999, this rate would go into effect imme- enue Service director for your area, or the
diately, since a new semiannual rate period Internal Revenue Service, Washington, DC
for this bond will begin in May, 2004. Series 20224.
I bonds issued in May begin new semiannual 3. What transactions have potential tax con-
rate periods in the months of May and No- sequences?
vember. In this example, the inflation rate The following types of transactions, among
will have its earliest impact in June 2004, others, may have potential tax con-
when interest from May accrues, three sequences:
months after the end of the six-month CPI- (a) A reissue that affects the rights of any
U period that ends in March, 2004. of the persons named on a definitive Series I
Example 2. The May 1, 2004, rate will apply savings bonds may have tax consequences for
similarly to a bond purchased in October the owner.
1999. Series I bonds issued in October begin (b) The transfer of a book-entry Series I
new semiannual rate periods in the months savings bonds from one owner to another
of April and October. Thus, for this bond, the may have tax consequences for the pur-
May 1, 2004, composite rate (which includes chaser.
the inflation rate) will not go into effect (c) The redemption of a book-entry Series
until a new semiannual rate period begins on I savings bonds by the secondary owner may
October 1, 2004. This rate, therefore, will de- have tax consequences for the primary
termine the inflation-indexed portion of each owner.
interest accrual from November, 2004, (d) The purchase of a Series I savings bonds
through April, 2005. In this example, the in- as a gift may have gift tax consequences for
flation rate will have its latest impact in the purchaser.
April 2005, 13 months following the six-
month CPI-U period that ended March 31, [67 FR 64278, Oct. 17, 2002, as amended at 68
2004. FR 24806, May 8, 2003]
461
PART 360—REGULATIONS GOV- 360.38 Payment during lifetime of owner of

beneficiary bond.
ERNING DEFINITIVE UNITED 360.39 Surrender for payment.
STATES SAVINGS BONDS, SERIES 360.40 Special provisions for payment.
I 360.41 Partial redemption.
360.42 Nonreceipt or loss of remittance
Subpart A—General Information issued in payment.
360.43 Effective date of request for payment.
Sec. 360.44 Withdrawal of request for payment.
360.0 Applicability.
360.1 Official agencies. Subpart H—Reissue and Denominational
360.2 Definitions. Exchange
360.3 Converting definitive savings bonds to
book-entry bonds in New Treasury Di- 360.45 General.
rect. 360.46 Effective date of request for reissue.
360.47 Authorized reissue; during lifetime.
Subpart B—Registration 360.48 Restrictions on reissue; denomina-
tional exchange.
360.5 General rules. 360.49 Correction of errors.
360.6 Authorized forms of registration. 360.50 Change of name.
360.7 Chain letters prohibited. 360.51 Requests for reissue.
Subpart C—Limitations on Annual Subpart I—Certifying Officers
Purchases
360.55 Individuals authorized to certify.
360.10 Amounts which may be purchased. 360.56 General instructions and liability.
360.11 Computation of amount. 360.57 When a certifying officer may not
360.12 Disposition of excess. certify.
360.13 Employee plans—Conditions of eligi- 360.58 Forms to be certified.
bility.
Subpart J—Minors, Incompetents, Aged
Subpart D—Limitations on Transfer or Persons, Absentees, et al.
Pledge
360.60 Payment to representative of an es-
360.15 Transfer. tate.
360.16 Pledge. 360.61 Payment after death.
360.62 Payment to minor.
Subpart E—Judicial Proceedings 360.63 Payment to a parent or other person
360.20 General. on behalf of a minor.
360.21 Payment to judgment creditors. 360.64 Payment or reinvestment—voluntary
360.22 Payment or reissue pursuant to di- guardian of an incapacitated person.
vorce. 360.65 Reissue.
360.23 Evidence.
360.24 Payment pursuant to judicial or ad- Subpart K—Deceased Owner, Coowner or
ministrative forfeiture. Beneficiary
Subpart F—Relief for Loss, Theft, Destruc- 360.70 General rules governing entitlement.
360.71 Decedent’s estate.
tion, Mutilation, Defacement, or Non-
360.72 [Reserved]
receipt of Bonds
360.25 General. Subpart L—Fiduciaries
360.26 Application for relief; after receipt of
360.75 Payment or reissue during the exist-
bond.
ence of the fiduciary estate.
360.27 Application for relief; nonreceipt of
360.76 Payment or reissue after termination
bond.
of the fiduciary estate.
360.28 Recovery or receipt of bond before or
after relief is granted.
360.29 Adjudication of claims.
Subpart M—Miscellaneous Provisions
360.90 Waiver of regulations.
Subpart G—General Provisions for 360.91 Additional requirements; bond of in-
Payment demnity.
360.92 Supplements, amendments, or revi-
360.35 Payment (redemption).
sions.
360.36 Payment during life of sole owner.
360.37 Payment during lives of both co- AUTHORITY: 5 U.S.C. 301; 31 U.S.C. 3105 and
owners. 3125.
462
SOURCE: 63 FR 38049, July 14, 1998, unless sponsible for administering the Savings
otherwise noted. Bond Program. Authority to process
transactions has been delegated to Fed-
Subpart A—General Information eral Reserve Banks and Branches listed
in paragraph (b) of this section, as fis-
§ 360.0 Applicability.
cal agents of the United States. The
(a) The regulations in this part apply Federal Reserve Banks and Branches,
to definitive (paper) Series I savings and their authority to process trans-
bonds that have not been converted to actions, as fiscal agents of the United
book-entry bonds through New Treas- States, are subject to change, as deter-
ury Direct.
mined by the Secretary of the Treas-
(b) The regulations in 31 CFR part 363
ury, or his or her designee.
apply to:
(1) book-entry Series I savings bonds (b) Communications concerning
that were originally issued as book- transactions and requests for forms
entry bonds in New Treasury Direct; should be addressed to:
and (1) A Federal Reserve Bank or Branch
(2) definitive Series I savings bonds in the list below; or, the Bureau of the
that have been converted to book-entry Public Debt, 200 Third Street, Parkers-
bonds through New Treasury Direct. burg, WV 26106–1328.
[70 FR 14942, Mar. 23, 2005] (2) The following Federal Reserve Of-
fices have been designated to provide
§ 360.1 Official agencies. savings bond services:
the Department of the Treasury is re-
Servicing office Reserve district served Geographic area served
Federal Reserve Bank, New York, Boston ......... Connecticut, Maine, Massachusetts, New Hampshire, New Jersey,
Buffalo Branch, 160 (northern half), New York, Rhode Island, Vermont, Puerto Rico, Virgin
Delaware Avenue, Buf- Islands.
falo, NY 14202.
Federal Reserve Bank, Cleveland, Philadelphia Delaware, Kentucky (eastern half), New Jersey, (southern half), Ohio,
Pittsburgh Branch, 717 Pennsylvania, West Virginia.
Grant Street, Pitts-
burgh, PA 15219.
Federal Reserve Bank of Richmond, Atlanta ......... Alabama, District of Columbia, Florida, Georgia, Louisiana, (southern
Richmond, 701 East half), Maryland, Mississippi (southern half), North Carolina, South
Byrd Street, Richmond, Carolina, Tennessee (eastern half), Virginia, West Virginia (except
VA 23219. northern panhandle).
Federal Reserve Bank of Minneapolis, Chicago .... Illinois (northern half), Indiana, (northern half), Iowa, Michigan, Min-
Minneapolis, 90 Hen- nesota, Montana, North Dakota, South Dakota, Wisconsin.
nepin Avenue, Min-
neapolis, MN 55401.
Federal Reserve Bank of Dallas, San Francisco, Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Illinois
Kansas City, 925 Kansas City, St. Louis. (southern half), Indiana (southern half), Kansas, Kentucky, (western
Grand Boulevard, Kan- half), Louisiana (northern half), Mississippi (northern half), Missouri,
sas City, MO 64106. Nebraska, Nevada, New Mexico, Oklahoma, Oregon, Tennessee
(western half), Texas, Utah, Washington, Wyoming, Guam.
(c) Notices and documents must be (b) Converted savings bond means a
filed with the agencies referred to in savings bond originally issued as a de-
paragraphs (a) and (b) of this section finitive bond that has been surrendered
and as indicated in the regulations in to us and converted to a book-entry
this part. savings bond to be maintained by
Treasury solely as a computer record.
§ 360.2 Definitions. (c) Incompetent means an individual
(a) Bond, or Series I savings bonds, as who is incapable of handling his or her
used in this part, means a definitive business affairs because of a legal,
United States Savings Bonds of Series mental or medical disability, except
I. that a minor is not an incompetent
solely because of age.
463
§ 360.3 31 CFR Ch. II (7–1–11 Edition)
(d) Inscription means the information (n) Taxpayer Identifying Number

that is printed on the face of the bond. means a social security account num-
(e) Issuing agent means an organiza- ber or an employer identification num-
tion that has been qualified under the ber.
provisions of Department of the Treas- (o) Voluntary guardian means an indi-
ury Circular, Public Debt Series No. 4– vidual who is recognized as authorized
67, as revised and amended (31 CFR to act for an incompetent, as provided
part 317), to issue savings bonds. by § 360.64.
(f) Paying agent means a financial in- (p) Voluntary representative means the
stitution that has been qualified under person qualified by the Department of
the provisions of Department of the the Treasury to request payment or
Treasury Circular No. 750, as revised distribution of a decedent’s savings
and amended (31 CFR part 321), to bonds pursuant to § 360.71.
make payment of savings bonds.
(g) Payment means redemption, un- [63 FR 38049, July 14, 1998, as amended at 67
less otherwise indicated by the con- FR 64268, Oct. 17, 2002; 70 FR 14942, Mar. 23,
text. 2005; 70 FR 57432, Sept. 30, 2005; 71 FR 46858,
Aug. 15, 2006]
(h) Person means a legal entity in-
cluding an individual or fiduciary es- § 360.3 Converting definitive savings
tate. bonds to book-entry bonds in New
(i) Personal trust estates means trust Treasury Direct.
estates established by natural persons
in their own right for the benefit of Series I savings bonds that were
themselves or other natural persons in originally issued as definitive bonds
whole or in part, and common trust may be converted to book-entry bonds
funds comprised in whole or in part of through New Treasury Direct, an on-
such trust estates. line system for holding Treasury secu-
(j) Registration means that the names rities. The Web address for New Treas-
of all persons named on the bond and ury Direct is www.treasurydirect.gov.
the taxpayer identification number Bond owners who wish to convert their
(TIN) of the owner, first-named co- definitive savings bonds should follow
owner, or purchaser of a gift bond are online instructions for conversion.
maintained on our records. Regulations governing converted bonds
(k) Reissue means the cancellation are found at 31 CFR part 363.
and retirement of a bond and the [70 FR 14942, Mar. 23, 2005]
issuance of a new bond or bonds of the
same series, same issue date, and same
total face amount. Subpart B—Registration
(l) Representative of the estate of a § 360.5 General rules.
minor, incompetent, aged person, absen-
tee, et al. means the court-appointed or (a) Registration is conclusive of owner-
otherwise qualified person, regardless ship. Savings bonds of Series I are
of title, who is legally authorized to issued only in registered form. The reg-
act for the individual. The term does istration must express the actual own-
not include parents in their own right, ership of, and interest in, the bond. The
voluntary or natural guardians, attor- registration is conclusive of ownership,
neys-in-fact, trustees of personal and except as provided in § 360.49.
similar trust estates, or the executors (b) Requests for registration. (1) Reg-
or administrators of decedents’ estates. istrations requested must be clear, ac-
(m) Surrender means the actual re- curate and complete, conform substan-
ceipt of a definitive bond with an ap- tially with one of the forms set forth in
propriate request for payment or re- this subpart, and include the taxpayer
issue by either a Federal Reserve Bank identifying number of the owner or
or Branch or the Bureau of the Public first-named coowner. The registration
Debt, or, if a paying agent is author- of all bonds owned by the same indi-
ized to handle the transaction, the ac- vidual or fiduciary estate should be
tual receipt of the definitive bond and uniform with respect to the name of
the request for payment by the paying the owner and any description of the fi-
agent. duciary capacity.
464
(2) An individual should be des- Example: Julie B. Jones, 123–45–6789.

ignated by the name he or she is ordi- (2) Coownership form. A bond may be
narily known by or uses in business, in- registered in the names of two individ-
cluding at least one full given name. uals in the alternative as coowners.
The name may be preceded or followed The form of registration ‘‘A and B’’ is
by any applicable title, such as Mr.,
not authorized.
Mrs., Ms., Miss, Dr., Rev., M.D., or D.D.
A suffix, such as Sr. or Jr., must be in- Examples: David R. Johnson 123–45–6789 or
cluded when ordinarily used or when Anna B. Johnson. Maria S. Gonzalez 987–65–
necessary to distinguish the owner 4321 or Juan C. Gonzalez.
from another member of his family. A (3) Beneficiary form. A bond may be
married woman’s own first name, not registered in the name of one indi-
that of her husband, must be used, for vidual payable on death to another.
example, Mary A. Jones or Mrs. Mary ‘‘Payable on death to’’ may be abbre-
A. Jones, NOT Mrs. Frank B. Jones. viated to ‘‘P.O.D.’’.
The address must include, where appro-
priate, the number and street, route, or Examples: Catherine B. Jordan 123–45–6789
any other local feature, city, State, payable on death to Daniel A. Jordan. Henry
and ZIP Code. C. Rodriguez 123–45–6789 P.O.D. Maria S.
Rodriguez.
(c) Registration of bonds purchased as
gifts. If the bonds are purchased as (b) Fiduciaries (including legal guard-
gifts, awards, prizes, etc., and the tax- ians, trustees, and similar representa-
payer identifying numbers of the in- tives)—(1) General. A bond may be reg-
tended owners are not known, the pur- istered in the name of any person or
chaser’s number must be furnished. persons or any organization acting as
Bonds so registered will not be associ- fiduciary of a single fiduciary estate,
ated with the purchaser’s own hold- but not where the fiduciary will hold
ings. A bond registered in the name of the bond merely or principally as secu-
a purchaser with another person as co- rity for the performance of a duty, ob-
owner or beneficiary is not considered ligation, or service. A bond’s registra-
a gift or an award. If the purchaser so tion should conform to a form author-
requests, a bond may be inscribed to ized by this paragraph. A common
provide a ‘‘Mail to’’ instruction, fol- trust fund established and maintained
lowed by a delivery name and address. by a financial institution authorized to
No rights of ownership are conferred on act as a fiduciary will be considered a
such designee. single fiduciary estate within the
[63 FR 38049, July 14, 1998, as amended at 71 meaning of the regulations in this part.
FR 46858, Aug. 15, 2006] (2) Legal guardians, conservators, simi-
lar representatives, certain custodians,
§ 360.6 Authorized forms of registra- etc. A bond may be registered in the
tion. name and fiduciary capacity of the le-
Subject to any limitations or restric- gally appointed or authorized rep-
tions contained in these regulations on resentative of the estate of a minor, in-
the right of any person to be named as competent, aged or infirm person, ab-
owner, coowner, or beneficiary, bonds sentee, et al., or of a personal or testa-
should be registered as indicated in mentary trust.
this section. A savings bond registered Examples: Tenth National Bank, Guardian
in a form not substantially in agree- (or Conservator, Trustee, etc.) of the Estate
ment with one of the forms authorized of George N. Brown 123–45–6789, a minor (or
by this subpart is not considered val- an incompetent, aged person, infirm person,
idly issued. or absentee). Henry C. Smith, Conservator of
(a) Natural persons. A bond may be the Estate of John R. White 123–45–6789, an
registered in the names of individuals adult, pursuant to Sec. 633.572 of the Iowa
in their own right, but only in one of Code. Juan B. Gonzalez 123–45–6789, a minor
(or an incompetent) under custodianship by
the forms authorized by this paragraph designation of the Veterans Administration.
(a). Frank M. Redd 123–45–6789, an incompetent
(1) Single ownership form. A bond may for whom Eric A. Redd has been designated
be registered in the name of one indi- trustee by the Department of the Army pur-
vidual. suant to 37 U.S.C. 602. Richard A. Rowe 123–
465
§ 360.7 31 CFR Ch. II (7–1–11 Edition)
45–6789, for whom Reba L. Rowe is represent- Subpart C—Limitations on Annual
ative payee for social security benefits (or
black lung benefits, as the case may be). Purchases
Henry L. Green 123–45–6789 or George M.
Brown, a minor under legal guardianship of § 360.10 Amounts which may be pur-
the Tenth National Bank. Henry L. Green chased.
123–45–6789 P.O.D. George M. Brown, a minor The amount of savings bonds of Se-
under legal guardianship of the Tenth Na- ries I which may be purchased and
tional Bank. Harbor State Hospital and
School, selected payee for Beth R. Weber 123–
held, in the name of any one person in
45–6789, a Civil Service annuitant, pursuant any one calendar year, is computed ac-
to 5 U.S.C. 8345(e). John F. Green or Mary B. cording to the provisions of § 360.11 and
Doe, Trustees of the Estate of Moe Green is limited as follows:
123–45–6789. Thomas J. White and Tenth Na- (a) General annual limitation, $5,000
tional Bank, Trustees under the Will of Rob- (par value).
ert J. Benjamin, deceased 12–3456789. Tenth
(b) Special limitation, $4,000 (par
National Bank, Trustee under Agreement
with Mark S. Dunston, dated 2/1/98, 12– value) multiplied by the highest num-
3456789. Ruth B. Grace and Pat A. Banks, ber of employees participating in an el-
Trustees under Agreement with Susan L. igible employee plan, as defined in
Chambers, dated 7/30/97, 12–3456789. Dennis R. § 360.13, at any time during the cal-
Adams, Trustee under Declaration of Trust, endar year in which the bonds are
dated 5/1/98, 12–3456789. issued.
(3) Employee thrift, savings, vacation [63 FR 38049, July 14, 1998, as amended at 72
and similar plans. Bonds may be reg- FR 67854, Dec. 3, 2007]
alone, of the trustee of an eligible em- § 360.11 Computation of amount.
ployee thrift, savings, vacation, 401(k) (a) General. The purchases of bonds in
or similar plan, as defined in § 360.13. If the name of any person in an indi-
the instrument creating the trust pro- vidual capacity are computed sepa-
vides that the trustees shall serve for a rately from purchases in a fiduciary ca-
limited term, their names may be pacity, e.g., as representative for the
omitted. estate of an individual.
Examples: Tenth National Bank, trustee of (b) Bonds included in computation. In
Pension Fund of Safety Manufacturing Com- computing the purchases for each per-
pany, U/A with the company, dated March 31, son, the following outstanding bonds
1996, 12–3456789.
are included:
Trustees of Retirement Fund of Safety
Manufacturing Company, under directors’ (1) All bonds registered in the name
resolution adopted March 31, 1996, 12–3456789. and bearing the taxpayer identifying
County Trust Company, trustee of the Em- number of that person alone;
ployee Savings Plan of Jones Company, Inc., (2) All bonds registered in the name
U/A dated January 17, 1996, 12–3456789. of the representative of the estate of
Trustees of the Employee Savings Plan of that person and bearing that person’s
Brown Brothers, Inc., U/A dated January 20,
1996, 12–3456789.
taxpayer identifying number; and
(3) All bonds registered in the name
(c) The United States Treasury. A per- of that person as coowner that also
son who desires to have a bond become bear that person’s taxpayer identifying
the property of the United States upon number.
his or her death may designate the (c) Bonds excluded from computation.
United States Treasury as beneficiary. In computing the purchases for each
Example: George T. Jones 123–45–6789 P.O.D. person, the following are excluded:
the United States Treasury. (1) Bonds on which that person is
[63 FR 38049, July 14, 1998, as amended at 71 named beneficiary;
FR 46858, Aug. 15, 2006] (2) Bonds to which that person has
become entitled—
§ 360.7 Chain letters prohibited. (i) Under § 360.70 as surviving bene-
The issuance of bonds in the further- ficiary upon the death of the registered
ance of a chain letter, pyramid, or owner;
similar scheme is against the public in- (ii) As an heir or a legatee of the de-
terest and is prohibited. ceased owner;
466
(iii) By virtue of the termination of a (c) Conditions of eligibility. An em-

trust or the happening of a similar ployee plan must conform to the fol-
event; and lowing rules in order to be eligible for
(3) Bonds that are purchased and re- the special limitation provided in
deemed within the same calendar year. § 360.10.
(1) Crediting of assets. All assets of a
§ 360.12 Disposition of excess. plan must be credited to the individual
If any person at any time has savings accounts of participating employees
bonds issued during any one calendar and may be distributed only to them or
year in excess of the prescribed their beneficiaries, except as provided
amount, instructions should be ob- in paragraph (c)(3) of this section.
tained from the Bureau of the Public (2) Purchase of bonds. Bonds may be
Debt, Parkersburg, WV 26106–1328, for purchased only with assets credited to
appropriate adjustment of the excess. the accounts of participating employ-
Under the conditions specified in ees and only if the amount taken from
§ 360.90, the Commissioner of the Public any account at any time for that pur-
Debt may permit excess purchases to pose is equal to the purchase price of a
stand in any particular case or class of $50 bond or bonds in an authorized de-
cases. nomination or denominations, and
shares in the bonds are credited to the
§ 360.13 Employee plans—Conditions accounts of the individuals from which
of eligibility. the purchase price was derived, in
(a) Definition of plan. Employee amounts corresponding with their
thrift, savings, vacation, 401(k), and shares. For example, if $100 credited to
similar plans are contributory plans es- the account of John Jones is commin-
tablished by the employer for the ex- gled with funds credited to the ac-
clusive and irrevocable benefit of its counts of other employees to make a
employees or their beneficiaries. Each total of $5,000 with which a Series I
plan must afford employees the means bond in the denomination of $5,000 (face
of making regular savings from their amount) is purchased in December 1998
wages through payroll deductions and and registered in the name and title of
provide for employer contributions to the trustee, the plan must provide, in
be added to these savings. effect, that John Jones’ account be
(b) Definition of terms used in this sec- credited to show that he is the owner
tion. (1) The term assets means all the of a Series I bond in the denomination
employees’ contributions and assets of $100 (face amount) bearing an issue
purchased with them and the employ- date of December 1, 1998.
er’s contributions and assets purchased (3) Irrevocable right of withdrawal.
with them, as well as accretions, such Each participating employee has an ir-
as dividends on stock, the increment in revocable right to request and receive
value on bonds and all other income; from the trustee all assets credited to
but, notwithstanding any other provi- the employee’s account (or their value,
sion of this section, the right to de- if the employee prefers) without regard
mand and receive all assets credited to to any conditions other than the loss
the account of an employee shall not or suspension of the privilege of par-
be construed to require the distribu- ticipating further in the plan. A plan
tion of assets in kind when it would may limit or modify such right in any
not be possible or practicable to make manner required for qualification of
such a distribution; for example, Series the plan under section 401 of the Inter-
I bonds may not be reissued in unau- nal Revenue Code of 1986, as amended
thorized denominations. (26 U.S.C. 401).
(2) The word beneficiary means: (4) Rights of beneficiary. Upon the
(i) The person or persons, if any, des- death of an employee, his or her bene-
ignated by the employee in accordance ficiary shall have the absolute and un-
with the terms of the plan to receive conditional right to demand and re-
the benefits of the plan upon the em- ceive from the trustee all assets cred-
ployee’s death; or ited to the account of the employee or
(ii) The estate of the employee. their value, if he or she so prefers.
467
§ 360.15 31 CFR Ch. II (7–1–11 Edition)
(5) Reissue or payment upon distribu- Subpart E—Judicial Proceedings

tion. (i) When settlement is made with
an employee or his or her beneficiary § 360.20 General.
with respect to any bond registered in (a) The Department of the Treasury
the name and title of the plan trustee will not recognize a judicial determina-
in which the employee has a share, the tion that gives effect to an attempted
bond must be paid or reissued to the voluntary inter vivos transfer of a
extent of the share. bond, or a judicial determination that
(ii) If an employee or the beneficiary impairs the rights of survivorship con-
is to receive distribution in kind, bonds ferred by the regulations in this part
bearing the same issue dates as those upon a coowner or beneficiary. All pro-
credited to the employee’s account will visions of this subpart are subject to
be reissued in the name of the em- these restrictions, except as provided
in § 360.24.
ployee or the employee’s beneficiary to
(b) The Department of the Treasury
the extent entitled, in authorized de-
will recognize a claim against an owner
nominations, in any authorized form of of a savings bond and conflicting
registration, upon the request and cer- claims of ownership of, or interest in, a
tification of the trustee. bond between coowners or between the
(d) Application for special limitation. A registered owner and the beneficiary, if
trustee of an employee plan who de- established by valid judicial pro-
sires to purchase bonds under the spe- ceedings, but only as specifically pro-
cial limitation should submit to the vided in this subpart. Section 360.23
designated Federal Reserve Bank or specifies the evidence required to es-
Branch a copy of: tablish the validity of the judicial pro-
(1) The plan; ceedings.
(2) Any instructions issued under the (c) The Department of the Treasury
plan that concern Series I bonds; and and the agencies that issue, reissue, or
(3) The trust agreement, in order to redeem savings bonds will not accept a
establish the plan’s eligibility. notice of an adverse claim or notice of
pending judicial proceedings, nor un-
(e) Vacation plans. Savings bonds may
dertake to protect the interests of a
be purchased under certain vacation litigant not in possession of a savings
plans. Questions concerning the eligi- bond.
bility of these plans to purchase bonds
in excess of the general limitation § 360.21 Payment to judgment credi-
should be addressed to the Bureau of tors.
the Public Debt, Parkersburg, WV (a) Purchaser or officer under levy. The
26106–1328. Department of the Treasury will pay
(but not reissue) a savings bond to the
Subpart D—Limitations on Transfer purchaser at a sale under a levy or to
or Pledge the officer authorized under appro-
priate process to levy upon property of
§ 360.15 Transfer. the registered owner or coowner to sat-
isfy a money judgment. Payment will
Savings bonds are not transferable be made only to the extent necessary
and are payable only to the owners to satisfy the money judgment. The
named on the bonds, except as specifi- amount paid is limited to the redemp-
cally provided in these regulations and tion value 60 days after the termi-
then only in the manner and to the ex- nation of the judicial proceedings. Ex-
tent so provided. cept in the case of a levy by the Inter-
nal Revenue Service, payment of a
§ 360.16 Pledge. bond registered in coownership form
A savings bond may not be hypoth- pursuant to a judgment or a levy
ecated, pledged, or used as security for against only one coowner is limited to
the performance of an obligation. the extent of that coowner’s interest in
the bond. That interest must be estab-
lished by an agreement between the co-
owners or by a judgment, decree, or
468
order of a court in a proceeding to § 360.23 Evidence.

which both coowners are parties. Pay- (a) General. To establish the validity
ment of a bond registered in coowner- of judicial proceedings, certified copies
ship form pursuant to a levy by the In- of the final judgment, decree, or court
ternal Revenue Service will be made if order, and of any necessary supple-
the levy is against either coowner on mentary proceedings, must be sub-
the bond. mitted. If the judgment, decree, or
(b) Trustee in bankruptcy, receiver, or court order was rendered more than six
similar court officer. The Department of months prior to the presentation of the
the Treasury will pay, at current re- bond, there must also be submitted a
demption value, a savings bond to a certification from the clerk of the
trustee in bankruptcy, a receiver of an court, under court seal, dated within
insolvent’s estate, a receiver in equity, six months of the presentation of the
or a similar court officer under the pro- bond, showing that the judgment, de-
visions of paragraph (a) of this section. cree, or court order is in full force.
(b) Trustee in bankruptcy or receiver of
§ 360.22 Payment or reissue pursuant
to divorce. an insolvent’s estate. A request for pay-
ment by a trustee in bankruptcy or a
(a) Divorce. (1) The Department of the receiver of an insolvent’s estate must
Treasury will recognize a divorce de- be supported by appropriate evidence of
cree that ratifies or confirms a prop- appointment and qualification. The
erty settlement agreement disposing of evidence must be certified by the clerk
bonds or that otherwise settles the in- of the court, under court seal, as being
terests of the parties in a bond. Reissue in full force on a date that is not more
of a savings bond may be made to than six months prior to the presen-
eliminate the name of one spouse as tation of the bond.
owner, coowner, or beneficiary or to (c) Receiver in equity or similar court
substitute the name of one spouse for officer. A request for payment by a re-
that of the other spouse as owner, co- ceiver in equity or a similar court offi-
owner, or beneficiary pursuant to the cer, other than a receiver of an
decree. However, if the bond is reg- insolvent’s estate, must be supported
istered in the name of one spouse with by a copy of an order that authorizes
another person as coowner, there must the presentation of the bond for re-
be submitted either: demption, certified by the clerk of the
(i) A request for reissue by the other court, under court seal, as being in full
person; or force on a date that is not more than
(ii) a certified copy of a judgment, six months prior to the presentation of
decree, or court order entered in pro- the bond.
ceedings to which the other person and
the spouse named on the bond are par- § 360.24 Payment pursuant to judicial
ties, determining the extent of the in- or administrative forfeiture.
terest of that spouse in the bond. Re- (a) Definitions. As used in this part:
issue will be permitted only to the ex- (1) Contact point means the individual
tent of that spouse’s interest. designated to receive referrals from the
(2) The evidence required under Bureau of the Public Debt, as provided
§ 360.23 must be submitted in every for in this section, by the Federal in-
case. When the divorce decree does not vestigative agency, United States At-
set out the terms of the property set- torney’s Office, or forfeiting agency
tlement agreement, a certified copy of specified in Public Debt Form 1522.
the agreement must be submitted. Pay- (2) Forfeiting agency means the fed-
ment, rather than reissue, will be made eral law enforcement agency respon-
if requested. sible for the forfeiture.
(b) Date for determining rights. When (3) Forfeiture. (i) Administrative for-
payment or reissue under this section feiture means the process by which
is to be made, the rights of the parties property may be forfeited by a federal
will be those existing under the regula- agency rather than through judicial
tions current at the time of the entry proceedings.
of the final judgment, decree, or court (ii) Judicial forfeiture means either a
order. civil or a criminal proceeding in a
469
§ 360.25 31 CFR Ch. II (7–1–11 Edition)
United States District Court that may (2) The Bureau of the Public Debt
result in a final judgment and order of will notify the submitter of the inquiry
forfeiture. of the referral to the contact point.
(4) Public Debt Form 1522 means the (3) The Bureau of the Public Debt
written notification of the forfeiture will not investigate the inquiry and
provided by the forfeiting agency to will defer to the forfeiting agency’s de-
the Bureau of the Public Debt on a termination of the appropriate course
Public Debt Form 1522 SPECIAL FORM of action, including settlement where
OF REQUEST FOR PAYMENT OF appropriate. Any settlement will be
UNITED STATES SAVINGS AND RE- paid from the forfeiture fund into
TIREMENT SECURITIES WHERE USE which the proceeds were deposited.
OF A DETACHED REQUEST IS AU-
THORIZED. Public Debt Form 1522 Subpart F—Relief for Loss, Theft,
must specify: the contact point; the Destruction, Mutilation, De-
issue date of each bond; the serial num- facement, or Nonreceipt of
ber for each bond; the date of for- Bonds
feiture; the forfeiture fund to which
payment is to be made; and be signed § 360.25 General.
by an individual authorized by the for-
feiting agency. The forfeited bonds and Relief, by the issue of a substitute
bond or by payment, is authorized for
the completed Public Debt Form 1522
the loss, theft, destruction, mutilation,
are to be mailed to the Department of
or defacement of a bond after receipt
the Treasury, Bureau of the Public
by the owner or his or her representa-
Debt, Parkersburg, WV 26106–1328.
tive. As a condition for granting relief,
(b) Forfeiture of bond. (1) Upon receipt the Commissioner of the Public Debt,
and review of the Public Debt Form as designee of the Secretary of the
1522, as described in paragraph (a)(4) of Treasury, may require a bond of indem-
this section, the Bureau of the Public nity, in the form, and with the surety,
Debt will make payment to the for- or security, he or she considers nec-
feiture fund specified on the form. essary to protect the interests of the
(2) The Bureau of the Public Debt United States. In all cases, the claim-
will record the forfeiture, the for- ant or claimants must identify the
feiture fund into which the proceeds lost, stolen, destroyed, mutilated, or
were paid, the contact point, and any defaced savings bond or savings bonds
related information. by serial number or serial numbers and
(3) The Bureau of the Public Debt must submit satisfactory evidence of
will rely exclusively upon the informa- the loss, theft, or destruction, or a sat-
tion provided by the Federal agency in isfactory explanation of the mutilation
the Public Debt Form 1522 and will not or defacement.
make any independent evaluation of
the validity of the forfeiture order, the § 360.26 Application for relief; after re-
request for payment, or the authority ceipt of bond.
of the individual signing the request (a) If the serial numbers of the lost,
for payment. stolen, or destroyed bonds are known,
(4) The amount paid is limited to the the claimant should execute an appli-
redemption value of the savings bonds cation for relief on the appropriate
as of the date of forfeiture specified in form and submit it to the Bureau of
the Public Debt Form 1522. the Public Debt, Parkersburg, WV
(c) Inquiry from previous owner. (1) 26106–1328.
Upon payment made pursuant to para- (b) If the bond serial numbers are not
graph (b) of this section, all inquiries known, the claimant must provide suf-
from the previous owner, including re- ficient information to enable the Bu-
quests for payment, reissue, or applica- reau of the Public Debt to identify the
tions for relief, related to forfeited sav- bond by serial number. See § 360.29(c).
ings bonds, will be referred by the Bu- The Bureau will furnish the proper ap-
reau of the Public Debt to the contact plication form and instructions.
point named in the Public Debt Form (c) A defaced bond and all available
1522. fragments of a mutilated bond should
470
be submitted to a Federal Reserve Of- promptly submitted to the Bureau of

fice listed in § 360.1(b)(2) or the Bureau the Public Debt, Parkersburg, 26106–
of the Public Debt. 1328, for cancellation.
(d) The application must be made by
the person or persons (including both § 360.29 Adjudication of claims.
coowners, if living) authorized under (a) General. The Bureau of the Public
the regulations in this part to request Debt will adjudicate claims for lost,
payment of the bond. In addition: stolen or destroyed bonds on the basis
(1) If the bond is in beneficiary form of records created and regularly main-
and the owner and beneficiary are both tained in the ordinary course of busi-
living, the application must be made ness.
by the owner, and the beneficiary may
(b) Claims filed 10 years after payment.
also be required to join in the applica-
Any claim filed 10 years or more after
tion to protect the interests of the
the recorded date of redemption or
United States.
other retirement will be barred.
(2) If a minor named on a bond as
owner, coowner, or beneficiary is not of (c) Claims filed 10 years after maturity.
sufficient competency and under- Any claim filed 10 years or more after
standing to request payment, the par- the maturity of a savings bond will be
ents or other person authorized to re- barred.
quest payment under § 360.63 will ordi-
narily be required to join in the appli- Subpart G—General Provisions for
cation. Payment
lief will be granted either by the § 360.35 Payment (redemption).
issuance of a bond bearing the same (a) General. Payment of a Series I
issue date as the bond for which the savings bond will be made to the per-
claim was filed or by the issuance of a son or persons entitled under the provi-
remittance in payment. sions of the regulations in this part,
§ 360.27 Application for relief; non- except that the redemption payment
receipt of bond. will not be delivered to addresses in
areas with respect to which the Depart-
If a bond issued on any transaction is ment of the Treasury restricts or regu-
not received, the issuing agent must be lates the delivery of remittances, in-
notified as promptly as possible and cluding checks and electronic pay-
given all information available about ments, drawn against funds of the
the nonreceipt. An appropriate form
United States. See Department of the
and instructions will be provided. If the
application is approved, relief will be
sion (31 CFR part 211). Payment will be
granted by the issuance of a bond bear-
made without regard to any notice of
ing the same issue date as the bond
adverse claims to a bond and no stop-
that was not received. Also, relief is
page or caveat against payment of a
authorized for the issuance of bonds for
bond will be entered.
which the Secretary has not received
payment, in order to preserve public (b) Mandatory initial holding period. A
confidence in dealing with issuing Series I bond issued on January 1, 2003,
agents. or earlier, will be paid at any time
after six months from issue date. A Se-
§ 360.28 Recovery or receipt of bond ries I bond issued on February 1, 2003,
before or after relief is granted. or thereafter, will be paid at any time
(a) If a bond reported lost, stolen, de- after 12 months from issue date. Bonds
stroyed, or not received, is recovered or will be paid at the current redemption
received before relief is granted, the value determined in the manner de-
Bureau of the Public Debt, Parkers- scribed in Department of the Treasury
burg, WV 26106–1328, must be notified Circular, Public Debt Series No. 1–98
promptly. (31 CFR part 359).
(b) A bond for which relief has been [63 FR 38049, July 14, 1998, as amended at 68
granted is the property of the United FR 2667, Jan. 17, 2003; 68 FR 7427, Feb. 14,
States and, if recovered, must be 2003]
471
§ 360.36 31 CFR Ch. II (7–1–11 Edition)
§ 360.36 Payment during life of sole ing agents are not authorized to proc-
owner. ess any case involving partial redemp-
A savings bond registered in single tion.
ownership form (i.e., without a co- (b) Procedure for all other cases. In the
owner or beneficiary) will be paid to case of definitive bonds to which the
the owner during his or her lifetime procedure in paragraph (a) of this sec-
upon surrender with an appropriate re- tion, does not apply, or if otherwise
quest. preferred, the owner or coowner, or
other person entitled to payment
§ 360.37 Payment during lives of both should establish his or her identity to
coowners. the satisfaction of an officer authorized
A savings bond registered in co- by the regulations in this part to cer-
ownership form will be paid to either tify requests for payment, sign the re-
coowner upon surrender with an appro- quests for payment, and provide deliv-
priate request, and upon payment (as ery information for the payment. The
determined in § 360.43), the other co- bonds must be forwarded to a des-
owner will cease to have any interest ignated Federal Reserve Bank or
in the bond. If both coowners request Branch or the Bureau of the Public
payment, the payment will be made in Debt. Usually, payment will be expe-
the form, ‘‘John A. Jones AND Mary C. dited by submission to a designated
Jones’’. Federal Reserve Bank or Branch. In all
cases, the cost and risk of presentation
§ 360.38 Payment during lifetime of of a bond will be borne by the owner.
owner of beneficiary bond. Payment will be made to the registered
A savings bond registered in bene- owner or other person entitled and will
ficiary form will be paid to the reg- be delivered according to the instruc-
istered owner during his or her lifetime tions of the owner or the other person
upon surrender with an appropriate re- entitled and the regulations in this
quest. Upon payment (as determined in part.
§ 360.43) the beneficiary will cease to (c) Date of request. Requests executed
have any interest in the bond. more than six months before the date
of receipt of a bond for payment will
§ 360.39 Surrender for payment. not be accepted. Neither will a bond be
(a) Procedure for definitive bonds of Se- accepted if payment is requested as of
ries I presented at authorized paying a date more than three months in the
agents. The owner, coowner, or other future.
person entitled to payment of a defini-
tive Series I bond may present the § 360.40 Special provisions for pay-
bond to an authorized paying agent for ment.
redemption. The presenter must estab- (a) Owner’s signature not required. A
lish his or her identity and entitlement bond may be paid by a paying agent or
to payment in accordance with Treas- a designated Federal Reserve Bank or
ury instructions and identification Branch without the owner’s signature
guidelines. The presenter must sign the to the request for payment if the bond
request for payment on the bond or, if bears the special endorsement of a pay-
authorized, on a separate detached re- ing agent specifically qualified to place
quest, and add his or her address. If the such an endorsement on savings bonds.
request for payment has been signed, (b) Signature by mark. A signature by
or signed and certified, before presen- mark (X) must be witnessed by at least
tation of the bond, the paying agent one disinterested person and a certi-
must be satisfied that the person pre- fying officer. See subpart I of this part.
senting the bond for payment is the The witness must attest to the signa-
owner, coowner, or other person enti- ture by mark substantially as follows:
tled to payment, and may require the ‘‘Witness to signature by mark’’, fol-
person to sign the request for payment lowed by his or her signature and ad-
again. If the bond is in order for pay- dress.
ment, the paying agent will make pay- (c) Name change. If the name of the
ment at the current redemption value owner, coowner, or other person enti-
without charge to the presenter. Pay- tled to payment, as it appears in the
472
registration or in any related evidence § 360.42 Nonreceipt or loss of remit-

or documents has been changed in any tance issued in payment.
legal manner, the signature to the re-
If a remittance in payment of the re-
quest for payment must show both
demption value of a bond surrendered
names and the manner in which the
change was made; for example, ‘‘Mary for redemption is not received within a
T. Jones Smith (Mary T. J. Smith or reasonable time or is lost after receipt,
Mary T. Smith) changed by marriage notice should be given to the same
from Mary T. Jones’’, or ‘‘John R. agency to which the bond was surren-
Young, changed by order of court from dered for payment. The notice should
Hans R. Jung’’. See § 360.50. give the date the bond was surrendered
(d) Attorneys-in-fact. A request for for payment and describe the bond by
payment executed by an attorney-in- series, denomination, serial number,
fact on behalf of the bond owner or and registration, including the tax-
other person entitled to payment of the payer identifying number of the owner.
bond will be recognized if it is accom-
panied by a copy of the power of attor- § 360.43 Effective date of request for
ney which meets the following require- payment.
ments: The Department of the Treasury will
(1) The power of attorney must bear treat the receipt of a bond with an ap-
the grantor’s signature, properly cer- propriate request for payment by:
tified or notarized, in accordance with (a) A Federal Reserve Bank or
applicable State law;
Branch;
(2) The power of attorney must grant,
by its terms, authority for the attor- (b) The Bureau of the Public Debt; or
ney-in-fact to sell or redeem the (c) A paying agent authorized to pay
grantor’s securities, sell his or her per- that bond, as the date upon which the
sonal property, or otherwise contain rights of the parties are fixed for the
similar authority; and purpose of payment.
(3) In the case of a grantor who has
become incapacitated, the power of at- § 360.44 Withdrawal of request for pay-
torney must conform with pertinent ment.
provisions of State law concerning its (a) Withdrawal by owner or coowner.
durability. Generally, in such cir- An owner or coowner, who has surren-
cumstances, the power of attorney dered a bond to a Federal Reserve Bank
should provide that the authority or Branch or to the Bureau of the Pub-
granted will not be affected by the sub- lic Debt or to an authorized paying
sequent incompetence or incapacity of agent with an appropriate request for
the grantor. Medical evidence or other payment, may withdraw the request if
proof of the grantor’s condition may be notice of intent to withdraw is received
required in any case. by the same agency prior to payment.
§ 360.41 Partial redemption. (b) Withdrawal on behalf of deceased
owner or incompetent. A request for pay-
A bond may be redeemed in part at
ment may be withdrawn under the
current redemption value, but only in
same conditions as in paragraph (a) of
amounts corresponding to authorized
this section by the executor or admin-
denominations, upon surrender of the
bond to a designated Federal Reserve istrator of the estate of a deceased
Bank or Branch or to the Bureau of the owner or by the person or persons who
Public Debt in accordance with could have been entitled to the bond
§ 360.39(b). In any case in which partial under subpart K of this part, or by the
redemption is requested, the phrase ‘‘to legal representative of the estate of a
the extent of $lllll (face amount) person under legal disability, unless
and reissue of the remainder’’ should surrender of the bond for payment has
be added to the request. Upon partial eliminated the interest of a surviving
redemption of the bond, the remainder coowner or beneficiary. See § 360.70(b)
will be reissued as of the original issue and (c).
date, as provided in subpart H of this
part.
473
§ 360.45 31 CFR Ch. II (7–1–11 Edition)
Subpart H—Reissue and (1) A coownership bond may be re-

Denominational Exchange issued to name a new owner, with or
without a coowner or beneficiary as re-
§ 360.45 General quested by the new owner, but only if
at least one of the coowners and the
Reissue of a bond may be made only new owner are parties to a divorce or
under the conditions specified in these annulment, but reissue is limited to
regulations, and only at: A designated the extent of that coowner’s interest in
Federal Reserve Bank or Branch, or the bond (See § 360.22(a)); or
the Bureau of the Public Debt. Reissue (2) To name as new sole owner the
will not be made if the request is re- personal trust estate created by at
ceived less than one full calendar least one of the coowners or which des-
month before the maturity date of a ignates as beneficiary at least one of
bond. See 31 CFR part 359. The request, the coowners.
however, will be effective to establish (c) Beneficiary. A bond registered in
ownership as though the requested re- beneficiary form may be reissued:
issue had been made. (1) To substitute another individual
as beneficiary; or
§ 360.46 Effective date of request for
reissue. (2) To eliminate the beneficiary, and,
if the beneficiary is eliminated, to ef-
The Department of the Treasury will fect any of the reissues authorized by
treat the receipt by: A Federal Reserve paragraph (a) of this section.
Bank or Branch, or the Bureau of the
Public Debt of a bond and an accept- § 360.48 Restrictions on reissue; de-
able request for reissue as determining nominational exchange.
the date upon which the rights of the Reissue is not permitted solely to
parties are fixed for the purpose of re- change denominations.
issue. For example, if the owner or ei-
ther coowner of a bond dies after the § 360.49 Correction of errors.
bond has been surrendered for reissue, A bond may be reissued to correct an
the bond will be regarded as having error in registration upon appropriate
been reissued in the decedent’s life- request supported by satisfactory proof
time. of the error.
§ 360.47 Authorized reissue; during § 360.50 Change of name.
lifetime.
An owner, coowner, or beneficiary
A bond belonging to a living indi- whose name is changed by marriage,
vidual may be reissued in any form of divorce, annulment, order of court, or
registration authorized by the regula- in any other legal manner after the
tions in this part upon an appropriate issue of the bond should submit the
request under the conditions and for bond with a request for reissue to sub-
the purposes outlined in this section. stitute the new name for the name in-
(a) Single ownership. A bond reg- scribed on the bond. Documentary evi-
istered in single ownership form may dence may be required in any appro-
be reissued: priate case.
(1) To add a coowner or beneficiary;
or § 360.51 Requests for reissue.
(2) To name a new owner, with or Subject to the conditions set out in
without a coowner or beneficiary as re- this subpart, a request for reissue of
quested by the new owner, but only if bonds in coownership form must be
the previous owner and the new owner signed by both coowners, except that a
are parties to a divorce or annulment; request solely to eliminate the name of
or one coowner may be signed by that co-
(3) To name as new sole owner the owner only. A bond registered in bene-
personal trust estate created by the ficiary form may be reissued upon the
previous owner or which designates as request of the owner, without the con-
beneficiary the previous owner. sent of the beneficiary. Public Debt
(b) Coownership. During the lifetime forms are available for requesting re-
of both coowners: issue.
474
Subpart I—Certifying Officers (4) By United States officials. Any

judge, clerk, or deputy clerk of a
§ 360.55 Individuals authorized to cer- United States court, including United
tify. States courts for the territories and
The following individuals are author- possessions of the United States and
ized to act as certifying officers for the the Commonwealth of Puerto Rico; any
purpose of certifying a request for pay- United States Commissioner, United
ment, reissue, or a signature to a Pub- States Attorney, or United States Col-
lic Debt form: lector of Customs, including their dep-
(a) Officers generally authorized—(1) uties; in the Internal Revenue Service,
Banks, trust companies, and member or- any Regional Commissioner, District
ganizations of the Federal Home Loan Director, Service Center Director, or
Bank System. (i) Any officer of a bank Internal Revenue agent.
incorporated in the United States, the (b) Officers with limited authority—(1)
territories or possessions of the United In the Armed Forces. Any commissioned
States, or the Commonwealth of Puer- officer or warrant officer of the Armed
to Rico. Forces of the United States, but only
(ii) Any officer of a trust company infor members of the respective services,
corporated in the United States, the their families, and civilian employees
territories or possessions of the United at posts, bases, or stations. The certi-
States, or the Commonwealth of Puer- fying officer must indicate his or her
to Rico. rank and state that the individual
(iii) Any officer of an organization signing the request is one of the class
that is a member of the Federal Home whose request the certifying officer is
Loan Bank System. This includes Fed- authorized to certify.
eral savings and loan associations. (2) Veterans Administration, Federal
(iv) Any officer of a foreign branch or penal institutions, and United States Pub-
domestic branch of an institution indi- lic Health Service hospitals. Any officer
cated in paragraphs (a)(1)(i) through in charge of a home, hospital or other
(iii) of this section. facility of the Veterans Administra-
(v) Any officer of a Federal Reserve tion, but only for the patients, or em-
Bank, a Federal Land Bank, or a Fed- ployees of the facility; any officer of a
eral Home Loan Bank. Federal penal institution or a United
(vi) Any employee of an institution States Public Health Service hospital
in paragraphs (a)(1)(i) through (v) of expressly authorized to certify by the
this section, who is expressly author- Secretary of the Treasury or his des-
ized to certify by the institution. ignee, but only for the inmates, pa-
(2) Credit unions. Any officer or em- tients or employees of the institution
ployee of a credit union, who is ex- involved. Officers of Veterans Adminis-
pressly authorized to certify by the in- tration facilities, Federal penal insti-
stitution. Certification by these offi- tutions, and Public Health Service hos-
cers or designated employees must be pitals must use the stamp or seal of the
authenticated by a legible imprint of particular institution or service.
either the corporate seal of the institu- (c) Authorized officers in foreign coun-
tion or of the issuing or paying agent’s tries. Any United States diplomatic or
stamp. The employee expressly author- consular representative, or the officer
ized to certify by an institution must of a foreign branch of a bank or trust
sign his or her name over the title company incorporated in the United
‘‘Designated Employee’’. States whose signature is attested by
(3) Issuing and paying agents. Any of- an imprint of the corporate seal or is
ficer or expressly authorized employee certified to the Department of the
of an organization that is not included Treasury. If none of these individuals
in paragraphs (a)(1)(i) through (v) of is available, a notary public or other
this section but is qualified as an officer authorized to administer oaths
issuing or paying agent for savings may certify, but, if not in a country
bonds of Series E, EE, or I. The agent’s that is a party to the Hague Conven-
stamp must be imprinted in the certifi- tion, his or her official character and
cation. jurisdiction must be certified by a
475
§ 360.56 31 CFR Ch. II (7–1–11 Edition)
United States diplomatic or consular § 360.58 Forms to be certified.

officer under seal of his or her office.
When required in the instructions on
(d) Authorized officers in particular lo-
calities. The Governor and the Treas- a Public Debt transaction form, the
urer of Puerto Rico; the Governor and form must be signed before an author-
the Commissioner of Finance of the ized certifying officer.
Virgin Islands; the Governor and the
Director of Finance of Guam; or the Subpart J—Minors, Incompetents,
Governor and the Director of Adminis- Aged Persons, Absentees, et al.
trative Services of American Samoa.
(e) Special provisions. If no certifying § 360.60 Payment to representative of
officer is readily accessible, the Com- an estate.
missioner of the Public Debt, Deputy (a) The representative of an estate of
Commissioner, any Assistant Commis- an owner who is a minor, an aged per-
sioner, or other designated official of son, incompetent, absentee, et al., may
the Bureau or of a Federal Reserve
receive payment upon request:
Bank or Branch is authorized to make
special provision for any particular (1) If the registration shows the name
case. and capacity of the representative;
(2) If the registration shows the ca-
§ 360.56 General instructions and li- pacity but not the name of the rep-
ability. resentative and the request is accom-
(a) The certifying officer must: panied by appropriate evidence; or
(1) Require the person presenting a (3) If the registration includes nei-
bond, or an appropriate Public Debt ther the name of the representative nor
transaction form, to establish his or his or her capacity but the request is
her identity in accordance with De- accompanied by appropriate evidence.
partment of the Treasury instructions (b)(1) Appropriate evidence for para-
and identification guidelines; graphs (a) (2) and (3) of this section in-
(2) Place a notation on the back of cludes Public Debt Forms 5385 (redemp-
the bond or on the appropriate Public tion) and 5386 (reissue) completed and
Debt transaction form, or in a separate signed by the representative in accord-
record, showing exactly how identifica- ance with the proper form’s instruc-
tion was established; and tions, which are incorporated herein,
(3) Affix, as part of the certification,
or a certified copy of the letters of ap-
his or her official signature, title, seal
pointment or, if the representative is
or issuing or paying agent’s stamp, ad-
dress, and the date of execution. not appointed by a court, other proof of
(b) The certifying officer and, if such qualification.
person is an officer or an employee of (2) Except in the case of corporate fi-
an organization, the organization will duciaries, the evidence must show that
be held fully responsible for the ade- the appointment is in full force and be
quacy of the identification. dated not more than one year prior to
(c) A signature guaranteed stamp the presentation of the bond for pay-
under the Securities Transfer Agents ment. The request for payment appear-
Medallion Program (STAMP) is an ac- ing on the back of a bond must be
ceptable official seal. signed by the representative as such,
for example, ‘‘John S. Jones, guardian
§ 360.57 When a certifying officer may (committee) of the estate of Henry W.
not certify.
Smith, a minor (an incompetent)’’.
Certifying officers may not certify
the requests for payment or reissue of § 360.61 Payment after death.
bonds, or appropriate Public Debt After the death of the ward, and at
transaction forms if, in their own right
any time prior to the representative’s
or in a representative capacity, they:
discharge, the representative of the es-
(a) Have an interest in the bonds; or
tate will be entitled to obtain payment
(b) Will, by virtue of the requests
being certified, acquire an interest in of a bond to which the ward was solely
the bonds. entitled.
476
§ 360.62 Payment to minor. gally qualified to do so, the relative, or

other person, responsible for the own-
If the owner of a savings bond is a
er’s care and support may submit an
minor and the form of registration does
application for recognition as vol-
not indicate that there is a representa-
untary guardian for the purpose of re-
tive of the minor’s estate, payment
deeming the owner’s bonds, if the total
will be made to the minor upon his or
redemption value of all of the owner’s
her request, provided the minor is of
bonds does not exceed $20,000. The
sufficient competency to sign the re-
bonds and application should be sub-
quest for payment and to understand
mitted to a designated Federal Reserve
the nature of the transaction. In gen-
Bank or the Bureau of the Public Debt.
eral, the fact that the request for pay-
(2) The redemption value of the bonds
ment has been signed by a minor and
shall be determined as of the date the
certified will be accepted as sufficient
bonds are received, accompanied by an
proof of competency and under-
appropriate request for payment. If the
standing.
total redemption value exceeds $20,000,
§ 360.63 Payment to a parent or other a legal representative must be ap-
person on behalf of a minor. pointed, as set forth in § 360.60.
(b) Reinvestment of bonds. (1) If the
(a) If the owner of a savings bond is
bonds have matured and ceased earning
a minor and the form of registration
interest, they may be redeemed and the
does not indicate that there is a rep-
proceeds reinvested in any other sav-
resentative of his or her estate, and if
ings bonds available. The new bonds
the minor is not of sufficient com-
must be registered in the name of the
petency to sign the request for pay-
incapacitated person, followed by
ment and to understand the nature of
words showing that he or she is under
the transaction, payment will be made
voluntary guardianship; for example,
to either parent with whom the minor
‘‘John Jones 123–45–6789, under vol-
resides or to whom legal custody has
untary guardianship’’. A living co-
been granted. If the minor does not re-
owner or beneficiary named on the ma-
side with either parent, payment will
tured bonds must be designated on the
be made to the person who furnishes
new bonds, unless such person fur-
the chief support for the minor.
nishes a certified statement consenting
(b) The request must appear on the
to omission of his or her name.
back of the bond in one of the following (2) If an amount insufficient to pur-
forms: chase an additional bond of any au-
(1) Request by parent: thorized denomination of savings bond
I certify that I am the mother of John C. remains after the reinvestment, the
Jones (with whom he resides) (to whom legal voluntary guardian may furnish addi-
custody has been granted). He is ll years of tional funds sufficient to purchase an-
age and is not of sufficient understanding to other savings bond of the lowest avail-
make this request.
able denomination. If additional funds
Mary Jones on behalf of John C. Jones are not furnished, the remaining
(2) Request by other person: amount will be paid to the voluntary
guardian for the use and benefit of the
I certify that John C. Jones does not reside incapacitated person.
with either parent and that I furnish his
chief support. He is ll years of age and is § 360.65 Reissue.
not of sufficient understanding to make this
request. A bond on which a minor or other
Alice Brown, grandmother, on behalf of John person under legal disability is named
C. Jones as the owner or coowner, or in which he
or she has an interest, may be reissued
§ 360.64 Payment or reinvestment— under the following conditions, but
voluntary guardian of an incapaci- only in accordance with subpart H of
tated person. this part:
(a) Payment of bonds. (1) When an (a) A minor for whose estate no rep-
adult owner of bonds is incapable of re- resentative has been appointed may re-
questing payment as a result of inca- quest reissue if the minor is of suffi-
pacity and there is no other person le- cient competency to sign his or her
477
§ 360.70 31 CFR Ch. II (7–1–11 Edition)
name to the request and to understand tates of both equally, and payment or
the nature of the transaction. reissue will be made accordingly.
(b) Except to the extent provided in (c) Beneficiary bond—(1) Owner de-
paragraph (a) of this section, reissue ceased. If the owner of a bond reg-
will be restricted to a form of registra- istered in beneficiary form has died and
tion which does not adversely affect is survived by the beneficiary, upon
the existing ownership or interest of a proof of death of the owner, the bene-
minor or other person under legal dis- ficiary will be recognized as the sole
ability. Requests for reissue should be and absolute owner of the bond. Pay-
executed by the person authorized to ment or reissue will be made as though
request payment under §§ 360.60 and the bond were registered in the sur-
360.63, or the person who may request vivor’s name alone. A request for pay-
recognition as voluntary guardian ment or reissue by the beneficiary
under § 360.64. must be supported by proof of death of
the owner.
(2) Beneficiary deceased. If the bene-
Subpart K—Deceased Owner, ficiary’s death occurs before, or simul-
Coowner or Beneficiary taneously with, that of the registered
owner, payment or reissue will be made
§ 360.70 General rules governing enti- as though the bond were registered in
tlement.
the owner’s name alone. Proof of death
The rules in this section govern own- of the owner and beneficiary is re-
ership or entitlement where one or quired to establish the order of death.
both of the persons named on a bond (d) Nonresident aliens. If the person
have died without the bond having who becomes entitled to a bond be-
been surrendered for payment or re- cause of the death of an owner is an
issue. Appropriate proof of death will alien who is a resident of an area with
be required. respect to which the Department of the
(a) Single owner bond. If the owner of Treasury restricts or regulates the de-
a bond registered in single ownership livery of remittances, including checks
form has died, the bond becomes the and electronic payments, drawn
property of that decedent’s estate, and against funds of the United States or
payment or reissue will be made as pro- its agencies or instrumentalities, deliv-
vided in this subpart. ery of the redemption payment will not
(b) Coowner bond—(1) One coowner de- be made so long as the restriction ap-
ceased. If one of the coowners named on plies. See Department of the Treasury
a bond has died, the surviving coowner Circular No. 655, current revision (31
will be recognized as the sole and abso- CFR part 211).
lute owner, and payment or reissue will [63 FR 38049, July 14, 1998, as amended at 70
be made as though the bond were reg- FR 57432, Sept. 30, 2005]
istered in the name of the survivor
alone. Any request for reissue by the § 360.71 Decedent’s estate.
surviving coowner must be supported (a) Estate is being administered. (1) A
by proof of death of the other coowner. legal representative of a deceased own-
(2) Both coowners deceased. If both co- er’s estate may request payment of
owners named on a bond have died, the savings bonds to the estate, or may dis-
bond becomes the property of the es- tribute the savings bonds to the per-
tate of the coowner who died last, and sons entitled.
payment or reissue will be made as if (2) Appropriate proof of appointment
the bond were registered in the name of for the legal representative of the es-
the last deceased coowner alone. Proof tate is required. Letters of appoint-
of death of both coowners will be re- ment must be dated not more than one
quired to establish the order of death. year prior to the date of submission of
(3) Simultaneous death of both co- the letters of appointment.
owners. If both coowners die under con- (b) Estate has been settled previously. If
ditions where it cannot be established, the estate has been settled previously
either by presumption of law or other- through judicial proceedings, the per-
wise, which coowner died first, the sons entitled may request payment or
bond becomes the property of the es- reissue of the savings bonds. A certified
478
copy of the court-approved final ac- (iii) There is a person eligible to

counting for the estate, the court’s de- serve as the voluntary representative
cree of distribution, or other appro- according to paragraph (e)(3) of this
priate evidence is required. section.
(c) Special provisions under the law of (2) Authority of voluntary representa-
the jurisdiction of the decedent’s domicile. tive. A voluntary representative may:
If there is no formal or regular admin- (i) Redeem the decedent’s savings
istration and no representative of the bonds that are eligible for redemption
estate is to be appointed, the person on behalf of the persons entitled by the
appointed to receive or distribute the law of the jurisdiction in which the de-
assets of a decedent’s estate without cedent was domiciled at the date of
regular administration under applica- death;
ble local law summary or small estates (ii) Distribute the decedent’s savings
procedures may request payment or re- bonds to the persons entitled by the
issue of savings bonds. Appropriate evi- law of the jurisdiction in which the de-
dence is required. cedent was domiciled at the date of
(d) When administration is required. If death.
the total redemption value of the (3) Order of precedence for voluntary
Treasury securities and undelivered representative. An individual eighteen
payments, if any, held directly on our years of age or older may act as a vol-
records that are the property of the de- untary representative according to the
cedent’s estate is greater than $100,000, following order of precedence: A sur-
administration of the decedent’s estate viving spouse; if there is no surviving
will be required. The redemption value spouse, then a child of the decedent; if
of savings bonds and the principal there are none of the above, then a de-
amount of marketable securities will scendant of a deceased child of the de-
be used to determine the value of secu- cedent; if there are none of the above,
then a parent of the decedent; if there
rities, and will be determined as of the
are none of the above, then a brother
date of death. Administration may also
or sister of the decedent; if there are
be required at the discretion of the De-
none of the above, then a descendant of
partment for any case.
a deceased brother or sister of the dece-
(e) Voluntary representative for small dent; if there are none of the above,
estates that are not being otherwise ad- then a next of kin of the decedent, as
ministered—(1) General. A voluntary determined by the law of the jurisdic-
representative is a person qualified action in which the decedent was domi-
cording to paragraph (e)(3) of this sec- ciled at the date of death. As used in
tion, to request payment or distribu- this order of precedence, child means a
tion of a decedent’s savings bonds. The natural or adopted child of the dece-
voluntary representative procedures dent.
are for the convenience of the Depart- (4) Liability. By serving, the vol-
ment; entitlement to the decedent’s untary representative warrants that
savings bonds and held payments, if the distribution of payments or savings
any, is determined by the law of the ju- bonds is to the persons entitled by the
risdiction in which the decedent was law of the jurisdiction in which the de-
domiciled at the date of death. Vol- cedent was domiciled at the date of
untary representative procedures may death. The United States is not liable
be used only if: to any person for the improper dis-
(i) There has been no administration, tribution of payments or securities.
no administration is contemplated, and Upon payment or distribution of the
no summary or small estate procedures securities at the request of the vol-
under applicable local law have been untary representative, the United
used; States is released to the same extent as
(ii) The total redemption value of the if it had paid or delivered to a rep-
Treasury securities and held payments, resentative of the estate appointed pur-
if any, held directly on our records suant to the law of the jurisdiction in
that are the property of the decedent’s which the decedent was domiciled at
estate is $100,000 or less as of the date the date of death. The voluntary rep-
of death; and resentative shall indemnify and hold
479
§ 360.72 31 CFR Ch. II (7–1–11 Edition)
harmless the United States and all authorized by law or regulation. The
creditors and persons entitled to the request for reissue should be executed
estate of the decedent. The amount of by the institution and any co-trustee.
the indemnification is limited to an (d) Successor fiduciary. If the fiduciary
amount no greater than the value rein whose name the bond is registered
ceived by the voluntary representative. has been replaced by another fiduciary,
(f) Creditor. If there has been no ad- a properly executed form or satisfac-
ministration, no administration is con- tory evidence of successorship should
templated, no summary or small estate be furnished.
procedures under applicable local law
have been used, and there is no person § 360.76 Payment or reissue after ter-
eligible to serve as a voluntary rep- mination of the fiduciary estate.
resentative pursuant to paragraph (e) A bond registered in the name or
of this section, then a creditor may title of a fiduciary may be paid or re-
make a claim for payment of the issued to the person who has become
amount of the debt, providing the debt entitled by reason of the termination
has not been barred by applicable local of an estate, other than a decedent’s
law. estate (see subpart K of this part). Re-
[70 FR 57432, Sept. 30, 2005] quests for reissue made by a fiduciary
pursuant to the termination of a fidu-
§ 360.72 [Reserved] ciary estate should be made on the ap-
propriate form. Requests for payment
Subpart L—Fiduciaries or reissue by other than the fiduciary
must be accompanied by evidence to
§ 360.75 Payment or reissue during the show that the person has become enti-
existence of the fiduciary estate. tled in accordance with applicable
(a) Request from the fiduciaries named State law or otherwise. When two or
in the registration. A request for reissue more persons have become entitled, the
or payment signed by at least one, but request for payment or reissue must be
less than all, of the fiduciaries named signed by each of them.
in the registration shall be deemed suf-
ficient and acceptable proof that less Subpart M—Miscellaneous
than all of the fiduciaries may properly
execute the request. If the fiduciaries
Provisions
named in the registration are still act- § 360.90 Waiver of regulations.
ing, no further evidence will be re-
quired. In other cases, i.e., cases in The Commissioner of the Public
which the fiduciary is not designated Debt, as designee of the Secretary of
by name and title in the bond registra- the Treasury, may waive or modify any
tion or a fiduciary designated in the provision or provisions of the regula-
bond registration is no longer acting, tions in this part. He or she may do so
the request must be made in accord- in any particular case or class of cases
ance with subparts J and K of this part. for the convenience of the United
(b) Corporate fiduciaries. If a bond is States or in order to relieve any person
registered in the name of a public or or persons of unnecessary hardship:
private corporation, such as a financial (a) If such action would not be incon-
institution, or a governmental body as sistent with law or equity;
fiduciary, the request must be signed (b) If it does not impair any material
by an authorized officer in the name of existing rights; and
the organization as fiduciary. Ordi- (c) If he or she is satisfied that such
narily, a signed and certified request action would not subject the United
will be accepted without further evi- States to any substantial expense or li-
dence. ability.
(c) Trustee of a common trust fund. A
bond held by a financial institution as § 360.91 Additional requirements; bond
a trustee may be reissued in the name of indemnity.
of the institution as trustee of its com- The Commissioner of the Public
mon trust fund to the extent that par- Debt, as designee of the Secretary of
ticipation in the common trust fund is the Treasury, may require:
480
(a) Such additional evidence as he or shipment (hereafter the Fund) or other

she may consider necessary or advis- relief under the Act, and render the
able; or consignor responsible for any loss oc-
(b) A bond of indemnity, with or curring through such failure.
without surety, in any case in which he
or she may consider such a bond nec- § 361.2 Definitions.
essary for the protection of the inter- (a) The term valuables means any ar-
ests of the United States. ticles or things or representatives of
value in which the United States has
§ 360.92 Supplements, amendments, or any interest, or in connection with
revisions. which it has any obligation or respon-
The Secretary of the Treasury may sibility, direct or indirect, and which
at any time, or from time to time, pre- have been declared to be valuables by
scribe additional, supplemental, the Secretary of the Treasury (here-
amendatory, or revised rules and regu- after Secretary) pursuant to the Act, as
lations governing United States Sav- listed in § 362.1 of this title.
ings Bonds. (b) The term shipment means the
transportation, or the effecting of
PART 361—CLAIMS PURSUANT TO transportation, of valuables, without
THE GOVERNMENT LOSSES IN limitation as to the means or facilities
SHIPMENT ACT used or by which the transportation is
effected or the person to whom it is
Sec. made, and includes, but is not limited
361.1 Scope of regulations. to, shipments made to any executive
361.2 Definitions. department, independent establish-
361.3 Shipping procedure. ment, agency, wholly or partly owned
361.4 Preparation of shipment. corporation, officer, or employee of the
361.5 Record of shipment.
United States, or any person acting on
361.6 Advice of shipment.
361.7 Report of loss, destruction or damage. his or its behalf or at his or its direc-
361.8 Claim for replacement. tion.
361.9 Proof of claim. (c) The term replacement means pay-
361.10 Recoveries. ment, reimbursement, replacement, or
AUTHORITY: Sec. 6, 50 Stat. 480; 40 U.S.C. duplication or the expenses incident
728. thereto.
(d) The term carrier means any per-
SOURCE: 41 FR 19302, May 12, 1976, unless
otherwise noted. Redesignated at 49 FR 47002, son, corporation, or other entity which
Nov. 30, 1984, and further redesignated at 50 effectuates the shipment for consignors
FR 51394, Dec. 17, 1985. of valuables.
§ 361.1 Scope of regulations. § 361.3 Shipping procedure.

This part governs the reporting of Shipments of valuables shall be made
loss or destruction of, or damage to, so as to provide the greatest possible
valuables shipped pursuant to section 1 protection against risk of loss and de-
of the Government Losses in Shipment struction of, and damage to, valuables,
Act (hereafter the Act) (40 U.S.C. 721) in accordance with requirements pre-
and proof of claim for replacement scribed by the consignors after notice
under section 3 of the Act (40 U.S.C. to the Secretary.
723) by executive departments, inde-
pendent establishments, agencies, § 361.4 Preparation of shipment.
wholly owned corporations, officers Each shipment shall be inspected and
and employees of the United States, verified by two responsible employees
and Federal Reserve banks when acting of a consignor before final preparation
on behalf of the United States or agen- (i.e., before sealing, locking, etc.) for
cies thereof (hereafter consignors). delivery to the carrier. The shipment
Failure by any consignor or agent or shall be finally prepared for delivery in
employee thereof to comply with these the presence of the two employees and
regulations may delay recoveries, pre- before leaving their immediate control.
clude reimbursement from the fund for If strict compliance herewith is impos-
the payment of Government losses in sible or impracticable, administrative
481
§ 361.5 31 CFR Ch. II (7–1–11 Edition)
officers of the consignor shall make § 361.6 Advice of shipment.

adequate provision, through the estab-
(a) If the value of any one shipment
lishment of accounting controls or oth-
to one consignee at one time by one
erwise, for the maintenance of basic
consignor, except in the case of any in-
records which will enable them to
tracity shipment or the shipment of
prove, to the satisfaction of the Sec- registered securities by certified mail,
retary, the extent of loss, destruction, or by another means providing the
or damage in connection with a claim same protection as certified mail,
against the Fund. The requirements of equals or exceeds $10,000, immediate
this section shall apply irrespective of notice thereof shall be forwarded by
the carrier or method of transportation the consignor to the consignee by sepa-
employed in making shipments. rate mail. Such notice shall include:
§ 361.5 Record of shipment. (1) A complete record of the contents
of the shipment;
(a) A record of each shipment shall be (2) The method of transportation em-
maintained by the consignor. The ployed and the name of the carrier; and
record shall include: (3) The date of delivery to such car-
(1) The name and address of the con- rier.
signee designated to receive the ship- (b) The consignee shall arrange that:
ment; (1) Shipment when received, be
(2) A complete description of the con- opened and inspected by one or more
tents of the shipment (if the shipment responsible employees;
is made up of securities, the record (2) Immediate advice of any dif-
shall be maintained by issue, series, de- ference between the amounts or quan-
nomination and serial number, and a tity indicated in the notice by the con-
description of any coupons attached to signor to the consignee and in the ship-
such securities at the time of shipment when opened be forwarded to the
ment); consignor;
(3) The face or par value of the ship- (3) The consignor and the post office,
ment in the case of securities, cur- or office of other carrier through which
rency, etc., or the replacement value in delivery would be made, be notified im-
the case of other valuables; mediately in the event of the failure of
(4) The registry number or the lock the shipment to arrive in due course;
and rotary numbers, if any, under (4) The consignor be advised imme-
which shipped; diately concerning any damage to the
(5) The number of the registry re- shipment; and
ceipt, or other receipt of the carrier; (5) All findings of the consignee in
(6) The date and hour of delivery to such cases be made a matter of record
the carrier; subject to the inspection of the Sec-
(7) A record of the signatures of the retary or other Government officer, in
consignor’s employees who verified the connection with any necessary inves-
contents of the package and witnessed tigation.
its sealing;
[41 FR 19302, May 12, 1976. Redesignated at 49
(8) A record of the signature(s) of the FR 47002, Nov. 30, 1984. Further redesignated
consignor’s employee(s) who thereafter at 50 FR 51394, Dec. 17, 1985, as amended at 51
had custody of the package until it was FR 19751, June 2, 1986]
delivered at the post office for registra-
tion or deposited with the post office or § 361.7 Report of loss, destruction or
other carrier for shipment; and damage.
(9) The name of the carrier. (a) If a consignor receives notice that
(b) The consignor shall also preserve, loss or destruction of, or damage to,
until assured that shipment has been valuables shipped in accordance with
completed and no claims action will be the Act has occurred, an immediate
initiated, all registry receipts or other written report shall be forwarded by
carriers’ receipts, and other documents the consignor to the Secretary, to the
incidental to the shipments. attention of the Bureau of the Public
482
Debt, Division of Financial Manage- § 361.9 Proof of claim.

ment, Room 201, P. O. Box 1328, Par-
The Secretary will require proof of
kersburg, WV 26106-1328. If the loss, de-
struction or damage represents a value claim in such form, and in such man-
equal to, or in excess of, $10,000 or if ner, as he deems necessary. Proof of
delay in reporting is likely to delay the claim will include satisfactory proof of
Government in recovering such shipment and satisfactory proof of loss,
valuables, the report shall be trans- destruction or damage. The claim shall
mitted by wire and promptly confirmed be supported by the original ‘‘record of
in writing. shipment’’ required pursuant to § 361.5,
(b) The report shall state: which will be returned after adjust-
(1) The date of shipment; ment of the claim. The consignor shall
(2) The amount and character of the submit a statement concerning the loss
valuables lost, destroyed, or damaged; or destruction of, or damage to, the
(3) The name and address of the con- shipment or any part thereof. If the
signee; shipment has been received by the con-
(4) The method of transportation, the signee with contents not intact, such
name of the carrier, and the location of statement shall set forth all the cir-
the office of the carrier from which cumstances relating to the condition in
shipment was made; which the shipment was received and
(5) The registry or other receipt num- the manner of inspection and
ber; and verification of its contents. Affidavits
(6) The cause of the loss, destruction covering the loss, destruction or dam-
or damage, if known. age to the shipment shall be obtained
(c) The consignor shall immediately from the consignee and the carrier. The
report the loss, destruction or damage consignor shall submit the statement
to the agent in charge of the nearest and recommendations of the inves-
United States Secret Service office, tigating officers.
and to the local post office or local of-
fice of other carrier. The consignor § 361.10 Recoveries.
shall also place a tracer on the ship- If relief is granted, the consignor
ment and take such other action as shall take all necessary and reasonable
may be necessary to facilitate recov- steps to recover the lost, destroyed or
ery. damaged valuables, or their value. All
[41 FR 19302, May 12, 1976. Redesignated and recoveries and repayments, in connec-
amended at 49 FR 47002, Nov. 30, 1984. Fur- tion with valuables for which replace-
ther redesignated and amended at 50 FR ment has been made out of the Fund,
51394, Dec. 17, 1985; 61 FR 20437, May 7, 1996] shall be forwarded to the Secretary for
credit to the Fund.
§ 361.8 Claim for replacement.
Claim for replacement shall be made PART 362—DECLARATION OF
in writing to the Secretary, to the at- VALUABLES UNDER THE GOVERN-
tention of the Bureau of the Public
Debt, Division of Financial Manage-
MENT LOSSES IN SHIPMENT ACT
ment, Room 201, P. O. Box 1328, Par-
Sec.
kersburg, WV 26106-1328. The claim, ac-
362.1 Declaration of ‘‘valuables’’.
companied by a recommendation re-
362.2 Amendments.
garding the manner of replacement,
shall be submitted through the head of AUTHORITY: Secs. 6, 7, 50 Stat. 480; 40 U.S.C.
the consignor concerned, or his des- 728, 729.
ignee. The manner of replacement shall
be determined by the Secretary in ac- § 362.1 Declaration of ‘‘valuables’’.
cordance with section 3 of the Act, i.e., It is determined that replacements,
by replacement out of the Fund or by a in accordance with the procedure es-
credit in the accounts of the claimant. tablished under section 3 of the Gov-
[41 FR 19302, May 12, 1976. Redesignated and ernment Losses in Shipment Act (50
amended at 49 FR 47002, Nov. 30, 1984. Fur- Stat. 479, as amended; 5 U.S.C. 134b), of
ther redesignated and amended at 50 FR the articles or things or representa-
51394, Dec. 17, 1985; 61 FR 20437, May 7, 1996] tives of value enumerated and referred
483
§ 362.2 31 CFR Ch. II (7–1–11 Edition)
to in this section would be in the pub- make supplemental or amendatory dec-

lic interest; accordingly, they are here- laration of valuables.
by declared to be ‘‘valuables’’ within
[4 FR 3796, Sept. 1, 1939, as amended at 5 FR
the meaning of the act. 2653, July 25, 1940. Redesignated at 49 FR
(a) Money of the United States and for- 47002, Nov. 30, 1984. Further redesignated at
eign countries. Currency, included muti- 50 FR 51394, Dec. 17, 1985]
lated currency and canceled currency,
coins, including uncurrent coins, and PART 363—REGULATIONS GOV-
specie. ERNING SECURITIES HELD IN
(b) Securities and other instruments or TREASURYDIRECT
documents, private and public.
Abstracts of title. Subpart A—General
Assignments.
Bills. Sec.
363.0 What is the TreasuryDirect ® system?
Bonds.
363.1 What Treasury securities are covered
Certificates of deposit.
by these regulations?
Certificates of indebtedness. 363.2 What agency administers
Checks, drafts and money orders. TreasuryDirect ®?
Coupons. 363.3 [Reserved]
Debentures. 363.4 How is TreasuryDirect® different from
Deeds. the Legacy Treasury Direct® system and
Equipment trust certificates. the commercial book-entry system?
Mortgages. 363.5 How do I contact Public Debt?
Notes. 363.6 What special terms do I need to know
Stamps, including postage, revenue, license, to understand this part?
food order and public debt. 363.7–363.8 [Reserved]
Stamped envelopes and postal cards.
Stock certificates. Subpart B—General Provisions Governing
Trust receipts. Securities Held in TreasuryDirect
Voting trust receipts.
363.9 What does this subpart cover?
Warehouse receipts.
363.10 What is a TreasuryDirect ® account?
Warrants.
363.11 Who is eligible to open a
TreasuryDirect ® account?
And other instruments or documents
363.12 Who may purchase and hold book-
similar to the foregoing and whether entry securities in TreasuryDirect ®?
complete, incomplete, mutilated, can- 363.13 How can I open a TreasuryDirect ® ac-
celed, in definitive form or represented count?
by interim documents. 363.14 How will you verify my identity?
(c) Precious metals and stones. Dia- 363.15 What is the procedure for offline
monds and other precious stones. Gold, verification?
silver and any other precious or rare 363.16 How do I access my account?
metal, including articles composed 363.17 Who is liable if someone else accesses
my TreasuryDirect ® account using my
thereof. password?
(d) All other. Works and collections of 363.18 Is Public Debt liable if the electronic
artistic, historical, scientific or edu- transmission of my data is intercepted?
cational value which are the property 363.19 What should I do if I become aware
of the United States or which may be that my password or other form of au-
loaned to the United States at its re- thentication has become compromised?
quest, or which may be shipped on au- 363.20 What do I need to know about the
forms of registration that are available
thority of the United States for its ex-
for purchases of securities through my
amination or acceptance as a gift. TreasuryDirect ® account?
[4 FR 3796, Sept. 1, 1939, as amended at 5 FR 363.21 When may you require offline authen-
2653, July 25, 1940. Redesignated at 49 FR tication and documentary evidence?
47002, Nov. 30, 1984. Further redesignated at 363.22 Who has the right to conduct online
50 FR 51394, Dec. 17, 1985] transactions in book-entry securities?
363.23–363.24 [Reserved]
§ 362.2 Amendments. 363.25 How do I conduct transactions in my
account or in Treasury securities held in
The Secretary of the Treasury may, my account?
at any time, or from time to time, 363.26 What is a transfer?
484
363.27 What do I need to know about ac- 363.54 What is the minimum amount of a
counts for minors who have not had a book-entry savings bond that I must hold
legal guardian appointed by a court? in my account?
363.28 Does Public Debt reserve the right to 363.55 May I transfer my book-entry savings
require that any TreasuryDirect ® trans- bonds to another person?
action be conducted in paper form? 363.56 What is the minimum amount of
363.29 May Treasury close an account, sus- book-entry savings bonds that I may
pend transactions in an account, or transfer in any one transaction?
refuse to open an account? 363.57 What is the minimum amount of
363.30 What actions may Treasury take if book-entry savings bonds that I may re-
funds used to purchase a security were deem in any one transaction?
credited or debited in error or through 363.58 May book-entry savings bonds be
fraud? pledged or used as collateral?
363.31–363.32 [Reserved] 363.59 What is a payroll savings plan?
363.33 Can an attorney-in-fact conduct 363.60 How do I discontinue my participa-
transactions in my TreasuryDirect ® action in my payroll savings plan?
count? 363.61–363.82 [Reserved]
363.34 What happens if an owner becomes in-
competent after opening a MINORS
TreasuryDirect ® account? 363.83 May an account owner transfer a
363.35 When is a transaction effective? book-entry savings bond to a minor?
363.36 What securities can I purchase and 363.84–363.94 [Reserved]
hold in my TreasuryDirect ® account?
363.37 How do I purchase and make payment GIFTS
for eligible Treasury securities through
my TreasuryDirect ® account? 363.95 How may I give, and who can receive,
363.38 What happens if my financial institu- a book-entry savings bond as a gift?
tion returns an ACH debit? 363.96 What do I need to know if I initially
363.39 Will I receive a confirmation of my purchase a bonds as a gift?
request to purchase a Treasury security? 363.97 What do I need to know if I transfer
363.40 How are payments of principal and a book-entry savings bond to another
interest made? person as a gift?
363.41 What happens if an ACH payment is 363.98 [Reserved]
returned to Public Debt? 363.99 What is the minimum amount of a
363.42 How will my interest income be re- bond that I may transfer or deliver as a
ported for tax purposes? gift in any one transaction?
363.43 What are the procedures for certi- 363.100 What are the rules for purchasing
fying my signature on an offline applica- and delivering gift savings bonds to mi-
tion for a TreasuryDirect ® account, or nors?
on an offline transaction form? 363.101 Can an account owner transfer a
363.44 What happens when a book-entry savings bond to a minor?
TreasuryDirect ® account owner dies and 363.102–363.124 [Reserved]
the estate is entitled to securities held in
PAYMENT
the account?
363.45 What are the rules for judicial and 363.125 How is payment made on a book-
administrative actions involving securi- entry savings bond?
ties held in TreasuryDirect ®? 363.126 Under what circumstances will pay-
363.46 What evidence is required to establish ment be made?
the validity of judicial proceedings? 363.127–363.129 [Reserved]
363.47 Will Public Debt pay Treasury securi-
ties pursuant to a forfeiture proceeding? Subpart D—Zero-percent Certificate of
363.48–363.49 [Reserved] Indebtedness
Subpart C—Book-Entry Savings Bonds GENERAL
Purchased Through TreasuryDirect 363.130 What does this subpart cover?
363.131 What is a TreasuryDirect ® zero-per-
GENERAL
cent certificate of indebtedness?
363.50 What Treasury securities does this 363.132 Can the sale of the zero-percent cer-
subpart cover? tificate of indebtedness be suspended?
363.51 [Reserved] 363.133 What happens to my zero-percent
363.52 What amount of book-entry Series certificate of indebtedness if the offering
EE and Series I savings bonds may I pur- is terminated by the Secretary?
chase in one year? 363.134 What regulations cover a zero-per-
363.53 What is the minimum amount of cent certificate of indebtedness?
book-entry savings bonds that I may pur- 363.135 In what form is a zero-percent cer-
chase in any transaction? tificate of indebtedness issued?
485
363.136 Do zero-percent certificates of in- 363.169 What transactions can I conduct in a
debtedness pay interest? converted savings bond on which I am
363.137 What do I need to know about the registered as the single owner, either co-
registration of a zero-percent certificate owner, the owner with a beneficiary, or
of indebtedness? an entity?
363.138 Is Treasury liable for the purchase of 363.170 What transactions can I conduct in a
a zero-percent certificate of indebtedness savings bond that I converted on which I
that is made in error? am not registered as the owner, either
363.139 May I transfer or deliver my zero- coowner, or owner with beneficiary?
percent certificate of indebtedness? 363.171 How do I redeem a converted savings
363.140 May a zero-percent certificate of in- bond?
debtedness be pledged or used as collat- 363.172–363.175 [Reserved]
eral? 363.176 May a converted savings bond be
ZERO-PERCENT CERTIFICATE OF INDEBTEDNESS pledged or used as collateral?
363.177–363.178 [Reserved]
363.141 How do I purchase a zero-percent 363.179 Does Public Debt make any reserva-
certificate of indebtedness? tions as to the conversion of an eligible
363.142 When is a zero-percent certificate of savings bond?
indebtedness issued? 363.180–363.199 [Reserved]
363.143 How do I purchase a security using
the redemption proceeds of my zero-per- Subpart F—Marketable Treasury Securities
363.144 Can I redeem my zero-percent cer- 363.200 What Treasury securities does this
tificate of indebtedness? subpart govern?
363.145 May I delete a pending transaction 363.201 What other regulations govern book-
involving a zero-percent certificate of in- entry marketable book-entry Treasury
debtedness? bills, notes, and bonds?
PAYROLL ZERO-PERCENT CERTIFICATE OF 363.202 What marketable Treasury securi-
INDEBTEDNESS ties may I purchase and hold through my
TreasuryDirect ® account?
363.146 Who may purchase a payroll zero- 363.203 After I purchase my marketable
percent certificate of indebtedness? Treasury security in TreasuryDirect ®, is
363.147 How do I purchase a payroll zero- there a period of time during which I
percent certificate of indebtedness? may not transfer the security?
363.148 Can I redeem all or a portion of my 363.204 What registrations are available for
accumulated payroll zero-percent certifi- my marketable Treasury securities held
cate of indebtedness? in TreasuryDirect ®?
363.149–363.152 [Reserved] 363.205 How do I reinvest the proceeds of a
maturing security held in
Subpart E—Conversion of a Definitive TreasuryDirect ®?
Savings Bond 363.206 How can I transfer my marketable
363.160 What subparts govern the conversion Treasury security into my
of definitive savings bonds? TreasuryDirect ® account from another
363.161 What definitive savings bonds are el- book-entry system?
igible to be converted to book-entry 363.207 Can I transfer my marketable Treas-
bonds? ury security from my TreasuryDirect ®
363.162 Who may convert a definitive sav- account to another TreasuryDirect ® ac-
ings bond? count?
363.163 How do I convert an eligible defini- 363.208 Can I transfer my marketable Treas-
tive savings bond? ury security from my TreasuryDirect ®
363.164 Is a converted savings bond eligible account to an account in another book-
to be converted back into a definitive entry system?
bond? 363.209 [Reserved]
363.165 What happens when I convert a sav- 363.210 Is there any period of time during
ings bond that is registered in my name which I will be unable to process certain
as a single owner, either coowner, an transactions regarding my security?
owner with a beneficiary, or an entity? 363.211–363.249 [Reserved]
363.166 What happens when I convert a sav-
ings bond that is not registered in my Subpart G [Reserved]
name as owner, either coowner, or owner
with beneficiary (including a bond reg- Subpart H—Miscellaneous
istered in the name of a minor)?
363.167 How will a converted savings bond 363.250 May Public Debt waive these regula-
be registered? tions?
363.168 What rules regarding registration 363.251 Can I be required to provide addi-
apply to a converted savings bond? tional evidence to support a transaction?
486
363.252 May Public Debt amend or supple- maintained by Treasury for holding
ment these regulations? and conducting permitted transactions
AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 31 in eligible marketable Treasury securi-
U.S.C. 3102, et seq.; 31 U.S.C. 3121, et seq. ties as book-entry products. The terms
SOURCE: 67 FR 64286, Oct. 17, 2002, unless and conditions for the Legacy Treasury
otherwise noted. Direct system are found at 31 CFR part
357, subpart C.
EDITORIAL NOTE: Nomenclature changes to
part 363 appear at 70 FR 57433, Sept. 30, 2005,
(c) Commercial book-entry system. The
70 FR 57442, Sept. 30, 2005, and 75 FR 70815, commercial book-entry system is the
Nov. 19, 2010. book-entry system in which Treasury
securities are held in a tiered system
Subpart A—General through securities intermediaries such
as financial institutions or brokerage
§ 363.0 What is the TreasuryDirect ® firms. The regulations governing the
system? commercial book-entry system are
The TreasuryDirect system found at 31 CFR part 357, subpart B,
(TreasuryDirect) is an online account and may be referred to in that part as
system in which you may hold and con- Treasury/Reserve Automated Debt
duct transactions in eligible book- Entry System (TRADES).
entry Treasury securities. [70 FR 57442, Sept. 30, 2005, as amended at 76
FR 18064, Apr. 1, 2011]
§ 363.1 What Treasury securities are
covered by these regulations? § 363.5 How do I contact Public Debt?
The regulations in this part apply to (a) You may use the ‘‘Contact Us’’
book-entry Treasury securities held in feature within TreasuryDirect ® to
the TreasuryDirect ® system. communicate information to us over a
secure Internet connection.
§ 363.2 What agency administers (b) Emails may be sent to: treas-
TreasuryDirect ®?
ury.direct@bpd.treas.gov. We will reply
The Bureau of the Public Debt (Pub- by e-mail unless you request otherwise.
lic Debt), Department of the Treasury We are not responsible for the security
(Treasury) is responsible for admin- of e-mail messages you may send to us,
istering TreasuryDirect. Public Debt or replies we may send to you.
may delegate authority to process cer- (c) Letters should be addressed to the
tain transactions in TreasuryDirect to address provided on our web site at
Federal Reserve Banks and Branches as http://www.treasurydirect.gov/write.htm.
fiscal agents of the United States.
§ 363.3 [Reserved] FR 57442, Sept. 30, 2005; 74 FR 19416, Apr. 29,
2009]
§ 363.4 How is TreasuryDirect® dif-
ferent from the Legacy Treasury Di- § 363.6 What special terms do I need to
rect® system and the commercial know to understand this part?
book-entry system? Account means a TreasuryDirect ® ac-
(a) TreasuryDirect. TreasuryDirect is count as described in § 363.10.
a book-entry, online system main- Authentication means confirming that
tained by Treasury for purchasing, the person accessing a TreasuryDirect
holding and conducting permitted account is the same person whose iden-
transactions in eligible Treasury secu- tity was initially verified at account
rities in electronic form as a computer establishment.
record on the books of Treasury. Automated Clearing House (ACH)
TreasuryDirect currently provides for means a funds transfer system gov-
the purchase and holding of eligible erned by the Rules of the National
book-entry savings bonds, zero-percent Automated Clearing House Association
certificates of indebtedness, and eligi- (NACHA). NACHA provides for the
ble marketable Treasury securities. interbank clearing of electronic entries
(b) Legacy Treasury Direct. The Leg- for participating financial institutions.
acy Treasury Direct system is a non- Beneficiary refers to the second indi-
Internet-based book-entry system vidual named in the registration of a
487
§ 363.6 31 CFR Ch. II (7–1–11 Edition)
definitive savings bond, a converted de- more information about custom ac-
finitive savings bond, or a book-entry counts.)
security purchased through the Definitive security means a Treasury
TreasuryDirect system, registered, security held in paper form.
e.g., ‘‘John Doe SSN 123–45–6789 POD De-link means the online process by
(payable on death to) Joseph Doe SSN which all securities contained within
987–65–4321. the minor linked account are moved to
Book-entry security means a Treasury the minor’s primary TreasuryDirect
security maintained by us in electronic account and the linked account is de-
or paperless form as a computer record. activated.
Business day means any day that Delivery means moving a minimum
funds may be settled through ACH. amount of $25 (consisting of principal
Closed book period means a period of and proportionate interest) of a secu-
four business days prior to the date a rity held as a gift from the account of
scheduled marketable security interest the purchaser to the account of the re-
and/or maturity payment is made, dur- cipient.
ing which time certain transactions Entity means any owner of a
will be delayed until after the closed TreasuryDirect account that is not an
book period is completed. (See § 363.210.) individual. Entity is a sole proprietor-
Commercial book-entry system refers to ship, partnership, corporation, limited
the book-entry system in which you liability company or professional lim-
hold your Treasury securities in a ited liability company, trust, the es-
tiered system through securities inter- tate of a decedent, or the estate of a
mediaries such as financial institutions living person such as an incompetent
or brokerage firms. (See § 363.4.) or a minor.
Court means a court of law with ju- Entity account manager is the indi-
risdiction over the parties and the sub- vidual who initially opens the
ject matter. TreasuryDirect account for an entity,
Conversion account means a linked ac- or his or her replacement; who is au-
count in TreasuryDirect that contains thorized by the entity to act alone on
only savings bonds that have been con- its behalf to open, access, and conduct
verted from definitive bonds to book- transactions with respect to the ac-
entry bonds. count; and who certifies that he or she
Converted savings bond means a sav- is so authorized.
Federal Reserve Bank (Reserve Bank)
ings bond originally issued as a defini-
means a Federal Reserve Bank or
tive bond that has been surrendered to
Branch.
us and converted to a book-entry sav-
Final maturity of a savings bond means
ings bond to be maintained by Treas-
the date beyond which an unredeemed
ury solely as a computer record.
savings bond no longer earns interest. 1
Converting coowner is the coowner
Financial institution, or depository fi-
who initiates and completes the trans-
nancial institution, means an entity de-
action to convert a definitive savings scribed in 12 U.S.C. 461 (b)(1)(A)(i)–(vi).
bond to a book-entry bond through his Gift means a Treasury security pur-
or her TreasuryDirect account. chased for or transferred to an in-
Coowner means either of the persons tended recipient, without consider-
named in the registration of a defini- ation.
tive or a converted definitive savings Incompetent individual or incompetent
bond, registered, e.g., ‘‘John Doe SSN person means an individual who has
123–45–6789 or Joseph Doe.’’ been declared by a court to be legally
Custodian of a minor account means a incompetent, incapacitated, or other-
person who opens an account on behalf wise unable to manage his or her finan-
of the minor. (See § 363.27 for more in- cial affairs.
formation about minor accounts.) Individual means a natural person.
Custom account means an account
that you establish for a specific pur- 1 Series EE and Series I savings bonds cur-
pose that is linked to your primary ac- rently have an original maturity period of 20
count. You use your primary account years and an extended maturity period of 10
as the portal to open and access your years beyond original maturity during which
custom linked account. (See § 363.10 for the bonds continue to earn interest.
488
Interest on a savings bond means the held in the single owner form of reg-
difference between the purchase price istration, the first individual named on
and the redemption value of the bond. a security held in the owner with bene-
Legacy Treasury Direct® system is a ficiary form of registration, the first
non-Internet-based book-entry system individual named on a security held in
maintained by Treasury since 1986 for the primary owner with secondary
holding and conducting permitted owner form of registration, or either
transactions in marketable Treasury individual named on a converted sav-
securities directly with Treasury as ings bond held in the coowner form of
book-entry products. (See § 363.4.) registration; when referring to a minor
Legal guardian of a minor or incom- linked account, the owner is the minor;
petent person refers to the court-ap- when referring to an entity, the owner
pointed or otherwise qualified person, is the entity.
regardless of title, who is legally au- Payroll savings plan is a method for
thorized to act for the minor or incom- the purchase of savings bonds using
petent individual. periodic ACH credits from your em-
Legal representative refers to the ployer or financial institution to pur-
court-appointed or otherwise qualified chase a payroll zero-percent certificate
person, regardless of title, who is le- of indebtedness until a sufficient
gally authorized to manage and settle amount of payroll zero-percent certifi-
the estate of a decedent. The term in- cate of indebtedness is accumulated to
cludes an executor and an adminis- enable the purchase of a savings bond
trator. in an amount, series, and registration
Legally incompetent means a court has that you previously selected using
declared an individual to be incapable functionality in your TreasuryDirect
of handling his or her business affairs. account. (See also the definition of pay-
Linked account means an account roll zero-percent certificate of indebt-
that is a separate account from your edness.)
primary account, but connected to
Payroll zero-percent certificate of in-
your primary account. You use your
debtedness is a restricted form of the
primary account as a portal to open
zero-percent certificate of indebtedness
and access the linked account. (See
that is held separately from the zero-
§ 363.10 for more information about
percent certificate of indebtedness and
linked accounts.)
used only for purchases made through
Marketable Treasury security refers to
the payroll savings plan. (See also the
a Treasury bill, note, or bond that is
definition for zero-percent certificate
negotiable and transferable, that is,
of indebtedness.)
may be bought and sold in the sec-
ondary market. Person means an individual or an en-
Minor means an individual under the tity.
age of 18 years. The term minor is also Primary account means the account
used to refer to an individual who has that you establish when you first open
attained the age of 18 years but has not your TreasuryDirect account; your pri-
yet taken control of the securities con- mary account is the portal used to
tained in his or her minor account. open and access all your linked ac-
Minor account means an account that counts. (See § 363.10 for more informa-
a custodian controls on behalf of a tion about primary accounts.)
minor, that is linked to the custodian’s Primary owner means the first person
primary account. (See §§ 363.10 and named in the registration of a security
363.27 for more information about held in TreasuryDirect registered, e.g.,
minor accounts.) ‘‘John Doe SSN 123–45–6789 with Joseph
Non-converting coowner is the coowner Doe SSN 987–65–4321.’’ In this example,
who does not participate in the trans- John Doe is the primary owner.
action to convert a definitive savings Principal amount means the amount
bond to a book-entry bond. of the original investment. Principal
Online means use of the Internet. amount does not include any interest
Owner when referring to an indi- earned.
vidual, is either the single individual Recipient means the person to whom
named in the registration of a security a gift is given.
489
§ 363.6 31 CFR Ch. II (7–1–11 Edition)
Redemption of a savings bond refers to tifications are acceptable for transfers

the payment of principal and interest of securities, but are not acceptable for
at final maturity, or prior to final ma- offline account establishment.
turity at the option of the owner. The Single owner means the individual
owner may redeem all principal and in- named in the registration of a book-
terest or a portion of the principal and entry Treasury security or a converted
the proportionate amount of interest. savings bond without a beneficiary,
Redemption value means principal secondary owner, or coowner.
plus accrued interest of a bond, or a Social security account number or so-
portion of the principal plus a propor- cial security number (SSN) means the
tionate amount of accrued interest on identifying number required on tax re-
the bond, as of the date of redemption.
turns and other documents submitted
Registration or Registered means that
to the Internal Revenue Service by an
the name and taxpayer identification
individual. A SSN is composed of nine
number(s) (TIN) of the person(s) named
digits separated by two hyphens, for
on the security are maintained on our
example, 123–45–6789.
records.
Reinvestment means using the re- Taxpayer identification number (TIN)
demption proceeds of a maturing mar- means the identifying number required
ketable security to purchase a new on tax returns and other documents
marketable security of the same type submitted to the Internal Revenue
and term, using the automatic rein- Service; that is, an individual’s social
vestment option available in security number (SSN) or an employer
TreasuryDirect. identification number (EIN). A SSN is
Secondary owner means the second composed of nine digits separated by
person named in the registration of a two hyphens, for example, 123–45–6789.
book-entry security held in An EIN is composed of nine digits sepa-
TreasuryDirect registered, e.g. ‘‘John rated by one hyphen, for example, 12–
Doe SSN 123–45–6789 with Joseph Doe 3456789. The hyphens are an essential
SSN 987–65–4321.’’ In this example, Jo- part of the numbers.
seph Doe is the secondary owner. Tender means an offer, or bid, to pur-
Security, or Treasury security, as used chase a marketable Treasury security.
in this part, means an obligation issued Transaction is any action affecting
by Treasury that may be held in Treasury securities or account infor-
TreasuryDirect. mation.
Series EE savings bond is an accrual- Transfer is a transaction to move a
type savings bond, issued either in de- security, or a portion of a security, to
finitive (paper) form or in book-entry or from a TreasuryDirect account. (See
form, that accrues interest on the prin- § 363.26.)
cipal based on rates determined by Verification means confirming the
Treasury. identity of an online applicant for a
Series I savings bond is a savings bond, TreasuryDirect account at account es-
issued either in definitive (paper) form
tablishment using an online
or in book-entry form, that accrues in-
verification service or offline
terest in accordance with a formula
verification.
that includes a fixed component and a
component indexed to the rate of infla- Verification service means a public or
tion. private service that confirms the iden-
Signature guarantee program means a tity of an online applicant for a
signature guarantee program estab- TreasuryDirect account at account es-
lished under 17 CFR 240.17Ad–15, issued tablishment using information pro-
under authority of the Securities Ex- vided by the applicant.
change Act of 1934. For the purpose of Voluntary representative means the
this part, we recognize the Securities person qualified by the Department of
Transfer Agents Medallion Program the Treasury to accept payment or di-
(STAMP), the Stock Exchanges Medal- rect distribution of a decedent’s securi-
lion Program (SEMP), and the New ties pursuant to § 363.44.
York Stock Exchange, Inc., Medallion We, us, or our refers to the Bureau of
Signature Program (MSP). These cer- the Public Debt. The term includes the
490
Secretary of the Treasury and the Sec- registration; gifts of savings bonds that
retary’s delegates at the Treasury De- have not yet been delivered; and con-
partment and Bureau of the Public verted savings bonds that were trans-
Debt. The term also includes any fiscal ferred from the conversion linked ac-
or financial agent we designate to act count.
on behalf of the United States. (2) Entities. A primary account for an
You or your refers to a entity may contain Treasury securities
TreasuryDirect primary account hold- purchased initially as book-entry secu-
er. rities registered in the name of the en-
Zero-percent certificate of indebtedness tity and converted savings bonds in the
is a one-day, non-interest-bearing secu- name of the entity that were trans-
rity that automatically matures and is ferred from the conversion linked ac-
rolled over each day until you request count.
that it be redeemed.
(b) Linked account. A linked account
[67 FR 64286, Oct. 17, 2002, as amended at 68 is an account that is a separate ac-
FR 24807, May 8, 2003; 69 FR 2507, Jan. 16, count from your primary account, but
2004; 69 FR 50308, Aug. 16, 2004; 70 FR 14942, that is connected to your primary ac-
Mar. 23, 2005; 70 FR 57433, Sept. 30, 2005; 70 FR
57442, Sept. 30, 2005; 72 FR 30978, June 5, 2007; count. You use your primary account
74 FR 19416, Apr. 29, 2009; 75 FR 26090, May 11, as a portal to open and access the
2010; 75 FR 70815, Nov. 19, 2010; 75 FR 78901, linked account. Linked accounts in-
Dec. 17, 2010; 76 FR 18064, Apr. 1, 2011] clude the following:
(1) Custom account. A custom account
Subpart B—General Provisions is an account that is linked to your
Governing Securities Held in primary account. You use your pri-
TreasuryDirect mary account as the portal to open and
access your custom account. You may
§§ 363.7–363.8 [Reserved] informally designate a purpose for the
custom account, for example, ‘‘vaca-
§ 363.9 What does this subpart cover? tion fund’’, or ‘‘Johnny’s college fund’’.
This subpart provides general rules However, the designation as to purpose
governing securities held within the has no legal effect; the registration of
TreasuryDirect ® system. Provisions in the securities held in the custom ac-
the subparts governing specific securi- count determines ownership (Annual
ties that conflict with these general purchase limitations include securities
rules will supersede these general held in custom accounts). You, as an
rules. individual owner, may use your custom
[70 FR 57433, Sept. 30, 2005]
account to buy, redeem, and transfer
securities that you own in single
§ 363.10 What is a TreasuryDirect ® ac- owner, owner with beneficiary, and pri-
count? mary owner with secondary owner
A TreasuryDirect account is an on- forms of registration. An individual
line account maintained by us solely in owner may also buy and deliver gift
your name in which you may hold and savings bonds from the custom ac-
conduct transactions in eligible book- count. An entity account manager, act-
entry Treasury securities. ing on behalf of an entity, may use the
(a) Primary account. The primary ac- entity’s custom account to buy, re-
count is the account that you establish deem, and transfer securities registered
when initially opening your in the entity form of registration.
TreasuryDirect account. The primary (2) Minor account. A minor account is
account may contain the following an account established by an individual
Treasury securities: custodian for an individual who has not
(1) Individual. A primary account for yet reached the age of 18 years. We do
an individual may contain Treasury se- not permit an entity to open a minor
curities purchased initially as book- account. A minor account is linked to
entry securities that are your personal the custodian’s primary account. The
holdings registered in single owner, minor is the owner of the securities,
owner with beneficiary, and primary but the custodian controls the account
owner with secondary owner forms of on behalf of the minor. (See § 363.27 for
491
§ 363.11 31 CFR Ch. II (7–1–11 Edition)
more information about minor ac- rity in any case or class of cases, if we
counts.) deem the action to be in the public in-
(3) Conversion account means a linked terest. Our decision in any such respect
account in TreasuryDirect that con- is final.
tains only savings bonds that have
been converted from definitive bonds [70 FR 57433, Sept. 30, 2005, as amended at 74
FR 19417, Apr. 29, 2009 ]
to book-entry bonds.
(c) Closing an account. If a § 363.13 How can I open a
TreasuryDirect primary account and TreasuryDirect® account?
all associated linked accounts have had
no holdings and no activity for a period (a) General. You must establish a
of two years, we reserve the right to TreasuryDirect account online before
close the account, along with all linked you purchase a Treasury security to be
accounts. held in your account. Instructions for
online account establishment may be
found at the official Public Debt
FR 14943, Mar. 23, 2005. Redesignated at 70 FR
57433, Sept. 30, 2005, as amended at 70 FR website at http://www.treasurydirect.gov,
57442, Sept. 30, 2005; 74 FR 19417, Apr. 29, 2009; or such other Internet address as Pub-
75 FR 78901, Dec. 17, 2010] lic Debt may from time to time an-
nounce by publication in the FEDERAL
§ 363.11 Who is eligible to open a REGISTER. When you have completed
TreasuryDirect® account? the application, you will create a pass-
Only an individual or an entity is eli- word to access your account. We will
gible to open a TreasuryDirect ac- verify your identity and send your ac-
count. In order to open a count number to you by e-mail when
TreasuryDirect account, an individual your account application is approved.
or entity account manager must have a In addition to your password, we may
valid social security number (SSN), be require you to use any other form(s) of
18 years of age or over, and be legally authentication that we consider nec-
competent. An entity must have a essary for the protection of your ac-
valid SSN or employer identification count.
number. The account owner must have (b) Entities. An individual, referred to
a United States address of record and as an entity account manager, must es-
have an account at a United States de- tablish an account on behalf of an enti-
pository financial institution that will ty. We will verify the identity of the
accept debits and credits using the entity account manager. We may
Automated Clearing House method of verify the identity of the entity using
payment. any evidence we deem appropriate. The
[74 FR 19417, Apr. 29, 2009] entity account manager must certify
that he or she is authorized to open and
§ 363.12 Who may purchase and hold access an account for the entity and
book-entry securities in has the authority to act alone on be-
TreasuryDirect ®? half of the entity with regard to the ac-
(a) A TreasuryDirect account owner count.
may purchase and hold securities
[74 FR 19417, Apr. 29, 2009]
through his or her account.
(b) We do not permit a legally incom-
§ 363.14 How will you verify my iden-
petent person to open an account, pur- tity?
chase securities, or convert savings
bonds once we have been provided with (a) Individual. When you establish an
an order from a court with appropriate account, we may use a verification
jurisdiction determining incompetence service to verify your identity using in-
to perform such activities. formation you provide about yourself
(c) We do not permit a voluntary rep- on the online application. At our op-
resentative to purchase securities on tion, we may require offline
behalf of the estate of a decedent. verification.
(d) We may reject any application for (b) Entity. When an entity account
the purchase of a security, in whole or manager establishes an online account
in part. We may refuse to issue a secu- on behalf of an entity, we may use a
492
verification service to verify the iden- § 363.19 What should I do if I become

tity of the entity account manager aware that my password or other
using information that the entity ac- form of authentication has become
count manager provides about himself compromised?
or herself on the online application. At If you become aware that your pass-
our option, we may require offline word has become compromised, that
verification of the entity account man- any other form of authentication has
ager. At our option, we may require been compromised, lost, stolen, or mis-
any evidence we deem appropriate to used, or that there have been any unau-
verify the identity of the entity. thorized transactions in your account,
[74 FR 19417, Apr. 29, 2009] you may place a hold on your account
so that it cannot be accessed by any-
§ 363.15 What is the procedure for off- one, and you should notify us imme-
line verification? diately by e-mail or telephone. Contact
In the event we require offline information is available on the
verification, we will provide a print- TreasuryDirect Web site.
able verification form for the indi- [72 FR 30978, June 5, 2007]
vidual account owner or entity account
manager to sign. The signature on the § 363.20 What do I need to know about
form must be certified or guaranteed as the forms of registration that are
provided at § 363.43, and the form must available for purchases of securities
be mailed to us at the address provided through my TreasuryDirect ® ac-
in § 363.5. We may require documentary count?
verification of an entity as we deem ap- (a) General principles. (1) Registration
propriate. must express the actual ownership of,
[74 FR 19417, Apr. 29, 2009] and interest in, the security. Registra-
tion conclusively establishes ownership
§ 363.16 How do I access my account? of a security.
You may access your account online (2) You must provide a last name and
using your account number, password, a first name for each individual in-
and any other form(s) of authentica- cluded in the registration of the secu-
tion that we may require. rity.
(3) You must provide the valid tax-
[72 FR 30978, June 5, 2007] payer identification number for each
person named in the registration of the
§ 363.17 Who is liable if someone else security.
accesses my TreasuryDirect ® ac-
count using my password? (b) Forms of registration for individ-
uals. The forms of registration avail-
You are solely responsible for the able for individuals for purchases of se-
confidentiality and use of your account curities made through your
number, password, and any other TreasuryDirect account are single
form(s) of authentication we may re- owner, owner with beneficiary, and pri-
quire. We will treat any transactions mary owner with secondary owner, un-
conducted using your password as hav- less the forms of registration available
ing been authorized by you. We are not for a security are specifically limited
liable for any loss, liability, cost, or ex- by the subpart governing that security.
pense that you may incur as a result of
(1) Single owner. (i) A single owner is
transactions made using your pass-
the individual named in the registra-
word.
tion of a book-entry security or a con-
[72 FR 30978, June 5, 2007] verted savings bond without a bene-
ficiary, secondary owner, or coowner.
§ 363.18 Is Public Debt liable if the (ii) A single owner may add a bene-
electronic transmission of my data ficiary or secondary owner.
is intercepted?
(iii) A single owner may conduct per-
We are not liable for any interception mitted online transactions on securi-
of electronic data or communication. ties held in his or her account.
[67 FR 64286, Oct. 17, 2002. Redesignated at 70 (iv) Upon the death of the single
FR 57434, Sept. 30, 2005] owner, his or her estate is entitled to
493
§ 363.20 31 CFR Ch. II (7–1–11 Edition)
the security. In determining entitle- (iii) The primary owner may remove
ment, the law of the decedent’s domi- the secondary owner without the con-
cile will be followed. sent of the secondary owner.
(v) Registration example: ‘‘John Doe, (iv) The secondary owner has no
SSN 123–45–6789.’’ rights to view or conduct transactions
(2) Owner with beneficiary. (i) The pur- in any security unless the primary
chaser must be named as the owner owner gives the secondary owner these
with another individual as beneficiary. rights.
(ii) The owner may remove or change (v) The primary owner may give the
the beneficiary without the consent of secondary owner the right to view any
the beneficiary. security or rights to view and conduct
(iii) The owner may conduct per- transactions in any security online
mitted online transactions on securi- from the account of the secondary
ties held in his or her account without owner.
the consent of the beneficiary. (vi) Once the right to conduct trans-
actions in a security has been given to
(iv) The beneficiary has no ownership
the secondary owner, the primary
rights to the security during the own-
owner may view and conduct trans-
er’s lifetime. Upon the death of the
actions in the security from the pri-
owner, the security becomes the prop-
mary owner’s account, and the sec-
erty of the surviving beneficiary, de-
ondary owner may view and conduct
spite any attempted testamentary dis-
transactions in the security using the
position or any applicable local law to
secondary owner’s own account.
the contrary.
(vii) The primary owner may revoke
(v) If the beneficiary does not survive any rights previously given to the sec-
the owner, the security belongs to the ondary owner at any time.
estate of the owner. (viii) Upon the death of either the
(vi) If both the owner and the bene- primary or secondary owner, the secu-
ficiary die under conditions where it rity becomes the property of the sur-
cannot be established, either by pre- vivor, despite any attempted testa-
sumption of law or otherwise, who died mentary disposition or any applicable
first, the security is the property of the local law to the contrary.
estate of the owner. (ix) If both the primary and the sec-
(vii) In order for the beneficiary to ondary owner die under conditions
obtain the security or the redemption where it cannot be established, either
proceeds after the death of the owner, by presumption of law or otherwise,
the beneficiary must provide proof of who died first, the security is the prop-
death of the owner. If the beneficiary erty of the estate of the primary
has a TreasuryDirect account, the se- owner.
curity will be transferred to that ac- (x) In order for the secondary owner
count. If the beneficiary does not have to obtain the security or the security
an account, he or she may establish an proceeds after the death of the primary
account. Alternatively, a beneficiary owner, the secondary owner must pro-
named on a savings bond may request vide proof of death of the primary
redemption. If the beneficiary requests owner. If the secondary owner has a
redemption, he or she must provide TreasuryDirect account, the security
ACH instructions for the payment. will be transferred to that account. If
(viii) Registration example: ‘‘John the secondary owner does not have an
Doe, SSN 123–45–6789 POD (payable on account, he or she may establish an ac-
death to) Jane Doe, SSN 987–65–4321.’’ count. Alternatively, a secondary
(3) Primary owner with secondary owner named on a savings bond may
owner. (i) The purchaser must be request redemption. If the secondary
named in the registration as the pri- owner requests redemption, he or she
mary owner with another individual as must provide ACH instructions.
secondary owner. (xi) Registration example: ‘‘John
(ii) The primary owner holds the se- Doe, SSN 123–45–6789 with Joseph Doe,
curities in his or her account and may SSN 987–65–4321.’’
view or conduct permitted online (c) Forms of registration for entities.
transactions in the securities. The forms of registration available for
494
entities are sole proprietorship; part- PLLC, EIN 34–5678912’’ or ‘‘Summit

nership; corporation; limited liability Consulting Service, LLC, EIN 12–
company or professional limited liabil- 3456789.’’
ity company (LLC or PLLC); trust; de- (5) Trust. A trust form of registration
cedent’s estate; and estate of a living is available. The trust form of registra-
person such as an incompetent or a tion is not available for trusts in which
minor. the trustee is acting on behalf of a fed-
(1) Sole proprietorship. A sole propri- eral, state, or local government. The
etorship form of registration is avail- registration must identify the trust
able for an individual who is doing with specificity; at a minimum, it
business as a sole proprietor. The enti- must include the authority or docu-
ty account manager must be the owner ment creating the trust, the date the
of the business. Registration example: document was executed (except in the
‘‘John Doe DBA Doe Plumbing Sup- case of a probated will when the date is
plies, EIN 12–3456789, [or SSN 123–45– not necessary), the name of a trustee of
6789].’’ the trust who is authorized to act alone
(2) Partnership. A partnership form of on behalf of the trust with regard to
registration is available for two or the account, and any information that
more individuals who are doing busi- is necessary to distinguish the trust
ness as a partnership, including a lim- from any other trust. The registration
ited liability partnership. Unless the may also include the names of addi-
name of a partnership includes the tional trustees and the full name of the
word ‘‘partnership,’’ the registration trust. If one or more of the trustees are
must include descriptive words indi- individuals, and the entity account
cating partnership status. The entity manager is an individual trustee, the
account manager must be a general entity account manager must be
partner, and must certify that he or named in the registration. If an organi-
she has the authority to act alone on zation serving as a trustee of the trust
behalf of the partnership with regard will administer this account, the enti-
to this account. Registration example: ty account manager must be a duly au-
‘‘Smith and Jones Construction Com- thorized employee of that organization
pany, a partnership, EIN 98–7654321, or who has the authority to act alone on
SSN 987–65–4321.’’ behalf of the organization in its role as
(3) Corporation. A corporate form of trustee of the trust with regard to the
registration is available for an entity account, and the organization must be
that has been incorporated pursuant to named in the registration. In either
state law. The registration must con- case, the entity account manager must
tain a reference to the corporate sta- certify that he or she has the authority
tus. The entity account manager must to act alone on behalf of the trust with
be a corporate officer or designated regard to the account. Registration ex-
employee and must certify that he or amples: ‘‘John Doe, Trustee under Dec-
she has the authority to act alone on laration of Trust dated January 1, 2001,
behalf of the corporation with regard SSN 123–45–6789;’’ ‘‘First National
to this account. Registration example: Bank, Trustee under Declaration of
‘‘ABC Corporation, EIN 23–4567891.’’ Trust dated January 1, 2001, EIN 12–
(4) Limited Liability Company (LLC) or 3456789;’’ ‘‘John Doe or Sarah Jones,
Professional Limited Liability Company Trustees under Agreement with Jane
(PLLC). A LLC or PLLC form of reg- Doe dated January 1, 2001, SSN 123–45–
istration is available for an entity that 6789;’’ ‘‘Sarah Jones, Trustee under the
has registered articles of organization Will of Matthew Smith, deceased, SSN
pursuant to state law. The registration 123–45–6789;’’ ‘‘Jane Doe, Trustee of the
must contain a reference to the com- Doe Family Trust dated January 1,
pany’s status. The entity account man- 2001, EIN 12–3456789.’’
ager must be a company official or des- (6) The estate of a decedent. The dece-
ignated employee and must certify dent’s estate form of registration is
that he or she has the authority to act available for an individual or organiza-
alone on behalf of the company with tion that has been appointed by a court
regard to this account. Registration according to state law to act on behalf
example: ‘‘Paine Dental Associates, of the estate of a decedent. This form
495
§ 363.21 31 CFR Ch. II (7–1–11 Edition)
of registration is not available where (2) Owner with beneficiary form of reg-
the legal representative is acting on istration. The owner can conduct trans-
behalf of a federal, state, or local gov- actions in securities held in his or her
ernment. The entity account manager TreasuryDirect account. The bene-
must be a court-appointed individual ficiary has no rights during the life-
legal representative who has the au- time of the owner and therefore cannot
thority to act alone with regard to the conduct transactions in the securities.
account, or an employee of the court- (3) Primary owner with secondary
appointed organizational legal rep- owner form of registration. (i) The pri-
resentative who has the authority to mary owner can conduct any permitted
act alone with regard to the account on transaction in a security held in the
behalf of the organization in its role as primary owner’s TreasuryDirect ac-
legal representative of the estate. Reg- count. (See § 363.20(e)).
istration example: ‘‘John Doe, Legal (ii) If the primary owner has given
Representative of the Estate of Wil- the secondary owner the right to con-
liam Jones, a decedent, EIN 12–3456789, duct transactions in a security, and
or SSN 123–45–6789.’’ has not revoked that right, then the
(7) The estate of a living person such as secondary owner can conduct trans-
an incompetent or a minor. A form of actions in the security. Transactions
registration is available for an indi- that may be conducted by the sec-
vidual or organization that has been ondary owner include transferring a
appointed according to state law to act marketable security, redeeming a sav-
on behalf of the estate of an incom- ings bond, and changing the destina-
petent person, a minor, or other living tion of interest and redemption pay-
person. This form of registration is not ments for marketable securities.
available where the legal guardian is (b) Converted savings bonds. The rules
acting on behalf of a federal, state, or for transactions governing converted
local government. The entity account savings bonds are contained in subpart
manager must be a court-appointed E of this part.
legal guardian who has the authority (c) Entity. The entity account man-
to act alone with regard to the ac- ager can conduct transactions in the
count, or an employee of the court-ap- securities held within the entity’s ac-
pointed organizational legal guardian count. Initially, the entity account
who has the authority to act alone manager is the individual who opens
with regard to the account on behalf of
the account. The entity account man-
the organization in its role as legal
ager may be changed to a different in-
guardian. Registration example: ‘‘John
dividual using procedures available on
Doe, Legal Guardian of the estate of
our Web site. The entity account man-
William Jones.’’ The SSN of the incom-
ager must certify that he or she is au-
petent person or the minor will be
thorized to act alone on behalf of the
used.
entity in accessing and conducting
[70 FR 57434, Sept. 30, 2005, as amended at 74 transactions on behalf of the entity
FR 19417, Apr. 29, 2009] with regard to the entity’s account.
§ 363.21 When may you require offline [70 FR 57434, Sept. 30, 2005 as amended at 70
authentication and documentary FR 57443, Sept. 30, 2005; 74 FR 19419, Apr. 29,
evidence? 2009; 75 FR 78901, Dec. 17, 2010]
We may require offline authentica- § 363.23–363.24 [Reserved]
tion and documentary evidence at our
option. § 363.25 How do I conduct transactions
[74 FR 19419, Apr. 29, 2009] in my account or in Treasury secu-
rities held in my account?
§ 363.22 Who has the right to conduct We will provide online instructions
online transactions in book-entry for conducting transactions through
securities? your account. If you are unable to con-
(a) Individual—(1) Single owner form of duct a transaction online, you should
registration. A single owner can conduct contact us at the address provided in
transactions in securities held in his or § 363.5. Offline transactions will require
her TreasuryDirect® account. a certified or guaranteed signature. See
496
§ 363.43 for instructions for obtaining a primary owner with secondary owner
certified or guaranteed signature. forms of registration.
(c) Procedure for opening an account
§ 363.26 What is a transfer? for a minor. (1) Online instructions will
(a) A transfer is a transaction to: be provided for establishing an account
(1) Move a Treasury security, or a for a minor.
portion of a Treasury security, from (2) The custodian must certify that
one account to another within all transactions conducted through the
TreasuryDirect ®; account will be on the minor’s behalf.
(2) Move a marketable Treasury secu- (d) Procedure for conducting trans-
rity to or from a TreasuryDirect ac- actions in the minor’s account. The cus-
count and an account in the commer- todian must conduct all transactions
cial book-entry system; in the minor’s account on behalf of the
(3) Move a marketable Treasury secu- minor. Access to the minor’s account is
rity to a TreasuryDirect account from through the custodian’s primary ac-
a Legacy Treasury Direct® account. count.
(e) Transactions permitted in the mi-
(b) Transfers of a specific type of se-
nor’s account. (1) The custodian may
curity may be limited by the subparts
purchase securities for and on behalf of
that refer to that security.
the minor through the minor’s ac-
(c) Gift delivery is not a transfer. A
count.
transfer does not include delivery of a
(2) The custodian may redeem sav-
gift savings bond from the donor to the
ings bonds on behalf of the minor
recipient. This is referred to as a deliv-
through the minor’s account. We will
ery.
report the interest earned on the secu-
[67 FR 64286, Oct. 17, 2002, as amended at 70 rity to the name and SSN of the minor.
FR 57443, Sept. 30, 2005; 76 FR 18064, Apr. 1, (3) The custodian may not purchase
2011] gift savings bonds from the minor’s ac-
count.
§ 363.27 What do I need to know about (4) The custodian may transfer a se-
accounts for minors who have not
had a legal guardian appointed by a curity to another TreasuryDirect ac-
court? count, provided the account is a linked
account bearing the name and taxpayer
(a) We do not permit a minor to pur- identification number of the minor.
chase securities. The custodian can transfer a market-
(b) Opening an account in the name of able Treasury security to an account in
a minor. (1) A parent or an individual the commercial book-entry system.
who provides the chief financial sup- (5) Securities may be transferred to
port of a minor may open an account the minor’s account.
for a minor. The person opening the ac- (6) Gift savings bonds may be deliv-
count for a minor is referred to as the ered to the minor’s account.
custodian of the minor’s account. (7) The custodian may grant rights to
(2) The custodian is a fiduciary for view and conduct transactions in the
the minor as to the securities held in security as may be permitted by
the minor’s account. § 363.22.
(3) The custodian must have an exist- (8) The custodian may purchase a
ing primary TreasuryDirect ® account zero-percent certificate of indebtedness
in order to open the minor’s account. on behalf of the minor. The zero-per-
(i) The minor’s account is an account cent certificate of indebtedness is the
that is linked to the custodian’s pri- property of the minor.
mary account. (f) When the minor reaches the age of 18
(ii) The custodian must use his or her years. (1) The only transactions that
primary TreasuryDirect account as a the custodian may make in the minor’s
portal to open and access the minor’s account after the minor attains the age
account. of 18 years are to purchase new securi-
(4) Securities contained in the mi- ties, and to transfer the securities con-
nor’s account will be registered in the tained in the minor’s account to an-
name and SSN of the minor, in either other account in the name and SSN of
sole owner, owner with beneficiary, or the minor. The receiving account in
497
§ 363.28 31 CFR Ch. II (7–1–11 Edition)
the name and SSN of the minor may be § 363.28 Does Public Debt reserve the
a primary account established by the right to require that any
minor, or it may be another minor TreasuryDirect ® transaction be
linked account with the same or a dif- conducted in paper form?
ferent custodian. The custodian may We reserve the right to require any
transfer one or more of the securities transaction to be conducted in paper
at a time, or the custodian may de-link form. Signatures on paper transactions
the account and transfer all of the se- must be certified or guaranteed as pro-
curities contained in the account to vided in § 363.43.
the minor’s previously established pri-
[70 FR 57434, Sept. 30, 2005]
mary TreasuryDirect account. The
minor must establish his or her own § 363.29 May Treasury close an ac-
primary TreasuryDirect account prior count, suspend transactions in an
to transfer of his or her securities. account, or refuse to open an ac-
(2) In order to gain control of the se- count?
curities held in the minor’s account, We reserve the right to take any of
the minor must first open his or her the following actions if, in our sole dis-
own primary account. cretion, we deem the action to be in
(3) The minor may gain control of the the best interests of the United States:
securities held in the minor’s account (a) Refuse to open an account for any
by the custodian transferring the secu- person;
rities held in the minor’s account to (b) Close any existing account, re-
the minor’s primary account, or the deem, sell, or liquidate the securities
minor may request that Public Debt held in the account, and pay the pro-
transfer the securities to his or her pri- ceeds to the person entitled;
mary account. (c) Suspend transactions with respect
(4) The minor may gain control of his to an account or any security held in
or her zero-percent certificate of in- an account; or
debtedness by the custodian de-linking (d) Take any other action with re-
the account and transferring the zero- gard to any account that we deem nec-
percent certificate of indebtedness to essary, if not inconsistent with exist-
the minor’s primary account, or the ing law and existing rights.
minor may request that Public Debt [70 FR 57434, Sept. 30, 2005, as amended at 72
de-link the account and transfer the FR 30978, June 5, 2007]
zero-percent certificate of indebtedness
to his or her primary account. § 363.30 What actions may Treasury
(g) Liability. We rely on the certifi- take if funds used to purchase a se-
cation of the custodian that he or she curity were credited or debited in
error or through fraud?
is acting on behalf of the minor. We are
not liable to the minor, or any other (a) If Treasury sustains a loss be-
person or party acting on behalf of the cause the funds used to purchase a se-
minor, for the actions of the custodian, curity were debited from an account at
nor are we liable for the application of a financial institution from which the
any proceeds from the transfer or re- TreasuryDirect account owner did not
demption of securities held in the mi- have the right to authorize such ACH
nor’s account. The custodian agrees to debit entry, we reserve the right to re-
indemnify and hold harmless the deem that security from the account
United States in the event that we suf- and use the proceeds to reimburse
fer any loss on account of any claim re- Treasury for the loss. If such security
lating to a minor account. has been transferred to another
TreasuryDirect account, we reserve the
[69 FR 2507, Jan. 16, 2004, as amended at 69 right to reverse the transfer, redeem
FR 50309, Aug. 16, 2004; 70 FR 57443, Sept. 30, the security, and use the proceeds to
2005; 74 FR 19419, Apr. 29, 2009; 75 FR 78901, reimburse Treasury for the loss. If such
Dec. 17, 2010; 76 FR 18064, Apr. 1, 2011] security has been redeemed or has ma-
tured and the proceeds paid to the ac-
count owner, we reserve the right to
498
take any action that we deem appro- §§ 363.31–363.32 [Reserved]

priate, including redeeming other secu-
rities remaining in the account and § 363.33 Can an attorney-in-fact con-
using the proceeds to reimburse Treas- duct transactions in my
ury for the loss. TreasuryDirect ® account?
(b) If an employer or a third-party (a) An attorney-in-fact who provides
agent acting on behalf of one or more a copy of a durable power of attorney
employers certifies, under penalty of granting him or her the authority to
perjury, that it has made an erroneous conduct TreasuryDirect transactions
ACH credit entry to purchase a on behalf of the owner may conduct
TreasuryDirect certificate of indebted- transactions online.
ness, we reserve the right to redeem se- (b) An attorney-in-fact who provides
curities from the TreasuryDirect ac- a copy of a limited power of attorney
count to which the entry was made in may only conduct transactions that he
the amount of the erroneous entry and or she is permitted by his or her power.
return the funds. No action will be Such transactions will be through an
taken if the certification is not re- offline process.
ceived by Treasury within 45 days of (c) A written copy of the power of at-
the erroneous entry. We will only re- torney must be sent to the address pro-
turn funds if the erroneous entry was vided in § 363.5. We may require any ad-
made to an account that does not be- ditional evidence that we consider nec-
long to the intended recipient, is a du- essary to support the power.
plicate payment, is in an amount that
is greater than was authorized by the § 363.34 What happens if an owner be-
recipient, or was made in error because comes incompetent after opening a
the employee was not in a pay status. TreasuryDirect ® account?
We reserve the right to refuse to return If we receive notice that the owner of
an entry. By requesting that Treasury a TreasuryDirect account has become
correct an erroneous entry, the em- incompetent, we will suspend all trans-
ployer agrees to indemnify Treasury actions in the account until we estab-
for any loss that Treasury may incur lish the authority of another person to
as a result of the correction of the act in his or her behalf.
error and agrees to provide such infor-
mation and assistance as Treasury may [67 FR 64286, Oct. 17, 2002, as amended at 68
require. FR 24807, May 8, 2003]
(c) If a financial institution, except a
§ 363.35 When is a transaction effec-
financial institution acting on behalf tive?
of an employer, makes an erroneous
ACH credit entry to a TreasuryDirect® A transaction is effective when we
account and provides a certification as post it to our records.
to the circumstances of the erroneous
entry within 6 months of the entry § 363.36 What securities can I purchase
date, we will notify the account owner and hold in my TreasuryDirect ®
account?
of the erroneous ACH credit entry and
attempt to resolve the issue. We re- You can purchase and hold eligible
serve the right to place a hold on and Treasury securities in your account.
to redeem securities from the Eligible securities are Series EE and
TreasuryDirect® account to which the Series I savings bonds, zero-percent
ACH credit entry was made in the certificates of indebtedness, and mar-
amount of the erroneous credit entry ketable Treasury securities that are
and return the funds to the financial available for purchase through the
institution. The financial institution TreasuryDirect Web site. In addition,
agrees to indemnify Treasury for any you can hold converted savings bonds
loss that Treasury may incur as a re- and eligible marketable Treasury secu-
sult of the correction of the error and rities that have been transferred from
agrees to provide information and as- the Legacy Treasury Direct system or
sistance as Treasury may require. the commercial book-entry system.
[75 FR 70815, Nov. 19, 2010] [70 FR 57443, Sept. 30, 2005]
499
§ 363.37 31 CFR Ch. II (7–1–11 Edition)
§ 363.37 How do I purchase and make tured and the proceeds paid, we reserve
payment for eligible Treasury secu- the right to reverse previously proc-
rities through my TreasuryDirect ® essed security transactions. We are not
account? responsible for any fees your financial
(a) Online purchase. Purchases of eli- institution may charge relating to re-
gible Treasury securities through your turned ACH debits.
TreasuryDirect account must be made [70 FR 57443, Sept. 30, 2005]
online.
(b) Payment for savings bonds and mar- § 363.39 Will I receive a confirmation
ketable Treasury securities. You can pay of my request to purchase a Treas-
for eligible savings bonds and market- ury security?
able Treasury securities by either a At the time that you submit a re-
debit from your designated account at quest to purchase a Treasury security
a United States financial institution
through your TreasuryDirect ® ac-
using the ACH method, or by using the
count, we will make available a print-
redemption proceeds of your zero-per-
able online confirmation of your re-
cent certificate of indebtedness. You
quest. Final confirmation will occur
can pay for savings bonds automati-
when the security is issued into your
cally using the redemption proceeds of
account. You will not receive a mailed
your payroll zero-percent certificate of
confirmation.
indebtedness through the payroll sav-
ings plan. § 363.40 How are payments of prin-
(c) Payment for zero-percent certificate cipal and interest made?
of indebtedness. You can pay for a zero-
percent certificate of indebtedness by: (a) Payment of a savings bond that has
(1) A credit from your financial insti- reached final maturity. We will purchase
tution or employer using the ACH a zero-percent certificate of indebted-
method to your TreasuryDirect® ac- ness in your TreasuryDirect ® account
count; using the proceeds of a matured sav-
(2) A debit from your designated ac- ings bond.
count at a financial institution using (b) Payments of interest and principal
the ACH method, limited to $1000 or (except a savings bond that has reached
less per transaction; or final maturity). (1) We provide two
(3) Using the proceeds of maturing se- methods of receiving payments of prin-
curities held in your TreasuryDirect® cipal and interest:
account. (i) Payment to your account at a fi-
(d) Payment for a payroll zero-percent nancial institution by the ACH meth-
certificate of indebtedness. The only od, or
method available to purchase a payroll (ii) Payment to your TreasuryDirect
zero-percent certificate of indebtedness account to purchase a zero-percent cer-
is to arrange for your employer or fi- tificate of indebtedness.
nancial institution to send a credit by (2) You may select different payment
the ACH method to purchase a payroll destinations for principal and interest
zero-percent certificate of indebtedness for a marketable Treasury security.
in your TreasuryDirect® account. You may change your payment des-
tination at any time, unless the secu-
[70 FR 57443, Sept. 30, 2005, as amended at 75 rity is in the closed book period. (See
FR 70816, Nov. 19, 2010]
§ 363.210.)
§ 363.38 What happens if my financial (3) If we are unable to deliver a pay-
institution returns an ACH debit? ment, we will use the payment to pur-
chase a zero-percent certificate of in-
If your designated financial institu-
debtedness in your TreasuryDirect ac-
tion returns an ACH debit, we reserve
count.
the right to reinitiate the debit at our
option. We also reserve the right to re- [70 FR 57443, Sept. 30, 2005]
verse the transaction, thereby remov-
ing the security from your § 363.41 What happens if an ACH pay-
TreasuryDirect ® account. If the ACH ment is returned to Public Debt?
return occurs after the security has We will notify you electronically of
been redeemed, transferred, or has ma- the returned payment. We will hold
500
your payment until you provide us withdraw your consent to receive tax
with instructions. Returned payments reporting forms by electronic means,
will not earn interest. We reserve the we reserve the right to redeem any sav-
right to redirect a returned payment to ings bonds held in your account and
the bank account at a financial institu- close your account.
tion that you have designated in your [67 FR 64286, Oct. 17, 2002, as amended at 70
TreasuryDirect ® account as your pri- FR 57435, Sept. 30, 2005]
mary bank account, if that account is
different from the one that returned § 363.43 What are the procedures for
the payment to us. We are not respon- certifying my signature on an off-
sible for any fees your financial insti- line application for a
tution may charge relating to returned TreasuryDirect ® account, or on an
offline transaction form?
ACH payments.
(a) Certification within the United
[69 FR 50308, Aug. 16, 2004] States. For certifications within the
United States, the certifying indi-
§ 363.42 How will my interest income vidual must be authorized to bind his
be reported for tax purposes?
or her institution by his or her acts, to
When you open your guarantee signatures to assignments of
TreasuryDirect ® account, you consent securities, or to certify assignments of
to receive the appropriate tax report- securities. The following table provides
ing forms by electronic means. We will a list of authorized certifying individ-
notify you when your tax reporting uals and the required evidence of au-
forms are available. The form will be thority. Members of Treasury-recog-
available in printable form through nized signature guarantee programs
your TreasuryDirect account. If you are for security transfers only.
Who can certify signatures in the U.S. Evidence of certifying individual’s authority
(1) Officers and employees of depository institutions ................. (i) We require the institution’s seal or signature guarantee
stamp.
(ii) If the institution is an authorized paying agent for U.S. Sav-
ings Bonds, we require a legible imprint of the paying
agent’s stamp.
(2) Institutions that are members of Treasury—recognized sig- We require the imprint of the signature guarantee stamp, i.e.,
nature guarantee programs (for security transfers only). the STAMP, SEMP, or MSP stamp for members of the Se-
curities Transfer Agents Medallion Program, the Stock Ex-
changes Medallion Program, or the New York Stock Ex-
change Inc. Medallion Signature Program.
(3) Officers and employees of corporate central credit unions, We require the entity’s seal.
Federal Land Banks, Federal Intermediate Credit Banks and
Banks for Cooperatives, the Central Bank for Cooperatives,
and Federal Home Loan Banks.
(4) Commissioned or warrant officers of the United States (i) We require a statement that the person executing the as-
Armed Forces, for signatures executed by Armed Forces signment is one whose signature the officer is authorized to
personnel, civilian field employees, and members of their certify under our regulations.
families. (ii) The certifying official’s rank must be shown.
(5) A judge or clerk of the court .................................................. We require the seal of the court.
(6) Other persons as designated by the Commissioner or Dep- Evidence is determined by our procedures.
uty Commissioner of Public Debt.
(b) Certification within foreign coun- eign countries and the required evi-
tries. The following table lists the au- dence of the individual’s authority.
thorized certifying individuals for for-
Who can certify signatures in foreign countries Evidence of certifying individual’s authority
(1) United States diplomatic or consular officials ........................ (i) We require the seal or stamp of the office.
(ii) If there is no seal or stamp, then we require certification by
some other authorized individual, under seal or stamp.
501
§ 363.44 31 CFR Ch. II (7–1–11 Edition)
Who can certify signatures in foreign countries Evidence of certifying individual’s authority
(2) Managers and officers of foreign branches of U.S. deposi- We require the seal of the depository institution, or the imprint
tory institutions and institutions that are members of Treas- of the signature guarantee stamp, i.e., the STAMP, SEMP,
ury-recognized signature guarantee programs (for security or MSP stamp for members of the Securities Transfer
transfers only). Agents Medallion Program, the Stock Exchanges Medallion
Program, or the New York Stock Exchange Incorporated Me-
dallion Signature Program.
(3) Notaries Public and other officers authorized to administer (i) We require the official seal or stamp of the office.
oaths, provided their authority is certified by a United States (ii) If there is no seal or stamp, the position must be certified
diplomatic or consular official. by some other authorized individual, under seal or stamp, or
otherwise proved to our satisfaction.
(c) Duties and liabilities of certifying (2) The endorsement must be dated
individuals. (1) The certifying indi- and the seal of the institution must be
vidual must first establish the identity added.
of the signer. (3) This form of endorsement is an
(2) The form must be signed in the unconditional guarantee to us that the
presence of the certifying individual. institution is acting for the signer
(3) If the certifying individual is not under proper authorization.
an officer, the certifying individual (f) Persons who cannot act as certifying
must insert the words ‘‘Authorized Sig- individuals. Any person having an in-
nature’’ in the space provided for the terest in a security involved in the
title. transaction cannot act as a certifying
(4) If the certifying individual is neg- individual. However, an authorized offi-
ligent in making the certification, the cer or employee of a depository finan-
certifying individual and his or her or- cial institution that is a member of a
ganization are jointly and severally Treasury-recognized signature guar-
liable for any loss the United States antee program can act as a certifying
may incur as a result of the negligence. individual for transfer of a security to
(d) Guaranteed signatures. (1) A secu- the institution or on behalf of the in-
rity or other form requiring certifi- stitution.
cation need not be executed in the
presence of a certifying individual if [67 FR 64286, Oct. 17, 2002, as amended at 70
the signature is unconditionally guar- FR 57435, Sept. 30, 2005]
anteed by the certifying individual. To
§ 363.44 What happens when a
guarantee a signature, the certifying TreasuryDirect ® account owner
individual must add a dated endorse- dies and the estate is entitled to se-
ment after the signature. For example: curities held in the account?
Signature guaranteed, First National Bank (a) Estate is being administered. For an
of Smithville, Smithville, NH, by A. B. Doe, estate that is being administered, the
President, dated 1/1/2001.
legal representative of the estate must
(2) The certifying individual and his open a TreasuryDirect account in the
or her organization unconditionally name of the estate in order to conduct
guarantee to us that the signature is transactions. The legal representative
genuine and the signer had the legal of the estate may then conduct any
capacity to execute the assignment or transactions that are available to an
related form. individual account owner. We will re-
(e) Guaranteed absence of a signature. quire appropriate proof of appointment
(1) A form requiring a certified signa- for the legal representative of the es-
ture need not be signed when a certi- tate. Letters of appointment must be
fying individual associated with a de- dated not more than one year prior to
pository financial institution places the date of submission of the letters of
the following endorsement on the secu- appointment.
rity or the form: (b) Estate has been settled previously. If
Absence of signature by owner and validity the estate has been settled previously
of transaction guaranteed, Second State through judicial proceedings, the per-
Bank of Jonesville, Jonesville, NC, by B. R. sons entitled may request payment of
Butler, Vice President, dated 11/1/2001. securities, if the securities are eligible
502
for redemption, or may transfer the se- death. Voluntary representative proce-
curities to the TreasuryDirect ac- dures may be used only if:
counts of the persons entitled, if the (i) There has been no administration,
securities are eligible for transfer. We no administration is contemplated, and
will require a certified copy of the no summary or small estate procedures
court-approved final accounting for the under applicable local law have been
estate, the court’s decree of distribu- used;
tion, or other appropriate evidence. If (ii) The total redemption value of the
payment is requested, we will require Treasury securities and held payments,
ACH instructions to process the re- if any, held directly on our records
quest. that are the property of the decedent’s
(c) Special provisions under the law of estate is $100,000 or less, as of the date
the jurisdiction of the decedent’s domicile. of death, and
If there is no formal or regular admin- (iii) There is a person eligible to
istration and no representative of the serve as the voluntary representative
estate is to be appointed, the person according to paragraph (e)(3) of this
appointed to receive or distribute the section.
assets of a decedent’s estate without (2) Authority of voluntary representa-
regular administration under summary tive. A voluntary representative may:
or small estates procedures under ap- (i) Redeem the decedent’s savings
plicable local law may request pay- bonds that are eligible for redemption.
ment of securities, if the securities are Payment may be made to the vol-
eligible for redemption, or may trans- untary representative on behalf of or
fer the securities to or on behalf of the directly to the persons entitled by the
persons entitled by the law of the juris- law of the jurisdiction in which the de-
diction in which the decedent was dom- cedent was domiciled at the date of
iciled at the date of death, if the secu- death;
rities are eligible for transfer. We will (ii) Transfer the decedent’s securities
require appropriate evidence. If pay- to the persons entitled by the law of
ment is requested, we will require ACH the jurisdiction in which the decedent
instructions to process the request. was domiciled at the date of death.
(d) When administration is required. If (3) Order of precedence for voluntary
the total redemption value of the representative. An individual eighteen
Treasury securities and undelivered years of age or older may act as a vol-
payments, if any, held directly on our untary representative according to the
records that are the property of the de- following order of precedence: a sur-
cedent’s estate is greater than $100,000, viving spouse; if there is no surviving
administration of the decedent’s estate spouse, then a child of the decedent; if
will be required. The redemption value there are none of the above, then a de-
of savings bonds and the principal scendant of a deceased child of the de-
amount of marketable securities will cedent; if there are none of the above,
be used to determine the value of secu- then a parent of the decedent; if there
rities, and will be determined as of the are none of the above, then a brother
date of death. Administration may also or sister of the decedent; if there are
be required at the discretion of the De- none of the above, then a descendant of
partment for any case. a deceased brother or sister of the dece-
(e) Voluntary representative for small dent; if there are none of the above,
estates that are not being otherwise ad- then a next of kin of the decedent, as
ministered—(1) General. A voluntary determined by the laws of the dece-
representative is a person qualified ac- dent’s domicile at the date of death. As
cording to paragraph (e)(3) of this sec- used in this order of precedence, child
tion, to redeem or transfer a decedent’s means a natural or adopted child of the
securities. The voluntary representa- decedent.
tive procedures are for the convenience (4) Liability. By serving, the vol-
of the Department; entitlement to the untary representative warrants that
decedent’s securities and held pay- the distribution of payments or securi-
ments, if any, is determined by the law ties are to or on behalf of the persons
of the jurisdiction in which the dece- entitled by the law of the jurisdiction
dent was domiciled at the date of in which the decedent was domiciled at
503
§ 363.45 31 CFR Ch. II (7–1–11 Edition)
the date of death. The United States is we will require a certified copy of the
not liable to any person for the im- agreement.
proper distribution of payments or se- (d) Final court order. We will recog-
curities. Upon payment or transfer of nize a final order entered by a court
the securities to the voluntary rep- that affects ownership rights in a secu-
resentative, the United States is re- rity held in TreasuryDirect only to the
leased to the same extent as if it had extent that the order is consistent with
paid or delivered to a representative of the provisions of this part. The owner
the estate appointed pursuant to the of the security must be a party to the
law of the jurisdiction in which the de- proceedings.
cedent was domiciled at the date of
(e) Levy to satisfy money judgment. We
death. The voluntary representative
shall indemnify and hold harmless the will honor a transaction request sub-
United States and all creditors and permitted by a person appointed by a
sons entitled to the estate of the dece- court and having authority under an
dent. The amount of the indemnifica- order of a court to dispose of a security
tion is limited to an amount no greater held in TreasuryDirect pursuant to a
than the value received by the vol- money judgment against the owner of
untary representative. the security, as owner is defined in
(5) Creditor. If there has been no ad- § 363.6 of this part. In the case of sav-
ministration, no administration is con- ings bonds, we will only make payment
templated, no summary or small estate pursuant to the court order to the ex-
procedures under applicable local law tent of the money judgment. We will
have been used, and there is no person not transfer the savings bonds.
eligible to serve as a voluntary rep- (f) Internal Revenue Service (IRS) levy.
resentative pursuant to paragraph (e) We will honor an IRS notice of levy
of this section, then a creditor may under section 6331 of the Internal Rev-
make a claim for payment of the enue Code:
amount of the debt, providing the debt (1) Against the owner, as owner is de-
has not been barred by applicable local fined in § 363.6 of this part, including a
law.
levy against the owner in the capacity
[70 FR 57435, Sept. 30, 2005, as amended at 70 of nominee, transferee, or alter ego;
FR 57443, Sept. 30, 2005; 74 FR 19419, Apr. 29, (2) Against a secondary owner, if the
2009]
secondary owner has the right to con-
§ 363.45 What are the rules for judicial duct transactions in a security at the
and administrative actions involv- date and time the notice of levy is de-
ing securities held in livered to Public Debt; or
TreasuryDirect ®? (3) Against an owner’s property to
(a) Notice of adverse claim or pending which a federal tax lien is attached.
judicial proceedings. We are not subject (g) Trustee in bankruptcy, a receiver of
to and will not accept a notice of an an insolvent’s estate, a receiver in equity,
adverse claim or notice of pending judi- or a similar court officer. We will honor
cial proceedings involving a security a transaction request submitted by a
held in TreasuryDirect. trustee in bankruptcy, a receiver of an
(b) Competing claims to a security. The insolvent’s estate, a receiver in equity,
Department of the Treasury, Public or a similar court officer, if the origi-
Debt, and the Federal Reserve Banks nal court order is against the owner, as
are not proper defendants in a judicial owner is defined in § 363.6 of this part.
proceeding involving competing claims In the case of savings bonds, we will
to a security held in TreasuryDirect. only make payment. We will not trans-
(c) Divorce decree. We will recognize a
fer the savings bonds.
divorce decree that either disposes of a
security held in TreasuryDirect or rati- (h) Court order that attempts to defeat
fies a property settlement agreement or impair survivorship rights. We will not
disposing of a security that is the prop- recognize a court order that attempts
erty of either of the parties. If the di- to defeat or impair the survivorship
vorce decree does not set out the terms rights of a beneficiary, secondary
of the property settlement agreement, owner, coowner of a converted savings
504
bond, or the registered owner of an un- judicial proceedings resulting in a dec-

delivered gift security held in laration of forfeiture; judicial for-
TreasuryDirect. feiture is a forfeiture through either a
civil or criminal proceeding in a United
FR 70816, Nov. 19, 2010] States District Court resulting in a
final judgment and order of forfeiture.
§ 363.46 What evidence is required to (c) Procedures for a forfeiting agency to
establish the validity of judicial request forfeiture of Treasury securities. A
proceedings? forfeiting agency must request for-
(a) We will require certified copies of feiture. An individual authorized by
the final judgment, decree, or court the forfeiting agency must sign the
order, and any necessary supple- transaction request. The request must
mentary proceedings. be mailed to the Department of the
(b) A transaction request by a trustee Treasury, Bureau of the Public Debt,
in bankruptcy or a receiver of an Parkersburg, WV 26106–7015.
insolvent’s estate must be supported by (d) Public Debt procedures upon receipt
evidence of appointment and qualifica- of forfeiture request. Upon receipt and
tion. review of the transaction request, we
(c) A transaction request by a re- will make payment to the forfeiture
ceiver in equity or a similar court offi- fund specified, if the security is eligible
cer (other than a receiver of an for payment, or we will transfer the se-
insolvent’s estate) must be supported curity pursuant to the transaction re-
by a copy of an order that authorizes quest. We will record the forfeiture, the
the receiver or similar court officer to forfeiture fund into which the proceeds
take possession and control of the se- were paid or the security transfer
curity. records, the contact point, and any re-
[70 FR 57435, Sept. 30, 2005] lated information.
(e) Inquiries from previous owner. All
§ 363.47 Will Public Debt pay Treasury inquiries or claims from the previous
securities pursuant to a forfeiture owner will be referred to the contact
proceeding? point of the forfeiting agency. We will
(a) General. We will honor a judicial tell the person who inquired that we
or administrative forfeiture order or referred his or her inquiry to the con-
declaration of forfeiture submitted by tact point. We will not investigate the
a federal agency. We will rely exclu- inquiry. We will defer to the forfeiting
sively upon the information provided agency’s determination of the appro-
by the Federal forfeiting agency and priate course of action, including set-
will not make any independent evalua- tlement where appropriate. Any settle-
tion of the validity of the forfeiture ment will be paid from the forfeiture
order, the request for payment, or the fund into which the proceeds were de-
authority of the individual signing the posited.
transaction request. The amount to be
[70 FR 57436, Sept. 30, 2005]
paid or transferred is limited to the
value of the security as of the date of §§ 363.48–363.49 [Reserved]
forfeiture.
(b) Definition of special terms relating
to forfeitures. Subpart C—Book-Entry Savings
Contact point means the individual Bonds Purchased Through
designated by the Federal investigative TreasuryDirect
agency, United States Attorney’s Of-
fice, or forfeiting agency, to receive re- GENERAL
ferrals from Public Debt.
Forfeiting agency means the federal § 363.50 What Treasury securities does
this subpart govern?
law enforcement agency responsible for
the forfeiture. This subpart governs:
Forfeiture means the process by which (a) Series EE and Series I book-entry
property may be forfeited by a federal savings bonds that were originally
agency. Administrative forfeiture is issued as book-entry bonds through
forfeiture by a federal agency without TreasuryDirect ®; and
505
§ 363.51 31 CFR Ch. II (7–1–11 Edition)
(b) Converted savings bonds that are of the bond to an amount less than $25,
registered in: we will not permit the transaction to
(1) The single owner or entity form of occur.
registration of any series,
(2) The owner with beneficiary form § 363.55 May I transfer my book-entry
of registration of Series EE and Series savings bonds to another person?
I savings bonds, (a) You may transfer a savings bond
(3) The owner with beneficiary form or a portion of a savings bond to the
of registration of Series E savings TreasuryDirect® account of another
bonds in which the beneficiary has con- person in a minimum amount of $25.
sented to a change in the registration The transfer may only be made as a
of the bond after conversion, and gift or in response to a final judgment,
(4) The coowner form of registration court order, divorce decree, or property
of any series in which the non-con- settlement agreement. You must cer-
verting coowner has consented to a tify online that the transfer is a gift or
change in the registration of the bond a specified exception.
after conversion. (b) We do not permit the transfer of
[70 FR 14943, Mar. 23, 2005, as amended at 74 savings bonds for consideration, unless
FR 19419, Apr. 29, 2009] it is an exception specified in para-
graph (a) of this section.
§ 363.51 [Reserved] (c) If the bond is being transferred to
§ 363.52 What amount of book-entry an individual, the bond will be trans-
Series EE and Series I savings ferred in the single owner form of reg-
bonds may I purchase in one year? istration. If the bond is being trans-
(a) Purchase limitation. The amount of ferred to an entity, the bond will be
book-entry savings bonds that you may transferred in the entity form of reg-
purchase in any calendar year is lim- istration.
ited to $5,000 for Series EE savings (d) We reserve the right to limit the
bonds and $5,000 for Series I savings transferability of savings bonds at any
bonds. time by amendment to these regula-
(b) Computation of amount for gifts. tions.
Bonds purchased or transferred as gifts [67 FR 64286, Oct. 17, 2002, as amended at 68
will be included in the computation of FR 24807, May 8, 2003; 70 FR 57436, Sept. 30,
the purchase limitation for the account 2005; 74 FR 19419, Apr. 29, 2009]
of the recipient for the year in which
the bonds are delivered to the recipi- § 363.56 What is the minimum amount
ent. of book-entry savings bonds that I
may transfer in any one trans-
[67 FR 64286, Oct. 17, 2002, as amended at 68 action?
FR 24807, May 8, 2003; 72 FR 67854, Dec. 3,
2007] Each transfer must be in a minimum
amount of $25 redemption value, with
§ 363.53 What is the minimum amount additional one-cent increments above
of book-entry savings bonds that I that amount, in any one transaction.
may purchase in any transaction? For example, you may transfer $25.00,
Each bond purchase must be in a $25.01, $25.02, or $25.03, and so forth.
minimum amount of $25, with addi- Transfers will be comprised of prin-
tional one-cent increments above that cipal and proportionate interest.
amount, in any one transaction. For
example, a purchase may be $25.00, § 363.57 What is the minimum amount
$25.01, $25.02, or $25.03, and so forth. of book-entry savings bonds that I
may redeem in any one trans-
§ 363.54 What is the minimum amount action?
of a book-entry savings bond that I Each redemption must be in a min-
must hold in my account? imum amount of $25 redemption value,
Each bond held in your account must with additional one-cent increments
have a redemption value of at least $25. above that amount, in any one trans-
If you request a transaction that would action. For example, you may redeem
reduce the remaining redemption value $25.00, $25.01, $25.02, or $25.03, and so
506
forth. Redemptions will be comprised §§ 363.61–363.82 [Reserved]

of principal and proportionate interest.
§ 363.83 May an account owner trans-
§ 363.58 May book-entry savings bonds fer a book-entry savings bond to a
be pledged or used as collateral? minor?
Bonds may not be pledged or used as An account owner may transfer a
collateral for the performance of an ob- bond to a minor as a gift or pursuant to
ligation. one of the specified exceptions in
§ 363.55(a).
§ 363.59 What is a payroll savings
plan? §§ 363.84–363.94 [Reserved]
A payroll savings plan is an auto-
GIFTS
matic method of purchasing savings
bonds. (See the definition in § 363.6.) § 363.95 How may I give, and who can
You may open your payroll savings receive, a book-entry savings bond
plan by selecting an amount, series, as a gift?
and registration for your savings bond
You may give a book-entry savings
purchases using functionality in your
bond as a gift in two ways:
TreasuryDirect® account. Each bond
purchase must be in a minimum (a) An individual may purchase a
amount of $25 with additional one-cent book-entry savings bond online as a
increments above that amount, up to a gift and give it to an individual; or
maximum amount of $5000, in any one (b) A person who owns a bond may
transaction. The series may be either a transfer that bond to another person as
Series EE or Series I savings bond. The a gift with immediate delivery.
registration may be any authorized [67 FR 64286, Oct. 17, 2002, as amended at 68
form of registration for an electronic FR 24807, May 8, 2003; 70 FR 57437, Sept. 30,
savings bond. You must also initiate a 2005; 74 FR 19419, Apr. 29, 2009]
request to your employer or your fi-
nancial institution to send credits on a § 363.96 What do I need to know if I
recurring basis to your payroll savings initially purchase a bond as a gift?
plan through the ACH method to pur- (a) An entity may not purchase a gift
chase a payroll zero-percent certificate savings bond.
of indebtedness. (See Subpart D for (b) The gift bond will be registered in
more information about a payroll zero- the name of the recipient(s). The reg-
percent certificate of indebtedness.) istration is irrevocable with regard to
When you have accumulated a suffi- the owner named on the gift bond.
cient amount of payroll zero-percent (c) You must provide the SSN of the
certificate of indebtedness to purchase recipient.
a savings bond in the amount, series, (d) You may deliver the bond upon
and registration that you selected, the purchase, or you may hold the bond in
TreasuryDirect® system will automati- your TreasuryDirect ® account until
cally redeem your payroll zero-percent you are ready to deliver the bond to
certificate of indebtedness and pur- the owner named on the gift bond.
chase your selected savings bond. (e) If the purchaser dies before deliv-
[75 FR 70816, Nov. 19, 2010] ering a gift bond to the recipient, the
bond belongs to the owner named on
§ 363.60 How do I discontinue my par- the gift bond, notwithstanding any tes-
ticipation in my payroll savings tamentary attempts to the contrary by
plan? the purchaser, or any state law to the
You may discontinue your participa- contrary. We will hold the bond until
tion in your payroll savings plan by ar- we receive instructions from the owner
ranging with your employer or finan- named on the gift bond.
cial institution to discontinue sending
funds. FR 2508, Jan. 16, 2004; 74 FR 19419, Apr. 29,
[75 FR 70816, Nov. 19, 2010] 2009]
507
§ 363.97 31 CFR Ch. II (7–1–11 Edition)
§ 363.97 What do I need to know if I pursuant to one of the specified excep-

transfer a book-entry savings bond tions in § 363.55(a).
to another person as a gift?
[70 FR 57444, Sept. 30, 2005]
(a) You must certify online that the
transfer is a gift. §§ 363.102–363.124 [Reserved]
(b) You must provide the SSN or EIN
PAYMENT
of the recipient.
(c) Once the transfer is made, the gift § 363.125 How is payment made on a
is irrevocable. book-entry savings bond?
(d) The bond will be transferred in We will make payment by the ACH
the single owner form of registration method to the designated account at a
for individual account owners, and in United States depository financial in-
the entity form of registration for ac- stitution.
count owners that are entities.
§ 363.126 Under what circumstances
[67 FR 64286, Oct. 17, 2002, as amended at 74 will payment be made?
FR 19420, Apr. 29, 2009]
We will make payment:
§ 363.98 [Reserved] (a) Upon your request for redemption
prior to maturity;
§ 363.99 What is the minimum amount (b) When the bond reaches final ma-
of a bond that I may transfer or de- turity; and
liver as a gift in any one trans- (c) If a person who becomes entitled
action? to the bond is unable, unwilling or in-
You may transfer or deliver gift eligible to open a TreasuryDirect ® ac-
bonds in any one-cent increment value count.
equal to or greater than $25.00 redemp- §§ 363.127–363.129 [Reserved]
tion value. For example, you may de-
liver a gift bond with a redemption
value of $25.00, $25.01, $25.02, and so
Subpart D—Zero-Percent
forth. If the bond was held in your ac- Certificate of Indebtedness
count prior to delivery to the recipient
for a period of time and has accrued in- SOURCE: 69 FR 50309, Aug. 16, 2004, unless
otherwise noted.
terest, the delivery will include prin-
cipal and proportionate interest. GENERAL
§ 363.100 What are the rules for pur- § 363.130 What does this subpart
chasing and delivering gift savings cover?
bonds to minors?
This subpart is the offering of the
(a) A TreasuryDirect ® account owner zero-percent certificate of indebtedness
can purchase a savings bond as a gift by the Secretary of the Treasury (Sec-
with a minor as the recipient. retary), and will continue until sus-
(b) An account owner can deliver a pended or terminated by the Secretary.
bond purchased as a gift to a minor. This subpart is also the governing reg-
The account owner must deliver the se- ulations for the zero-percent certifi-
curity to the minor’s linked account. cate of indebtedness.
Once delivered, the bond will be under
the control of the custodian of the mi- § 363.131 What is a TreasuryDirect ®
zero-percent certificate of indebted-
nor’s account. (See § 363.27.) ness?
[70 FR 57444, Sept. 30, 2005] A TreasuryDirect® zero-percent cer-
tificate of indebtedness is a non-inter-
§ 363.101 Can an account owner trans- est-bearing security that is issued
fer a book-entry savings bond to a daily, with a one-day maturity, which
minor?
automatically rolls over at maturity
An account owner can transfer a until you request redemption. A zero-
book-entry savings bond held in percent certificate of indebtedness has
TreasuryDirect ® to a minor as a gift or a minimum purchase amount of one
508
cent. The only purpose of a zero-per- § 363.136 Do zero-percent certificates

cent certificate of indebtedness is to of indebtedness pay interest?
accumulate funds for the purchase of Zero-percent certificates of indebted-
another eligible security in the ness do not pay any interest. However,
TreasuryDirect system. A zero-percent the Secretary may prescribe a rate of
certificate of indebtedness within a mi- interest, or change the interest rate,
nor’s account is the property of the for zero-percent certificates of indebt-
minor alone. The payroll zero-percent edness by announcement at any time.
certificate of indebtedness is a re- The new rate would apply to zero-per-
stricted form of the zero-percent cer- cent certificates of indebtedness issued
tificate of indebtedness that is held thereafter, as provided in the an-
separately from the zero-percent cer- nouncement. The Secretary’s deter-
tificate of indebtedness and used only mination of the rate will be final.
for purchases made through the payroll
savings plan. § 363.137 What do I need to know
about the registration of a zero-per-
[69 FR 50309, Aug. 16, 2004, as amended at 75 cent certificate of indebtedness?
FR 70816, Nov. 19, 2010]
A zero-percent certificate of indebt-
§ 363.132 Can the sale of the zero-per- edness is automatically registered in
cent certificate of indebtedness be the name of the TreasuryDirect® ac-
suspended? count owner.
The Secretary may suspend and re- [74 FR 19420, Apr. 29, 2009]
scind the suspension of sales of the
zero-percent certificate of indebtedness § 363.138 Is Treasury liable for the
by announcement at any time. purchase of a zero-percent certifi-
cate of indebtedness that is made in
§ 363.133 What happens to my zero- error?
percent certificate of indebtedness We are not liable for any deposits of
if the offering is terminated by the funds for the purchase of a zero-percent
Secretary? certificate of indebtedness that are
Upon the termination of this offering made in error by your financial institu-
by the Secretary, the zero-percent cer- tion or employer.
tificate of indebtedness ceases to roll
[69 FR 50309, Aug. 16, 2004. Redesignated at 75
over; the proceeds will be paid by the FR 70816, Nov. 19, 2010]
ACH method to the bank account at a
financial institution that you des- § 363.139 May I transfer or deliver my
ignated in your TreasuryDirect ® ac- zero-percent certificate of indebted-
count as your primary bank account. ness?
§ 363.134 What regulations cover a edness is nontransferable. You may not
ness? deliver a zero-percent certificate of in-
debtedness to another TreasuryDirect ®
The regulations in part 363 apply to a account as a gift.
ness. We expressly disclaim representa- [69 FR 50309, Aug. 16, 2004. Redesignated at 75
FR 70816, Nov. 19, 2010]
tions or warranties regarding a zero-
percent certificate of indebtedness that § 363.140 May a zero-percent certifi-
in any way conflict with these regula- cate of indebtedness be pledged or
tions and other applicable law. used as collateral?
§ 363.135 In what form is a zero-per- A zero-percent certificate of indebt-

cent certificate of indebtedness edness may not be pledged or used as
issued? collateral for the performance of an ob-
ligation.
edness is issued in electronic form only [69 FR 50309, Aug. 16, 2004. Redesignated at 70
in the TreasuryDirect ® system. FR 57437, Sept. 30, 2005, and further redesig-
nated at 75 FR 70816, Nov. 19, 2010]
509
§ 363.141 31 CFR Ch. II (7–1–11 Edition)
ZERO-PERCENT CERTIFICATE OF § 363.142 When is a zero-percent cer-

INDEBTEDNESS tificate of indebtedness issued?
§ 363.141 How do I purchase a zero-
percent certificate of indebtedness? edness is issued the business day after
the purchase transaction is made.
(a) Primary and linked accounts. You
may purchase a zero-percent certifi- [69 FR 50309, Aug. 16, 2004. Redesignated at 75
FR 70816, Nov. 19, 2010]
cate of indebtedness through one or
more of the following four methods: § 363.143 How do I purchase a security
(1) Payroll deduction, in which your using the redemption proceeds of
employer sends funds through the ACH my zero-percent certificate of in-
method to your TreasuryDirect® ac- debtedness?
count; You may purchase an eligible secu-
(2) Deposit by your financial institu- rity by redeeming all or a portion of
tion, in which your financial institu- your zero-percent certificate of indebt-
tion sends funds by the ACH method to edness and applying the proceeds to-
your TreasuryDirect® account on a re- ward the purchase of another eligible
curring or one-time basis; security. To do this, your zero-percent
(3) Through the Buy Direct function certificate of indebtedness must be of
of your TreasuryDirect® account, in sufficient value to cover the cost of the
which you direct us to debit funds from security. If you are paying for a secu-
your financial institution account to rity using the redemption proceeds of a
purchase a zero-percent certificate of zero-percent certificate of indebted-
indebtedness. This method is limited to ness, you must pay the full amount of
the purchase price of the security using
an amount no greater than $1000 per
the redemption proceeds.
transaction. When you use the Buy Di-
rect function to debit funds to pur- [69 FR 50309, Aug. 16, 2004. Redesignated at 75
chase all or a portion of a zero-percent FR 70816, Nov. 19, 2010]
certificate of indebtedness, you will
not be permitted to schedule a redemp- § 363.144 Can I redeem my zero-per-
tion to your financial institution from
the zero-percent certificate of indebt- You can redeem part or all of the
edness within five business days after value of your zero-percent certificate
the settlement date of the debit entry; of indebtedness at any time, with one
and exception: if you purchased all or a
(4) By using the proceeds from the re- portion of your zero-percent certificate
demption of a savings bond, the proof indebtedness through a debit using
the ACH method, you may not schedule
ceeds of a maturing security, or an in-
a redemption from your zero-percent
terest payment from a security to pur-
certificate of indebtedness within five
chase a zero-percent certificate of in- business days after the date of the
debtedness. debit entry.
(b) Payroll savings plan. You may pur-
chase a payroll zero-percent certificate [70 FR 57444, Sept. 30, 2005. Redesignated at
of indebtedness for your payroll sav- 75 FR 70816, Nov. 19, 2010]
ings plan through payroll deduction, in § 363.145 May I delete a pending trans-
which your employer sends funds action involving a zero-percent cer-
through the ACH method to your tificate of indebtedness?
TreasuryDirect® payroll savings plan,
(a) You may delete a pending pur-
or through a credit using the ACH chase of a zero-percent certificate of
method by your financial institution, indebtedness initiated from your
in which your financial institution TreasuryDirect ® account.
sends funds by the ACH method to your (b) You may delete a pending pur-
TreasuryDirect® payroll savings plan. chase of a security using a zero-percent
[75 FR 70816, Nov. 19, 2010] certificate of indebtedness as payment.
(c) You may not delete a pending re-
demption of all or part of the value of
510
a zero-percent certificate of indebted- § 363.160 What subparts govern the

ness. conversion of definitive savings
bonds?
[69 FR 50309, Aug. 16, 2004. Redesignated at 75
FR 70816, Nov. 19, 2010] (a) This subpart governs:
(1) The process of converting defini-
PAYROLL ZERO-PERCENT CERTIFICATE OF tive savings bonds of all eligible series
INDEBTEDNESS and types of registration to book-entry
bonds in TreasuryDirect ®;
§ 363.146 Who may purchase a payroll (2) Converted savings bonds of all se-
ness? ries registered in the coowner form of
registration, unless the non-converting
Only an individual TreasuryDirect® coowner consents to a change in the
account owner may purchase a payroll registration of the bonds after conver-
zero-percent certificate of indebted- sion;
ness, only through his or her primary (3) Converted savings bonds of Series
account, and only through the payroll E registered in the owner with bene-
savings plan. ficiary form of registration, unless the
[75 FR 70817, Nov. 19, 2010] beneficiary consents to a change in the
registration of the bonds after conver-
§ 363.147 How do I purchase a payroll sion; and
zero-percent certificate of indebted- (4) Converted savings bonds of all se-
ness? ries that are held as gift bonds by the
You may purchase a payroll zero-per- person who converted the bonds.
cent certificate of indebtedness (b) Subpart C governs:
through your TreasuryDirect® account (1) Converted savings bonds of any se-
using your payroll savings plan. (See ries registered in the single owner or
§§ 363.59 and 363.60 for more information entity form of registration;
on opening a payroll savings plan.) The (2) Converted Series EE and Series I
only method of purchase for a payroll savings bonds registered in the owner
zero-percent certificate of indebtedness with beneficiary form of registration;
is a credit of funds from your employer (3) Converted Series E savings bonds
or financial institution using the ACH registered in the owner with bene-
method. You cannot purchase a payroll ficiary form of registration, where the
zero-percent certificate of indebtedness beneficiary has consented to a change
by using a debit from your financial in- in the registration of the bonds after
stitution. conversion; and
[75 FR 70817, Nov. 19, 2010] (4) Converted savings bonds of all se-
ries registered in the coowner form of
§ 363.148 Can I redeem all or a portion registration, where the non-converting
of my accumulated payroll zero-per- coowner has consented to a change in
cent certificate of indebtedness? the registration of the bonds after con-
You may redeem all or a portion of version.
your accumulated payroll zero-percent [70 FR 14943, Mar. 23, 2005, as amended at 70
certificate of indebtedness to any fi- FR 57347, Sept. 30, 2005; 74 FR 19420, Apr. 29,
nancial institution that is of record in 2009]
your TreasuryDirect® account.
§ 363.161 What definitive savings
[75 FR 70817, Nov. 19, 2010] bonds are eligible to be converted
to book-entry bonds?
§§ 363.149–363.152 [Reserved]
Series E, Series EE, and Series I sav-
ings bonds issued in denominations of
Subpart E—Conversion of a $25 or greater are eligible for conver-
Definitive Savings Bond sion to book-entry bonds in
TreasuryDirect®.
SOURCE: 70 FR 14943, Mar. 23, 2005, unless
otherwise noted. [74 FR 19420, Apr. 29, 2009]
511
§ 363.162 31 CFR Ch. II (7–1–11 Edition)
§ 363.162 Who may convert a definitive (b) Matured savings bond. A savings
savings bond? bond that has reached final maturity
The owner of a TreasuryDirect® pri- and is registered in the name of the
mary account may convert a definitive TreasuryDirect account owner as a sin-
savings bond. gle owner, either coowner, an owner
(a) Bond that is registered to the ac- with beneficiary, or an entity, will be
count owner. The following persons may converted to a book-entry savings bond
convert a definitive savings bond of an and automatically redeemed. The re-
eligible series to a book-entry bond to demption proceeds will be used to pur-
be held in the person’s TreasuryDirect chase a zero-percent certificate of in-
account: debtedness in the account owner’s
(1) The owner of a definitive savings name in the primary account.
bond registered in the single owner or [74 FR 19420, Apr. 29, 2009]
entity form of registration;
(2) Either co-owner of a bond reg- § 363.166 What happens when I con-
istered in the coowner form of registra- vert a savings bond that is not reg-
tion; and istered in my name as owner, either
(3) The owner of a bond registered in coowner, or owner with beneficiary
the owner with beneficiary form of reg- (including a bond registered in the
name of a minor)?
istration.
(b) Bond that is registered to someone We will presume that a savings bond
other than the account owner. We will registered in the name of someone
convert an eligible definitive savings other than the TreasuryDirect® ac-
bond submitted by an individual account owner (including a bond reg-
count owner who is not the registered istered in the name of a minor) was
owner of the savings bond. See the spe- purchased by the account owner as a
cial rules in § 363.166. gift for the registered owner. We will
not permit an entity to convert a sav-
[74 FR 19420, Apr. 29, 2009]
ings bond that is not registered in the
§ 363.163 How do I convert an eligible name of the entity.
definitive savings bond? (a) Unmatured savings bond—(1) Gen-
eral. An unmatured savings bond reg-
We will provide online instructions
istered in the name of someone other
for converting your definitive savings
than the account owner will be con-
bond. You must surrender to us the de-
verted to a book-entry bond, released
finitive bond to be converted at the
as a gift bond to the account owner’s
time of conversion.
conversion linked account, and held
§ 363.164 Is a converted savings bond until delivered to the TreasuryDirect
eligible to be converted back into a account (or minor linked account, if
definitive bond? the registered owner is a minor) of the
Once a definitive savings bond has registered owner.
been converted to a book-entry bond, it (2) Delivery of unmatured gift bond to
may not be converted back into a de- registered owner. The TreasuryDirect
finitive bond. account owner may deliver the con-
verted gift bond to the TreasuryDirect
§ 363.165 What happens when I con- account (or minor linked account, if
vert a savings bond that is reg- the registered owner is a minor) of the
istered in my name as a single registered owner, or, if the bond is reg-
owner, either coowner, an owner istered in the coowner form of registra-
with a beneficiary, or an entity? tion, to the account of either coowner.
(a) Unmatured savings bond. When the A bond registered in coowner or owner
conversion is approved, an unmatured with beneficiary form of registration
savings bond that is registered in the will retain the coowner or beneficiary
name of the TreasuryDirect® account form of registration upon delivery.
owner as a single owner, either co- (b) Savings bond that has reached final
owner, an owner with beneficiary, or maturity—(1) General. A savings bond
an entity, will be released to the ac- that has reached final maturity and is
count owner’s conversion linked ac- registered in the name of someone
count. other than the account owner will be
512
converted to a book-entry bond, re- istration. By converting a definitive

leased as a gift bond into the account bond of any eligible series registered in
owner’s conversion linked account, and the single owner or entity form of reg-
automatically redeemed. We will hold istration to book-entry in
the redemption proceeds in the name of TreasuryDirect®, the owner has con-
the registered owner of the definitive sented to the bond being governed by
bond until the proceeds are delivered to the rules regarding registration con-
the TreasuryDirect account (or minor tained in subpart C of this part.
linked account, if the registered owner (b) Savings bond of Series EE or Series
is a minor) of the registered owner. I registered in the owner with beneficiary
(2) Delivery of bond proceeds to reg- form of registration. By converting a de-
istered owner. If the gift bond has finitive bond of Series EE or Series I
reached final maturity and has been registered in an owner with beneficiary
automatically redeemed, then the form of registration to a book-entry
Treasury Direct account owner may di- bond in TreasuryDirect, the owner has
rect that the held redemption proceeds consented to the bond being governed
be delivered to the Treasury Direct ac- by the rules regarding registration con-
count of the registered owner (or minor tained in subpart C of this part.
linked account, if the registered owner (c) Savings bond of Series E registered
is a minor), where we will use the pro- in the owner with beneficiary form of reg-
ceeds to purchase a zero-percent cer- istration. The registration of a con-
tificate of indebtedness in the name of verted savings bond of Series E reg-
the registered owner. If the bond is registered in the owner with beneficiary
istered in the coowner form of registra- form of registration may be changed
tion, the account owner may direct upon the request of the owner and the
that the held redemption proceeds be consent of the beneficiary. The trans-
delivered to the account of either co- action will not be conducted through
owner, where we will use the proceeds the registered owner’s TreasuryDirect
to purchase a zero-percent certificate account.
of indebtedness in the name of the co- (d) Savings bond of any series registered
owner to whose account the bond was in the coowner form of registration. The
delivered. registration of a converted savings
bond of any eligible series registered in
FR 57347, Sept. 30, 2005; 74 FR 19420, Apr. 29, the coowner form of registration may
2009] be changed upon the request of one co-
owner and the consent of the other co-
§ 363.167 How will a converted savings owner. The transaction will not be con-
bond be registered? ducted through the registered owner’s
The registration of the converted TreasuryDirect account.
bond will be the same as on the defini- [70 FR 14943, Mar. 23, 2005, as amended at 74
tive bond, provided that it was reg- FR 19420, Apr. 29, 2009]
istered properly in an authorized form
of registration. We will change a defin- § 363.169 What transactions can I con-
itive savings bond that was not reg- duct in a converted savings bond on
istered in an authorized form of reg- which I am registered as the single
istration to the closest authorized form owner, either coowner, the owner
with a beneficiary, or an entity?
of registration. For example, a defini-
tive savings bond erroneously reg- (a) Savings bond of any series registered
istered ‘‘John Doe and Jane Doe’’ will in the single owner or entity form of reg-
be changed to ‘‘John Doe or Jane Doe.’’ istration. By converting a definitive
We are not liable to any person for any savings bond of any series registered in
such decision as to the closest form of the single owner or entity form of reg-
authorized registration. istration to a book-entry bond, you
have consented to the bond being treat-
§ 363.168 What rules regarding reg- ed as if it were originally issued as a
istration apply to a converted sav- book-entry bond in TreasuryDirect®.
ings bond? The bond will be subject to the provi-
(a) Savings bond of any series registered sions of subpart C of this part. Any
in the single owner or entity form of reg- transaction available for a book-entry
513
§ 363.169 31 CFR Ch. II (7–1–11 Edition)
bond originally issued in the from the registration and transfer the
TreasuryDirect system is available for bond to the account of the beneficiary
a converted bond registered in single or a third party, with the consent of
owner or entity form of registration. the beneficiary. The transaction will
(b) Savings bond of Series EE and Series not be conducted through the reg-
I registered in the owner with beneficiary istered owner’s TreasuryDirect ac-
form of registration. By converting a de- count. The bond will be transferred in
finitive savings bond registered in the the single owner form of registration.
owner with beneficiary form of reg- Once the transfer is completed, the
istration to a book-entry bond, you bond will be treated as a bond origi-
have consented to the bond being treat- nally issued as a book-entry bond in
ed as if it were originally issued as a TreasuryDirect, and will be subject to
book-entry bond in TreasuryDirect. subpart C of this part. The owner may
The bond will be subject to the provi- then perform any transaction available
sions of subpart C of this part. Any for book-entry bonds purchased in the
transaction available for a book-entry TreasuryDirect system.
bond purchased in the TreasuryDirect (d) Savings bond of any series registered
system is available for a converted in the coowner form of registration. The
bond of Series EE and Series I reg- converting coowner of a converted
istered in the owner with beneficiary bond registered in the coowner form of
form of registration. registration may make the following
(c) Savings bond of Series E registered transactions:
in the owner with beneficiary form of reg-
(1) Provide view or transact rights to
istration. The owner of a converted Se-
non-converting coowner. The converting
ries E bond registered in the owner
coowner may provide the non-con-
with beneficiary form of registration
verting coowner with the rights to
may make the following transactions:
view the bond or to view and redeem
(1) Provide view rights to the bene-
the bond through the non-converting
ficiary. The owner may provide the ben-
coowner’s TreasuryDirect account.
eficiary with the right to view the bond
Once either of these rights is provided
in the beneficiary’s TreasuryDirect ac-
to the non-converting coowner, the
count. Once the right to view the bond
converting coowner may not revoke
is provided to the beneficiary, the
owner may not revoke that right. the right.
(2) Transfer without change in registra- (2) Transfer without change in registra-
tion. The owner may transfer the bond tion. The converting coowner may
without a change of registration to an- transfer the bond without a change in
other account in the name of the registration to another account in the
owner. name of the converting coowner. The
(3) Remove the beneficiary from the reg- bond may be transferred without the
istration. The owner may remove the consent of the non-converting coowner,
beneficiary’s name from the registra- and will retain the coowner registra-
tion with the consent of the bene- tion.
ficiary. The transaction will not be (3) Remove a coowner from the registra-
conducted through the registered own- tion. The converting coowner (or the
er’s TreasuryDirect account. The bond non-converting coowner, if the bond
will be changed to the single owner has been previously transferred to the
form of registration. Once the trans- account of the non-converting co-
action is completed, the bond will be owner) may remove the other coowner
treated as a bond originally issued as a from the registration. The consent of
book-entry bond in TreasuryDirect, the other coowner is required. The
and will be subject to subpart C of this bond must reside in the account of the
part. The owner may then perform any coowner who is requesting the trans-
transaction available for book-entry action. The transaction will not be
bonds purchased in the TreasuryDirect conducted through the registered own-
system. er’s TreasuryDirect account. The
(4) Transfer to the beneficiary or a third bond’s registration will be changed to
party with a change in registration. The the single owner form of registration.
owner may remove his or her name Once this transaction is completed, the
514
bond will be treated as a bond origi- converting coowner may redeem the
nally issued as a book-entry bond in converted savings bond of any series
TreasuryDirect, and will be subject to registered in the coowner form of reg-
subpart C of this part. The owner may istration at any time prior to final ma-
then perform any transaction available turity after the minimum holding pe-
for book-entry bonds purchased in the riod through his or her TreasuryDirect
TreasuryDirect system. account. The non-converting coowner
(4) Transfer to non-converting coowner may redeem the converted savings
or a third party with a change in registra- bond at any time prior to final matu-
tion. The converting coowner may re- rity after the minimum holding period
move his or her name from the reg- provided that he or she has been grant-
istration and transfer the bond to ei-
ed transaction rights in the converted
ther the account of the non-converting
bond by the converting coowner.
coowner or to the account of a third
party. The consent of the non-con- (b) Upon final maturity—(1) Savings
verting coowner is required. The trans- bond of any series registered in the single
action will not be conducted through owner, owner with beneficiary, coowner,
the registered owner’s TreasuryDirect or entity forms of registration. If you
account. The bond will be transferred have not previously redeemed or trans-
in the single owner form of registra- ferred your converted savings bond of
tion. Once the transfer is completed, any series registered in the single
the bond will be treated as a bond owner, owner with beneficiary, co-
originally issued as a book-entry bond owner, or entity forms of registration,
in TreasuryDirect, and will be subject it will be automatically redeemed for
to subpart C of this part. The owner you at final maturity.
may then perform any transaction (2) The redemption proceeds will be
available for book-entry bonds pur- automatically used to purchase a zero-
chased in the TreasuryDirect system. percent certificate of indebtedness reg-
[70 FR 14943, Mar. 23, 2005, as amended at 74 istered in your name and held in your
FR 19420, Apr. 29, 2009] TreasuryDirect account.
§ 363.170 What transactions can I con- [70 FR 14943, Mar. 23, 2005, as amended at 74
duct in a savings bond that I con- FR 19420, Apr. 29, 2009]
verted on which I am not registered
as the owner, either coowner, or §§ 363.172–363.175 [Reserved]
owner with beneficiary?
§ 363.176 May a converted savings
The only transaction that you may
bond be pledged or used as collat-
conduct on a savings bond that you eral?
converted on which you are not reg-
istered as the owner, either coowner, or A converted savings bond may not be
owner with beneficiary is to deliver the pledged or used as collateral for the
converted bond to the TreasuryDirect ® performance of an obligation.
account of the registered owner.
§§ 363.177–363.178 [Reserved]
§ 363.171 How do I redeem a converted
savings bond? § 363.179 Does Public Debt make any
(a) Before final maturity—(1) Savings reservations as to the conversion of
an eligible savings bond?
bond of any series registered in the single
owner, owner with beneficiary, or entity We may reject any application for
form of registration. You may redeem conversion or refuse to convert a sav-
your converted savings bond of any se- ings bond in any case or class of cases,
ries registered either in the single if we deem the action to be in the pub-
owner, owner with beneficiary, or enti- lic interest. Our action in any such re-
ty form of registration any time prior spect is final.
to final maturity after the minimum
holding period through your
TreasuryDirect® account.
(2) Savings bond of any series registered
in the coowner form of registration. The
515
§§ 363.180–363.199 31 CFR Ch. II (7–1–11 Edition)
§§ 363.180–363.199 [Reserved] (ii) Any marketable security pur-

chase scheduled prior to May 15, 2010,
Subpart F—Marketable Treasury with an effective issue date after July
Securities 9, 2010, will be canceled.
(b) Hold. You may transfer into the
system and maintain in your
SOURCE: 70 FR 57444, Sept. 30, 2005, unless
otherwise noted.
TreasuryDirect account any eligible
marketable book-entry Treasury bill,
§ 363.200 What Treasury securities note, or bond.
does this subpart govern?
This subpart provides the rules for FR 26090, May 11, 2010]
holding marketable Treasury bills,
notes, and bonds in book-entry form in § 363.203 After I purchase my market-
TreasuryDirect ®. able Treasury security in
TreasuryDirect ®, is there a period
§ 363.201 What other regulations gov- of time during which I may not
ern book-entry marketable book- transfer the security?
entry Treasury bills, notes, and Once you purchase a marketable
bonds?
Treasury security in TreasuryDirect,
(a) 31 CFR part 356 governs the sale you may not transfer that security for
and issue of marketable book-entry a period of 45 calendar days after the
Treasury securities on or after March issue date of the security, or the term
1, 1993, whether held in of the security, whichever is less.
TreasuryDirect ®, Legacy Treasury Di-
rect, or the commercial book-entry § 363.204 What registrations are avail-
system. able for my marketable Treasury
(b) 31 CFR part 357 governs holding securities held in TreasuryDirect ®?
marketable book-entry Treasury bills, You may register your marketable
notes, and bonds in the Legacy Treas- Treasury securities in any form of reg-
ury Direct system and in the commer- istration permitted by § 363.20 of this
cial book-entry system. part.
§ 363.202 What marketable Treasury
securities may I purchase and hold § 363.205 How do I reinvest the pro-
through my TreasuryDirect ® ac- ceeds of a maturing security held in
count? TreasuryDirect ®?
(a) Purchase. (1) Advance purchase. (a) Method for reinvesting a maturing
You may purchase any marketable security. The only method of rein-
Treasury security that is available for vesting a maturing marketable secu-
purchase through the TreasuryDirect ® rity in TreasuryDirect ® is through the
website. One day each week, market- automatic reinvestment option avail-
able securities that are scheduled for able in your TreasuryDirect account.
auction within 8 weeks will be made Purchasing a security by directing that
available on the TreasuryDirect the proceeds of a maturing security be
website for scheduling an advance pur- used to purchase a zero-percent certifi-
chase, and are the only marketable se- cate of indebtedness, and then sched-
curities that you can schedule for ad- uling the purchase of a new security
vance purchase. using the redemption proceeds of the
(2) Purchases scheduled prior to May zero-percent certificate of indebted-
15, 2010, with an effective issue date on or ness, is not a reinvestment.
after May 15, 2010. (i) Any marketable (b) When a reinvestment can be sched-
security purchase scheduled prior to uled, edited, or canceled. You can sched-
May 15, 2010, and with an effective ule your reinvestment either at the
issue date of May 15, 2010, through July time of purchase or after the security
9, 2010, will be treated as a new pur- is issued into your TreasuryDirect ac-
chase, even if the transaction would count. You cannot schedule, edit, or
have been treated as a reinvestment cancel a reinvestment when the matur-
under the rules in effect prior to May ing security goes into a closed book pe-
15, 2010. riod, or when a noncompetitive bid for
516
the replacement security is no longer cate of indebtedness is insufficient to

accepted, whichever comes first. pay the additional amount, the rein-
(c) What securities can be reinvested. vestment will be canceled and we will
Any marketable security can be rein- refund the proceeds of the maturing se-
vested. curity.
(d) Limits on scheduling reinvestments. (3) Special rules if the maturing security
Reinvestments will be limited at any was purchased prior to May 15, 2010. If
one time to 25 times for a 4-week bill, the maturing security was purchased
7 times for a 13-week bill, 3 times for a within TreasuryDirect or received
26-week bill, and once for all other through a transfer prior to May 15,
marketable security types. 2010, we will debit your primary ac-
(e) Canceling reinvestments. If there is count at a financial institution for the
no security available for reinvestment additional funds. If we are unable to
with an issue date that coincides with obtain sufficient funds from your pri-
the maturity date or call date, if in- mary account at a financial institu-
voked, of the maturing security, and tion, the reinvestment will be canceled
with the same type and term, the and we will refund the proceeds of the
scheduled reinvestment will be can- maturing security.
celed and the proceeds of the maturing
[75 FR 26090, May 11, 2010]
security will be returned to the cus-
tomer. § 363.206 How can I transfer my mar-
(f) Procedure if there are insufficient ketable Treasury security into my
funds from the maturing security to pay TreasuryDirect ® account from an-
the full purchase price of the replacement other book-entry system?
security. If there are insufficient funds (a) Legacy Treasury Direct to
from the maturing security to pay the TreasuryDirect. 31 CFR part 357, subpart
full purchase price of the replacement C, governs the transfer of a marketable
security, we will either debit your pri- book-entry Treasury security from
mary account at a financial institution your Legacy Treasury Direct account
or pay the additional funds using the into TreasuryDirect.
redemption proceeds of your zero-per-
(b) Commercial book-entry system to
cent certificate of indebtedness.
TreasuryDirect. You may transfer your
(1) Debit from primary account at fi-
marketable Treasury security from the
nancial institution. If the maturing se-
commercial book-entry system by con-
curity is purchased on or after May 15,
tacting the financial institution or
2010, we will pay the additional funds
broker that handles your commercial
by a debit from your primary account
book-entry account.
at a financial institution if the matur-
(c)(1) Individuals. When a security is
ing security was purchased within
transferred into the TreasuryDirect ac-
TreasuryDirect by a debit from a finan-
count of an individual, it will be trans-
cial institution account or if the ma-
ferred in the name of the individual ac-
turing security was received through a
count owner in the single owner form
transfer. If we are unable to obtain suf-
of registration, regardless of the form
ficient funds from your primary ac-
of registration prior to the transfer.
count at a financial institution, the re-
After the transfer is completed, you
investment will be canceled and we
can change the registration to any
will refund the proceeds of the matur-
form of registration permitted by these
ing security.
regulations.
(2) Withdrawal of funds from zero-per-
cent certificate of indebtedness. If the (2) Entities. When a security is trans-
maturing security is purchased on or ferred into the TreasuryDirect account
after May 15, 2010, we will pay the addi- of an entity, the security will be trans-
tional funds using the redemption pro- ferred in the name of the entity, re-
ceeds of your zero-percent certificate gardless of the form of registration
of indebtedness if the purchase of the prior to the transfer.
maturing security was made using the (d) Amounts transferred. You can only
zero-percent certificate of indebted- transfer in increments of $1000.
ness. If the amount available from a re- [70 FR 57444, Sept. 30, 2005, as amended at 74
demption of the zero-percent certifi- FR 19421, Apr. 29, 2009]
517
§ 363.207 31 CFR Ch. II (7–1–11 Edition)
§ 363.207 Can I transfer my marketable the United States or in order to relieve

Treasury security from my any person or persons of unnecessary
TreasuryDirect ® account to an- hardship:
other TreasuryDirect account? (a) If the waiver would not be incon-
After the initial 45-calendar day sistent with law or equity;
holding period for your marketable (b) If the waiver does not impair any
Treasury security (see § 363.203) you can material existing rights; and
transfer your security to another (c) If we are satisfied that the waiver
TreasuryDirect account in increments would not subject the United States to
of $1000. any substantial expense or liability.
[67 FR 64286, Oct. 17, 2002. Redesignated at 70
§ 363.208 Can I transfer my marketable FR 14943, Mar. 23, 2005. Redesignated at 70 FR
Treasury security from my 57444, Sept. 30, 2005]
TreasuryDirect ® account to an ac-
count in another book-entry sys- § 363.251 Can I be required to provide
tem? additional evidence to support a
After the initial 45-calendar day transaction?
holding period for your marketable We may require additional evidence
Treasury security (see § 363.203) you can and/or a bond of indemnity, with or
transfer your security to an account in without surety, in any case where we
the commercial book-entry system in determine it necessary to protect the
increments of $1000. interests of the United States.
[70 FR 57444, Sept. 30, 2005, as amended at 76 [67 FR 64286, Oct. 17, 2002. Redesignated at 70
FR 18064, Apr. 1, 2011] FR 14943, Mar. 23, 2005. Redesignated at 70 FR
57444, Sept. 30, 2005]
§ 363.209 [Reserved]
§ 363.252 May Public Debt amend or
§ 363.210 Is there any period of time supplement these regulations?
during which I will be unable to
process certain transactions regard- We may amend, revise, or supplement
ing my security? these regulations at any time.
A closed book period will be in effect [67 FR 64286, Oct. 17, 2002. Redesignated at 70
for four business days prior to the date FR 14943, Mar. 23, 2005. Redesignated at 70 FR
a marketable security interest and/or 57444, Sept. 30, 2005]
redemption payment is made. During
the closed book period, you cannot PART 370—ELECTRONIC TRANS-
change the registration of the security, ACTIONS AND FUNDS TRANSFERS
change the payment destination of the RELATING TO UNITED STATES SE-
proceeds, change the view or trans- CURITIES
action rights, make transfers, or sched-
ule, edit, or cancel a reinvestment. We Subpart A—General Information
will hold transactions requiring sub-
mission of a form for processing until Sec.
the closed book period ends. 370.0 What does this part cover?
[75 FR 26091, May 11, 2010, as amended at 75 to understand this part?
FR 78901, Dec. 17, 2010]
Subpart B—Credit ACH Entries
§§ 363.211–363.249 [Reserved]
370.5 How can I appoint a financial institu-
tion to receive payments on my behalf?
Subpart G [Reserved] 370.6 What requirements apply to a finan-
cial institution that handles a credit
Subpart H Miscellaneous entry?
370.7 How can my financial institution
§ 363.250 May Public Debt waive these change my designated deposit account?
regulations? 370.8 Are there any requirements related to
a prenotification entry?
We may waive or modify any provi- 370.9 How can my payment instructions be
sion of the regulations in this part. We changed?
may do so in any particular case or 370.10 What can cause my payments to be
class of cases for the convenience of suspended?
518
370.11 What must my financial institution Subpart A—General Information
do when it receives a payment?
370.12 What happens if an error is made in a
§ 370.0 What does this part cover?
credit entry, or if a duplicate credit
entry is made? (a) Scope. This part applies to the
370.13 Can time limits for taking an action transfer of funds by the Automated
on a credit entry be extended? Clearing House method as used by us in
370.14 Can substitute payment procedures
be used?
connection with United States securi-
370.15 What limitations exist on liability? ties. This part also provides regula-
tions for the electronic submission of
Subpart C—Debit Entries transaction requests through us, ex-
cept as varied by agreement or as oth-
370.20 What requirements apply if I want to
authorize a debit entry to my deposit ac- erwise provided. This part does not
count? apply to transactions for the sale of
370.21 Are there any requirements related United States Savings Bonds accom-
to a prenotification entry? plished through savings bond issuing
370.22 What requirements apply to a finan- agents generally, except and to the ex-
cial institution that debits a deposit ac- tent we direct otherwise.
count?
370.23 What other requirements apply to a (b) Operating Rules of the National
financial institution? Automated Clearing House Association
370.24 What right does the Bureau of the and Regulations of the Financial Man-
Public Debt have to terminate or sus- agement Service. The Operating Rules of
pend debit entries? the National Automated Clearing
370.25 What rights do I have to terminate or House Association generally apply to
suspend debit entries?
370.26 What limitations exist on liability?
these transactions. However, the Oper-
ating Rules do not apply to the extent
Subpart D—Electronic Submission of Trans- that the Operating Rules are pre-
action Requests Through the Bureau of empted entirely and excluded specifi-
the Public Debt cally by application of Financial Man-
agement Service regulations in part 210
370.35 Does the Bureau of the Public Debt of this chapter. In the event of any in-
accept all electronically signed trans-
action requests? consistencies between this part 370 and
370.36 When does a transaction request be- either the Operating Rules or part 210,
come effective? this part 370 applies.
370.37 Where is the point of transaction for (c) Regulations of the Board of Gov-
an electronically submitted transaction ernors of the Federal Reserve. To the ex-
request? tent that Regulation E (12 CFR part
370.38 What is the legal effect of an elec-
tronic signature?
205) and Regulation Z (12 CFR part 226)
370.39 To what extent is a digital signature of the Board of Governors of the Fed-
admissible in any civil litigation or dis- eral Reserve System apply to trans-
pute? actions authorized by this part, those
370.40 Can I be held accountable if my neg- Federal laws are unaffected by this
ligence contributes to a forged signa- part 370.
ture?
370.41 What limitations exist on liability?
(d) Variance by agreement. The terms
of this part may be varied by agree-
Subpart E—Additional Provisions ment.
370.45 What is the status of a security if the § 370.1 What special terms do I need to
remittance cannot be collected? know to understand this part?
370.46 Are there any situations in which the
Bureau of the Public Debt may waive Automated Clearing House (ACH) entry
these regulations? means a transaction in accordance
370.47 To what extent may the Bureau of with the Operating Rules of the Na-
the Public Debt change these regula- tional Automated Clearing House Asso-
tions? ciation, as modified by these regula-
AUTHORITY: 12 U.S.C. 391; 31 U.S.C. chapter tions and other law. The regulations in
31. this part control in the event of any in-
SOURCE: 64 FR 40487, July 26, 1999, unless consistencies with the applicable Oper-
otherwise noted. ating Rules.
519
§ 370.1 31 CFR Ch. II (7–1–11 Edition)
Credit entry means an ACH entry for (4) Any insured credit union as de-
the payment of money to a deposit ac- fined in section 101 of the Federal Cred-
count. it Union Act (12 U.S.C. 1752) or any
Debit entry means an ACH entry for credit union that is eligible to make
the collection of money from a deposit application to become an insured cred-
account. it union pursuant to section 201 of such
Deposit account means a demand de- Act (12 U.S.C. 1781);
posit (checking), savings, or asset ac- (5) Any savings association as defined
count (other than an occasional or in- in section 3 of the Federal Deposit In-
cidental credit balance in a credit plan) surance Act (12 U.S.C. 1813) that is an
held directly or indirectly by a finan- insured depository institution as de-
cial institution. fined in that act or is eligible to apply
Digital signature means a type of elec- to become an insured depository insti-
tronic signature. A signer creates a tution under that act; and
digital signature by using public-key (6) Any Federal branch or agency of a
encryption to transform a message di- foreign bank as defined in section 1(b)
gest of an electronic message. If a re- of the International Banking Act, as
cipient of the digital signature has an amended (12 U.S.C. 3101).
electronic message, message digest Investor account is our record of your
function, and the signer’s public key, TreasuryDirect holdings, including a list
the recipient can verify: of your total security holdings, the
(1) Whether the transformation was exact form of registration of your ac-
accomplished with the private key that count, your mailing address, your
corresponds to the signer’s public key; TreasuryDirect account number, your
and social security account number or em-
(2) Whether the electronic message ployer identification number, and your
has been altered since the trans- deposit account instructions.
formation was made. Message digest function means an al-
Electronic message means information gorithm that transforms an electronic
that is stored in an electronic medium message into a seemingly unintelli-
and is retrievable in perceivable form. gible, generally smaller, result called
Electronic signature means a signature the message digest. A message digest
of an electronic message that: function has these qualities:
(1) Identifies and authenticates a par- (1) The same electronic message
ticular person as the source of the elec- yields the same message digest every
tronic message; and time the algorithm is executed;
(2) Indicates such person’s approval (2) It is computationally infeasible
of the information contained in the that an electronic message can be de-
electronic message. rived from the message digest result
Financial institution means: produced by the algorithm; and
(1) Any insured bank as defined in (3) it is computationally infeasible
section 3 of the Federal Deposit Insur- that two electronic messages can be
ance Act (12 U.S.C. 1813) or any bank found that produce the same message
that is eligible to make application to digest using the algorithm.
become an insured bank under section Payment means, for the purpose of
5 of such Act (12 U.S.C. 1815); this part, funds paid by us to you.
(2) Any mutual savings bank as de- Person means any natural person or
fined in section 3 of the Federal De- organization.
posit Insurance Act (12 U.S.C. 1813) or Public-key encryption means a cryp-
any bank that is eligible to make ap- tographic process which generates and
plication to become an insured bank employs a key pair, consisting of a
under section 5 of such Act (12 U.S.C. public key and a different but mathe-
1815); matically related private key. One use
(3) Any savings bank as defined in of the public key is to verify a digital
section 3 of the Federal Deposit Insur- signature created by the private key.
ance Act (12 U.S.C. 1813) or any bank Security means an obligation offered
that is eligible to make application to by the Secretary of the Treasury.
become an insured bank under section Settlement date means the date an ex-
5 of such Act (12 U.S.C. 1815); change of funds with respect to an ACH
520
entry is reflected on the books of the lowing the Operating Rules of the Na-
Federal Reserve Bank(s). tional Automated Clearing House Asso-
Signature means any symbol or meth- ciation. The financial institution’s re-
od executed or adopted by a person quest will be deemed an agreement by
with present intention to be bound. the institution to indemnify us and
We (or ‘‘us’’) refers to the Secretary you for any loss resulting from the re-
of the Treasury and the Secretary’s quested change.
delegates at the Treasury Department
and Bureau of the Public Debt. The § 370.8 Are there any requirements re-
term also extends to any fiscal or fi- lated to a prenotification entry?
nancial agent acting on behalf of the (a) Use of prenotification in our discre-
United States when designated to act tion. In our discretion, we may initiate
by the Secretary or the Secretary’s a prenotification entry to a financial
delegates. The term does not extend to institution before we send a credit
United States Savings Bond issuing entry. We may also send a
and paying agents. prenotification message whenever
You means a deposit account owner, there is a change in the payment in-
in subparts B and C, unless stated oth- structions. If we send a prenotification
erwise. The word ‘‘you’’ means a person message, we will follow the time
who electronically submits transaction frames as established by the Operating
requests through us, in subpart D. Rules of the National Automated
Clearing House Association. A
Subpart B—Credit ACH Entries prenotification is a zero-dollar ACH
entry that can help us determine
§ 370.5 How can I appoint a financial whether there might be problems with
institution to receive payments on sending a subsequent credit entry.
my behalf? (b) Requirements placed upon financial
You must name a financial institu- institution that receives a prenotification.
tion to receive payments through cred- A financial institution must respond to
it entries using the ACH method. You a prenotification within the time
also must identify the deposit account frame for such responses as established
to which payments are to be made. To by the Operating Rules of the National
do this, you must use a form approved Automated Clearing House Associa-
by us. tion. If the receiving financial institu-
tion does not respond to the
§ 370.6 What requirements apply to a prenotification message within the
financial institution that handles a specified time period, we may interpret
credit entry? the nonresponsiveness as the financial
A financial institution that accepts institution’s agreement to this sub-
and handles a credit entry initiated by part. Furthermore, a financial institu-
us agrees to the provisions of this sub- tion warrants by its nonresponsiveness
part, and warrants that it will comply that the deposit account number and
with all requirements imposed upon the type of account contained in the
Receiving Depository Financial Insti- prenotification entry message was ac-
tutions under the Operating Rules of curate as of the moment the financial
the National Automated Clearing institution received it.
House Association, as modified by
these regulations and other law. § 370.9 How can my payment instruc-
tions be changed?
§ 370.7 How can my financial institu- Your payment instructions will con-
tion change my designated deposit tinue to apply until either you or your
account? financial institution requests us to
If your financial institution requests make a change.
us to make a change in your deposit
account number or type of your ac- § 370.10 What can cause my payments
count, we will change the information to be suspended?
without requiring any confirmation (a) Change in deposit account. We will
from you. The request from the finan- suspend payments if we receive notice
cial institution must be made fol- that your deposit account has been
521
§ 370.11 31 CFR Ch. II (7–1–11 Edition)
closed, that someone named on your roneous credit entry, or any duplicate
deposit account is dead or has been de- credit entry, as follows:
clared legally incompetent, that there (a) Return of amount of erroneous or
is a change in the title of your deposit duplicate credit entry by financial institu-
account that alters your interests; or, tion. We will send a notice to the finan-
if a corporation is the owner, that it cial institution to which the erroneous
has been dissolved. or duplicate credit entry was sent.
(b) Change in status of owner. We will When it receives this notice, the finan-
suspend payments when we receive no- cial institution must immediately re-
tice that an owner of a bond, security, turn to the appropriate Federal Re-
or investor account is dead or has been serve Bank an amount equal to the
declared legally incompetent, or in any credit entry. If the institution is un-
case where we receive notice of a able to do this, the institution must
change in the name or status of an or- immediately notify us, and provide any
ganization or representative named on information that it has about the mat-
a bond, security, or investor account. ter. We reserve the right to request the
(c) Continuation of suspension. Pay- return of a partial amount of an erro-
ments will continue to be suspended neous or duplicate credit entry.
until we receive satisfactory evidence (b) Collection of amount of unreturned
as to who is authorized or entitled to erroneous or duplicate credit entry.
receive payments. Where the erroneous or duplicate cred-
§ 370.11 What must my financial insti- it entry has not been returned, we will
tution do when it receives a pay- undertake any other actions that are
ment? appropriate. To the extent permitted
by law, the collection action may in-
An institution which receives a pay-
clude deducting the amount owed from
ment on behalf of its customer must:
future credit entries made to the de-
(a) Upon receipt, make the payment
posit account to which the erroneous
available to you on the payment date.
or duplicate credit entry was made.
If a scheduled payment date is not a
(c) Authorization of Debit to collect
business day for the Federal Reserve
Bank of the district in which the insti- unreturned dulicate or erroneous credit
tution is located, payment will be entry. If a financial institution has not
made on the next-succeeding business responded within 60 calendar days of
day. If the institution is unable to the notice, its acceptance of the credit
make a credit entry to the designated entry will be considered an authoriza-
account, it must return the payment in tion for a debit in the amount of the
accordance with the Operating Rules of entry. The debit will be made from the
the National Automated Clearing account maintained or utilized by the
House Association. financial institution at the Federal Re-
(b) Promptly notify us when your ac- serve Bank to which the entry was
count has been closed, or when it is on made. An institution designated by a
notice of the death or legal incapacity financial institution to receive pay-
of you or any other individual named ment on its behalf, in permitting the
on your account, or when it is on no- usage, is deemed to have authorized a
tice of the dissolution of a corporation debit. The debit will be made from its
in whose name the deposit account is account maintained at the Federal Re-
held. The institution must return all serve Bank to which the entry was
payments received along with an expla- made. The institution to which the
nation for the return. credit entry has been directed is
deemed to have agreed to provide infor-
§ 370.12 What happens if an error is mation and assistance to recover any
made in a credit entry, or if a dupli- erroneous or duplicate entry. You are
cate credit entry is made? also deemed to have agreed to provide
If we make an erroneous credit entry information and assistance, and to
under this part, we will make a cor- take any action provided by law to re-
rected credit entry to your account. We cover an erroneous or duplicate credit
will then take action to recover the er- entry.
522
§ 370.13 Can time limits for taking an investor account maintained by us, you
action on a credit entry be ex- must be named on the investor ac-
tended? count. The authorization must be ac-
If we or your financial institution are complished only through forms or
delayed beyond applicable time limits means approved by us.
in taking any action with respect to a (b) Single-entry and recurring debit en-
credit entry because of circumstances tries. You only may authorize single-
beyond our control, then the time for entry debits for purchases of book-
taking that action will be extended as entry securities held in TreasuryDirect.
necessary until the cause of the delay You only may authorize recurring
ends. debit entries for purchases of definitive
§ 370.14 Can substitute payment proce- savings bonds.
dures be used? (c) Credit entries to be made to same de-
We may use substitute payment pro- posit account. To the extent that pay-
cedures, instead of ACH, if we consider ments by us with respect to a security
it to be necessary. Any such action is are to be made through credit entries,
final. you must receive debit and credit en-
tries in the same deposit account.
§ 370.15 What limitations exist on li- (d) Signature. The authorization must
ability? have your signature and that of any
(a) We may rely on the information other person whose signature is re-
provided by you or anyone else author- quired to withdraw funds from the de-
ized to provide information concerning posit account. We need not verify your
your financial institution or deposit identity or the authenticity of your
account to which payments are to be signature.
made. We do not need to verify this in-
formation. We are not liable for any ac- § 370.21 Are there any requirements
tion we may take in reliance on the in- related to a prenotification entry?
formation furnished. (a) Use of prenotification in our discre-
(b) Our liability does not extend be-
tion. In our discretion, we may initiate
yond the amount of the payment due.
a prenotification entry to a financial
(c) When you name a financial insti-
tution to receive payments on your be- institution prior to sending a debit
half, you are appointing that institu- entry. A prenotification is a zero-dollar
tion as your agent for the receipt of ACH entry that can help us determine
payments. When a credit entry is made whether there might be problems with
to your financial institution for de- sending a subsequent debit entry.
posit to your account following your (b) Requirements placed upon financial
instructions, we no longer have any institution that receives a prenotification.
further responsibility for that pay- If sent, a financial institution must re-
ment. Where your financial institution spond to a prenotification within the
has arranged with the Federal Reserve time frame for such responses as estab-
Bank to have payments made through lished by the National Automated
another financial institution, the cred- Clearing House Association. If the re-
iting of your payment to that institu- ceiving financial institution does not
tion relieves us of any further responsi- respond to the prenotification message
bility for that payment. within the specified time period, we
may interpret the nonresponsiveness as
Subpart C—Debit Entries the financial institution’s agreement
to this subpart. Furthermore, a finan-
§ 370.20 What requirements apply if I
want to authorize a debit entry to cial institution warrants by its non-
my deposit account? responsiveness that the deposit ac-
count number and the type of account
(a) General. You may pay for a secu-
contained in the prenotification entry
rity and related fees by authorizing us
to initiate one or more debit entries to message was accurate as of the mo-
your deposit account. For a purchase of ment the financial institution received
a book-entry security to be held in an it.
523
§ 370.22 31 CFR Ch. II (7–1–11 Edition)
§ 370.22 What requirements apply to a (b) Exception. If you submit a debit

financial institution that debits a entry authorization in conjunction
deposit account? with a Treasury auction tender for the
A financial institution that debits a purchase of a book-entry security, you
deposit account upon receiving a debit cannot terminate or suspend a debit
initiated by us agrees to the provisions entry after the auction closes.
of this subpart. A financial institution
§ 370.26 What limitations exist on li-
that does so also warrants that it has ability?
the authority to receive debit entries.
If we sustain a loss because a finan-
§ 370.23 What other requirements cial institution fails to handle an entry
apply to a financial institution? in accordance with this part, the finan-
cial institution is liable to us for the
The financial institution warrants
loss, but not beyond the amount of the
that it will comply with all require-
debit entry. In no instance does our li-
ments imposed upon Receiving Deposi-
ability extend beyond the amount of
tory Financial Institutions under the
the debit entry.
Operating Rules of the National Auto-
mated Clearing House Association, as
modified by these regulations and Subpart D—Electronic Submission
other law. of Transaction Requests
Through the Bureau of the
§ 370.24 What right does the Bureau of Public Debt
the Public Debt have to terminate
or suspend debit entries? § 370.35 Does the Bureau of the Public
We may terminate or suspend the Debt accept all electronically
availability of one or more debit en- signed transaction requests?
tries in any case or class of cases, and An electronic signature will not be
may do so without notice at any time. accepted if it has not been accom-
A decision to terminate or suspend the plished through a method that has
availability of debit entries is in our been approved for specific purposes by
sole discretion and is final. us.
§ 370.25 What rights do I have to ter- § 370.36 When does a transaction re-
minate or suspend debit entries? quest become effective?
(a) General. If you are an investor ac- Except for auction bids of U.S. secu-
count owner or deposit account owner, rities or unless otherwise agreed, a
you generally may terminate or sus- transaction request becomes effective
pend one or more debit entries by noti- at the moment we send a confirmation
fying us orally or in writing at least message. In no instance does a trans-
three business days before the sched- action request become effective before
uled date of a transfer. In response to we actually receive the request.
an oral notice, we may require you to
give written notice, to be received by § 370.37 Where is the point of trans-
us within fourteen days of an oral no- action for an electronically sub-
mitted transaction request?
tice. An oral notice ceases to be bind-
ing after fourteen days if you fail to For jurisdiction and venue purposes,
provide the required written confirma- the point of transaction for a trans-
tion. A suspension will remain in effect action request handled pursuant to this
for the duration you specify, but for no subpart is Parkersburg, West Virginia,
more than six months. The termi- regardless of from where the trans-
nation and suspension methods need action request is transmitted or where
not be recited in the authorization. the transaction request is actually
These termination or suspension rights processed.
are in addition to those that you may
have through your financial institution § 370.38 What is the legal effect of an
under Regulation E of the Board of electronic signature?
Governors of the Federal Reserve Sys- An electronic signature and any elec-
tem (12 CFR part 205). tronic message to which it is affixed or
524
attached may not be denied legal ef- in our discretion cancel the security
fect, including legal effect as a signa- unless it has been legally transferred
ture, a writing, or an original, solely for value to a third person who had no
because the signature or record is in knowledge of the improper debit entry
electronic form. at the time of the transfer.
§ 370.39 To what extent is a digital sig- § 370.46 Are there any situations in
nature admissible in any civil litiga- which the Bureau of the Public
tion or dispute? Debt may waive these regulations?
In asserting a digital signature We reserve the right, in our discre-
against you in any civil litigation or tion, to waive any provision of these
dispute, extrinsic evidence of authen- regulations in any case or class of
ticity as a condition precedent of ad- cases. We may do so if such action is
missibility (such as testimony about not inconsistent with law and will not
the scientific validity of digital signa- subject the United States to substan-
tures) is not necessary to establish: tial expense or liability.
(a) That a digital signature cor-
responds to a specific public key pair, § 370.47 To what extent may the Bu-
and; reau of the Public Debt change
(b) That an electronic message to these regulations?
which the digital signature is affixed Any aspect of this part may be
has not been altered from its original changed at any time and without no-
form. tice. You assume the risk that a
change may terminate a provision that
§ 370.40 Can I be held accountable if was to your advantage. Nothing in this
my negligence contributes to a part creates vested rights in your
forged signature? favor.
(a) General. If your failure to exercise
ordinary care substantially contributes PART 375—MARKETABLE TREASURY
to the submission of a forged signature, SECURITIES REDEMPTION OPER-
then you cannot claim that the signa-
ture is a forgery. However, we cannot
ATIONS
invoke this section against you if we
cannot first establish that we were rea-
sonable in relying upon the signature. Sec.
If we can do so, you bear the burden of 375.0 What authority does the Treasury
production and the burden of persua- have to redeem its securities?
sion in establishing your exercise of or- 375.1 Where are the rules for the redemption
dinary care. If you cannot do so, then operation located?
375.2 What special definitions apply to this
you cannot claim that the signature is
rule?
a forgery. 375.3 What is the role of the Federal Re-
(b) Exception. This section has no ap- serve Bank of New York in this process?
plication in any dispute involving a
debit authorization or credit card Subpart B—Offering, Certifications, and
transaction. Delivery
§ 370.41 What limitations exist on li- 375.10 What is the purpose of the redemp-
ability? tion operation announcement?
375.11 Who may participate in a redemption
In no instance does our liability ex- operation?
tend beyond the amount of the trans- 375.12 How do I submit an offer?
action. 375.13 What requirements apply to offers?
375.14 Do I have to make any certifications?
Subpart E—Additional Provisions 375.15 Who is responsible for delivering se-
curities?
§ 370.45 What is the status of a secu-
rity if the remittance cannot be col- Subpart C—Determination of Redemption
lected? Operation Results; Settlement
If we cannot promptly collect all of 375.20 When will the Treasury decide on
the remittance for a security, we may which offers to accept?
525
§ 375.0 31 CFR Ch. II (7–1–11 Edition)
375.21 When and how will the Treasury an- Customer means a person or entity on
nounce the redemption operation re- whose behalf a submitter has been di-
sults? rected to submit an offer of a specified
375.22 Will I receive confirmations and, if I
amount of securities in a specific re-
am submitting offers for others, do I
have to provide confirmations? demption operation.
375.23 How does the securities delivery proc- Minimum offer amount means the
ess work? smallest par amount of a security that
may be offered to the Treasury. We will
Subpart D—Miscellaneous Provisions state the minimum offer amount in the
redemption operation announcement.
375.30 Does the Treasury have any discre-
tion in this process? Multiple means the smallest addi-
375.31 What could happen if someone does tional par amount of a security that
not fully comply with the redemption op- may be offered to the Treasury. We will
eration rules or fails to deliver securi- state the multiple in the redemption
ties? operation announcement.
AUTHORITY: 5 U.S.C. 301; 31 U.S.C. 3111; 12 Offer means an offer to deliver for re-
U.S.C. 391. demption a stated par amount of a spe-
SOURCE: 65 FR 3116, Jan. 19, 2000, unless
cific security to the Treasury at a stat-
otherwise noted. ed price.
Price means the dollar amount to be
paid for a security expressed as a per-
Subpart A—General Information cent of its current par amount.
§ 375.0 What authority does the Treas- Privately held amount means the total
ury have to redeem its securities? amount outstanding of a security less
Section 3111 of Title 31 of the United holdings of the Federal Reserve System
States Code authorizes the Secretary and Federal Government accounts.
of the Treasury to use money received Redemption amount means the max-
from the sale of an obligation and imum par amount of securities that we
other money in the general fund of the are planning to redeem through a re-
Treasury to buy, redeem, or refund, at demption operation. We will state the
or before maturity, outstanding bonds, redemption amount in the redemption
notes, certificates of indebtedness, operation announcement.
Treasury bills, or savings certificates Redemption operation means a com-
of the United States Government. For petitive process by which the Treasury
the purposes of this part, we will refer accepts offers of marketable Treasury
to these outstanding obligations as securities that by their terms are not
‘‘securities’’. immediately payable.
Security means an outstanding
§ 375.1 Where are the rules for the re- unmatured obligation of the United
demption operation located? States Government that the Secretary
The provisions in this part and the is authorized to buy, redeem or refund
redemption operation announcement under section 3111 of Title 31 of the
govern the redemption of marketable United States Code.
Treasury securities under 31 U.S.C. Settlement means full and complete
3111. (See § 375.10.) delivery of and payment for securities
redeemed.
§ 375.2 What special definitions apply Settlement amount means the par
to this rule? amount of each security that we re-
The definitions in 31 CFR part 356 deem, multiplied by the price we ac-
govern this part except as follows: cept in a redemption operation, plus
Accrued interest means an amount any accrued interest.
payable by the Treasury as part of the Settlement date means the date speci-
settlement amount for the interest in- fied in the redemption operation an-
come earned between the last interest nouncement on which you must deliver
payment date up to and including the a security to the Treasury for pay-
settlement date. ment.
Bank means the Federal Reserve Submitter means an entity submitting
Bank of New York. offers directly to the Treasury for its
526
own account, for the account of others, cable redemption operation announce-
or both. (See § 375.11(a)). ment along with this part.
Tender means a computer trans-
mission or document submitted in a re- § 375.11 Who may participate in a re-
demption operation that contains one demption operation?
or more offers. (a) Submitters. To be a submitter, you
We (‘‘us’’) means the Secretary of the must be an institution that the Federal
Treasury and his or her delegates, in- Reserve Bank of New York has ap-
cluding the Treasury Department, the proved to conduct open market trans-
Bureau of the Public Debt, and their actions with the Bank.
representatives. The term also includes (b) Others. A person or entity other
the Federal Reserve Bank of New York, than a submitter may participate only
acting as fiscal agent of the United if it arranges to have an offer or offers
States. submitted on its behalf by a submitter.
You means a prospective submitter in
a redemption operation. § 375.12 How do I submit an offer?
As a submitter, you must submit an
§ 375.3 What is the role of the Federal offer in a tender to the Treasury via
Reserve Bank of New York in this
process? the Federal Reserve Bank of New York.
You must submit any tenders in an ap-
As fiscal agent of the United States, proved format and the Bank must re-
the Federal Reserve Bank of New York ceive them prior to the closing time
performs various activities necessary stated in the redemption operation an-
to conduct a redemption operation nouncement. If we do not receive your
under this part. These activities may tenders timely, we will reject them.
include but are not limited to: Your tenders are binding on you after
(a) Accepting and reviewing tenders; the closing time specified in the re-
(b) Calculating redemption operation demption operation announcement.
results; You are responsible for ensuring that
(c) Issuing notices of redemptions; we receive your tenders on time. We
(d) Accepting deliveries of Treasury will not be responsible in any way for
securities at settlement; and any unauthorized tender submissions
(e) Processing the Treasury payment or for any delays, errors, or omissions
for securities delivered at settlement. in submitting tenders.
Subpart B—Offering, Certifications, § 375.13 What requirements apply to

and Delivery offers?
(a) General. You may only submit
§ 375.10 What is the purpose of the re- competitive offers (specifying a price).
demption operation announcement? All offers must state the security de-
We provide public notice that we are scription, par amount, and price of
redeeming Treasury securities by each security offered. All offers must
issuing a redemption operation an- equal or exceed the minimum offer
nouncement. This announcement lists amount, and be in the multiple, stated
the details of each proposed redemp- in the redemption operation announce-
tion operation, including the maximum ment.
redemption amount, the range of matu- (b) Price format. You must express of-
rities of eligible securities, descrip- fered prices in terms of price per $100 of
tions of the securities that fall within par with three decimals, e.g., 102.172.
that maturity range, and the redemp- The first two decimals represent frac-
tion operation and settlement dates. tional 32nds of a dollar. The third dec-
The redemption operation announce- imal represents eighths of a 32nd of a
ment and this part specify the terms dollar, and must be a 0, 2, 4, or 6. For
and conditions of a redemption oper- example, an offer of 102.172 means one
ation. If anything in the redemption hundred two and seventeen 32nds and
operation announcement differs from two eighths of a 32nd, or in decimals,
anything in this part, the redemption 102.5390625.
operation announcement will apply. (c) Maximum number of offers. There is
Accordingly, you should read the appli- no limit on the number of offers you
527
§ 375.14 31 CFR Ch. II (7–1–11 Edition)
may make for each eligible security. fying that customer of the impending
There is also no limit on the number of redemption.
eligible securities you may offer.
§ 375.23 How does the securities deliv-
§ 375.14 Do I have to make any certifi- ery process work?
cations?
If any of the offers you submitted are
By submitting a tender offering a se- accepted, you must transfer the correct
curity or securities for sale, you certify book-entry Treasury securities in the
that you are in compliance with this correct par amount against the correct
part and the redemption operation an-
settlement amount on the settlement
nouncement.
date. You must deliver the securities
§ 375.15 Who is responsible for deliv- to the account specified in the redemp-
ering securities? tion operation announcement.
As a submitter, you are responsible
for delivering any securities we accept Subpart D—Miscellaneous
in the redemption operation, including Provisions
any securities for which you submitted
offers on behalf of others. (See § 375.23.) § 375.30 Does the Treasury have any
All securities you deliver must be free discretion in this process?
and clear of all liens, charges, claims, (a) We have the discretion to:
and any other restrictions. (1) Accept or reject any offers or
tenders submitted in a redemption op-
Subpart C—Determination of Re- eration;
demption Operation Results; (2) Redeem less than the amount of
Settlement securities specified in the redemption
operation announcement;
§ 375.20 When will the Treasury decide
on which offers to accept? (3) Add to, change, or waive any pro-
vision of this part; or
We will determine which offers or
(4) Change the terms and conditions
portions of offers to accept after the
of a redemption operation.
closing time for receipt of tenders. All
such determinations will be final. (b) Our decisions under this part are
final. We will provide a public notice if
§ 375.21 When and how will the Treas- we change any redemption operation
ury announce the redemption oper- provision, term or condition.
ation results?
We will make an official announce- § 375.31 What could happen if someone
ment of the redemption operation re- does not fully comply with the re-
sults through a press release. For each demption operation rules or fails to
deliver securities?
security we redeem, the press release
will include such information as the (a) General. If a person or entity fails
amounts offered and accepted, the to comply with any of the redemption
highest price accepted, and the remain- operation rules in this part, we will
ing privately held amount outstanding. consider the circumstances and take
what we deem to be appropriate action.
§ 375.22 Will I receive confirmations This could include barring the person
and, if I am submitting offers for
others, do I have to provide con- or entity from participating in future
firmations? redemption operations under this part
and future auctions under 31 CFR part
(a) Confirmations to submitters. We will
provide a confirmation of acceptance 356. We also may refer the matter to an
or rejection in the form of a results appropriate regulatory agency.
message to submitters of offers by the (b) Liquidated damages. If you fail to
close of the business day of the redemp- deliver securities on time, we may re-
tion operation. quire you to pay liquidated damages of
(b) Confirmation of customer offers. If up to 1% of your projected settlement
you submit a successful offer for a cus- amount.
tomer, you are responsible for noti-
528
PART 380—COLLATERAL to govern the respective programs

ACCEPTABILITY AND VALUATION themselves.
§ 380.1 What special definitions apply

Subpart A—General Information to this part?
Sec. Special definitions that may apply to
380.0 What do these regulations govern? this part are contained in 31 CFR parts
380.1 What special definitions apply to this
part? 202, 203 and 225.
Subpart B—Acceptable Collateral and Its Subpart B—Acceptable Collateral

Valuation and Its Valuation
380.2 What collateral may I pledge if I am a
depositary or a financial agent of the § 380.2 What collateral may I pledge if
Government under 31 CFR part 202, and I am a depositary or a financial
what value will you assign to it? agent of the Government under 31
380.3 What collateral may I pledge if I am a CFR part 202, and what value will
Treasury Tax and Loan depositary under you assign to it?
31 CFR part 203, and what value will you Unless we specify otherwise, we will
assign to it? list the types and valuation of accept-
380.4 What collateral may I pledge instead able collateral in Treasury procedural
of a surety bond under 31 CFR part 225,
and what value will you assign to it?
instructions. We will also post updated
information and guidance on Treas-
Subpart C—Miscellaneous Provisions ury’s Bureau of the Public Debt Web
site at http://www.treasurydirect.gov.
380.5 Where can I find current information,
and who can I contact for additional § 380.3 What collateral may I pledge if
guidance and interpretation? I am a Treasury Tax and Loan de-
AUTHORITY: 12 U.S.C. 90, 265–266, 332, 391, positary under 31 CFR part 203,
1452(d), 1464(k), 1767, 1789a, 2013, 2122, 3101– and what value will you assign to
3102; 26 U.S.C. 6302; 31 U.S.C. 321, 323, 3301– it?
3304, 3336, 9301, 9303. Unless we specify otherwise, we will
SOURCE: 73 FR 75590, Dec. 12, 2008, unless list the types and valuation of accept-
otherwise noted. able collateral in Treasury procedural
instructions. We will also post updated
Subpart A—General Information information and guidance on Treas-
ury’s Bureau of the Public Debt Web
§ 380.0 What do these regulations gov- site at http://www.treasurydirect.gov.
ern?
The regulations in this part govern § 380.4 What collateral may I pledge
the types of acceptable collateral that instead of a surety bond under 31
CFR part 225, and what value will
you may pledge to secure deposits of you assign to it?
public monies and other financial in-
terests of the Federal Government, as Unless we specify otherwise, we will
well as the valuation of that collateral. list the types and valuation of accept-
Specifically, the regulations in this able collateral in Treasury procedural
part apply to the programs governed by instructions. We will also post updated
the Department of the Treasury’s regu- information and guidance on Treas-
lations at 31 CFR part 202 (Depositaries ury’s Bureau of the Public Debt Web
and Financial Agents of the Govern- site at http://www.treasurydirect.gov.
ment), 31 CFR part 203 (Payment of
Federal Taxes and the Treasury Tax Subpart C—Miscellaneous
and Loan Program), and 31 CFR part Provisions
225 (Acceptance of Bonds Secured by
Government Obligations in Lieu of § 380.5 Where can I find current infor-
Bonds with Sureties). The regulations mation, and who can I contact for
in this part apply only to the accept- additional guidance and interpreta-
ability and valuation of collateral that tion?
may be pledged under these programs. You can find a current list of accept-
31 CFR parts 202, 203, and 225 continue able classes of securities, instruments
529
and respective valuations on Treas- entitled to assess and later relin-

ury’s Bureau of the Public Debt Web quishes that right. Two examples of an
site at http://www.treasurydirect.gov. adjustment are: (a) Where the under-
You may also contact the Office of the lying claim is without merit, and (b)
Commissioner. We can be reached by where the debtor is not notified of the
postal mail at: Department of the claim as required by 31 U.S.C. 3717. The
Treasury, Bureau of the Public Debt, latter includes being misinformed as to
Office of the Commissioner, Govern- the amount of the charges or the time
ment Securities Regulations Staff, 799 of their commencement.
9th Street, NW., 8th Floor, Washington,
DC 20239–0001, or by e-mail at § 391.1 General.
govsecreg@bpd.treas.gov. (a) Waiver of late charges. Late
charges may be waived:
PART 391—WAIVER OF INTEREST, (1) When the underlying claim is
ADMINISTRATIVE COSTS, AND compromised in accordance with 4 CFR
PENALTIES part 103;
(2) Where the underlying claim is not
Sec. compromised but it is appropriate to
391.0 Scope of regulations. waive late charges under the criteria of
391.1 General. 4 CFR part 103 relating to enforcement
391.2 Equitable considerations. policy;
391.3 Resolution of disputes. (3) When collection of the underlying
391.4 Documentary evidence. claim is terminated in accordance with
391.5 Waiver approval.
4 CFR part 104;
AUTHORITY: 31 U.S.C. 3701; 31 U.S.C. 3711; 31 (4) When a claim is suspended in ac-
U.S.C. 3717. cordance with 4 CFR part 104.
SOURCE: 50 FR 6344, Feb. 15, 1985, unless (5) Where the cost of collecting the
otherwise noted. unpaid late charges would approach or
exceed the amount of unpaid late
§ 391.0 Scope of regulations. charges to be collected and the amount
These regulations apply to the waiv- of late charges does not qualify for re-
er of late charges on claims due the Bu- ferral to a collection agency or the De-
reau of the Public Debt as authorized partment of Justice;
by 31 U.S.C. 3717(h). They are con- (6) Where the late charges pertain to
sistent with the Federal Claims Collec- claims involving savings bonds and
tion Standards on interest, administra- notes arising under 31 U.S.C. 3105 and
tive costs, and penalties prescribed 3106 which are replaced pursuant to 31
jointly by the General Accounting Of- U.S.C. 3126;
fice and the Department of Justice and (7) For reasons of equity or good con-
set forth in 4 CFR 102.13. The term science as provided in § 391.2.
‘‘claim’’ as used in this part refers to (b) Partial waiver. Late charges may
an amount of money or property that be waived in full or in part.
has been determined to be owed to the
Bureau of the Public Debt from any § 391.2 Equitable considerations.
person, organization, or entity, except For reasons of equity and good con-
another Federal agency. The term science, late charges may be waived
‘‘late charges’’ as used in this part in- under the circumstances identified in
cludes interest, administrative costs, this section.
and penalties. When applying the fol- (a) Where, without fault or bad faith,
lowing regulations, a distinction shall the debtor could not submit payment
be drawn between an adjustment and a within 30 days of the interest accrual
waiver. An adjustment is an account date, the mandatory waiver provision
correction under any circumstances in 4 CFR 102.13(g) may be extended.
where the Bureau records a claim or Such waiver will be considered on a
accrues late charges to which it is not case-by-case basis. Examples include,
legally entitled. An adjustment may be but are not limited to:
made without the promulgation of reg- (1) Postal service delays in for-
ulations. A waiver applies whenever warding the notice of indebtedness to a
the Bureau accrues late charges it is new address; and
530
(2) Late receipt of the notice of in- review is received and ends 10 days
debtedness where the debtor was away after the final determination is mailed
from home on an extended vacation or to the debtor. This paragraph shall not
hospitalized. apply if the request for review is made
(b) Where an installment plan is con- in bad faith or for purposes of delay.
templated and the amount of the late
charges in relation to the amount of § 391.4 Documentary evidence.
reasonably affordable installment pay-
ments is so large that the debt may (a) When late charges are waived, the
never be paid, late charges may be debtor’s administrative file shall be
waived. properly documented with a memo-
randum. The memorandum shall con-
§ 391.3 Resolution of disputes. tain a brief narrative statement de-
(a) To avoid the accrual of additional scribing the circumstances leading to
late charges during the resolution of a the waiver and the reason(s) for grant-
dispute, a debtor has the option of paying the waiver.
ing the amount of the claim and filing (b) A credit report or a financial
a request for a refund together with a statement sworn to by the debtor may
request for review of the claim. be required before waiver of late
(b) Where the claim is a result of the charges is approved for a compromise,
Bureau’s administrative error, late suspension, or termination, except
charges accruing during the review pe- where the cost of obtaining such a re-
riod may be waived unless the Bureau’s port or statement exceeds the late
actions would have placed a reasonable charges due.
person on notice that the Bureau erred
and that the person should inquire fur- § 391.5 Waiver approval.
ther.
(c) Where the claim is a result of the Waivers of late charges shall be ap-
debtor’s error or negligence and the ad- proved by the Commissioner of the Bu-
ministrative review is unreasonably reau of the Public Debt or designee, ex-
protracted, late charges accruing dur- cept that compromises and termi-
ing the protracted portion of the re- nations of the underlying claim shall
view period may be waived. be upon the recommendation of the
(d) The period for administrative re- Chief Counsel in accordance with 31
view begins on the date the request for CFR 5.3.
531

31 306 General Regulations Governing US Securities

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31 306 General Regulations Governing US Securities

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SUBCHAPTER B—BUREAU OF THE PUBLIC DEBT

PART 306—GENERAL REGULATIONS CERTIFICATES OF INDEBTEDNESS, AND COM-

Subpart A—General Information Subpart F—Assignments of Registered

union which is eligible to make appli- istered securities assigned simply to

(3) A partnership. The name of a part- § 306.13 Nontransferable securities.

§ 306.22 Exchange of Treasury Bonds, change, reissue, withdrawal from book-

legal guardian or similar representa- APPENDIX TO SUBPART E OF PART 306—

Regular year Leap year Regular year Leap year

January to July ...................................................................... 181 182 181 182

1 year (any 2 consecutive half-years) .................................. 365 366 365 366

Half-year of 184 Half-year of 183 Half-year of 182 Half-year of 181

Half-year of 184 Half-year of 183 Half-year of 182 Half-year of 181

§ 306.41 Form of assignment. In the absence of a disclaimer, an affi-

Banks for Cooperatives, and Federal dorsement: ‘‘Signature guaranteed,

(3) Officers and authorized employees of Subpart G—Assignments by or in

9 See § 306.11(a) (2) for forms of registration

expressing or precluding survivorship.

minor or incompetent must be sup- or small estates procedures under ap-

attorney in fact may use Form PD 1006 § 306.96 Nontransferable securities.

§ 306.102 Nontransferable securities. ing judicial proceedings by any person

§ 306.115 Definition of terms. Subpart P—Miscellaneous

§ 306.117 Withdrawal of eligible book- § 306.127 Preservation of existing

§ 306.128 Supplements, amendments or § 308.3 Exchanges of denominations.

the bills shall be accompanied by a Public Debt, Washington, DC 20226, and

an express guaranty of payment in full (a) That any qualified depositary

of the provisions of this circular at any § 312.1 Authority.

authorized to perform such acts until PART 315—REGULATIONS GOV-

All of the fiscal agency employment 315.20 General.

Subpart H—General Provisions for Payment 315.77 Exchanges by fiduciaries.

315.35 Payment (redemption). Subpart N—Private Organizations (Cor-

§ 315.1 Official agencies. (b) Communications concerning

agreement with one of the forms au- pointed or authorized representative of

the name of an executor authorized to Board of Trustees of Immediate Relief Trust

other financial institution, or an indi- partnership agreement, or other au-

(e) Institutions (churches, hospitals, amounts applicable to each series of

§ 315.58 Forms to be certified. sufficient competency to sign the re-

title to the property of a religious, edu- § 315.77 Exchanges by fiduciaries.

partnership by operation of law or oth- provided for. The appropriate form

reissued in unauthorized denomina- (c) Savings stamps. The sale of United

guaranteed minimum investment yield available prior to each of those dates

District Director, Internal Revenue structions and identification guide-

(2) Until March 1, 1996, other Federal § 317.1 Definitions.

§ 317.0 Purpose and effective date. § 317.2 Organizations authorized to

(c) Specific activities of designated Fed- 321.7 Authorized cash payments.

321.2 Eligible organizations. SOURCE: 53 FR 37511, Sept. 26, 1988, unless

provisions of Department of the Treas- Subpart C—Scope of Authority

(b) The following Federal Reserve Of-

[59 FR 10537, Mar. 4, 1994, as amended at 63 FR 38042, July 14, 1998]

§ 321.26 Preservation of rights. (a) Offering circulars. Department of the

shall be made available in accordance § 323.3 Materials available for inspec-

(c) By or through banks at any time (1) For payment or redemption—at

of the Public Debt, Washington, DC, PART 330—REGULATIONS GOV-

include fiduciaries, corporations, part- to employ the special endorsement pro-

(b) Endorsement stamps. Endorsement (b) Assumed complete and uncondi-

[59 FR 10539, Mar. 4, 1994, as amended at 63 FR 38044, July 14, 1998]

§ 330.10 Modifications of other circu- 332.10 Payment or redemption.

§ 332.10 Payment or redemption. § 332.11 Reservation as to issue of

(2) Until March 1, 1996, other Federal PART 337—SUPPLEMENTAL REGU-

by appropriate written advice. A trans- § 337.6 Conversions to book-entry.

§ 337.15 General provisions. EDITORIAL NOTE: The sale of U.S. Savings

and envelopes may be obtained from (b) Method of determining accepted

§ 340.12 Reservations as to terms of § 341.1 Description of bonds.

(c) Denominations—issue date. Retire- one is to be designated, will also be