[Federal Register Volume 59, Number 219 (Tuesday, November 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27977]


[[Page Unknown]]

[Federal Register: November 15, 1994]


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Part VI





Department of the Treasury





_______________________________________________________________________



Fiscal Service



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31 CFR Parts 306 and 357



General Regulations Governing U.S. Securities and Book-Entry Treasury 
Bonds, Notes and Bills; Final Rule
DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Parts 306 and 357

 

General Regulations Governing U.S. Securities; Regulations 
Governing Book-Entry Treasury Bonds, Notes and Bills

AGENCY: Department of the Treasury, Fiscal Service, Bureau of the 
Public Debt.

ACTION: Final rule.

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SUMMARY: This rule amends agency regulations to recognize as certifying 
individuals for transactions in and assignments of Treasury marketable 
securities officers and employees of securities brokers, dealers, and 
related institutions that are members of the Securities Transfer Agents 
Medallion Program (STAMP), the Stock Exchanges Medallion Program 
(SEMP), and the New York Stock Exchange Incorporated Medallion 
Signature Program (MSP). The change is being made to conform Treasury 
procedures with currently accepted commercial practice, in order to 
make it more convenient for investors to have their signatures 
certified (guaranteed) in transactions in marketable Treasury 
securities.

EFFECTIVE DATE: November 15, 1994.

FOR FURTHER INFORMATION CONTACT: Thomas A. Tracy, Office of the 
Assistant Commissioner (Securities and Accounting Services), (202) 874-
4190, or Cynthia Reese, Office of the Chief Counsel, (202) 219-3320.

SUPPLEMENTARY INFORMATION: Treasury has determined that it would be in 
keeping with currently accepted commercial practice to recognize 
officers and employees of members of the STAMP, SEMP, and MSP signature 
guarantee programs as certifying individuals for transactions in and 
assignments of marketable Treasury securities. Under the regulations 
governing marketable Treasury securities, a certifying individual, in 
certifying an investor's signature, makes assurances to Treasury that 
the signature is genuine. Depository institutions (such as banks) are 
already recognized as institutions whose officers and employees are 
eligible to act in this capacity; many of these institutions are 
members of STAMP. Treasury currently recognizes their use of the STAMP 
signature guarantee stamp as evidence of their authority.
    This action is in response to the recent establishment of the 
STAMP, SEMP, and MSP signature guarantee programs as a consequence of 
the promulgation of Rule 17 Ad-15 (17 CFR 240.17Ad-15), issued under 
authority of the Securities Exchange Act of 1934. STAMP, SEMP, and MSP 
have been endorsed by the Securities Transfer Association and these 
programs are widely accepted in the financial community.
    Other changes have been made in order to update, clarify and 
conform the certification provisions of existing Part 306, governing 
registered definitive securities, to their counterparts in more 
recently issued Part 357, governing book-entry Treasury securities.
    In addition, a class of certifying officials whose authority is 
limited to assignments for redemption of certificated securities is 
deleted as obsolete. (See current Sec. 306.45(c)(1).) Such assignments 
and, hence, certifications are no longer required. Finally, a cross 
reference in Section 357.30 has been corrected.

Procedural Requirements

    This final rule does not meet the criteria for a ``significant 
regulatory action'', pursuant to Executive Order 12866. The regulatory 
review procedures, therefore, do not apply. The notice, public comment, 
and delayed effective date provisions of the Administrative Procedure 
Act do not apply because this final rule relates to public contracts 
and procedures for United States securities, 5 U.S.C. 553(a)(2). As no 
notice of proposed rulemaking is required, the provisions of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., do not apply. There 
are no collections of information required by this final rule, and, 
therefore, the Paperwork Reduction Act does not apply.

List of Subjects in 31 CFR Parts 306 and 357

    Banks, Banking, Bonds, Government Securities, Federal Reserve 
System.

    Dated: November 7, 1994.
Gerald Murphy,
Fiscal Assistant Secretary.

    Parts 306 and 357 of Chapter II of Title 31 of the Code of Federal 
Regulations are amended as follows:

PART 306--GENERAL REGULATIONS GOVERNING U.S. SECURITIES

    1. The authority citation for Part 306 is revised to read as 
follows:

    Authority: 31 U.S.C. Chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.

    2. In Sec. 306.2, paragraphs (p) through (r) are redesignated (r) 
through (t), paragraphs (g) through (o) are redesignated (h) through 
(p), and new paragraphs (g) and (q) are added to read as follows:


Sec. 306.2  Definitions of words and terms as used in these 
regulations.

* * * * *
    (g) Depository institution means an entity described in section 
19(b)(1)(A)(i)--(vi) of the Federal Reserve Act (12 U.S.C. 
461(b)(1)(A)(i)--(vi)). Under section 19(b) of the Federal Reserve Act, 
the term depository institution includes:
    (1) Any insured bank as defined in 12 U.S.C. 1813 or any bank which 
is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (2) Any mutual savings bank as defined in 12 U.S.C. 1813 or any 
bank which is eligible to make application to become an insured bank 
under 12 U.S.C. 1815;
    (3) Any savings bank as defined in 12 U.S.C. 1813 or any bank which 
is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (4) Any insured credit union as defined in 12 U.S.C. 1752 or any 
credit union which is eligible to make application to become an insured 
credit union under 12 U.S.C. 1781;
    (5) Any member as defined in 12 U.S.C. 1422; and
    (6) Any savings association (as defined in 12 U.S.C. 1813) which is 
an insured depository institution, as defined in the Federal Deposit 
Insurance Act, 12 U.S.C. 1811, et seq., or is eligible to apply to 
become an insured depository institution under such Act.
* * * * *
    (q) Signature guarantee program means a signature guarantee program 
established in response to Rule 17 Ad-15 (17 CFR 240.17Ad-15), issued 
under authority of the Securities Exchange Act of 1934. For the purpose 
of the regulations, in this part, the Securities Transfer Agents 
Medallion Program (STAMP), the Stock Exchanges Medallion Program 
(SEMP), and the New York Stock Exchange, Inc. Medallion Signature 
Program (MSP) are recognized by Treasury as such signature guarantee 
programs.
* * * * *
    3. Section 306.40 is revised to read as follows:


Sec. 306.40  Execution of assignments.

    The assignment of a registered security should be executed by the 
owner, or his or her authorized representative, in the presence of an 
individual authorized to certify assignments. All assignments must be 
made on the backs of the securities, unless otherwise authorized by the 
Bureau, a Federal Reserve Bank or branch. An assignment by mark (X) 
must be witnessed not only by a certifying individual, but also by at 
least one other person, who should add an endorsement substantially as 
follows: ``Witness to signature by mark,'' followed by the witness' 
signature and address.
    4. Section 306.45 is revised to read as follows:


Sec. 306.45  Certifying individuals.

    (a) General. The following individuals may certify assignments of, 
or forms with respect to, securities:
    (1) Officers and employees of depository institutions, corporate 
central credit unions, and institutions that are members of Treasury-
recognized signature guarantee programs who have been authorized:
    (i) Generally to bind their respective institutions by their acts;
    (ii) Unqualifiedly to guarantee signatures to assignments of 
securities; or
    (iii) To certify assignments of securities.
    (2) Officers and authorized employees of Federal Reserve Banks and 
branches.
    (3) Officers of Federal Land Banks, Federal Intermediate Credit 
Banks and Banks for Cooperatives, and Federal Home Loan Banks.
    (4) Commissioned officers and warrant officers of the Armed Forces 
of the United States but only with respect to signatures executed by 
Armed Forces personnel, civilian field employees, and members of their 
families.
    (5) U.S. Attorneys, Collectors of Customs, and Regional 
Commissioners, District Directors, and Service Center Directors, 
Internal Revenue Service.
    (6) Judges and Clerks of U.S. Courts.
    (7) Such other persons as the Commissioner of the Public Debt or 
his designee may authorize.
    (b) Foreign countries. The following individuals are authorized to 
certify assignments of, or forms with respect to, securities executed 
in a foreign country:
    (1) United States diplomatic or consular officials.
    (2) Managers and officers of foreign branches of depository 
institutions and institutions that are members of Treasury-recognized 
signature guarantee programs.
    (3) Notaries public and other officers authorized to administer 
oaths, provided their official position and authority are certified by 
a United States diplomatic or consular official under seal of the 
office.
    (c) Duties and liabilities of certifying individuals.
    (1) General. Except as specified in paragraph (c)(2) of this 
section, a certifying individual shall require that the security or 
related form be signed in the certifying individual's presence after he 
or she has established the identity of the person seeking the 
certification. An employee who is not an officer should insert the 
words ``Authorized signature'' in the space provided for the title. A 
certifying individual and the organization for which he or she is 
acting are jointly and severally liable for any loss the United States 
may incur as a result of the individual's negligence in making the 
certification.
    (2) Signature guaranteed. The assignment or related form need not 
be executed in the presence of a certifying individual if he or she 
unqualifiedly guarantees the signature, in which case the certifying 
individual shall, after the signature, add the following endorsement: 
``Signature guaranteed, First National Bank of Smithville, Smithville, 
NH, by A.B. Doe, President'', and add the date. In guaranteeing a 
signature, the certifying individual and the organization for which he 
or she is acting warrant to the Department that the signature is 
genuine and that the signer had the legal capacity to execute the 
assignment or related form.
    (3) Absence of signature guaranteed by depository institution. A 
security or related form need not be actually signed by the owner in 
any case where a certifying individual associated with a depository 
institution has placed an endorsement on the security or the form 
reading substantially as follows: ``Absence of signature by owner and 
validity of transaction guaranteed, Second State Bank of Jonesville, 
Jonesville, NC, by B.R. Butler, Vice President''. The endorsement 
should be dated, and the seal of the institution should be added. This 
form of endorsement is an unconditional guarantee to the Department 
that the institution is acting for the owner under proper 
authorization.
    (d) Evidence of certifying individual's authority. The authority of 
a certifying individual to act is evidenced by affixing to the 
certification the following:
    (1) Officers and employees of depository institutions. The 
institution's seal or signature guarantee stamp; if the institution is 
an authorized paying agent for U.S. Savings Bonds, a legible imprint of 
the paying agent's stamp; or, if the institution is a member of the 
Securities Transfer Agents Medallion Program (STAMP), a legible imprint 
of the STAMP signature guarantee stamp.
    (2) Officers and authorized employees of institutions that are 
members of Treasury-recognized signature guarantee programs. A legible 
imprint of the program's signature guarantee stamp, e.g., the STAMP, 
SEMP, or MSP stamp for members of the Securities Transfer Agents 
Medallion Program, the Stock Exchanges Medallion Program, or the New 
York Stock Exchange Incorporated Medallion Signature Program, 
respectively.
    (3) Officers and authorized employees of Federal Reserve Banks. 
Whatever is prescribed in procedures established by the Department.
    (4) Officers and employees of corporate central credit unions and 
other entities listed in paragraph (a)(3) of this section. The entity's 
seal.
    (5) Notaries public, diplomatic or consular officials. The official 
seal or stamp of the office. If the certifying individual has no seal 
or stamp, then the official's position must be certified by some other 
authorized individual, under seal or stamp, or otherwise proved to the 
satisfaction of the Department.
    (6) Commissioned or warrant officers of the United States Armed 
Forces. A statement which sets out the officer's rank and the fact that 
the person executing the assignment or form is one whose signature the 
officer is authorized to certify under the regulations in this part.
    (7) A judge or clerk of the court. The seal of the court.
    (8) Any other certifying individual. The official seal or stamp of 
the office. If the certifying individual has no seal or stamp, then the 
certifying individual's position and signature must be certified by 
some other authorized individual under official seal or stamp, or 
otherwise proved to the satisfaction of the Department.
    (e) Interested persons not to act as certifying individual. Neither 
the transferor, the transferee, nor any person having an interest in a 
security involved in the transaction may act as a certifying 
individual. However, an authorized officer or employee of a depository 
institution or of an institution that is a member of a Treasury-
recognized signature guarantee program may act as a certifying 
individual on a security or related form for transfer of a security to 
the institution, or any security or related form executed by another 
individual on behalf of the institution.
    5. Sections 306.46, 306.47, 306.48 and 306.49 are removed.

PART 357--REGULATIONS GOVERNING BOOK-ENTRY TREASURY BONDS, NOTES 
AND BILLS

    6. The authority citation for Part 357 is revised to read as 
follows:

    Authority: 31 U.S.C. Chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.
    7. Section 357.3 is amended as follows:
    A. In the definition of Depository institution, paragraph (g) is 
removed, and the introductory text and paragraphs (d), (e), and (f) are 
revised to read as follows:


Sec. 357.3  Definitions.

* * * * *
    Depository institution means an entity described in section 
19(b)(1)(A)(i)-(vi) of the Federal Reserve Act (12 U.S.C. 
461(b)(1)(A)(i)-(vi). Under section 19(b) of the Federal Reserve Act, 
the term depository institution includes:
* * * * *
    (d) Any insured credit union as defined in 12 U.S.C. 1752 or any 
credit union which is eligible to make application to become an insured 
credit union under 12 U.S.C. 1781;
    (e) Any member as defined in 12 U.S.C. 1422; and
    (f) Any savings association (as defined in 12 U.S.C. 1813) which is 
an insured depository institution, as defined in the Federal Deposit 
Insurance Act, 12 U.S.C. 1811, et seq., or is eligible to apply to 
become an insured depository institution under such Act.
    B. A new definition is added to Sec. 357.3, between the definitions 
for Security interest and pledge and Taxpayer identifying number or 
TIN, to read as follows:
* * * * *
    Signature guarantee program means a signature guarantee program 
established in response to Rule 17 Ad-15 (17 CFR 240.17Ad-15), issued 
under authority of the Securities Exchange Act of 1934. For the purpose 
of the regulations in this part, the Securities Transfer Agents 
Medallion Program (STAMP), the Stock Exchanges Medallion Program 
(SEMP), and the New York Stock Exchange, Inc. Medallion Signature 
Program (MSP) are recognized by Treasury as such signature guarantee 
programs.
* * * * *
    8. Section 357.30 is amended by revising the first sentence to read 
as follows:


Sec. 357.30  Cases of delay or suspension of payment.

    If evidence required by the Department in support of a transaction 
request is not received by the Department at least twenty (20) calendar 
days before the maturity date of the security, or if payment at 
maturity has been suspended pursuant to Sec. 357.26(d), then, except as 
provided in Sec. 357.27, in cases of reinvestment, the Department will 
redeem the security and hold the redemption proceeds in the same form 
of registration as the security redeemed, pending further disposition.* 
* *
    9. Section 357.31 is revised to read as follows:


Sec. 357.31  Certifying individuals.

    (a) General. The following individuals may certify signatures on 
transaction request forms:
    (1) Officers and employees of depository institutions, corporate 
central credit unions, and institutions that are members of Treasury-
recognized signature guarantee programs who have been authorized:
    (i) Generally to bind their respective institutions by their acts;
    (ii) Unqualifiedly to guarantee signatures to assignments of 
securities; or
    (iii) To certify assignments of securities.
    (2) Officers and authorized employees of Federal Reserve Banks.
    (3) Officers of Federal Land Banks, Federal Intermediate Credit 
Banks and Banks for Cooperatives, the Central Bank for Cooperatives, 
and Federal Home Loan Banks.
    (4) Commissioned officers and warrant officers of the Armed Forces 
of the United States but only with respect to signatures executed by 
Armed Forces personnel, civilian field employees, and members of their 
families.
    (5) Such other persons as the Commissioner of the Public Debt or 
his designee may authorize.
    (b) Foreign countries. The following individuals are authorized to 
certify signatures on transaction request forms executed in a foreign 
country:
    (1) United States diplomatic or consular officials.
    (2) Managers and officers of foreign branches of depository 
institutions and institutions that are members of Treasury-recognized 
signature guarantee programs.
    (3) Notaries public and other officers authorized to administer 
oaths, provided their official position and authority are certified by 
a United States diplomatic or consular official under seal of the 
office.
    (c) Duties and liabilities of certifying individuals.
    (1) General. Except as specified in paragraph (c)(2) of this 
section, a certifying individual shall require that the transaction 
request form be signed in the certifying individual's presence after he 
or she has established the identity of the person seeking the 
certification. An employee who is not an officer should insert the 
words ``Authorized signature'' in the space provided for the title. A 
certifying individual and the organization for which he or she is 
acting are jointly and severally liable for any loss the United States 
may incur as a result of the individual's negligence in making the 
certification.
    (2) Signature guaranteed. The transaction request form need not be 
executed in the presence of a certifying individual if he or she 
unqualifiedly guarantees the signature, in which case the certifying 
individual shall, after the signature, add the following endorsement: 
``Signature guaranteed, First National Bank of Smithville, Smithville, 
NH, by A.B. Doe, President'', and add the date. In guaranteeing a 
signature, the certifying individual and the organization for which he 
or she is acting warrant to the Department that the signature is 
genuine and that the signer had the legal capacity to execute the 
transaction request.
    (3) Absence of signature guaranteed by depository institution. A 
transaction request form need not be actually signed by the owner in 
any case where a certifying individual associated with a depository 
institution has placed an endorsement on the form reading substantially 
as follows: ``Absence of signature by owner and validity of transaction 
guaranteed, Second State Bank of Jonesville, Jonesville, NC, by B.R. 
Butler, Vice President''. The endorsement should be dated, and the seal 
of the institution should be added. This form of endorsement is an 
unconditional guarantee to the Department that the institution is 
acting for the owner under proper authorization.
    (d) Evidence of certifying individual's authority. The authority of 
a certifying individual to act is evidenced by affixing to the 
certification the following:
    (1) Officers and employees of depository institutions. The 
institution's seal or signature guarantee stamp; if the institution is 
an authorized paying agent for U.S. Savings Bonds, a legible imprint of 
the paying agent's stamp; or, if the institution is a member of the 
Security Transfer Agents Medallion Program (STAMP), a legible imprint 
of the STAMP signature guarantee stamp.
    (2) Officers and authorized employees of institutions that are 
members of Treasury-recognized signature guarantee programs. A legible 
imprint of the program's signature guarantee stamp, e.g., the STAMP, 
SEMP, MSP stamp for members of the Securities Transfer Agents Medallion 
Program, the Stock Exchanges Medallion Program, or the New York Stock 
Exchange Incorporated Medallion Signature Program, respectively.
    (3) Officers and authorized employees of Federal Reserve Banks. 
Whatever is prescribed in procedures established by the Department.
    (4) Officers and employees of corporate central credit unions and 
other entities listed in paragraph (a)(3) of this section. The entity's 
seal.
    (5) Notaries public, diplomatic or consular officials. The official 
seal or stamp of the office. If the certifying individual has no seal 
or stamp, then the official's position must be certified by some other 
authorized individual, under seal or stamp, or otherwise proved to the 
satisfaction of the Department.
    (6) Commissioned or warrant officers of the United States Armed 
Forces. A statement which sets out the officer's rank and the fact that 
the person executing the transaction request is one whose signature the 
officer is authorized to certify under the regulations in this part.
    (7) Such other persons as the Commissioner of the Public Debt or 
his designee may authorize. The evidence specified by the Commissioner 
or his designee.
    (e) Interested persons not to act as certifying individual. Neither 
the transferor, the transferee, nor any person having an interest in a 
security involved in the transaction may act as a certifying 
individual. However, an authorized officer or employee of a depository 
institution or of an institution that is a member of a Treasury-
recognized signature guarantee program may act as a certifying 
individual on a transaction request for transfer of a security to the 
institution, or any request executed by another individual on behalf of 
the institution.

[FR Doc. 94-27977 Filed 11-14-94; 8:45 am]
BILLING CODE 4810-39-P