[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Notices]
[Pages 67388-67389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31462]



=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Fiscal Service


Coupons Under Book-Entry Safekeeping (CUBES)

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

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice is being published to announce the reopening by 
the Department of the Treasury of its Coupons Under Book-Entry 
Safekeeping (CUBES) program, to permit the conversion of certain 
physical coupons detached from U.S. Treasury bonds to book-entry form 
in the commercial book-entry system. With the reopening of the 
conversion window under CUBES, depository institutions holding eligible 
coupons will have the opportunity, during the period from March 4, 
1996, to and including August 30, 1996, to convert such coupons to 
book-entry form. Other entities wishing to convert stripped coupons 
must arrange to do so through a depository institution.

DATES: March 4, 1996, through August 30, 1996, as described below.

FOR FURTHER INFORMATION CONTACT: Maureen Parker, Director, Division of 
Securities Systems, Bureau of the Public Debt, Parkersburg, West 
Virginia, 26106-1328, (304) 480-7761.

SUPPLEMENTARY INFORMATION: The CUBES regulations permit reopenings of 
the CUBES window for conversion to book-entry form of detached, 
physical coupons. 31 CFR Part 358.0(c) provides, in part, that notice 
of time periods for conversion, as well as coupons eligible for 
conversion and applicable fees, will be published in the Federal 
Register two months prior to the date coupons may be presented. 
Accordingly, pursuant to that authority, Treasury will reopen the 
window for conversion under its CUBES program beginning March 4, 1996, 
and ending close of business August 30, 1996. Under the program, 
depository institutions holding coupons stripped from Treasury 
securities will be permitted to convert them to book-entry form. 
Entities other than depository institutions which hold stripped 
Treasury coupons and which wish to convert them to book-entry accounts 
under the CUBES program must arrange for such conversion through a 
depository institution.
    Only Treasury coupons stripped before the date of this notice, and 
with payment dates on or after February 15, 1997, will be eligible for 
conversion, excluding those having payment dates during a callable 
period.
    Presentation of coupons under the reopened CUBES window may be made 
only at the Federal Reserve Bank of New York (FRBNY) and in compliance 
with the presentation procedures established by FRBNY. Submissions of 
coupons are subject to the terms and conditions described in Appendix A 
of Part 358, except insofar as the terms and conditions are modified by 
the regulations, the provisions of this notice, or the procedures 
issued by the FRBNY related to the conversion.
    Physical coupons submitted for the CUBES program will be subject to 
rejection and book-entry CUBES balances established as a result of the 
submission of coupons will be subject to adjustment until the 
submission has been verified and approved by Treasury. This 
verification and approval will be 

[[Page 67389]]
completed by Treasury within twelve (12) business days following 
deposit by FRBNY of the coupons into the designated accounts. Such 
verification and approval by Treasury are final determinations.
    The CUBES program will offer on-line trading of CUBES balances 
between depository institutions. However, the submitting institution is 
prohibited from trading any CUBES balance resulting from the submission 
of coupons under this notice prior to the Treasury verification of the 
submission and approval of the resulting CUBES balances.
    If, as a result of verification, Treasury determines that an 
adjustment is necessary to one or more CUBES balances for the 
submitting institution, the institution will be notified. If a CUBES 
balance is insufficient for a reduction adjustment to be processed, the 
submitting institution is responsible for immediately acquiring such 
CUBES balance as is necessary to allow the adjustments to be made.
    The value of all coupons submitted to FRBNY on the same date with 
the same delivery instructions and for the same payment date will be 
rounded down to the next lowest full dollar amount since on-line 
trading is done only in full dollar amounts. For example, on March 18, 
Institution A submits coupons for a variety of customers or accounts 
and directs that the CUBES balances be established in its trust account 
(or similar subaccount). The total of the coupon value with this 
delivery instruction for payment date 8/15/01 is $44,356.87. The total 
of the value for payment date 11/15/01 is 56,002.13. The submitting 
institution will receive in its trust account an 8/15/01 CUBES balance 
of $44,356.00 and an 11/15/01 CUBES balance of $56,002.00.
    Book-entry transfers of CUBES will be subject to the same fee 
schedule applicable for the transfer of other on-line Treasury book-
entry securities.
    Once stripped coupons have been converted to CUBES, their 
reconversion to physical form will not be permitted. The principal 
(corpus) securities from which the interest coupons have been stripped 
will not be accepted in CUBES.
    A depository institution wishing to participate in CUBES should 
contact Grace Jaiman (212) 720-8183 or Joanna Grever (212) 720-8184 of 
FRBNY as soon as possible to obtain an information package and the 
necessary supplies required to present the stripped coupons in 
acceptable form. The institution should inform the FRBNY of its 
intention to participate as soon as possible, but no later than two 
weeks before deposit, and should submit a completed holdings statement 
on the form provided in the information package.
    Participants will be charged a participation fee of $4 per coupon 
for conversion to book-entry. Participants will also bear the full cost 
and risk associated with both the delivery of the coupons to the FRBNY 
and any returns that may be necessary if the stated presentation 
procedures are not followed.
    Submitters of coupons are deemed to agree to the terms and 
conditions set forth in this notice, 31 CFR Part 358, including 
Appendix A, and any other requirements that may be prescribed by the 
Department of the Treasury and the FRBNY.

    Dated: December 22, 1995.
Richard L. Gregg,
Commissioner, Bureau of the Public Debt.
[FR Doc. 95-31462 Filed 12-28-95; 8:45 am]
BILLING CODE 4810-35-P