[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