[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Rules and Regulations]
[Pages 6113-6114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3168]



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

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Parts 357 and 370


Regulations Governing Book-Entry Treasury Bonds, Notes and Bills; 
Regulations Governing Payments by the Automated Clearing House Method

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

ACTION: Final rule.

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

SUMMARY: The purpose of this final rule is to amend the general 
regulations governing book-entry Treasury securities, which apply to 
investors in the TREASURY DIRECT system, to require the Bureau of the 
Public Debt to send prenotification messages when an investor has 
requested that payments on his account be made by the Automated 
Clearing House (ACH) method, and to modify the number of days required 
to wait after a prenotification message is sent before live dollar 
entries can be initiated. This amendment will bring the procedures for 
prenotification messages for TREASURY DIRECT ACH payments in conformity 
with the procedures for the National Automated Clearing House 
Association (NACHA). Part 370 governs payments by the ACH method when 
such payments are made by Treasury on account of United States 
securities, including ACH payments in the TREASURY DIRECT system. This 
rule affects only ACH payments in the TREASURY DIRECT system. Because 
the amended Part 357 will contain some prenotification procedures 
inconsistent with Part 370, Part 370 will indicate that it applies to 
ACH payments made by Treasury on account of United States securities, 
except as otherwise provided.

EFFECTIVE DATE: February 16, 1996.

FOR FURTHER INFORMATION CONTACT: Maureen Parker, Director, Division of 
Securities Systems, Bureau of the Public Debt, Parkersburg, West 
Virginia, 26106-1328, (304) 480-7761 or Susan Klimas, Attorney-Adviser, 
Office of the Chief Counsel, Bureau of the Public Debt, (304) 480-5192.

SUPPLEMENTARY INFORMATION: This final rule amends the general 
regulations governing book-entry Treasury securities to require that, 
when payments are made by the ACH method, prenotification messages be 
sent by the Bureau of the Public Debt to the financial institution to 
which such payments are to be directed, and to change the current 
waiting period after a prenotification message is sent before live 
dollar entries can be transmitted from 15 days to 10 days, to conform 
with the standard practice of NACHA. Prior to this amendment, the 
regulations provided for prenotification messages to be sent, but did 
not specifically require such messages. Accordingly, Part 357 is 
amended by changing Sec. 357.26(b)(3) to provide that prenotification 
messages must be sent and to require a 10 day waiting period after the 
prenotification message is sent before a live money transfer can be 
made. Additionally, the provisions of 31 CFR 370.5 relating to the 
sending of prenotification messages, which were formerly incorporated 
by reference, are added to this regulation. Because the amended Part 
357, governing the TREASURY DIRECT system, will contain some procedures 
inconsistent with Part 370, which applies to payments made by the 
Bureau of the Public Debt by the ACH method of payment, Part 370 is 
amended to indicate that it applies except as otherwise provided.

Procedural Requirements

    It has been determined that this final rule does not meet the 
criteria for a ``significant regulatory action,'' as defined in 
Executive Order 12866. Therefore, the regulatory review procedures 
contained therein do not apply.
    This rule relates to matters of public contract and procedures for 
U.S. securities, as well as the borrowing power and fiscal authority of 
the United States. Accordingly, pursuant to 5 U.S.C. 553(a)(2), the 
notice, public comment and delayed effective date provisions of the 
Administrative Procedure Act do not apply. 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 new collections of information contained in this Final 
Rule, and, therefore, the Paperwork Reduction Act (44 U.S.C. 3504(h)) 
does not apply.

List of Subjects in 31 CFR Parts 357 and 370

    Banks, Banking, Bonds, Federal Reserve System, Government 
securities, Electronic funds transfer, Government securities, 
Securities.

    Dated: January 11, 1996.
Gerald Murphy,
Fiscal Assistant Secretary.

    For the reasons set out in the preamble, 31 CFR Parts 357 and 370 
are amended as follows:

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

    1. The authority citation for Part 357 continues to read as 
follows:

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

    2. Section 357.26(b)(3) is revised to read as follows:


Sec. 357.26  Payments.

* * * * *
    (b) * * *
    (3) Prenotification. A prenotification message must be sent to the 
financial 

[[Page 6114]]
institution designated to receive ACH payments to confirm the accuracy 
of the account information furnished by an owner, or other person or 
entity entitled to make the designation, and to advise the financial 
institution that such account has been so designated. Prenotification 
messages may be sent at any time, but not less than 10 calendar days 
prior to the first ACH payment. A prenotification message may also be 
sent whenever there is a change in the payment instructions. The 
prenotification message shall contain the ABA routing/transit number of 
the financial institution to which payments with respect to a security 
are to be made, as well as a depositor name reference, deposit account 
number, and type or classification of account at the institution to 
which such payments are to be credited. Responses to a prenotification 
message will be received in accordance with the provisions in 31 CFR 
370.5. Where the circumstances indicate that there is insufficient time 
to effect the change received in response to the prenotification 
message, payment will be made by check in accordance with paragraph (c) 
of this section.
* * * * *

PART 370--REGULATIONS GOVERNING PAYMENTS BY THE AUTOMATED CLEARING 
HOUSE METHOD ON ACCOUNT OF UNITED STATES SECURITIES

    1. The authority citation for Part 370 continues to read as 
follows:

    Authority: 31 U.S.C. Chapter 31.

    2. Section 370.0 is revised to read as follows:


Sec. 370.0  Applicability.

    The regulations in this part apply to the Automated Clearing House 
method of payment where employed by the Bureau of the Public Debt in 
connection with United States securities, except as otherwise provided.
[FR Doc. 96-3168 Filed 2-15-96; 8:45 am]
BILLING CODE 4810-39-W