[Federal Register Volume 62, Number 89 (Thursday, May 8, 1997)]
[Rules and Regulations]
[Pages 25113-25115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12017]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 356


Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, 
and Bonds (Department of the Treasury Circular, Public Debt Series No. 
1-93)

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

ACTION: Final rule.

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[[Page 25114]]

SUMMARY: The Department of the Treasury (``Treasury'' or 
``Department'') is issuing in final form an amendment to 31 CFR Part 
356 (Uniform Offering Circular for the Sale and Issue of Marketable 
Book-Entry Treasury Bills, Notes, and Bonds). This final rule codifies 
in the Code of Federal Regulations a change in the way the offering 
amounts for Treasury bill auctions are announced and auction amounts 
are awarded to the Federal Reserve Banks for their own account, also 
referred to as the System Open Market Account. The change involves 
treating such auction awards as additions to the announced offering 
amount rather than making such awards within this amount.

EFFECTIVE DATE: May 8, 1997.

ADDRESSES: This final rule has been made available for downloading from 
the Bureau of the Public Debt's Internet site at the following address: 
www.publicdebt.treas.gov.

FOR FURTHER INFORMATION CONTACT: Ken Papaj (Director), Lee Grandy or 
Kurt Eidemiller (Government Securities Specialists), Bureau of the 
Public Debt, Government Securities Regulations Staff, (202) 219-3632.

SUPPLEMENTARY INFORMATION: 31 CFR Part 356, also referred to as the 
uniform offering circular, sets out the terms and conditions for the 
sale and issuance by the Department of the Treasury to the public of 
marketable Treasury bills, notes, and bonds. The uniform offering 
circular, in conjunction with offering announcements, represents a 
comprehensive statement of those terms and conditions.\1\ This rule 
amends the defined term ``public offering'' in section 356.2 and makes 
an unrelated, administrative correction to paragraph (a) of section 
356.13 of the uniform offering circular pertaining to the reporting of 
net long positions.
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    \1\ The uniform offering circular was published as a final rule 
on January 5, 1993 (58 FR 412). Amendments to the circular were 
published on June 3, 1994 (59 FR 28773), March 15, 1995 (60 FR 
13906), July 16, 1996 (61 FR 37007), August 23, 1996 (61 FR 43626), 
October 22, 1996 (61 FR 54908), and January 6, 1997 (62 FR 846).
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    The current rules provide that, when the Department issues an 
offering announcement for a regular Treasury bill auction (i.e., 13-, 
26-, and 52-week bills), the stated public offering amount of each 
security issue includes any amounts that would be awarded in the 
auction to the Federal Reserve Banks for their own account and for the 
accounts of foreign and international monetary authorities up to the 
amount of maturing securities held by each. This practice differs from 
the treatment of these amounts in the announcements and auctions of 
cash management bills (``CMBs''), notes, and bonds. In these 
announcements and auctions, the rules provide that the amounts to be 
awarded to the Federal Reserve Banks for both their own account and for 
the accounts of foreign and international monetary authorities are in 
addition to the announced public offering amounts.
    In a press release dated March 18, 1997, Treasury announced a 
change in the way bill auctions are announced, beginning with the 
auction of 52-week bills that were auctioned on March 26, 1997. The 
press release stated that amounts to be awarded to the Federal Reserve 
Banks for their own account will be treated as additions to the 
announced offering amount of Treasury bill auctions. As a result, 
awards to the Federal Reserve Banks for their own account in bill 
auctions are now treated as additions to the amount sold to the public. 
The Department made this change to provide market participants with 
more complete information and greater certainty as to the supply of 
bills available to the public in an auction. Awards to the Federal 
Reserve Banks for their own account in bill auctions will continue to 
be at the weighted average discount rate of accepted competitive 
tenders. The treatment of the amount to be awarded to the Federal 
Reserve Banks for the accounts for foreign and international monetary 
authorities in regular Treasury bill auctions remains unchanged.
    Accordingly, to codify this change in determining the public 
offering amount for auctions of regular Treasury bills, section 356.2 
of the uniform offering circular is amended by revising the definition 
of the term ``public offering.'' It is anticipated that the sample 
announcements of Treasury offerings, found in Exhibit A to Part 356, 
will be revised to reflect this change once the recent proposed 
amendments to accommodate three decimal bidding in .005 increments for 
Treasury bill auctions, as published in the Federal Register on May 5, 
1997 (62 FR 24375), are finalized.
    This final rule also makes an unrelated, administrative correction 
to section 356.13(a). The section is being restated in its entirety to 
reflect the intent of the revisions to the uniform offering circular 
that were published on July 16, 1996 (61 FR 37007) and January 6, 1997 
(62 FR 846). This correction does not involve any substantive changes.

Procedural Requirements

    This final rule does not meet the criteria for a ``significant 
regulatory action'' pursuant to Executive Order 12866.
    Because this rule relates to public contracts and procedures for 
United States securities, the notice, public comment, and delayed 
effective date provisions of the Administrative Procedure Act are 
inapplicable, pursuant to 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 is no new collection of information contained in this final 
rule, and, therefore, the Paperwork Reduction Act does not apply. The 
collections of information of 31 CFR Part 356 have been previously 
approved by the Office of Management and Budget under section 3507(d) 
of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) under 
control number 1535-0112. Under this Act, an agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a valid OMB control number.

List of Subjects in 31 CFR Part 356

    Bonds, Federal Reserve System, Government securities, Securities.

    For the reasons set forth in the preamble, 31 CFR Chapter II, 
Subchapter B, Part 356, is amended as follows:

PART 356--SALE AND ISSUE OF MARKETABLE BOOK-ENTRY TREASURY BILLS, 
NOTES, AND BONDS (DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT 
SERIES NO. 1-93)

    1. The authority citation for part 356 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 31 U.S.C. 3102, et seq.; 12 U.S.C. 391.

    2. Section 356.2 is amended by revising the definition of ``public 
offering'' to read as follows:


Sec. 356.2  Definitions.

* * * * *
    Public offering means the par amount of securities offered to the 
public for purchase in an auction. For all bills except cash management 
bills, the public offering is the amount specified in the offering 
announcement, less securities awarded in the auction to the Federal 
Reserve Banks for the accounts of foreign and international monetary 
authorities (up to the amount of maturing securities held by such 
accounts). For notes, bonds, and cash management bills, the public 
offering is

[[Page 25115]]

the same as the amount specified in the offering announcement.
* * * * *
    3. Section 356.13 is amended by revising paragraph (a) to read as 
follows:


Sec. 356.13  Net long position.

    (a) Reporting net long positions. When bidding competitively, a 
bidder must report the amount of its net long position when the total 
of all of its bids in an auction plus the bidder's net long position in 
the security being auctioned equals or exceeds the net long position 
reporting threshold amount. The threshold amount for any particular 
security will be as stated in the offering announcement for that 
security. (See Sec. 356.10.) That amount will be $2 billion for bills, 
notes, and bonds unless otherwise stated in the offering announcement. 
For example, the net long position reporting threshold amount may be 
less than $2 billion for smaller security offerings, e.g., certain 
inflation-indexed securities or cash management bills. If the bidder 
either has no position or has a net short position and the total of all 
of its bids equals or exceeds the threshold amount, e.g., $2 billion, a 
net long position of zero must be reported. In cases where a bidder 
that is required to report the amount of its net long position has more 
than one bid, the bidder's total net long position should be reported 
in connection with only one bid. A bidder that is a customer must 
report its reportable net long position through only one depository 
institution or dealer. (See Sec. 356.14(c).)
* * * * *
    Dated: April 30, 1997.
Gerald Murphy,
Fiscal Assistant Secretary.
[FR Doc. 97-12017 Filed 5-7-97; 8:45 am]
BILLING CODE 4810-39-M