[Federal Register Volume 65, Number 101 (Wednesday, May 24, 2000)]
[Notices]
[Pages 33732-33735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13016]



[[Page 33731]]

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Part VI





Federal Reserve System

Department of the Treasury





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Fiscal Service



Policy Statement on Payments System Risk: Modifications to Daylight 
Overdraft Posting Procedures; Treasury Tax and Loan Program 
Enhancements; Notices

  Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / 
Notices  

[[Page 33732]]


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FEDERAL RESERVE SYSTEM

[Docket No. R-1068]


Policy Statement on Payments System Risk: Modifications to 
Daylight Overdraft Posting Procedures

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Policy Statement.

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SUMMARY: The Board has adopted changes to the procedures for measuring 
daylight overdrafts. Posting times for Treasury Investment Program 
transactions have been added to these procedures to implement program 
changes announced by Department of the Treasury in today's Federal 
Register.

EFFECTIVE DATE: July 10, 2000 for transitional posting procedures and 
November 2, 2000 for final posting procedures.

FOR FURTHER INFORMATION CONTACT: Myriam Payne, Manager (202/452-3219), 
Stacy Coleman, Financial Services Analyst (202/452-2934), or Donna 
DeCorleto, Project Leader (202/452-3956), Division of Reserve Bank 
Operations and Payment Systems; for the hearing impaired only: 
Telecommunications Device for the Deaf, Janice Simms (202/872-4984).

SUPPLEMENTARY INFORMATION:

Background

    The Board's Policy Statement on Payments System Risk establishes 
maximum limits (net debit caps) and fees on daylight overdrafts in 
depository institutions' accounts at Federal Reserve Banks. The Federal 
Reserve measures depository institutions' intraday account balances 
according to a set of ``posting rules'' established by the Board. These 
rules comprise a schedule for the posting of debits and credits to 
institutions' Federal Reserve accounts for different types of 
payments.\1\ The Board's objectives in designing the posting rules 
include minimizing intraday float, facilitating depository 
institutions' monitoring and control of their cash balances during the 
day, and reflecting the legal rights and obligations of parties to 
payments. The Board has established daylight overdraft posting times 
for the new Treasury Investment Program (TIP) transactions based on 
these objectives.
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    \1\ See ``Federal Reserve Policy Statement on Payments System 
Risk,'' section I.A (57 FR 47093, October 14, 1992).
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    The Federal Reserve will implement TIP on July 10, 2000, to replace 
the Treasury Tax and Loan (TT&L) system. The Reserve Banks, as fiscal 
agents and depositories of the United States, act on behalf of the 
Department of the Treasury (Treasury) to collect Federal taxes and 
invest excess Treasury balances with depository institutions. The 
Reserve Banks use the TT&L system to collect and invest Federal tax 
proceeds and to monitor the collateral pledged by institutions.\2\ TT&L 
is primarily an end-of-day batch processing system implemented in the 
mid-1980s to process paper-based tax payments.
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    \2\ 31 CFR part 203 ``Payment of Federal Taxes and the Treasury 
Tax and Loan Program'' requires that TT&L depositaries pledge to 
Treasury sufficient collateral to protect the uninsured portion of 
Treasury tax proceeds and the full value of Treasury investments 
held at the depositaries.
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    In 1993, the North American Free Trade Agreement Implementation Act 
(NAFTA) required Treasury to begin an orderly conversion from its 
paper-based system to an electronic tax collection system to accelerate 
the availability of its funds. In 1996, Treasury introduced the 
Electronic Federal Tax Payment System (EFTPS) to offer taxpayers 
electronic payment alternatives, such as the Automated Clearing House 
(ACH) and Fedwire.\3\ The Reserve Banks modified the TT&L automated 
application to accept and invest tax proceeds collected through EFTPS. 
The aging technology of the TT&L application, however, limited 
opportunities to automate tax collection further. As a result, the 
Reserve Banks worked with Treasury to design the TIP application to 
support Treasury's changing tax collection and investment requirements.
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    \3\ For purposes of this notice, ``Fedwire'' refers to the 
electronic funds transfer system owned and operated by the Federal 
Reserve System. See 31 CFR part 203 for further detail regarding 
electronic tax payment alternatives.
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    Treasury envisioned an all-electronic tax collection system when 
TIP was developed but later determined that a paper-based tax payment 
alternative should be available to smaller business taxpayers.\4\ At 
Treasury's request, the Federal Reserve developed the Paper Tax System 
(PATAX) to accommodate paper-based tax payments. The Federal Reserve 
will implement the TIP and PATAX applications concurrently.
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    \4\ Treasury currently requires that business taxpayers with an 
annual tax liability of $200,000 or more pay their income, 
withholding, and other federal taxes by electronic means no later 
than the tax due date. Other taxpayers are encouraged to use 
electronic means, but have the option of submitting their tax 
payment information using a paper Federal Tax Deposit (FTD) coupon. 
See 26 CFR parts 1, 20, 25, 31, and 40 regarding ``Electronic Funds 
Transfers of Federal Deposits.''
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    An important feature of the TIP application is its ability to 
receive and process data from interfacing applications in real time. 
Throughout the day, TIP will receive and process payment information 
from EFTPS, the Federal Reserve Electronic Tax Application (FR-ETA), 
and PATAX, and collateral information from the National Book-Entry 
System (NBES) and the Definitive Safekeeping System (DSS). The Federal 
Reserve will adjust the total Treasury balances at depository 
institutions based on Treasury's cash needs and depository 
institutions' willingness and ability to collateralize Treasury 
investments. In addition, TIP will monitor the value of collateral 
pledged to protect government monies held at depository institutions 
for other Treasury purposes besides tax collections and investments.\5\ 
The Federal Reserve will be able to reduce those balances at depository 
institutions if the value of collateral is insufficient to protect 
those monies.
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    \5\ Government monies can be held at depository institutions for 
a variety of reasons. Initially, TIP will monitor collateral pledged 
pursuant to 31 CFR part 202 ``Depositaries and Financial Agents of 
the Government'' and 31 CFR part 203.
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TIP-Related Daylight Overdraft Posting Rule Changes

    Unlike TT&L, TIP will process transactions throughout the day and 
depository institutions will be able to access information on the 
status of TIP transactions destined for their Federal Reserve accounts 
through their FedLine terminals.\6\ Therefore, in accordance with the 
Board's objective to minimize intraday float, the Board believes the 
TIP transactions should post to depository institutions' accounts in 
real time throughout the day.
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    \6\ FedLine is the Federal Reserve's proprietary PC software 
that offers depository institutions access to Federal Reserve 
services such as accounting, ACH, book-entry, cash, check, 
statistical reporting, funds transfer, and Treasury services.
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    Currently, because TT&L is primarily an end-of-day batch processing 
system, the Reserve Banks post TT&L transactions resulting in debits to 
depository institutions' accounts after the close of Fedwire. TIP will 
process transactions throughout the day, however, allowing the Reserve 
Bank to post TIP-related transactions on a flow basis in order to match 
more closely the actual TIP processing times. In the near term this 
change could make controlling daylight overdrafts related to some TIP 
transactions more challenging for depository institutions. For example, 
with near real-time posting under TIP, a large debit transaction could 
post to a depository institution's account early in the day and create 
a considerable daylight overdraft. Under TT&L, the debit transaction 
would post after the close of Fedwire, providing the depository 
institution ample time to

[[Page 33733]]

fund its account. As a result, depository institutions may find 
managing their daylight overdrafts more difficult until they become 
familiar with TIP's processing patterns.
    The Board recognizes that depository institutions may need time to 
change the systems or procedures they use to fund their accounts and 
monitor their tax payment flows. For this reason, the Board will 
introduce the TIP-related posting rule changes for most transactions 
resulting in debits to depository institutions' accounts in two 
phases.\7\ To allow sufficient time for depository institutions to 
adjust to the various operational changes associated with TIP, 
initially the Federal Reserve will post most transactions resulting in 
debits to depository institutions' accounts after the close of Fedwire. 
Approximately four months after the implementation of TIP, on November 
2, 2000, the Federal Reserve will post all transactions resulting in 
debits to depository institutions' accounts on a flow basis as TIP 
processes them. The Board believes that this approximate four-month 
transition period, which covers a full quarterly business tax payment 
cycle, provides depository institutions with sufficient time to 
identify the effects of and adjust to the new debit timing patterns 
that TIP creates.
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    \7\ The Reserve Banks will post small-dollar transactions, such 
as uninvested PATAX tax deposits and penalties for tax payments, on 
a flow basis as they are processed beginning July 10, 2000. The 
posting rules for these transactions will not change in the second 
phase.
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Debits to Depository Institutions \8\

After-the-Close-of-Fedwire Posting
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    \8\ The Board has not modified the posting rules for existing 
TT&L transactions unless specifically referenced in this notice.
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    Beginning July 10, 2000 the Federal Reserve will post the TIP 
transactions listed below, resulting in debits to depository 
institutions' Federal Reserve accounts, after the close of Fedwire. The 
Reserve Banks will provide depository institutions with information on 
their TIP transactions through FedLine, which will allow depository 
institutions to observe and become familiar with the actual TIP 
processing cycles. Beginning November 2, 2000, the Reserve Banks will 
post these transactions on an intraday basis to reflect more closely 
the actual TIP processing times. Unless stated otherwise in this 
notice, the Reserve Banks will begin posting TIP-related transactions 
at 8:30 a.m. ET and on an hourly basis, on the half-hour, 
thereafter.\9\
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    \9\ While TIP begins processing transactions as early as 6 a.m. 
ET, the Federal Reserve will not begin posting transactions until 
8:30 a.m. ET in order to match the initial posting of other non-wire 
transactions and to allow depository institutions time to manage or 
fund their accounts.
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    Main Account System-Initiated Balance Limit Withdrawal. This 
transaction withdraws from a depository institution's account any 
amount that exceeds its balance limit. A depository institution's 
balance limit is the amount of Treasury funds that it is willing to 
accept as investments and may be changed at any time.
    Main Account System-Initiated Collateral Deficiency Withdrawal. 
This transaction withdraws from a depository institution's account any 
amount that is not protected by collateral.
    Main Account Treasury Withdrawal. This transaction withdraws some 
or all of Treasury's invested balances from a depository institution's 
Federal Reserve account.\10\ TIP will process the transactions on the 
date and time specified by Treasury. The Federal Reserve will post 
future-day withdrawals at 8:30 a.m. ET on the settlement day designated 
by Treasury, same-day withdrawals announced by 11:30 a.m. ET at 1:00 
p.m. ET, and same-day withdrawals announced by 6:15 p.m. ET after the 
close of Fedwire.\11\
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    \10\ The balances that Treasury invests with depository 
institutions are payable on demand without prior notice. Treasury 
may announce these balance withdrawals, however, hours or days in 
advance. See 31 CFR 203.23.
    \11\ On rare occasions, the Treasury may announce withdrawals in 
advance that are based on depository institutions' closing balances 
on the withdrawal date. The Federal Reserve will post these 
withdrawals after the close of Fedwire.
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    31 CFR Part 202 Collateral Deficiency Withdrawal. Under 31 CFR part 
202 (formerly called Circular 176), Treasury permits authorized 
depository institutions to hold fully collateralized deposits of public 
monies for government agencies. Under TIP, Treasury has centralized the 
monitoring of the collateral pledged to protect 31 CFR part 202 
deposits and requires that collateral be assessed at market value. At 
the discretion of the depositing government agency, this transaction 
will withdraw from the depository institution's account any amount not 
protected by collateral. TIP will identify deficiencies between 7:00 
a.m. and 6:00 p.m. ET, and the Reserve Bank will work with the 
depository institutions and the depositing government agencies to 
resolve the deficiencies. If a deficiency is not corrected before the 
end of the day, the Federal Reserve may debit the depository 
institution's account for the uncollateralized amount.

Near Real-Time Posting

    Beginning July 10, 2000, the Federal Reserve will post the TIP 
transactions listed below, resulting in debits to depository 
institutions' account balances, on an intraday basis during the day as 
soon as TIP processes them. The Board does not believe depository 
institutions require a transitional period for these transactions' 
posting times given their relatively small dollar value.
    Uninvested PATAX Tax Deposit. This transaction withdraws from 
depository institutions' accounts the proceeds of PATAX tax collections 
that will not be invested with those institutions. The Reserve Banks 
will post these transactions beginning at 8:30 a.m. ET and on an hourly 
basis, on the half-hour, thereafter.
    Penalty for Tax Payments. Treasury will use this transaction to 
assess a penalty any time that a depository institution accepts a 
timely payment from a taxpayer, but submits the payment to the Treasury 
late. Every Thursday night, the Reserve Banks will identify and notify 
depository institutions of their Treasury-authorized penalties.\12\ The 
Reserve Banks will calculate the penalty for each depository 
institution and post the debit to the depository institution's account 
at 8:30 a.m. ET on the following business day.
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    \12\ In the event that Thursday is a holiday, the Reserve Banks 
will identify and notify depository institutions with Treasury-
authorized penalties on the following business day. Penalties will 
then be posted on the business day following notification.
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Credits to Depository Institutions

    Beginning July 10, 2000, the Federal Reserve will post the TIP 
transactions listed below, resulting in credits to depository 
institutions' accounts, on an intraday basis during the day as soon as 
TIP processes them.
    Dynamic Investment. The Dynamic Investment is a new transaction 
that will invest excess Treasury funds with depository institutions 
that want the funds and have sufficient collateral to protect the 
investment.\13\ The Reserve Banks will post these transactions 
beginning at 12:30 p.m. ET and on an hourly basis, on the half-hour, 
thereafter.
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    \13\ Depository institutions specify the times of day and the 
amount of funds they are willing to accept as investments. Funds are 
distributed pro-rata based on depository institutions' capacity 
levels.
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    FR-ETA Value Fedwire Investment. The FR-ETA Value Fedwire 
Investment is a new transaction that will return to depository 
institutions, as a Treasury investment, the tax proceeds that the 
institutions sent to Treasury through a FR-ETA Value Fedwire 
transaction (31 CFR 203.2). TIP will identify those FR-

[[Page 33734]]

ETA tax payments that were sent by Retainer or Investor institutions 
with unused capacity and will invest the funds with those Retainer or 
Investor institutions.\14\ The Reserve Banks will post these 
transactions beginning at 9:30 a.m. ET and on an hourly basis, on the 
half-hour, thereafter.\15\
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    \14\ A Retainer institution will collect tax payments using FR-
ETA, EFTPS, and/or PATAX, and will accept back in its Main Account, 
as Treasury investments, only the amount it collected. The Main 
Account replaces the TT&L account under TIP. An Investor institution 
will collect tax payments using ETA, EFTPS, and/or PATAX, accept 
those funds as a Treasury investment, and also accept other Treasury 
investments to its Main Account up to capacity.
    \15\ For example, a Retainer or Investor institution with 
sufficient collateral that sends an FR-ETA tax payment at 11:45 a.m. 
ET will receive an FR-ETA Value Fedwire Investment at 12:30 p.m. ET.
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    Penalty Abatement. The Penalty Abatement is a new transaction that 
Treasury will use to return money paid previously as penalties by a 
depository institution to Treasury. In the event that a depository 
institution provides evidence that the Treasury charged it incorrectly, 
Treasury may return the penalty money to the depository institution. 
The Reserve Banks will process and post Penalty Abatements on Thursdays 
at 6:30 p.m. ET.\16\
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    \16\ In the event that Thursday is a holiday, TIP will process 
Treasury-authorized penalty abatements on the following business 
day.
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    Main Account Administrative Investment and SDI Administrative 
Investment. These transactions are administrative or correcting entries 
that Reserve Banks will occasionally make to depository institutions' 
Main Accounts or Special Direct Investment Accounts.\17\ For example, 
after two entities merge, the Reserve Banks would use one of the Main 
Account Administrative Investment transactions to move the non-
survivor's TIP account balance to the survivor's account.\18\ The 
Reserve Banks will post these transactions at 8:30 a.m. ET and on an 
hourly basis, on the half-hour, thereafter.
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    \17\ The Special Direct Investment Account is define din 31 CFR 
part 203.
    \18\ The TIP application receives notice of a merger the day the 
merger occurs and therefore cannot combine merged accounts after the 
close of Fedwire prior to the merger day. In addition, the TIP 
operations staff must determine whether the surviving entity will 
accept the non-surviving entity's account balance and has the 
capacity to do so.
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    31 CFR Part 202 Account Deposits. The 31 CFR part 202 Account 
Deposit is a new transaction that will place public monies with 
depository institutions authorized by Treasury to accept these 
deposits, but only after TIP confirms that the depository institutions 
have pledged sufficient collateral to protect these deposits. Based on 
Treasury's or the depositing agency's instruction, the Reserve Banks 
will post these transactions at 8:30 a.m. ET and on an hourly basis, on 
the half-hour, thereafter.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
ch. 3506; 5 CFR 1320 Appendix A.1), the Board has reviewed the policy 
statement under the authority delegated to the Board by the Office of 
Management and Budget. No collections of information pursuant to the 
Paperwork Reduction Act are contained in the policy statement.

Policy Statement on Payments System Risk

    1. The ``Federal Reserve Policy Statement on Payments System Risk'' 
(57 FR 47093, October 14, 1992), section I.A., under the heading 
``Modified Procedures for Measuring Daylight Overdrafts '' is amended, 
effective July 10, 2000, as follows with changes identified by italics:

I. Federal Reserve Policy

A. Daylight Overdraft Definition

* * * * *

Modified Procedures for Measuring Daylight Overdrafts \3\

Opening Balance (Previous Day's Closing Balance)

Post at 8:30 a.m. Eastern Time:
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    \3\ The posting changes do not affect the overdraft restrictions 
and overdraft-measurement provisions for nonbank banks established 
by the Competitive Equality Banking Act of 1987 and the Board's 
Regulation Y (12 CFR 225.52).
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    +/-Government and commercial ACH credit transactions
    +Treasury Electronic Federal Tax Payment System (EFTPS) 
investments from ACH credit transactions
    + Advance-notice Treasury investments
    + Treasury state and local government series (SLGs) interest and 
redemption payments
    + Treasury checks, postal money orders, local Federal Reserve 
Bank checks, and EZ-Clear savings bond redemptions in separately 
sorted deposits
    - Penalty Assessments for tax payments from the Treasury 
Investment Program (TIP) \4\
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    \4\ The Reserve Banks will identify and notify depository 
institutions with Treasury-authorized penalties on Thursdays. In the 
event that Thursday is a holiday, the Reserve Banks will identify 
and notify depository institutions with Treasury-authorized 
penalties on the following business day. Penalties will then be 
posted on the business day following notification.

Post at 8:30 a.m. Eastern Time and Hourly, on the Half-Hour, 
Thereafter:
    + Main Account Administrative Investment from TIP
    + SDI (Special Direct Investment) or Administrative Investment 
from TIP
    + 31 CFR part 202 Account Deposits from TIP
    - Uninvested PATAX Tax Deposits from TIP

Post Throughout Business Day:
    +/-Fedwire funds transfers
    +/-Fedwire book-entry securities transfers
    +/-Net settlement entries \5\
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    \5\ Settlement entries from the ``settlement sheet'' service 
will be posted on the next clock hour approximately one hour after 
settlement data are received by the Reserve Banks. The settlement 
sheet service will be discontinued by year-end 2001. Settlement 
entries from the enhanced settlement service will be posted on a 
flow basis as they are processed.

Post by 9:15 a.m. Eastern Time:
    + U.S. Treasury and government agency book-entry interest and 
redemption payments
    + U.S. Treasury and government agency matured coupons and 
definitive securities received before the maturity date

Post Beginning at 9:15 a.m. Eastern Time:
    - Original issues of Treasury securities \6\
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    \6\ Original issues of government agency securities are 
delivered as book-entry securities transfers and will be posted when 
the securities are delivered to the purchasing institutions.
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Post at 9:30 a.m. Eastern Time and Hourly, on the Half-Hour, 
Thereafter:
    + FR-ETA Value Fedwire Investments from TIP

Post at 11:00 a.m. Eastern Time:
    +/-ACH debit transactions
    + EFTPS investments from ACH debit transactions

Post at 11:00 a.m. Eastern Time and Hourly Thereafter:
    +/-Commercial check transactions, including return items
    +/-Check correction amounting to $1 million or more
    + Currency and coin deposits
    + Credit adjustments amounting to $1 million or more

Post at 12:30 p.m. Eastern Time and Hourly, on the Half-Hour, 
Thereafter:
    + Dynamic Investment from TIP

Post by 1:00 p.m. Eastern Time:
    + Same-day Treasury investments

Post at 2:00 p.m. Eastern Time:
    + Processed manual letters of credit \7\
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    \7\ Letters-of-credit transactions are drawdowns of government 
grants.

Post at 5:00 p.m. Eastern Time:
    + Treasury checks, postal money orders, and EZ-Clear savings 
bond redemptions in separately sorted deposits. These items must be 
presented by 4:00 p.m. eastern time.
    + Local Federal Reserve Bank checks. These items must be 
presented before 3:00 p.m. eastern time.
    + Processed manual letters of credit
    +/-Same-day ACH transactions. These transactions include ACH 
return items, check-truncation items, and flexible settlement items.

Post at 6:30 p.m. Eastern Time: \8\
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    \8\ The Reserve Banks will process and post Treasury-authorized 
penalty abatements on Thursdays. In the event that Thursday is a 
holiday, the Reserve Banks will process and post Treasury-authorized 
penalty abatements on the following business day.

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[[Page 33735]]

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    + Penalty Abatements from TIP

Post After the Close of Fedwire Funds Transfer System:
    +/-All other non-Fedwire transactions. These transactions 
include the following: local Federal Reserve Bank checks presented 
after 3:00 p.m. eastern time, but before 3:00 p.m. local time; 
noncash collections; credits for U.S. Treasury and government agency 
definitive security interest and redemption payments if the coupons 
or securities are received on or after the maturity date; Treasury 
Investment Program Main Account Balance Limit Withdrawals and 
Collateral Deficiency Withdrawals; Main Account Treasury 
Withdrawals; \9\ 31 CFR part 202 Deficiency Withdrawals; 
subscriptions for SLGS; currency and coin shipments; small-dollar 
credit adjustments; all debit adjustments; and small-dollar check 
corrections. Discount-window loans and repayments are normally 
posted after the close of Fedwire as well; however, in unusual 
circumstances a discount window loan may be posted earlier in the 
day with repayment 24 hours later, or a loan may be repaid before it 
would otherwise become due.
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    \9\ On rare occasions, the Treasury may announce withdrawals in 
advance that are based on depository institutions' closing balances 
on the withdrawal date. The Federal Reserve will post these 
withdrawals after the close of Fedwire.

Equals:
    Closing balance
* * * * *
    2. Footnotes 7 through 29 are renumbered 10 through 32.

I. Federal Reserve Policy

A. Daylight Overdraft Definition

Policy Statement on Payments System Risk

    3. The ``Federal Reserve Policy Statement on Payments System 
Risk,'' (57 FR 47093, October 14, 1992) section I.A., under the 
heading ``Modified Procedures for Measuring Daylight Overdrafts'' is 
amended, effective November 2, 2000, as follows with changes 
identified by italics:
* * * * *

Modified Procedures for Measuring Daylight Overdrafts \3\

Opening Balance (Previous Day's Closing Balance)
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    \3\ The posting changes do not affect the overdraft restrictions 
and overdraft-measurement provisions for nonbank banks established 
by the Competitive Equality Banking Act of 1987 and the Board's 
Regulation Y (12 CFR 225.52).
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Post at 8:30 a.m. Eastern Time:
    +/- Government and commercial ACH credit transactions
    + Treasury Electronic Federal Tax Payment System (EFTPS) 
investments from ACH credit transactions
    + Advance-notice Treasury investments
    + Treasury state and local government series (SLGs) interest and 
redemption payments
    + Treasury checks, postal money orders, local Federal Reserve 
Bank checks, and EZ-Clear savings bond redemptions in separately 
sorted deposits
    - Penalty Assessments for tax payments from the Treasury 
Investment Program (TIP) \4\
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    \4\ The Reserve Banks will identify and notify depository 
institutions with Treasury-authorized penalties on Thursdays. In the 
event that Thursday is a holiday, the Reserve Banks will identify 
and notify depository institutions with Treasury-authorized 
penalties on the following business day. Penalties will then be 
posted on the business day following notification.

Post at 8:30 a.m. Eastern Time and Hourly, on the Half-Hour, 
Thereafter:
    + Main Account Administrative Investment from TIP
    + SDI (Special Direct Investment) or Administrative Investment 
from TIP
    + 31 CFR part 202 Account Deposits from TIP
    - 31 CFR part 202 Deficiency Withdrawals from TIP
    - Uninvested PATAX Tax Deposits from TIP
    - Main Account Balance Limit Withdrawals from TIP 
    - Collateral Deficiency Withdrawals from TIP

Post at 8:30 a.m., 11:30 a.m., and 6:30 p.m. Eastern Time:
    - Main Account Treasury Withdrawals from TIP \5\
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    \5\ On rare occasions, the Treasury may announce withdrawals in 
advance that are based on depository institutions' closing balances 
on the withdrawal date. The Federal Reserve will post these 
withdrawals after the close of Fedwire.
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Post Throughout Business Day:
    +/- Fedwire funds transfers
    +/- Fedwire book-entry securities transfers
    +/- Net settlement entries \6\
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    \6\ Settlement entries from the ``settlement sheet'' service 
will be posted on the next clock hour approximately one hour after 
settlement data are received by the Reserve Banks. The settlement 
sheet service will be discontinued by year-end 2001. Settlement 
entries from the enhanced settlement service will be posted on a 
flow basis as they are processed.

Post by 9:15 a.m. Eastern Time:
    + U.S. Treasury and government agency book-entry interest and 
redemption payments
    + U.S. Treasury and government agency matured coupons and 
definitive securities received before the maturity date

Post Beginning at 9:15 a.m. Eastern Time:
    - Original issues of Treasury securities \7\
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    \7\ Original issues of government agency securities are 
delivered as book-entry securities transfers and will be posted when 
the securities are delivered to the purchasing institutions.

Post at 9:30 a.m. Eastern Time and Hourly, on the Half-Hour, 
Thereafter:
    + FR-ETA Value Fedwire Investments from TIP

Post at 11 a.m. Eastern Time:
    +/- ACH debit transactions
    + EFTPS investments from ACH debit transactions

Post at 11:00 a.m. Eastern Time and Hourly Thereafter:
    +/- Commercial check transactions, including return items
    +/- Check correction amounting to $1 million or more
    + Currency and coin deposits
    + Credit adjustments amounting to $1 million or more

Post at 12:30 p.m. Eastern Time and Hourly, on the Half-Hour, 
Thereafter:
    + Dynamic Investment from TIP

Post by 1:00 p.m. Eastern Time:
    + Same-day Treasury investments

Post at 2:00 p.m. Eastern Time:
    + Processed manual letters of credit \8\
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    \8\ Letters-of-credit transactions are drawdowns of government 
grants.

Post at 5:00 p.m. Eastern Time:
    + Treasury checks, postal money orders, and EZ-Clear savings 
bond redemptions in separately sorted deposits. These items must be 
presented by 4:00 p.m. eastern time.
    + Local Federal Reserve Bank checks. These items must be 
presented before 3:00 p.m. eastern time.
    + Processed manual letters of credit
    +/- Same-day ACH transactions. These transactions include ACH 
return items, check-truncation items, and flexible settlement items.

Post at 6:30 p.m. Eastern Time: \9\
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    \9\ The Reserve Banks will process and post Treasury-authorized 
penalty abatements on Thursdays. In the event that Thursday is a 
holiday, the Reserve Banks will process and post Treasury-authorized 
penalty abatements on the following business day.
---------------------------------------------------------------------------

    + Penalty Abatements from TIP

Post After the Close of Fedwire Funds Transfer System:
    +/- All other non-Fedwire transactions. These transactions 
include the following: local Federal Reserve Bank checks presented 
after 3:00 p.m. eastern time but before 3:00 p.m. local time; 
noncash collection; credits for U.S. Treasury and government agency 
definitive security interest and redemption payments if the coupons 
or securities are received on or after the maturity date; 
subscriptions for SLGS; currency and coin shipments; small-dollar 
credit adjustments; all debit adjustments; and small-dollar check 
collections. Discount-window loans and repayments are normally 
posted after the close of Fedwire as well; however, in unusual 
circumstances a discount window loan may be posted earlier in the 
day with repayment 24 hours later, or a loan may be repaid before it 
would otherwise become due.

Equals:
    Closing balance
* * * * *
    4. Footnotes 7 through 29 are renumbered 10 through 32.


    By order of the Board of Governors of the Federal Reserve 
System, May 18, 2000.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 00-13016 Filed 5-23-00; 8:45 am]
BILLING CODE 6210-01-P