[Federal Register Volume 71, Number 244 (Wednesday, December 20, 2006)]
[Rules and Regulations]
[Pages 76150-76151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21668]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 356

[Docket No. BPD GSRS 06-02]


Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, 
and Bonds--Customer Confirmation Reporting Requirement Threshold Amount

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

ACTION: Final rule.

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SUMMARY: The Department of the Treasury (``Treasury,'' ``We,'' or 
``Us'') 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) that raises the customer 
confirmation reporting requirement threshold amount from $500 million 
to $750 million. Beginning on December 31, 2006, any customer awarded a 
par amount of $750 million or more in a Treasury marketable securities 
auction must send us a confirmation of its awarded bid(s) by 10 a.m. on 
the day following the auction. This final rule also clarifies that 
customer confirmations may now be sent by e-mail as well as by fax or 
hand delivery.

DATES: Effective Date: January 1, 2007.

ADDRESSES: You may download this final rule from the Bureau of the 
Public Debt's Web site at http://www.treasurydirect.gov or from the 
Electronic Code of Federal Regulations (e-CFR) Web site at http://www.gpoaccess.gov/ecfr. It is also available for public inspection and 
copying at the Treasury Department Library, Room 1428, Main Treasury 
Building, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. To visit 
the library, call (202) 622-0990 for an appointment.

[[Page 76151]]


FOR FURTHER INFORMATION CONTACT: Lori Santamorena (Executive Director) 
or Chuck Andreatta (Associate Director), Bureau of the Public Debt, 
Government Securities Regulations Staff, (202) 504-3632 or e-mail us at 
[email protected].

SUPPLEMENTARY INFORMATION: The Uniform Offering Circular (UOC), in 
conjunction with the announcement for each auction, provides the terms 
and conditions for the sale and issuance in an auction to the public of 
marketable Treasury bills, notes and bonds.\1\ Since 1992 Treasury has 
required customers \2\ awarded a par amount of $500 million or more in 
a Treasury marketable securities auction to provide a written 
confirmation of their awarded bids, including the name of the submitter 
that submitted the bids on their behalf.\3\ The confirmation must also 
include a statement with certain information related to the customer's 
net long position.\4\ The confirmation must be sent no later than 10 
a.m. on the day following the auction. According to the UOC, the 
confirmation must be in writing and signed by the customer or by an 
authorized representative.\5\ In addition, since November 2005, we have 
permitted customers to e-mail us their confirmations.
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    \1\ The Uniform Offering Circular was published as a final rule 
on January 5, 1993 (58 FR 412). The circular, as amended, is 
codified at 31 CFR part 356. A final rule converting the UOC to 
plain language and making certain other minor changes was published 
in the Federal Register on July 28, 2004 (69 FR 45202).
    \2\ ``Customer'' is defined in the UOC as a bidder that directs 
a depository institution or dealer to submit or forward a bid for a 
specific amount of securities in a specific auction on the bidder's 
behalf. See Sec.  356.2.
    \3\ Department of the Treasury, Securities and Exchange 
Commission and Board of Governors of the Federal Reserve System 
Joint Report on the Government Securities Market, pp. 7-8. (January 
1992). See also Sec.  356.24(d).
    \4\ See Sec.  356.24(d)(2).
    \5\ If an authorized representative signs the confirmation, it 
must include the capacity in which the representative is acting.
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    The customer confirmation requirement helps prevent large, false 
(unauthorized) customer bids from being awarded securities in an 
auction. On May 3, 2006, Treasury announced that it was contemplating 
changes to the customer confirmation requirement and cited the fact 
that the reporting threshold has never been changed despite changes in 
average auction sizes and transaction volumes.\6\ On August 2, 2006, 
Treasury announced that, beginning on December 31, 2006, the customer 
confirmation reporting requirement threshold amount will be raised from 
$500 million or more to $750 million or more.\7\ We are raising the 
threshold amount to reduce the regulatory burden on customers complying 
with this requirement, since auction offering amounts, on average, are 
substantially higher than they were when the requirement was first 
implemented.
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    \6\ See Quarterly Refunding Statement by Emil W. Henry, Jr., 
Assistant Secretary for Financial Institutions (May 2006).
    \7\ See Quarterly Refunding Statement by Emil W. Henry, Jr., 
Assistant Secretary for Financial Institutions (August 2006).
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    We are also adding e-mail into the UOC as an acceptable method for 
customers to send confirmations. This addition supports our goal of 
allowing securities auction transactions to be conducted with us 
electronically whenever possible.
    We are not making any changes to the requirement that a submitter 
or intermediary submitting bids for a customer notify the customer of 
the confirmation requirement if its auction awards are equal to or 
greater than the threshold. Also, no change is being made to the 
information that is required on the confirmation and the deadline for 
us to receive it.
    This final rule will be effective for all marketable Treasury 
securities auctions occurring after December 31, 2006.

Procedural Requirements

    This final rule is not a significant regulatory action for purposes 
of Executive Order 12866. The notice and public procedures requirements 
of the Administrative Procedure Act do not apply, under 5 U.S.C. 
553(a)(2).
    Since a notice of proposed rulemaking is not required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply.
    The Office of Management and Budget previously approved the 
collections of information in this final amendment in accordance with 
the Paperwork Reduction Act under control number 1535-0112. We are not 
making substantive changes to these requirements that would impose 
additional burdens on auction bidders.

List of Subjects in 31 CFR Part 356

    Bonds, Federal Reserve System, Government securities, Securities.

0
For the reasons stated in the preamble, 31 CFR 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)

0
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.


0
2. Revise Sec.  356.24 (d) to read as follows:


Sec.  356.24  Will I be notified directly of my awards and, if I am 
submitting bids for others, do I have to provide confirmations?

* * * * *
    (d) Customer confirmation. Any customer awarded a par amount of 
$750 million or more in an auction must send us a confirmation in 
written form or via e-mail containing the information in paragraphs 
(d)(1) and (2) of this section. The confirmation must be sent no later 
than 10 a.m. on the day following the auction. If sent in written form, 
the confirmation must be signed by the customer or authorized 
representative. Confirmations sent by e-mail must be sent by the 
customer or authorized representative. Confirmations signed or sent by 
an authorized representative must include the capacity in which the 
representative is acting. A submitter or intermediary submitting or 
forwarding bids for a customer must notify the customer of this 
reporting requirement if we award the customer $750 million or more as 
a result of those bids. The information the customer must provide is:
    (1) A confirmation of the awarded bid(s), including the name of the 
submitter that submitted the bid(s) on the customer's behalf, and
    (2) A statement indicating whether the customer had a reportable 
net long position as defined in Sec.  356.13. If a position had to be 
reported, the statement must provide the amount of the position and the 
name of the submitter that the customer requested to report the 
position.

    Dated: December 12, 2006.
Donald V. Hammond,
Fiscal Assistant Secretary.
 [FR Doc. E6-21668 Filed 12-19-06; 8:45 am]
BILLING CODE 4810-39-P