[Federal Register Volume 74, Number 177 (Tuesday, September 15, 2009)]
[Rules and Regulations]
[Pages 47099-47100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-22147]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 356

[Docket No. BPD GSRS 09-02]


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: Treasury recently raised the customer confirmation reporting 
requirement threshold amount from $750 million to $2 billion for all 
Treasury marketable securities auctions. This final rule amends 
Treasury's auction rules to conform to the new $2 billion threshold 
amount.

DATES: Effective Date: Effective September 15, 2009.

ADDRESSES: This final rule is available on the Bureau of the Public 
Debt's Web site at: http://www.treasurydirect.gov. 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, one can call (202) 622-
0990 for an appointment.

FOR FURTHER INFORMATION CONTACT: Lori Santamorena, Lee Grandy, or Kevin 
Hawkins, Department of the Treasury, Bureau of the Public Debt, 
Government Securities Regulations Staff, (202) 504-3632.

SUPPLEMENTARY INFORMATION: The Department of the Treasury 
(``Treasury,'' ``we,'' or ``us'') is issuing an amendment to 31 CFR 
356.24(d) of the Uniform Offering Circular for the Sale and Issue of 
Marketable Book-Entry Treasury Bills, Notes, and Bonds (``UOC'' or 
``auction rules'') \1\ to raise the threshold amount for the customer 
confirmation reporting requirement from $750 million to $2 billion. In 
a press release on June 25, 2009, we announced that this new threshold 
amount would be effective beginning with auctions conducted on June 29, 
2009.\2\ Beginning with the Treasury auctions announced on June 25, 
2009, we stated the new threshold amount in each Treasury auction 
offering announcement.\3\ This final rule amends the UOC to conform to 
the new $2 billion threshold amount.\4\ Treasury is also restructuring, 
without making any substantive changes, the current Sec.  356.24(d) to 
make clearer which provisions apply to customers and which apply to 
submitters and intermediaries.
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    \1\ The UOC was published as a final rule on January 5, 1993, at 
58 FR 412, and is codified, as amended, at 31 CFR part 356. The UOC, 
together with the offering announcement for each auction, sets out 
the terms and conditions for the sale and issuance by Treasury to 
the public of marketable book-entry Treasury bills, notes, and 
bonds.
    \2\ Public Debt News Release on June 25, 2009, which is 
available at the Bureau of the Public Debt's Web site at: http://www.treasurydirect.gov/instit/annceresult/press/preanre/2009/BPD_SPL_20090625_1.pdf.
    \3\ See June 25, 2009 Treasury offering announcements for the 
91-day, 182-day, and 364-day Treasury bills. As noted in Sec.  
356.10, if anything in the auction announcement differs from the 
UOC, the auction announcement will control.
    \4\ Once this final rule becomes effective, we will no longer 
include the customer confirmation threshold amount in each specific 
offering announcement.
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    Starting in 1992, Treasury required customers \5\ that were awarded 
a par amount of $500 million or more in a Treasury auction to provide 
written confirmation of their awarded bids, including the name of the 
submitter that submitted the bids on their behalf.\6\ The confirmation 
must also include a statement with specific information related to the 
customer's net long position.\7\ The customer must send the 
confirmation no later than 10 a.m. on the day following the auction. 
The UOC requires that the confirmation be in writing and signed by the 
customer or by an authorized representative.\8\ Treasury established 
the customer confirmation reporting requirement in order to verify the 
authenticity of large customer bids that resulted in securities being 
awarded. Treasury subsequently raised the customer confirmation 
reporting requirement threshold amount in Sec.  356.24(d) from $500 
million to $750 million, effective on January 1, 2007.\9\ Treasury 
auction offering amounts, on average, are substantially higher than 
when we last raised the customer confirmation reporting requirement 
threshold amount in 2007. For this reason, on June 25, 2009, Treasury 
again raised the customer confirmation threshold, from $750 million to 
$2 billion.\10\ We now amend the UOC to reflect that change.
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    \5\ ``Customer'' is already 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. Sec.  356.2.
    \6\ Sec.  356.24(d). See Department of the Treasury, Securities 
and Exchange Commission and Board of Governors of the Federal 
Reserve System, Joint Report on the Government Securities Market 7-
8. (January 1992).
    \7\ Sec.  356.24(d).
    \8\ If an authorized representative signs the confirmation, it 
must include the capacity in which the representative is acting. Id.
    \9\ 71 FR 76150, December 20, 2006. Treasury also added e-mail 
as an acceptable method for customers to send confirmations.
    \10\ See note 2, supra.
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    We have restructured Sec.  356.24(d) to make clearer which 
provisions apply to customers and which apply to submitters and 
intermediaries. The new subparagraph (d)(1) states the customer

[[Page 47100]]

requirements, including the new threshold amount in (d)(1)(i). 
Subparagraph (d)(2) applies to submitters and intermediaries.
    Also, Treasury is making one change to the text in the new Sec.  
356.24(d)(1)(ii)(A), formerly in Sec.  356.24(d)(1), to clarify that 
the customer must provide a confirmation of all of its awarded bids, 
including the name of ``each'' submitter that submitted bids on the 
customer's behalf. In other words, if more than one submitter submitted 
bids for a customer, then that customer must still confirm all of its 
awarded bids, provided the total amount of the awarded bids is $2 
billion or more.
    We are making an additional change to the language in the new Sec.  
356.24(d)(1)(i), formerly in Sec.  356.24(d), to clarify that the 
customer must provide confirmation of the awarded bid(s) on the ``next 
business'' day following the auction.\11\
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    \11\ ``Business day'' is already defined in the UOC as any day 
on which the Federal Reserve Banks are open for business. Sec.  
356.2.
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Regulatory Analysis and Review

    Executive Order 12866. This rule is not a significant regulatory 
action pursuant to Executive Order 12866.
    Administrative Procedure Act (APA). Because this rule relates to 
United States securities, which are contracts between Treasury and the 
owner of the security, this rule falls within the contract exception to 
the APA, 5 U.S.C. 553(a)(2). As a result, the notice, public comment, 
and delayed effective date provisions of the APA are inapplicable to 
this rule.
    Regulatory Flexibility Act. The provisions of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., do not apply to this rule 
because, pursuant to 5 U.S.C. 553(a)(2), it is not required to be 
issued with notice and opportunity for public comment.
    Paperwork Reduction Act (PRA). There is no new collection of 
information contained in this final rule that would be subject to the 
PRA, 44 U.S.C. 3501 et seq. Under the PRA, 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. The Office 
of Management and Budget already has approved all collections of 
information in 31 CFR part 356, under OMB control number 1535-0112.
    Congressional Review Act (CRA). This rule is not a major rule 
pursuant to the CRA, 5 U.S.C. 801 et seq., because it is a minor 
amendment to the reporting requirements Treasury places on customers 
submitting bids in Treasury marketable securities auctions. This rule 
actually requires less reporting and therefore, is not expected to lead 
to any of the results listed in 5 U.S.C. 804(2).

List of Subjects in 31 CFR Part 356

    Bonds, Federal Reserve System, Government securities, Securities.


0
For the reasons set forth 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--(1) Customer requirements--(i) When and 
how must a customer confirm its awards? Any customer awarded a par 
amount of $2 billion or more in an auction must send us a confirmation 
in written form or via e-mail containing the information in paragraph 
(d)(1)(ii) of this section. The confirmation must be sent no later than 
10 a.m. Eastern Time on the next business 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.
    (ii) What must the customer include in its confirmation? The 
information the customer must provide is:
    (A) A confirmation of the awarded bid(s), including the name of 
each submitter that submitted the bid(s) on the customer's behalf, and
    (B) 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.
    (2) Submitter or intermediary requirements. A submitter or 
intermediary submitting or forwarding bids for a customer must notify 
the customer of the customer confirmation reporting requirement if we 
award the customer $2 billion or more as a result of those bids.

Richard L. Gregg,
Acting Fiscal Assistant Secretary.
[FR Doc. E9-22147 Filed 9-14-09; 8:45 am]
BILLING CODE 4810-39-P