[Federal Register Volume 75, Number 242 (Friday, December 17, 2010)]
[Rules and Regulations]
[Pages 78900-78901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31489]


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

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Parts 357 and 363


Regulations Governing Book-Entry Treasury Bonds, Notes and Bills 
Held in Legacy Treasury Direct; Regulations Governing Securities Held 
in Treasury Direct

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

ACTION: Final rule.

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

SUMMARY: Treasury's retail electronic systems for holding Treasury 
marketable securities began with the goal of permitting investors to 
buy and hold marketable Treasury securities until maturity. As a cost-
saving measure, Treasury is returning the Legacy Treasury Direct and 
TreasuryDirect systems to this initial vision by eliminating the 
SellDirect program that permits investors to sell their marketable 
securities on the open market through a Federal Reserve Bank. Investors 
will now need to transfer a marketable security to a broker or 
financial institution in order to effect a sale of the security prior 
to maturity.

DATES: Effective Date: December 17, 2010.

ADDRESSES: You can download this Final Rule at the following Internet 
addresses: http://www.publicdebt.treas.gov, http://www.gpo.gov, or 
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Elisha Whipkey, Director, Division of 
Program Administration, Office of Retail Securities, Bureau of the 
Public Debt, at (304) 480-6319 or [email protected].
    Susan Sharp, Attorney-Adviser; Ann Fowler, Attorney-Adviser; Dean 
Adams, Assistant Chief Counsel; Edward Gronseth, Deputy Chief Counsel, 
Office of the Chief Counsel, Bureau of the Public Debt, at (304) 480-
8692 or [email protected].

SUPPLEMENTARY INFORMATION: Treasury's retail electronic systems for 
holding Treasury marketable securities began with the goal of 
permitting investors to buy and hold marketable Treasury securities 
until maturity. In 1997 Treasury offered Legacy Treasury Direct 
investors the ability, for a fee, to sell their marketable securities 
on the secondary market, thus bypassing the need to transfer their 
securities to a broker or financial institution for sale. When Treasury 
began offering marketable securities in TreasuryDirect, its electronic, 
online system, the SellDirect service was offered to investors in that 
system as well. Because SellDirect was inconsistent with the initial 
vision of the marketable retail program, Treasury specifically reserved 
the right to end the program at any time.
    SellDirect volumes are low because most investors using the Legacy 
Treasury Direct and TreasuryDirect systems hold their securities to 
maturity. From Fiscal Year 2005 to Fiscal Year 2009, an annual average 
of 13,000 securities worth approximately $800 million were sold through 
SellDirect, less than 1.5 percent of holdings. Alternative services by 
brokers or financial institutions are available to conduct sales. As a 
cost-saving measure, Treasury is returning the Legacy Treasury Direct 
and TreasuryDirect systems to their initial vision of buy and hold to 
maturity by eliminating SellDirect. Investors will now need to transfer 
a marketable security to a broker or financial institution in order to 
effect a sale of the security before maturity.

Procedural Requirements

    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 357 (OMB No. 1535-0068) and Part 363 (OMB 
No. 1535-0138).
    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 that is expected to decrease costs for taxpayers; therefore, 
this rule is not expected to lead to any of the results listed in 5 
U.S.C. 804(2). This rule may take immediate effect after we submit a 
copy of it to Congress and the Comptroller General.

List of Subjects

31 CFR Part 357

    Banks, Banking, Bonds, Electronic funds transfers, Government 
securities, Reporting and recordkeeping requirements.

[[Page 78901]]

31 CFR Part 363

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

0
Accordingly, for the reasons set out in the preamble, 31 CFR Chapter 
II, Subchapter B, is amended as follows:

PART 357--REGULATIONS GOVERNING BOOK-ENTRY TREASURY BONDS, NOTES 
AND BILLS HELD IN TREASURY/RESERVE AUTOMATED DEBT ENTRY SYSTEM 
(TRADES) AND LEGACY TREASURY DIRECT

0
1. The authority citation for part 357 continues to read as follows:

    Authority: 31 U.S.C. chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.


0
2. Revise the heading for Part 357 to read as set forth above.

0
3. Amend Sec.  357.22 by removing paragraph (b) and redesignating 
paragraphs (c), (d), (e), and (f) as paragraphs (b), (c), (d), and (e).

PART 363--REGULATIONS GOVERNING SECURITIES HELD IN TREASURYDIRECT

0
4. The authority citation for part 363 continues to read as follows:

    Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3102, et seq.; 
31 U.S.C. 3121, et seq.


Sec.  363.6  [Amended]

0
5. Remove the definition of ``Sell Direct'' from Sec.  363.6.

0
6. Amend Sec.  363.10 by adding paragraph (c) to read as follows:


Sec.  363.10  What is a TreasuryDirect account?

* * * * *
    (c) Closing an account. If a TreasuryDirect primary account and all 
associated linked accounts have had no holdings and no activity for a 
period of two years, we reserve the right to close the account, along 
with all linked accounts.


Sec.  362  [Amended]

0
7. Amend Sec.  363.22 by removing the phrase ``including a transfer for 
a Sell Direct transaction,'' from the second sentence in paragraph 
(a)(3)(ii).


Sec.  363.27  [Amended]

0
8. Amend Sec.  363.27 by removing the phrase ``, and may request a Sell 
Direct transaction'' from the second sentence in paragraph (e)(4).


Sec.  363.209  [Removed and reserved]

0
9. Remove and reserve Sec.  363.209.


Sec.  363.210  [Amended]

0
10. Amend Sec.  363.210 by removing the phrase ``initiate a SellDirect 
transaction,'' from the second sentence and removing the fourth and 
fifth sentences.

Richard L. Gregg,
Fiscal Assistant Secretary.
[FR Doc. 2010-31489 Filed 12-16-10; 8:45 am]
BILLING CODE 4810-39-P