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###### Department of the Treasury

###### Fiscal Service

          - 31 CFR Part 356
          - [Docket No. BPD GSRS 06-03]

# AGENCY:

Bureau of the Public Debt, Fiscal Service, Treasury.

# ACTION:

Final rule. 

# SUMMARY:

This final rule provides that the Department of the Treasury may announce that certain marketable Treasury securities to be offered will not be eligible for purchase or holding in the Legacy Treasury Direct system. Treasury is issuing this amendment to the auction rules because the Legacy Treasury Direct system will eventually be phased out.

# DATES:

Effective January 18, 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.                    

# 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                         *govsecreg@bpd.treas.gov.*

# 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]                                          There are three book-entry securities systems—the commercial book-entry system, TreasuryDirect ®, and Legacy Treasury Direct ®—into which we issue marketable Treasury securities.[2]                                          The current UOC generally authorizes purchases of all types of marketable Treasury securities in any of the three book-entry systems. The Legacy Treasury Direct system, which was implemented in 1986, will eventually be phased out, leaving only the newer, on-line TreasuryDirect system as the system for purchasing marketable Treasury securities directly on the records of the Bureau of the Public Debt, Department of the Treasury.[3]                                          The commercial book-entry system will remain an option for all securities for those investors who want to purchase and hold their securities through a depository institution or dealer.                

As we begin phasing out Legacy Treasury Direct, we plan to discontinue the practice of generally allowing all marketable Treasury securities being offered by Treasury to be purchased and held in this system. This final rule amendment states explicitly that we may announce that certain marketable securities to be offered will not be eligible for purchase or holding in Legacy Treasury Direct. Any such restriction will be included in that security's offering announcement. This change will not affect any outstanding securities currently held in Legacy Treasury Direct.

## Procedural Requirements

This final rule is not a significant regulatory action for purposes of Executive Order 12866. The notice and public procedures and delayed effective date requirements of the Administrative Procedure Act do not apply, under 5 U.S.C. 533(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                           ( print page 2193)                        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

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)

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. Amend § 356.4 by revising the introductory paragraph and paragraph (c) to read as follows: 

§ 356.4 

There are three book-entry securities systems—the commercial book-entry system, TreasuryDirect®, and legacy Treasury Direct®—into which we issue marketable Treasury securities. We may obtain and transfer securities in these three book-entry systems at their par amount. Par amounts of Treasury inflation-protected securities do not include adjustments for inflation. Securities may be transferred from one system to the other, unless the securities are not eligible to be held in the receiving system. See Department of the Treasury Circular, Public Debt Series No. 2-86, as amended (part 357 of this chapter) and part 363 of this chapter.

* * * * *

                            (c)                             *Legacy Treasury Direct.*                             In this system, we maintain the book-entry securities of account holders directly on the records of the Bureau of the Public Debt, Department of the Treasury. Bids for securities to beheld in Legacy Treasury Direct are generally submitted directly to us, although such bids may also be forwarded to us by a depository institution or dealer. From time to time, Treasury may announce that certain securities to be offered will not be eligible for purchase or holding in Legacy Treasury Direct.                        

Dated: January 12, 2007.

Donald V. Hammond,

Fiscal Assistant Security.

# Footnotes

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).                    
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2.                             On September 30, 2005, Treasury issued a final amendment to the UOC to make the changes necessary to accommodate participation in Treasury marketable auctions for securities to be held in either the TreasuryDirect or the Legacy Treasury Direct system (70 FR 57347).                    
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3.                             Legacy Treasury Direct was called TreasuryDirect from 1986 to 2005. The regulations for Legacy Treasury Direct are found at 31 CFR part 357. The regulations for TreasuryDirect are found at 31  CFR part 363.                    
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[FR Doc. 07-209  Filed 1-16-07; 1:47 pm]

BILLING CODE 4810-39-M