Wednesday, 

September 13, 2000 

Part V 

Department of the 

Treasury 

Fiscal Service 

31 CFR Part 202, 203, 225, 380 

Collateral Acceptability and Valuation; 

Final Rule 

Depositaries and Financial Agents of the 

Government; Final Rule 

Payment of Federal Taxes and the 

Treasury Tax and Loan Program; Final 

Rule 

Acceptance of Bonds Secured by 

Government Obligations in Lieu of Bonds 

with Sureties; Final Rule 
55426 Federal Register / Vol. 65, No. 178 / Wednesday, September 13, 2000 / Rules and Regulations 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 380 

RIN 1535—AA00 

Collateral Acceptability and Valuation 

AGENCY: Bureau of the Public Debt, 

Fiscal Service, Department of the 

Treasury. 

ACTION: Final Rule. 

SUMMARY: The Department of the 

Treasury (‘‘Treasury,’’ ‘‘We,’’ or ‘‘Us’’) is 

issuing a rule in final form that governs 

the acceptability and valuation of all 

collateral pledged to secure deposits of 

public monies and other financial 

interests of the Federal Government 

under Treasury’s three Fiscal Service 

collateral programs. These programs are 

titled and described in existing parts of 

the Code of Federal Regulations (‘‘CFR’’) 

as: Depositaries and Financial Agents of 

the Government (31 CFR part 202); 

Payment of Federal Taxes and the 

Treasury Tax and Loan Program (31 CFR 

part 203); and Acceptance of Bonds 

Secured by Government Obligations in 

Lieu of Bonds with Sureties (31 CFR 

part 225). We are establishing a new 

part in the CFR for this purpose. This 

final rule provides a central location for 

the acceptability and valuation 

provisions for Treasury’s collateral 

programs without substantive changes. 

EFFECTIVE DATE: October 13, 2000. 

ADDRESSES: You may download this 

final rule from Treasury’s Bureau of the 

Public Debt website at 

www.publicdebt.treas.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, call (202) 622–0990 for an 

appointment. 

FOR FURTHER INFORMATION CONTACT: Lori 

Santamorena (Executive Director), Kurt 

Eidemiller (Senior Financial Advisor), 

or Nadir Z. Isfahani (Government 

Securities Specialist), Department of the 

Treasury, Bureau of the Public Debt, 

Government Securities Regulations 

Staff, (202) 691–3632. 

SUPPLEMENTARY INFORMATION: 

I. Background 

We are publishing this final rule 

governing the determination of the 

acceptable types of collateral and their 

assigned values when pledged to secure 

deposits of public monies and other 

financial interests of the Federal 

Government under Treasury’s three 

Fiscal Service collateral programs. We 

are centralizing these collateral 

provisions and establishing a new part 

380 of Title 31 of the CFR for this 

purpose. 

Treasury’s Fiscal Service administers 

three financial programs that involve 

the pledging of specific collateral. These 

programs are governed by 31 CFR part 

202 (Depositaries and Financial Agents 

of the Government), 31 CFR part 203 

(Payment of Federal Taxes and the 

Treasury Tax and Loan Program), and 

31 CFR part 225 (Acceptance of Bonds 

Secured by Government Obligations in 

Lieu of Bonds with Sureties). The 

Financial Management Service (‘‘FMS’’), 

a bureau within Treasury’s Fiscal 

Service, administers these programs, 

which are handled operationally by the 

Federal Reserve System, acting as the 

fiscal agent for Treasury. FMS will 

continue to be responsible for 

administering and amending the 

regulations for these programs and 

providing operational oversight. The 

Bureau of the Public Debt (‘‘Public 

Debt’’), another bureau within 

Treasury’s Fiscal Service, will 

administer 31 CFR part 380, pertaining 

to the acceptability and valuation of the 

collateral in these programs and will 

provide guidance accordingly. 

On October 29, 1999, we published a 

proposed rule for public comment that 

laid out our intent to centralize the 

acceptability and valuation standards 

for collateral pledged to Treasury’s three 

Fiscal Service financial programs.1 The 

closing date for comments was 

November 29, 1999. We have decided to 

adopt the approach essentially as 

proposed. 

II. Comments Received in Response to 

Proposed Rule 

In response to the proposed rule, we 

received one comment letter and the 

commenter was supportive of the 

proposal.2 The commenter 

recommended that fixed income 

securities be included in parts 202 and 

225. The commenter also suggested that 

valuation for all pledged collateral be 

based on the class of acceptable 

securities using a market valuation 

methodology. 

Certain fixed income securities are 

currently acceptable collateral for 

pledging in these programs. Obligations 

1 64 FR 58364 (October 29, 1999). 

2 See Bank of America Corporation letter dated 

November 29, 1999, from Patrick M. Frawley, 

Director, Regulatory Relations, to Van Zeck, 

Commissioner, Bureau of the Public Debt. The 

comment letter is available for downloading on the 

Internet and for inspection and copying at the 

Treasury Department Library at the addresses 

provided earlier in this rule. 

of the U.S. government, governmentsponsored corporations, and those 

issued by certain international 

development banks, such as the InterAmerican Development Bank or the 

World Bank, are acceptable for part 202. 

Acceptable collateral for Part 225 is 

statutorily limited to public debt 

obligations of the United States and 

those obligations ‘‘whose principal and 

interest is unconditionally guaranteed 

by the Government.’’ 3 Such obligations, 

including U.S. Treasury notes, bonds, 

and selected U.S. government agency 

issues, are commonly called fixed 

income securities. Also, we currently 

apply a market valuation methodology 

for collateral pledged under part 203 

and continue to work at extending this 

methodology to the other two programs. 

III. Changes from the Proposed Rule 

We have decided to adopt this rule to 

establish a different regulatory structure 

to centralize the acceptability and 

valuation standards for Treasury’s three 

financial programs that require the 

pledging of collateral. The final rule 

adopts the proposed rule without 

significant changes. The only change 

that has been made is to reference 

current Treasury guidance rather than 

set out the acceptable classes of 

collateral and respective valuations in 

the regulation, as we had considered in 

the preamble to the proposed rule.4 

Eliminating specific mention of the 

acceptable classes and respective 

valuations in the final rule allows us the 

flexibility to maintain guidance that can 

be readily updated for the benefit of 

participants in the programs. Sections 

380.2, 380.3, and 380.4 of this rule 

provide that we will list the types and 

valuation of acceptable collateral in 

Treasury procedural instructions. The 

term ‘‘procedural instructions,’’ for 

instance, is described in 31 CFR 203.2 

as ‘‘the Treasury Financial Manual, 

Volume IV (TFM IV), other Treasury 

instructions issued through the TFAs, 

and FRB operating circulars issued 

consistent with this part.’’ 5 We will also 

provide guidance and information about 

collateral acceptability and valuation 

issues on Treasury’s Bureau of the 

3 31 U.S.C. 9301(2). 

4 64 FR 58365 (October 29, 1999). 

5 For example §§ 203.1 and 203.2 of Title 31 of 

the CFR reference several terms that are applied to 

part 203 and that will also be applied by reference 

to part 380, as applied to part 203. Included in these 

references and definitions is the term ‘‘TFA’’ 

meaning ‘‘Treasury Financial Agent.’’ Also, 

Treasury procedural instructions consistent with 31 

CFR part 203 include periodic releases distributed 

by Treasury to supplement and update the Treasury 

Financial Manual. These are often referred to as 

Treasury Tax and Loan (TT&L) Releases. FRB refers 

to Federal Reserve Banks. 
Federal Register / Vol. 65, No. 178 / Wednesday, September 13, 2000 / Rules and Regulations 55427 

Public Debt website at: 

www.publicdebt.treas.gov. 

The office responsible for 

implementation of part 380, including 

interpretations, is the Office of the 

Commissioner, Bureau of the Public 

Debt. FMS and Public Debt are 

coordinating on the issuance of their 

respective rules. FMS is simultaneously 

publishing its corresponding regulatory 

amendments to parts 202, 203, and 225 

of Title 31 of the CFR, removing current 

references to collateral acceptability and 

valuation and replacing them with 

references to 31 CFR part 380. 

IV. Procedural Requirements 

This final rule is not a ‘‘significant 

regulatory action’’ under Executive 

Order 12866. We certify that this 

regulation will not have a significant 

economic impact on a substantial 

number of small entities. This 

regulation provides a central location, 

without substantive change, for 

regulatory provisions that currently 

appear in three separate sets of 

regulations for Treasury’s collateral 

programs. Accordingly, we are not 

required to perform a regulatory 

flexibility analysis. Finally, this final 

rule contains no new collection of 

information. Therefore, the Paperwork 

Reduction Act does not apply. 

List of Subjects in 31 CFR Part 380 

Collateral, Depositaries, Government 

obligations, Government securities, 

Securities, Surety bonds. 

For the reasons set forth in the 

preamble, we amend Subchapter B of 

Chapter II of Title 31 of the Code of 

Federal Regulations, by adding Part 380 

to read as follows: 

PART 380—COLLATERAL 

ACCEPTABILITY AND VALUATION 

Subpart A—General Information 

Sec.


380.0 What do these regulations govern?


380.1 What special definitions apply to this


part? 

Subpart B—Acceptable Collateral and its 

Valuation 

380.2 What collateral may I pledge if I am 

a depositary or a financial agent of the 

Government under 31 CFR part 202, and 

what value will you assign to it? 

380.3 What collateral may I pledge if I am 

a Treasury Tax and Loan depositary 

under 31 CFR part 203, and what value 

will you assign to it? 

380.4 What collateral may I pledge instead 

of a surety bond under 31 CFR part 225, 

and what value will you assign to it? 

Subpart C—Miscellaneous Provisions 

380.5 Where can I find current information, 

and who can I contact for additional 

guidance and interpretation? 

Authority: 12 U.S.C. 90, 265–266, 332, 391, 

1452(d), 1464(k), 1767, 1789a, 2013, 2122, 

3101–3102; 26 U.S.C. 6302; 31 U.S.C. 321, 

323, 3301–3304, 3336, 9301, 9303. 

Subpart A—General Information 

§ 380.0 What do these regulations govern? 

The regulations in this part govern the 

types of acceptable collateral that you 

may pledge to secure deposits of public 

monies and other financial interests of 

the Federal Government, as well as the 

valuation of that collateral. Specifically, 

the regulations in this part apply to the 

programs governed by the Department 

of the Treasury’s regulations at 31 CFR 

part 202 (Depositaries and Financial 

Agents of the Government), 31 CFR part 

203 (Payment of Federal Taxes and the 

Treasury Tax and Loan Program), and 

31 CFR part 225 (Acceptance of Bonds 

Secured by Government Obligations in 

Lieu of Bonds with Sureties). The 

regulations in this part apply only to the 

acceptability and valuation of collateral 

that may be pledged under these 

programs. 31 CFR parts 202, 203, and 

225 continue to govern the respective 

programs themselves. 

§ 380.1 What special definitions apply to 

this part? 

Special definitions that may apply to 

this part are contained in 31 CFR parts 

202, 203 and 225. 

Subpart B—Acceptable Collateral and 

its Valuation 

§ 380.2 What collateral may I pledge if I am 

a depositary or a financial agent of the 

Government under 31 CFR part 202, and 

what value will you assign to it? 

Unless we specify otherwise, we will 

list the types and valuation of 

acceptable collateral in Treasury 

procedural instructions. We will also 

post updated information and guidance 

on Treasury’s Bureau of the Public Debt 

website at www.publicdebt.treas.gov. 

§ 380.3 What collateral may I pledge if I am 

a Treasury Tax and Loan depositary under 

31 CFR part 203, and what value will you 

assign to it? 

Unless we specify otherwise, we will 

list the types and valuation of 

acceptable collateral in Treasury 

procedural instructions. We will also 

post updated information and guidance 

on Treasury’s Bureau of the Public Debt 

website at www.publicdebt.treas.gov. 

§ 380.4 What collateral may I pledge 

instead of a surety bond under 31 CFR part 

225, and what value will you assign to it? 

Unless we specify otherwise, we will 

list the types and valuation of 

acceptable collateral in Treasury 

procedural instructions. We will also 

post updated information and guidance 

on Treasury’s Bureau of the Public Debt 

website at www.publicdebt.treas.gov. 

Subpart C—Miscellaneous Provisions 

§ 380.5 Where can I find current 

information, and who can I contact for 

additional guidance and interpretation? 

You can find a current list of 

acceptable classes of securities, 

instruments and respective valuations 

on Treasury’s Bureau of the Public Debt 

website at www.publicdebt.treas.gov. 

You may also contact the Office of the 

Commissioner. We can be reached by 

postal mail at: Department of the 

Treasury, Bureau of the Public Debt, 

Office of the Commissioner, 

Government Securities Regulations 

Staff, 999 E Street, NW., Room 315, 

Washington, DC 20239–0001, or by email at govsecreg@bpd.treas.gov. 

Dated: August 17, 2000. 

Van Zeck, 

Commissioner. 

[FR Doc. 00–23087 Filed 9–12–00; 8:45 am] 

BILLING CODE 4810–39–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 202 

RIN–1510–AA75 

Depositaries and Financial Agents of 

the Government 

AGENCY: Financial Management Service, 

Fiscal Service, Treasury. 

ACTION: Final Rule. 

SUMMARY: The Financial Management 

Service (FMS) is issuing this final rule 

which governs the designation of 

Depositaries and Financial Agents of the 

Federal Government; their authorization 

to accept deposits of public money and 

to perform other specific services; and 

the securing of public money. This 

revision removes current references to 

collateral acceptability and valuation 

and replaces them with references to the 

new rule of the Bureau of the Public 

Debt (BPD), codified at 31 CFR part 380, 

governing collateral acceptability and 

valuation. The revision is necessary 

because the responsibility for 

determining the acceptability and 

valuation of collateral under 31 CFR 

part 202 was recently transferred from 

FMS to BPD. 

EFFECTIVE DATE: October 13, 2000. 

FOR FURTHER INFORMATION CONTACT: 

Mary Bailey, Financial Program 

Specialist, at (202) 874–6749; Walt 

Henderson, Senior Financial Program