[Federal Register Volume 62, Number 155 (Tuesday, August 12, 1997)]
[Rules and Regulations]
[Pages 43091-43096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21277]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR 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)

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

ACTION: Final rule.

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SUMMARY: The Department of the Treasury (``Treasury'' or 
``Department'') is publishing 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). This amendment makes the 
necessary changes to accommodate three decimal competitive bidding, in 
.005 percent increments, for regular Treasury bills--13-, 26-, and 52-
week bills--and a reduction in the net long position reporting 
threshold amount for all Treasury bill auctions (including cash 
management bills). The final rule also makes certain technical 
clarifications and conforming changes.

DATES: The effective date is September 11, 1997, except for the change 
to Sec. 356.13 (Net long position) which is effective November 10, 
1997.

ADDRESSES: This final rule has also been made available for downloading 
from the Bureau of the Public Debt's Internet site at the following 
address: www.publicdebt.treas.gov.

FOR FURTHER INFORMATION CONTACT: Ken Papaj (Director), Lee Grandy or 
Kurt Eidemiller (Government Securities Specialists), Department of the 
Treasury, Bureau of the Public Debt, Government Securities Regulations 
Staff, (202) 219-3632.

SUPPLEMENTARY INFORMATION: 31 CFR part 356, also referred to as the 
uniform offering circular, sets out the terms and conditions for the 
sale and issuance by the Department of the Treasury to the public of 
marketable Treasury bills, notes, and bonds. The uniform offering 
circular, in conjunction with offering announcements, represents a 
comprehensive statement of those terms and conditions.<SUP>1</SUP> The 
Department

[[Page 43092]]

published for public comment a proposed amendment to the uniform 
offering circular on May 5, 1997,<SUP>2</SUP> which specifically 
requested comments on extending three decimal bidding, in .005 percent 
increments, to all Treasury bill auctions (including cash management 
bills (``CMBs'')) and reducing the net long position reporting 
threshold amount for all Treasury bill auctions (including CMBs) from 
$2 billion to $1 billion. The closing date for comments was June 4, 
1997. The Department received one comment letter which was submitted by 
PSA, the Bond Market Trade Association (``PSA'').<SUP>3</SUP> In 
general, PSA expressed support for the changes as proposed, with a few 
exceptions which are noted in each respective section below. Treasury 
considered the comments expressed in the PSA letter in developing this 
final rule.
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    \1\ The uniform offering circular was published as a final rule 
on January 5, 1993 (58 FR 412). Amendments to the circular were 
published on June 3, 1994 (59 FR 28773), March 15, 1995 (60 FR 
13906), July 16, 1996 (61 FR 37007), August 23, 1996 (61 FR 43626), 
October 22, 1996 (61 FR 54908), January 6, 1997 (62 FR 846), and May 
8, 1997 (62 FR 25113).
    \2\ 62 FR 24375 (May 5, 1997).
    \3\ See letter dated June 4, 1997 from Stephanie S. Wolf, Vice 
President and Associate General Counsel of PSA, the Bond Market 
Trade Association to Kenneth R. Papaj, Director, Government 
Securities Regulations Staff. The comment letter is available for 
public inspection and downloading on the Internet, at the address 
provided earlier in this rule, and for inspection and copying at the 
Treasury Department Library, Room 5030, Main Treasury Building, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220.
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    The final rule amends Secs. 356.12 and 356.13 of the uniform 
offering circular and provides two minor technical clarifications in 
Appendix B to part 356 (Formulas and Tables) as well as updated sample 
announcements of Treasury auctions in Exhibit A to part 356 (Sample 
Announcements of Treasury Offerings to the Public).

A. Three Decimal Competitive Bidding in .005 Percent Increments

    In February 1995, Treasury began requiring competitive bids in note 
and bond auctions to be expressed as yields using three decimal places, 
in .001 percent increments, e.g., 7.123, rather than two decimal 
places.<SUP>4</SUP> At that time, Treasury did not extend three decimal 
bidding to bill auctions because three decimal bidding, in .001 percent 
increments, would not provide a price unique to each discount rate for 
bills with maturities less than 360 days. Price uniqueness occurs when 
each separate discount rate produces a different (unique) price rounded 
to three decimal places, i.e., no two discount rates result in the same 
price. Price uniqueness is a function of the minimum bid increment 
allowed in auctions, price rounding conventions, and the number of days 
to maturity.
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    \4\ Treasury Press Release was dated February 15, 1995. An 
amendment to the uniform offering circular was published on March 
15, 1995 (60 FR 13906).
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    Under two decimal bidding, price uniqueness is maintained for CMBs 
with maturities of 36 days or more. If three decimal bidding in 
increments of one-half basis point is extended to CMBs, price 
uniqueness would be maintained with maturities of 72 days or more. As 
stated in the proposed rule, Treasury does not consider this to be 
problematic given auction participants' experience with the non-price 
uniqueness of short-term CMBs under the two decimal bidding process. 
For regular Treasury bill auctions--13-, 26-, and 52-week bills--three 
decimal bidding, in .005 percent increments, would maintain price 
uniqueness since these bills have maturities of 90 days or more.
    As stated in its comment letter, PSA supports three decimal bidding 
for bill auctions with the view that consistent bidding practices for 
all Treasury securities would benefit the market and result in an 
easier understanding of the requirements for auction participation. The 
letter also stated that the conversion to three decimal bidding should 
not require significant systems changes since many market participants 
already trade Treasury bills in minimum increments of one-half to one-
quarter basis points. However, PSA recommended that two decimal bidding 
for CMBs be maintained given market participants' concern with non-
price uniqueness being extended further into the maturity spectrum, 
from 36 to 72 days. This concern and ultimate recommendation were based 
on PSA's view that, historically, Treasury has generally issued CMBs 
with shorter maturities, noting that during the past twelve months most 
of the CMBs have been issued with short maturities, with a majority of 
less than 36 days. The Department understands PSA's view and 
appreciates this concern given that there has been only one CMB issued 
since November 1995 with a maturity of more than 72 days. Accordingly, 
as PSA recommends, Treasury will not extend three decimal bidding to 
CMBs, but will maintain the current two decimal bidding requirement, in 
.01 percent increments, for all CMB auctions.
    Section 356.12(c)(1)(i) of the final rule reflects the change from 
the proposed rule by requiring three decimal bidding, in .005 percent 
increments, for regular Treasury bills only. The third decimal must be 
expressed in increments of one-half basis point (e.g., 5.320 or 5.325) 
in which the final decimal must be either zero or five. The rule 
provides that three decimal bidding, in .005 percent increments, will 
be a requirement for regular Treasury bill auctions--13-,
26-, and 52-week bills. The final rule also specifically states that 
competitive bids for CMBs must show the discount rate bid expressed 
with two decimals, in .01 percent increments. Accordingly, the 
requirement for competitive bids for CMBs to be expressed in two 
decimals, in .01 percent increments, remains unchanged.
    As PSA suggested in its comment letter, the effective date for the 
change to Sec. 356.12 will be 30 days after publication of the final 
rule to provide market participants with sufficient time to update 
internal auction policies and procedures. Accordingly, the effective 
date of this rule change is September 11, 1997. Although this final 
rule amends the uniform offering circular to accommodate three decimal 
bidding for regular bill auctions, Treasury will implement this bidding 
change through the offering announcements for specific auctions. 
Therefore, auction participants should refer to the specific offering 
announcements as to when this change in bidding will be implemented, 
which in any event will be no sooner than the date referenced above. 
All offering announcements will continue to list specific bidding 
requirements for each offering, including how competitive bids 
submitted for the particular auction must be expressed, and will govern 
in the event of an inconsistency with the rules. (See Sec. 356.10)
    As stated in the proposed rule, the change from two decimal, in .01 
percent increments, to three decimal bidding, in .005 percent 
increments, for regular Treasury bills is being adopted to promote more 
efficient and aggressive bidding in these auctions and is expected to 
lead to marginally higher auction revenues for Treasury.
    The change to three decimal competitive bidding, in .005 percent 
increments, for regular bill auctions will not affect how awards are 
made to noncompetitive bidders, i.e., the price of securities awarded 
to noncompetitive bidders in these auctions will continue to be the 
price equivalent to the weighted average discount rate of accepted 
competitive bids. Finally, the Department wishes to remind auction 
participants that the requirement for competitive bids for Treasury 
note and bond auctions to be expressed in three decimals, in .001 
percent increments, remains unchanged. Further, the restriction against 
using fractions still applies to all marketable security auctions.

[[Page 43093]]

B. Decrease in Net Long Position Reporting Threshold Amount

    Section 356.13(a) reflects the reduction in the net long position 
reporting threshold amount for all Treasury bill auctions (i.e., 13-, 
26-, 52-week bills and CMBs) from $2 billion to $1 billion, while 
maintaining the $2 billion threshold amount for Treasury note and bond 
auctions. This change in the reporting threshold amount is being 
adopted in the final rule as it was proposed. PSA supports this change 
as reasonable and appropriate and believes that consistently applying 
the $1 billion threshold uniformly to all bill auctions, rather than 
changing the threshold from time to time, depending on the public 
offering amount, will likely result in a better overall understanding 
of, and compliance with, the auction rules. PSA requested that more 
preparation time be provided for those market participants, who in the 
past, may not have come close to approaching the $2 billion threshold. 
In its letter, PSA stated that these participants may require 
significant changes to their internal auction policies, procedures, and 
systems in order to capture and report positions at the lower 
threshold. In order to provide market participants with a reasonable 
amount of time to make the necessary procedural changes and to notify 
their affiliates and customers to ensure the broadest level of 
compliance, Treasury accepts PSA's recommendation for a delayed 
effective date of 90 days after the final rule is published. The 
effective date of the change to this section is November 10, 1997.
    The net long position reporting threshold amount for bills, notes, 
and bonds will continue to be provided in the offering announcement for 
the particular security. As currently stated in Sec. 356.10 of the 
uniform offering circular, the offering announcement takes precedence 
whenever any provision of the announcement is inconsistent with any 
provision of the circular. Section 356.10 affords Treasury the 
flexibility to change the net long position reporting threshold amount 
by providing the amount in the offering announcement. As stated in the 
preamble to the proposed rule, this reduction in the threshold amount 
for Treasury bills is being adopted to more effectively achieve a 
Treasury financing objective of ensuring a broad distribution of a 
security issue, whereby no single bidder is awarded more than 35% of 
the public offering less the bidder's net long position as reportable 
under Sec. 356.13.

C. Additional Technical Clarifications

    Two minor technical changes are also being made with this final 
rule. A clarifying note on Treasury's price rounding convention for 
conversion of inflation-indexed security yields to equivalent prices is 
being added to Appendix B, Section III, Paragraphs A and B after each 
resolution. This change was not part of the proposed rule. Also, the 
final rule adopts, with a minor conforming revision, the note at the 
end of Appendix B, Section IV, Paragraph C. This minor revision 
identifies the changes that have been made over the years in the 
bidding conventions for Treasury bill auctions. Treasury is not 
revising any of the examples of formulas in Appendix B, Section IV 
since the change to three decimal competitive bidding will not require 
any changes in the applicable formulas for bills.
    The sample offering announcements of Treasury auctions in Exhibit A 
are also being updated in this final rule to reflect the changes that 
have occurred since they were incorporated in the uniform offering 
circular. Updated samples for Treasury's quarterly financing, weekly 
bills, and CMB auction announcements are included in this final rule 
but were not part of the proposed rule.

Procedural Requirements

    This final rule does not meet the criteria for a ``significant 
regulatory action'' pursuant to Executive Order 12866.
    Although this rule was issued in proposed form to secure the 
benefit of public comment, the notice and public procedures 
requirements of the Administrative Procedure Act are inapplicable, 
pursuant to 5 U.S.C. 553(a)(2). As no notice of proposed rulemaking is 
required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 
601, et seq.) do not apply.
    There is no new collection of information contained in this final 
rule, and, therefore, the Paperwork Reduction Act does not apply. The 
collections of information of 31 CFR part 356 have been previously 
approved by the Office of Management and Budget under Sec. 3507(d) of 
the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) under 
control number 1535-0112. Under this Act, 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.

List of Subjects in 31 CFR Part 356

    Bonds, Federal Reserve System, Government securities, Securities.

    Dated: August 6, 1997.
Gerald Murphy,
Fiscal Assistant Secretary.

    For the reasons set forth in the preamble, 31 CFR Chapter II, 
subchapter B, 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. Section 356.12 is amended by revising paragraph (c)(1)(i) to 
read as follows:


Sec. 356.12  Noncompetitive and competitive bidding.

* * * * *
    (c) * * *
    (1) * * *
    (i) Treasury bills. For all bills except cash management bills, a 
competitive bid must show the discount rate bid, expressed with three 
decimals in .005 percent increments. The third decimal must be either a 
zero or a five, e.g., 5.320 or 5.325. Fractions may not be used. For 
cash management bills, a competitive bid must show the discount rate 
bid, expressed with two decimals in .01 percent increments, e.g., 5.14. 
Fractions may not be used.
* * * * *
    3. Section 356.13 is amended by revising paragraph (a) to read as 
follows:


Sec. 356.13  Net long position.

    (a) Reporting net long positions. When bidding competitively, a 
bidder must report the amount of its net long position when the total 
of all of its bids in an auction plus the bidder's net long position in 
the security being auctioned equals or exceeds the net long position 
reporting threshold amount. The net long position reporting threshold 
amount for any particular security will be as stated in the offering 
announcement for that security. (See Sec. 356.10.) That amount will be 
$1 billion for bills, and $2 billion for notes and bonds, unless 
otherwise stated in the offering announcement. If the bidder either has 
no position or has a net short position and the total of all of its 
bids equals or exceeds the net long position reporting threshold 
amount, e.g., $1 billion for bills and $2 billion for notes and bonds, 
a net long position of zero must be reported. In cases where a bidder 
that is required to report the

[[Page 43094]]

amount of its net long position has more than one bid, the bidder's 
total net long position should be reported in connection with only one 
bid. A bidder that is a customer must report its reportable net long 
position through only one depository institution or dealer. (See 
Sec. 356.14(c).)
* * * * *
    4. Appendix B to Part 356, Section III, Paragraphs A and B are 
amended by adding a note at the end of each paragraph, respectively, to 
read as follows:

Appendix B to Part 356--Formulas and Tables

* * * * *

III. Formulas for Conversion of Inflation-Indexed Security Yields to 
Equivalent Prices

* * * * *
    A. For inflation-indexed securities with a regular first 
interest payment period:
* * * * *
    Note: For the real price (P), Treasury has rounded to three 
places. These amounts are based on 100 par value.

    B. For inflation-indexed securities reopened during a regular 
interest period where the purchase price includes predetermined 
accrued interest:
* * * * *
    Note: For the real price (P), and the inflation-adjusted price 
(P<INF>adj</INF>), Treasury has rounded to three places. For accrued 
interest (A) and adjusted accrued interest (A<INF>adj</INF>), 
Treasury has rounded to six places. These amounts are based on 100 
par value.
* * * * *
    5. Appendix B to part 356, Section IV, Paragraph C is amended by 
revising the note at the end of the paragraph to read as follows:
* * * * *

IV. Computation of Purchase Price, Discount Rate, and Investment Rate 
(Coupon-Equivalent Yield) for Treasury Bills

* * * * *
    C. Conversion of prices to discount rates for Treasury bills of 
all maturities:
* * * * *
    Note: Prior to April 18, 1983, all bills were sold in price-
basis auctions, in which discount rates calculated from prices were 
rounded to three places, using normal rounding procedures. Since 
that time, all bills have been sold only on a discount rate basis. 
For regular Treasury bills--13-, 26-, and 52-week bills--discount 
rates bid were submitted with two decimals in increments of .01 
percent, e.g., 5.32, until 1997, when Treasury instituted a change 
to three decimal bidding in increments of .005 percent, e.g., 5.320 
or 5.325.
* * * * *
    6. Exhibit A to Part 356 is amended by revising the text of 
Sections I through III to read as follows:

Exhibit A to Part 356--Sample Announcements of Treasury Offerings to 
the Public

* * * * *

I. Treasury Quarterly Financing Announcement

For Release When authorized at Press Conference
February 5, 20XX
Contact: Office of Financing 202/XXX-XXXX

Treasury February Quarterly Financing

    The Treasury will auction $17,750 million of 3-year notes, 
$12,000 million of 10-year notes, and $10,000 million of 30-year 
bonds to refund $18,037 million of publicly-held securities maturing 
February 15, 20XX, and to raise about $21,725 million new cash.
    In addition to the public holdings, Federal Reserve Banks hold 
$1,795 million of the maturing securities for their own accounts, 
which may be refunded by issuing additional amounts of the new 
securities.
    The maturing securities held by the public include $1,654 
million held by Federal Reserve Banks as agents for foreign and 
international monetary authorities. Amounts bid for these accounts 
by Federal Reserve Banks will be added to the offering.
    The 10-year note and the 30-year bond being offered today are 
eligible for the STRIPS program.
    Tenders will be received at Federal Reserve Banks and Branches 
and at the Bureau of the Public Debt, Washington, D.C. This offering 
of Treasury securities is governed by the terms and conditions set 
forth in the Uniform Offering Circular (31 CFR Part 356, as amended) 
for the sale and issue by the Treasury to the public of marketable 
Treasury bills, notes, and bonds.
    Details about the notes and bonds are given in the attached 
offering highlights.

Attachment

                Highlights of Treasury Offerings to the Public--February 20XX Quarterly Financing               
                                                February 5, 20XX                                                
                                                                                                                
                                                                                                                
                                                                                                                
Offering Amount:.....................  $17,750 million........  $12,000 million........  $10,000 million        
Description of Offering:                                                                                        
    Term and type of security........  3-year note............  10-year notes..........  30-year bonds          
    Series...........................  U-20XX.................  B-20XX.................  Bonds of February 20XX 
    CUSIP number.....................  912827 XX X............  912827 XX X............  912810 XX X            
    Auction date.....................  February 11, 20XX......  February 12, 20XX......  February 13, 20XX      
    Issue date.......................   February 18, 20XX.....  February 18, 20XX......  February 18, 20XX      
    Dated date.......................  February 18, 20XX......  February 15, 20XX......  February 15, 20XX      
    Maturity date....................  February 15, 20XX......  February 15, 20XX......  February 15, 20XX      
    Interest rate....................  Determined based on the  Determined based on the  Determined based on the
                                        average of accepted      average of accepted      average of accepted   
                                        competitive bids.        competitive bids.        competitive bids      
    Yield............................  Determined at auction..  Determined at auction..  Determined at auction  
    Interest payment dates...........  August 15 and February   August 15 and February   August 15 and February 
                                        15.                      15.                      15                    
    Minimum bid amount...............  $5,000.................  $1,000.................  $1,000                 
    Multiples........................  $1,000.................  $1,000.................  $1,000                 
    Accrued interest payable by        None...................  Determined at auction..  Determined at auction  
     investor.                                                                                                  
    Premium or discount..............  Determined at auction..  Determined at auction..  Determined at auction  
STRIPS Information:                                                                                             
    Minimum amount required..........  Not applicable.........  Determined at auction..  Determined at auction  
    Corpus CUSIP number..............  Not applicable.........  912820 XX X............  912803 XX X            
    Due dates and CUSIP numbers for    Not applicable.........  Not applicable.........  February 15, 20XX--    
     additional TINTs.                                                                    912833 XX X           
The following rules apply to all securities mentioned above:                                                    
Submission of bids:                                                                                             
    Noncompetitive bids..............                                                                           
(2)Accepted in full up to $5,000,000                                                                            
 at the average yield of accepted                                                                               
 competitive bids.                                                                                              
    Competitive bids.................                                                                           
(2)(1) Must be expressed as a yield                                                                             
 with three decimals in increments of                                                                           
 .001%, e.g., 7.123%.                                                                                           
                                                                                                                
(2)(2) Net long position for each                                                                               
 bidder must be reported when the sum                                                                           
 of the total bid amount, at all                                                                                
 yields, and the net long position is                                                                           
 $2 billion or greater.                                                                                         
                                                                                                                
(2)(3) Net long position must be                                                                                
 determined as of one half-hour prior                                                                           
 to the closing time for receipt of                                                                             
 competitive tenders.                                                                                           

[[Page 43095]]

                                                                                                                
Maximum Recognized Bid at a Single                                                                              
 Yield: .                                                                                                       
(2) 35% of public offering.                                                                                     
Maximum Award: ......................                                                                           
(2) 35% of public offering.                                                                                     
Receipt of Tenders:                                                                                             
    Noncompetitive tenders...........                                                                           
(2)Prior to 12:00 noon Eastern                                                                                  
 Standard time on auction day.                                                                                  
    Competitive tenders..............                                                                           
(2)Prior to 1:00 p.m. Eastern                                                                                   
 Standard time on auction day.                                                                                  
Payment Terms .......................                                                                           
(2)Full payment with tender or by                                                                               
 charge to a funds account at a                                                                                 
 Federal Reserve Bank on issue date.                                                                            
                                                                                                                

II. Treasury Weekly Bill Announcement

Embargoed until 2:30 P.M., April 15, 20XX
Contact: Office of Financing, 202/XXX-XXXX

Treasury's Weekly Bill Offering

    The Treasury will auction two series of Treasury bills totaling 
approximately $12,000 million, to be issued April 24, 20XX. This 
offering will result in a paydown for the Treasury of about $6,225 
million, as the maturing publicly-held weekly bills are outstanding 
in the amount of $18,220 million.
    In addition to the public holdings, Federal Reserve Banks for 
their own accounts hold $6,558 million of the maturing bills, which 
may be refunded at the weighted average discount rate of accepted 
competitive tenders. Amounts issued to these accounts will be in 
addition to the offering amount.
    Federal Reserve Banks hold $3,007 million as agents for foreign 
and international monetary authorities, which may be refunded within 
the offering amount at the weighted average discount rate of 
accepted competitive tenders. Additional amounts may be issued for 
such accounts if the aggregate amount of new bids exceeds the 
aggregate amount of maturing bills.
    Tenders for the bills will be received at Federal Reserve Banks 
and Branches and at the Bureau of the Public Debt, Washington, D.C. 
This offering of Treasury securities is governed by the terms and 
conditions set forth in the Uniform Offering Circular (31 CFR part 
356, as amended) for the sale and issue by the Treasury to the 
public of marketable Treasury bills, notes, and bonds.
    Details about each of the new securities are given in the 
attached offering highlights.

Attachment

 Highlights of Treasury Offerings of Weekly Bills To Be Issued April 24,
                                  20XX                                  
                             April 15, 20XX                             
                                                                        
                                                                        
                                                                        
Offering Amount:................  $6,000 million....  $6,000 million    
Description of Offering:                                                
    Term and type of security...  91-day bill.......  182-day bill      
    CUSIP number................  912794 XX X.......  912794 XX X       
    Auction date................  April 21, 20XX....  April 21, 20XX    
    Issue date..................  April 24, 20XX....  April 24, 20XX    
    Maturity date...............  July 24, 20XX.....  October 23, 20XX  
    Original issue date.........  July 25, 20XX.....  April 24, 20XX    
    Currently outstanding.......  $31,725 million...  ..................
    Minimum bid amount..........  $10,000...........  $10,000           
    Multiples...................  $ 1,000...........  $ 1,000           
The following rules apply to all                                        
   securities mentioned above:                                          
Submission of Bids:                                                     
    Noncompetitive bids.........                                        
(1)Accepted in full up to                                               
 $1,000,000 at the average                                              
 discount rate of accepted                                              
 competitive bids.                                                      
    Competitive bids............                                        
(1)(1) Must be expressed as a                                           
 discount rate with three                                               
 decimals in increments of                                              
 .005%, e.g., 7.100%, 7.105%.                                           
                                                                        
(1)(2) Net long position for                                            
 each bidder must be reported                                           
 when the sum of the total bid                                          
 amount, at all discount rates,                                         
 and the net long position is $1                                        
 billion or greater.                                                    
                                                                        
(1)(3) Net long position must be                                        
 determined as of one half-hour                                         
 prior to the closing time for                                          
 receipt of competitive tenders.                                        
Maximum Recognized Bid at a                                             
 Single Yield:.                                                         
(1)35% of public offering.                                              
Maximum Award:..................                                        
(1)35% of public offering.                                              
Receipt of Tenders:                                                     
    Noncompetitive tenders......                                        
(1)Prior to 12:00 noon Eastern                                          
 Daylight Saving time on auction                                        
 day.                                                                   
    Competitive tenders.........                                        
(1)Prior to 1:00 p.m. Eastern                                           
 Daylight Saving time on auction                                        
 day.                                                                   
Payment Terms:..................                                        
(1)Full payment with tender or                                          
 by charge to a funds account at                                        
 a Federal Reserve Bank on issue                                        
 date.                                                                  
                                                                        

III. Treasury Cash Management Bill Announcement

Embargoed until 2:30 p.m., February 25, 20XX
Contact: Office of Financing 202/XXX-XXXX

Treasury to Auction Cash Management Bills

    The Treasury will auction approximately $23,000 million of 45-
day Treasury cash management bills to be issued March 3, 20XX.
    Competitive and noncompetitive tenders will be received at all 
Federal Reserve Banks and Branches. Tenders will not be accepted for 
bills to be maintained on the book-entry records of the Department 
of the Treasury (TREASURY DIRECT). Tenders will not be received at 
the Bureau of the Public Debt, Washington, D.C.
    Additional amounts of the bills may be issued to Federal Reserve 
Banks as agents for foreign and international monetary authorities 
at the average price of accepted competitive tenders.
    This offering of Treasury securities is governed by the terms 
and conditions set forth in the Uniform Offering Circular (31 CFR 
part 356, as amended) for the sale and issue by the Treasury to the 
public of marketable Treasury bills, notes, and bonds.
    Details about the new security are given in the attached 
offering highlights.

Attachment

[[Page 43096]]



     Highlights of Treasury Offering of 45-Day Cash Management Bill     
                            February 25, 20XX                           
                                                                        
                                                                        
                                                                        
Offering Amount........................  $23,000 million.               
Description of Offering:...............                                 
    Term and type of security..........  45-day Cash Management Bill.   
    CUSIP number.......................  912794 XX X.                   
    Auction date.......................  February 27, 20XX.             
    Issue date.........................  March 3, 20XX.                 
    Maturity date......................  April 17, 20XX.                
    Original issue date................  October 17, 20XX.              
    Currently outstanding..............  $24,724 million.               
    Minimum bid amount.................  $10,000.                       
    Multiples..........................  $1,000.                        
    Minimum to hold amount.............  $10,000.                       
    Multiples to hold..................  $1,000.                        
Submission of Bids:                                                     
    Noncompetitive bids................  Accepted in full up to         
                                          $1,000,000 at the average     
                                          discount rate of accepted     
                                          competitive bids.             
    Competitive bids...................  (1) Must be expressed as a     
                                          discount rate with two        
                                          decimals in increments of     
                                          .01%, e.g., 7.12%.            
                                         (2) Net long position for each 
                                          bidder must be reported when  
                                          the sum of the total bid      
                                          amount, at all discount rates,
                                          and the net long position is  
                                          $1 billion or greater.        
                                         (3) Net long position must be  
                                          determined as of one half-hour
                                          prior to the closing time for 
                                          receipt of competitive        
                                          tenders.                      
Maximum Recognized Bid at a Single       35% of public offering.        
 Yield.                                                                 
Maximum Award..........................  35% of public offering.        
Receipt of Tenders:                                                     
    Noncompetitive tenders.............  Prior to 11:00 a.m. Eastern    
                                          Standard time on auction day. 
    Competitive tenders................  Prior to 11:30 a.m. Eastern    
                                          Standard time on auction day. 
Payment Terms..........................  Full payment with tender or by 
                                          charge to a funds account at a
                                          Federal Reserve Bank on issue 
                                          date.                         
                                                                        

* * * * *
[FR Doc. 97-21277 Filed 8-11-97; 8:45 am]
BILLING CODE 4810-39-W