Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Rules and Regulations 16165 

based companies in domestic and 

export markets. 

Unfunded Mandates Reform Act of 1995 

Section 4(2) of the Unfunded 

Mandates Reform Act of 1995, 2 U.S.C. 

1503(2), excludes from coverage under 

that Act any proposed or final Federal 

regulation that ‘‘establishes or enforces 

any statutory rights that prohibit 

discrimination on the basis of race, 

color, religion, sex, national origin, age, 

handicap, or disability.’’ Accordingly, 

this rulemaking is not subject to the 

provisions of the Unfunded Mandates 

Reform Act. 

Paperwork Reduction Act of 1995 

This rule does not contain any 

information collection requirements that 

require approval by OMB under the 

Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. 

Dated: March 15, 2012. 

Eric H. Holder, Jr., 

Attorney General. 

[FR Doc. 2012–6748 Filed 3–15–12; 4:45 pm] 

BILLING CODE 4410–13–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Parts 321 and 330 

United States Savings Bonds and 

Notes; Payments 

AGENCY: Bureau of the Public Debt, 

Fiscal Service, Treasury. 

ACTION: Final rule. 

SUMMARY: Treasury is changing the 

procedures for financial institutions to 

transmit and receive settlement for 

redeemed definitive (paper) savings 

securities (savings bonds and savings 

notes) from the EZ Clear system to an 

image-based securities process through 

the Federal Reserve. By changing the 

procedures, Treasury will reduce costs 

and provide for a more efficient method 

of processing savings securities through 

the Federal Reserve. Treasury is making 

discretionary the payment of fees to 

paying agents for the processing of 

redeemed definitive savings securities. 

Treasury will have the flexibility to 

adjust paying agent fees and 

significantly reduce program costs. 

DATES: Effective date: April 11, 2012. 

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: D. 

Michael Linder, Director, Division of 

Program Administration, Office of Retail 

Securities, Bureau of the Public Debt, at 

(304) 480–6319 or 

<mike.linder@bpd.treas.gov>. 

Ann Fowler, Attorney-Adviser, Brian 

Metz, 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 

<dean.adams@bpd.treas.gov>. 

SUPPLEMENTARY INFORMATION: United 

States savings securities are nonmarketable Treasury securities. 

Generally, definitive savings securities 

are redeemed by banks and other 

financial institutions that are authorized 

by Treasury as paying agents to redeem 

eligible savings securities for cash and 

process those securities in accordance 

with Treasury regulations and 

instructions. 

Beginning October 1, 1988, Treasury 

permitted paying agents to transmit and 

receive settlement for redeemed 

definitive savings securities through the 

EZ CLEAR system, under which the 

securities are manually sorted and 

mailed to the appropriate Federal 

Reserve Bank or Branch. Service fees for 

redeemed definitive savings securities 

presented through EZ CLEAR are paid 

to the institution presenting the 

securities to a Federal Reserve Bank. 

Effective April 11, 2012, financial 

institutions will begin to transition the 

submission of redeemed definitive 

savings securities from the EZ CLEAR 

process to an existing image-based 

securities process through the Federal 

Reserve. Use of this existing imagebased securities process will enable 

paying agents to image redeemed 

definitive savings securities in the same 

manner as they do for checks and 

electronically transmit the images to a 

Federal Reserve Processing Site for 

payment. The Federal Reserve will 

provide specific details on the use of the 

image-based securities process while the 

Bureau of the Public Debt will provide 

other detailed instructions to paying 

agents via its Web site at 

www.treasurydirect.gov and other 

established means of communication 

such as FedFlash and FedFocus. The 

new procedures will enable financial 

institutions to eliminate the manual 

sorting of redeemed definitive savings 

securities and mailing them to a Federal 

Reserve Bank for clearing. This will 

simplify and modernize the processing 

of redeemed definitive savings 

securities for paying agents. 

Treasury will be using a more 

streamlined, efficient, and cost-effective 

method for redeeming and processing 

definitive savings securities through a 

Federal Reserve Processing Site to 

which the paying agent is instructed to 

transmit images of redeemed definitive 

savings securities for payment. The 

Federal Reserve Bank of Minneapolis 

will continue to provide fiscal services 

as the designated Treasury Retail 

Securities Site. 

The new procedures eliminate 

exception processing for paying agents 

and greatly reduce their handling costs. 

Accordingly, Treasury is making the 

payment of paying agent fees 

discretionary, which will allow 

Treasury the flexibility to adjust paying 

agent fees and significantly reduce 

Treasury’s program costs. Treasury 

anticipates that most agents will 

continue redeeming definitive savings 

securities as a service to their 

customers. 

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). We 

ask for no collections of information in 

this final rule. Therefore, the Paperwork 

Reduction Act, 44 U.S.C. 3501 et seq., 

does not apply. 

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 will take effect April 11, 2012, 

after we submit a copy of it to Congress 

and the Comptroller General. 

List of Subjects 

31 CFR Part 321 

Banks and banking, Federal Reserve 

System, Government Securities. 

31 CFR Part 330 

Banks and banking, Federal Reserve 

System, Government Securities. 


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16166 Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Rules and Regulations 

Accordingly, for the reasons set out in 

the preamble, Treasury amends 31 CFR 

Chapter II, Subchapter B, as follows: 

PART 321—PAYMENTS BY BANKS 

AND OTHER FINANCIAL 

INSTITUTIONS OF DEFINITIVE UNITED 

STATES SAVINGS BONDS AND 

UNITED STATES SAVINGS NOTES 

(FREEDOM SHARES) 

■ 1. Revise the authority citation for part 

321 to read as follows: 

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

U.S.C. 321; 31 U.S.C. 3105, 3126. 

■ 2. The heading for part 321 is revised 

to read as set forth above. 

■ 3. Revise § 321.0 to read as follows: 

§ 321.0 Purpose. 

These regulations govern the manner 

in which financial institutions may 

qualify and act as paying agents for the 

redemption of: 

(a) Definitive United States Savings 

Bonds of Series A, B, C, D, E, EE, and 

I, and United States Savings Notes 

(Freedom Shares), presented for cash 

payment; and 

(b) Eligible definitive Series E and 

Series EE savings bonds and savings 

notes presented for redemption in 

exchange for Series HH savings bonds 

under the provisions of Department of 

the Treasury Circular, Public Debt 

Series No. 2–80 (31 CFR part 352). 

■ 4. Amend § 321.1 by: 

■ a. Removing the paragraph 

designations and arranging the 

definitions in alphabetical order; 

■ b. Removing the definitions for 

‘‘Central site,’’ ‘‘EZ Clear,’’ ‘‘Federal 

Reserve Bank or Branch,’’ ‘‘Mixed cash 

letter,’’ ‘‘Presenting institution,’’ and 

‘‘Separately sorted cash letter,’’; and 

■ c. Adding the definitions of 

‘‘Definitive security,’’ ‘‘Federal Reserve 

Operating Circular,’’ ‘‘Federal Reserve 

Processing Site,’’ and ‘‘Federal Reserve 

Treasury Retail Securities Site or TRS 

Site’’ to read as follows: 

§ 321.1 Definitions. 

* * * * * 

Definitive security means a Treasury 

security held in paper form. 

* * * * * 

Federal Reserve Operating Circular 

means the operating circular referred to 

in § 321.27, issued by the Federal 

Reserve Banks, that provides 

instructions on the requirements for 

submitting definitive redeemed 

securities to a Federal Reserve 

Processing Site and sets forth the rights 

and obligations of paying agents with 

respect to such securities. 

Federal Reserve Processing Site means 

a Federal Reserve Bank (including any 

Branch or office thereof, as appropriate) 

referred to in § 321.26 to which the 

paying agent, or institution acting on its 

behalf, is instructed to transmit 

redeemed securities for payment 

pursuant to the Federal Reserve 

Operating Circular. 

Federal Reserve Treasury Retail 

Securities Site or TRS Site means a 

Federal Reserve Bank (including any 

Branch or office thereof, as appropriate) 

referred to in § 321.26 that is authorized 

to qualify paying agents and provide 

other fiscal agency services consistent 

with this part. 

* * * * * 

■ 5. Amend § 321.2, by revising 

paragraph (a)(3) to read as follows: 

§ 321.2 Eligible organizations. 

(a) * * * 

(3) Are under the supervision of a 

federal or state regulatory agency or 

equivalent authority; and 

* * * * * 

■ 6. Amend § 321.2 by revising 

paragraph (b) to read as follows: 

§ 321.2 Eligible organizations. 

* * * * * 

(b) An organization that desires to 

redeem securities must first qualify as a 

paying agent. An organization that has 

qualified and is serving as a paying 

agent must: 

(1) Submit redeemed securities 

directly to a Federal Reserve Processing 

Site in accordance with the Federal 

Reserve Operating Circular; and 

(2) Have the ability to receive 

payment of applicable fees by ACH, or 

arrange to obtain one or more of these 

services from another financial 

institution. 

■ 7. In § 321.3: 

■ a. Amend paragraph (a): 

■ i. In the introductory text by adding 

the paragraph designation ‘‘(1)’’ before 

‘‘An eligible’’ and revising the first 

sentence; 

■ ii. By redesignating paragraphs (a)(1) 

and (2) as (a)(1)(i) and (ii), respectively; 

and 

■ iii. By designating the undesignated 

paragraph as (a)(2) and revising it; 

■ b. Amend paragraph (b) by revising 

the first two sentences; and 

■ c. Revise paragraphs (c) and (d). 

The revisions read as follows: 

§ 321.3 Procedure for qualifying and 

serving as paying agent. 

(a) Execution of applicationagreement. (1) An eligible organization 

wishing to act as a paying agent shall 

obtain from, execute, and file an 

application-agreement with a TRS Site. 

* * * 

* * * * * 

(2) For the purpose of these 

regulations, all eligible institutions shall 

make application to a TRS Site. 

* * * * * 

(b) Qualification. A TRS Site, as fiscal 

agent of the United States, is authorized 

to qualify any eligible organization that 

possesses adequate authority under its 

charter to act as paying agent. Upon 

approval of an application-agreement, a 

TRS Site will issue a certificate of 

qualification to the organization. * * * 

(c) Announcement of authority. Upon 

receipt of a certificate of qualification 

from a TRS Site, a financial institution 

may announce or advertise its authority 

to redeem eligible securities for cash 

and to process eligible Series E and EE 

savings bonds and savings notes 

presented for redemption in exchange 

for Series HH savings bonds under the 

provisions of Department of the 

Treasury Circular, Public Debt Series 

No. 2–80 (31 CFR part 352). 

(d) Adverse action. A TRS Site will 

notify an organization in writing if its 

application-agreement to act as paying 

agent is not approved. 

■ 8a. Amend § 321.5 by revising 

paragraphs (a) and (b) to read as follows: 

§ 321.5 Termination of qualification. 

(a) By the Treasury. The Secretary of 

the Treasury, or a designee, may 

authorize a TRS Site to terminate the 

qualification of any paying agent at any 

time, following prior written notice of 

such action to the agent. 

(b) At request of paying agent. A TRS 

Site will terminate the qualification of a 

paying agent upon its written request, 

provided the agent renders a final 

accounting for all redeemed securities 

and is found to have fully complied 

with the terms of its agreement and the 

applicable regulations and instructions. 

* * * * * 

§ 321.7 [Amended] 

■ 8b. In § 321.7(e), in the first sentence, 

remove the reference ‘‘§ 321.1(f)’’ and 

add in its place ‘‘§ 321.1’’. 

■ 9. Amend § 321.8 by revising 

paragraph (d) to read as follows: 

§ 321.8 Redemption-exchange of Series E 

and EE savings bonds and savings notes. 

* * * * * 

(d) Completion of transaction. An 

agent shall transmit for settlement 

eligible securities redeemed on 

exchange and, at the same time, forward 

the exchange application (PD F 3253) 

and any additional cash needed to 

complete the transaction to a TRS Site. 

■ 10. Revise § 321.13 to read as follows: 


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Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Rules and Regulations 16167 

§ 321.13 Cancellation of redeemed 

securities. 

A paying agent shall cancel each 

redeemed security by imprinting the 

word ‘‘PAID’’ on its face and entering 

the amount and date of the actual 

payment and the agent’s name, location, 

and four-digit code number assigned by 

a TRS Site or nine-digit ABA code 

number. The recordation of this data 

shall constitute a certification by the 

agent that the security was redeemed in 

accordance with the provisions of this 

part, that the presenter’s identity and 

entitlement to request payment were 

duly established, and that the proceeds 

were paid to the presenter or remitted 

to a TRS Site in payment for Series HH 

savings bonds. 

■ 11. Revise § 321.14 to read as follows: 

§ 321.14 Transmittal to and settlement with 

a Federal Reserve Processing Site. 

Except for eligible securities 

redeemed on exchange pursuant to 

§ 321.8, a paying agent shall transmit for 

payment all redeemed securities to a 

Federal Reserve Processing Site in 

accordance with the Federal Reserve 

Operating Circular. 

■ 12. Revise § 321.16 to read as follows: 

§ 321.16 Report of erroneous payment. 

If an agent discovers an erroneous 

payment of securities, it should 

immediately advise the Bureau of the 

Public Debt, Parkersburg, WV, as further 

described in the instructions and 

guidance issued pursuant to § 321.27. 

■ 13. Revise § 321.20 to read as follows: 

§ 321.20 Applicability of provisions. 

The provisions of this subpart shall 

apply to securities redeemed by or 

submitted to any Federal Reserve 

Processing Site, any TRS Site, or any 

Treasury office authorized to redeem 

securities, as well as to paying agents. 

■ 14. Revise § 321.22 to read as follows: 

§ 321.22 Forwarding securities not payable 

by an agent. 

Any securities an agent is not 

authorized to pay under the provisions 

of this part should be forwarded for 

redemption to a TRS Site. The requests 

for payment on the securities should be 

properly certified. Any documentary 

evidence required to support the 

transaction should accompany the 

securities. If the securities are presented 

for redemption-exchange, they must 

also be accompanied by a completed 

and signed exchange subscription and 

additional cash needed to complete the 

transaction. Unpaid securities must be 

forwarded to a TRS Site in accordance 

with the rules in this part. The Bureau 

of the Public Debt provides agents with 

instructions and guidance regarding 

forwarding items. These instructions 

identify the specific types of redemption 

cases that should be forwarded and the 

processing instructions that paying 

agents must follow. These instructions 

are available from a TRS Site or online 

at www.treasurydirect.gov. 

■ 15. Revise § 321.23 to read as follows: 

§ 321.23 Paying agent fees and charges. 

(a) Fees. Fees may be paid as outlined 

in this section. A schedule setting out 

the fees, and the basis on which they are 

computed and paid, is separately 

published in the Federal Register. 

Current information is available from a 

TRS Site or online at 

www.treasurydirect.gov. 

(b) Discontinuance, reduction, or 

delay in fees. The Secretary may 

authorize, upon notice in the Federal 

Register, the discontinuance, reduction, 

or delay of fee payments. 

(c) Charges to presenters. A paying 

agent shall not make any charge 

whatever to persons entitled to request 

payment of securities, for redeeming 

them under the provisions of this part. 

■ 16. Revise § 321.25 to read as follows: 

§ 321.25 Payment and retention of 

definitive securities. 

The definitive security must be 

presented and surrendered to the paying 

agent in order to receive payment. An 

agent is prohibited from accepting an 

image, or other copy or reproduction of 

the definitive security, for redemption 

or processing. To ensure that all 

transactions processed by agents are 

properly validated, agents must 

establish and comply with a retention 

period for definitive securities that are 

truncated and converted to an electronic 

image. At a minimum, the agent must 

retain such securities for a period of 

thirty calendar days following the date 

that the agent submitted the electronic 

image of the paid security to a Federal 

Reserve Processing Site. Agents may 

establish longer retention periods for 

definitive securities at their discretion. 

§§ 321.26 and 321.27 [Redesignated as 

§§ 321.28 and 321.29] 

■ 17. Redesignate §§ 321.26 and 321.27 

as §§ 321.28 and 321.29, respectively. 

■ 18. Add a new § 321.26 to read as 

follows: 

§ 321.26 Role of Federal Reserve Banks. 

Federal Reserve Banks (including any 

Branch or office thereof, as appropriate) 

perform services as fiscal agents of the 

United States. These Federal Reserve 

Banks shall perform such services in 

connection with this part as may be 

requested by the Secretary of the 

Treasury, or a designee. These Federal 

Reserve Banks are authorized and 

directed to perform such duties, 

including the issuance of supplemental 

instructions and forms, as may be 

necessary to fulfill the purposes and 

requirements of these regulations. The 

instructions and guidance issued 

pursuant to § 321.27 set forth each 

Federal Reserve Bank that has been 

designated as a Federal Reserve 

Processing Site or as a TRS Site by the 

Secretary of the Treasury, or a designee. 

■ 19. Add a new § 321.27 to read as 

follows: 

§ 321.27 Instructions and guidance. 

(a) The Bureau of the Public Debt will 

provide Federal Reserve Processing 

Sites, TRS Sites, and paying agents with 

instructions and guidance on how to 

process redemption transactions. This 

information is available online at the 

Bureau of the Public Debt’s Web site at 

www.treasurydirect.gov, Federal Reserve 

Processing Sites, and TRS Sites. Paying 

agents must follow these instructions 

and guidance. 

(b) The Federal Reserve Operating 

Circular sets forth additional rights and 

obligations of paying agents with 

respect to redemption transactions. 

Additional instructions and guidance 

are available online at the Federal 

Reserve Bank Services Web site at 

www.FRBservices.org. 

(c) Paying agents are required to 

process redemptions in accordance with 

the terms and conditions cited in 

paragraphs (a) and (b) of this section. 

The Secretary of the Treasury, or a 

designee, reserves the right to hold an 

agent liable whose failure to follow 

these instructions results in an incorrect 

amount being paid for a redeemed 

security. 

* * * * * 

■ 20. Amend the appendix to part 321: 

■ a. Under ‘‘Subpart B’’ by: 

■ i. Revising paragraph 4; and 

■ ii. Revising the first sentence of 

paragraph 5 

■ b. Under ‘‘Subpart C,’’ in paragraph 9, 

by revising the first sentence of 

paragraph (a); 

■ c. Under ‘‘Subpart D’’ by: 

■ i. Revising, under paragraph 13, 

paragraphs (a) and (b); 

■ ii. Revising, under paragraph 14, 

paragraphs (a), (b), and (d); 

■ iii. Revising paragraph 15; 

■ iv. Removing paragraphs 16 and 17; 

and 

■ v. Redesignating paragraph 18 as 

paragraph 16 and revising it; 

■ d. Under ‘‘Subpart E’’ by: 

■ i. Revising the Subpart E heading; 


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16168 Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Rules and Regulations 

■ ii. Redesignating paragraphs 19 

through 22 as paragraphs 17 through 20, 

respectively; and 

■ iii. Revising newly redesignated 

paragraph 17; 

■ e. Under ‘‘Subpart F’’ by redesignating 

paragraph 23 and paragraph 21 and 

revising its heading, paragraphs (a) and 

(d), and revising the last sentence of 

paragraph (e); 

■ f. Under ‘‘Subpart G’’ by: 

■ i. Redesignating paragraphs 24 

through 26 as paragraphs 22 through 24 

respectively; 

■ ii. Revising newly redesignated 

paragraphs 22 and 23; 

■ iii. Adding new paragraph 25; and 

■ iv. Redesignating paragraph 27 and 

paragraph 26 and revising it. 

■ The revisions and addition read as 

follows: 

Appendix to Part 321—Appendix to 

Department of the Treasury Circular 

No. 750, Fourth Revision 

Fiscal Service, Bureau of the Public Debt 

* * * * * 

Subpart B—Procedures for Qualification 

* * * * * 

4. Paying agent code numbers. [§§ 321.3(b) 

and 321.13] The TRS Site may assign a fourdigit code number to each agent it qualifies. 

A separate number may be assigned to each 

branch of the paying agent authorized to 

redeem and submit redeemed securities for 

its own account at a TRS Site. At the paying 

agent’s request, only one four-digit code will 

be assigned for use by all of its branches. 

5. Requalification. [§ 321.3(b)] If there has 

been a change in the corporate name of an 

agent, whether through merger, 

consolidation, sale of assets, or in any other 

manner, the agent may be asked by a TRS 

Site to requalify to reflect the change. * * * 

* * * * * 

Subpart C—Scope of Authority 

* * * * * 

9. * * * 

(a) * * * Securities that an agent may not 

redeem because of the limitations in § 321.9 

should be forwarded to a TRS Site for 

handling. * * * 

* * * * * 

Subpart D—Payment and Transmittal of 

Securities 

* * * * * 

13. * * * 

(a) Redemption value tables. [§ 321.12] The 

Bureau of the Public Debt distributes 

redemption values in various formats and as 

parts of programs for personal computers, for: 

(1) Series E savings bonds, (2) Series EE 

savings bonds, (3) Series I savings bonds, and 

(4) savings notes. Additional tables or 

information may be requested from a TRS 

Site. 

(b) Use of tables. [§ 321.12] Care should be 

exercised to correctly determine the current 

redemption value of the security presented 

for the month in which it is redeemed. 

Incorrect payments can lead to costly and 

time-consuming adjustments for the agent, 

Department of the Treasury, and a TRS Site. 

* * * * * 

14. * * * 

(a) Paying agent stamp. [§ 321.13] Each 

redeemed security must be cancelled by the 

imprint of a payment stamp. The stamp may 

not exceed 11⁄8 inches in any dimension and 

must include the following information in 

the arrangement shown: 

Paid $lll (for recording amount paid) 

Name, location, and four-digit paying agent 

code number assigned by a TRS Site 

(subject to abbreviation and arrangement 

by a TRS Site) or ABA code number. 

Date lll (for recording actual date of 

payment). 

By lll (for use by agent in recording 

initials, or signature, codes, symbols, etc., 

of the officer or employee who approved or 

made the payment.) 

(b) Procurement of stamps. [§ 321.12] A 

paying agent may requisition stamps from a 

TRS Site or purchase its own stamps. Stamps 

not provided by a TRS Site must conform 

exactly in size to that prescribed or approved 

by a TRS Site. To insure legible impressions, 

stamps should be replaced when worn. 

* * * * * 

(d) Redemption-exchange. [§ 321.13] 

Eligible Series E and EE savings bonds and 

savings notes presented for redemptionexchange shall be stamped ‘‘PAID’’ in the 

same manner as securities redeemed for cash, 

but only when all elements of the transaction 

have been completed, including the receipt 

of any additional cash. The exact date of 

redemption shall also be recorded on the 

exchange subscription to enable a TRS Site 

to establish the proper issue date for the 

Series HH savings bonds. An officer or 

authorized employee of the agent shall also 

sign the exchange subscription, in his or her 

official capacity, and furnish other requested 

information that identifies the paying agent. 

* * * * * 

15. Transmittal of securities to a Federal 

Reserve Processing Site. [§ 321.14] An agent 

shall transmit and settle a redeemed security 

in accordance with the rules and instructions 

set forth in the Federal Reserve Operating 

Circular. 

16. Record of securities paid. [§§ 321.14 

and 321.24] A record of the serial number, 

amount paid, and any other information 

necessary to complete the form for an 

‘‘Application for Relief Due to the Loss, 

Theft, or Destruction of Paid United States 

Savings Bonds/Notes’’ (PD F 2517) must be 

retained by the agent for each definitive 

security sent to a Federal Reserve Processing 

Site. Copies or other records of the front and 

back of a paper savings bond must be kept 

confidential, and prints of the bond may be 

made only with the permission of the Bureau 

of the Public Debt or a TRS Site. 

Subpart E—Losses Resulting from Erroneous 

Payments [§ 321.16] 

17. Report of erroneous payment. Any 

erroneous payment that comes to the 

attention of an agent should be reported 

immediately to the Bureau of the Public Debt, 

Parkersburg, WV, as further described in the 

instructions and guidance issued pursuant to 

§ 321.27. 

* * * * * 

Subpart F—Forwarding Items 

21. Securities forwarded to a TRS Site for 

payment. [§ 321.22] 

(a) General. [§ 321.22] Securities presented 

for cash payment or redemption-exchange 

that an agent is not authorized to redeem 

shall be forwarded to a TRS Site, with all 

required supporting documentation and any 

necessary payment instructions. 

* * * * * 

(d) Redemption-exchange. [§ 321.22] For 

redemption-exchange transactions submitted 

as forwarding items, the issue date of the 

Series HH savings bonds will be the first day 

of the month in which a correctly completed 

and signed exchange subscription and full 

payment are received by a TRS Site. 

(e) Partial redemption. [§§ 321.9(l) and 

321.22] * * * The security shall be 

forwarded to a TRS Site. 

Subpart G—Miscellaneous Provisions 

22. Fees and charges. [§ 321.23] Service 

fees are not intended to compensate paying 

agents for the reporting of interest paid as 

part of the redemption value of securities as 

required by Federal Tax Regulations (26 CFR 

1.6049–4). Fees may be paid as set out in 

§ 321.23. 

23. Claims on account of lost securities. 

[§ 321.24] If a security redeemed by an agent 

is lost, stolen, or destroyed while in the 

custody of the agent, or in transit prior to 

settlement or audit, relief will be considered, 

provided the security can be identified by 

serial number. [See paragraph 16 of this 

Appendix regarding the maintenance of 

records of redeemed securities.] The agent 

should resubmit a facsimile of the security to 

obtain settlement in accordance with 

established procedures. Questions 

concerning the established procedures 

should be referred to a TRS Site. 

* * * * * 

25. Payment and retention of definitive 

securities. [§ 321.25] The definitive security 

must be presented to the agent in order to 

receive payment. An agent is prohibited from 

accepting an image, or other copy or 

reproduction of the definitive security, for 

redemption or processing. To ensure that all 

transactions processed by agents are properly 

validated, agents must establish and comply 

with a retention period for definitive 

securities that are truncated and converted to 

an electronic image. At a minimum, the agent 

must retain such definitive securities for a 

period of thirty calendar days following the 

date that the agent submitted the electronic 

image of the paid security to a Federal 

Reserve Processing Site. Agents may 

establish longer retention periods for 

definitive securities at their discretion. 

(a) Example: if the agent paid the presenter 

of a security on May 7, 2012, and submitted 

the security’s electronic image to a Federal 

Reserve Processing Site on May 11, 2012, 

then the retention requirements would 

obligate the agent to retain the definitive 

security, at a minimum, until June 10, 2012. 

(b) During the specified retention period, 

agents must store the securities under 


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Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Rules and Regulations 16169 

suitably secured conditions that safeguard 

customer information. Specifically, the 

securities must be stored in a secured 

location with physical, procedural, and 

systemic controls in place to ensure that 

access to the securities is restricted to 

authorized personnel and that the securities 

are protected from loss, theft, destruction, 

and unauthorized or inadvertent viewing. 

(c) At the end of the retention period, 

agents must destroy the securities in a 

manner that safeguards customer 

information. Specifically, securities must be 

destroyed by burning, mulching, pulping, 

pulverizing, or shredding beyond recognition 

and reconstruction. 

26. Additional information. [§ 321.26] 

Requests for additional advice, clarification 

of the payment regulations or this Appendix, 

and other matters relating to the actions of a 

financial institution as paying agent should 

generally be made to a TRS Site. 

PART 330—REGULATIONS 

GOVERNING PAYMENT UNDER 

SPECIAL ENDORSEMENT OF 

DEFINITIVE UNITED STATES SAVINGS 

BONDS AND UNITED STATES 

SAVINGS NOTES (FREEDOM SHARES) 

■ 21. The authority citation for part 330 

continues to read as follows: 

Authority: 5 U.S.C. 301; 31 U.S.C. 3105. 

■ 22. Revise § 330.0 to read as follows: 

§ 330.0 Purpose. 

The regulations in this part establish 

a procedure under which qualified 

paying agents may specially endorse 

definitive United States Savings Bonds 

of certain series and United States 

Savings Notes (Freedom Shares), and 

either redeem the securities so 

endorsed, or forward them to a TRS Site 

for redemption, with or without the 

owner’s signature to the request for 

payment. 

■ 23. Amend § 330.1 by: 

■ a. Removing the paragraph 

designations and arranging the 

defintions in alphabetical order; 

■ b. Removing the definition for 

‘‘Federal Reserve Bank or Bank’’; 

■ c. Adding the definitions of 

‘‘Definitive security,’’ ‘‘Federal Reserve 

Processing Site,’’ and ‘‘Federal Reserve 

Treasury Retail Securities Site or TRS 

Site’’; and 

■ d. Revising the definitions of ‘‘Savings 

bond(s) or bond(s),’’ ‘‘Security or 

securities,’’ and ‘‘Special endorsement’’. 

The additions and revisions read as 

follows: 

§ 330.1 Definition of terms. 

* * * * * 

Definitive security means a Treasury 

security held in paper form. 

* * * * * 

Federal Reserve Processing Site means 

a Federal Reserve Bank (including any 

Branch or office thereof, as appropriate) 

referred to in 31 CFR part 321, to which 

the paying agent, or institution acting on 

its behalf, is instructed to transmit 

redeemed securities for payment 

pursuant to the Federal Reserve 

Operating Circular. 

Federal Reserve Treasury Retail 

Securities Site or TRS Site means a 

Federal Reserve Bank (including any 

Branch or office thereof, as appropriate) 

referred to in 31 CFR part 321, that is 

authorized to qualify paying agents, 

provide customer service, and provide 

other fiscal agency services under the 

provisions of this part. See § 330.9. 

* * * * * 

Savings bond(s) or bond(s) means a 

definitive United States Savings Bond of 

Series A, B, C, D, E, EE, or I. 

* * * * * 

Security or securities means a savings 

bond or savings note, as defined in 

paragraphs (h) and (i) of this section. 

Special endorsement means a 

procedure under which a security is 

redeemed by an agent, qualified under 

the provisions of this part, for cash or 

on redemption-exchange (or forwarded 

for redemption to a TRS Site), utilizing 

a special stamp placed on the security 

in lieu of a request for payment signed 

by the owner. 

■ 24. Amend § 330.3 by revising the first 

sentence of the endorsement in 

paragraph (a) and revising paragraph (b) 

to read as follows: 

§ 330.3 Special endorsement of securities. 

(a) * * * 

Request by owner and validity of 

transaction guaranteed in accordance 

with Treasury Department Circular No. 

888, as revised. (Name, location and 

paying agent code number assigned by 

a TRS Site.) 

* * * * * 

(b) Endorsement stamps. 

Endorsement stamps may be obtained 

from a TRS Site or, with its approval, 

purchased by the agent. Requests for 

stamps to be furnished or approved by 

a TRS Site must be made in writing by 

an officer of the paying agent. Stamps 

procured by an agent may not exceed a 

space bounded by 13⁄4 inches vertically 

and 3 inches horizontally. They must 

follow exactly the wording prescribed. 

They may also include space for the 

transaction date and the initials or 

signature of the officer or employee 

authorized to approve the transaction. 

* * * * * 

■ 25. Revise § 330.4 to read as follows: 

§ 330.4 Guaranty given to the United 

States. 

By the act of paying or submitting to 

any Federal Reserve Processing Site, any 

TRS Site, or any Treasury office 

authorized to redeem securities, a 

security on which it has affixed the 

special endorsement, a paying agent 

shall be deemed to have: 

(a) Unconditionally guaranteed to the 

United States the validity of the 

transaction, including the identification 

of the owner and the disposition of the 

proceeds or the new bonds, as the case 

may be, in accordance with the 

presenter’s instruction; 

(b) Assumed complete and 

unconditional liability to the United 

States for any loss which may be 

incurred by the United States as a result 

of the transaction; and 

(c) Unconditionally agreed to make 

prompt reimbursement for the amount 

of any loss, upon request of the 

Department of the Treasury. 

■ 26. Amend § 330.6, by revising 

paragraph (c) to read as follows: 

§ 330.6 Securities eligible for special 

endorsement. 

* * * * * 

(c) Securities owned by nonresident 

aliens. As securities owned by a 

nonresident alien individual, or a 

nonresident foreign corporation, 

partnership, or association, may be 

subject to the nonresident alien 

withholding tax, bonds and notes held 

or received by an agent for the account 

of such owners must be forwarded to a 

TRS Site for redemption, even though 

the agent may specially endorse the 

securities. 

■ 27. Amend § 330.7 by removing the 

last two sentences of the section and 

adding a new last sentence to read as 

follows: 

§ 330.7 Payment or redemption-exchange 

by agent. 

* * * Securities so paid should be 

combined with other securities paid 

under that Circular and presented for 

settlement in accordance with 31 CFR 

part 321. 

■ 28. Revise § 330.8 to read as follows: 

§ 330.8 Payment or redemption-exchange 

by a TRS Site. 

Specially endorsed securities that an 

agent is not authorized to redeem for 

cash or on exchange should be 

forwarded to a TRS Site in accordance 

with the instructions set forth in 31 CFR 

part 321. The transmittals must be 

accompanied by appropriate 

instructions governing the transaction 

and the disposition of the redemption 

proceeds. The securities must be kept 


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16170 Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Rules and Regulations 

separate from other securities the agent 

has paid and must be submitted in 

accordance with instructions issued by 

the Bureau of the Public Debt and/or its 

fiscal agents. 

■ 29. Revise § 330.9 to read as follows: 

§ 330.9 Fiscal agents. 

Federal Reserve Banks (including any 

Branch or office thereof, as appropriate) 

perform services as fiscal agents of the 

United States. These Federal Reserve 

Banks shall perform such services in 

connection with this part as may be 

requested by the Secretary of the 

Treasury, or a designee. These Federal 

Reserve Banks are authorized and 

directed to perform such duties, 

including the issuance of supplemental 

instructions and forms, as may be 

necessary to fulfill the purposes and 

requirements of these regulations. The 

instructions and guidance issued 

pursuant to § 321.27 set forth each 

Federal Reserve Bank that has been 

designated as a Federal Reserve 

Processing Site or as a TRS Site by the 

Secretary of the Treasury, or a designee. 

Richard L. Gregg, 

Fiscal Assistant Secretary. 

[FR Doc. 2012–6351 Filed 3–19–12; 8:45 am] 

BILLING CODE 4810–39–P 

DEPARTMENT OF THE TREASURY 

Office of Foreign Assets Control 

31 CFR Part 560 

Iranian Transactions Regulations 

AGENCY: Office of Foreign Assets 

Control, Treasury. 

ACTION: Final rule. 

SUMMARY: The Department of the 

Treasury’s Office of Foreign Assets 

Control is amending the Iranian 

Transactions Regulations to redefine the 

term entity owned or controlled by the 

Government of Iran to substantially 

conform to the definition in the 

amended Iranian Financial Sanctions 

Regulations. 

DATES: Effective: March 20, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Assistant Director for Sanctions 

Compliance & Evaluation, tel.: 202/622– 

2490, Assistant Director for Licensing, 

tel.: 202/622–2480, Assistant Director 

for Policy, tel.: 202/622–4855, Office of 

Foreign Assets Control, or Chief Counsel 

(Foreign Assets Control), tel.: 202/622– 

2410, Office of the General Counsel, 

Department of the Treasury (not toll free 

numbers). 

SUPPLEMENTARY INFORMATION: 

Electronic and Facsimile Availability 

This document and additional 

information concerning OFAC are 

available from OFAC’s Web site 

(www.treas.gov/ofac). Certain general 

information pertaining to OFAC’s 

sanctions programs also is available via 

facsimile through a 24-hour fax-ondemand service, tel.: 202/622–0077. 

Background 

By a separate rulemaking, the 

Department of the Treasury’s Office of 

Foreign Assets Control (‘‘OFAC’’) has 

amended the Iranian Financial 

Sanctions Regulations, 31 CFR part 561 

(the ‘‘IFSR’’), and reissued them in their 

entirety, to implement section 1245(d) 

of the National Defense Authorization 

Act for Fiscal Year 2012. In the 

amended IFSR, OFAC defined the term 

entity owned or controlled by the 

Government of Iran in a way that differs 

slightly from the definition of the term 

in the Iranian Transactions Regulations, 

31 CFR part 560 (the ‘‘ITR’’). To ensure 

that the term entity owned or controlled 

by the Government of Iran is defined 

consistently in these Iran sanctions 

programs, OFAC also is amending the 

ITR to more closely conform the 

definition in section 560.313 of the ITR 

to the one in section 561.322 of the 

IFSR. OFAC intends to issue more 

thorough amendments to the ITR to 

implement Executive Order 13599 of 

February 5, 2012 (‘‘Blocking Property of 

the Government of Iran and Iranian 

Financial Institutions’’)(‘‘E.O. 13599’’), 

at a later date. See 77 FR 7660 (Feb. 13, 

2012), for a Notice containing additional 

information on E.O. 13599 and OFAC 

general and specific licenses set forth in 

or issued pursuant to the ITR. 

Public Participation 

Because the ITR involve a foreign 

affairs function, the provisions of 

Executive Order 12866 and the 

Administrative Procedure Act (5 U.S.C. 

553) requiring notice of proposed 

rulemaking, opportunity for public 

participation, and delay in effective date 

are inapplicable. Because no notice of 

proposed rulemaking is required for this 

rule, the Regulatory Flexibility Act (5 

U.S.C. 601–612) does not apply. 

Paperwork Reduction Act 

The collections of information related 

to the ITR are contained in 31 CFR part 

501 (the ‘‘Reporting, Procedures and 

Penalties Regulations’’). Pursuant to the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507), those collections of 

information have been approved by the 

Office of Management and Budget under 

control number 1505–0164. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless the 

collection of information displays a 

valid control number. 

List of Subjects in 31 CFR Part 560 

Administrative practice and 

procedure, Banks, Banking, Brokers, 

Foreign Trade, Investments, Loans, 

Securities, Iran. 

For the reasons set forth in the 

preamble, the Department of the 

Treasury’s Office of Foreign Assets 

Control amends 31 CFR part 560 as 

follows: 

PART 560—IRANIAN TRANSACTIONS 

REGULATIONS 

■ 1. The authority citation to part 560 

continues to read as follows: 

Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 

2332d; 22 U.S.C. 2349aa–9; 22 U.S.C. 7201– 

7211; 31 U.S.C. 321(b); 50 U.S.C. 1601–1651, 

1701–1706; Pub. L. 101–410, 104 Stat. 890 

(28 U.S.C. 2461 note); Pub. L. 110–96, 121 

Stat. 1011 (50 U.S.C. 1705 note); Pub. L. 111– 

195, 124 Stat. 1312 (22 U.S.C. 8501–8551); 

E.O. 12613, 52 FR 41940, 3 CFR, 1987 Comp., 

p. 256; E.O. 12957, 60 FR 14615, 3 CFR, 1995 

Comp., p. 332; E.O. 12959, 60 FR 24757, 3 

CFR, 1995 Comp., p. 356; E.O. 13059, 62 FR 

44531, 3 CFR, 1997 Comp., p. 217. 

Subpart C—General Definitions 

■ 2. Revise § 560.313 to read as follows: 

§ 560.313 Entity owned or controlled by 

the Government of Iran. 

The term entity owned or controlled 

by the Government of Iran includes any 

corporation, partnership, association, or 

other entity in which the Government of 

Iran owns a 50 percent or greater 

interest or a controlling interest, and 

any entity which is otherwise controlled 

by that government. 

Dated: March 9, 2012. 

Adam J. Szubin, 

Director, Office of Foreign Assets Control. 

[FR Doc. 2012–6606 Filed 3–19–12; 8:45 am] 

BILLING CODE 4810–AL–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket No. USCG–2012–0154] 

Safety Zones; Recurring Events in 

Captain of the Port New York Zone 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of enforcement of 

regulation. 


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