66174 Federal Register / Vol. 65, No. 214 / Friday, November 3, 2000 / Rules and Regulations

1 Includes both fixed-principal and inflationindexed Treasury securities.

2The uniform offering circular was published as

a final rule on January 5, 1993 (58 FR 412). The

circular, as amended, is codified at 31 CFR part 356.

3We use the term ‘‘fixed-principal’’ to distinguish

such securities from Treasury ‘‘inflated-indexed’’

securities, whose principal amounts are adjusted

periodically for inflation.

4 63 FR 35782 (June 30, 1998).

chronological order by ‘‘Date of Final

Publication’’ to read as follows:

§ 938.15 Approval of Pennsylvania

regulatory program amendments.

* * * * *

Original amendment

submission date

Date of final

publication Citation/description

*******

November 2, 1999 ............... November 3, 2000 ............. 25 Pa. Code 86.1, 86.124, 86.152, 86.156, 86.160, 86.171, 86.182, 86.193,

86.194, 86.195, 86.201, and 86.202.

[FR Doc. 00–28268 Filed 11–2–00; 8:45 am]

BILLING CODE 4310–05–P

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Parts 306 and 356

[Department of the Treasury Circular, Public

Debt Series No. 1–93]

Marketable Book-Entry Treasury Bills,

Notes, and Bonds; Minimum Par

Amounts Required for STRIPS

AGENCY: Bureau of Public Debt, Fiscal

Service, Department of Treasury.

ACTION: Final rule.

SUMMARY: The Department of the

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

issuing in final form amendments to 31

CFR part 306 (General Regulations

Governing U.S. Securities) and 31 CFR

part 356 (Uniform Offering Circular for

the Sale and Issue of Marketable BookEntry Treasury Bills, Notes, and Bonds).

The purpose of these amendments is to

simplify and enhance market

participants’ ability to strip Treasury

fixed-principal securities. ‘‘Stripping’’ a

security means to separate it into its

principal and interest components. The

amendment modifies the minimum and

multiple amounts that are required to

strip Treasury fixed-principal securities

by setting them each at $1,000. It also

eliminates the multiple requirement for

the interest components that result from

stripping, in effect making Treasury

fixed-principal securities strippable ‘‘to

the penny.’’ Further, the amendment

eliminates Exhibit C of this part,

‘‘Minimum Par Amounts for FixedPrincipal STRIPS,’’ since this table will

no longer be necessary. Finally, the

amendment provides us the flexibility

to designate a Treasury note or bond as

strippable even if the note or bond was

not originally designated as strippable

by its offering announcement. This

flexibility will allow us to make eligible

for stripping outstanding five-year

Treasury notes issued prior to

September 30, 1997.

EFFECTIVE DATE: March 1, 2001, except

for the amendment of § 356.31(a), which

is effective November 3, 2000.

ADDRESSES: You may download this

final rule from the Bureau of the Public

Debt’s Internet site at the following

address: 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) or

Chuck Andreatta (Senior Financial

Advisory), Bureau of the Public Debt,

Government Securities Regulations

Staff, (202) 691–3632, or e-mail us at

govsecreg@bpd.treas.gov.

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 to

the public of marketable Treasury bills,

notes, and bonds.1 The uniform offering

circular, in conjunction with offering

announcements, represents a

comprehensive statement of these terms

and conditions.2 This final rule

modifies § 356.31, which pertains to

STRIPS (Separate Trading of Registered

Interest and Principal of Securities). It

also eliminates Exhibit C (‘‘Minimum

Par Amounts for Fixed-Principal

STRIPS’’). In addition, this rule amends

31 CFR 306.128, which pertains to

Treasury’s discretion to supplement,

amend, or revise regulations governing

U.S. securities.

Stripping Treasury Securities ‘‘To the

Penny’’

The STRIPS program, which began in

January 1985, allows holders of bookentry (electronic) Treasury notes and

bonds to separate those securities into

their separate principal and interest

components. These components can

then be held and traded separately as

zero-coupon securities. The interest

components (‘‘TINTs’’), but not the

principal components, are fungible

(interchangeable). This means that

TINTs with the same maturity date have

the same identifying CUSIP number

regardless of the underlying security

from which they were stripped.

Securities with the same CUSIP number

are considered to be the same security.

Since its implementation, the STRIPS

program has required that the par

amount of a fully constituted Treasury

fixed-principal 3 security to be stripped

must be an amount that, based on the

stated interest rate of the security, will

produce a TINT of $1,000 or a multiples

of $1,000. Any amount greater than this

par amount must be in a multiple of that

amount. Once a book-entry security has

been separated, each interest and

principal component can then be

maintained and transferred in multiples

of $1,000. This $1,0000 minimum and

multiple requirement conforms with the

minimum and multiple requirement of

fully constituted Treasury notes and

bonds.

The $1,000 multiple requirement for

the TINTs, however, results in a wide

disparity in the par amounts of fully

constituted (unstripped) securities with

different interest rates that are needed to

produce TINTs in multiples of $1,000.

For example, a note or bond with an

interest rate of 61⁄8 percent requires a

minimum of $1,600,000 of the fully

constituted security for stripping in

order for the resulting TINTs to be in a

multiple of $1,000. In this example, the

resulting TINTs have payment amounts

of $49,000. By contrast, a note or bond

with an interest rate of 61⁄4 percent

requires only a minimum par amount of

$32,000 to be stripped, with resulting

TINTs of $1,000, which is the minimum

amounts for TINTs.

When we implemented a process to

make TINTs from inflation-indexed

securities fungible on March 31, 1999,4

Federal Register / Vol. 65, No. 214 / Friday, November 3, 2000 / Rules and Regulations 66175

5 63 FR 35783 (June 30, 1998).

it was necessary for us to convert the

payment values of the TINTs to ‘‘adjust

values,’’ which could be maintained and

transferred ‘‘to the penny.’’ At that time,

we stated that we would ‘‘consider at a

later date the desirability of making

changes to the minimum and multiple

requirements for fixed-principal TINTs,

* * * and permitting fixed-principal

TINTs to be held in amounts to the

penny.’’ 5

On November 1, 2000, we announced

that, effective March 1, 2001, we will be

changing the minimum and multiple

requirements for stripping Treasury

fixed-principal securities. We have

decided to make these changes because

elimination of the $1,000 minimum and

multiple requirements will make

stripping easier. Market participants

will no longer be required to deliver

fully constituted securities in widely

different amounts depending on the

interest rate of the underlying security.

By simplifying the requirements for

STRIPS, our goal is to enhance the

liquidity and efficiency of the STRIPS

market.

Increasing the Number of Strippable

Securities

Enhancing the liquidity of the STRIPS

market is also our objective in

modifying the STRIPS rules to permit us

to designate a note or bond as strippable

even if the note or bond was not

originally designated as strippable by its

offering announcement. When the

STRIPS program was first implemented

in 1985, only Treasury notes and bonds

with maturities of 10 years or longer

were eligible for stripping. At that time

there was little market interest in

stripping securities with maturities less

than 10 years.

By 1997, however, interest in

stripping shorter-term Treasury notes

had developed. Consequently, on

September 17, 1997, we announced that

all Treasury notes issued on or after

September 30, 1997, were eligible for

STRIPS.

Because Treasury securities currently

can be made eligible for STRIPS only by

being designated as such in their

offering announcements, we have not

been able to make eligible for stripping

outstanding shorter-term (five-year)

notes that were issued prior to

September 30, 1997. This amendment to

the uniform offering circular will allow

us to do so. As a result, we plan to

announce that we are making eligible

for stripping five-year notes issued prior

to September 30, 1997, thereby allowing

for an increase in the supply of TINTs

that mature in the next two years.

Amendments, Revisions, and Deletions

Accordingly, we are amending the

uniform offering circular’s general

paragraph on STRIPS, 356.31(a), so that

we may designate Treasury notes and

bonds as being eligible for stripping at

a later date if they were not designated

as being eligible in their offering

announcement. We are also amending

paragraph 356.31(b)(1), which provides

the minimum par amount and multiple

requirements for stripping Treasury

fixed-principal securities, so that they

may be stripped to the penny. We are

also amending 31 CFR 306.128 in order

to allow outstanding Treasury notes and

bonds that we issued prior to the

effective date of the uniform offering

circular, March 1, 1993, to also be

stripped to the penny. As a result of

these amendments, we are removing

Exhibit C to the uniform offering

circular because this table is no longer

necessary.

We are issuing this amendment in

final form rather than proposed form in

order to more quickly simplify and

expand the STRIPS market. In addition,

there is no negative impact on the

holders of the issues of the securities

affected. This change provides an

additional feature that should enhance

the marketability of these issues.

Procedural Requirements

This final rule is not a ‘‘significant

regulatory action’’ under Executive

Order 12866. The notice and public

procedures and delayed effective date

requirements of the Administrative

Procedure Act also do not apply, under

5 U.S.C. 553(a)(2).

Since no notice of proposed

rulemaking is required, the provisions

of the Regulatory Flexibility Act (5

U.S.C. 601, et seq.) do not apply.

List of Subjects

Bonds, Federal Reserve System,

Government securities, Securities.

For the reasons stated in the

preamble, we amend 31 CFR Chapter II,

Subchapter B, as follows:

PART 306—GENERAL REGULATIONS

GOVERNING U.S. SECURITIES

1. The authority citation for part 306

continues to read as follows:

Authority: 31 U.S.C. Chapter 31; 5 U.S.C.

301; 12 U.S.C. 391.

2. Revise § 306.128 to read as follows:

§ 306.128 Supplements, amendments or

revisions.

The Secretary of the Treasury may at

any time, or from time to time, prescribe

additional supplemental, amendatory or

revised regulations with respect to U.S.

securities. The Secretary also may lower

the minimum and multiple

requirements for stripping marketable

Treasury notes and bonds issued prior

to March 1, 1993, through an

announcement as provided in § 356.31

of this title.

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)

3. 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.

4. Amend § 356.31 as set forth below:

a. Revise the first sentence in

paragraph (a), and

b. Revise paragraph (b)(1) to read as

follows:

§ 356.31 STRIPS.

(a) General. A note or bond may be

designated in the offering

announcement, or later by

announcement by Treasury, as eligible

for the STRIPS program. * * *

(b) Treasury fixed-principal

securities—(1) Minimum par amounts

required for STRIPS. The minimum par

amount of a fixed-principal security that

may be stripped into the components

described in paragraph (a) of this

section is $1,000. Any par amount to be

stripped above $1,000 must be in a

multiple of $1,000.

* * * * *

Exhibit C to Part 356 [Removed]

5. Remove Exhibit C to Part 356.

Dated: October 31, 2000.

Donald V. Hammond,

Fiscal Assistant Secretary.

[FR Doc. 00–28280 Filed 11–1–00; 8:45 am]

BILLING CODE 4810–39–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[CA 241–0244a; FRL–6893–1]

Revisions to the California State

Implementation Plan, Antelope Valley

Air Pollution Control District

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Direct final rule.

SUMMARY: EPA is taking direct final

action to approve revisions to the

Antelope Valley Air Pollution Control