40438 Federal Register / Vol. 87, No. 129 / Thursday, July 7, 2022 / Rules and Regulations 

1The Uniform Offering Circular was published as 

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

2 In 2009, Treasury amended the UOC to remove 

a provision regarding auction bids that fulfilled a 

guarantee. The guarantee provision was intended 

for multiple-price auctions which Treasury no 

longer conducts. 74 FR 26084 (June 1, 2009). 

3On March 1, 2011, Treasury published in the 

Federal Register a final amendment to the UOC that 

established a minimum interest rate of 1⁄8 of one 

percent for all new Treasury note and bond issues, 

including inflation-protected securities (76 FR 

11079). 

11590; phone: (516) 228–7300; email: 

chirayu.a.gupta@faa.gov. 

(2) Refer to Transport Canada AD CF– 

2021–24, dated July 21, 2021, for more 

information. You may view the Transport 

Canada AD at https://www.regulations.gov in 

Docket No. FAA–2022–0450. 

(l) Material Incorporated by Reference 

(1) The Director of the Federal Register 

approved the incorporation by reference 

(IBR) of the service information listed in this 

paragraph under 5 U.S.C. 552(a) and 1 CFR 

part 51. 

(2) You must use this service information 

as applicable to do the actions required by 

this AD, unless the AD specifies otherwise. 

(i) Diamond Aircraft Industries Mandatory 

Service Bulletin No. MSB 40–093, Rev. 0, 

dated July 6, 2021. 

(ii) Diamond Aircraft Industries Mandatory 

Service Bulletin No. MSB 40NG–065, Rev. 1, 

dated July 6, 2021. 

(iii) Diamond Aircraft Industries 

Mandatory Service Bulletin No. MSB F4–039, 

Rev. 0, dated July 6, 2021. 

(3) For service information identified in 

this AD, contact Diamond Aircraft Industries 

Inc., Att: Thit Tun, 1560 Crumlin Road, 

London, N5V 1S2, Canada; phone: (519) 457– 

4000; email: T.Tun@diamondaircraft.com. 

(4) You may view this service information 

at the FAA, Airworthiness Products Section, 

Operational Safety Branch, 901 Locust, 

Kansas City, MO 64106. For information on 

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call (817) 222–5110. 

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ibr-locations.html. 

Issued on June 13, 2022. 

Christina Underwood, 

Acting Director, Compliance & Airworthiness 

Division, Aircraft Certification Service. 

[FR Doc. 2022–14335 Filed 7–6–22; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 356 

Sale and Issue of Marketable BookEntry Treasury Bills, Notes, and Bonds 

AGENCY: Department of the Treasury. 

ACTION: Final rule. 

SUMMARY: The Department of the 

Treasury (Treasury) is issuing in final 

form several technical amendments to 

the terms and conditions for the sale 

and issuance to the public of marketable 

Treasury securities. These amendments 

are designed to modernize the 

regulations, enhance clarity, and 

improve consistency in the use of 

terminology. 

DATES: Effective August 8, 2022. 

ADDRESSES: This final rule is available at 

http://www.treasurydirect.gov. 

FOR FURTHER INFORMATION CONTACT: Lori 

Santamorena (Executive Director), Kurt 

Eidemiller (Associate Director), Kevin 

Hawkins (Associate Director) or John 

Garrison (Associate Director), 

Government Securities Regulations 

Staff, Bureau of the Fiscal Service, 

Department of the Treasury, (202) 504– 

3632 or email us at govsecreg@

fiscal.treasury.gov. 

SUPPLEMENTARY INFORMATION: Chapter 

31 of Title 31 of the United States Code 

authorizes the Secretary of the Treasury 

to issue United States obligations, and 

to offer them for sale under such terms 

and conditions as the Secretary may 

prescribe. Title 31 CFR part 356, also 

referred to as the Uniform Offering 

Circular (UOC), sets out the terms and 

conditions for the sale and issuance by 

Treasury to the public of marketable, 

book-entry Treasury bills, notes, and 

bonds.1 The UOC, together with the 

auction announcement for each 

Treasury security auction, represents a 

comprehensive statement of those terms 

and conditions. Following a review of 

the UOC, Treasury is issuing in final 

form eight technical amendments. 

The first change removes specific 

references to the Legacy Treasury Direct 

and TreasuryDirect systems. This 

change removes outdated references to 

legacy technology and reduces the 

likelihood that Treasury would need to 

make future regulation changes based 

on technological developments. 

The second change removes 

references to ‘‘press release’’ throughout 

part 356 to allow for a range of 

distribution methods for Treasury 

auction announcements and results. 

The third change modifies § 356.5 

paragraphs (b)(2) and (c)(2) to clarify 

that Treasury does not conduct 

unscheduled reopenings of Treasury 

inflation-protected securities (TIPS). In 

a reopening, Treasury auctions an 

additional amount of an outstanding 

security. Treasury’s planned auction 

schedule includes regularly scheduled 

reopenings. In an unscheduled 

reopening, the highest accepted yield 

determined in the auction of a new, 

non-indexed note or bond 

coincidentally aligns with the yield of 

an outstanding non-indexed note or 

bond with the same maturity date. In 

that situation, Treasury reopens the 

outstanding non-indexed note or bond 

rather than issuing a new security. 

Because TIPS have a 6-digit, inflationindex ratio set when each security is 

issued, there is an extremely low 

probability that a previously issued 

TIPS will have an initial index ratio, 

coupon rate, and maturity date that 

coincidentally aligns with a newly 

issued TIPS. Therefore, Treasury does 

not conduct unscheduled reopenings of 

TIPS. 

The fourth change increases the 

noncompetitive bid limit for all 

marketable Treasury securities auctions 

from $5 million to $10 million 

considering the increase in auction sizes 

and inflation over several decades. This 

change aims to encourage participation 

by smaller investors by expanding their 

opportunities to bid noncompetitively. 

The fifth change adds clarifying 

language at § 356.14(a) to confirm that 

the bidder has been properly identified 

when submitting a customer bid in an 

auction. Currently, the UOC does not 

directly address the identification of 

customers on bids that satisfy guarantee 

arrangements.2 To eliminate any 

potential ambiguity regarding such bids, 

the UOC is being amended to explicitly 

require the identification of customers 

on bids that satisfy guarantee 

arrangements. Treasury expects any 

entity guaranteeing bids to confirm that 

the customer has been properly 

identified on the bid and raise any 

questions with Treasury staff. 

The sixth change revises paragraph 

§ 356.20(b) to clarify that new inflationprotected notes and bonds are issued 

with a minimum interest rate of 1⁄8 of 

one percent.3

The seventh change revises certain 

examples in Appendix B to part 356 to 

replace references to ‘‘inflationindexed’’ with ‘‘inflation-protected’’ for 

consistency. 

The eighth change adds clarifying 

language in Appendix B to part 356 to 

the examples for calculating the 

investment rate (coupon-equivalent 

yield) for Treasury bills. The clarifying 

language explains how to calculate 

variable y when the year following the 

issue date of a Treasury bill is a leap 

year. 

To provide market participants and 

Treasury sufficient time to modify their 

systems and to make any other 


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Federal Register / Vol. 87, No. 129 / Thursday, July 7, 2022 / Rules and Regulations 40439 

operational changes that may be needed, 

we are providing a 30-day delayed 

effective date. 

Procedural Requirements 

Executive Order 12866. This final rule 

is not a significant regulatory action 

pursuant to Executive Order 12866. 

Administrative Procedure Act (APA). 

This rule falls within the contract 

exception to the APA, 5 U.S.C. 

553(a)(2), because it relates to United 

States securities, which are contracts 

between Treasury and the owner of the 

security. 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 final 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. 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 

final rule is not a major rule pursuant 

to the CRA, 5 U.S.C. 801 et seq. 

List of Subjects in 31 CFR Part 356 

Banks, Banking, Bonds, Federal 

Reserve System, Government securities, 

Reporting and recordkeeping 

requirements, Securities. 

Text of Amendments 

For the reasons set forth in the 

preamble, amend 31 CFR part 356 as 

follows: 

PART 356—SALE AND ISSUE OF 

MARKETABLE BOOK-ENTRY 

TREASURY BILLS, NOTES, AND 

BONDS (DEPARTMENT OF THE 

TREASURY CIRCULAR, FISCAL 

SERVICE SERIES NO. 1–93) 

■ 1. The authority citation for part 356 

continues to read as follows: 

Authority: 5 U.S.C. 301; 31 U.S.C. 3102, et 

seq.; 12 U.S.C. 391. 

■ 2. Amend § 356.2 by revising the 

definitions of ‘‘Book-entry security’’, 

‘‘Index rate’’, removing the definition of 

‘‘Legacy Treasury Direct’’, revising the 

definition of ‘‘Security’’, and removing 

the definition of ‘‘TreasuryDirect’’. 

The revisions read as follows: 

§ 356.2 What definitions do I need to know 

to understand this part? 

Book-entry security means a security 

that is issued or maintained as an 

accounting entry or electronic record. 

(See § 356.4.) 

* * * * * 

Index rate means the simple-interest 

money market yield, computed on an 

actual/360 basis and rounded to nine 

decimal places, from the highest 

accepted discount rate of a 13-week bill 

auction as announced in the Treasury 

auction results. (See appendix B for 

methods and examples for computing 

the index rate.) 

* * * * * 

Security means a Treasury bill, note, 

or bond, each as described in this part. 

Security also means any other obligation 

we issue that is subject to this part 

according to its auction announcement. 

Security includes an interest or 

principal component under the STRIPS 

program, as well as a certificate of 

indebtedness. 

* * * * * 

■ 3. Amend § 356.4 by revising the 

introductory text and paragraph (b) and 

removing paragraph (c) to read as 

follows: 

§ 356.4 What are the book-entry systems 

in which auctioned Treasury securities may 

be issued or maintained? 

We issue marketable Treasury 

securities into the commercial bookentry system and into accounts 

maintained directly on the records of 

the Department of the Treasury 

(‘‘securities held directly with 

Treasury’’). 

* * * * * 

(b) Securities held directly with 

Treasury. Account holders maintain 

accounts in a book-entry system directly 

on the records of the Department of the 

Treasury. Securities held directly with 

Treasury are subject to the terms and 

conditions in this part, the auction 

announcement, and the regulations 

governing the system in which the 

securities are held. (See subtitle B, 

chapter II of this title.) 

■ 4. Amend § 356.5 by revising the 

introductory text and footnote 1 to 

paragraph (b)(1) introductory text and 

adding paragraphs (b)(2)(vi) and 

(c)(2)(vi) to read as follows: 

§ 356.5 What types of securities does the 

Treasury auction? 

We offer securities under this part 

exclusively in book-entry form and as 

direct obligations of the United States 

issued under Chapter 31 of Title 31 of 

the United States Code. When we issue 

additional securities with the same 

CUSIP number as outstanding 

securities, we consider them to be the 

same securities as the outstanding 

securities. 

* * * * * 

(b) * * * 

(1) * * * 

1We use the term ‘‘non-indexed’’ in 

this part to distinguish such notes and 

bonds from ‘‘inflation-protected 

securities’’ and ‘‘floating rate notes.’’ We 

refer to non-indexed notes and nonindexed bonds as ‘‘notes’’ and ‘‘bonds’’ 

in official Treasury publications, such 

as auction announcements and auction 

results, as well as in auction systems. 

(2) * * * 

(vi) Are only reopened as scheduled 

or announced. 

* * * * * 

(c) * * * 

(2) * * * 

(vi) Are only reopened as scheduled 

or announced. 

■ 5. Amend § 356.11 by revising the first 

sentence of paragraph (a)(1), revising 

paragraph (c), and removing paragraph 

(d) to read as follows: 

§ 356.11 How are bids submitted in an 

auction? 

(a) * * * 

(1) All bids must be submitted using 

an approved method, which depends on 

the system into which the awarded 

securities will be issued. (See § 356.4.) 

* * * 

* * * * * 

(c) Securities held directly with 

Treasury. You must submit your bids in 

accordance with the regulations 

governing the system in which the 

security will be held. You may reinvest 

the proceeds of a maturing security held 

directly with Treasury as permitted by 

the system in which it is held. 

■ 6. Amend § 356.12 by revising 

paragraphs (b)(1) and (c)(3) to read as 

follows: 

§ 356.12 What are the different types of 

bids and do they have specific 

requirements or restrictions? 

* * * * * 

(b) * * * 

(1) Maximum bid. You may not bid 

noncompetitively for more than $10 

million. The maximum bid limitation 

does not apply if you are bidding solely 

through a request to reinvest the 

proceeds of a maturing security held 

directly with Treasury, which is a 

noncompetitive bid. 

* * * * * 

(c) * * * 

(3) Additional restrictions. You may 

not bid competitively in an auction in 

which you are bidding 

noncompetitively. You may not bid 

competitively for securities to be held 

directly with Treasury. 


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40440 Federal Register / Vol. 87, No. 129 / Thursday, July 7, 2022 / Rules and Regulations 

■ 7. Amend § 356.14 by revising 

paragraph (a) to read as follows: 

§ 356.14 What are the requirements for 

submitting bids for customers? 

(a) Institutions that may submit bids 

for customers. Only depository 

institutions or dealers may submit bids 

for customers (see definitions at 

§ 356.2), or for customers of 

intermediaries, under the requirements 

set out in this section. If a bid fulfills a 

guarantee to sell to a customer a 

specified amount of securities at the 

price determined in the auction, then 

the bid is a bid of that customer. 

* * * * * 

■ 8. Amend § 356.17 by revising 

paragraph (b), removing paragraph (c), 

and redesignating paragraph (d) as 

paragraph (c) to read as follows: 

§ 356.17 How and when do I pay for 

securities awarded in an auction? 

* * * * * 

(b) Securities held directly with 

Treasury. You must pay for your 

awarded securities by a debit entry to a 

deposit account that you are authorized 

to debit or by using the redemption 

proceeds of your certificate of 

indebtedness. Payment by debit entry 

occurs on the settlement date for the 

actual settlement amount due. (See 

§ 356.25.) 

* * * * * 

■ 9. Amend § 356.20 by revising 

paragraph (b) introductory text to read 

as follows: 

§ 356.20 How does the Treasury determine 

auction awards? 

* * * * * 

(b) Determining the interest rate for 

new non-indexed and inflationprotected note and bond issues. If a 

Treasury non-indexed or inflationprotected note or bond auction results 

in a yield lower than 0.125 percent, the 

interest rate will be set at 1⁄8 of one 

percent, and successful bidders’ award 

prices will be calculated accordingly. 

(See appendix B to this part for 

formulas.) 

* * * * * 

■ 10. Amend § 356.22 by revising 

paragraph (a) to read as follows: 

§ 356.22 Does the Treasury have any 

limitations on auction awards? 

(a) Awards to noncompetitive bidders. 

The maximum award to any 

noncompetitive bidder is $10 million. 

This limit does not apply to bidders 

bidding solely through a request to 

reinvest the proceeds of a maturing 

security held directly with Treasury. 

* * * * * 

■ 11. Amend § 356.23 by revising 

paragraph (a) and paragraph (b) 

introductory text to read as follows: 

§ 356.23 How are the auction results 

announced? 

(a) After the conclusion of the 

auction, we will make the auction 

results available on our website at 

http://www.treasurydirect.gov. 

(b) The auction results will include 

such information as: 

* * * * * 

■ 12. Amend § 356.25 by revising 

paragraphs (a) and (b) and removing 

paragraph (d) to read as follows: 

§ 356.25 How does the settlement process 

work? 

* * * * * 

(a) Payment by debit entry to a deposit 

account. If you are paying by debit entry 

to a deposit account as provided for in 

§ 356.17(b), we will charge the 

settlement amount to the specified 

account on the issue date. 

(b) Payment by authorized charge to 

a funds account. Where the submitter’s 

method of payment is an authorized 

charge to the funds account of a 

depository institution as provided for in 

§ 356.17(c), we will charge the 

settlement amount to the specified 

funds account on the issue date. 

* * * * * 

■ 13. Amend § 356.30 by revising the 

paragraph heading to paragraph (c)(2) 

and removing paragraph (c)(3) to read as 

follows: 

§ 356.30 When does the Treasury pay 

principal and interest on securities? 

* * * * * 

(c) * * * 

(2) Securities held directly with 

Treasury. * * * 

■ 14. Amend appendix B to part 356: 

■ a. In section I.C, by revising the first 

four sentences in paragraph 1 and the 

first two sentences in paragraph 3; 

■ b. In section III.A and B, by removing 

‘‘inflation-indexed’’ and adding in its 

place ‘‘inflation-protected’’ wherever it 

occurs; and 

■ c. In section VI.D, by revising the first 

occurrence of the variable y in 

paragraphs 1 and 2. 

The revisions read as follows: 

Appendix B to Part 356—Formulas and 

Tables 

* * * * * 

I. * * * 

C. * * * 

1. * * * We issue floating rate notes with 

a daily interest accrual feature. This means 

that the interest rate ‘‘floats’’ based on 

changes in the representative index rate. We 

pay interest on a quarterly basis. The index 

rate is the High Rate of the 13-week Treasury 

bill auction announced on the auction results 

that has been converted into a simple-interest 

money market yield computed on an actual/ 

360 basis and rounded to nine decimal 

places. * * * 

* * * * * 

3. * * * In general, accrued interest for a 

particular calendar day in an accrual period 

is calculated by using the index rate from the 

most recent auction of 13-week bills that took 

place before the accrual day, plus the spread 

determined at the time of a new floating rate 

note auction, divided by 360, subject to a 

zero-percent minimum daily interest accrual 

rate. However, the rate determined in a 13- 

week bill auction that takes place in the twobusiness-day period prior to a settlement date 

or interest payment date will be excluded 

from the calculation of accrued interest for 

purposes of the settlement amount or interest 

payment. * * * 

* * * * * 

VI. * * * 

D. * * * 

1. * * * 

y = number of days in year following the 

issue date; normally 365, but if the period 

from the issue date to the same date 1 year 

ahead contains February 29, then y is 366. 

(e.g., 2020 is a leap year. Suppose the issue 

date for a 26-week bill is February 28, 2019. 

The date 1 year ahead is February 28, 2020. 

That 1-year period from the issue date of the 

bill does not contain ‘‘February 29,’’ therefore 

y = 365. Now suppose the issue date of a 26- 

week bill is March 1, 2019. The date 1 year 

ahead is March 1, 2020. That 1-year period 

from the issue date of the bill contains 

‘‘February 29,’’ therefore y = 366.) 

* * * * * 

2. * * * 

y = number of days in year following the 

issue date; normally 365, but if the period 

from the issue date to the same date 1 year 

ahead contains February 29, then y is 366. 

(e.g., 2020 is a leap year. Suppose the issue 

date for a 26-week bill is February 28, 2019. 

The date 1 year ahead is February 28, 2020. 

That 1-year period from the issue date of the 

bill does not contain ‘‘February 29,’’ therefore 

y = 365. Now suppose the issue date of a 26- 

week bill is March 1, 2019. The date 1 year 

ahead is March 1, 2020. That 1-year period 

from the issue date of the bill contains 

‘‘February 29,’’ therefore y = 366.) 

David A. Lebryk, 

Fiscal Assistant Secretary. 

[FR Doc. 2022–13409 Filed 7–6–22; 8:45 am] 

BILLING CODE 4810–AS–P 


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