[Federal Register Volume 59, Number 219 (Tuesday, November 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27977]
[[Page Unknown]]
[Federal Register: November 15, 1994]
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Part VI
Department of the Treasury
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Fiscal Service
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31 CFR Parts 306 and 357
General Regulations Governing U.S. Securities and Book-Entry Treasury
Bonds, Notes and Bills; Final Rule
DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Parts 306 and 357
General Regulations Governing U.S. Securities; Regulations
Governing Book-Entry Treasury Bonds, Notes and Bills
AGENCY: Department of the Treasury, Fiscal Service, Bureau of the
Public Debt.
ACTION: Final rule.
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SUMMARY: This rule amends agency regulations to recognize as certifying
individuals for transactions in and assignments of Treasury marketable
securities officers and employees of securities brokers, dealers, and
related institutions that are members of the Securities Transfer Agents
Medallion Program (STAMP), the Stock Exchanges Medallion Program
(SEMP), and the New York Stock Exchange Incorporated Medallion
Signature Program (MSP). The change is being made to conform Treasury
procedures with currently accepted commercial practice, in order to
make it more convenient for investors to have their signatures
certified (guaranteed) in transactions in marketable Treasury
securities.
EFFECTIVE DATE: November 15, 1994.
FOR FURTHER INFORMATION CONTACT: Thomas A. Tracy, Office of the
Assistant Commissioner (Securities and Accounting Services), (202) 874-
4190, or Cynthia Reese, Office of the Chief Counsel, (202) 219-3320.
SUPPLEMENTARY INFORMATION: Treasury has determined that it would be in
keeping with currently accepted commercial practice to recognize
officers and employees of members of the STAMP, SEMP, and MSP signature
guarantee programs as certifying individuals for transactions in and
assignments of marketable Treasury securities. Under the regulations
governing marketable Treasury securities, a certifying individual, in
certifying an investor's signature, makes assurances to Treasury that
the signature is genuine. Depository institutions (such as banks) are
already recognized as institutions whose officers and employees are
eligible to act in this capacity; many of these institutions are
members of STAMP. Treasury currently recognizes their use of the STAMP
signature guarantee stamp as evidence of their authority.
This action is in response to the recent establishment of the
STAMP, SEMP, and MSP signature guarantee programs as a consequence of
the promulgation of Rule 17 Ad-15 (17 CFR 240.17Ad-15), issued under
authority of the Securities Exchange Act of 1934. STAMP, SEMP, and MSP
have been endorsed by the Securities Transfer Association and these
programs are widely accepted in the financial community.
Other changes have been made in order to update, clarify and
conform the certification provisions of existing Part 306, governing
registered definitive securities, to their counterparts in more
recently issued Part 357, governing book-entry Treasury securities.
In addition, a class of certifying officials whose authority is
limited to assignments for redemption of certificated securities is
deleted as obsolete. (See current Sec. 306.45(c)(1).) Such assignments
and, hence, certifications are no longer required. Finally, a cross
reference in Section 357.30 has been corrected.
Procedural Requirements
This final rule does not meet the criteria for a ``significant
regulatory action'', pursuant to Executive Order 12866. The regulatory
review procedures, therefore, do not apply. The notice, public comment,
and delayed effective date provisions of the Administrative Procedure
Act do not apply because this final rule relates to public contracts
and procedures for United States securities, 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
are no collections of information required by this final rule, and,
therefore, the Paperwork Reduction Act does not apply.
List of Subjects in 31 CFR Parts 306 and 357
Banks, Banking, Bonds, Government Securities, Federal Reserve
System.
Dated: November 7, 1994.
Gerald Murphy,
Fiscal Assistant Secretary.
Parts 306 and 357 of Chapter II of Title 31 of the Code of Federal
Regulations are amended as follows:
PART 306--GENERAL REGULATIONS GOVERNING U.S. SECURITIES
1. The authority citation for Part 306 is revised to read as
follows:
Authority: 31 U.S.C. Chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.
2. In Sec. 306.2, paragraphs (p) through (r) are redesignated (r)
through (t), paragraphs (g) through (o) are redesignated (h) through
(p), and new paragraphs (g) and (q) are added to read as follows:
Sec. 306.2 Definitions of words and terms as used in these
regulations.
* * * * *
(g) Depository institution means an entity described in section
19(b)(1)(A)(i)--(vi) of the Federal Reserve Act (12 U.S.C.
461(b)(1)(A)(i)--(vi)). Under section 19(b) of the Federal Reserve Act,
the term depository institution includes:
(1) Any insured bank as defined in 12 U.S.C. 1813 or any bank which
is eligible to make application to become an insured bank under 12
U.S.C. 1815;
(2) Any mutual savings bank as defined in 12 U.S.C. 1813 or any
bank which is eligible to make application to become an insured bank
under 12 U.S.C. 1815;
(3) Any savings bank as defined in 12 U.S.C. 1813 or any bank which
is eligible to make application to become an insured bank under 12
U.S.C. 1815;
(4) Any insured credit union as defined in 12 U.S.C. 1752 or any
credit union which is eligible to make application to become an insured
credit union under 12 U.S.C. 1781;
(5) Any member as defined in 12 U.S.C. 1422; and
(6) Any savings association (as defined in 12 U.S.C. 1813) which is
an insured depository institution, as defined in the Federal Deposit
Insurance Act, 12 U.S.C. 1811, et seq., or is eligible to apply to
become an insured depository institution under such Act.
* * * * *
(q) Signature guarantee program means a signature guarantee program
established in response to Rule 17 Ad-15 (17 CFR 240.17Ad-15), issued
under authority of the Securities Exchange Act of 1934. For the purpose
of the regulations, in this part, the Securities Transfer Agents
Medallion Program (STAMP), the Stock Exchanges Medallion Program
(SEMP), and the New York Stock Exchange, Inc. Medallion Signature
Program (MSP) are recognized by Treasury as such signature guarantee
programs.
* * * * *
3. Section 306.40 is revised to read as follows:
Sec. 306.40 Execution of assignments.
The assignment of a registered security should be executed by the
owner, or his or her authorized representative, in the presence of an
individual authorized to certify assignments. All assignments must be
made on the backs of the securities, unless otherwise authorized by the
Bureau, a Federal Reserve Bank or branch. An assignment by mark (X)
must be witnessed not only by a certifying individual, but also by at
least one other person, who should add an endorsement substantially as
follows: ``Witness to signature by mark,'' followed by the witness'
signature and address.
4. Section 306.45 is revised to read as follows:
Sec. 306.45 Certifying individuals.
(a) General. The following individuals may certify assignments of,
or forms with respect to, securities:
(1) Officers and employees of depository institutions, corporate
central credit unions, and institutions that are members of Treasury-
recognized signature guarantee programs who have been authorized:
(i) Generally to bind their respective institutions by their acts;
(ii) Unqualifiedly to guarantee signatures to assignments of
securities; or
(iii) To certify assignments of securities.
(2) Officers and authorized employees of Federal Reserve Banks and
branches.
(3) Officers of Federal Land Banks, Federal Intermediate Credit
Banks and Banks for Cooperatives, and Federal Home Loan Banks.
(4) Commissioned officers and warrant officers of the Armed Forces
of the United States but only with respect to signatures executed by
Armed Forces personnel, civilian field employees, and members of their
families.
(5) U.S. Attorneys, Collectors of Customs, and Regional
Commissioners, District Directors, and Service Center Directors,
Internal Revenue Service.
(6) Judges and Clerks of U.S. Courts.
(7) Such other persons as the Commissioner of the Public Debt or
his designee may authorize.
(b) Foreign countries. The following individuals are authorized to
certify assignments of, or forms with respect to, securities executed
in a foreign country:
(1) United States diplomatic or consular officials.
(2) Managers and officers of foreign branches of depository
institutions and institutions that are members of Treasury-recognized
signature guarantee programs.
(3) Notaries public and other officers authorized to administer
oaths, provided their official position and authority are certified by
a United States diplomatic or consular official under seal of the
office.
(c) Duties and liabilities of certifying individuals.
(1) General. Except as specified in paragraph (c)(2) of this
section, a certifying individual shall require that the security or
related form be signed in the certifying individual's presence after he
or she has established the identity of the person seeking the
certification. An employee who is not an officer should insert the
words ``Authorized signature'' in the space provided for the title. A
certifying individual and the organization for which he or she is
acting are jointly and severally liable for any loss the United States
may incur as a result of the individual's negligence in making the
certification.
(2) Signature guaranteed. The assignment or related form need not
be executed in the presence of a certifying individual if he or she
unqualifiedly guarantees the signature, in which case the certifying
individual shall, after the signature, add the following endorsement:
``Signature guaranteed, First National Bank of Smithville, Smithville,
NH, by A.B. Doe, President'', and add the date. In guaranteeing a
signature, the certifying individual and the organization for which he
or she is acting warrant to the Department that the signature is
genuine and that the signer had the legal capacity to execute the
assignment or related form.
(3) Absence of signature guaranteed by depository institution. A
security or related form need not be actually signed by the owner in
any case where a certifying individual associated with a depository
institution has placed an endorsement on the security or the form
reading substantially as follows: ``Absence of signature by owner and
validity of transaction guaranteed, Second State Bank of Jonesville,
Jonesville, NC, by B.R. Butler, Vice President''. The endorsement
should be dated, and the seal of the institution should be added. This
form of endorsement is an unconditional guarantee to the Department
that the institution is acting for the owner under proper
authorization.
(d) Evidence of certifying individual's authority. The authority of
a certifying individual to act is evidenced by affixing to the
certification the following:
(1) Officers and employees of depository institutions. The
institution's seal or signature guarantee stamp; if the institution is
an authorized paying agent for U.S. Savings Bonds, a legible imprint of
the paying agent's stamp; or, if the institution is a member of the
Securities Transfer Agents Medallion Program (STAMP), a legible imprint
of the STAMP signature guarantee stamp.
(2) Officers and authorized employees of institutions that are
members of Treasury-recognized signature guarantee programs. A legible
imprint of the program's signature guarantee stamp, e.g., the STAMP,
SEMP, or MSP stamp for members of the Securities Transfer Agents
Medallion Program, the Stock Exchanges Medallion Program, or the New
York Stock Exchange Incorporated Medallion Signature Program,
respectively.
(3) Officers and authorized employees of Federal Reserve Banks.
Whatever is prescribed in procedures established by the Department.
(4) Officers and employees of corporate central credit unions and
other entities listed in paragraph (a)(3) of this section. The entity's
seal.
(5) Notaries public, diplomatic or consular officials. The official
seal or stamp of the office. If the certifying individual has no seal
or stamp, then the official's position must be certified by some other
authorized individual, under seal or stamp, or otherwise proved to the
satisfaction of the Department.
(6) Commissioned or warrant officers of the United States Armed
Forces. A statement which sets out the officer's rank and the fact that
the person executing the assignment or form is one whose signature the
officer is authorized to certify under the regulations in this part.
(7) A judge or clerk of the court. The seal of the court.
(8) Any other certifying individual. The official seal or stamp of
the office. If the certifying individual has no seal or stamp, then the
certifying individual's position and signature must be certified by
some other authorized individual under official seal or stamp, or
otherwise proved to the satisfaction of the Department.
(e) Interested persons not to act as certifying individual. Neither
the transferor, the transferee, nor any person having an interest in a
security involved in the transaction may act as a certifying
individual. However, an authorized officer or employee of a depository
institution or of an institution that is a member of a Treasury-
recognized signature guarantee program may act as a certifying
individual on a security or related form for transfer of a security to
the institution, or any security or related form executed by another
individual on behalf of the institution.
5. Sections 306.46, 306.47, 306.48 and 306.49 are removed.
PART 357--REGULATIONS GOVERNING BOOK-ENTRY TREASURY BONDS, NOTES
AND BILLS
6. The authority citation for Part 357 is revised to read as
follows:
Authority: 31 U.S.C. Chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.
7. Section 357.3 is amended as follows:
A. In the definition of Depository institution, paragraph (g) is
removed, and the introductory text and paragraphs (d), (e), and (f) are
revised to read as follows:
Sec. 357.3 Definitions.
* * * * *
Depository institution means an entity described in section
19(b)(1)(A)(i)-(vi) of the Federal Reserve Act (12 U.S.C.
461(b)(1)(A)(i)-(vi). Under section 19(b) of the Federal Reserve Act,
the term depository institution includes:
* * * * *
(d) Any insured credit union as defined in 12 U.S.C. 1752 or any
credit union which is eligible to make application to become an insured
credit union under 12 U.S.C. 1781;
(e) Any member as defined in 12 U.S.C. 1422; and
(f) Any savings association (as defined in 12 U.S.C. 1813) which is
an insured depository institution, as defined in the Federal Deposit
Insurance Act, 12 U.S.C. 1811, et seq., or is eligible to apply to
become an insured depository institution under such Act.
B. A new definition is added to Sec. 357.3, between the definitions
for Security interest and pledge and Taxpayer identifying number or
TIN, to read as follows:
* * * * *
Signature guarantee program means a signature guarantee program
established in response to Rule 17 Ad-15 (17 CFR 240.17Ad-15), issued
under authority of the Securities Exchange Act of 1934. For the purpose
of the regulations in this part, the Securities Transfer Agents
Medallion Program (STAMP), the Stock Exchanges Medallion Program
(SEMP), and the New York Stock Exchange, Inc. Medallion Signature
Program (MSP) are recognized by Treasury as such signature guarantee
programs.
* * * * *
8. Section 357.30 is amended by revising the first sentence to read
as follows:
Sec. 357.30 Cases of delay or suspension of payment.
If evidence required by the Department in support of a transaction
request is not received by the Department at least twenty (20) calendar
days before the maturity date of the security, or if payment at
maturity has been suspended pursuant to Sec. 357.26(d), then, except as
provided in Sec. 357.27, in cases of reinvestment, the Department will
redeem the security and hold the redemption proceeds in the same form
of registration as the security redeemed, pending further disposition.*
* *
9. Section 357.31 is revised to read as follows:
Sec. 357.31 Certifying individuals.
(a) General. The following individuals may certify signatures on
transaction request forms:
(1) Officers and employees of depository institutions, corporate
central credit unions, and institutions that are members of Treasury-
recognized signature guarantee programs who have been authorized:
(i) Generally to bind their respective institutions by their acts;
(ii) Unqualifiedly to guarantee signatures to assignments of
securities; or
(iii) To certify assignments of securities.
(2) Officers and authorized employees of Federal Reserve Banks.
(3) Officers of Federal Land Banks, Federal Intermediate Credit
Banks and Banks for Cooperatives, the Central Bank for Cooperatives,
and Federal Home Loan Banks.
(4) Commissioned officers and warrant officers of the Armed Forces
of the United States but only with respect to signatures executed by
Armed Forces personnel, civilian field employees, and members of their
families.
(5) Such other persons as the Commissioner of the Public Debt or
his designee may authorize.
(b) Foreign countries. The following individuals are authorized to
certify signatures on transaction request forms executed in a foreign
country:
(1) United States diplomatic or consular officials.
(2) Managers and officers of foreign branches of depository
institutions and institutions that are members of Treasury-recognized
signature guarantee programs.
(3) Notaries public and other officers authorized to administer
oaths, provided their official position and authority are certified by
a United States diplomatic or consular official under seal of the
office.
(c) Duties and liabilities of certifying individuals.
(1) General. Except as specified in paragraph (c)(2) of this
section, a certifying individual shall require that the transaction
request form be signed in the certifying individual's presence after he
or she has established the identity of the person seeking the
certification. An employee who is not an officer should insert the
words ``Authorized signature'' in the space provided for the title. A
certifying individual and the organization for which he or she is
acting are jointly and severally liable for any loss the United States
may incur as a result of the individual's negligence in making the
certification.
(2) Signature guaranteed. The transaction request form need not be
executed in the presence of a certifying individual if he or she
unqualifiedly guarantees the signature, in which case the certifying
individual shall, after the signature, add the following endorsement:
``Signature guaranteed, First National Bank of Smithville, Smithville,
NH, by A.B. Doe, President'', and add the date. In guaranteeing a
signature, the certifying individual and the organization for which he
or she is acting warrant to the Department that the signature is
genuine and that the signer had the legal capacity to execute the
transaction request.
(3) Absence of signature guaranteed by depository institution. A
transaction request form need not be actually signed by the owner in
any case where a certifying individual associated with a depository
institution has placed an endorsement on the form reading substantially
as follows: ``Absence of signature by owner and validity of transaction
guaranteed, Second State Bank of Jonesville, Jonesville, NC, by B.R.
Butler, Vice President''. The endorsement should be dated, and the seal
of the institution should be added. This form of endorsement is an
unconditional guarantee to the Department that the institution is
acting for the owner under proper authorization.
(d) Evidence of certifying individual's authority. The authority of
a certifying individual to act is evidenced by affixing to the
certification the following:
(1) Officers and employees of depository institutions. The
institution's seal or signature guarantee stamp; if the institution is
an authorized paying agent for U.S. Savings Bonds, a legible imprint of
the paying agent's stamp; or, if the institution is a member of the
Security Transfer Agents Medallion Program (STAMP), a legible imprint
of the STAMP signature guarantee stamp.
(2) Officers and authorized employees of institutions that are
members of Treasury-recognized signature guarantee programs. A legible
imprint of the program's signature guarantee stamp, e.g., the STAMP,
SEMP, MSP stamp for members of the Securities Transfer Agents Medallion
Program, the Stock Exchanges Medallion Program, or the New York Stock
Exchange Incorporated Medallion Signature Program, respectively.
(3) Officers and authorized employees of Federal Reserve Banks.
Whatever is prescribed in procedures established by the Department.
(4) Officers and employees of corporate central credit unions and
other entities listed in paragraph (a)(3) of this section. The entity's
seal.
(5) Notaries public, diplomatic or consular officials. The official
seal or stamp of the office. If the certifying individual has no seal
or stamp, then the official's position must be certified by some other
authorized individual, under seal or stamp, or otherwise proved to the
satisfaction of the Department.
(6) Commissioned or warrant officers of the United States Armed
Forces. A statement which sets out the officer's rank and the fact that
the person executing the transaction request is one whose signature the
officer is authorized to certify under the regulations in this part.
(7) Such other persons as the Commissioner of the Public Debt or
his designee may authorize. The evidence specified by the Commissioner
or his designee.
(e) Interested persons not to act as certifying individual. Neither
the transferor, the transferee, nor any person having an interest in a
security involved in the transaction may act as a certifying
individual. However, an authorized officer or employee of a depository
institution or of an institution that is a member of a Treasury-
recognized signature guarantee program may act as a certifying
individual on a transaction request for transfer of a security to the
institution, or any request executed by another individual on behalf of
the institution.
[FR Doc. 94-27977 Filed 11-14-94; 8:45 am]
BILLING CODE 4810-39-P
