31 C.F.R. PART 358—REGULATIONS GOVERNING BOOK-ENTRY CONVERSION OF BEARER CORPORA AND DETACHED BEARER COUPONS
Title 31 - Money and Finance: Treasury
Authority: 12 U.S.C. 391, 31 U.S.C. Ch. 31.
Source: 65 FR 65701, Nov. 1, 2000, unless otherwise noted.
(a) This part applies to the conversion to book-entry of United States Treasury bearer corpora and detached bearer coupons. (b) These instruments are accepted from depository institutions for conversion under the Bearer Corpora Conversion System (BECCS) and Coupons Under Book Entry Safekeeping (CUBES) programs. (1) For coupons converted after November 1, 2000, these regulations supersede the terms and conditions governing CUBES set forth in the written “Agreements to the Terms and Conditions Governing CUBES” signed by depository institutions that previously participated in the CUBES program. (2) Depository institutions that submit bearer corpora and detached bearer coupons are deemed to agree to the terms and conditions in this part and any other requirements we may prescribe. Bearer security means a definitive security payable to the bearer on its face at maturity or when called for redemption before maturity in accordance with its terms. Ownership of a bearer security is not recorded. Title to the security may pass by delivery without endorsement or notice. The only remaining unmatured bearer securities are bearer bonds. BECCS means the Treasury's Bearer Corpora Conversion System. BECCS security means a United States Treasury bearer security converted to book-entry form and held in BECCS. Callable means a United States Treasury security subject to call before maturity. Callable Coupons means the coupons associated with a callable security that are due after the date the security is subject to call. Conversion, as used in this part, means a change in the form of a security from definitive form to book-entry form. Corpus (plural corpora) means the principal portion of a United States Treasury bearer security. Coupon means a definitive bearer interest instrument associated with a United States Treasury bearer security. CUBES means the Treasury's Coupon Under Book-Entry Safekeeping program. CUBES security means a definitive coupon detached from a United States Treasury security and held in CUBES. Definitive security means a security held in paper form. Depository institution means: (1) Any insured bank, mutual savings bank, or savings bank as defined in 12 U.S.C. 1813, or any institution eligible to become an insured bank under 12 U.S.C. 1815; (2) Any insured credit union as defined in 12 U.S.C. 1752, or any credit union eligible to become an insured credit union under 12 U.S.C. 1781; (3) Any member as defined in 12 U.S.C. 1422; and (4) Any savings association as defined in 12 U.S.C. that is an insured depository institution as defined in the Federal Deposit Insurance Act, 12 U.S.C. 1811 et seq., or is eligible to become an insured depository institution under that Act. Non-callable means a United States Treasury bearer security not subject to call before maturity. Non-callable coupons means coupons associated with a non-callable bearer security or coupons associated with a callable bearer security that are due on or before the date on which the callable bearer security is subject to call. Non-transferable means the ownership of a security held in BECCS or CUBES may not be transferred. See §358.5. Transferable means the ownership of a security held in BECCS or CUBES may be transferred. See §358.4 of this part. We (or “us”) refers to the Secretary of the Treasury and the Secretary's delegates at the Treasury Department and the Bureau of the Public Debt. The term also extends to any fiscal or financial agent we designate to act on behalf of the United States. BECCS and CUBES securities are deemed to be securities for the purposes of 31 CFR part 357, subparts A, B, and D, and are governed by that part. Notwithstanding the provisions of 31 CFR part 357, certain BECCS and CUBES securities are non-transferable. See §358.5. Bearer corpora and detached bearer coupons will not be accepted if they are submitted: (a) Within 30 days of their maturity date; or (b) If the call provision has been invoked, within 30 days of their call date. (a) For a callable corpus to be eligible for conversion to a transferable BECCS security, all associated callable coupons must be submitted with the corpus. These callable coupons will be linked with the corpus within BECCS when converted. Once the coupons are linked to the corpus, they may not be transferred separately. (b) A corpus that is not subject to call will be converted to a transferable BECCS security. (c) Non-callable coupons will be converted to transferable CUBES securities. If all of the callable coupons associated with the corpus are not submitted with the corpus, the corpus will be converted to a non-transferable BECCS security. Any remaining callable coupons submitted with the corpus will be converted to individual non-transferable CUBES securities. Bearer corpora and detached bearer coupons must be submitted in accordance with our procedures. They must be accompanied by an approved form executed by an authorized officer of the submitting depository institution. Until we verify the submission, the bearer corpora and detached bearer coupons are subject to rejection or adjustment. Send bearer corpora and detached bearer coupons to be converted to: Bureau of the Public Debt, Division of Customer Service, P. O. Box 426, Parkersburg, WV 26106–0426. We do not charge fees for the conversion of bearer corpora or detached bearer coupons to BECCS or CUBES securities. The following guidelines apply to the transportation of bearer corpora and detached bearer coupons: (a) Shipment from the depository institution is at the risk and expense of the depository institution; (b) Shipment between our designated agent and the Department, if required, is at our risk and expense; and (c) Shipment of securities that are returned to the depository institution is at the risk and expense of the depository institution. Only full dollar amounts can be held in CUBES; principal amounts that include cents cannot be held in CUBES. Upon the conversion of coupons to CUBES, amounts of less than one dollar in aggregate per CUBES CUSIP will not be credited to the account of the depository institution. Example: A depository institution submits five coupons with face amount of $346.88 each, and a total dollar amount of $1,734.40. Upon conversion of these coupons to CUBES, only $1,734.00 will be credited to the depository institution's account. By submitting bearer corpora and detached bearer coupons for conversion to BECCS and CUBES securities, a depository institution represents that it has the authority to request the conversion. We are not liable if the depository institution has no authority to convert the bearer corpora and detached bearer coupons to book-entry form or to take other actions in respect to book-entry accounts in BECCS and CUBES. We are not liable for any loss incurred by the depository institution as a result of its failure to properly follow our procedures. (a) After processing and initial verification, we will transfer the securities accepted to the depository institution's book-entry account, establishing a securities entitlement in TRADES according to 31 CFR part 357 subpart B. (b) We will do the final verification within twenty (20) business days of initial receipt of the bearer corpora and detached bearer coupons. (c) If at any time after this twenty (20) day period we determine that the security was improperly credited to the BECCS or CUBES account of the depository institution, such as in the case of a previously undetected, counterfeit security, we reserve the right to adjust the BECCS or CUBES account. (a) If we make an adjustment to all or part of the submitted securities, we will instruct the depository institution to transfer BECCS or CUBES securities of the same payment date and face amount from the depository institution's account to an account that we designate. (b) If no such BECCS or CUBES securities exist in the depository institution's account, we will instruct the depository institution as to how the adjustment will be made. (c) If the depository institution fails to comply with our instructions within five (5) business days of receipt of the instructions, we reserve the right to debit the master account of the depository institution for the face value of the adjusted bearer corpora and detached bearer coupons. By the submission of the bearer corpora and detached bearer coupons, the depository institution is deemed to agree to this debit. BECCS and CUBES accounts are maintained separately from accounts maintained in Treasury's STRIPS (Separate Trading of Registered Interest and Principal of Securities) program. After bearer corpora and detached bearer coupons have been converted to book-entry form, reconversion to physical form is prohibited. The reconstitution of a BECCS security with CUBES securities or any combination of Treasury obligations is prohibited. (a) Except as otherwise provided by regulation, circular, or written agreement, any fiscal agent designated to act on our behalf is liable for its action or omission only if it failed to exercise ordinary care. (b) We do not assume any responsibility to any party except the sending and receiving depository institutions involved in a BECCS or CUBES transaction. (c) We do not assume any responsibility in connection with a BECCS or CUBES transaction for the insolvency, neglect, misconduct, mistake, or default of another bank or person, including the immediate participants. The submitting depository institution shall indemnify the United States against any loss resulting from the conversion of a bearer corpus that is missing one or more associated callable coupons. We reserve the right to waive or modify any provision of the regulations in this part for the convenience of the United States or to relieve any person of unnecessary hardship, if such action is not inconsistent with law, does not impair existing rights, and does not subject the United States to any substantial expense or liability. We may at any time supplement, amend, or revise the regulations in this part.
Title 31: Money and Finance: Treasury
PART 358—REGULATIONS GOVERNING BOOK-ENTRY CONVERSION OF BEARER CORPORA AND DETACHED BEARER COUPONS
Section Contents
§ 358.0 What does this part cover?
§ 358.1 What special terms apply to this part?
§ 358.2 What regulations cover these securities?
§ 358.3 Are there any bearer corpora or detached bearer coupons that are not eligible for conversion?
§ 358.4 Which bearer corpora or detached bearer coupons are eligible for conversion to transferable BECCS or CUBES securities?
§ 358.5 Which bearer corpora or detached bearer coupons are eligible for conversion to non-transferable BECCS or CUBES securities?
§ 358.6 What is the procedure for converting bearer corpora and detached bearer coupons to book-entry?
§ 358.7 Where do I send my bearer corpora and detached bearer coupons to be converted?
§ 358.8 Are there fees for the conversion of bearer corpora or detached bearer coupons?
§ 358.9 Who is responsible for the cost and risks associated with the shipment of securities?
§ 358.10 How are amounts of less than one dollar credited?
§ 358.11 What is required to establish the authority of a depository institution to request conversion?
§ 358.12 What is Treasury's liability if the depository institution does not have authority to convert securities?
§ 358.13 What is Treasury's liability if the depository institution incurs a loss because it does not follow required procedures?
§ 358.14 What happens when securities are accepted for conversion?
§ 358.15 What happens if securities are adjusted?
§ 358.16 Are BECCS and CUBES accounts maintained separately from the STRIPS program?
§ 358.17 Can BECCS and CUBES securities be reconstituted to physical form?
§ 358.18 What limitations exist on liability?
§ 358.19 Who is responsible for any loss resulting from the conversion of a bearer corpus missing callable coupons?
§ 358.20 Can these regulations be waived?
§ 358.21 Can these regulations be amended?
§ 358.0 What does this part cover?
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§ 358.1 What special terms apply to this part?
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§ 358.2 What regulations cover these securities?
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§ 358.3 Are there any bearer corpora or detached bearer coupons that are not eligible for conversion?
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§ 358.4 Which bearer corpora or detached bearer coupons are eligible for conversion to transferable BECCS or CUBES securities?
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§ 358.5 Which bearer corpora or detached bearer coupons are eligible for conversion to non-transferable BECCS or CUBES securities?
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§ 358.6 What is the procedure for converting bearer corpora and detached bearer coupons to book-entry?
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§ 358.7 Where do I send my bearer corpora and detached bearer coupons to be converted?
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§ 358.8 Are there fees for the conversion of bearer corpora or detached bearer coupons?
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§ 358.9 Who is responsible for the cost and risks associated with the shipment of securities?
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§ 358.10 How are amounts of less than one dollar credited?
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§ 358.11 What is required to establish the authority of a depository institution to request conversion?
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§ 358.12 What is Treasury's liability if the depository institution does not have authority to convert securities?
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§ 358.13 What is Treasury's liability if the depository institution incurs a loss because it does not follow required procedures?
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§ 358.14 What happens when securities are accepted for conversion?
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§ 358.15 What happens if securities are adjusted?
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§ 358.16 Are BECCS and CUBES accounts maintained separately from the STRIPS program?
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§ 358.17 Can BECCS and CUBES securities be reconstituted to physical form?
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§ 358.18 What limitations exist on liability?
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§ 358.19 Who is responsible for any loss resulting from the conversion of a bearer corpus missing callable coupons?
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§ 358.20 Can these regulations be waived?
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§ 358.21 Can these regulations be amended?
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