FROM THE OFFICE OF PUBLIC AFFAIRS

August 23, 2004
js-1867

Treasury Calls for Large Position Reports

The Treasury is calling for Large Position Reports from those entities whose reportable position in the 4% Treasury Notes of June 2009 equals or exceeds $2 billion as of close of business Wednesday, August 18, 2004.  This call for Large Position Reports is a test.  Entities with reportable positions in this note equal to or exceeding this $2 billion threshold must report these positions to the Federal Reserve Bank of New York.  Entities with positions in this note below $2 billion are not required to file Large Position Reports.  Reports must be received by the Government Securities Dealer Statistics Unit of the Federal Reserve Bank of New York before noon Eastern Time on Friday, August 27, 2004, and must include the required position and administrative information.  Large Position Reports may be faxed to (212) 720-5030 or delivered to the Bank at 33 Liberty Street, 4th floor.

Details on Call for Large Position Reports

Security Description:                                                  4% Treasury Notes of June 2009, Series J-2009

CUSIP Number:                                                         912828 CL 2

CUSIP Number of STRIPS Principal Component:    912820 KH 9

Maturity Date:                                                            June 15, 2009

Date for Which Information Must Be Reported:      August 18, 2004 as of COB

Large Position Reporting Threshold:                         $2 Billion (Par Value)

Date Report Is Due:                                                   August 27, 2004, before noon Eastern time

            This call for large position information is made under Treasury's large position reporting rules (17 CFR Part 420).  The notice calling for Large Position Reports is also being published in the Federal Register.  This press release and a copy of a sample Large Position Report, which appears in Appendix B of the rules at 17 CFR Part 420, are available at the Bureau of the Public Debt's Internet site at www.publicdebt.treas.gov.

            Questions about Treasury's large position reporting rules should be directed to Treasury's Government Securities Regulations Staff at Public Debt on (202) 504-3632.  Questions regarding the method of submission of Large Position Reports should be directed to the Government Securities Dealer Statistics Unit of the Federal Reserve Bank of New York at (212) 720-7993.

BACKGROUND INFORMATION

Treasury's large position reporting rules (17 CFR Part 420), which were issued in final form on September 12, 1996 (61 FR 48338), established recordkeeping and reporting requirements for entities that control large positions in certain Treasury securities.  An amendment to the rules was issued on December 18, 2002, and was effective January 17, 2003.  The rules put in place an on-demand reporting system which, in response to a notice by Treasury requesting large position information, requires large position reports to be filed by entities that control a position in a particular Treasury security or securities equaling or exceeding the specified large position threshold.  Holders will have three and one-half days in which to respond to the request.

The rules were first effective March 31, 1997.  When the rules were announced, Treasury said that it would issue a test call annually.  Treasury has issued six test calls to date.

The purpose of the rules is to give Treasury the means to acquire information quickly on concentrations of a security's holdings in the event of a market dislocation affecting that security.  The rules are intended to improve the information available to Treasury and other regulators regarding concentrations of control and to ensure that regulators have the tools necessary to monitor the Treasury securities market.  Large positions, in and of themselves, are not inherently harmful, and there is no presumption of manipulative or illegal intent on the part of a controlling entity merely because it is required to submit a large position report in response to these rules.  The Treasury does not expect to have to use such authority for such purposes frequently, but it wants holders' reporting systems to be fully functional in the event it needs to require large position information.

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