[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR356.25]

[Page 379-380]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
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)--Table of Contents
 
          Subpart C_Determination of Auction Awards; Settlement
 
Sec.  356.25  How does the settlement process work?

    Securities bought in the auction must be paid for by the issue date. 
The payment amount for awarded securities will be the settlement amount 
as defined in Sec.  356.2. (See formulas in Appendix B.) There are 
several ways to pay for securities:
    (a) Payment by debit entry to a deposit account. If you are paying 
by debit entry to a deposit account as provided for in Sec.  356.17 (b) 
and (c), 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 Sec.  356.17 
(c)(1) and (d), we will charge the settlement amount to the specified 
funds account on the issue date.
    (c) Payment through a certificate of indebtedness. If you are paying 
with the redemption proceeds of your certificate of indebtedness as 
provided for in Sec.  356.17(b), we will redeem the certificate of 
indebtedness for the settlement amount of the security and apply the 
proceeds on the issue date.
    (d) Payment with bids. If you paid the par amount with your bids as 
provided for in Sec.  356.17 (c)(2), you may have to pay an additional 
amount, or we may have to pay an amount to you, as follows:
    (1) When we owe an amount to you. If the amount you paid is more 
than the settlement amount, we will refund the balance to you after the 
auction. This will generally occur if you submit payment with your bids. 
A typical example would be an auction where the price is a discount from 
par and there is no accrued interest.
    (2) When you must remit an additional amount. If the settlement 
amount is more than the amount you paid, we will notify you of the 
additional amount due. You may owe us such an

[[Page 380]]

additional amount if the auction calculations result in a premium or if 
accrued interest or an inflation adjustment is due. If your securities 
are to be held in TreasuryDirect[supreg], we will collect this amount 
through the same payment method that you previously authorized for the 
transaction. If your securities are to be held in Legacy Treasury 
Direct[supreg], you will be responsible for remitting this additional 
amount immediately.

[69 FR 45202, July 28, 2004, as amended at 70 FR 57440, Sept. 30, 2005]