Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, and Bonds

Issuing agencies

Abstract

The Department of the Treasury ("Treasury" or "we") is issuing in final form amendments to the Uniform Offering Circular for the Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, and Bonds (the "UOC" or "auction rules"). These amendments make technical changes to several sections of the UOC to remove outdated references and to be consistent with Treasury's current auction terminology. These amendments also modify the requirements for submitting noncompetitive customer bids, to require submitters to provide all customer bid information prior to the noncompetitive auction close.

Full Text

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<title>Federal Register, Volume 91 Issue 198 (Thursday, October 15, 2026)</title>
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[Federal Register Volume 91, Number 198 (Thursday, October 15, 2026)]
[Rules and Regulations]
[Pages 65456-65460]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21069]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 356


Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, 
and Bonds

AGENCY: Bureau of the Fiscal Service, Department of the Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury (``Treasury'' or ``we'') is 
issuing in final form amendments to the Uniform Offering Circular for 
the Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, and 
Bonds (the ``UOC'' or ``auction rules''). These amendments make 
technical changes to several sections of the UOC to remove outdated 
references and to be consistent with Treasury's current auction 
terminology. These amendments also modify the requirements for 
submitting noncompetitive customer bids, to require submitters to 
provide all

[[Page 65457]]

customer bid information prior to the noncompetitive auction close.

DATES: 
    Effective date: October 15, 2026.
    Applicability Date: The changes to 31 CFR 356.14 and 356.23 apply 
to all auctions of Treasury marketable securities beginning with the 
first Treasury marketable securities auction conducted using Treasury's 
upgraded auction system, which will be communicated to market 
participants in advance of the first applicable auction. All other 
changes apply as of the effective date.

FOR FURTHER INFORMATION CONTACT: Lori Santamorena, Kevin Hawkins, John 
Garrison, or Luisa Jou-Penchev, Office of Securities Regulatory 
Operations, Office of Financing, at <a href="/cdn-cgi/l/email-protection#eb8c849d988e88998e8cab8d8298888a87c59f998e8a989e9992c58c849d"><span class="__cf_email__" data-cfemail="096e667f7a6c6a7b6c6e496f607a6a6865277d7b6c687a7c7b70276e667f">[email&#160;protected]</span></a> or 
202-504-3632.

SUPPLEMENTARY INFORMATION:

Background

    The UOC, codified at 31 CFR part 356, 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 and 
the offering announcement for each auction represent a comprehensive 
statement of the auction terms and conditions.\2\
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    \1\ The UOC was published as a final rule in January 1993. 58 FR 
412.
    \2\ See 31 CFR 356.10.
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Discussion

    In September 2026, Treasury announced plans to upgrade the auction 
system for the sale of marketable Treasury securities.\3\ In connection 
with the planned upgrade, Treasury is adopting amendments to the UOC to 
align auction rules with the planned system upgrades and to make other 
technical amendments for clarity and consistency.
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    \3\ See Remarks by Deputy Secretary of the Treasury Francis 
Brooke before the Treasury Market Conference September 22, 2026, 
available at <a href="https://home.treasury.gov/news/press-releases/sb0633">https://home.treasury.gov/news/press-releases/sb0633</a>.
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    First, Treasury is modifying the definitions of adjusted value, 
dated date, index ratio, issue date, and settlement amount in Sec.  
356.2 and making conforming changes to the examples in appendix B to 
part 356 with respect to references to dated date, issue date, and 
original issue date. The changes include a clarification that the 
denominator in the formula for calculating the index ratio is always 
the reference Consumer Price Index applicable for the original dated 
date. None of the changes affect the calculation of the adjusted value, 
index ratio, or settlement amount for inflation-protected securities.
    Second, Treasury is making several changes to remove outdated 
references, by modifying (1) the definition of CUSIP number in Sec.  
356.2 to remove a reference to the name of the entity that formerly 
issued CUSIPs; (2) Sec.  356.11(a)(2) to remove a reference to bids in 
paper form, which are no longer accepted; and (3) the header to Section 
III of appendix B to part 356 to remove a reference to inflation-
indexed securities, which are now uniformly referred to as inflation-
protected securities.
    Third, Treasury is modifying the definitions of index, index rate, 
and noncompetitive bid in Sec.  356.2, and modifying Sec. Sec.  356.15, 
356.20, and 356.21 to align references to the high yield, high discount 
rate, or high discount margin more closely to Treasury's current 
auction terminology. We are also modifying Sec. Sec.  356.20 and 356.23 
to use the words award and recognize in lieu of accept and tender. 
Section 356.23(b) is also revised to clarify that the list of 
information that may be included in the auction results is 
illustrative. These changes improve consistency between the auction 
rules, announcements, and results. Treasury will make corresponding 
adjustments to the terminology on future auction announcements and 
results press releases, as appropriate.
    Fourth, Treasury is modifying the requirements for submitting 
noncompetitive customer bids in Sec. Sec.  356.14(c) and (e) to require 
submitters to provide, prior to the noncompetitive auction close, each 
individual customer's name and bid amount for all noncompetitive bids. 
Submitters will no longer be able to submit a summary bid amount; the 
individual customer names and respective bid amounts may still be 
submitted in one consolidated list, but it must be received prior to 
the noncompetitive auction close. These changes, which will be 
effective with the planned system upgrades, will ensure all 
noncompetitive bid information is received prior to the noncompetitive 
auction close and will enable Treasury auction staff to finalize post-
auction operations earlier in the day.
    Finally, Treasury is removing references in Sec. Sec.  356.23(a) 
and 356.31(a) to <a href="http://www.treasurydirect.gov">http://www.treasurydirect.gov</a> and instead stating that 
we will make the auction results available on our website. This change 
will provide Treasury more administrative flexibility while maintaining 
public transparency regarding auction results.

Procedural Requirements

    Executive Order 12866. This final rule is not a significant 
regulatory action pursuant to Executive Order 12866, as amended.
    Administrative Procedure Act (APA). The APA generally imposes 
requirements on agency rulemakings related to notice, public comment, 
and delayed effective dates, under 5 U.S.C. 553. However, 5 U.S.C. 
553(a)(2) exempts matters relating to contracts from those 
requirements. The auction regulations relate to Treasury securities, 
which are contracts between Treasury and the owner of the security; 
therefore, the notice, public comment, and delayed effective date 
requirements of the APA do not apply to this final 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), this rule is not required to 
be issued with notice and opportunity for public comment.
    Paperwork Reduction Act. This final rule does not involve a 
collection of information. 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, 31 CFR part 356 is 
amended 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)

0
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.


0
2. Section 356.2 is amended by revising paragraph (2) of the definition 
of ``Adjusted value'' and the definitions of ``CUSIP number,'' ``Dated 
date,'' ``Index,'' ``Index rate,'' ``Index ratio,'' ``Issue date,'' 
``Noncompetitive bid,'' and ``Settlement amount'' to read as follows:


Sec.  356.2  What definitions do I need to know to understand this 
part?

* * * * *

[[Page 65458]]

    Adjusted value * * *
    (2) Multiplying this value by: 100 divided by the Reference CPI of 
the original dated date. (See appendix B, section V of this part for an 
example of how to calculate the adjusted value.)
* * * * *
    CUSIP number means the unique identifying number assigned to each 
separate security issue and each separate STRIPS component. CUSIP is an 
acronym for Committee on Uniform Securities Identification Procedures.
* * * * *
    Dated date means the date from which interest accrues for notes and 
bonds. The dated date and issue date are usually the same. In those 
cases where interest begins accruing prior to the issue date, however, 
the dated date will be prior to the issue date. An example is when the 
dated date is a Saturday and the issue date is the following Monday. 
For reopened securities, references to ``original dated date'' refer to 
the dated date at original issuance.
    Index means the Consumer Price Index for inflation-protected 
securities. For floating rate notes, the index is the high discount 
rate on 13-week bills determined by Treasury auctions of those 
securities.
* * * * *
    Index rate means the simple-interest money market yield, computed 
on an actual/360 basis and rounded to nine decimal places, from the 
high 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.)
* * * * *
    Index ratio means, for an inflation-protected security, the 
Reference CPI of a particular date divided by the Reference CPI of the 
original dated date.
* * * * *
    Issue date means the date specified in the auction announcement on 
which we issue a security as an obligation of the United States. 
Interest normally begins to accrue on a security's issue date. For 
reopened securities, references to ``original issue date'' refer to the 
issue date at original issuance.
* * * * *
    Noncompetitive bid means, for a single-price auction, a bid to 
purchase a stated par amount of securities at the high yield, high 
discount rate, or high discount margin awarded to competitive bidders. 
For a multiple-price auction, a noncompetitive bid means a bid to 
purchase securities at the weighted average yield, weighted average 
discount rate, or weighted average discount margin of awards to 
competitive bidders.
* * * * *
    Settlement amount means the total of the par amount of securities 
awarded, less any discount amount or plus any premium amount, and plus 
any accrued interest. For inflation-protected securities, the 
settlement amount also includes any inflation-adjusted principal.
* * * * *

0
2. Section 356.11 is amended by revising the third sentence of 
paragraph (a)(2) to read as follows:


Sec.  356.11  How are bids submitted in an auction?

    (a) * * *
    (2) * * * Our computer time stamp will establish the receipt time. 
* * *
* * * * *

0
3. Section 356.14 is amended by revising the last sentence of paragraph 
(c) introductory text and paragraph (e) to read as follows:


Sec.  356.14  What are the requirements for submitting bids for 
customers?

* * * * *
    (c) * * * For trusts or other fiduciary estates (see appendix A), 
submitters must provide:
* * * * *
    (e) Noncompetitive customer bids. For each noncompetitive bid, the 
submitter must provide the customer's name and the amount bid.

0
4. Section 356.15 is amended by revising the first sentence of 
paragraph (e) to read as follows:


Sec.  356.15  What rules apply to bids submitted by investment 
advisers?

* * * * *
    (e) Proration of awards. Investment advisers that submit 
competitive bids in the names of controlled accounts are responsible 
for prorating any awards at the high yield, high discount rate, or high 
discount margin using the same percentage that we announce. * * *

0
5. Section 356.20 is amended by revising paragraphs (a), (d)(1) and (2) 
to read as follows:


Sec.  356.20  How does the Treasury determine auction awards?

    (a) Determining the range and amount of awarded competitive bids--
(1) Awarding bids. After the competitive auction closes, we award 
noncompetitive bids that were submitted prior to the noncompetitive 
auction close, subject to the noncompetitive bidding limitations and 
restrictions described in this part. Then we award competitive bids at 
the lowest yields, discount rates, or discount margins, through 
successively higher yields, discount rates, or discount margins, up to 
the amount required to meet the offering amount. When necessary, we 
prorate bids at the high yield, high discount rate, or high discount 
margin as described below. If the amount of noncompetitive bids would 
absorb all or most of the offering amount, we will award competitive 
bids in an amount sufficient to provide a fair determination of the 
yield, discount rate, or discount margin for the securities we are 
auctioning.
    (2) Awarding bids at the high yield, high discount rate, or high 
discount margin. Generally, the total amount of bids at the high yield, 
high discount rate, or high discount margin exceeds the offering amount 
remaining after we award the noncompetitive bids and the competitive 
bids at the lower yields, discount rates, or discount margins. In order 
to keep the total amount of awards as close as possible to the 
announced offering amount, we award a percentage of the bids at the 
high yield, high discount rate, or high discount margin. We derive the 
percentage by dividing the remaining par amount needed to fill the 
offering amount by the par amount of the bids at the high yield, high 
discount rate, or high discount margin and rounding up to the next 
hundredth of a whole percentage point, for example, 17.13%.
* * * * *
    (d) * * *
    (1) Single-price auctions. Both noncompetitive and competitive 
bidders receive the price equivalent to the high yield, high discount 
rate, or high discount margin at which bids were awarded. For 
inflation-protected securities, the price for awarded securities is the 
price equivalent to the high real yield.
    (2) Multiple-price auctions--(i) Competitive bids. Competitive 
bidders receive the price equivalent to each yield, discount rate, or 
discount margin at which their bids were awarded.
    (ii) Noncompetitive bids. Noncompetitive bidders receive the price 
equivalent to the weighted average yield, discount rate, or discount 
margin of awarded competitive bids.

0
6. Section 356.21 is revised to read as follows:


Sec.  356.21  How are awards at the high yield, high discount rate, or 
high discount margin calculated?

    (a) Awards to submitters. We generally prorate bids at the high 
yield, high discount rate, or high discount margin under Sec.  
356.20(a)(2) of this part. For example, if 80.15% is the

[[Page 65459]]

announced percentage at the high yield, high discount rate, or high 
discount margin, we award 80.15% of the amount of each bid at that 
yield, discount rate, or discount margin. A bid for $100 million at the 
high yield, high discount rate, or high discount margin would be 
awarded $80,150,000 in this example. We always make awards for at least 
the minimum to bid, and above that amount we make awards in the 
appropriate multiple to bid. For example, Treasury bills may be issued 
with a minimum to bid of $100 and multiples to bid of $100. Say we 
accept an $18,000 bid at the high discount rate, and the percent 
awarded at the high discount rate is 88.27%. We would award $15,900 to 
that bidder, which is an upward adjustment from $15,888.60 ($18,000 x 
.8827) to the nearest multiple of $100. If we were to award 4.65% of 
bids at the high discount rate, for example, the award for a $100 bid 
at that rate would be $100, rather than $4.65, in order to meet the 
minimum to bid for a bill issue.
    (b) Awards to customers. The same prorating rules apply to 
customers as apply to submitters. Depository institutions and dealers, 
whether submitters or intermediaries, are responsible for prorating 
awards for their customers at the same percentage that we announce. For 
example, if 80.15% is the announced percentage at the high yield, high 
discount rate, or high discount margin, then each customer bid at that 
yield, discount rate, or discount margin must be awarded 80.15%.

0
7. Section 356.23 is amended by revising paragraphs (a), (b) 
introductory text, (b)(1), (b)(2), (b)(5), and (b)(6) to read as 
follows:


Sec.  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.
    (b) The auction results may include such information as:
    (1) The amounts of bids we recognized and awarded;
    (2) The range of awarded yields, discount rates, or discount 
margins.
* * * * *
    (5) A breakdown of the amounts of noncompetitive and competitive 
bids we recognized from, and awarded to, the public;
    (6) The amounts of bids recognized from and awarded to the Federal 
Reserve Banks for their own accounts;
* * * * *

0
8. Section 356.31 is amended by revising the last sentence of paragraph 
(a) and paragraph (c)(3)(i) to read as follows:


Sec.  356.31  How does the STRIPS program work?

    (a) * * * We provide the CUSIP numbers and payment dates for the 
principal and interest components in auction announcements and on our 
website.
* * * * *
    (c) * * *
    (3) * * *
    (i) Adjusted value. Interest components stripped from inflation-
protected securities are maintained in accounts, and transferred, at 
their adjusted value. This value is derived by multiplying the 
semiannual interest rate by the par amount and then multiplying this 
value by: 100 divided by the Reference CPI of the original dated date. 
See appendix B, section V of this part for an example of how to do this 
calculation.
* * * * *

0
9. Amend appendix B to part 356 by:
0
a. In section I.B., revising paragraph 2, the first sentence of 
paragraph 3(iv), and the first sentence of the example in paragraph 5;
0
b. In section III:
0
i. Revising the section heading;
0
ii. Removing ``Ref CPI<INF>IssueDate</INF>'' and adding in its place 
``Ref CPI<INF>OriginalDatedDate</INF>'' wherever it appears;
0
iii. Under the ``Definitions'' heading, removing the note following the 
undesignated text before paragraph A;
0
iv. In paragraph B(2) revising the definition of ``Bidding'' and the 
Example; and
0
c. In section V., in the Definitions section, removing the definition 
of ``Ref CPI<INF>IssueDate</INF>'' and adding in its place the 
definition of ``Ref CPI<INF>OriginalDatedDate</INF>''.
    The revisions read as follows:

Appendix B to Part 356--Formulas and Tables

* * * * *
    I. * * *
    B. * * * 2. Index Ratio. The numerator of the Index Ratio, the Ref 
CPI<INF>Date</INF>, is the index number applicable for a specific day. 
The denominator of the Index Ratio is the Ref CPI applicable for the 
original dated date. The formula for calculating the Index Ratio is:
[GRAPHIC] [TIFF OMITTED] TR15OC26.028

Where:

Date = valuation date

    3. * * *
    (iv) To calculate the Index Ratio for April 16, 1996, for an 
inflation-protected security originally issued on April 15, 1996, with 
an original dated date of April 15, 1996, the Ref 
CPI<INF>April 16, 1996</INF> must first be calculated. * * *
* * * * *
    * * *
    Example
    A 10-year inflation-protected note paying 37/8% interest was 
originally issued on January 15, 1999, with an original dated date of 
January 15, 1999, with the first interest payment on July 15, 1999. * * 
*
* * * * *
    III. Formulas for Conversion of Inflation-Protected Security Yields 
to Equivalent Prices.
* * * * *
    B. * * *
    (2) * * *
    Bidding: The dollar amount of each bid is in terms of the par 
amount. For example, if the Ref CPI applicable to the original dated 
date of the note is 120, and the reference CPI applicable to the issue 
date is 132, a bid of $10,000 will in effect be a bid of $10,000 x 
(132/120), or $11,000.
* * * * *
    Example:
    We originally issued a 35/8% 10-year inflation-protected note on 
January 15, 1998, with an original dated date of January 15, 1998, with 
interest payments on July 15 and January 15. For a reopening on October 
15, 1998, with inflation compensation accruing from January 15, 1998 to 
October 15, 1998, and accrued interest accruing from July 15, 1998 to 
October 15, 1998 (92 days), solve for the price per 100 (P) at a real 
yield, as determined in the reopening

[[Page 65460]]

auction, of 3.65%. The base index applicable to the original dated date 
of this note is 161.55484 and the reference CPI applicable to October 
15, 1998, is 163.29032.
* * * * *
    V. * * *
    Definitions: * * *
    Ref CPI<INF>OriginalDatedDate</INF> = reference CPI for the 
original dated date of the underlying (unstripped) security.
* * * * *

Gary Grippo,
Acting Fiscal Assistant Secretary.
[FR Doc. 2026-21069 Filed 10-14-26; 8:45 am]
BILLING CODE 4810-AS-P


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