Sale and Issue of Marketable Book-Entry Treasury Bills, Notes, and Bonds
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...
Bureau of the Fiscal Service, Department of the Treasury.
ACTION:
Final rule.
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 These amendments make technical changes to several sections of the UOC to remove outdated references and to be consistent with Treasury's current auction terminology.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
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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
govsecreg@fiscal.treasury.gov
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]
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.
First, Treasury is modifying the definitions of adjusted value, dated date, index ratio, issue date, and settlement amount in § 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 § 356.2 to remove a reference to the name of the entity that formerly issued CUSIPs; (2) § 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 § 356.2, and modifying §§ 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 §§ 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 §§ 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 §§ 356.23(a) and 356.31(a) to
www.treasurydirect.gov
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.
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. 601et 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. 3501et seq.,
does not apply.
Congressional Review Act (CRA).
This final rule is not a major rule pursuant to the CRA, 5 U.S.C. 801et seq.
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)
1. The authority citation for part 356 continues to read as follows:
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:
What definitions do I need to know to understand this part?
* * * * *
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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.
* * * * *
2. Section 356.11 is amended by revising the third sentence of paragraph (a)(2) to read as follows:
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. * * *
5. Section 356.20 is amended by revising paragraphs (a), (d)(1) and (2) to read as follows:
(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.
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 § 356.20(a)(2) of this part. For example, if 80.15% is the
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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 × .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%.
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:
(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.
* * * * *
9. Amend appendix B to part 356 by:
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;
b. In section III:
i. Revising the section heading;
ii. Removing “Ref CPIIssueDate
” and adding in its place “Ref CPIOriginalDatedDate
” wherever it appears;
iii. Under the “Definitions” heading, removing the note following the undesignated text before paragraph A;
iv. In paragraph B(2) revising the definition of “Bidding” and the Example; and
c. In section V., in the Definitions section, removing the definition of “Ref CPI IssueDate
” and adding in its place the definition of “Ref CPIOriginalDatedDate
”.
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 CPIDate, 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:
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 CPIApril 16, 1996
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 × (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
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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 CPIOriginalDatedDate
= reference CPI for the original dated date of the underlying (unstripped) security.
* * * * *
Gary Grippo,
Acting Fiscal Assistant Secretary.
Footnotes
1.
The UOC was published as a final rule in January 1993. 58 FR 412.
31 CFR 356.14
www.treasurydirect.gov
5 U.S.C. 553
home.treasury.gov/news/press-releases/sb0633