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securities issued upon exchange will have all unmatured coupons attached.

§ 306.18

Exchanges of coupon securities for registered securities.

Coupon securities presented for exchange for registered securities should have all matured interest coupons detached. All unmatured coupons should be attached, except that if presented when the transfer books are closed (in which case the exchange will be effected on or after the date on which the books are reopened), the next maturing coupons should be detached and held for collection in ordinary course when due. If any coupons which should be attached are missing, the securities must be accompanied by a remittance in an amount equal to the face amount of the missing coupons. The new registered securities will bear interest from the interest payment date next preceeding the date on which the exchange is made. § 306.19

Denominational exchanges of coupon securities.

All matured interest coupons and all unmatured coupons likely to mature before and exchange can be completed should be detached from securities presented for denominational exchange. All unmatured coupons should be attached. If any are missing, the securities must be accompanied by a remittance in an amount equal to the face amount of the missing coupons. The new coupon securities will have all unmatured coupons attached. § 306.20

Reissue of registered transferable securities. Assignments are not required for reissue of registered transferable securities in the name(s) of (a) the surviving joint owner(s) of securities registered in the names of or assigned to two or more persons, unless the registration or assignment includes words which preclude the right of survivorship, (b) a succeeding fiduciary or other lawful successor, (c) an individual, corporation or unincorporated association whose name has been legally changed, (d) a corporation or unincorporated association which is the lawful successor to another corporation or unincorporated association, and (e) a successor in title to a public officer or body. Evidence of survivorship, succession, or change of name, as appropriate, must be furnished. The appropriate taxpayer identifying number also must be furnished if the registration of the

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(a) Treasury Bonds, Investment Series A-1965. Bonds of this series may be reissued only when (1) the name of an owner has been changed, (2) the trustees in whose names the bonds are registered have been succeeded by other trustees, and (3) the corporation, unincorporated association or fund in whose name the bonds are registered has been succeeded by another corporation or unincorporated association or fund, by operation of law or otherwise, whereby the business or activities of the original organization or fund are continued without substantial change in the successor. Bonds presented for reissue must be accompanied by pertinent evidence and an appropriate request for reissue. (Form PD 2168 should be used.)

(b) Treasury Bonds, Investment Series B-1975-80. Bonds of this series may be reissued only in the names of (1) lawful successors in title, (2) the legal representatives or distributees of a deceased owner's estate, or the distributees of a trust estate, and (3) State supervisory authorities in pursuance of any pledge required of the owner under State law, or upon termination of the pledge in the names of the pledgors or their successors. Bonds presented for reissue must be accompanied by evidence of entitlement.

§ 306.22 Exchange of Treasury Bonds, Investment Series B-1975-80.

Bonds of this series presented for exchange for 12 percent 5-year Treasury notes must bear duly executed assignments to "The Secretary of the Treasury for exchange for the current series of EA or EO Treasury notes to be delivered to (inserting the name and address of the person to whom the notes are to be delivered)." The notes will bear the April 1 or October 1 date next preceding the date the bonds, duly assigned with supporting evidence, if necessary, are received by the Bureau or a Federal Reserve Bank or Branch. Interest accrued at the rate of 234 percent on the bonds surrendered from the next preceding interest payment date to the date of exchange will be credited, and interest at the rate of 12 percent on the notes

for the same period will be charged and the difference will be paid to the owner. Subpart D-Redemption or Payment § 306.25

Presentation and surrender.

(a) General. Securities, whether in registered or bearer form, are payable in regular course of business at maturity unless called for redemption before maturity in accordance with their terms, in which case they will be payable in regular course of business on the date of call. The Secretary of the Treasury may provide for the exchange of maturing or called securities, or in advance of call or maturity, may afford owners the opportunity of exchanging a security for another security pursuant to an advance refunding offer. Registered securities should be presented and surrendered for redemption to the Bureau, a Federal Reserve Bank or Branch, or the Treasurer's Office, and bearer securities to a Federal Reserve Bank or Branch or the Treasurer's Office. If securities are registered in the name of, or assigned to (1) a state or other political entity, (2) a corporation, or (3) a board, committee or other body authorized to act as a unit and which is the fiduciary of a public or private trust estate, no evidence will be required in support of an assignment by an officer of the registered owner or assignee for redemption for its account. Under the same circumstances, no evidence will be required for an assignment for redemption-exchange, or exchange pursuant to an advance refunding offer, if the new securities are to be registered exactly the same as the registration or assignment of the securities surrendered. To the extent appropriate, these rules also apply to securities registered in the title of a public officer who is the official custodian of public funds.

(b) "Overdue" securities. If a bearer security or a registered security assigned in blank, or to bearer, or so assigned as to become, in effect, payable to bearer, is presented and surrendered for redemption after it has become overdue, the Secretary of the Treasury may require satisfactory proof of ownership. (Form PD 1071 may be used.) A security shall be considered to be overdue after the lapse of the following periods of time from its face maturity:

* See § 306.28 for presentation and surrender of securities eligible for use in payment of Federal estate taxes.

(1) One month for securities issued for a term of 1 year or less.

(2) Three months for securities issued for a term of more than 1 year but not in excess of 7 years.

(3) Six months for securities issued for a term of more than 7 years.

[Dept. Circ. 300, 3rd Rev., 29 F.R. 19020, Dec. 30, 1964, as amended at 35 F.R. 8228, May 26, 1970]

§ 306.26 Redemption of registered securities at maturity, upon prior call, or for advance refunding.

Registered securities presented and surrendered for redemption at maturity or pursuant to a call for redemption before maturity should be assigned to "The Secretary of the Treasury for redemption," unless the assignor desires that payment be made to some other person, in which case the assignments should be made to "The Secretary of the Treasury for redemption for the account of (inserting name and address of person to whom payment is to be made)." Assignments in blank or other assignments having a similar effect will be accepted but specific instructions for the issuance and delivery of the redemption check, signed by the owner or his authorized representative, must accompany the securities, unless included in the assignment. (Form PD 1705 may be used.) Payment of the principal will be made either (a) by check drawn on the Treasurer of the United States to the order of the person entitled and mailed in accordance with the instructions received, or (b) upon appropriate request, by crediting the amount in a member bank's account with the Federal Reserve Bank of its district. Securities presented for advance refunding should be assigned as provided in the advance refunding offer. § 306.27 Redemption of bearer securities at maturity, upon prior call, or for advance refunding.

All interest coupons due and payable on or before the date of maturity or date fixed in the call for redemption before maturity should be detached from coupon securities presented for redemption and should be collected separately in regular course. All coupons bearing dates subsequent to a date fixed in a call for redemption, or an offer of advance refunding, should be left attached to the securities. If any such coupons are missing the full face amount thereof will be deducted from the payment to

be made upon redemption or the advance refunding adjustment unless satisfactory evidence of their destruction is submitted. Any amounts so deducted will be held in the Department to provide for adjustments or refunds in the event that the missing coupons should be subsequently presented or their destruction is later satisfactorily established. In the absence of other instructions, payment of bearer securities will be made by check drawn to the order of the person presenting and surrendering the securities and mailed to him at his address, as given in the advice which should accompany the securities. (Form PD 1704 may be used.) A Federal Reserve Bank, upon appropriate request, may make payment to a member bank from which bearer securities are received by crediting the amount in the member bank's account.

§ 306.28 Optional redemption of Treasury bonds at par (before maturity or call redemption date) and application of the proceeds in payment of Federal estate taxes.

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(a) General. All Treasury bonds to be redeemed at par for the purpose of applying the proceeds to payment of Federal estate taxes on a decedent's estate must be presented and surrendered to a Federal Reserve Bank or Branch or the Bureau. They should be accompanied by Form PD 1782, fully completed and duly executed in accordance with the instructions on the form, and evidence as described therein. Redemption will be made at par plus accrued interest from the last preceding interest payment date to the date of redemption, except that if registered bonds are received by a Federal Reserve Bank or Branch or the Bureau within one month preceding an interest payment date for redemption before that date a deduction will be made for interest from the date of redemption to the interest payment date, and a check for

5 Certain issues of Treasury bonds are redeemable at par and accrued interest upon the death of the owner, at the option of the representative of, or if none, the persons entitled to, his estate, for the purpose of having the entire proceeds applied in payment of the Federal estate taxes on the decedent's estate, in accordance with the terms of the offering circulars cited on the face of the bonds. A current list of eligible issues may be obtained from any Federal Reserve Bank or Branch, the Bureau of the Public Debt, or the Treasurer's Office.

the full six months' interest will be paid in due course. The proceeds of redemption will be deposited to the credit of the District Director, Internal Revenue Service, designated in Form PD 1782, the representative of the estate will be notified of the deposit, and the District Director will forward a formal receipt.

(b) Conditions. The bonds presented for redemption under this section must have (1) been owned by the decedent at the time of his death and (2) thereupon constituted part of his estate, as determined by the following rules in the case of joint ownership, partnership and trust holdings:

(i) Joint ownerships. Bonds held by the decedent at the time of his death in joint ownership with another person or persons will be deemed to have met the above conditions either (a) to the extent to which the bonds actually became the property of the decedent's estate, or (b) in an amount not to exceed the amount of the Federal estate taxes which the surviving joint owner or owners are required to pay on account of such bonds and other jointly-held property."

(ii) Partnerships. Bonds held at the time of the decedent's death by a partnership in which he had an interest will be deemed to have met the above conditions to the extent of his fractional share of the bonds so held proportionate to his interest in the assets of the partnership.

(iii) Trusts. Bonds held in trust at the time of the decedent's death will be deemed to have met the above conditions in an amount not to exceed the amount of the Federal estate taxes if (a) the trust actually terminated in favor of the decedent's estate, or (b) the trustee as such is required to pay the decedent's Federal estate taxes under the terms of the trust instrument or otherwise, or (c) the debts of the decedent's estate, including costs of administration, State inheritance and Federal estate taxes, exceeds the assets of his estate without regard to the trust estate.

(c) Transactions after owner's death. No transactions involving changes of ownership may be conducted after an owner's death without affecting the eligibility of the bonds for redemption

Substantially the same rule applies to community property except that upon the death of either spouse bonds which constitute part of the community estate are deemed to meet the required conditions to the extent of one-half of each loan and issue of bonds.

at par for application of the proceeds to payment of Federal estate taxes. Transactions, involving no changes of ownership, which may be conducted without affecting eligibility are (1) exchange of bonds for those of lower denominations where the bonds exceed the amount of the taxes and are not in the lowest authorized denominations, (2) exchange of registered bonds for coupon bonds, (3) exchange of coupon bonds for bonds registered in the names of the representatives of the estate, and (4) transfer to the names of the representatives of the owner's estate. However, any such transactions must be explained on Form PD 1782 or in a supplemental statement.

§ 306.35

Subpart E-Interest

Computation of interest.

The interest on Treasury securities accrues and is payable on a semiannual basis unless otherwise provided in the circular offering them for sale or exchange. If the period of accrual is an exact six months, the interest accrual is an exact one-half year's interest, without regard to the number of days in the period. If the period of accrual is less than an exact six months, the accrued interest is computed by determining the daily rate of accrual on the basis of the exact number of days in the full interest period and multiplying the daily rate by the exact number of days in the fractional period for which interest has actually accrued. A full interest period does not include the day as of which the securities were issued or the day on which the last preceding interest became due, but does include the day on which the next succeeding interest payment is due. A fractional part of an interest period does not include the day as of which the securities were issued or the day on which the last preceding interest payment became due, but does include the day as of which the transaction terminating the accrual of interest is effected. The 29th of February in a leap year is included whenever it falls within either a full interest period or a fractional part thereof."

7 The Appendix to the regulations in this part contains a complete explanation of the method of computing interest on a semiannual basis on Treasury bonds, notes and certificates of indebtedness, and an outline of the method of computing the discount rates on Treasury bills. Also included are tables of computation of interest on quarterly and annual bases.

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(a) Method of payment. The interest on registered securities is payable by checks drawn on the Treasurer of the United States to the order of the registered owners, except as otherwise provided herein. Interest checks are prepared by the Department in advance of the interest payment date and are ordinarily mailed in time to reach the addressees on that date. Interest on a registered security which has not matured or been called and which is presented for any transaction during the period the books for that loan are closed will be paid by check drawn to the order of the registered owner of record. Upon receipt of notice of the death or incompetency of an individual named as registered owner, a change in the name or in the status of a partnership, corporation or unincorporated association, the removal, resignation, succession or death of a fiduciary or trustee, delivery of interest checks will be withheld pending receipt and approval of evidence showing who is entitled to receive the interest checks. If the inscriptions on securities do not clearly identify the owners delivery of interest checks will be withheld pending reissue of the securities in the correct registration. The final installment of interest, unless otherwise provided in the offering circular or notice of call, will be paid by check drawn to the order of the registered owner of record and mailed in advance of the interest payment date in time to reach the addressee on or about that date. Interest on securities presented for advance refunding will be adjusted as provided in the advance refunding offer.

(b) Change of address. To assure timely delivery of interest checks, owners should promptly notify the Bureau of any change of address. (Form PD 345

8 The final installment of interest on securities which matured or were called before the effective date of these regulations will be paid with the principal upon presentation of the securities unless otherwise provided in the offering circular or notice of call. See § 306.15(b) for presentation of securities during periods transfer books are closed.

may be used.) The notification must be signed by the registered owner or a joint owner or an authorized representative, and should show the old and new addresses, the serial number and denomination of each security, the titles of the securities (for example 34-percent Treasury Bonds of 1978-83, dated May 1, 1953), and the registration of each security. Notifications by attorneys in fact, trustees or by the legal representatives of the estates of deceased, incompetent or minor owners should be supported by proof of their authority, unless in the case of trustees or legal representatives, they are named in the registration.

(c) Collection of interest checks—(1) General. Interest checks may be collected in accordance with the regulations governing the endorsement and payment of Government warrants and checks, which are contained in Department Circular No. 21, Revised, as amended. (Part 360 of this chapter.)

(2) By voluntary guardians of incompetents. Interest checks drawn to the order of a person who has become incompetent and for whose estate no legal guardian or similar representative has been appointed should be returned to the Bureau with a full explanation of the circumstances. For collection of interest, the Department will recognize the relative responsible for the incompetent's care and support or some other person as voluntary guardian for the incompetent. (Application may be made on Form PD 1461.)

(d) Nonreceipt, loss, theft or destruction of interest checks. If an interest check is not received within a reasonable period after an itnerest payment date the Bureau should be notified. Should a check be lost, stolen, or destroyed after receipt, the Office of the Treasurer of the United States, Check Claims Division, Washington, D.C. 20226, should be notified. Notification should include the name and address of the owner, the serial number, denomination and titles of the security upon which the interest was payable. If the check is subsequently received or recovered the latter office should also be advised.

§ 306.38 Interest on bearer securities.

Unless the offering circular and notice of call provide otherwise, interest on coupon securities is payable in regular course of business upon presentation and surrender of the interest coupons as they mature. Such coupons are payable at

any Federal Reserve Bank or Branch, or the Treasurer's Office. Interest on Treasury bills, and any other bearer securities which may be sold and issued on a discount basis and which are payable at par at maturity, is represented by the difference between the purchase price and the par value, and no coupons are attached.

Subpart F-Assignments of Registered Securities-General

§ 306.40 Execution of assignments or special endorsements.

(a) Execution of assignments. The assignment of a registered security should be executed by the owner or his authorized representative in the presence of an officer authorized to certify assignments. All assignments must be made on the backs of the securities, unless otherwise authorized by the Bureau, a Federal Reserve Bank or Branch, or the Treasurer of the United States. An assignment by mark (X) must be witnessed not only by a certifying officer but also by at least one other person, who should add an endorsement substantially as follows: "Witness to signature by mark," followed by his signature and address.

(b) Special endorsements in lieu of assignments. A security may be presented without assignment for any authorized transaction by a financial institution which is (1) a member of the Federal Reserve System, (2) a member of the Federal Home Loan Bank System, or (3) insured by the Federal Deposit Insurance Corporation, provided full instructions are furnished as to the transaction desired and the security bears the endorsement, under the official seal of the institution, as follows:

Presented in accordance with instructions of the owner(s).

Absence of assignment guaranteed.

By

(Name of financial institution)

(Signature and title of officer) This form of endorsement will be an unconditional guarantee to the Treasury Department that the institution is acting as attorney in fact for the owner(s) of the security under proper authorization and that the officer is duly authorized to act.

Banking institutions will usually cash the coupons without charge as an accommodation to their customers.

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