[Federal Register Volume 77, Number 74 (Tuesday, April 17, 2012)]
[Rules and Regulations]
[Pages 22666-22667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9211]

[[Page 22666]]



12 CFR Part 204

[Docket No. OP-1440]

Payment System Risk Policy; Daylight Overdraft Posting Rules

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Policy statement.


SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
has revised its Policy on Payment System Risk (PSR Policy) to modify 
the posting rules to conform with procedural changes to the redemption 
of separately-sorted savings bonds and to eliminate a reference to the 
contractual clearing balance program.

DATES: Effective Date: The PSR Policy revisions concerning separately-
sorted savings bond redemptions will take effect on April 11, 2012. 
Revisions related to the elimination of the contractual clearing 
balance program are effective July 12, 2012.

FOR FURTHER INFORMATION CONTACT: Susan V. Foley, Associate Director, 
(202/452-3596) or Jeffrey D. Walker, Manager, Financial Risk 
Management, (202/721-4559), Division of Reserve Bank Operations and 
Payment Systems. For users of Telecommunications Device for the Deaf 
(TDD) only, please call 202/263-4869.


I. Background

Posting Rules for Separately-Sorted Savings Bond Redemptions

    The Board's PSR Policy measures depository institutions' intraday 
account balances according to a set of ``posting rules'' that determine 
the intraday timing of debits and credits to institutions' Federal 
Reserve accounts for different payment types. Posting rules currently 
specify that EZ-Clear savings bond redemptions in separately-sorted 
deposits will post at 8:30 a.m. Eastern time or 5 p.m. Eastern time, 
depending on the deposit time.
    As announced by the Department of the Treasury on March 20, 2012 
(77 FR 16165), effective April 11, 2012, Treasury is changing the 
procedures for financial institutions to transmit and receive 
settlement for redeemed definitive (paper) savings securities (savings 
bonds and savings notes) from the EZ-Clear system to an image-based 
securities process through the Federal Reserve Banks, and the EZ-Clear 
program will be decommissioned following the transition. The Reserve 
Banks will begin accepting redeemed savings bonds as electronic images 
on Monday, April 16, 2012. The Federal Reserve Bank of Atlanta will 
accept deposits of redeemed savings bonds in paper form, but the 
processing of the bonds will no longer be based on the EZ-Clear system. 
The posting rules for separately-sorted savings bond redemptions remain 
unchanged, except that references to the EZ-Clear system have been 
removed from the PSR Policy.

Reference to the Contractual Clearing Balance Program

    Under the PSR Policy, each Reserve Bank has the right to protect 
its risk exposure from individual institutions by unilaterally imposing 
risk-control measures, including requiring an institution to maintain 
balances under the contractual clearing balance program.\1\ The Board, 
however, is amending Regulation D to eliminate the contractual clearing 
balance program on July 12, 2012.\2\ To conform to this amendment to 
Regulation D, the reference to clearing-balance requirements is being 
removed from the PSR policy. Instead, the PSR policy will reference the 
right of a Reserve Bank to impose balance requirements. Depository 
institutions may be eligible to earn interest on these required 
balances held in their Federal Reserve accounts.\3\

    \1\ A contractual clearing balance is an amount that an 
institution contracts to maintain with a Reserve Bank in additional 
to any reserve balance requirement.
    \2\ 77 FR 21846 (April 12, 2012).
    \3\ 73 FR 59482 (October 9, 2008).

Policy on Payment System Risk

    The Federal Reserve Policy on Payment System Risk, Section II.A. 
under the heading ``Procedures for Measuring Daylight Overdrafts'' and 
the subheadings ``Post at 8:30 a.m. Eastern time'' and ``Post at 5 p.m. 
Eastern time'' is amended with changes as indicated in italics.
    Procedures for measuring daylight overdrafts \4\

    \4\ This schedule of posting rules does not affect the overdraft 
restrictions and overdraft-measurement provisions for nonbank banks 
established by the Competitive Equality Banking Act of 1987 and the 
Board's Regulation Y (12 CFR 225.52).

    Post at 8:30 a.m. Eastern time:

+/- Term deposit maturities and accrued interest
+/- Government and commercial ACH credit transactions \5\

    \5\ Institutions that are monitored in real time must fund the 
total amount of their commercial ACH credit originations in order 
for the transactions to be processed. If the Federal Reserve 
receives commercial ACH credit transactions from institutions 
monitored in real time after the scheduled close of the Fedwire 
Funds Service, these transactions will be processed at 12:30 a.m. 
the next business day, or by the ACH deposit deadline, whichever is 
earlier. The Account Balance Monitoring System provides intraday 
account information to the Reserve Banks and institutions and is 
used primarily to give authorized Reserve Bank personnel a mechanism 
to control and monitor account activity for selected institutions. 
For more information on ACH transaction processing, refer to the ACH 
Settlement Day Finality Guide available through the Federal Reserve 
Financial Services Web site at http://www.frbservices.org.

+ Treasury Electronic Federal Tax Payment System (EFTPS) investments 
from ACH credit transactions
+ Advance-notice Treasury investments
+ Treasury checks, postal money orders, local Federal Reserve Bank 
checks, and savings bond redemptions in separately sorted deposits; 
these items must be deposited by 12:01 a.m. local time or the local 
deposit deadline, whichever is later.
- Penalty assessments for tax payments from the Treasury Investment 
Program (TIP).\6\

    \6\ The Reserve Banks will identify and notify institutions with 
Treasury-authorized penalties on Thursdays. In the event that 
Thursday is a holiday, the Reserve Banks will identify and notify 
institutions with Treasury-authorized penalties on the following 
business day. Penalties will then be posted on the business day 
following notification.

    Post at 5 p.m. Eastern time:

+/- FedACH SameDay service transactions
+ Treasury checks, postal money orders, and savings bond redemptions in 
separately sorted deposits; these items must be deposited by 4 p.m. 
Eastern time
+ Local Federal Reserve Bank checks; these items must be presented 
before 3 p.m. Eastern time
+/- Immediate-settlement ACH transactions; these transactions include 
ACH return items and check-truncation items.

    Additionally, in the Federal Reserve Policy on Payment System Risk, 
Section II.G.1 under the subheading ``Ex post,'' the phrase ``clearing-
balance requirements'' will be replaced with ``balance requirements.'' 
The new sentence will read ``Each Reserve Bank retains the right to 
protect its risk exposure from individual institutions by unilaterally 
reducing net debit caps, imposing (additional) collateralization or 
balance requirements, rejecting or delaying certain transactions as 
described below, or, in extreme cases, taking the institution offline 
or prohibiting it from using Fedwire.''

[[Page 22667]]

    By order of the Board of Governors of the Federal Reserve 
System, April 12, 2012.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2012-9211 Filed 4-16-12; 8:45 am]