Treasury Tax and Loan Service - Collateral

As a tax depositary, the law requires you to pledge collateral with your local Federal Reserve Bank in an amount equal to your Treasury Investment Program (TIP) Main Account balance to secure the Treasury’s funds. Rules applicable to acceptable collateral and procedures for pledging collateral are in Treasury regulations and Federal Reserve Bank Operating Circulars.

Pledged Collateral

Book-Entry

Certain book-entry securities, both Treasury and government agency securities, can be deposited in a collateral account at your local Federal Reserve Bank, through the National Book-Entry System (NBES), the central securities application of the Federal Reserve System.

Definitive

Definitive collateral consists of securities represented by actual (physical) documents. This can include securities in bearer or registered form or customer notes, which can be held by your local Federal Reserve Bank.

Third/Fourth Party

In certain cases, definitive collateral may be held off-premises by designated third or fourth party custodians. Custodians authorized by the Federal Reserve Banks can hold collateral on your behalf through a custody agreement.

Collateral monitoring procedures in the TIP help prevent collateral deficiencies by automatically withdrawing Treasury funds when there is insufficient collateral pledged to your Main Account, and by ensuring that funds are not placed into your Main Account if collateral is insufficient.

Acceptable Collateral

The most current listing of acceptable collateral under the TT&L Program is available on the Bureau of the Public Debt’s Treasury Direct website (Off-site Link).

Collateral Valuation

Collateral values for the TT&L Program are calculated based on margins that are applied to either the available market price or, where market prices are not available, the par or outstanding principal balance.

The most current collateral margins table for the TT&L Program is available on the Bureau of the Public Debt’s Treasury Direct website (Off-site Link, PDF).

Additional Information

Additional information regarding TT&L program collateral can be found in the Collateral Guide and can be accessed here (PDF). For further assistance, contact the Treasury Support Center toll free at (888) 568-7343, option 2.

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