Collateral Services
Treasury Collateral Programs
The Federal Reserve Banks, in their role as fiscal agent for the United States Treasury, provide collateral services for the programs discussed below. Collateral for these programs may be held in book-entry form through the Federal Reserve’s National Book-Entry System (NBES) or in definitive (physical) form through your local Reserve Bank. In some cases, a third or fourth-party custodian may maintain collateral.
Acceptance of Bonds Secured By Government Obligations in Lieu of Bonds With Sureties (31 CFR 225)
Under this program, individuals, partnerships or corporations required by U.S. law or regulations to furnish a surety bond to the federal government may pledge acceptable securities as collateral in lieu of a surety bond. The collateral value must equal the amount of the required surety bond and may be deposited at a Federal Reserve Bank.
Depositaries and Financial Agents of the Federal Government (31 CFR 202)
This program applies to financial institutions required to pledge acceptable securities as collateral to secure deposits of U.S. federal program agencies held by the financial institutions.
The U.S. Department of the Treasury, Bureau of the Fiscal Service (Fiscal Service) (Off-site) is responsible for oversight of the 31 CFR 225 Program and the 31 CFR 202 Program, including collateral pledged to secure public funds. The regulations regarding these programs can be found on the Fiscal Service site referenced above.
The Treasury Collateral Management and Monitoring system (TCMM) is a centralized application for collateral monitoring of the 31 CFR Part 202 and 225 Treasury Fiscal Service Collateral programs. This Web-based application provides financial institutions online access to review account balances and generate reports. In addition, it provides Federal Program Agencies with the ability to update pledgors’ Amount to be Collateralized (ATBC).
For more information on Treasury collateral programs and how to obtain TCMM access, please visit the Bureau of Fiscal Service’s Treasury Collateral Management and Monitoring page (Off-site).
Safekeeping Systems
National Book-Entry System (NBES)
NBES is the electronic facility operated by the Federal Reserve Banks for maintaining Securities Accounts for book-entry securities issued in electronic form by the United States Government, any agency or instrumentality thereof, certain international organizations, or others that the Federal Reserve Banks have determined are eligible to be held in NBES (“Fedwire® securities”). The Federal Reserve Banks’ Operating Circular 7, Fedwire Securities Account Maintenance and Transfer Services, sets forth the terms under which the Federal Reserve Banks maintain Securities Accounts and effect transfers of book-entry securities.
Collateral Management System (CMS)
CMS is an application operated by the Federal Reserve Banks that maintains a record of and values collateral pledged in non-Fedwire book-entry or definitive (physical) form for all Treasury collateral programs administered by the Federal Reserve Banks.
Collateral Valuation
Collateral values for Treasury Collateral Management and Monitoring (TCMM) are calculated based on margins that are applied either to the available market price or, where market prices are not available, the par or outstanding principal balance.
Third/Fourth-Party Custodian Arrangements
If you are interested in third- or fourth-party custodian arrangements, your local Federal Reserve Bank will assist you in establishing an appropriate arrangement.