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Timeline of Separate Trading of Registered Interest and Principal Securities (STRIPS)

Year Event
1961 Introduced "STRIPS" of bills which were sold as a package of several re-openings of existing bills maturing over a period of several weeks. Bidders were required to bid for bills in each maturity on the basis of the proportion that each bill in the STRIP bore to the total amount of bills offered.
1974 The use of STRIPS of bills was discontinued.
1985 The STRIPS program was initiated for new Treasury securities that mature in 10 years or over and are maintained in the Federal Reserve book-entry system. The Treasury had vacated its objections to stripping after the tax law was changed in 1982 to include the accretion of discount on Treasury securities in current income, using a compound interest formula. The market can trade separate principal and interest components, each of which is a zero-coupon instrument, in book-entry form as direct obligations of the United States.
1986 The methodology for determining component values of STRIPS when they become eligible as collateral for Treasury Tax and Loan Depositaries was announced. The method is Treasury's "lost bond program," which is used to find the present value of a zero-coupon instrument that is consistent with a given par value yield curve.
1986 A facility to permit the reconstitution of securities within the STRIPS program was established. Reconstitution enabled the reassembly of a book-entry STRIPS security previously separated into its principal and interest components into a fully constituted security.
1987 The separate interest and principal components of Treasury STRIPS became eligible as collateral for Treasury Tax and Loan Accounts.
1997 September 30, 1997: The notes and bonds eligible for stripping were expanded from 10-year notes and 30-year bonds to all notes and bonds.
1998 April 1998: The Federal Reserve Bank of New York (FRBNY) began accepting stripped bearer corpora for conversion to the new book-entry program BEarer Corpora ConversionS (BECCS).
2000 STRIPS program was expanded to include all outstanding 5-year notes that had not previously been eligible for stripping.