STATUTES & REGULATIONS

Frequently Asked Questions Relating to Treasury's Large Position Recordkeeping and Reporting Rules - APPENDIX A TO PART 420 - SEPARATE REPORTING ENTITY

5.1) Does an entity qualify as a separate reporting entity without having to request such status if it already has received recognition as a separate bidder for purposes of Treasury auctions?

Yes, an entity that receives recognition as a separate bidder for auction purposes is also recognized as a separate reporting entity without having to request this status. However, the entity must maintain procedures (i.e., Chinese walls) to prevent the exchange of information related to secondary market transactions in Treasury securities, not just auction-related transactions, with any other aggregating entity.

5.2) Conversely, does such an entity qualify as a separate bidder for auction purposes without requesting such status if the entity has already received recognition as a separate reporting entity for purposes of the large position rules?

No, the process does not work in the reverse direction. Therefore, an entity that would like recognition as a separate reporting entity may want to consider requesting recognition as a separate bidder for auction purposes and, if granted, automatically obtain separate reporting entity recognition at the same time.

5.3) Where a reporting entity consists of more than one aggregating entity, is each aggregating entity that requests recognition as a separate reporting entity required to send a separate written letter to Treasury?

No, more than one request may be contained in a letter. However, the required information for each request, such as the certification, should be provided separately for each requested reporting entity in the letter.

5.4) Can organizational components that are not separate legal entities be carved out as separate reporting entities?

Yes, since organizational components (e.g., bank trust departments) fall within the definition of “aggregating entity,” they may be recognized as separate reporting entities. As is the case with separate bidder recognition in the auctions, organizational components are not required to be distinct legal entities.

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