We issue marketable Treasury securities into the commercial book-entry system and into accounts maintained directly on the records of the Department of the Treasury (“securities held directly with Treasury”).

(a) The commercial book-entry system. When depository institutions or dealers submit bids for Treasury securities in an auction, securities awarded as a result of those bids are generally held in the commercial book-entry system. Specifically, we maintain book-entry accounts in the National Book-Entry System ® (“NBES”) for Federal Reserve Banks, depository institutions, and other authorized entities, such as government and international agencies and foreign central banks. In their accounts, depository institutions maintain securities held for their own account and for the accounts of others. The accounts held for others include those of other depository institutions and dealers, which may, in turn, maintain accounts for others.

(b) Securities held directly with Treasury. Account holders maintain accounts in a book-entry system directly on the records of the Department of the Treasury. Securities held directly with Treasury are subject to the terms and conditions in this part, the auction announcement, and the regulations governing the system in which the securities are held. (See subtitle B, chapter II of this title.)