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Treasury Tax & Loan Investment Program

The Term Investment Option (TIO) Program, part of the Treasury Tax & Loan Investment Program, provides participants with an opportunity to invest excess funds for fixed terms through a competitive bidding auction process. This program aims to enhance the certainty of funding and increase investment capacity. It includes requirements for participants, which must be sound financial institutions. The process involves notification, auction day bidding, and investment settlement, with detailed historical results available on the Treasury's Financial Management Service website.

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Treasury Tax & Loan Investment Program

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  1. Treasury Tax & Loan Investment Program Term Investment Option (TIO)Program Overview Updated September 2009

  2. TT&L Investment Program Introduction TT&L Organizational Stakeholders • Department of the Treasury / Fiscal Service • Office of the Fiscal Assistant Secretary (OFAS) • Financial Management Service (FMS) • Bureau of the Public Debt (BPD) • Federal Reserve System • Federal Reserve Bank of St. Louis • Federal Reserve Bank of New York • TT&L Depositary Institutions

  3. TT&L Investment Program Overview • Treasury has funds based on: • Cyclical factors (strong vs. weak economy) • Seasonal factors (peak tax periods) • Monthly cash flow (middle through end of month) • Legislative Factors (debt ceiling) • Investment Options • Direct Investment • Dynamic Investment • Special Direct Investment • Term Investment Option (TIO) • Reverse Repurchase Agreement (REPO)

  4. Term Investment Option (TIO)Overview • Treasury Objectives • Provide tax payers with a greater rate of return on funds invested • Increase investment capacity in the TT&L program • Participant Benefits • Greater certainty of funding • Enhanced flexibility • Pilot Program - April 2002 • Permanent Program Inception - October 2003

  5. Term Investment Option (TIO)Overview • TIO Participants • Participants must be TT&L depositaries in sound financial condition • Money center banks, regional banks, & credit unions • Currently 65 participants (September 2009)

  6. Term Investment Option (TIO)Overview • General Overview • Excess funds offered for a fixed term • Funds awarded through a competitive bidding auction process • Bids submitted and accepted via telephone

  7. Term Investment Option (TIO)Process • Update Notification • General intent notice sent to participants (via e-mail) one day prior to official announcement • Announcement Day • Offering amount, length of term, acceptable collateral • Auction Day • Participants place bids by calling 1-877-830-3496 prior to cutoff time (usually 11:00am ET) • Results announced within 30 minutes

  8. Term Investment Option (TIO) Process • Investment Day • Collateral pledged by designated time (12:00pm ET) • Funds are settled into awarded participant’s TIO and Reserve account (by 2:00pm ET) • Maturity Day • Principal and interest are collected from participants • Collateral is available after funds are collected

  9. Term Investment Option Sources of Information • Historical Results • For announcement information, auction results and an historical summary of TIO activity, visit the Treasury’s FMS Website. • E-mail notification sign-up available. http://fms.treas.gov/tip/reports.html

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