Effective July 12, 2012, the Federal Reserve Banks are amending Operating Circulars 1 (Account Relationships), 3 (Collection of Cash Items and Returned Checks), 4 (Automated Clearing House Items), 6 (Funds Transfers Through the Fedwire^® Funds Service), 7 (Book-Entry Securities Account Maintenance and Transfer Services), and 12 (Multilateral Settlement).  The changes principally relate to efforts to simplify the administration of reserve requirements and complement the amendments to Regulations D and J announced by the Board of Governors of the Federal Reserve System on April 5, 2012.  Other changes are intended to clarify existing provisions in the operating circulars.

Specifically, references in the operating circulars to contractual clearing balances, as-of adjustments, and earnings credits have been eliminated.  In addition, the definition of “account” or “master account” in Operating Circulars 4, 6, 7, and 12 has been explicitly tied to the definition of “master account” in Operating Circular 1.

Other notable changes include the following:

The definition of “Primary RTN” in Operating Circular 1 has been revised to clarify that it refers to the Routing Transit Number assigned by the ABA Registrar of Routing Numbers that is associated with a financial institution’s main office.

• Section 2.10 of Operating Circular 1 has been revised to permit Federal Reserve Banks to terminate any master account–related agreement by notice to the account holder.
• Section 2.11 of Operating Circular 1 is new, though much of the substance was taken from the prior version of section 2.10 of that operating circular.  The Federal Reserve Banks believe the placement of those provisions under the new section heading, along with certain textual changes, helps to clarify the right of the Federal Reserve Banks to impose risk controls and other conditions on financial institutions with respect to their settlement arrangements and accounts.
• Paragraph 21.3 of Operating Circular 4 has been revised to state that a bank has an obligation to pass through the benefit of an adjustment or interest payment it receives if it is not the party entitled to compensation.  The prior version of this paragraph applied only if the bank was not the party entitled to compensation under Article 4A of the Uniform Commercial Code (as set forth in appendix B to Regulation J).

As a convenience, redlined versions of each operating circular, marked against the version currently in effect, have been posted to FRBservices.org.  Please refer to the clean versions of the operating circulars as posted on FRBservices.org for the definitive text.  You can access each version by following the link below. 

Your continued use of Federal Reserve financial services on or after July 12, 2012, constitutes agreement to the revised terms of these operating circulars.

Operating Circulars  

“Fedwire” is a registered service mark of the Federal Reserve Banks.  A complete list of marks owned by the Federal Reserve Banks is available at FRBservices.org.