Pledging Securities Platfoms

Institutions can pledge eligible securities to Reserve Banks through a variety of platforms including Fedwire^® Securities Service, Depository Trust Company, Clearstream and Euroclear. This page includes information on pledging securities through each platform. Contact your local Reserve Bank for general questions related to pledging securities.

Note: Stated processing times for all pledging processes are approximate and may vary based on asset type, volume, securities depository, and other considerations and are not guaranteed.

Fedwire^® Securities Service (FSS) Pledging Process

The FSS is an electronic securities service that provides issuance, maintenance, transfer and settlement services for all marketable U.S. Treasury securities, as well as certain securities issued by other federal government agencies, government-sponsored enterprises and international organizations. Institutions can find information on FSS, including how to set-up accounts on the FRB Services website or by contacting the Federal Reserve Bank Services Support Center - Fedwire^® Services Contacts at (833) FRS-SVCS (377-7827), option 3: Fedwire, then option 4: all other inquiries.

Institutions can utilize FSS to pledge eligible securities to the Reserve Banks by transferring securities into its restricted securities account (U102). Institutions can transfer securities to their U102 accounts using the FedLine^® Direct Solution, Fedline Advantage^® Solution, and offline services by contacting the Federal Reserve Bank Services Support Center - Fedwire^® Services Contacts at (833) FRS-SVCS (377-7827), option 3: Fedwire, then option 1: offline.

While securities are pledged to a Reserve Bank, principal and interest payments will continue to be paid to the pledging institution; however, principal payments at maturity may be suspended if the funds are needed to collateralize an outstanding obligation to a Reserve Bank.

General Operating Hours:

Pledges and withdrawals of collateral maintained with FSS may be made during the hours of operation noted below. Please refer to the Fedwire Securities Service Schedule and FedPayments® Manager — Securities Hours page.

Pledges:
8:30 a.m. ET – 3:15 p.m. ET for securities transferred against payment from another participant;
8:30 a.m. ET – 4:30 p.m. ET for repositioning securities against payment between accounts at same participant;
8:30 a.m. ET – 7:00 p.m. ET for securities transferred free of payment from another participant and repositioning securities free of payment between accounts at same participant

Withdrawals:
8:30 a.m. ET – 3:15 p.m. ET for securities transferred against payment to another participant;
8:30 a.m. ET – 4:30 p.m. ET for repositioning securities against payment between accounts at same participant;
8:30 a.m. ET – 7:00 p.m. ET for repositioning securities free of payment between accounts at same participant

General Processing Time:

Offline Service:
Offline operations require an authorized individual at the financial institution to call the Reserve Bank to provide securities transfer information. A separate authorized individual at the same institution must then receive a callback to verify the securities transfer before the transaction can be released to the Fedwire Securities Service for processing. The cutoff time for receiving offline instructions is 1:30 p.m. ET for delivery versus payment transactions and 5:15 p.m. ET for free of payment transactions.

Pledges:
Effective upon the transaction is received by the Fedwire Securities Service.

Withdrawals:
Effective within minutes upon the transaction is received by the Fedwire Securities Service. Withdrawals requiring manual intervention by Reserve Bank staff may take longer but will be typically processed same-day. FSS securities that secure any outstanding indebtedness or obligation owed to a Reserve Bank may not be withdrawn.

In-Transit Securities

With prior approval from its local Reserve Bank, an institution may pledge in-transit securities to secure additional daylight overdraft capacity beyond its net debit cap in support of its max cap. In-transit securities are defined as book-entry securities transferred over FSS that have been purchased by an institution but not yet paid for and owned by the institution's customers. The pledging of in-transit securities requires an institution to record on its books in real time both the securities that are pledged to the Reserve Bank and the cash allocated by the institution's customers to fund securities transactions.

An institution pledging in-transit securities must provide a file to the Reserve Bank each night containing Committee on Uniform Securities Identification Procedures (CUSIP)-level, minute-by-minute data on the securities and cash provided by the institution's customers to fund the securities purchases. A pledging institution will need to establish a connection for the data transmission, comply with deadlines for file submission, and conform to file formatting requirements. The Reserve Bank will price the securities, apply any necessary margin adjustments to these securities net of customer funding amounts to arrive at a value for in-transit collateral for each minute of the day.

Institutions interested in pledging in-transit collateral for payment system risk purposes should contact their local Reserve Bank for detailed information and technical specifications.

Depository Trust Company (DTC) Pledging Process

DTC is a central securities depository for equity and fixed-income securities in the U.S. market. Each Reserve Bank has established a pledge account with DTC through which securities may be pledged. All DTC participants are eligible to pledge securities via DTC. Pledging institutions that are not themselves DTC participants can pledge securities through a DTC participant. Participants can pledge securities collateral by logging directly into DTC's Participant Terminal System (PTS)/Participant Browser Service (PBS) and using DTC's “COLL” function. The DTC PTS/PBS system contains specific screens for pledging securities to the Reserve Banks. Below is the list of Reserve Bank pledge accounts:

Securities to secure discount window borrowing must be pledged using Federal Reserve purpose code 01. To pledge DTC securities for Treasury programs, refer to the DTC Pledge Arrangements section of the Treasury Fiscal Service Collateral Programs Guide.

Pledges can be made by entering a separate pledge request for each security or by using a file feed option that allows the input of multiple pledges through a file upload feature. Pledging instructions are communicated between DTC and the Reserve Banks via an automated connection; therefore, there is no requirement to contact the Reserve Bank prior to pledging securities collateral into or out of a Reserve Bank's pledge account. Questions regarding the use of DTC's PTS/PBS system should be directed to DTC.

Principal and interest payments on pledged securities will generally continue to flow to the pledging institution; however, principal payments at maturity may be suspended if the pledging institution defaults on the loan or if the funds are needed to collateralize an outstanding obligation to a Reserve Bank.

Institutions may request an end-of-day extension of settlement to allow for late day pledging and withdrawing of securities. For information on how to request an extension, visit the Fedwire^® Services and National Settlement Service Extension Guidelines.

General Operating Hours:

Pledges and withdrawals of collateral maintained with DTC may be made during the DTC's general hours of operation noted below. An institution should consult DTC directly for transaction specific instructions as platform operations and hours are subject to change.

Pledges:
8:00 a.m. ET - 5:00 p.m. ET

Withdrawals:
8:00 a.m. ET - 5:00 p.m. ET
Note: To receive the proceeds of maturing securities on their maturity date, the securities must be withdrawn prior to the same-day payment deadline esablished by DTC, which may be earlier than the deadline for other withdrawals. Contact DTC for further information.

General Processing Times:

Pledges:
Most eligible DTC securities receive straight-through processing by the Reserve Banks. Straight-through processing is effective within minutes of receiving a message from DTC. Some DTC securities may require manual processing, which can take up to several hours after receiving a message from DTC. If accepted by the Reserve Bank, collateral value is assigned within seconds; if rejected, DTC will reverse the pledge on its books within minutes. For some securities, it may take several days to gather and evaluate the information needed to make a final eligibility determination and provide collateral value. A Reserve Bank may either reject the pledge while completing its analysis or accept it and not assign a collateral value until after eligibility is verified.

Late-day pledges requiring manual review may be rejected if required information is not readily available prior to the end of the processing day.

Withdrawals:
Effective within minutes after receiving a message from DTC for automated withdrawals. Withdrawal requests requiring manual intervention by Reserve Bank staff may take longer but will be approved or rejected same-day. DTC securities that secure any outstanding indebtedness or obligation owed to a Reserve Bank may not be withdrawn.

Clearstream Pledging Process

Clearstream is an international central securities depository based in Luxembourg and is a principal clearing and settlement agent for international and non-U.S. dollar denominated securities. Pledging securities collateral via Clearstream requires that the pledging institution and the Reserve Bank enter into a tri-party pledging arrangement. Any institution wishing to pledge collateral via Clearstream should contact its local Reserve Bank.

General Operating Hours:

Pledges and withdrawals of collateral maintained with Clearstream may be made during Clearstream's general hours of operation noted below.* An institution should consult Clearstream directly for transaction specific instructions as platform operations and hours are subject to change.

Pledges:
For same-day pledging, requests must be submitted to Clearstream prior to 1:00 p.m. ET/7:00 p.m. CET (Europe).

Withdrawals:
For same-day withdrawal, requests must be submitted to Clearstream prior to 1:00 p.m. ET/7:00 p.m. CET (Europe).

*Times are subject to change. Processing times and effectiveness of pledges and withdrawals may vary based on volume and other constraints and are not guaranteed. Please contact Clearstream for more information regarding cut-off times.

Euroclear Pledging Process

Euroclear is an international central securities depository based in Belgium and is a principal clearing and settlement agent for international and non-U.S. dollar denominated securities. Pledging securities collateral via Euroclear requires that the pledging institution and the Reserve Bank enter into a tri-party pledging arrangement. Any institution wishing to pledge collateral via Euroclear should contact its local Reserve Bank.

General Operating Hours:

Pledges and withdrawals of collateral maintained with Euroclear may be made during the general hours of operation noted below.* An institution should consult Euroclear directly for transaction specific instructions as platform operations are subject to change.

Pledges:
For same-day pledging, requests must be submitted to Euroclear prior to 12:15p.m. ET/6:15 p.m. CET (Europe).

Withdrawals:
For same-day withdrawal, requests must be submitted to the Reserve Bank prior to 10:00 a.m. ET/4:00p.m. CET (Europe).

*Times are subject to change. Processing times and effectiveness of pledges and withdrawals may vary based on volume and other constraints and are not guaranteed. Please contact Euroclear for more information regarding cut-off times.