Treasury has published an updated rule governing State and Local Government Series Securities

FOR IMMEDIATE RELEASE

March 4, 2024

The U.S. Department of the Treasury, Bureau of the Fiscal Service has published an updated rule governing State and Local Government Series (SLGS) nonmarketable Treasury securities under CFR Title 31, Subtitle B, Chapter II, Subchapter A, Part 344. The amended rule will be effective Monday, August 26, 2024, unless an extension is necessary. If an extension is required, Fiscal Service will issue an updated press release.

The new rule amends the SLGS regulations to prevent impermissible uses of the SLGS program, most notably the use of program flexibilities by tax-advantaged entities, usually a state or local government, investing in SLGS securities to create impermissible cost-free options.

In addition, the rule makes administrative changes to increase efficiencies in the program to lower Treasury's borrowing and administrative costs, and additional costs passed to the Federal taxpayer.

The TreasuryDirect website has more information about the SLGS Program and the updated regulation.

The SLGS program began in 1972 to assist state and local government entities in complying with IRS arbitrage regulations. SLGS securities are not available to the general public.