Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds With Sureties

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This rule proposes to revise its regulations which govern the acceptance of bonds secured by Government obligations in lieu of bonds with sureties. It specifically addresses the mechanics of pledging book-entry Government obligations, and clarifies existing requirements for accepting bonds secured with Government obligations. These revisions are intended to provide greater clarity and flexibility by replacing obsolete references and unnecessary requirements with current references and requirements. In addition, this rule proposes to expand the use to which the proceeds of the pledged Government obligations, in the event of a default in performance, may be applied.