State and Local Government Series Securities

Overview

The State and Local Government Series (SLGS) securities program was established in 1972 as the result of federal legislation enacted in 1969 which restricted state and local governments from earning arbitrage profits by investing bond proceeds in higher yielding investments.

SLGS securities are offered for sale to issuers of state and local government tax-exempt debt to assist with compliance of yield restriction or arbitrage rebate provisions of the Internal Revenue Code. Subscribers may invest in time deposit or demand deposit types of securities. All SLGS securities are issued in book-entry form and are non-marketable.

SLGS at a Glance

You can invest in either Time Deposit SLGS or Demand Deposit SLGS.

Feature	Time Deposit SLGS	Demand Deposit SLGS
Issued as	Certificate of Indebtedness (C of I) or Note or Bond	One-day Certificate of Indebtedness (C of I)
Maturity length	C of I – 15 days to 1 year Note – more than 1 year to 10 years Bond – more than 10 years to 40 years	One-day but they roll over automatically until you ask us to cash them
Interest paid	C of I pays interest when the Time Deposit SLGS matures Notes and bonds pay interest every 6 months	Interest is capitalized every day on principal and prior accrued interest and paid at redemption
Interest rate	The maximum allowable rate is one basis point below the current estimated Treasury borrowing rate for a security of comparable maturity The daily rate table shows the maximum allowable rate. A  SLGS customer may choose any rate they want from 0% to the maximum in the daily rate table	Based on an adjustment of the average yield in the most recent auction of the 13-week Bill
Amount offered	Minimum: $1,000 No maximum Whole dollar amounts only	Minimum: $1,000 No maximum Does not have to be in whole dollar amounts

For more information, see our SLGS FAQS

The SLGSafe Software Application

Subscribers can purchase SLGS securities by using SLGSafe, our secure Internet application for managing your SLGS portfolio. With SLGSafe, you’ll enjoy immediate subscription confirmation, report access, and redemption capabilities.

Funds for purchasing the security are sent through the Fedwire Funds Transfer system (Fedwire) on the issue date. Scheduled interest and redemption payments are paid through Automated Clearing House (ACH). Fedwire pays some of the proceeds of redemptions requested before maturity.

For more information about the application, see the SLGSafe FAQs

2024 SLGS Updated Rule

New rules governing SLGS nonmarketable Treasury securities will change both SLGS program and SLGSafe operations. Effective Monday, August 26, 2024, the updated rule governing SLGS securities will go into effect and impact SLGSafe Users. The press release announcing this change is available at https://www.treasurydirect.gov/news/.

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.

Also, 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. Visit the Federal Register to read the final regulation affecting SLGS.

A Quick Reference Guide to 2024 SLGS Program Changes, and corresponding SLGSafe changes, are summarized below and available to download at https://www.treasurydirect.gov/files/government/slgs/slgsafe/res-qrg.pdf. New instructional videos that show these changes are also found in the SLGSafe Videos page under SLGSafe Resources.

SLGS Program Changes in Brief

	New Rule	Old Rule
Subscriptions	Security information is required for SLGS time deposits when a subscription is submitted.	Security information was required by 3:00 PM on issue date.
	Changes to principal amounts greater/less than 10% are calculated at the security level.	Changes to principal amounts greater/less than 10% were calculated at the case level.
	Maturity date changes are restricted to +/-30 days for certificate of indebtedness (C of I), +/- 6 months for notes, and +/- 1 year for bonds.	Maturity date changes were allowed until 3:00 PM on issue date with no restrictions.
	Subscriptions require a 'Yes' or 'No' designation for EMMA ® (Electronic Municipal Market Access) registration. 'Yes' designations must reflect the "Issue Description" as it is registered in EMMA®.	There was no designation requirement for the EMMA® Registration.
Redemptions	Early redemption requests cannot be entered until 14 days after the issue date for notes and bonds.	Early redemption requests could be requested the day after issuance for notes and bonds.
	New lead time of five (5) business days is required for SLGS demand deposit redemptions $500 million or more. All lead time requirements for demand redemptions will be determined by total redemptions at the owner level.	SLGS demand deposit redemption lead times were one (1) business day for $10 million or less and three (3) business days for more than $10 million. All lead time requirements were determined at the security level.
Certifications	Subscribers certify that the term of securities being subscribed for is no longer than reasonably necessary for the underlying governmental purpose.	No certification as to security terms was required.
	Subscribers certify that funds or issuer eligibility changes will be communicated to Treasury as soon as practicable.	No certification as to eligibility changes was required.

SLGSafe Customer Experience Enhancements

	After the Enhancements	Before the Enhancements
Subscriptions	Subscriptions can now be saved without submitting (but must be submitted the same business day).	Subscriptions must be entered and submitted at the same time.
Debt Issuance Suspension Period (DISP)	Special 90-day C of I's are accessible in SLGSafe during a debt limit contingency.	Special 90-day C of I's are accessible in SLGSafe during a debt limit contingency.