U.S. Treasury Securities-State and Local Government Series

The Department of the Treasury (Treasury) is issuing this final rule to amend the regulations governing State and Local Government Series (SLGS) securities. SLGS securities are non-marketable Treasury securities that are available for purchase only by issuers of tax-advantaged securities. The final 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. The final rule amends the existing regulations to prevent such activity. In addition, the final rule makes administrative changes to increase efficiencies in the program.