State and Local Government Series Securities
State and Local Government Series (SLGS) securities are special purpose securities that Treasury issues to state and local governments to assist with compliance of federal tax laws and IRS regulations governing the investment of cash proceeds generated from a tax-exempt bond issuance. The software for SLGS is called SLGSafe.
Overview
The SLGS program was established in 1972 as a result of federal legislation enacted in 1969, which restricted state and local governments from arbitrage profiting by investing bond proceeds in higher yielding investments.
SLGS securities are offered for sale to issuers of state and local government tax-exempt debt 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
| 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: 1–15 days to 1 year. Note: more than 1 year up to 10 years. Bond: more than 10 years up to 40 years. | One-day but they roll over automatically until you ask us to cash them |
| Amount offered | Minimum $1,000. No maximum. Whole dollar amounts only. | Minimum $1,000. No maximum. Does not have to be whole dollar amounts. |
The SLGSafe Software Application
Subscribers purchase SLGS securities using SLGSafe, a secure internet application for managing your SLGS portfolio, with immediate subscription confirmation and redemption capabilities.