Financial Code - FIN - FIN § 2082

Summary

(a) “Eligible security” means any United States currency eligible security or foreign currency eligible security. (b) For the purposes of this division, the following are United States currency eligible securities: (1) Cash, cash in transit via armored car, cash in smart safes, a

Text

(a)
“Eligible security” means any United States currency eligible security or foreign currency eligible security.
(b)
For the purposes of this division, the following are United States currency eligible securities:
(1)
Cash, cash in transit via armored car, cash in smart safes, and cash in licensee-owned locations.
(2)
Any deposit in an insured bank, an insured savings and loan association, or an insured credit union, including any deposit in an insured bank, an insured savings and loan association, or an insured credit union that is in an account held for the benefit of the licensee’s customers that is titled “(name of licensee) FBO Its
(licensee’s customers or specific group of licensee’s customers).”
(3)
Any bond, note, or other obligation that is issued or is guaranteed by the United States or any agency of the United States.
(4)
Any bond, note, or other obligation that is issued or guaranteed by any state of the United States or by any governmental agency of or within any state of the United States and that is assigned an eligible rating by an eligible securities rating service.
(5)
Any bankers acceptance that is eligible for discount by a federal reserve bank.
(6)
Any commercial paper that is assigned an eligible rating by an eligible rating securities service.
(7)
Any bond, note, or other obligation that is assigned
an eligible rating by an eligible securities rating service.
(8)
Any share of an investment company that is an open-end management company, that is registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), that holds itself out to investors as a money market fund, and that operates in accordance with all provisions of the Investment Company Act of 1940, and the regulations of the Securities and Exchange Commission applicable to money market funds, including Section 270.2a-7 of the regulations of the Securities and Exchange Commission (17 C.F.R. 270.2a-7).
For purposes of this paragraph and paragraph (9), “investment company,” “management company,” and “open-end” have the meanings set forth in Sections 3, 4, and 5, respectively, of the Investment Company Act of 1940 (15 U.S.C. Secs. 80a-4 and 80a-5, respectively).
(9)
Any share of an investment company that is an open-end management company, that is registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), and that invests exclusively in securities that constitute eligible securities that comply with the valuation requirements of this division.
(10)
Any account due to any licensee from any agent in the United States on account of the receipt of money on behalf of the licensee for money transmission by the agent, if the account is current and not past due or otherwise doubtful of collection.
(11)
Any other security or class of securities that the commissioner has by regulation or order declared to be eligible securities.
(12)
Any receivable owed by a bank and resulting from a debit card- or credit card-funded transmission, automated
clearinghouse items in transit to the licensee, and automated clearinghouse items or international wires in transit to a payee.
(13)
The full drawable amount of an irrevocable standby letter of credit for which the stated beneficiary is the commissioner that stipulates that the beneficiary need only draw a sight draft under the letter of credit and present it to obtain funds up to the letter of credit amount within seven days of presentation of the items required by subparagraph (B).
(A)
The letter of credit described by this paragraph shall meet all of the following criteria:
(i)
The letter of credit is issued by an insured depository financial institution, a foreign bank that is authorized under federal law to maintain a federal agency or federal branch office in any state, or a foreign bank that is authorized
under state law to maintain a branch in a state that bears an eligible rating or whose parent company bears an eligible rating and that is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks, credit unions, and trust companies.
(ii)
The letter of credit is irrevocable, unconditional, and indicates that it is not subject to any condition or qualifications outside of the letter of credit.
(iii)
The letter of credit does not contain reference to any other agreements, documents, or entities, or otherwise provide for any security interest in the licensee.
(iv)
(I)
The letter of credit contains an issue date and expiration date and expressly provides for automatic extension, without a written amendment, for an additional period of
one year from the present or each future expiration date, unless the issuer of the letter of credit notifies the commissioner in writing by certified or registered mail or courier mail or other receipted means, at least 60 days before any expiration date, that the irrevocable letter of credit will not be extended.
(II)
If the issuer notifies, pursuant to subclause (I), the commissioner that a letter of credit will not be extended, the licensee shall demonstrate to the satisfaction of the commissioner at least 15 days before expiration that the licensee maintains, and will maintain, permissible investments in accordance with Section 2081 upon the expiration of the letter of credit. If the licensee is not able to do so, the commissioner may draw on the letter of credit in an amount up to the amount necessary to meet the licensee’s requirements to maintain permissible investments in accordance with Section 2081. Any such draw shall be offset
against the licensee’s outstanding money transmission obligations. The drawn funds shall be held in trust by the commissioner or the commissioner’s designated agent, to the extent authorized by law, as agent for the benefit of the purchasers and holders of the licensee’s outstanding money transmission obligations.
(B)
The letter of credit shall provide that the issuer of the letter of credit will honor, at sight, a presentation made, on or before the expiration date of the letter of credit, by the beneficiary to the issuer of both of the following documents:
(i)
The original letter of credit, including any amendments.
(ii)
A written statement from the beneficiary stating that any of the following events have occurred:
(I)
The filing of a petition by or
against the licensee under Sections 101 to 110, inclusive, of Title 11 of the United States Code, as amended or recodified from time to time, for bankruptcy or reorganization.
(II)
The filing of a petition by or against the licensee for receivership or the commencement of any other judicial or administrative proceeding for its dissolution or reorganization.
(III)
The seizure of assets of a licensee by a commissioner pursuant to an emergency order issued in accordance with applicable law on the basis of an action, violation, or condition that has caused, or is likely to cause, the insolvency of the licensee.
(IV)
The beneficiary has received notice of expiration or non-extension of a letter of credit, and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee will maintain
permissible investments in accordance with Section 2081 upon the expiration or non-extension of the letter of credit.
(C)
(i)
The letter of credit shall authorize the commissioner to designate an agent to serve on the commissioner’s behalf as beneficiary to a letter of credit if the agent and letter of credit meet requirements established by the commissioner.
(ii)
An agent designated pursuant to this subparagraph may serve as agent for multiple licensing authorities for a single irrevocable letter of credit if the proceeds of the drawable amount for the purposes of this section are assigned to the commissioner.
(c)
“Foreign currency eligible security” means any of the following that is denominated in a foreign currency:
(1)
Cash.
(2)
Any deposit, made with the prior approval of the commissioner, in an office of a bank that is located in a foreign country, if the licensee has received a satisfactory rating in its most recent examination, and the foreign depository institution meets all of the following criteria:
(A)
The foreign depository institution has an eligible rating.
(B)
The foreign depository institution is registered under the federal Foreign Account Tax Compliance Act.
(C)
The foreign depository institution is not located in a country subject to sanctions from the federal Office of Foreign Asset Control.
(D)
The foreign depository institution is not located in a high-risk or
non-cooperative jurisdiction as designated by the Financial Action Task Force.
(3)
Any other security or class of securities that the commissioner has by regulation or order declared to be eligible securities pursuant to Section 2086.
(d)
For the purposes of this division, “value” means the following:
(1)
When used with respect to an eligible security owned by a licensee of the type described in paragraph (10) of subdivision (b), net carrying value as determined in conformity with United States generally accepted accounting principles. However, in computing the value of the account, any amount that consists of money that has not been remitted to the licensee or refunded within 45 business days of receipt by the agent shall be excluded from the value of the account and shall be excluded from the calculation of
eligible securities.
(2)
Market value when used with respect to any other eligible security owned by a licensee.

Retrieval chunks

• #1 | Financial Code - FIN - FIN § 2082

  (a) “Eligible security” means any United States currency eligible security or foreign currency eligible security. (b) For the purposes of this division, the following are United States currency eligible securities: (1) Cash, cash in transit via armored car, cash in smart safes, and cash in licensee-owned location…

• #2

  Any share of an investment company that is an open-end management company, that is registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), and that invests exclusively in securities that constitute eligible securities that comply with the valuation requirements of this division. (10) Any …

• #3

  one year from the present or each future expiration date, unless the issuer of the letter of credit notifies the commissioner in writing by certified or registered mail or courier mail or other receipted means, at least 60 days before any expiration date, that the irrevocable letter of credit will not be extended. (I…

• #4

  The beneficiary has received notice of expiration or non-extension of a letter of credit, and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee will maintain permissible investments in accordance with Section 2081 upon the expiration or non-extension of the letter of credit. …

• #5

  Market value when used with respect to any other eligible security owned by a licensee.