N.Y. Comp. Codes R. & Regs. tit. 3 § 402.6

Current through Register Vol. 46, No. 45, November 2, 2024

Section 402.6 - Deposit of assets in lieu of surety bond; assets eligible for deposit

(a) A licensee, in lieu of obtaining a bond pursuant to this Part, may keep on deposit in a branch of a bank, savings bank, savings and loan association, trust company, private banker, national bank, Federal savings bank, or Federal savings and loan association, located in this State, regardless of whether the principal office of the foregoing institution is located within or without this State, subject to the approval of the superintendent, interest-bearing bonds, notes, debentures, or other obligations of the United States or any agency or instrumentality thereof, or guaranteed by the United States, or of this State, or of a city, county, town, village, school district, or instrumentality of this State or guaranteed by this State, or dollar deposits. The amount of the deposit shall be $250,000 (based on the lower of principal amount or market value), or such larger or smaller amount as the superintendent may require.

(b) In addition to the assets described in subdivision (a) of this section, the following assets are eligible for deposit for purposes of this Part:

(1) commercial paper payable in dollars in the United States provided such paper is accorded the highest rating of a rating service designated by the Banking Board pursuant to section 61.1 of this Title. In the event that an issue of commercial paper is rated by more than one designated rating service, it must have the highest rating of each;

(2) negotiable certificates of deposit that are payable in the United States and issued by an unaffiliated domestic banking institution or a domestic office of an unaffiliated foreign banking corporation;

(3) banker's acceptances that are payable in the United States and issued by an unaffiliated domestic banking institution or a domestic office of an unaffiliated foreign banking corporation;

(4) bonds which have an investment grade rating from either Moody's Investors Services, Inc., Standard & Poor's Corporation or Fitch Investors' Service, Inc.; and

(5) such other assets as approved by the superintendent upon written application.

(c) If the superintendent determines that an asset which otherwise qualifies under paragraphs (b)(1) through (5) of this section is valued for purposes of this Part at less than the amount otherwise required by this Part, the superintendent shall so notify the licensee which shall thereafter value such asset for purposes of this Part as directed by the superintendent.

(d) Within 90 days of the effective date of Banking Law, section 580, as amended by chapter 629 of the Laws of 2002, which date is April 7, 2003, each licensee shall comply with the provisions of this section.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 402.6