§ 53-342. Securities and other investments.

§ 53‑342.  Securitiesand other investments.

(a)        A State trustcompany may invest its corporate funds in any type or character of equitysecurities or debt securities subject to the limitations provided by thissection.

(b)        Unless theCommissioner approves maintenance of a lesser amount, a State trust companyshall invest and maintain an amount equal to at least forty percent (40%) ofits equity capital in unencumbered cash, cash equivalents, and readilymarketable securities.

(c)        Subject tosubsections (d) and (e) of this section, the total investment in equity andinvestment securities of any one issuer, obligor, or maker held by a Statetrust company for its own account shall not exceed an amount equal to fifteenpercent (15%) of the State trust company's equity capital. The Commissioner mayauthorize investments in excess of this limitation if the Commissionerconcludes that the safe and sound operation of a State trust company would notbe adversely affected by a proposed investment exceeding this limitation.

(d)        In calculatingcompliance with the investment limits set forth in subsection (c) of thissection, a State trust company shall not be required to combine:

(1)        The State trustcompany's pro rata share of the securities of an issuer in the portfolio of acollective investment vehicle with the State trust company's pro rata share ofthe securities of that issuer held by another collective investment vehicle inwhich the State trust company has invested; or

(2)        The State trustcompany's own direct investment in the securities of an issuer with the Statetrust company's pro rata share of the securities of that issuer held bycollective investment vehicles in which the State trust company has investedunder the provisions of this section.

(e)        Notwithstandingsubsection (c) of this section, a State trust company may purchase for its ownaccount, without limitation and subject only to the exercise of prudentjudgment:

(1)        Bonds and othergeneral obligations of a state, an agency, or political subdivision of a state,the United States, or an agency or instrumentality of the United States;

(2)        A debt security thatthis State, an agency or political subdivision of this State, the UnitedStates, or an agency or instrumentality of the United States has unconditionallyagreed to purchase, insure, or guarantee;

(3)        Securities that areoffered and sold under 15 U.S.C. § 77d(5);

(4)        Mortgage‑relatedsecurities as defined in 15 U.S.C. § 78c(a);

(5)        Investmentsecurities issued or guaranteed by the Federal Home Loan Mortgage Corporation,Fannie Mae, the Government National Mortgage Association, the FederalAgricultural Mortgage Association, or the Federal Farm Credit Banks FundingCorporation; and

(6)        Investmentsecurities issued or guaranteed by the North American Development Bank.

(f)         The Commissionermay allow State trust companies to make other investments of its corporatefunds not specified in this Subpart by rules, orders, or declaratory rulings. (2001‑263, s. 1.)