Texas Finance Code 152.355 – Maintenance of Permissible Investments by Money Transmission Licensee
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(a) A money transmission licensee shall maintain at all times permissible investments that have a market value computed in accordance with United States generally accepted accounting principles of not less than the aggregate amount of all of its outstanding money transmission obligations.
(b) Except for permissible investments allowed under § 152.356(a), the commissioner, with respect to a money transmission licensee, may limit the extent to which a specific investment maintained by a licensee within a class of permissible investments may be considered a permissible investment, if the specific investment represents undue risk to customers not reflected in the market value of investments.
Terms Used In Texas Finance Code 152.355
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- United States: includes a department, bureau, or other agency of the United States of America. See Texas Government Code 311.005
(c) Permissible investments are held in trust for the benefit of the purchasers and holders of the money transmission licensee’s outstanding money transmission obligations in the event of:
(1) insolvency;
(2) the filing of a petition by or against the licensee under the United States Bankruptcy Code (11 U.S.C. Sections 101-1532) for bankruptcy or reorganization;
(3) the filing of a petition by or against the licensee for receivership;
(4) the commencement of any other judicial or administrative proceeding for the licensee’s dissolution or reorganization; or
(5) an action by a creditor who is not a beneficiary of the trust under this section against the licensee.
(d) A permissible investment impressed with a trust under Subsection (c) is not subject to attachment, levy of execution, or sequestration by order of any court, except for a beneficiary of the trust.
(e) On the establishment of a trust under Subsection (c) or when any funds are drawn on a letter of credit under § 152.356(a)(4), the commissioner shall notify the applicable regulator of each state in which the money transmission licensee is licensed to engage in money transmission services of the establishment of the trust or the funds drawn on the letter of credit, as applicable. Notice under this subsection is considered to be given if performed under a multistate agreement or through the NMLS.
(f) Funds drawn on a letter of credit, and any other permissible investments held in trust for the benefit of the purchasers and holders of the money transmission licensee’s outstanding money transmission obligations, are considered held in trust for the benefit of those purchasers and holders on a pro rata and equitable basis in accordance with statutes under which permissible investments are required to be held in this state, and other states, as applicable.
(g) A trust established under Subsection (c) shall be terminated on extinguishment of all of the money transmission licensee’s outstanding money transmission obligations.
(h) The commissioner may allow other types of investments that the commissioner determines are of sufficient liquidity and quality to be a permissible investment. The commissioner may participate in efforts with other state regulators to determine that other types of investments are of sufficient liquidity and quality to be a permissible investment.