A. A 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.

Terms Used In Arizona Laws 6-1229

  • Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • 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
  • Licensee: means a person licensed under this article. See Arizona Laws 6-1201
  • NMLS: means the nationwide multistate licensing system and registry that is developed by a conference of state bank supervisors and the American association of residential mortgage regulators and that is owned and operated by a state regulatory registry for the licensing and registration of persons in financial services industries. See Arizona Laws 6-1201
  • United States: includes the District of Columbia and the territories. See Arizona Laws 1-215

B. Except for permissible investments enumerated in section 6-1230, subsection A, the director 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.

C. Permissible investments, even if commingled with other assets of the licensee, are held in trust for the benefit of the purchasers and holders of the licensee’s outstanding money transmission obligations in the event of insolvency, the filing of a petition by or against the licensee under the United States bankruptcy code (11 United States Code §§ 101 through 112) for bankruptcy or reorganization, the filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization or in an action by a creditor against the licensee that is not a beneficiary of this statutory trust. A permissible investment impressed with a trust pursuant to this subsection is not subject to attachment, levy of execution or sequestration by order of any court, except for a beneficiary of this statutory trust.

D. On the establishment of a statutory trust pursuant to subsection C of this section or when any money is drawn on a letter of credit pursuant to section 6-1230, subsection A, paragraph 7, the director shall notify the applicable regulator of each state in which the licensee is licensed to engage in money transmission of the establishment of the trust or the money drawn on the letter of credit. Notice is satisfied if performed pursuant to a multistate agreement or through NMLS. Money drawn on a letter of credit and any other permissible investments held in trust for the benefit of the purchasers and holders of the licensee’s outstanding money transmission obligations are deemed held in trust for the benefit of such purchasers and holders on a pro rata and equitable basis in accordance with statutes pursuant to which permissible investments are required to be held in this state and other states, as applicable. A statutory trust is terminated on extinguishment of all of the licensee’s outstanding money transmission obligations.

E. The director may allow other types of investments that the director determines are of sufficient liquidity and quality to be a permissible investment. The director 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.

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