Florida Regulations 69U-120.009: Securities Purchasable by Banks; Investment Characteristics
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(1) Securities of political subdivisions of the states are not eligible for investment unless current as to all payments of principal and interest and otherwise supported as to investment quality and marketability by a credit rating file compiled and maintained in current status by the purchasing bank or trust company. It is understood that the compiled and current credit rating file will indicate the presence of protection for both principal and interest through satisfactory basic credit factors as follows:
(a) For general obligations – assessed valuations; tax rates; tax collections; receipts and disbursements; long-term debt record; direct debt-overlapping debt; budget controls; operating results; economic status of political subdivision including population trend; and, political subdivision management record.
(b) For revenue obligations – assessed valuations; tax rates; tax collections; specific pledged revenues, with projections if available; operating expenses chargeable to revenues; net revenues available for debt service; nature of revenue lien; restrictions against excessive additional revenue bonds; necessity of project; competitive facilities; legal authority for the revenue issue; economic status of political subdivision; and population, including growth trend.
(2) Corporate obligations listed upon a recognized exchange, and new corporate issues for which listing applications are pending, which are current as to all payments of principal and interest and otherwise supported as to investment quality and marketability by a credit file compiled and maintained in current status by the purchasing bank or trust company shall be considered eligible bank investments, except as follows:
(a) Equipment trust issues shall not be subject to the listing requirement.
(b) Securities convertible into stock at the option of the holder or with stock purchase warrants attached shall be prohibited if the price paid is in excess of the comparative investment value considered independently of the conversion or purchase warrant features.
(c) Securities convertible into stock at the option of the issuer are predominantly speculative and shall be ineligible.
(3) Marketability, which is considered as present in listed corporate issues and in new corporate issues for which listing applications are pending, shall be accepted as present in securities of political subdivisions if they shall be salable under ordinary circumstances with reasonable promptness at a fair value.
Rulemaking Authority Florida Statutes § 655.012(2). Law Implemented Florida Statutes § 658.67. History-New 7-18-74, Amended 6-30-81, Formerly 3-1.04, 3C-11.04, 3C-11.004, 3C-120.009, Amended 10-29-12.
Terms Used In Florida Regulations 69U-120.009
- Lien: A claim against real or personal property in satisfaction of a debt.
(b) For revenue obligations – assessed valuations; tax rates; tax collections; specific pledged revenues, with projections if available; operating expenses chargeable to revenues; net revenues available for debt service; nature of revenue lien; restrictions against excessive additional revenue bonds; necessity of project; competitive facilities; legal authority for the revenue issue; economic status of political subdivision; and population, including growth trend.
(2) Corporate obligations listed upon a recognized exchange, and new corporate issues for which listing applications are pending, which are current as to all payments of principal and interest and otherwise supported as to investment quality and marketability by a credit file compiled and maintained in current status by the purchasing bank or trust company shall be considered eligible bank investments, except as follows:
(a) Equipment trust issues shall not be subject to the listing requirement.
(b) Securities convertible into stock at the option of the holder or with stock purchase warrants attached shall be prohibited if the price paid is in excess of the comparative investment value considered independently of the conversion or purchase warrant features.
(c) Securities convertible into stock at the option of the issuer are predominantly speculative and shall be ineligible.
(3) Marketability, which is considered as present in listed corporate issues and in new corporate issues for which listing applications are pending, shall be accepted as present in securities of political subdivisions if they shall be salable under ordinary circumstances with reasonable promptness at a fair value.
Rulemaking Authority Florida Statutes § 655.012(2). Law Implemented Florida Statutes § 658.67. History-New 7-18-74, Amended 6-30-81, Formerly 3-1.04, 3C-11.04, 3C-11.004, 3C-120.009, Amended 10-29-12.