(a) A licensee, at all times, shall possess permissible investments having an aggregate market value, calculated in accordance with generally accepted accounting principles, of no less than the aggregate amount of all outstanding money transmission obligations. This requirement may be waived by the commissioner if the dollar volume of a licensee’s outstanding money transmission obligations does not exceed the bond or other security devices posted by the licensee pursuant to section 489D-7.
Terms Used In Hawaii Revised Statutes 489D-8
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
(b) Permissible investments, even if commingled with other assets of the licensee, shall be 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, title 11 United States Code § 101 – 110, as may be amended or recodified, 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 the event of an action by a creditor against the licensee who is not a beneficiary of this statutory trust. No permissible investments impressed with a trust pursuant to this section shall be subject to attachment, levy of execution, or sequestration by order of any court, except for a beneficiary of a statutory trust established pursuant to this subsection.(c) Upon the establishment of a statutory trust in accordance with subsection (b) or when any funds are drawn on a letter of credit pursuant to section 489D-7(a), the licensee or applicant shall notify the commissioner of the establishment of the trust or the funds drawn on the letter of credit, as applicable. Notice shall be deemed satisfied if performed pursuant to a multistate agreement or through NMLS. 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 licensee’s outstanding money transmission obligations, shall be deemed held in trust for the benefit of the 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 the State, and other states, as applicable. Any statutory trust established pursuant to this subsection shall be terminated upon extinguishment of all of the licensee’s outstanding money transmission obligations.(d) The commissioner, by rule or by order, 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.
