Statutes, codes, and regulations
Alabama Administrative Code
Title 482 - ALABAMA DEPARTMENT OF INSURANCE
Chapter 482-1-077 - CUSTODIAL AGREEMENTS AND USE OF CLEARING CORPORATIONS BY DOMESTIC INSURANCE COMPANIES
Section 482-1-077-.03 - Definitions

Ala. Admin. Code r. 482-1-077-.03

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Current through Register Vol. 43, No. 02, November 27, 2024
Section 482-1-077-.03 - Definitions

The following definitions shall apply for the purposes of this chapter:

(a) AGENT. A national bank, state bank or trust company that maintains an account in its name in a clearing corporation or that is a member of the Federal Reserve System and through which a custodian participates in a clearing corporation or the Federal Reserve book-entry system, except that with respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business therein, "agent" may include a corporation that is organized or existing under the laws of a foreign country and that is legally qualified under those laws to accept custody of securities.
(b) CLEARING CORPORATION. A corporation as defined in Code of Ala. 1975, § 7-8-102(a)(5), that is organized for the purpose of effecting transactions in securities by computerized book-entry, except that with respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business therein, "clearing corporation" may include a corporation that is organized or existing under the laws of a foreign country and which is legally qualified under those laws to effect transactions in securities by computerized book-entry. Clearing corporation also includes "Treasury/Reserve Automated Debt Entry Securities System" and "Treasury Direct" book-entry securities systems established pursuant to 31 USC §§ 3100, et seq., 12 USC pt. 391, and 5 USC pt. 301.
(c) CUSTODIAN.
1. A national bank, state bank, federal home loan bank, or trust company that shall at all times during which it acts as a custodian pursuant to this chapter be no less than adequately capitalized as determined by the standards adopted by the regulator charged with establishing standards for, and assessing, the institution's solvency and that is regulated by either federal or state banking laws or the Federal Home Bank Act, as amended, or is a member of the Federal Reserve System and that is legally qualified to accept custody of securities in accordance with the standards set forth below, except that with respect to securities issued by institutions organized or existing under the laws of a foreign country, or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business therein, "custodian" may include a bank or trust company incorporated or organized under the laws of a country other than the United States that is regulated as such by that country's government or an agency thereof that shall at all times during which it acts as a custodian pursuant to this chapter be no less than adequately capitalized as determined by the standards adopted by international banking authorities and that is legally qualified to accept custody of securities.
2. A broker/dealer that shall be registered with and subject to jurisdiction of the Securities and Exchange Commission, maintains membership in the Securities Investor Protection Corporation, and has a tangible net worth equal to or greater than two hundred fifty million dollars ($250,000,000).
(d) CUSTODIED SECURITIES. Securities held by the custodian or its agent or in a clearing corporation, include the Treasury/Reserve Automated Debt Equity Securities System (TRADES) or Treasury Direct systems.
(e) SECURITIES. Has the same meaning as "certificated securities" and "uncertificated securities" as defined in Code of Ala. 1975, §§ 7-8-102(a)(4) and 7-8-102(a)(18).
(f) SECURITIES CERTIFICATE. Has the same meaning as "certificated securities" and "uncertificated securities" as defined in Code of Ala. 1975, §§ 7-8-102(a)(4) and 7-8-102(a)(18).
(g) TANGIBLE NET WORTH. Shareholders equity, less intangible assets, as reported in the broker/dealer's most recent Annual or Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (S.E.C. Form 10-K) filed with the Securities and Exchange Commission.
(h) TREASURY/RESERVE AUTOMATED DEBT ENTRY SECURITIES SYSTEM (TRADES) and TREASURY DIRECT. The book entry securities systems established pursuant to 31 U.S.C. §§ 3100, et seq., 12 U.S.C. pt. 391, and 5 U.S.C. pt. 301. The operation of TRADES and Treasury Direct are subject to 31 C.F.R. pt. 357, et seq.

Ala. Admin. Code r. 482-1-077-.03

New Rule: November 13, 1986; effective February 14, 1987. Supplemented May 29, 1990; effective July 1, 1990. Revised: January 25, 1996; effective February 5, 1996. Revised: May 27, 2003; effective June 9, 2003. Filed with LRS May 30, 2003. Rule is not subject to the Alabama Administrative Procedure Act.
Amended by Alabama Administrative Monthly Volume XL, Issue No. 10, July 29, 2022, eff. 7/17/2022.

Author: Commissioner of Insurance

Statutory Authority:Code of Ala. 1975, §§ 27-2-17, 27-37-1.