Md. Code Regs. 31.04.09.01

Current through Register Vol. 51, No. 22, November 1, 2024

Section 31.04.09.01 - Definitions

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) Agent.

(a) "Agent" means:

(i) A qualified bank or qualified broker/dealer 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

(ii) 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 in the foreign country, 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)"Agent" includes a subcustodian.

(2) "Carrier" means:

(a) A domestic insurer;

(b) A nonprofit health service plan;

(c) A dental plan organization;

(d) A health maintenance organization; or

(e) A managed care organization.

(3) Clearing Corporation.

(a) "Clearing corporation" means:

(i) A corporation, as defined in Commercial Law Article, § 8-102(a)(5), Annotated Code of Maryland, that is organized for the purpose of effecting transactions in securities by computerized book-entry; or

(ii) 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 in the foreign country, a corporation that is organized or existing under the laws of a foreign country and that is legally qualified under those laws to effect transactions in securities by computerized book-entry.

(b) "Clearing corporation" includes:

(i) Treasury Direct; and

(ii) The Treasury/Reserve Automated Debt Entry System.

(4) "Custodian" means a qualified bank, qualified broker/dealer, or clearing corporation that:

(a) Accepts deposits of securities from carriers; and

(b) Safeguards, holds, and reports on the securities under a written custodial agreement with the carrier.

(5) "Custodied securities" means securities held:

(a) By a custodian or its agent; or

(b) In a clearing corporation.

(6) "Qualified bank" means:

(a) A bank, trust company, or federal home loan bank that:

(i) At all times during which it acts as a custodian under this chapter is not less than adequately capitalized as determined by the standards adopted by United States banking regulators;

(ii) Is regulated by either state banking laws or is a member of the Federal Reserve System; and

(iii) Is legally qualified to accept custody of securities in accordance with this chapter; or

(b) 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 in the foreign country, a bank or trust company incorporated or organized under the laws of a country other than the United States that:

(i) Is regulated as a bank or trust company by that country's government or an agency of that country's government;

(ii) At all times during which it acts as a custodian under this chapter is not less than adequately capitalized as determined by the standards adopted by international banking authorities; and

(iii) Is legally qualified to accept custody of securities.

(7) "Qualified broker/dealer" means a securities firm that:

(a) Has a tangible net worth of at least $250,000,000 as evidenced by its most recent audited financial statement;

(b) Is registered with and subject to the jurisdiction of the Securities and Exchange Commission; and

(c) Maintains at all times Securities Investor Protection Corporation excess insurance coverage equal to or greater than the market value of the carriers' securities maintained with the broker/dealer.

(8) "Registered form" has the meaning stated in Commercial Law Article, § 8-102(a)(13), Annotated Code of Maryland.

(9) Security.

(a) "Security" has the meaning stated in Commercial Law Article, § 8-102(a)(15), Annotated Code of Maryland.

(b) "Security" includes:

(i) A certificated security as defined by Commercial Law Article, § 8-102(a)(4), Annotated Code of Maryland; and

(ii) An uncertificated security as defined by Commercial Law Article, § 8-102(a)(18), Annotated Code of Maryland.

(10) "Treasury Direct" means the book-entry securities system:

(a) Established pursuant to 5 U.S.C. § 301, 12 U.S.C. § 391, and 31 U.S.C. Subtitle III, Chapter 31; and

(b) Governed by 31 CFR Part 357, Subpart C.

(11) "Treasury/Reserve Automated Debt Entry System (TRADES)" means the book-entry securities system:

(a) Established pursuant to 5 U.S.C. § 301, 12 U.S.C. § 391, and 31 U.S.C. Subtitle III, Chapter 31; and

(b) Governed by 31 CFR Part 357, Subpart B.

Md. Code Regs. 31.04.09.01

Regulation .01 amended effective November 6, 1995 (22:22 Md. R. 1657)
Regulations .01 adopted effective September 22, 1997 (24:19 Md. R. 1339)
Regulations .01, Registration of Securities in the Names of Nominees and the Deposit of Securities in Depository Trust Company, repealed and Regulations .01, Custody Agreements and the Use of Clearing Corporations and Federal Reserve Book-Entry System, adopted effective April 26, 2004 (31:8 Md. R. 648)