N.J. Admin. Code § 3:11-11.3

Current through Register Vol. 56, No. 17, September 3, 2024

Section 3:11-11.3 - Equity security investments

(a) A bank shall be prohibited from investing, pursuant to 17:9A-24.1 2, in stocks, preferred or common, issued by a corporation in which it has made a stock investment under some other provision of law.

(b) A bank may invest in equity securities under 17:9A-24.1 2 provided that no bank shall make an investment in the stock of any corporation pursuant to this subchapter, except as otherwise provided by this subchapter, at any time when the total ownership of any one class of equity securities of such corporation exceeds or if the making of such investment would cause such investment to exceed two percentum of any one class of the outstanding equity securities of such corporation. In addition the aggregate amount invested in all classes of the outstanding equity securities of any one corporation shall not exceed three percentum of the capital funds of the bank. A bank, by resolution of its board of directors, may apply to the Commissioner for approval to make an investment in equity securities beyond the maximum amount provided above. The application procedure and approval process shall be as provided in 3:11-11.9 and 3:11-11.1 0.

(c) This subchapter shall not prohibit a bank from making loans or incurring liabilities authorized by a provision of law other than 17:9A-24.1 2 to any corporation in which the bank has invested in the equity securities pursuant to this subchapter. The total liabilities, not including equity investments made pursuant to this subchapter, of any person incurred by virtue of any provision of law, including this subchapter, are subject to the total liability limitations in 17:9A-62.

N.J. Admin. Code § 3:11-11.3