2023 Indiana Code › Title 28. Financial Institutions › Article 8. Financial Services › Chapter 4.1. Money Transmission Modernization Act › 28-8-4.1-1003. Permissible Investments; Statutory Trust

Effective 1-1-2024.
Sec. 1003. (a) A licensee shall maintain at all times permissible investments that have a market value computed in accordance with United States generally accepted accounting principles of not less than the aggregate amount of all of the licensee's outstanding money transmission obligations.
(b) Except for permissible investments set forth in section 1004(a) of this chapter, the department, with respect to any licensee, may by rule or order limit the extent to which a specific investment maintained by a licensee within a class of permissible investments may be considered a permissible investment, if the specific investment represents undue risk to customers, not reflected in the market value of investments.
(c) Permissible investments, even if commingled with other assets of the licensee, are held in trust for the benefit of the purchasers and holders of the licensee's outstanding money transmission obligations in the event of:
(1) insolvency of the licensee;
(2) the filing of a petition by or against the licensee under the federal Bankruptcy Code (11 U.S.C. 101-110) for bankruptcy or reorganization;
(3) the filing of a petition by or against the licensee for receivership;
(4) the commencement of any other judicial or administrative proceeding for the dissolution or reorganization of the licensee; or
(5) an action against the licensee by a creditor who is not a beneficiary of the statutory trust established by this subsection.
The permissible investments impressed with a trust under this subsection are not subject to attachment, levy of execution, or sequestration by order of any court, except for a beneficiary of the statutory trust established by this subsection.
(d) Upon the establishment of a statutory trust in accordance with subsection (c) or when any funds are drawn on a letter of credit pursuant to section 1004(a)(4) of this chapter, the director shall notify the applicable regulator of each state in which the licensee is licensed to engage in money transmission, if any, of the establishment of the trust or the funds drawn on the letter of credit, as applicable. The notice required by this subsection is considered satisfied if performed pursuant to a multistate agreement or through the 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, are considered held in trust for the benefit of those 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 Indiana, and in other states, as applicable. Any statutory trust established under this section is terminated upon extinguishment of all of the licensee's outstanding money transmission obligations.
(e) The department by rule or by order may allow other types of investments that the department determines are of sufficient liquidity and quality to be a permissible investment. The department 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.
As added by P.L.198-2023, SEC.4.