2023 New York Laws › FIS - Financial Services Law › Article 5 - Restrictions on Officers and Employees of the Department › 501 - Restrictions on Officers and Employees of the Department; Penalty.

§  501.  Restrictions  on  officers  and  employees of the department;
penalty. (a) No officer or employee of the  department  shall  obtain  a
loan  or  extension of credit from any regulated person or be interested
in any such regulated person as a  director,  partner,  owner,  officer,
attorney, agent, trustee or employee, or own or deal in, either directly
or indirectly, the stocks or obligations of any such regulated person. A
violation  of  the provisions of this section by any officer or employee
shall constitute sufficient grounds  for  his  or  her  removal  by  the
superintendent.
(b) Nothing in this section shall be construed to prohibit any officer
or employee from obtaining financing from a regulated person upon his or
her  primary or secondary residence, provided that the premises securing
such loan are occupied by such employee, and further provided that  such
loan  is  reported to the department, which shall keep a record thereof.
The term "residence," for the purposes of this  section,  shall  mean  a
single   family  or  two  family  residence,  condominium  apartment  or
cooperative apartment, occupied in whole or in part, by the  officer  or
employee.  The  term  "cooperative  apartment"  means  a residence where
ownership is evidenced by certificates of stock or other evidence of  an
ownership  interest  in,  and a proprietary lease from, a corporation or
partnership formed for the purpose of the cooperative ownership of  real
estate.
(c) Nothing in this section shall be construed to prohibit any officer
or  employee  from: (1) obtaining a loan secured by an assignment of his
or her deposit in a banking organization, or an assignment or pledge  of
his or her shares in a savings and loan association or credit union; (2)
accepting  financing  of an automobile, truck or other personal property
from a banking organization or a sales  finance  company;  (3)  entering
into  a  premium finance agreement with a premium finance agency; or (4)
owning  shares  of  an  investment  company  (mutual  fund)   that   may
incidentally  invest in the securities of any regulated person, provided
that the purpose of the investment portfolio of such investment  company
may  not  be  to  invest  primarily  or exclusively in the securities of
banking or insurance entities. For purposes of this section,  investment
companies  include open-end and closed-end investment companies and unit
investment trusts as those terms are  defined  in  an  Act  of  Congress
entitled "The Investment Company Act of 1940," as amended.
(d)  Nothing in this section shall be construed to prevent any officer
or employee from becoming a policyholder of any insurer or  from  taking
out  a  loan  under  the  officer's  or  employee's insurance policy, or
prevent or impair  the  ability  of  the  superintendent  to  act  as  a
liquidator,   rehabilitator,   or   conservator   pursuant   to  article
seventy-four of the insurance law or article  thirteen  of  the  banking
law.
(e)  The  superintendent  may  promulgate  policies and procedures for
exempting particular employees, or classes of employees, from investment
restrictions in subsection (a) of this section as to  regulated  persons
with  which  such  employee  or  class  of employees has no authority or
involvement.
(f) This section shall not apply to investments held in a blind  trust
approved by the superintendent or the superintendent's designee.