Vermont § 2542 - Maintenance of permissible investments

§ 2542. Maintenance of permissible investments

• (a) A licensee shall maintain at all times permissible investments that have a market
  value computed in accordance with U.S. generally accepted accounting principles of
  not less than the aggregate amount of all of its outstanding money transmission obligations. (b) Except for permissible investments enumerated in subsection 2543(a) of this subchapter,
  the Commissioner, 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 upon the occurrence of one or more of the following
  events: (1) the insolvency of the licensee; (2) the filing of a petition by or against the licensee under the U.S. Bankruptcy Code,
  11 U.S.C. §§ 101–110, as may be amended, 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 its dissolution
  or reorganization; or (5) the commencement of an action by a creditor against the licensee who is not a beneficiary
  of this statutory trust. (d) No permissible investments impressed with a trust pursuant to subsection (c) of this
  section shall be subject to attachment, levy of execution, or sequestration by order
  of any court, except for a beneficiary of this statutory trust. (e) Upon the establishment of a statutory trust in accordance with subsection (c) of this
  section or when any funds are drawn on a letter of credit pursuant to subdivision
  2543(a)(4) of this subchapter, the Commissioner 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. Notice shall be deemed satisfied if performed pursuant to a multistate
  agreement or through 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 deemed held in trust for the benefit
  of such 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 this
  State, and other states, as applicable. Any statutory trust established hereunder
  shall be terminated upon extinguishment of all of the licensee’s outstanding money
  transmission obligations. (f) The Commissioner by rule or order may allow other types of investments that the Commissioner
  determines are of sufficient liquidity and quality to be a permissible investment.
  The Commissioner is authorized to 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. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)