| (a) Approved deposit agreement. A foreign bank and
a depository must execute a deposit agreement approved by the banking
commissioner before the foreign bank may deposit assets for purposes
of Finance Code, §204.113, and this subchapter. In addition to
any other terms and conditions that are not inconsistent with those
listed in this section or imposed by the banking commissioner, the
deposit agreement must include the terms and conditions set forth
in subsections (b) through (m) of this section.
(b) Limitation on assets that may be deposited. Only
assets eligible to be pledged under §3.58 of this title (relating
to Eligible Assets and Conditions) may be deposited into the pledge
account.
(c) Assets pledged to banking commissioner. The assets
must be pledged to the banking commissioner for the benefit of the
creditors and depositors of the Texas state branch's or agency's business
in this State. The banking commissioner must be provided with, and
is deemed to have, a security interest in the pledged assets.
(d) Assets held as special deposit. The depository
must hold the assets deposited under the agreement as a special deposit
free of any lien, charge, right of set-off, credit, or preference
in connection with any claim of the depository against the foreign
bank or the Texas state branch or agency. The depository may not accept
any asset under the agreement that is not accompanied by documentation
necessary to facilitate transfer of title.
(e) Depository to furnish receipt. The depository must
furnish the foreign bank, upon the deposit of assets under the depository
agreement, a receipt or statement as evidence of the deposit. The
receipt or statement must identify the deposit as having been made
pursuant to Finance Code, §204.113, and under the deposit agreement,
and must state the amount of the deposit and, with respect to the
deposit of securities, a description of each security deposited.
(f) Release of securities by depository. The depository
must release deposited assets to the foreign bank upon written request:
(1) when accompanied by a certificate, as described
in subsection (g) of this section, signed by a duly authorized officer
of the foreign bank; or
(2) upon receipt of the banking commissioner's written
order to release such part of the deposited assets under such conditions
and terms as the order may specify.
(g) Model certificate. A duly authorized officer of
the foreign bank must execute the following or a similar certificate
before making a withdrawal under subsection (f)(1) of this section:
It is hereby certified that the aggregate value of securities and/or
funds remaining on deposit pursuant to the Deposit Agreement after
this withdrawal or substitution amounts to $_________, valued at the
lower of principal amount or market value, and that such amount is
at least equal to the amount required to be deposited under Finance
Code, §204.113, and 7 TAC §3.51 et seq. The amount required
to be maintained on deposit, calculated in accordance with this subchapter,
is $_____ as of this date.
(h) Depository to furnish monthly statement of all
transactions. The depository must furnish to the foreign bank, at
least once in each calendar month, a statement of all transactions
in the pledge account since the closing date of the previous statement.
The statement must include a listing of the securities and/or the
amount of funds on deposit as of the closing date of the statement.
The depository must simultaneously send a copy of the statement to
the banking commissioner.
(i) Depository may pay interest. So long as the Texas
state branch or agency continues business in the ordinary course,
the depository may pay interest earned on the assets in the pledge
account in accordance with such arrangements as may be made between
the depository and the foreign bank.
(j) Responsibility of depository with respect to deposited
securities. Except as provided in this subsection, a depository must
hold securities deposited under the deposit agreement separate and
apart from all other securities and must permit duly authorized representatives
of the foreign bank or of the banking commissioner to examine and
compare such securities. A depository may utilize a central depository,
clearing corporation or book entry system to hold securities deposited
under the deposit agreement, provided that the records of the central
depository, clearing corporation or book entry system show that the
depository holds the securities as principal or as agent or as custodian
of its customers. The depository must maintain adequate records to
demonstrate the disposition of any book entry deposits.
(k) Safeguarding of deposited securities. The depository
must give the same degree of care to the safekeeping, handling and
shipping of deposited securities that the depository would give to
its own securities.
(l) Banking commissioner not to pay for services rendered.
The banking commissioner is not required to pay for any of the services
rendered or any expenses incurred by the depository or the foreign
bank under or in connection with 7 TAC §§3.51-3.61 or the
deposit agreement.
(m) Termination of deposit agreement by foreign bank
or depository. The foreign bank or the depository may terminate the
deposit agreement by giving the other party at least sixty days written
notice of the termination, or such shorter notice as the banking commissioner
may approve, provided that no termination by the foreign bank or the
depository is effective until:
(1) the foreign bank has designated another depository;
(2) the foreign bank has provided the banking commissioner
with the name and address of the successor depository;
(3) the foreign bank and the successor depository have
executed a deposit agreement that conforms to this section and has
been approved by the banking commissioner; and
(4) the depository has released to foreign bank all
the deposited assets in accordance with written instructions from
the foreign bank approved by the banking commissioner.
(n) Additional terms and conditions. The banking commissioner
may at any time impose different or additional terms and conditions
upon the deposit agreement as deemed necessary or desirable.
(o) Termination of the right to substitute or withdraw
assets. Upon notice to the foreign bank and the depository, the banking
commissioner may terminate or suspend the authority of the foreign
bank under subsection (f)(1) of this section to substitute or withdraw
deposited assets.
(p) Termination of deposit agreement by banking commissioner.
Upon notice to the foreign bank and the depository, the banking commissioner
may terminate the deposit agreement and order the depository to release
the pledged assets on such terms as are specified in the order if
the foreign bank or the depository fails to comply with any term of
the deposit agreement required by this section or with any other terms
and conditions imposed by the banking commissioner under subsection
(n) of this section.
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