1998 Florida Code
TITLE XIX PUBLIC BUSINESS
Chapter 280 Security For Public Deposits  
280.04   Collateral for public deposits; general provisions.

280.04  Collateral for public deposits; general provisions.--

(1)  Every qualified public depository shall deposit with the Treasurer eligible collateral equal to or in excess of the required collateral of the depository to be held subject to his or her order. The Treasurer, by rule, shall establish minimum required collateral pledging levels and shall notify each qualified public depository of its required pledging level. Each qualified public depository shall calculate the amount of its required collateral based upon any one or any combination of the following formulas:

(a)  The greater of the average daily balance of public deposits multiplied by the depository's minimum required collateral pledging level, or 25 percent of the average monthly balance of public deposits, unless otherwise required by paragraph (b), paragraph (c), or paragraph (d).

(b)  One hundred twenty-five percent of the average daily balance of public deposits in excess of capital accounts.

(c)  One hundred twenty-five percent of the average daily balance of public deposits if the qualified public depository:

1.  Has been established for less than 3 years;

2.  Has experienced decreases in its capital accounts; or

3.  Has an overall financial condition which is deteriorating.

(d)  One hundred twenty-five percent of the average daily balance of public deposits in excess of 20 percent of the total average monthly balances of public deposits held by all qualified public depositories. The Treasurer shall determine the total average monthly balances of public deposits held during the immediately preceding 12-month period. That 12-month average amount must be disseminated to the qualified public depositories at such time and in such manner as the Treasurer determines appropriate.

(2)  With the approval of the Treasurer, a qualified public depository may deposit eligible collateral with a custodian subject to order of the Treasurer.

(a)  If eligible collateral consisting of registered definitive securities is deposited, and the securities are held by the Treasurer or other custodian and are in the name of the qualified public depository, the Treasurer may require the qualified public depository owning the securities to execute and deliver to the Treasurer a separate certified power of attorney or bond power or other bond assignment form required by the bond agent or bond trustee authorizing the Treasurer to transfer ownership of such securities for the purposes provided in this chapter. A certified copy of a corporate resolution or other resolution adopted by the qualified public depository's governing body authorizing the execution of the power of attorney or bond power or other bond assignment form for each issue of security must be delivered to the Treasurer with the certified power of attorney, bond power, or bond assignment.

(b)  If eligible collateral, consisting of registered definitive securities, is deposited and the securities are held by a custodian other than the Treasurer and are in the name of the custodian or in the name of a nominee, the Treasurer may require the custodian to execute and deliver to the Treasurer a separate certified power of attorney or bond power or other bond assignment form required by the bond agent or bond trustee authorizing the Treasurer to transfer ownership of such securities for the purposes provided in this chapter. A certified copy of a corporate resolution or other resolution adopted by the custodian's governing body authorizing the execution of the power of attorney or bond power or other bond assignment form for each issue of security must be delivered to the Treasurer with the certified power of attorney, bond power, or bond assignment.

(c)  A qualified public depository may not accept any public deposit that would increase its average daily balance for the current month by 25 percent over the average daily balance for the previously reported month unless it deposits or has on deposit additional required collateral to secure such increase within 48 hours of the deposit.

(d)  A qualified public depository may not accept or retain any public deposit which is required to be secured unless it has deposited eligible collateral equal to its required collateral pursuant to this chapter.

(3)  For reporting purposes, each qualified public depository shall value its collateral at market price as of the close of business on the last banking day in the reported month, or as of a date specified by rule of the Treasurer, except that any material decline in value between such day and the date of mailing the monthly report to the Treasurer shall be considered and used for reporting purposes.

(4)  Unless the Treasurer has officially notified the qualified public depository that a substitution may not be made, a substitution of collateral may be made by the qualified public depository at any time if the market value of the securities substituted is equal to or greater than the market value of the securities withdrawn. At the time of making a substitution, the depository shall simultaneously submit a request for the substitution, upon a form approved by the Treasurer, to the custodian of the securities and to the Treasurer.

(5)  Except in cases of substitution as provided in subsection (4), a qualified public depository may not withdraw collateral previously pledged without the prior approval of the Treasurer.

(6)  A custodian other than the Treasurer holding securities as collateral for a qualified public depository shall not permit the depository to withdraw the collateral without the prior written approval of the Treasurer, except in cases of substitution as provided in subsection (4).

(7)  A qualified public depository that violates subsection (5) or a custodian that violates subsection (6) is subject to the penalties provided in s. 280.054(3).

History.--s. 3, ch. 81-285; s. 9, ch. 83-122; s. 132, ch. 83-217; s. 3, ch. 85-259; s. 2, ch. 86-84; s. 3, ch. 87-409; s. 4, ch. 88-185; s. 7, ch. 90-357; s. 11, ch. 91-244; s. 188, ch. 95-148; s. 6, ch. 96-216; s. 13, ch. 98-409.