2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 6.1. SAVINGS BANKS CHAPTER 10. SAVINGS BANKS DEALING IN INVESTMENT SECURITIES
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IC 28-6.1-10
Chapter 10. Savings Banks Dealing in Investment Securities
IC 28-6.1-10-1
Application of limitations
Sec. 1. The limitations imposed by this chapter do not apply to the
following:
(1) Direct or indirect obligations of the United States.
(2) Direct obligations of a United States territory or insular
possession.
(3) Direct obligations of the state or a municipal corporation or
taxing district in Indiana.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-2
Total equity capital
Sec. 2. As used in this section, "total equity capital" means
unimpaired capital stock, unimpaired surplus, unimpaired retained
earnings, subordinated debt that has been approved by state or
federal regulatory agencies, and one hundred percent (100%) of loan
reserves.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-3
Dealing requirements
Sec. 3. Except as otherwise provided in this article, a savings bank
may deal in investment securities only by purchasing and selling
securities without recourse, solely upon the order and for the account
of customers.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-4
Dealings for bank's own account
Sec. 4. Except as otherwise provided in this article, a savings bank
may not deal in investment securities for its own account.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-5
Underwriting or guaranteeing issues of securities
Sec. 5. A savings bank may not underwrite or guarantee all or a
part of an issue of securities other than obligations issued or
guaranteed by or on behalf of the state, a political subdivision of the
state, or an agency or instrumentality of the state or of a political
subdivision.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-6
Purchase and sale of investment securities for bank's own account
under department rules; limitation on investment securities
Sec. 6. (a) Subject to subsection (b), a savings bank may purchase
for its own account and sell investment securities under limitations
and restrictions the department prescribes by regulation, rule, policy,
or guidance.
(b) The total amount of the investment securities of any one (1)
obligor or maker, purchased or held by any savings bank for its own
account may not at any time exceed ten percent (10%) of the amount
of the total equity capital of the savings bank.
As added by P.L.42-1993, SEC.72. Amended by P.L.27-2012,
SEC.88.
IC 28-6.1-10-7
Purchase and sale of government chartered small business
investment company stock
Sec. 7. A savings bank may purchase for its own account and sell
shares of stock in federal or state chartered small business investment
companies that have received a permit or license to operate under the
federal Small Business Investment Act, subject to the limitations and
restrictions the department prescribes by rule.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-8
Purchase and sale of collateralized mortgage obligations
Sec. 8. (a) Subject to subsection (b), a savings bank may purchase
for its own account and sell obligations, commonly known as
collateralized mortgage obligations, that are eligible for purchase and
sale by national banking associations.
(b) A savings bank may purchase for its own account and sell the
obligations only to the extent that a national banking association can
purchase and sell those obligations.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-8.5
Purchase of speculative securities or securities not rated by a
generally recognized security rating service
Sec. 8.5. (a) A savings bank may not purchase for its own account
any bond, note, or other evidence of indebtedness that is commonly
designated as a security that is speculative in character or that has
speculative characteristics. For the purposes of this subsection, a
security is speculative or has speculative characteristics if at the time
of purchase the security:
(1) is rated below the first four (4) rating classes by a generally
recognized security rating service;
(2) is in default; or
(3) is otherwise considered speculative by the director.
(b) A savings bank may purchase for its own account a security
that is not rated by a generally recognized security rating service if:
(1) the savings bank at the time of purchase obtains financial
information that is adequate to document the investment quality
of the security; and
(2) the security is not otherwise considered speculative by the
director.
As added by P.L.176-1996, SEC.20. Amended by P.L.89-2011,
SEC.46.
IC 28-6.1-10-9
Purchase and sale of nonsubsidiary corporation stock
Sec. 9. (a) Except as otherwise provided by law, a savings bank
may not purchase shares of stock of a corporation that is not a
subsidiary of that savings bank unless the purchase is considered
expedient to prevent loss from a debt previously contracted in good
faith.
(b) A savings bank shall sell shares of stock:
(1) acquired under subsection (a); and
(2) that the savings bank would not otherwise have been
permitted to buy;
not more than six (6) months after the date of acquisition unless the
director grants an extension of time for the sale.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-10
Purchase and holding of banker's bank stock
Sec. 10. (a) As used in this section, "bank" has the meaning set
forth in IC 28-2-14-2.
(b) As used in this section, "banker's bank" means a bank that
satisfies both of the following:
(1) The stock of the bank is owned exclusively by:
(A) other banks; or
(B) a bank holding company, the stock of which is owned
exclusively by other banks.
(2) The bank is engaged exclusively in providing services to
other banks and to their officers, directors, and employees.
(c) Notwithstanding any other provision of this article, a savings
bank may purchase for its own account shares of stock of a banker's
bank insured by the Federal Deposit Insurance Corporation or a
holding company that owns or controls a banker's bank insured by
the Federal Deposit Insurance Corporation.
(d) A savings bank's holdings of the stock of an insured banker's
bank or of a holding company that owns or controls an insured
banker's bank may not exceed ten percent (10%) of the capital and
surplus of the savings bank.
(e) A savings bank may not purchase the stock of an insured
banker's bank or of a holding company that owns or controls an
insured banker's bank if, after the purchase, the savings bank would
own more than five percent (5%) of any class of voting securities of
the banker's bank or holding company.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-11
Investments in casualty insurance companies
Sec. 11. (a) Notwithstanding any other provision of this article, a
savings bank may invest in a casualty insurance company organized
solely for the purpose of insuring banks, trust companies, and bank
holding companies and their officers and directors from and against
liabilities, including those covered by bankers' blanket bonds and
director and officer liability insurance and other public liability
insurance.
(b) An investment under this section must take the form of:
(1) the purchase for the savings bank's own account of shares of
stock of the casualty insurance company or shares of stock of an
association of banks organized for the purpose of funding the
casualty insurance company; or
(2) loans to such an association of banks.
(c) The total investment of a savings bank under this subsection
may not exceed five percent (5%) of the capital and surplus of the
savings bank.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-12
Establishment and acquisition of subsidiaries
Sec. 12. A savings bank may establish or acquire a subsidiary that
engages in either of the following:
(1) The sale, distribution, or underwriting of securities issued
by investment companies (as defined in Section 3 of the
Investment Company Act of 1940 (15 U.S.C. 80a-3)).
(2) The underwriting or distribution of securities backed by or
representing an interest in mortgages.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-13
Establishment of trading accounts
Sec. 13. A savings bank may establish a trading account for the
purchase and resale of securities that are otherwise eligible for
purchase or resale by the savings bank. The trading account must
comply with the requirements established by policy or rule of the
department.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-14
Definition of investment securities
Sec. 14. The department may define an investment security by
department policy or by rule.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-10-15
Purchase records
Sec. 15. A savings bank that purchases a security for its own
account shall maintain sufficient records of the security to allow the
security to be properly identified by the department for examination
purposes.
As added by P.L.176-1996, SEC.21.
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