17 CFR 270.5b-3 - Acquisition of repurchase agreement or refunded security treated as acquisition of underlying securities.

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§ 270.5b-3 Acquisition of repurchase agreement or refunded security treated as acquisition of underlying securities.
(a) Repurchase Agreements. For purposes of sections 5 and 12(d)(3) of the Act (15 U.S.C. 80a-5 and 80a-12(d)(3)), the acquisition of a repurchase agreement may be deemed to be an acquisition of the underlying securities, provided the obligation of the seller to repurchase the securities from the investment company is Collateralized Fully.
(b) Refunded Securities. For purposes of section 5 of the Act (15 U.S.C. 80a-5), the acquisition of a Refunded Security is deemed to be an acquisition of the escrowed Government Securities.
(c) Definitions. As used in this section:
(1) Collateralized Fully in the case of a repurchase agreement means that:
(i) The value of the securities collateralizing the repurchase agreement (reduced by the transaction costs (including loss of interest) that the investment company reasonably could expect to incur if the seller defaults) is, and during the entire term of the repurchase agreement remains, at least equal to the Resale Price provided in the agreement;
(ii) The investment company has perfected its security interest in the collateral;
(iii) The collateral is maintained in an account of the investment company with its custodian or a third party that qualifies as a custodian under the Act;
(iv) The collateral consists entirely of:
(A) Cash items;
(B) Government Securities;
(C) Securities that at the time the repurchase agreement is entered into are rated in the highest rating category by the Requisite NRSROs; or
(D) Unrated Securities that are of comparable quality to securities that are rated in the highest rating category by the Requisite NRSROs, as determined by the investment company's board of directors or its delegate; and
(v) Upon an Event of Insolvency with respect to the seller, the repurchase agreement would qualify under a provision of applicable insolvency law providing an exclusion from any automatic stay of creditors' rights against the seller.
(2) Event of Insolvency means, with respect to a person:
(i) An admission of insolvency, the application by the person for the appointment of a trustee, receiver, rehabilitator, or similar officer for all or substantially all of its assets, a general assignment for the benefit of creditors, the filing by the person of a voluntary petition in bankruptcy or application for reorganization or an arrangement with creditors; or
(ii) The institution of similar proceedings by another person which proceedings are not contested by the person; or
(iii) The institution of similar proceedings by a government agency responsible for regulating the activities of the person, whether or not contested by the person.
(3) Government Security means any “Government Security” as defined in section 2(a)(16) of the Act (15 U.S.C. 80a-2(a)(16)).
(4) Refunded Security means a debt security the principal and interest payments of which are to be paid by Government Securities (“deposited securities”) that have been irrevocably placed in an escrow account pursuant to an agreement between the issuer of the debt security and an escrow agent that is not an “affiliated person,” as defined in section 2(a)(3)(C) of the Act (15 U.S.C. 80a-2(a)(3)(C)), of the issuer of the debt security, and, in accordance with such escrow agreement, are pledged only to the payment of the debt security and, to the extent that excess proceeds are available after all payments of principal, interest, and applicable premiums on the Refunded Securities, the expenses of the escrow agent and, thereafter, to the issuer or another party; provided that:
(i) The deposited securities are not redeemable prior to their final maturity;
(ii) The escrow agreement prohibits the substitution of the deposited securities unless the substituted securities are Government Securities; and
(iii) At the time the deposited securities are placed in the escrow account, or at the time a substitution of the deposited securities is made, an independent certified public accountant has certified to the escrow agent that the deposited securities will satisfy all scheduled payments of principal, interest and applicable premiums on the Refunded Securities.
(5) NRSRO means any nationally recognized statistical rating organization, as that term is used in paragraphs (c)(2)(vi)(E), (F) and (H) of § 240.15c3-1 of this chapter, that is not an “affiliated person,” as defined in section 2(a)(3)(C) of the Act (15 U.S.C. 80a-2(a)(3)(C)), of the issuer of, or any insurer or provider of credit support for, the security.
(6) Requisite NRSROs means:
(i) Any two NRSROs that have issued a rating with respect to a security or class of debt obligations of an issuer; or
(ii) If only one NRSRO has issued a rating with respect to such security or class of debt obligations of an issuer at the time the investment company acquires the security, that NRSRO.
(7) Resale Price means the acquisition price paid to the seller of the securities plus the accrued resale premium on such acquisition price. The accrued resale premium is the amount specified in the repurchase agreement or the daily amortization of the difference between the acquisition price and the resale price specified in the repurchase agreement.
(8) Unrated Securities means securities that have not received a rating from the Requisite NRSROs.
[66 FR 36161, July 11, 2001, as amended at 74 FR 52373, Oct. 9, 2009]

Title 17 published on 2013-04-01

The following are only the Rules published in the Federal Register after the published date of Title 17.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-01-08; vol. 79 # 5 - Wednesday, January 8, 2014
    1. 79 FR 1316 - Removal of Certain References to Credit Ratings Under the Investment Company Act
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      SECURITIES AND EXCHANGE COMMISSION
      Final rule.
      Effective Date: February 7, 2014; Compliance Date: July 7, 2014.
      17 CFR Parts 239, 270, and 274

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United States Code
U.S. Code: Title 15 - COMMERCE AND TRADE

§ 30 - Repealed.

§ 37 - Immunity from antitrust laws

§ 77f - Registration of securities

§ 77g - Information required in registration statement

§ 77h - Taking effect of registration statements and amendments thereto

§ 77j - Information required in prospectus

§ 77q - Fraudulent interstate transactions

§ 77s - Special powers of Commission

§ 77eee - Securities required to be registered under Securities Act

§ 77ggg - Qualification of indentures covering securities not required to be registered

§ 77nnn - Reports by obligor; evidence of compliance with indenture provisions

§ 77sss - Rules, regulations, and orders

§ 78c - Definitions and application

§ 78d - Securities and Exchange Commission

15 U.S. Code § -

§ 78m - Periodical and other reports

§ 78n - Proxies

15 U.S. Code § -

§ 78w - Rules, regulations, and orders; annual reports

§ 78bb - Effect on existing law

§ 78ee - Transaction fees

§ 79c

§ 79t

15 U.S. Code § 80a–1 - Findings and declaration of policy

15 U.S. Code § 80a–2 - Definitions; applicability; rulemaking considerations

15 U.S. Code § 80a–3 - Definition of investment company

15 U.S. Code § 80a–3a - Protection of philanthropy under State law

15 U.S. Code § 80a–4 - Classification of investment companies

15 U.S. Code § 80a–5 - Subclassification of management companies

15 U.S. Code § 80a–6 - Exemptions

15 U.S. Code § 80a–7 - Transactions by unregistered investment companies

15 U.S. Code § 80a–8 - Registration of investment companies

15 U.S. Code § 80a–9 - Ineligibility of certain affiliated persons and underwriters

15 U.S. Code § 80a–10 - Affiliations or interest of directors, officers, and employees

15 U.S. Code § 80a–11 - Offers to exchange securities

15 U.S. Code § 80a–12 - Functions and activities of investment companies

15 U.S. Code § 80a–13 - Changes in investment policy

15 U.S. Code § 80a–14 - Size of investment companies

15 U.S. Code § 80a–15 - Contracts of advisers and underwriters

15 U.S. Code § 80a–16 - Board of directors

15 U.S. Code § 80a–17 - Transactions of certain affiliated persons and underwriters

15 U.S. Code § 80a–18 - Capital structure of investment companies

15 U.S. Code § 80a–19 - Payments or distributions

15 U.S. Code § 80a–20 - Proxies; voting trusts; circular ownership

15 U.S. Code § 80a–21 - Loans by management companies

15 U.S. Code § 80a–22 - Distribution, redemption, and repurchase of securities; regulations by securities associations

15 U.S. Code § 80a–23 - Closed-end companies

15 U.S. Code § 80a–24 - Registration of securities under Securities Act of 1933

15 U.S. Code § 80a–25 - Reorganization plans; reports by Commission

15 U.S. Code § 80a–26 - Unit investment trusts

15 U.S. Code § 80a–27 - Periodic payment plans

15 U.S. Code § 80a–28 - Face-amount certificate companies

15 U.S. Code § 80a–29 - Reports and financial statements of investment companies and affiliated persons

15 U.S. Code § 80a–30 - Accounts and records

15 U.S. Code § 80a–31 - Accountants and auditors

15 U.S. Code § 80a–32 - Filing of documents with Commission in civil actions

15 U.S. Code § 80a–33 - Destruction and falsification of reports and records

15 U.S. Code § 80a–34 - Unlawful representations and names

15 U.S. Code § 80a–35 - Breach of fiduciary duty

15 U.S. Code § 80a–36 - Larceny and embezzlement

15 U.S. Code § 80a–37 - Rules, regulations, and orders

15 U.S. Code § 80a–38 - Procedure for issuance of rules and regulations

15 U.S. Code § 80a–39 - Procedure for issuance of orders

15 U.S. Code § 80a–40 - Hearings by Commission

15 U.S. Code § 80a–41 - Enforcement of subchapter

15 U.S. Code § 80a–42 - Court review of orders

15 U.S. Code § 80a–43 - Jurisdiction of offenses and suits

15 U.S. Code § 80a–44 - Disclosure of information filed with Commission; copies

15 U.S. Code § 80a–45 - Reports by Commission; hiring and leasing authority

15 U.S. Code § 80a–46 - Validity of contracts

15 U.S. Code § 80a–47 - Liability of controlling persons; preventing compliance with subchapter

15 U.S. Code § 80a–48 - Penalties

15 U.S. Code § 80a–49 - Construction with other laws

15 U.S. Code § 80a–50 - Separability

15 U.S. Code § 80a–51 - Short title

15 U.S. Code § 80a–52 - Effective date

15 U.S. Code § 80a–53 - Election to be regulated as business development company

15 U.S. Code § 80a–54 - Acquisition of assets by business development companies

15 U.S. Code § 80a–55 - Qualifications of directors

15 U.S. Code § 80a–56 - Transactions with certain affiliates

15 U.S. Code § 80a–57 - Changes in investment policy

15 U.S. Code § 80a–58 - Incorporation of subchapter provisions

15 U.S. Code § 80a–59 - Functions and activities of business development companies

15 U.S. Code § 80a–60 - Capital structure

15 U.S. Code § 80a–61 - Loans

15 U.S. Code § 80a–62 - Distribution and repurchase of securities

15 U.S. Code § 80a–63 - Accounts and records

15 U.S. Code § 80a–64 - Preventing compliance with subchapter; liability of controlling persons

15 U.S. Code § 80b–3 - Registration of investment advisers

15 U.S. Code § 80b–4 - Reports by investment advisers

15 U.S. Code § 80b–11 - Rules, regulations, and orders of Commission

15 U.S. Code § 79 to 79z–6 - Repealed.

15 U.S. Code § 79 to 79z–6 - Repealed.

15 U.S. Code § 79 to 79z–6 - Repealed.

Title 17 published on 2013-04-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 17 CFR 270 after this date.

  • 2014-01-08; vol. 79 # 5 - Wednesday, January 8, 2014
    1. 79 FR 1316 - Removal of Certain References to Credit Ratings Under the Investment Company Act
      GPO FDSys XML | Text
      SECURITIES AND EXCHANGE COMMISSION
      Final rule.
      Effective Date: February 7, 2014; Compliance Date: July 7, 2014.
      17 CFR Parts 239, 270, and 274