Ariz. Admin. Code § R2-14-103 - Collateral Required

A.An eligible depository that intends to accept and retain uninsured public monies shall execute a Collateral Security Agreement with the Treasurer, using a form that is available on the web site of the Treasurer. In the agreement, the eligible depository shall pledge for the benefit of the Treasurer eligible collateral having a market value of at least 102 percent of the retained amount of uninsured public monies.

B.An eligible depository shall deposit all eligible collateral, including a letter of credit that satisfies the requirements at A.R.S. §§ 35-312(A)(4) and 35-323(G)(4), with a qualified escrow agent that will hold the required collateral in trust for the use and benefit of the Treasurer on behalf of the collateral pool.

C.An eligible depository that does not have a preferred qualified escrow agent may ask the Administrator for permission to use the Treasurer's existing custodial contracts as a qualified escrow agent.

D.An eligible depository that has pledged required collateral to a housing authority in an amount and manner required by the United States Department of Housing and Urban Development is not required to pledge additional collateral to the collateral pool. However, the eligible depository shall include the HUD-related public monies in the reports required under R2-14-105 .

E. If an eligible depository uses a security as eligible collateral, the eligible depository shall:

1. At the time the security is deposited with a qualified escrow agent, forward to the Administrator the par and market value of the security, identified by the security's CUSIP, and the source of the valuation. The Administrator shall, from time to time, test the market value of the security using an independent source; and

2. If the security matures or is called for redemption, the cash proceeds will be retained by the qualified escrow agent until substitute collateral is pledged to replace the matured or called security.

Notes

Ariz. Admin. Code § R2-14-103

Adopted by final rulemaking at 21 A.A.R. 233, effective 4/4/2015.