California Code of Regulations
Title 10 - Investment
Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions
Subchapter 80 - Money Transmission
Article 6 - Licensees
Subarticle 4 - Eligible Securities
Section 80.5301 - Ownership-Ability to Transfer

(a) For purposes of Financial Code Section 2084(a)(3), a licensee shall not be deemed to be able freely to otherwise transfer an eligible security which consists of a deposit in a bank or savings and loan association unless such licensee is able freely to withdraw such deposit. However, if the deposit is a savings or time deposit and is subject to restrictions on withdrawal usually imposed on a savings or time deposit, as the case may be, the licensee shall not, on account of such restrictions, be deemed unable freely to withdraw the deposit.

(b) For purposes of Financial Code Section 2084(a)(3), a licensee shall not be deemed to be able freely to negotiate, assign, or otherwise transfer an eligible security if any negotiation, assignment, or other transfer of such eligible security would constitute a breach or event of default by such licensee or by any affiliate of the licensee under any contract, obligation, note, or other security issued by the licensee or by any affiliate of the licensee. For example, for purposes of Financial Code Section 2084(a)(3), a licensee shall not be deemed to be able freely to negotiate, assign, or otherwise transfer an eligible security which consists of a deposit in a bank if such licensee's failure to maintain such deposit would constitute a breach of a provision for compensating balances set forth in a loan contract between such bank and the licensee or a parent of the licensee.