California Code of Regulations
Title 10 - Investment
Chapter 2 - Savings and Loan Commissioner
Subchapter 6 - Operations-Savings
Article 1 - Investment Certificates and Withdrawable Shares
Section 106.108 - Eurodollar Deposits

Universal Citation: 10 CA Code of Regs 106.108

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) Definitions. As used in this section:

(1) "Eurodollar certificate" means a certificate account, denominated in United States dollars, evidencing a Eurodollar deposit;

(2) "Eurodollar deposit" means a deposit by a person who is not a United States person;

(3) "United States person" means any national or resident of the United States of America, its territories and possessions, including any corporation, trust, estate, or other entity organized under the laws thereof or of any political subdivision thereof; and

(4) "Participation" means an interest or participation in a Eurodollar certificate.

(b) General. Unless otherwise provided, Eurodollar deposit issuance shall follow the rules set forth in Section 235.50.

(c) Collateralization of Certificates. Notwithstanding the provisions of Section 563.31 of the Federal Insurance Regulations which allows associations to give bond or security for borrowings, an association may give security for Eurodollar deposits. For any secured Eurodollar certificate, the terms of the certificate shall provide that the commissioner and the Federal Savings and Loan Insurance Corporation (FSLIC) shall receive prompt written notification of any default on the obligation and, before a sale or other disposition of any portion of the collateral, that the FSLIC shall have thirty (30) days after receipt of written notice of the proposed sale or other disposition to exercise a right to repurchase the collateral at the price to be paid at the sale or to acquire the collateral at the value to be assigned to it in any other disposition. The notice and right of purchase required by this paragraph shall not apply to collateral consisting of liquid assets as defined in Section 523.10 of the Bank System Regulations or collateral that would qualify as liquid assets but for its remaining term to maturity.

(d) Requirements as to Distribution.

(1) In exercising authority under this section, an association shall require an undertaking in writing from each purchaser of a Eurodollar certificate or participation to the effect that:
(A) If the purchaser is not a dealer, he will not offer, sell or deliver such Eurodollar certificate(s) or participations directly or indirectly in the United States of America or its territories or possessions or to nationals or residents thereof, including any corporation, trust, estate or other entity organized under the laws thereof or of any political subdivision thereof; or

(B) If the purchaser is a dealer, he has not offered, sold or delivered, and agrees that he will not offer, sell or deliver, any such Eurodollar certificate(s) or participations directly or indirectly in the United States of America or its territories or possessions or to nations or residents thereof and he is not purchasing any such Eurodollar certificate(s) or participations for the account of any such nationals or residents. Further, if the purchaser is a dealer, he shall agree that he will require the undertaking required by subparagraph (d)(1)(A) of this section on any sales of the Eurodollar certificate(s) or participations and that he will inform the issuing association promptly if any beneficial ownership by a United States person comes to his attention.

(2) Upon completion of the distribution of any Eurodollar certificates or participations, the lead or managing underwriter shall deliver to the issuing association a certification as to the sale stating that to the knowledge of the underwriter no beneficial owner or owners of the Eurodollar certificate(s) or participations is a United States person; and, further, that the underwriter has not knowingly sold or offered for sale and will not sell or offer for sale, the Eurodollar certificate(s) or participations to any United States person.

(3) To the extent that beneficial ownership of a Eurodollar certificate or participation is acquired by a United States person, the return payable may not exceed the maximum rate of return payable on an account without a fixed term from the time ownership is acquired by the United States person. The issuing association shall take the necessary and appropriate action to ensure that the interest paid on a Eurodollar certificate, or that portion of a Eurodollar certificate attributable to a participation beneficially owned by a United States person, does not exceed the maximum rate of return payable on an account without a fixed term.

(4) Upon issuance of any certificate under this section, the issuing association shall provide to the commissioner and the FSLIC such information as is deemed necessary to monitor effectively the use of the authority provided by this section.

(e) Requirements as to Eurodollar Certificates. Each Eurodollar certificate and participation, including a temporary Eurodollar certificate or participation, shall bear on its face, in boldface type, a legend substantially in the following form:

"This Eurodollar certificate has been issued pursuant to a regulation of the Federal Home Loan Bank Board, an agency of the United States government, and the California Department of Savings and Loan, which requires that the Eurodollar certificate be sold, and interest at the amount stated hereon paid, only to purchasers who are not United States nationals or residents, and may not be directly or indirectly offered or sold in the United States of America, its territories or possessions, or to persons who are nationals or residents thereof."

(f) Requirements as to Coupons. Each coupon attached to a Eurodollar certificate or participation shall bear a legend substantially in the following form:

"To the extent that beneficial ownership of the Eurodollar certificate or the participation therein to which this coupon appertains is acquired by a United States national or resident of the United States of America or its territories and possessions, including any corporation or other entity organized under the laws thereof or any political subdivision thereof, the return payable thereon will be the maximum permissible rate of return payable on a regular account of the association."

(g) Pooling of Certificates. An association may engage in pooling or participate in pooling funds, or soliciting or promoting pooled accounts, in connection with the issuance of a Eurodollar certificate in conformity with this section.

1. Change without regulatory effect renumbering former Section 218 to Section 106.108 (Register 87, No. 14). For prior history, see Register 83, No. 4.

Note: Authority cited: Section 5255, Financial Code. Reference: Section 6420, Financial Code.

Disclaimer: These regulations may not be the most recent version. California may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.