Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
029 - BUREAU OF FINANCIAL INSTITUTIONS
Chapter 122 - SECURITIES ACTIVITIES OF SUBSIDIARIES OF FINANCIAL INSTITUTIONS (Reg. 22)
Section 029-122-III - DEFINITIONS

Universal Citation: 02 ME Code Rules ยง 029-122-III

Current through 2024-38, September 18, 2024

For purposes of this regulation, the following terms have the following meanings:

1) Control - The power to exercise a controlling influence over the management and policies of a company, as further defined in Title 9-B M.R.S.A. Section1011(4).

2) Discount Brokerage Services - Buying and selling securities, solely as agent, on the order and for the account of customers. Discount brokerage services do not include providing investment advice or buying or selling for the account of the financial institution, or the issuing, underwriting or distributing of securities or any public sale of securities which may be prohibited by § 378(a)(1).

3) Extension of Credit - The making or renewal of any loan, a draw upon a line of credit, or an extending of credit in any manner whatsoever and includes, but is not limited to:

(i) A purchase, whether or not under repurchase agreement, of securities, other assets, or obligations;

(ii) An advance by means of an overdraft, cash item, or otherwise;

(iii) Issuance of a standby letter of credit (or other similar arrangement regardless of name or description);

(iv) An acquisition by discount, purchase, exchange, or otherwise of any note, draft, bill of exchange, or other evidence of indebtedness upon which a natural person or company may be liable as maker, drawer, endorser, guarantor, or surety;

(v) A discount of promissory notes, bills of exchange, conditional sales contracts, or similar paper, whether with or without recourse;

(vi) An increase of an existing indebtedness, but not if the additional funds are advanced by the bank for its own protection for (A) accrued interest or (B) taxes, insurance, or other expenses incidental to the existing indebtedness; or

(vii) Any other transaction as a result of which a natural person or company becomes obligated to pay money (or its equivalent to a bank, whether the obligation arises directly or indirectly, or because of an endorsement on an obligation or otherwise, or by any means whatsoever.

4) Investment Quality Debt Security - A marketable bond, note or debenture that is rated in the top four rating categories by a nationally recognized rating service which has the characteristics of such top-rated obligation.

5) Investment Quality Equity Security - A marketable common stock or preferred corporate stock that is ranked or graded in the top four categories or equivalent categories by a nationally recognized rating service, or a marketable preferred corporate stock that has the characteristics of such a top-rated issue.

6) Subsidiary - A service corporation authorized by and subject to the provisions of Title 9-B M.R.S.A. Section445 and which may engage in activities pursuant to Title 9-B M.R.S.A. Section131(37), or any other corporation controlled by a financial institution.

7) Securities - The term "securities" as used in this rule shall be defined by Title 32 M.R.S.A.

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