South Carolina Code of Regulations
Chapter 15 - STATE BOARD OF FINANCIAL INSTITUTIONS CONSUMER FINANCE DIVISION
Article 1 - BANKING, COMMERCIAL PAPER AND FINANCE
Section 15-1 - Limitations and Restrictions on Purchase and Sale of Securities

Universal Citation: SC Code Regs 15-1

Current through Register Vol. 48, No. 9, September 27, 2024

(1) Except as hereinafter provided or otherwise permitted by law no bank or banking institution shall purchase for its own account any shares of stock in any corporation except as provided in subsection (7) hereof.

(2) The purchase of securities which are in default, either as to principal or interest, is prohibited.

(3) Purchase of an "investment security" at a price exceeding par is prohibited, unless the bank shall:

(a) Provide for the regular amortization of the premium paid, so that the premium shall be entirely extinguished at or before the maturity of the security and the security (including premium) shall at no intervening date be carried at an amount in excess of that at which the obligor may legally redeem such security; or

(b) Set up a reserve account in order to amortize the premium, said account to be credited periodically with an amount not less than the amount required for amortization under (a) above, or

(c) Charge such premium to undivided profits account or reserve account of said bank at the time of purchase.

(4) Purchase of securities convertible into stock at the option of the issuer is prohibited.

(5) Any purchase of securities under repurchase agreement is deemed to be a "loan" and is to be so treated and classified and is hereby made subject to all laws, rules and regulations governing loans and specifically as to Sections 34-13-50 to 34-13-70, S.C. Code 1976. However, these limitations do not apply to the purchase of bonds, notes, certificates of indebtedness, or Treasury bills of the United States under agreement to resell.

(6) Any sale of securities under repurchase agreement is deemed to be "money borrowed" and is to be so treated and classified.

(7) Subject to the approval of the Board of Bank Control, banks may own stocks in subsidiary corporations primarily engaged in a banking activity or in an activity which, in the opinion of the Board, is so closely related to banking as to be a proper incident thereto, PROVIDED, that the bank owns at least 80% of the outstanding stock of the corporation or corporations: and PROVIDED further, that the initial investment and any future direct investments in one such corporation shall not exceed 15% of the total of the bank's capital and surplus accounts, or the aggregate of such investments in all such corporations shall not exceed 50% of the total of the bank's capital and surplus accounts. PROVIDED still further, that the restrictions contained in the two immediately preceding PROVISOS shall not apply to nor be affected by ownership in corporations organized to hold title to banking house properties, specified in Section 34-3-210(3)(c), S.C. Code, 1976, but investments in these corporations may be regarded as investments in bank fixed assets.

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