NAC356.120. Collateral pools: Required agreements.

     1. A depository that receives notification from a public depositor that wishes to participate in a collateral pool at the depository pursuant to NAC 356.110 shall execute an agreement with the State Treasurer, in a format approved by the State Treasurer, to pledge and maintain collateral against the uninsured deposits of the public depositor. Such an agreement must:

     (a) Require the depository to maintain as collateral at a third-party depository for the benefit of the State Treasurer acceptable securities having a fair market value that is at least 102 percent of the amount of the uninsured balances of the public money of the public depositor held at the depository.

     (b) If the depository is not maintaining the minimum level of collateral at the third-party depository required by paragraph (a), require the depository to pledge additional collateral to meet the requirements of paragraph (a) within the deadline established by the State Treasurer.

     (c) Prohibit the depository from holding, at any one time, public money in an amount exceeding the total equity of the depository, as reflected on the financial statement of the depository.

     2. Except as otherwise provided in this subsection, if a depository that receives notification from a public depositor that wishes to participate in a collateral pool at the depository pursuant to NAC 356.110 has not yet established a collateral pool on the date of receipt of the notification, the depository shall execute an agreement with the State Treasurer and a third-party depository, in a format approved by the State Treasurer, to pledge and maintain collateral against the uninsured deposits of the public depositor at the third-party depository for the benefit of the State Treasurer. If the depository elects to use the Federal Reserve Bank as the third-party depository, the terms specified in the Operating Circulars of the Federal Reserve Banks governing book-entry securities apply.

     3. An agreement entered into pursuant to subsection 2 with a third-party depository other than the Federal Reserve Bank must include a provision that requires the third-party depository to maintain only acceptable securities as pledged collateral from depositories.

     (Added to NAC by St. Treasurer by R028-04, eff. 6-30-2004)