Sec.36a-428c-6. Deposit agreement

No deposit by a foreign bank with a licensed state branch or licensed state agency with a depository pursuant to section 36a-428c(a) of the general statutes shall be made until the foreign bank and the depository shall have executed a deposit agreement satisfactory to the commissioner. The commissioner may by written authorization relieve the foreign bank or the depository from compliance with any term or condition of the deposit agreement, including any term or condition prescribed by this section, if the commissioner finds such action necessary and proper to give effect to the purpose of section 36a-428c(a) of the general statutes or of sections 36a-428c-6 and 36a-428c-7 of the Regulations of Connecticut State Agencies. The deposit agreement, in addition to any other terms and considerations not inconsistent with this section, shall contain the following provisions:

(a) Assets to be held as special deposit. Assets deposited by a foreign bank with a depository under the deposit agreement shall be held by the depository as a special deposit free of any lien, charge, right of set-off, credit or preference in connection with any claim of the depository against the foreign bank. The depository shall not accept, as a deposit by the foreign bank pursuant to the deposit agreement, any asset that is not accompanied by documentation necessary to facilitate transfer of title.

(b) Depository to furnish receipt. The depository shall furnish to the foreign bank, upon deposit of any assets pursuant to the deposit agreement, a receipt or statement evidencing such deposit. Such receipt or statement shall identify the deposit as having been made by the foreign bank pursuant to section 36a-428c(a) of the general statutes and under the deposit agreement, and it shall provide the amount of the deposit and, with respect to deposits of securities, a description of each security so deposited.

(c) Release of assets by depository. The depository shall release deposited assets to the foreign bank upon written request (1) when accompanied by a certificate, as described in subsection (e) of this section, signed by a duly authorized officer of the foreign bank, or (2) upon receipt of a written authorization of the commissioner to release to the foreign bank such part of the assets on deposit under such conditions and terms as the authorization may specify.

(d) Termination of right to substitute or withdraw assets. The right to substitute or withdraw assets provided in this section may be terminated or suspended by the commissioner at any time.

(e) Model certificate. The following or similar certificate shall be executed by a duly authorized officer of the foreign bank where withdrawals are made pursuant to subdivision (1) of subsection (c) of this section:

It is hereby certified that the aggregate of assets remaining on deposit pursuant to the Deposit Agreement after this withdrawal or substitution amounts to $ , valued at the lower of principal amount or market value, and that such amount is at least equal to the amount required to be deposited pursuant to section 36a-428c(a) of the Connecticut General Statutes and Section 36a-428c-4 of the Regulations of Connecticut State Agencies. The amount required to be maintained on deposit, as calculated pursuant to Section 36a-428c-4 of the Regulations of Connecticut State Agencies is $ as of this date.

(f) Depository to furnish monthly statements of all transactions. The depository shall furnish to the foreign bank, at least once in each calendar month, a statement of all transactions in the special deposit account since the closing date of the previous such statement. The statement shall include a listing of the assets on deposit, as of the closing date of the statement. A copy of such statement shall be simultaneously forwarded by the depository to the commissioner.

(g) Depository may pay interest earned upon assets. The depository may pay to the foreign bank interest earned on assets deposited in accordance with such arrangements as may be made between the depository and the foreign bank. The commissioner is authorized to revoke this provision.

(h) Responsibility of depository with respect to deposited securities. Except as provided in this subsection, a depository shall hold the securities deposited by a foreign bank under the deposit agreement separate and apart from all other securities and shall permit examination and comparison thereof by duly authorized representatives of the foreign bank or of the commissioner. A depository may utilize a central depository, clearing corporation or book entry system to hold securities deposited pursuant to a deposit agreement, provided the records of the central depository, clearing corporation or book entry system show that the securities are held for the depository as principal, agent or custodian for its customers. The depository shall maintain adequate records to demonstrate the disposition of such book entry deposits.

(i) Depository shall safeguard securities. The depository shall give to the safekeeping, handling and shipping of securities deposited with it by the foreign bank the same degree of care given by such depository to its own securities.

(j) Commissioner shall not pay for services rendered. The commissioner shall not be required to pay for any of the services rendered or any expenses incurred by the depository or the foreign bank under or in connection with this section or the deposit agreement.

(k) Termination of deposit agreement. The foreign bank or the depository may terminate the deposit agreement by giving the other party thereto at least 60 days written notice of such termination, or such shorter notice as the commissioner may approve, provided no termination by the foreign bank shall be effective until (1) another depository has been designated by the foreign bank, (2) such other depository has been approved by the commissioner, (3) a deposit agreement has been executed in conformity with this section, and (4) the depository has released to the foreign bank all the assets on deposit in accordance with written instructions from the foreign bank, approved by the commissioner.

(l) Termination of deposit agreement by action of commissioner. If the conditions provided in subsection (k) of this section are not met within 60 days after notice of termination, or such shorter period as the commissioner may approve, the commissioner may require the depository to release the assets on such terms as the commissioner specifies. The depository, in such case, shall release the assets upon the terms so specified, and the deposit agreement shall terminate upon such release.

(Adopted effective December 23, 1997; Amended September 6, 2002)