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§ 30.300. Investments.


Barclays Official California Code of Regulations Currentness
Title 10. Investment
Chapter 1. Commissioner of Business Oversight, Division of Financial Institutions
Subchapter 30. Credit Unions
Article 3. Management
10 CCR § 30.300
§ 30.300. Investments.
(a) Investments made by a credit union pursuant to Sections 14652, 14653 and 14653.5 of the Financial Code shall be subject to the following provisions:
(1) The board of directors of a credit union shall adopt and review at least annually, and the credit union shall comply with, a written investment policy which sets out the goals of the credit union's investment portfolio with respect to the yield, maturity, liquidity and diversification, and risk management for its investments.
(2) A credit union shall maintain documentary evidence that its investments are authorized pursuant to Sections 14652, 14653 and 14653.5 of the Financial Code and meet the requirements of this Section.
(b) Pursuant to Section 14653.5 of the Financial Code, a credit union is authorized to invest in the securities issued by any person, as that term is defined in Section 14001.1 of the Financial Code, subject to the limitation that the credit union's total investments in the securities issued by any one person shall not exceed 10 percent of the credit union's equity capital, as that term is defined in Section 14400 of the Financial Code. In addition, the following investments are authorized and not subject to the 10-percent limit:
(i) Obligations of the United States and those for which the faith and credit of the United States are pledged for the payment of the principal and interest;
(ii) Investments in an “investment company” (commonly known as a “mutual fund”) as defined in the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) or trusts, provided all investments and investment practices of the investment company or trust would be permissible if made directly by federal credit unions;
(iii) Investments in deposits of authorized financial institutions; and
(iv) Funds sold to authorized financial institutions, provided that the interest or other consideration received from the authorized financial institution is the market value of federal funds transactions and that the transaction has a maturity of one or more business days or the credit union is able to require repayment at any time.
(c) Credit unions may not engage in the following investment activities with respect to investments authorized by Subdivision (b):
(1) A credit union may not buy or sell a standby commitment.
(2) A credit union may not buy or sell a futures contract.
(3) A credit union may not engage in adjusted trading.
(4) A credit union may not engage in a short sale.
(5) A credit union's directors, officials, committee members and employees, and their immediate family members, may not receive pecuniary consideration in connection with the making of an investment or deposit by the credit union.
(d) For purposes of Subdivisions (b) and (c) of this Section, the following definitions shall apply:
(1) “Adjusted trading” means any method or transaction used to defer a loss whereby a credit union sells a security to a vendor at a price above its current market price and simultaneously purchases or commits to purchase from the vendor another security at a price above its current market price.
(2) “Authorized financial institution” means a national bank, state bank, trust company, savings association, credit union, or other financial institution which is organized under the laws of the State of California, or which is insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund.
(3) “Federal funds transaction” means a short-term or open-ended transfer of funds to an authorized financial institution.
(4) “Futures contract” means a contract for the future delivery of commodities, including certain government securities, sold on commodities exchanges.
(5) “Immediate family member” means a spouse, or a child, parent, grandchild, grandparent, brother or sister, or the spouse of any such individual.
(6) “Market price” means the last established price at which a security is sold.
(7) “Security” means any security, obligation, account, deposit, or other item authorized for investment by a credit union.
(8) “Short sale” means the sale of a security not owned by the seller.
(9) “Standby commitment” means a commitment to either buy or sell a security, on or before a future date, at a predetermined price. The seller of the commitment is the party receiving payment for assuming the risk associated with committing either to purchase a security in the future at a predetermined price, or to sell a security in the future at a predetermined price. The seller of the commitment is required to either accept delivery of a security (in the case of a commitment to buy) or make delivery of a security (in the case of a commitment to sell), in either case at the option of the buyer of the commitment.
Note: Authority cited: Section 14201, Financial Code. Reference: Sections 14652, 14653 and 14653.5, Financial Code.
1. Change without regulatory effect adding new article 3 (sections 30.300-30.307) and renumbering and amending former section 922 to new section 30.300 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).
2. Amendment of section and Note filed 2-27-2003; operative 3-29-2003 (Register 2003, No. 9).
3. Amendment filed 1-6-2022; operative 4-1-2022 (Register 2022, No. 1).
This database is current through 4/22/22 Register 2022, No. 16
10 CCR § 30.300, 10 CA ADC § 30.300
End of Document