6:02:02:06.  Method of pledging eligible securities, certificates of deposit, or issuing letters of credit. Every security or certificate of deposit pledged to the commission must be deposited with a custodian that is a member of the federal reserve system, and evidenced with joint receipts of custody from the custodian. One copy must be sent to the state treasurer and one copy must be sent to the qualified public depository which has secured the public deposits. In lieu of securities, certificates of deposit, book entry receipts, or investment securities which include portions of loans which are unconditionally guaranteed by a United State's government agency, irrevocable standby letters of credit may be furnished on behalf of the public depository if they are provided according to the requirements of § 6:02:02:03 and if the letter of credit is issued by a federal home loan bank. Each letter of credit must be assigned to the commission as the beneficiary and must be accompanied by a credit rating report.

          Source: 13 SDR 37, effective October 9, 1986; 24 SDR 93, effective January 12, 1998; 42 SDR 51, effective October 13, 2015.

          General Authority: SDCL 4-6A-20.

          Law Implemented: SDCL 4-6A-1, 4-6A-3, 4-6A-5.

          6:02:02:06.01.  Surety bonds as security for public deposits in lieu of pledging eligible securities or furnishing letters of credit. Corporate surety bonds, when given, must be designated to the commission and together with the value of security offered must be acceptable to the commission according to the requirements in § 6:02:02:03. Each surety bond must be issued by an insurance company licensed under SDCL title 58 or by a surety company which is authorized to transact the business of a surety in this state and each surety bond must have a face value of at least 100 percent of the amount of that portion of the public deposits to be secured by the eligible collateral.

          Source: 24 SDR 93, effective January 12, 1998; 42 SDR 51, effective October 13, 2015.

          General Authority: SDCL 4-6A-20.

          Law Implemented: SDCL 4-6A-3, 4-6A-4, 4-6A-5.

          6:02:02:06.02.  Requirements on public depository furnishing collateral. The commission may request information from any qualified public depository pledging eligible collateral, which enables the commission to determine that the state's security interests in the eligible collateral may be perfected. If the commission determines that a qualified public depository does not have, in accordance with SDCL 4-6A-3, segregated eligible collateral as security for uninsured public deposits in the amount of at least 100 percent of the uninsured deposits, the public depository must use eligible collateral that adequately secures the public deposits so that public deposits are granted a paramount, preferred, and perfected first lien on the public depository's assets segregated.

          Source: 24 SDR 93, effective January 12, 1998; 42 SDR 51, effective October 13, 2015.

          General Authority: SDCL 4-6A-20.

          Law Implemented: SDCL 4-6A-3, 4-6A-6, 51A-10-9.

          6:02:02:06.03.  Pledging certificates of deposit as eligible collateral. A certificate of deposit purchased from another institution and held as an asset of the qualified public depository may be pledged to the commission up to the amount of deposit insurance if the certificate of deposit is deposited with a custodian according to the requirements in § 6:02:02:06.

          Source: 42 SDR 51, effective October 13, 2015.

          General Authority: SDCL 4-6A-20.

          Law Implemented: SDCL 4-6A-3.