N.J. Admin. Code § 3:34-1.6

Current through Register Vol. 56, No. 16, August 19, 2024

Section 3:34-1.6 - Collateral obligations

(a) Every public depository having uninsured public funds on deposit shall maintain, in addition to collateral noted in (b) and (c) below, as security for such deposits, eligible collateral having a market value at least equal to:

1. Five percent of the uninsured public funds on deposit, if the public depository is well capitalized;

2. 50 percent of the uninsured public funds on deposit, if the public depository is adequately capitalized;

3. 75 percent of the uninsured public funds on deposit, if the public depository is undercapitalized;

4. 100 percent of the uninsured public funds on deposit, if the public depository is significantly undercapitalized; or

5. 150 percent of the uninsured public funds on deposit, if the public depository is critically undercapitalized.

(b) A public depository which receives and holds on deposit for any period exceeding 15 calendar days public funds of a governmental unit or units which in the aggregate exceed 75 percent of the capital funds of the public depository as reported on the most recent valuation date shall report such excess and describe the eligible collateral pledged to secure said excess. Such collateral shall have a market value at least equal to the amount of such excess and shall be in addition to the security required by (a) above and as reported in the most recent report filed with the Department. For purposes of this subsection, the capital funds of a public depository located in New Jersey which has branches located outside New Jersey shall be its total capital funds multiplied by the percentage of deposits located in New Jersey to total deposits of the depository.

(c) Every public depository having uninsured public funds on deposit in excess of $ 200,000,000, not collateralized under (b) above, shall maintain, as security for such excess uninsured public funds, eligible collateral having a market value at least equal to 100 percent of the average daily balance of those collected, uninsured public funds on deposit in excess of $ 200,000,000 during the three-month period ending on the immediately preceding valuation date or, at the election of the depository, at least equal to 100 percent of the average balance of those collected, uninsured public funds on deposit in excess of $ 200,000,000 on the first, eighth, 15th and 22nd days of each month in the three-month period ending on the immediately preceding valuation date.

(d) The amount of eligible collateral in relation to the amount of uninsured public funds on deposit necessary for a public depository to meet the collateral requirements shall be measured as:

1. The percentage, set forth under (a) above, of the average daily balance of collected, uninsured public funds on deposit during the three-month period ending on the immediately preceding valuation date; or

2. At the election of the depository, the percentage, set forth under (a) above, of the average balance of collected, uninsured public funds on deposit on the first, eighth, 15th and 22nd days of each month in the three-month period ending on the immediately preceding valuation date.

N.J. Admin. Code § 3:34-1.6