AGO 85-29.

• Court: North Dakota

North Dakota Attorney General Opinions 1985. AGO 85-29. Office of the Attorney General State of North Dakota Opinion No. 85-29Date Issued: August 15, 1985Requested by: Marilyn K. Foss Commissioner Department of Banking and Financial Institutions--QUESTION PRESENTED-- Whether Treasury Securities, the ownership of which is evidenced by Treasury Receipts, are securities which are eligible to be pledged by a financial institution as security for the repayment of a deposit of public funds by a public corporation pursuant to N.D.C.C. § 21-04-09.--ATTORNEY GENERAL'S OPINION-- It is my opinion that Treasury Securities, the ownership of which is evidenced by Treasury Receipts, are securities which are eligible to be pledged by a financial institution as security for the repayment of a deposit of public funds by a public corporation pursuant to N.D.C.C. § 21-04-09. --ANALYSIS-- Public funds, as defined in N.D.C.C. § 21-04-01(5), of a public corporation, as defined in N.D.C.C. § 21-04-01(4), must be deposited in the Bank of North Dakota or in financial institutions which have been designated as depositories pursuant to N.D.C.C. Ch. 21-04. N.D.C.C. § 21-04-03. As security for the repayment of deposits of a public corporation, in lieu of a personal or surety bond a financial institution may pledge securities to the public corporation in the amount of $110 for every $100 of public deposits. Securities which are eligible to be pledged include, among others, bills, notes, or bonds issued by the United States government, its agencies, or instrumentalities. N.D.C.C. § 21-04-09. The term 'Treasury Receipts' is the product name given by certain investment bankers, such as First Boston Corp., to the instruments evidencing the ownership of future interest and principal payments on certain United States Treasury Notes or Bonds ('Treasury Securities'). The interest and principal payments on the Treasury Securities are direct obligations of the United States of America. The Treasury Securities against which the Treasury Receipts are issued are held by a custodian financial institution ('Custodian') pursuant to a custody agreement entered into between the Custodian and the holders of the Treasury Receipts ('Custody Agreement'). The Treasury Receipts are issued by the Custodian in registered form which means that the Custodian must maintain a register...