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under Statute Law. A “Statute” is defined in black’s 4th edition revised as a kind of bond or obligation of record, being an abbreviation for “statute merchant” or “statute staple.” Statute –merchant = is defined as a security for a debt acknowledged to be due, entered into before the chief magistrate of some trading town, pursuant to the statute 13 Edward I. De Mercatoribus, by which not only the body of the debtor might be imprisoned, and his goods seized in satisfaction of the debt, but also his lands might be delivered to the creditor till out of the rents and profits of them the debt be satisfied. This was also called a Pocket Judgment. Statute Staple = A 1353 statute establishing procedure for settling disputes among merchants who traded in staple towns. The statute helped merchants receive swift judgment for debt. Cf. STATUTE MERCHANT. 2. A bond for commercial debt. A statute staple gave the lender a possessory right in the land of a debtor who failed to repay a loan. See STAPLE. “A popular form of security after 1285 . . . was the . . . ‘statute staple’ – whereby the borrower could by means of a registered contract charge his land and goods without giving up possession; if he failed to pay, the lender became a tenant of the land until satisfied . . . the borrower under a statue or recognizance remained in possession of his land, and it later became a common practice under the common-law forms of mortgage likewise to allow the mortgagor to remain in possession as a tenant at will or at sufferance of the mortgage.”J.H. Baker, An introduction to English Legal History 354 (3d edition 1990). Recognizance = A bond or obligation of record binding a person to some act as to appear in court and subject to forfeit money if obligation is not fulfilled. Fifa = Fifa, short for the Latin phrase fieri facias (“let it be made . . .”) was a court (execution) to the sheriff to levy on (Take) the property of a debtor in order to satisfy a judgment (see judgment and execution dockets, above). The sheriff might typically keep track of fifas in a Sheriff’s Fifa Docket Book. Usually written on a fill-in-the blank form, a fifa names the parties to the court judgment and the value of property to be taken to satisfy the judgment. On the back, the sheriff or his deputies annotate their actions in carrying out the order. The fifas were to be returned to the court which issued them and the actions annotated on the Judgment Docket. Theoretically, the docket books should contain everything that was noted on the fifas. In websters 1913 dictionary the word stand is defined as being also the word statute. I believe this is why the judge in every court always asks do you under – stand the charges being assessed against you. In the O.E. [Old English] it is understandan, to stand under or to be subjected to or under the control of or I am subjecting or agreeing to put my myself under the control of or putting myself under the statute or bond of record. I have been doing more research on our prison system via the internet and have found out some interesting things, regarding what is really going on in the courtroom. The court is looking for an acceptance and acceptor under 3-410 of the U.C.C. as the Principal has the primary obligation to pay or discharge any instrument presented for acceptance. Since they are presenting a Bill of Exchange [indictment] for acceptance. This is called an acceptance for honor, which involves a negotiable instrument especially a bill of exchange [indictment] that has been accepted for payment. The complaint, information, or indictment is a three party Draft, Commercial paper, or Bill of Exchange under Article 3 of the U.C.C. The Grand Jury Foreman is the Drawer or Maker of the Indictment by his signature, the Defendant/Debtor or Straw man is the Drawee and the State is the Payee and the live man is the Payor. What they are doing in the courtroom is all commercial, this is in conformity to 27 CFR 72.11, where it says all crimes are commercial. What the judge and prosecutor are doing in the courtroom is making a commercial presentment under section 3-501 (1) "Unless excused (section 3-511) presentment is necessary to charge secondary parties as follows": (a) Presentment for acceptance is necessary to charge the drawer and endorsers of a draft where the draft so provides, or is payable elsewhere than at the residence or place of business of the Drawee, or its date of
payment depends upon such presentment. The holder may at his option present for acceptance any other draft payable at a stated date; (b) Presentment for payment is necessary to charge any endorser; (c) in the case of any drawer, the acceptor of a draft payable at a bank or the maker of a note payable at a bank, presentment for payment is necessary, but failure to make presentment discharges such drawer, acceptor or maker only as stated in section 3-502 (1)(B). If you don't accept the charge or presentment you are in dishonor for non acceptance under 3-505 of the U.C.C. (c) and 3-501 (2) (a), (b). Acceptance is the drawer's signed engagement to honor the draft as presented. It must be written on the draft, and may consist of his signature alone. It becomes operative when completed by delivery or notification 3-410 of the U.C.C. You are the fiduciary trustee of the straw man which is a Cesti Que Trust; in this capacity you have the responsibility to discharge all his debts, by operation of law. “All moneys of the Federal Reserve Board shall be treated as trust funds for the purpose of section 906 (a) (2) (FOOTNOTE 1) of title 2. This section is effective for fiscal year 1986 and every fiscal year thereafter.” TITLE 12 BANKS AND BANKING CHAPTER 14 SECTION 1772 (e). Every account is a trust, this is why every deed, conveyance or transfer uses the words Grantor, Grantee, or Assignor, Assignee, or Transferor or Transferee. You are also the principal or asset holder on the private side of the accounting ledger; you are holding the exemption necessary to discharge the debt. When they monetize debt they have to have a principal, capital and interest is what circulates as principal and is called revenue or re-venue. Principal is where venue lies. Revenue is a Tax debt or Tax bills. All bills when presented represent revenue, interest, capitol, or accruals circulating from you as the principal, when it is returned back to you as capital or interest it is called income or in-coming. This method of accounting is called the "Accrual Accounting Method" and is represented by debits and credits. Debits are assets Credits are liabilities. The credits and liabilities have to be in balance, this is accomplished through double bookkeeping entries or reverse bookkeeping entry. These bookkeeping entries are the funds referred to in commercial banking. When you are in dishonor they cannot use your exemption to pass the debt or charge through your account to obtain a discharge, so they sell your dishonor, which has a commercial of $ 1,000,000 dollars for each count. When social security # is assigned or issued a blank bond is issued and when you are imprisoned the bond is filled out. This bond is called a Bid Bond, standard form 24 (REV. 1098) prescribed by GSA-FAR (48CFR) 53.228(a). This is also called a prison bond. These are also referred to as contract surety bonds. The first, the bid bond, provides financial assurance that the bid has been submitted in good faith and that the contractor intends to enter into the contract at the price bid and provide the required performance and payment bonds. The second, the performance bond, protects the obligee from financial loss should the contractor fail to perform the contract in accordance with the terms and conditions of the contract documents. The Third kind of contract bond is the payment bond which guarantees that the contractor will pay certain subcontractor, labor and material bills associated with the project. The fourth bond and most important is the STANDARD FORM 28 (Rev. 6/2003) prescribed by GSA-FAR (48 CFR) 53.228 (e) OMB No. 9000-0001, if you read this form carefully it says under the sworn statement “I also depose and say that, concerning any stocks or bonds included in the assets listed below, that there are no restrictions on the resale of these securities pursuant to the registration provisions of Section 5 of the Securities Exchange Act of 1933. The word securities takes you back to section 8-102 (9) of Article 8 of the UCC, which defines securities as a financial asset (i) security (ii) obligation of a person, or a share, participation of a person or in property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or (iii) any property held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the person that the property is to be treated as a financial asset under this Article. As the context requires, the term means either the interest itself or the means by which a person’s claim to it is evidenced, including a certificated or uncertificated security, a security certificate, or a security entitlement. The definition of “security” has three components. First, there is the subparagraph (i) test that the interest or obligation be fully transferable, in the sense that the issuer either maintains transfer books or the
obligation or interest is represented by a certificate in bearer or registered form. Second, there is the subparagraph (ii) test that the interest or obligation be divisible, that is, one of a class or series, as distinguished from individual obligations of the sort governed by ordinary contract law or by Article 3. Third, there is the subparagraph (iii) functional test, which generally turns on whether the interest or obligation is, or is of a type, dealt in or traded on securities markets or securities exchanges. There is, however, an “opt in” provision in subparagraph (iii) which permits the issuer of any interest or obligation that is “a medium of investment” to specify that it is a security governed by Article 8. The divisibility test of subparagraph (ii) applies to the security-that is, the underlying intangible interest-not the means by which that interest is evidenced. Thus, securities issued in book-entry only form meet the divisibility test because the underlying intangible interest is divisible via the mechanism of the indirect holding system. This is so even though the clearing corporation is the only eligible direct holder of the security. The third component, the functional test in subparagraph (iii), provides flexibility while ensuring that the Article 8 rules do not apply to interest or obligations in circumstances so unconnected with the securities markets that parties are unlikely to have thought of the possibility that Article 8 might apply. Subparagraph (iii)(A) covers interests or obligations that either are dealt in or traded on securities exchanges or securities markets, or are of a type dealt in or traded on securities exchanges or securities markets. The “is dealt in or traded on” phrase eliminates problems in the characterization of new forms of securities Which are to be traded in the markets, even though no similar type has previously been dealt in or traded in the markets. Subparagraph (iii)(B) covers the broader category of media for investment, but it applies only if the terms of the interest or obligation specify that it is an Article 8 security. This opt-in provision allows for deliberate expansion of the scope of Article 8. Section 8-103 contains additional rules on the treatment of particular interests as securities or financial assets. 1. Part 5 rules apply to security entitlements, and Section 8-501 (b) provides that a person has a security entitlement when a financial asset has been credited to a “security account.” Thus, the term “securities account” specifies the type of arrangements between institutions and their customers that are covered by Part 5. A securities account is a consensual arrangement in which the intermediary undertakes to treat the customer as entitled to exercise The rights that comprise the financial asset. The consensual aspect is covered by the requirement that the account be established pursuant to agreement. The term agreement is used in the broad sense defined in section 1-201(3). There is no requirement that a formal or written agreement. 1-201(3) “Agreement”, as distinguished from “contract”, means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in Section 1-303. 1-303. Course of performance, Course of Dealing, and Usage of Trade. (a) A “course of performance” is a sequence of conduct between the parties to a particular transaction that exists if; (1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection. (b) A “course of dealing” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct. (c) A “usage of trade”is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in
(e) Except as otherwise provided in subsection (f). or Optional Form 91. 28. And (3) course of dealing prevails over usage of trade. may give particular meaning to specific terms of the agreement. Code of Federal Regulations] [Title 48. (f) Subject to Section 2-209 and Section 2A-208.and may supplement or qualify the terms of the agreement. Release of Personal Property from Escrow. A surety's assets pledged in support of a payment bond may be released to a subcontractor or supplier upon Government receipt of a Federal district court 4 . Release of Lien on Real Property.203-5] [Page 541-542] TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM CHAPTER 1--FEDERAL ACQUISITION REGULATION PART 28_BONDS AND INSURANCE--Table of Contents Subpart 28.and usage of trade. The existence and scope of such a usage must be proved as facts. (d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties’ agreement. the express terms of an agreement and any applicable course of performance. If such a construction is unreasonable: (1) express terms prevail over course of performance. (2) course of performance prevails over course of dealing and usage of trade.question.203-5 Release of lien.S. (a) After consultation with legal counsel. Government Printing Office via GPO Access [CITE: 48CFR28. course of dealing. course of dealing. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance. the contracting officer shall release the security interest on the individual surety's assets using the Optional Form 90. the interpretation of the record is a question of law. If it is established that such a usage is embodied in a trade code or similar record. or a similar release as soon as possible consistent with the conditions in subparagraphs (a) (1) and (2) of this subsection. a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance. Volume 1] [Revised as of October 1. 2003] From the U.2_Sureties and Other Security for Bonds Sec. or usage of trade must be construed whenever reasonable as consistent with each other. (g) Evidence of relevant usage of trade offered by one party is not admissible unless the party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.
or a sworn statement by the subcontractor or supplier that the claim is correct along with a notarized authorization of the release by the surety stating that it approves of such release. as a condition of the partial release. 1996] [Code of Federal Regulations] [Title 48. whichever is later. Nov.1021(b)(1)). The security interest shall be maintained for the later of (i) 1 year following final payment. (2) Contracts subject to alternative payment protection (28. the contracting officer may release a portion of the security interest on the individual surety's assets based upon substantial performance of the contractor's obligations under its performance bond. The security interest shall be maintained for the full contract performance period plus one year. (b) Upon written request.204-3] [Page 553-554] TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM (This book contains chapter 1.204-3 Irrevocable letter of credit (ILC).S. 5 . (ii) until completion of any warranty period (applicable only to performance bonds). June 20. The individual surety shall. 1989. 2004] From the U. (1) Contracts subject to the Miller Act. In making this determination. including payments to subcontractors and other potential liabilities. parts 1 to 51) CHAPTER 1--FEDERAL ACQUISITION REGULATION -------------------------------------------------------------------PART 28_BONDS AND INSURANCE--Table of Contents Subpart 28. as amended at 61 FR 31652. Release of the security interest in support of a payment bond must comply with the subparagraphs (a) (1) through (3) of this subsection. Volume 1] [Revised as of October 1. 28. the contracting officer may release the security interest on the individual surety's assets in support of a bid guarantee based upon evidence that the offer supported by the individual surety will not result in contract award. [54 FR 48988.[[Page 542]] judgment. (c) Upon written request by the individual surety. 28. (3) Other contracts not subject to the Miller Act. Government Printing Office via GPO Access [CITE: 48CFR28. or (iii) pending resolution of all claims filed against the payment bond during the 1-year period following final payment. The security interest shall be maintained for 90 days following final payment or until completion of any warranty period (applicable only to performance bonds). furnish an affidavit agreeing that the release of such assets does not relieve the individual surety of its obligations under the bond(s).2_Sureties and Other Security for Bonds Sec. the contracting officer will give consideration as to whether the unreleased portion of the lien is sufficient to cover the remaining contract obligations.
or (C) For payment bonds only. after the period of performance of a contract where ILCs are used to support payment bonds. (2) If used as an alternative to corporate or individual sureties as security for a performance or payment bond. (ii) For contracts not subject to the Miller Act. ILCs over $5 million must be confirmed by another acceptable financial institution that had letter of credit business of at least $25 million in the past year. The ILC shall provide that. at least 30 days before an ILC's scheduled expiration. until the period of required coverage is institution with a written statement waiving the right to payment. (g) Only federally insured financial institutions rated investment grade or higher shall issue or confirm the ILC. the contracting officer shall immediately draw on the ILC. if any) to the issuing financial institution or the [[Page 554]] confirming financial institution (if any). A separate ILC is required for each bond. the contracting officer shall use the sight draft set forth in the clause at 52. or any future expiration date. if any). The period of required coverage shall be: (i) For contracts subject to the Miller Act. Unless the financial institution issuing the ILC had letter of credit business of at least $25 million in the past year. (1) The offeror/contractor shall provide the contracting officer a credit rating from a recognized commercial rating service as specified 6 .228-14. until completion of any warranty period. (d) If the contractor does not furnish an acceptable replacement ILC. (B) For performance bonds only. (e) If. (c) To draw on the ILC. and be issued/confirmed by an acceptable federally insured financial institution as provided in paragraph (g) of this subsection. or (B) For performance bonds only. there are outstanding claims against the payment bond. or other acceptable substitute. require presentation of no document other than a written demand and the ILC (and letter of confirmation. unless the issuer provides the beneficiary written notice of non-renewal at least 60 days in advance of the current expiration date. the offeror/contractor may submit an ILC with an initial expiration date estimated to cover the entire period for which financial security is required or an ILC with an initial expiration date that is a minimum period of one year from the date of issuance. the contracting officer shall draw on the ILC prior to the expiration date of the ILC to cover these claims. the later of-(A) One year following the expected date of final payment. until completion of any warranty period. the ILC is automatically extended without amendment for one year from the expiration date. until resolution of all claims filed against the payment bond during the one-year period following final payment.204). the later of-(A) 90 days following final payment. and present it with the ILC (including letter of confirmation. the ILC should expire no earlier than 60 days after the close of the bid acceptance period. (f) The period for which financial security is required shall be as follows: (1) If used as a bid guarantee. (b) The ILC shall be irrevocable.(a) Any person required to furnish a bond has the option to furnish a bond secured by an ILC in an amount equal to the penal sum required to be secured (see 28. expire only as provided in paragraph (f) of this subsection.
net [61 FR 31653. (2) If the contracting officer learns that a financial institution's rating has dropped below the required level.204-4. This pamphlet may be obtained by calling the Office of Management and Budget's publications office at (202) 395-7332. (b) If the offeror intends to use an ILC in lieu of a bid bond. until the expiration date of the letter. the later of -(A) One year following the expected date of final payment. and -(1) If used as a bid guarantee. International Chamber of Commerce Publication No. as amended at 62 FR 44807. shall require presentation of no document other than a written demand and the ILC (including confirming letter. is available from: ICC Publishing. 10010. 1997] 52. June 20. 22. as used in this clause. unless the issuer provides the beneficiary written notice of non-renewal at least 60 days in advance of the current expiration date. Neither the financial institution nor the offeror/Contractor can revoke or condition the letter of credit. means a written commitment by a federally insured financial institution to pay all or part of a stated amount of money. E-mail: iccpub@interport. or any future expiration date. (B) For performance bonds only.204-3(h)) that indicates the financial institution has the required rating(s) as of the date of issuance of the ILC. Aug. 7 (see 28.228-14 -. shall be issued/confirmed by an acceptable federally insured financial institution as provided in paragraph (d) of this clause. The ILC shall provide that. or to secure other types of bonds such as performance and payment bonds. the ILC shall expire no earlier than 60 days after the close of the bid acceptance period. 7. or 7 . 1996. until completion of any warranty period. if any). (2) A copy of the Uniform Customs and Practice (UCP) for Documentary Credits. insert the following clause: Irrevocable Letter of Credit (Dec 1999) (a) “Irrevocable letter of credit” (ILC). until the period of required coverage is completed and the Contracting Officer provides the financial institution with a written statement waiving the right to payment. Inc. New York NY. (c) The letter of credit shall be irrevocable. 156 Fifth Avenue. upon presentation by the Government (the beneficiary) of a written demand therefor. 1993 Revision. Telefax: (212) 633-6025. 500. The period of required coverage shall be: (i) For contracts subject to the Miller Act.228-14. the offeror/Contractor may submit an ILC with an initial expiration date estimated to cover the entire period for which financial security is required or may submit an ILC with an initial expiration date that is a minimum period of one year from the date of issuance. the letter of credit and letter of confirmation formats in paragraphs (e) and (f) of this clause shall be used. the contracting officer shall give the contractor 30 days to substitute an acceptable ILC or shall draw on the ILC using the sight draft in paragraph (g) of the clause at 52. the ILC is automatically extended without amendment for one year from the expiration date.in Office of Federal Procurement Policy Pamphlet No. As prescribed in 28.. (2) If used as an alternative to corporate or individual sureties as security for a performance or payment bond. Use of Irrevocable Letters of Credit.Irrevocable Letter of Credit. (h)(1) Additional information on credit rating services and investment grade ratings is contained within Office of Federal Procurement Policy Pamphlet No. Telephone: (212) 206-1150.
or (B) For performance bonds only. confirming financial institution’s] office at [issuing financial institution’s address and. for all or any part of this credit if presented with this Letter of Credit and confirmation. The offeror/Contractor shall provide the Contracting Officer a credit rating that indicates the financial institution has the required rating(s) as of the date of issuance of the ILC. if any. ________________ Account party’s name ________________________ Account party’s address ______________________ For Solicitation No. This Letter of Credit is transferable. 4. __________ (for reference only) To: [U. and subsequent paragraphs are renumbered. [This paragraph is omitted if used as a bid guarantee.S. (e) The following format shall be used by the issuing financial institution to create an ILC: _____________________________________________________ [Issuing Financial Institution’s Letterhead or Name and Address] Issue Date ______ Irrevocable Letter of Credit No. if any. Transfers and assignments of proceeds are to be effected without charge to either the beneficiary or the transferee/assignee of proceeds. confirming financial institution’s address] and expires with our close of business on ______. that we elect not to consider this Letter of Credit renewed for any such additional period. the later of -(A) 90 days following final payment.S. Government Agency’s Address] 1. (ii) For contracts not subject to the Miller Act. ILCs over $5 million must be confirmed by another acceptable financial institution that had letter of credit business of at least $25 million in the past year. 3. Such transfer or assignment shall be only at the written direction of the Government (the beneficiary) in a form satisfactory to the issuing financial institution and the confirming financial institution. Government agency] [U.] It is a condition of this Letter of Credit that it is deemed to be automatically extended without amendment for one year from the expiration date hereof. or any automatically extended expiration date.(C) For payment bonds only. We hereby undertake to honor your or the transferee’s sight draft(s) drawn on the issuing or. if any. Unless the financial institution issuing the ILC had letter of credit business of at least $25 million in the past year. we notify you or the transferee by registered mail. the confirming financial institution. 2. This Letter of Credit is payable at [issuing financial institution’s and. if any) by the same means of delivery. unless at least 60 days prior to any expiration date. at the office specified in paragraph 1 of this Letter of Credit on or before the expiration date or any automatically extended expiration date. we also agree to notify the account party (and confirming financial institution. until resolution of all claims filed against the payment bond during the one-year period following final payment. if any. (d) Only federally insured financial institutions rated investment grade or higher shall issue or confirm the ILC. or any future expiration date. or other receipted means of delivery. if any. We hereby establish this irrevocable and transferable Letter of Credit in your favor for one or more drawings up to United States $ ______. until completion of any warranty period. 8 . At the time we notify you.
International Chamber of Commerce Publication No. 1993 Revision. We hereby undertake to honor sight draft(s) drawn under and presented with the Letter of Credit and this Confirmation at our offices as specified herein. 3. of its election not to extend the expiration date of the Letter of Credit. This Letter of Credit is subject to the Uniform Customs and Practice (UCP) for Documentary Credits. the account party. issued by __________ [name of issuing financial institution] for drawings of up to United States dollars ___________/U. _______________________ [Issuing financial institution] (f) The following format shall be used by the financial institution to confirm an ILC: ___________________________________________________________________ [Confirming Financial Institution’s Letterhead or Name and Address] (Date) _____________ Our Letter of Credit Advice Number _____________ Beneficiary: ___________ [U. or the transferee and the issuing financial institution. we shall notify the Contracting Officer. 4. to the laws of _____________________ [state of confirming financial institution. by registered mail or other receipted means of delivery. Sincerely. If this credit expires during an interruption of business of this financial institution as described in Article 17 of the UCP. 6.] It is a condition of this confirmation that it be deemed automatically extended without amendment for one year from the expiration date hereof. otherwise state of issuing financial institution].5. 1993 Revision. 9 . and to the extent not inconsistent therewith. $_______ and expiring with our close of business on _____________ [the expiration date]. or any automatically extended expiration date. and ourselves. to the laws of ________ [state of confirming financial institution]. or any automatically extended expiration date. unless: (a) At least 60 days prior to any such expiration date. 500. or (b) The issuing financial institution shall have exercised its right to notify you or the transferee. International Chamber of Commerce Publication No. the original of which is attached. This confirmation is subject to the Uniform Customs and Practice (UCP) for Documentary Credits. that we elect not to consider this confirmation extended for any such additional period. 2.: ___________ Gentlemen: 1. and to the extent not inconsistent therewith. We hereby confirm the above indicated Letter of Credit. if any. Draft(s) drawn under the Letter of Credit and this Confirmation are payable at our office located at ___________________. 5.S. and subsequent paragraphs are renumbered. 500. Government agency] Issuing Financial Institution: __________________ Issuing Financial Institution’s LC No.S. the financial institution specifically agrees to effect payment if this credit is drawn against within 30 days after the resumption of our business. [This paragraph is omitted if used as a bid guarantee.
State] (Date) ______________ [Name and address of financial institution] Pay to the order of ______________ [Beneficiary Agency] ___________ the sum of United States $____________. especially an investment banker. The insurers would 10 . prison operators need to maintain a steady flow of prisoners and prison dollars.6 billion dollar deficit. we as owner principal’s work on the General Calendar Accounting Year or Cycle. The term underwriter derives its meaning from former British Insurance Practices. When insuring their cargo shippers would seek out investors to insure their property. This means that New York will issue $ 6. Sincerely. One of the Industries tools for accomplishing this is the American Legislative Exchange Council. this deficit represents unredeemed debt on the credit side of the accrual accounting system and cannot be executed to the debit side of accrual accounting ledger. ALEC.6 billion dollar deficit. ___________________________ [Confirming financial institution] (g) The following format shall be used by the Contracting Officer for a sight draft to draw on the Letter of Credit: Sight Draft ________________________ [City. New York City has a $ 6. Corporations work on the Fiscal Accounting Cycle because they operate using commercial debt. to be combined with a $150 million notes offering. who guarantees the sale of newly issued securities by purchasing all or part of the shares for resale to the public. From 1995 to 2000. ______________. New York has therefore put its bond underwriting business up for bid. not only promotes privatization. Wackenhut. Lehman Brothers Bank will underwrite New York's $ 6. Industry leaders CCA and Wackenhut have paid tens (if not hundreds) of thousands of dollars in exchange for a privileged position on ALEC's Criminal Justice Task Force (which CCA chairs). 2002 (12:18 pm) Lehman Brothers Banking Cartel in New York City agreed to provide prison industry leader CCA (Corrections Corporation of America) with a new $ 695. and Cornell spent $520.000. except through the principal's exemption.6 billion in bonds and pay underwriters over $30. "America's new wall of homeland security is creating a big demand for cells to hold suspects and illegal aliens who might be rounded up.000 on state elections. This draft is drawn under Irrevocable Letter of Credit No. we specifically agree to effect payment if this credit is drawn against within 30 days after the resumption of our business. in turn.000 in Federal elections. If this confirmation expires during an interruption of business of this financial institution as described in Article 17 of the UCP. a powerful right wing lobby group that helps corporations draft and enacts "model" legislation-. An underwriter is an Insurer or one who buys stock from the issuer with an intent to resell it to the public or an entity or person. ___________________ [Beneficiary Agency] ____________________ [By] On April 9. a New York Post story on the for-profit private prison industry stated.000 senior secured credit facility. the industry spends millions on campaign contributions. The war on terrorism has created a buzz in the private prison industry. million in fees in the next fiscal year alone. In addition to investing heavily in groups like ALEC and the Reason Foundation.for a price. and in 1998. the industry spent $540. CCA. where a little money goes a long way. but also brags of having helped enact "Truth in Sentencing" and "Three Strikes" laws in 25 states. Less than three weeks after September 11th." In order to prosper.6.
CCA later merged into PRISON REALTY TRUST.000. or even seeing “Yesterday’s Closing Stock Price: $2. there is a placard with the words “Yesterday’s closing stock price. Prices through the first half of may have generally been below $3 a share. Investors are angry that PZN lost its REIT status and the related dividend. and how morale or turnover will effect daily operations. the price closed below $3 a share again after briefly hitting $3. Joel Dyer notes that outside one CCA facility. but a Legg-Mason stock analyst declared PZN an UNDERPERFORM. Germany. hence the term 'underwriter'.add their signatures and would write their names under those of the shipper. In Berlin Germany there ticker symbol is CXW.3 million severance. which sent the common stock to new lows as shareholders realized they are not likely to see dividends soon. One important condition is that it distribute 95% of its income to shareholders. they are filing class actions suits against Prison Realty Trust for false claims on Securities and Exchange Commission documents. Dreman Value Management. Meanwhile Prison Realty just paid a dividend on their preferred stock (belonging to executives and institutional partners). Of course.12 each.” says an analyst for First Union Securities.12”.50 the previous week. but this has been a financial engineering disaster.000 restricting plan from its current shareholder Pacific Life Insurance Co. Specifically. Localities that have contracts with the companies are concerned about whether guards will get paid. The private prison was offered a $200. stock rose $1 a share on news that their $1 billion credit line is restructured and they receive a $780.000 loss for 1999 and was in default on the terms of its credit facility. with guaranteed 95% occupancy rate. two of the executives are leaving. Both in terms of the insurance industry and securities markets. companies acquire U. Shares hit a new 52 week low of 2. that really inspires confidence in the justice system. they are concerned about the non-disclosure of payments by PZN to CCA. Their Ticker Symbol for their stock is CXW_pb on the NYSE and CXW under business services on the NYSE. company audits expressed doubt about the company’s solvency. Corrections Corporation. Wall Street was unimpressed at the company’s earlier scheme to issue junk bonds. the major stock holder is the Paine Webber Group. 11 . The Corrections Corporation of America owns most of your prison systems and sells its stock and shares on the New York Stock Exchange. Share prices bottomed out at $0. The Private prison’s largest shareholder.18 –yes. During the next week. but not without a $1. Together. This was a $4 Billion Transaction. class action lawsuits from shareholders about the merger and management fees for restructuring.000. At the close of business 26 April.00 and talks started on financial restructuring to remedy default on credit line. In April of 2000.000. Now you know how they are financing the commodities and securities market and why New York City is called the Great Whore of Babylon in the Book of Revelations Chapter 18 verses 10-24. lost $265 million: “It’s a slim chance. there’s also been millions in attorney fees. was pleased at the offer: “We always maintained that the (prison) business was great.S. including prison security. Because the stock has lost 75% of its value. which does not change the underlying financials of the company. who is now on the Board of PZN.BE and CXW.000 federal contract. the stock hit a new low of $2.37. Michael Quinlan. but the other requirement was met when Lehman Brothers refinanced PZN’s $ 1 billion credit line. Quinlan is now one of the top executives in the company.DE in Frankfurt. Tennessee at 10 Burton Hills Blvd and can be reached at 1-800-624-2931. In his book the Perpetual Prisoner Machine [see resources]. The Federal Contract. 18 cents. but prevented them from being removed from the New York Stock Exchange. West Mutual Shippers Association out of Luxemburg is underwriting Social Security Administration a surety ship contract or Bond. it posted a $62. CCA and its spin off Prison Realty Trust. provided financial resources to reject a restructuring offer from Pacific Life Insurance. but bankruptcy is a possibility. down from the 52 week high of $22.” Imagine the legitimacy and confidence that are lost by people driving by seeing the stock price plummet. They instituted a 10 for 1 split. Prison Realty Trust failed to meet those conditions of cash flow problems. They have a Dunn & Bradstreet rating and are headquartered in Nashville. On June 7. a provision making REITs attractive to investors. Instrumental in pulling off this contract was former Federal Bureau of Prisons head J.” Shareholder lawsuits still must be settled on satisfactory terms for the deal to be finalized. a Real Estate Investment Trust that is exempt from corporate taxes if it meets certain conditions. the concept of underwriting have expanded significantly since its inception.
NY 10020 1-212-798-6100. New York.S. Roland Berger & Partner. John Kerry Forbes 2004 campaign ‘advisor’ Roger C.W. Stirling Square. The transaction.4 billion euros of existing financing. In addition to AIG. Stelmar’s 40 vessel fleet consists of 24 Handymax. and Scandinaviska Enskilda Banken.html). Fortress Investment Group is a global alternative investment and asset management firm founded in 1998 with approximately $11 billion in equity capitol. APCO worldwide was started by Margery Kraus in 1984 and she is active on the board of Group Menatep (chair. Greece.” In December 2001. Military-industrial complex and oil industry. Henry Kissinger’s real name is 12 .blackstone. Fortress on November 15. which is valued at approximately 3. phone # 1-202-778-1000. 5-7 Carlton Gardens. from the German Federal Government’s social security and pension agency.2 billion in future Blackstone sponsored funds. than the agreement Prison Realty Trust currently has with Fortress Investment Group LLC. APCO Worldwide is located at 1615 L St. the Blackstone Group and Bank of America. The Blackstone Group is also handling the restructuring of Global Crossing. Schwarzman.. The Blackstone group is a private investment banking firm and describes itself as a leading global investment and advisory firm.C. Stelmar operates one of the world’s largest and most modern Handymax and Panamax tanker fleets with an average age of approximately six years.3 billion).” Blackstone has developed strategic alliances with some of the largest and most sophisticated international financial institutions. and 700 million euros of private equity capitol. They are located at 1251 Avenue of the Americas 16th floor New York. London location is the Blackstone Group International Limited. Bundesversicherungsanstalt Fuer Angestellte (or BfA). Teuza Fund. 4th Floor London. N. a Fairchild technology venture (Israel).com/company/bst_group. +1 212 583 5000 Fax: +1 212 583 5712. Stelmar is an international provider of petroleum products and crude oil transportation services and is Headquartered in Athens.” the website states  (http://www./Henry Kissinger. Fortress just recently completed the acquisition of Germany’s fourth largest residential housing company. D. 13 Panamax and three Aframax tankers. 2004 merged with Stelmar Shipping Ltd. Altman was Vice Chairman of the Blackstone Group from 1987 through 1992 “where he led the firm’s merger advisory business. The Blackstone Group was founded in 1985 by a group of four. The company’s Blackstone Alternative Asset Management unit handles $1 billion in hedge funds for pension giant CalPERS. Kissinger Associates and APCO Worldwide announced that they had formed “a strategic alliance”. Inc. includes the assumption of 1. # 900. a $1. GAGFAH. the Blackstone Group was appointed as Enron’s principal financial advisor with regard to financial restructuring. Kissinger Associates is located at 350 Park Avenue. NY 10154 USA Phone. Group MENATEP is an international diversified holding company and long-term Russian strategic and portfolio investor in international financial and capital markets. The Blackstone Group has ties to American International Group Inc. the largest Russian holding company. GmbH. According to the Blackstone website. 2000 Pacific Life Insurance Company submitted to the board of directors of Prison Realty Trust a shareholder based proposal to invest in and restructure Prison Realty Trust (NYSE:PZN). Peterson and Stephen A. Advisory Board).5 billion euros (U. (AIG) and Kissinger Associates. less dilution and potentially higher returns for existing shareholders of Prison Realty Trust. The shareholder proposal would involve additional value. Washington.4 billion acquisition loan.K. they include Kissinger Associates. In October 2004. SW1Y 5AD U. AIG acquired a 7 % non-voting interest in the company in 1998 for $150 million”and committed to invest $1. Other groups associated with Kissinger are Kissinger McLarty Associates. including Peter G.On February 23. $4. Phone: +44 20 7451 4000 Fax: +44 20 7451 4038. The Blackstone Group is located at 345 Park Avenue New York.
The Tax Reform Act of 1986 allowed REIT’s to manage their properties directly. beneficially owns approximately 4. Investments in real estate provided investors with income and appreciation. These REITs loan money for mortgages to owners of real estate. whose main function is to pass profits on to investors. the demand for real estate funds skyrocketed and President Eisenhower signed the 1960 real estate investment trust tax provision which reestablished the special tax considerations qualifying REIT’s as pass through entities (thus eliminating the double taxation). Today. The shareholder proposal by Pacific Life provides for additional value in the form of Series C Preferred Stock (approximately $2. individual annuities and group employee benefits. This tax advantage. however. Pacific Life was founded in 1868 and provides life and health insurance products. making it easier to buy and sell REIT assets/shares than to buy and sell properties in private markets. which are the groups running are government at every facet of its existence. Another major advantage of REIT investment is its liquidity (ease of liquidation of assets into cash). a REIT’s business activities are generally restricted to generation of property rental income. As pass through entities.Henry Stern. This law has remained relatively intact with minor improvements since its inception. and in 1993 REIT investment barriers to pension funds were eliminated. The pacific life family of companies manages $300 billion in assets. develops.3%) 13 . and potentially higher future returns. who started and trained the terrorist group the Stern Gang in Israel. companies who are able distribute the majority of income cash flows to investors without taxation at the corporate level (providing that certain conditions are met). Pacific Life Insurance Company is a member of the fortune 500 group.1%) Equity REITS invest and own properties (thus responsible for the equity or value of their real estate assets). along with generating between $45 to $123 million in additional cash flow to Prison Realty Trust. and all passive investments were taxed first at the corporate level and later taxed as a part of individual incomes. businesses and pension plans a variety of investment products and services. Mortgage REITs: (1. Their revenues come principally from their property rents. Following WWII. Unlike stock and bond investment companies. and the military. companies as clients. or REIT (pronounced “reet”) date back to the 1880s. and currently counts 65 of the 100 largest U. REIT’s fall into three broad categories: Equity REIT’s: (96.S. which is a real estate investment trust [REIT] and is the world’s largest private sector owner and developer. which is now called the Mossad. as compared to traditional private real estate ownership which are not very easy to liquidate.5 million shares of Prison Realty Trust. A REIT is a company that buys. This trend of reforms continued to increase the interest in and value of REIT investment. and offers to individuals. REIT investment increased throughout the 1980s with the elimination of certain real estate tax shelters. Hybrid REITs: (2. there are over 300 publicly traded REIT’s operating in the United States their assets total over $300 billion. CIA. Approximately two-thirds of these trade on the national stock exchanges. investors could avoid double taxation because trusts were not taxed at the corporate level if income was distributed to beneficiaries. a long term investor. The origins of the real estate investment trust. REIT’s were unable to secure legislation to overturn the 1930 decision until 30 years later. One reason for the liquid nature of REIT investments is that its shares are primarily traded on major exchanges. Their revenues are generated primarily by the interest that they earn on the mortgage loans. He trains global terrorist groups for the FBI.6%) Mortgage REITs deal in investment and ownership of property mortgages. The Prison Realty Trust [PZN]. manages and sells real estate assets.20 per share) to be distributed to existing shareholders. making it one of the largest financial institutions in America. REIT’s qualify as pass through entities. At that time. REIT’s allows participates to invest in a professionally managed portfolio of real estate properties. Pacific Life. was reversed in the 1930s. or invest in (purchase) existing mortgages or mortgage backed securities.
founded in 1934. which is composed of the following Agencies: Biometric Consortium Border Research and Technology Center (BRTC) Bureau of Alcohol.5% Mortgage Backed 1. apartments or healthcare facilities).3 % Health Care 3. and Firearms (BATF) Corrections Program Office (CPO) Counter drug Technology Assessment Center (CTAC) Drug Enforcement Administration (DEA) Federal Bureau of Prisons (FBP) Federal Prison Industries (operated by DOJ). San Diego (Navy SSC San Diego) Southwest Border High Intensity Drug Trafficking Area (HIDTA) UNICOR U. office buildings.1% Federal Prison Industries.8% Self Storage 3.0% Industrial/Office 33. Unicor is a supplier to the military during the current war in Iraq. Customs Service U.S. Tobacco. Certain REITs choose a broader focus. or metropolitan area).S.S. industrial facilities.S.5% Lodging/Resort 6. Department of Defense (DOD)/Biometric Management Office (BMO) U.1% Specialty 2. The current REIT industry’s investment choices can be broken down by property: • • • • • • • • • Retail 20% Residential 21. investing in a variety of types of property and mortgage assets across a wider spectrum of locations. or in property types (such as retail properties. is operated by the Department of Justice (DOJ) and is wholly owned government corporation which employs 25 percent of the Federal Bureau of Prisons’ sentenced inmate population.6% Diversified 8.Hybrid REITs combine the investment strategies of Equity REITs and Mortgage REITs by investing in both properties and mortgages. state. Department of Homeland Security/Border and Transportation Security Directorate (BTS) U. Individual REITs are able to distinguish themselves by specialization. Department of Justice (DOJ) U. REITs may focus their investments geographically (by region. The government has also created the Prison Industrial Complex. also known as UNICOR Immigration and Naturalization Service National Institute of Corrections (NIC) National Institute of Justice (NIJ) National Law Enforcement and Corrections Technology Center (NLECTC) National Technical Information Service (NTIS) Office of Correctional Education (OVAE) Office of Drug Control Policy (ODCP) Office of Law Enforcement Standards (OLES) Office of Law Enforcement Technology Commercialization (OLETC) Office of National Drug Control Policy (ONDCP) Office of Science and Technology (OS&T) Space and Naval Warfare Systems Center. Parole Commission 14 . also known by its trade name UNICOR.S.
TRansCor America Urban Development Corporation U.com corrections. MCI Maximum Security. Communities and Culture Premier Detention Services Printrak (Motorola) Prison Industries The Prison Litigation Reform Act (1996) Prison Realty Trust (merged with Corrections Corporation of America) Prison telephone service (AT&T the Authority. Corrections Corporation purchased by Corrections Corporation of America Wackenhut Corporation/Wackenhut Corrections Other Related Disinfopedia Resources 15 . Inc. Management and Training Corporation Manhattan Institute Marriott Management Services Misuse of labor N-Group Securities National Criminal Justice Commission National Institute of Corrections (NIC) Open Society Institute/Center on Crime.com Corrections Corporation of America (CCA) Corrections Yellow Pages Dominion Management Dove Development Corporation Earl Warren Legal Institute Federal Extradition Agency (private) General Security Service Government owned/contractor operated Iridian Technologies. Inc.Non-Governmental Entities Alternative Monitoring Services American Correctional Association American Legislative Exchange Council (ALEC) “Bed brokers” BI Inc. Inc.) Juvenile and Jail Facility Management Services Justice Policy Institute (JPI) Justice Technology Information Network (JTIN) Law Enforcement and Corrections Technology Advisory Council (LECTAC) Mace Security Inc.S. (formerly IriScan. Stun Tech Inc. BellSouth MAX. North American In telecom) R&S Prisoner Transport “Rent-a-call (see “bed brokers”) Scientific Applications and Research Associates (SARA) The Sentencing Project SENTRI/Secured Electronic Network for Travelers’ Rapid Inspection Serco Group. (Biometric Systems) The [Biometric Foundation] Bobby Ross Group Capital Correction Resources Cornell Corrections correctionalnews.
6. They have grown 33-fold in revenues and offenders under contract since that time. It is a project of the Center for Media & Democracy. They are the only company really in the business of aggressively growing in each of these three sectors. The Wackenhut Corporation is a U. They are the moving force and promoter of the National Council of State Legislatures who privatize criminal statutes for financial gain and profit. issues and groups shaping the public agenda. Rhode Island. 12. The Reason Foundation is run by David Nott. The types and techniques of Privatization are: 1.secure institutional. They are promoting public policy in regard to prize and capture law under the War Powers Acts. Massachusetts. Contracting Out [also called Outsourcing] Management Contracts Public-Private Competition [also called managed competition or market testing] Franchise Internal Markets Vouchers Commercialization [also referred to as service shedding] Self Help [also referred to as transfer to non-profit organization] Volunteers Corporatization Asset Sale or Long-Term Lease Private Infrastructure Development and Operation Cornell Corrections Inc. Suite 400 Los Angeles California 90034 1-310-391-2245. 2. [NYSE:CRN] is chaired by DAVID M. the president and is a think tank promoting privatization of penal institutions for financial gain they are located at 3415 S. 10. American Legislative Exchange Council is owned by Paul Weyrich of the Free Congress Foundation and receives financial support from all of your major corporations. the other in Central Falls. CORNELL and their Company’s concept began December 7. 1991 [They are also called Trinity Venture Capital and Shane Reihill is the Chairman and founder. 7. email bob AT Disinfopedia. based division of Group 4 Falck A/S. and government markets. provider of contract services to the business. they go up to maximum security. 3. Sepulveda Blvd.Biometrics Defense contractors Eugenics Federal contractors Global detention system Global economy Globalization Military-industrial complex Surveillance-industrial complex Population control Prison labor Sustainable development Timeline to global governance External links Wikipedia: carceral state Wikipedia: retribution justice Wikipedia: prison-industrial complex Disinfopedia is an encyclopedia of people. 8. 5. They have diversified and are now dependent upon development and have diversified into the three sectors of the business. the world’s second largest provider of Security Services and is based in Copenhagen. 4. Denmark and is the premier U.S. it was a rough business plan. commercial. and pre-release. 1990. They built correctional facilities in Plymouth.S. 11. 9. yet the Dillon Read Venture Capitol became there first investor on February 21. There 16 . juvenile.
. growing crops. Retail.000 Corporations.C.000 employees spread across 40 countries. Now you know why the United States of America is the Plaintiff in every Federal Tax Case. Water. Every metropolitan Police Department and Federal Police have this system installed in their Vehicles and is referred to as the Criminal Justice Tracking System. Section 1775. Defense. Inc. Insurance. 2-102(a) (24). Advertising.” U.htm you will see the 20 largest companies. CUSIP is the trademark for the system that uniquely identifies securities and other instruments of general interest.C. letter-of-credit rights. Suite 211 – Foster City.transnationale. to govern. deposit accounts. Transportation.04 of Title 17 Corporations: Partnerships of the Ohio Revised Code says “Rules of Law and Equity. Media. when it is sold at the International Level it goes Ordinance or Military and uses a nine digit accounting number. accounts. they own and run the prison system. investment property. Food Chains. and Staffing. Telecommunications. instruments. that are movable at the time of identification to contract for sale and future goods. The Warden is a Bailee or Warehouseman [before the term admiral was used He was called Custos Maris “Warden of the Sea”] [In some ancient records He was called Capitanus Maritimarum or “Captain or Tenant in Chief of the Maritime”] who receives personal property from another as Bailment. Consulting. Holding. Recreational. Medical. The term includes the unborn young of animals. Post: USPS [United States Postal Service. School. Fashion. Motorbike. Conglomerate.C. Based on the above information it looks like GSA and GAO are heavily involved in the accounting aspect of the Prison System.United States of America. including specially manufactured goods. especially articles of trade or items of merchandize. Services. Aerospace. Packaging. 1-103. one of the largest banks in the world.650-655-3700 or call toll free 1-866-XML-SOAP.C. Bailment is the delivery of personal property by one person [the Bailor] to another [the Bailee] who holds the property for a certain purpose under an expressed or implied-in-fact contract. Tourism. chattel paper. Go to the Paine Webber group on any search engine or go to www. Tobacco. Printing & Publishing. Everything is being run under the Law Merchant under U. maintains a global profile on 10.institutional revenues are around 42 percent. When your dishonor is sold within the United States it has a six digit accounting # and is called a Cardinal number. Appliance. . Finance. and other identified things to be severed from real property . . Equipment. put out by CCH and says that the law of the Merchant governs all sections in the Internal Revenue Code. Construction. SUITE 1500 HOUSTON. Privatization is the transfer of assets or service delivery from the government sector. This company is currently operating in five different time zones and is headquartered at 1700 W. Goods are tangible or movable property other than money. Pharmaceutical. juvenile revenues approximate 40 percent and prerelease revenues are around 18 percent. Also spelled Bailor. These factors represent the outsourcing phase of the prison system. Credit Card Companies. Dillion Read Venture Capital a New York based corporation merged with SG Warburg in 1997 creating Warburg Dillion Read. Healthcare. Metal.org/pays/USAs. The sale of goods is governed by Article 2 of the U. TEXAS  [1-713-235-9366].C.” UCC 1-103 is quoted in the Administrative Manual of the Internal Revenue Service. Private Person. LOOP SOUTH. Electronics. Computer. This is where AutoTRIS and CUSIP come in. through you and is funded by your commercial dishonor. Paper. Transnational Corporations Observatory. Notice that the Postal Service is involved in this. “Goods means all things. letters of credit. Inc. Prisons are nothing but warehouses for the storage of goods and chattel under commercial law. Restaurants. Auto. Performance. or general intangibles. AutoTRIS is the Automated Forensic Traces Investigation System and was designed in the Russian Federal Center of Forensic Science using a graphical toolkit that was developed at Automation Designs & Solutions. This group is the United States of America and is the largest stock holder in the world in Corrections Corporation of America that owns and controls the entire world prison system. This program is used as a Jail Management System for Inmate Tracking. The term does not include money in which the price is to be paid. including the Law Merchant. It has some 40. CNF Inc]. Real Estate. the subject matter of foreign exchange transactions documents. The Name CUSIP is derived from the ABA Committee on Uniform Security Identification Procedures. Textile Apparel. Energy. Hotels. for other software products. Waste Management. Cosmetics. AutoTRIS is copyrighted and licensed to AD&S in the USA and other countries of America. Mining. This bank was started by the Paul Warburg family which owns and controls the World Bank and started the Federal Reserve System. Biotechnology. which explains why they are supplying all the Bond forms respecting the Bid. Chemical. California 94404. Payment and Affidavit of Individual Surety.C. Xignite. non-profit organization created by Re’gis Castellani in October 1999 in Marttiques [France]. London based UBS Warburg is the investment banking division of the Swiss giant UBS. This system also has a Law Enforcement Module and a Court Management Module for courtroom accounting. Illinois 60604. UBS Warburg is located at 141 West Jackson Boulevard Chicago. The CUSIP Agency is 17 . Electricity. Materials. The Bailer is one who provides bail as a surety for a criminal defendant’s release. designs the software that is used in AutoTRIS and is located at 1291 East Hillsdale Boulevard. Banks.
A/K/A the United States of American. For financial instruments actively traded on an International basis. including banks. Currency.. The National Association of Insurance Commissioners [NAIC] in October 1988 mandated the use by issuers of a uniform private placement number [PPN] to identify investments in their annual statements filed with the State Regulatory Authorities.000 global financial instruments and cross references all major national numbering systems. To show how massive this system is ISID plus contains over 500. At the International level there is EPIM [the European Pre-issuance Messaging]. NSCC. And is located at 55 Water Street. depositories. FICC. is the leading of complete global trade management services. Treasury Bills. Warrant and Rights.? I also have a form called a PRIVATE PLACEMENT DEBT. 18 and whose 18 . Preferred Stock. which operates under a license agreement with the ABA. It is also called or referred to as the EMCC. which is a central messaging hub linking the parties involved in the Issuance of European Commercial Paper [ECP]. and Sinking Funds. coupon. which are either underwritten debt issues or domiciled equities outside the United States and Canada. Clearstream International. A unique partnership between the securities Industries leading utility and the commercial sector. issuing and paying agents. GSCC. The object of ANNA is to maintain and promote the standards of International Standard ISO 6166. which identifies for purchase Serial Bonds. All Bonds are identified by using a CUSIP nine digit number. I have a form from CUSIP called a PRIVATE PLACEMENT EQUITY which identifies Mutual Funds. ISID Plus has been designed to minimize the impact on back-office systems and operations. and settlement month. commodities. as amended from time to time [hereafter “the Standard”]. Working with the MBSCC. I bet that this standard # 6166 is the number of a man and His number is 666 and is talked about in Revelations 13. MSCC. CUSIP also identifies the issuers of securities and other financial instruments within a standard nine-character framework.C.. and administer the PPN system primarily for the Insurance Industry. and DTCC. a security’s mortgage type [Ginnie Mae. enhancing. Standard & Poor’s CUSIP Service was selected by the NAIC to create. CINS numbers appear in the International Securities Identification Directory [ISID Plus Services] which is co-produced by Standard & Poor’s and Telkurs [USA].the organization within the ABA [American Bankers Association] which is charged with the responsibility of developing. Ginnie Mae. I have the Articles of Incorporation of THE ASSOCIATION of NATIONAL NUMBERING AGENCIES or [ANNA SC] the registered office is located and established at 6. They are also offering TBAs which are futures contracts on mortgaged-backed pools. maturity. How much do you want to bet that CUSIP and DTC is the clearinghouse for all Arrest Warrants? Which are commercial checks under Article 3 of the U. Interestedly this is the same address of the DTC Depository Trust Cooperation and The Depository Trust Company which is the holding and settlement company for all credit card trust accounts and is the holder of all bonds and certificated securities for all investors and which is the clearinghouse for all goods. assign. CUSIP is the Trademark of Standard and Poor’s. Freddie Mac. The CINS number was developed in 1988 by Standard & Poor’s and Telekurs [USA] in response to the North American Securities industries need for 9 character identifier for International Financial Instruments. DTCC. CINS numbers employ the same issuer [6 characters] Issue [2 characters & check digit] concept espoused by the CUSIP Numbering System. Omega is industry-backed and marketoriented. Notes. dealers. NY 10041. securities organizations. and maintaining the system and policies necessary for uniform securities identification. signifying the Issuer’s country code [domicile] or Geographic region. and exchanges. Fannie Mae. banks. the CUSIP Service Bureau developed specialized numbering scheme TBA [The Bond Market Association] mortgagedbacked securities [Mortgage Backed Securities is ownership position in a group. EPIM was launched as a cooperative effort by Euroclear. the financial instruments will be identified by a CINS [CUSIP International Numbering System] number. It is Bonds in which interest and principal received from this pool of mortgage loans are passed through to the Bondholders]. Sally Mae. GCN [the Global Clearing Network] and DCC&S [Defined Contribution Clearance & Settlement]. The first position of a CINS code is always represented by an alpha character. while facilitating cross-border communications among global custodians. Term Bonds. or pool. I finally understand where the United States of America is located and who they are and why in the Bluebook put out by the ABA [American Bar Association] they are referred to as a foreign country.C. avenue de Schiphol-1140 Brussels – Belgium. and disseminating this information to the financial marketplace. 47th floor New York. a joint venture company owned equally by the Depository Trust & Clearing Corporation [DTCC] and Thomson Financial. Sally Mae. of mortgage loans. Through its integrated suite of Intelligent Trade Management Solutions SM. Omega LLC. and securities. and Fannie Mae. and Freddie Mac]. I have a 26 Page list with Bonds. securities depositories and numbering agencies. TBA and CUSIPs incorporate within the number itself. These are the clearinghouses for all shares and stocks sold through the CCA and the Paine Webber Group.
airlines. In addition. and Municipal Employees AFSCME. They have been meeting since 1975 when there were only five countries. The Nation explains this miracle would be accomplished. brokerage firms and insurance companies to enter their market. equities into shares. Canada. telephone companies. banks.” Most guards in public prisons belong to the LEOU. For 22 years. Great Britain. The answer is we are all double minded and do not know who we are in a commercial setting. financial. Also contributing to the new financial architecture is the rise of multi-national and transnational corporations. they chipped away at national financial sovereignty. CORNELL CORRECTIONS. mergers and acquisitions. has contributed to a changed financial landscape. ANNA also assigns the ISIN [International Securities Identification Number]. UBS WARBURG. I have a pointed question for you. Futures. this makes the Treasury Secretary of the United States a puppet of the Federal Reserve. France. all that has to be done in order to destroy a country is to sell their currency at same time. Unfettered American Capitalism would produce a better fetter. The Third to Sixth Character: attributes for further description and grouping. has changed the control of our banking system by repealing the Glass-Stegall Act in 1999 that allowed banks to buy brokerage firms and insurance companies. This represents a further integration of the economies. also known as fascism. preferred shares etc. Under Article 5 ANNA has unlimited Capital through BIS [Bank for International Settlements]. REASON FOUNDATION. Germany. Rights. Each dime they don’t spend on food or medical care [for prisoners] or on wages and training for the guards is a dime they can pocket. Russia is the most recent country to join. That set the tone for other countries to follow suit. saving cash-strapped states millions of dollars each year” while simultaneously generating huge profits. Why is privatizing prisons so appealing to federal. stocks. Italy. Debt Instruments. the G7 finance ministers met alone. Since the central banks hold the currency of other countries. the Financial Stability Forum was set up as a further layer and deeper integration of the global economies.S. CCA. state. WARBURG DILLON READ and the PAINE WEBBER GROUP. agriculture. the head General. Let us regain and claim our honor and status as the Principal with primary responsibility on obligations for 19 . which is run by Count Hans Kolvenbach. The First Character: Category [Equities. The Second Character: Group within category e. or civil transactions directly or indirectly related to the objects of ANNA. They participate fully in every area with the exception of finance where they only participate in financial terrorism. SG WARBURG. since they control and dictate monetary policy worldwide. Furthermore. Penal Institutions. along with the IMF and World Bank. Then in 1998 they were joined by the central bank ministers.purpose under Article 3 is to carry out any commercial. policies and movement of monies and investments. Pontiff and Gregorian Counsel for the Order of Jesuits and he is called the “Black Pope” and who owns and controls all Prisons. from subjection to a judicial lien. “Private prisons receive a guaranteed [per diem] fee for each prisoner. which is part of the American Federation of State. They are private corporations established in every country to manage and control that country’s monetary system. and Banks. a private corporation. their respective Securities and Exchange Commissions. and “exemption” means protection. Under Article 29 ANNA has a list of all public finds. DILLION READ VENTURE CAPITOL. etc. Others]. why aren’t we as principals on the Private side of the accounting cycle using our Exemption Priority to discharge all this Public Debt under the Uniform Exemption Act section 3 “Exempt” means protected. Which brought together the G 7 Central Bank ministers. and other securities composing ANNA’S Portfolio. there is the move towards a global stock exchange. WACKENHUT. Therefore as a result of the global volatility which I believe was a result of the central bank’s selling the aforementioned countries currencies. “A person who has doubts is thinking about two different things at the same time and can’t make up his mind about anything” or as the King James Version says “A double minded man is unstable in all his ways. Japan. The U. there is the Group of Eight which is comprised of the heads of state from the United States. I think ANNA is owned by the Order of Jesuits out of Rome Italy. process. In the late 1990’s they set up a new structure called the Financial Stability Forum. bonds. ALEC. Further more. or proceeding to collect a debt. the establishment of a World’s Customs Organization and “open skies” between countries. County. G 7 Finance Ministers. the rise of public-private partnerships which is a merger between government and business. the Comptroller of the Currency and FDIC. Options. Every individual in Prison is in there. shares.” James 1:8. country privatization of its assets such as railroads.g. The Bank for International Settlements is at the apex of all of the world’s central banks. with the establishment of the World Trade Organization Financial Services Agreement which demands that all countries allow foreign banks. and Russia. Furthermore. regardless of the actual costs. because of a Commercial Dishonor. and local governments? As the Nation put it: The selling point was simple: Private companies could build and run prisons cheaper that the governments. in addition to the Central Banks.
The Bid. and Payment Bonds Standard Form 25A.042 dollars. Optional form 90. 1. Quinlan. These can be viewed by going to http://finance. Legg Mason Inc. which is a Bond of Record or Obligation for the payment of debt. to discharge any debts.102-1 and 28.102-1 and 28. The Institutional Holders who own most of the Shares are: 1.yahoo. Release of Personal Property from Escrow [see title 48 section 28.228-14 the contractor can draw on the ILC using the sight draft draw up in section (g).791. and payment bonds and Affidavit of Individual Surety. These bonds can be used to release the liens imposed by the bid. Joseph V. An Irrevocable Letter of Credit under title 48 section 52. performance. creates or issues stock certificates based on prison population. By legal definition all of your Federal and State “Statutes” are Bonds or Obligations of Record and are represented in the courtroom by the Recognizance Bond. upon presentation by the Government (the beneficiary) of a written demand therefor..203-5] And Optional Form 91.com/q/mh?s=CXW. The Bid Bond is then indemnified by a surety company through Performance and Payment Bonds. (a) “Irrevocable letter of credit” (ILC).discharge on the public and payment on the private. Bid Bonds are usually purchased by Brokerage Houses. means a written commitment by a federally insured financial institution to pay all or part of a stated amount of money. as used in this clause.. A condensed version of what is going on is that the CCA as a corporation.102-1 and 28. The investment banker purchases all or part of the shares of the stock for resale to the public in the form of newly issued investment securities based on the shares of the stock. [see title 48 sections 28. 2. 041. Barclays Bank Pic 1.228-14 can be used in lieu of a bid bond. Russell. 2.575 shares as of 10-Sep-02 20 . Through our Exemption as Principal. Michael 40. J. until the expiration date of the letter. 3.254 dollars. 084. (b) If the offeror intends to use an ILC in lieu of a bid bond. issued by GSA under the Comptroller General.101]. which is usually an investment banker. or to secure other types of bonds such as performance and payment bonds. Under section (g) of the clause at 52.986. we can use these Standard form 24 Bid Bonds [ see title 48 section 28. There are seventeen more corporations owning various amounts of shares at varying dollar values. Neither the financial institution nor the offeror/Contractor can revoke or condition the letter of credit.487.340 shares as of 2-May-03 28.106-3 (b)] form 28 Affidavit of Individual Surety [see title 48 sections 28.083. and Payment Bonds are then underwritten by an Affidavit of Individual Surety through the Banks as Investment Securities for resale to the public. the letter of credit and letter of confirmation formats in paragraphs (e) and (f) of this clause shall be used. Brokerage Houses and Insurance Companies Bid on the Investment Securities with a Bid Bond issued by the GSA. Release of Lien on Real Property [see title 48 section 28. Performance Bonds [see title 48 sections 28. The Top Insider & Rule 144 Holders are: 1. The underwriter is the one who buys the stock from the Issuer the CCA with intent to resell it to the public or an entity or person. FMR [Fidelity Management & Research Corporation 3. Performance.671 shares valued at $37.106-3 (b)] Standard Form 25. and Insurance Companies. 3.563 shares valued at $43.203-5]. goods or chattel as they are called in commercial law.235.106-3 (b)]. John D. 64.024 shares at a value of $109.450 shares as of 2-May-03 Ferguson.
Securicor operates in 50 different countries. Jimmy Horne. and Lloyds’ Syndicates. 13 a John Allen Appleman & Jean Appleman.S. there on left side you will see sureties listing. They are then put on the bond market through TBA [The Bond Association]. Post Judgment Interest Rates. and handles all matters prior to and subsequent to loss. . reinsurance can increase the capacity of the insurer to accept risk. First. The Performance Bond is then under written by a Payment Bond. then click on Clerk’s Office. which shows a map of the circuit courts. 13. you will see Criminal Justice Act. click on 7th circuit. The laying off of risk by means of reinsurance traditionally serves three basic purposes. consolidations and mergers. Contractors and Insurance Companies are bidding on the default judgments with a Bid Bond. then to Financial Department. this system permeates every fabric of our society. District Courts are buying up the State Court default judgments. Woloniecki. U. which was completed in July 2004. click on sureties it will take you to FMS.326 pages volume 2 is 823 pages long. or a larger number of smaller risks. then a Reinsurance Company comes in and purchases a Performance Bond as a surety for the Bid Bond. admitted reinsurers and forms. . The insurer may be enabled to take on larger individual risks. O’Neill & J. this is all admiralty maritime at its finest. and text writers with so little discrimination that such confusion has arisen as to what that term actually connotes. excess insurance. then go to administrative services.GOV.TREAS. click on forms and you will see Reinsurance Agreement for a Miller Act Performance Bond SF 273. 21 . in which the liability of the reinsurer is solely to the reinsured. Reinsurance. These should be consulted and read before these bonds are used. Insurance Law and Practice section 7681. or a combination of both . Securicor is one of your biggest international securities companies and is located in South Africa and have acquired Gray Security Services. and in other connections that it now lacks a clear-cut field of operation.’ generally expressed as a ratio of net premium income over capital and free reserves. The Payment Bond is then under written by an Affidavit of Individual Surety.DivestTerror. this is usually done by an investment company or investment banker.T. Currently global terrorism is being funded by the prison system and the State’s Retirement Fund go to www. and in which contract the ceding company retains all contact with the original insured. John R. a list of the 7th and 8th circuit courts will appear. Pools and Associations . Go to court links and click. Turner. These bonds are being used in cases where it is desired to cover the excess of a Direct Writing Company’s underwriting limitation by reinsurance instead of co-insurers on Miller act performance bonds running to the United States. at 479-80 . and list of sureties. reinsurance can promote financial stability by ameliorating [improving] the adverse consequences of an unexpected accumulation of losses or of a single catastrophic losses. These FAR regulations come in two volumes. which is the ceding company . at least in part. This treatise represents about 700 hours of brainstorming. These bonds are also sold as investment securities through brokerage houses or insurance companies. The term ‘reinsurance’ has been used by courts.817 shares as of 23-May-03 5. because these will. Thus it has so often been used in connection with transferred risks. Go to a search engine and type in U. to an insurance lawyer means one thing only – the ceding by one insurance company to another of all or a portion of its risks for a stipulated portion of the premium.751 shares as of 29-Jun-04 As you can see by the above information. Securicor was formed from the merger between Securicor pic and Group 4 Falk. Thirdly. .4. Secondly.228(h). reinsurance can strengthen the solvency of an insurer from the point of view of any regulations under which the insurer must operate which provide for a minimum ‘solvency margin.202-1 and 53. P. 5. Reinsurance is defined as insurance of all or part of one insurer’s risk by a second insurer.S Courts. the Law of Reinsurance in England and Bermuda 4 . be absorbed by reinsurers. assumed risks. you will also see a list of the Department of the Treasury’s Listing of Approved Sureties [Department Circular 570]. . . Also termed reassurance. attorneys. volume 1 is approximately 1. who accepts the risk in exchange for a percentage of the original premium. . When these Bonds are pooled they become mortgage backed securities or surety bonds.W.Org this is a 115 page treatise on the Terrorism Investments of the 50 States. when you refuse to pay or dishonor the debt. click on Illinois Northern District Court. and a SF274 Payment Bond and a Reinsurance Agreement in Favor of the United States SF 275 and a list of Admitted Reinsurers. All of the performance and payment bonds are regulated and controlled by FAR [Federal Acquisition Regulations] which is under [48 CFR] 28.
S. All discount Window advances must be secured by collateral acceptable to the Reserve Bank.C. Collaterized Mortgage Obligations 5. 12. which the U. The Bid. The bid. Under section 9303 Government Obligations may be substituted for Surety Bonds. sections 270 a – 270d-1 and is federal law requiring the posting of performance and payment bonds before an award is made for a contract for construction. Obligations of states or political subdivisions of the U. government agencies and government sponsored enterprises 3. as defined in sections 3 (a) (44) of the Securities Exchange Act of 1934 (15U. payment bonds and Affidavit of Individual Surety in addition to being sold on the commodities and securities exchange as pooled mortgaged backed securities and cleared for settlement through the FICC [Fixed Income Clearing Corporation]. or agricultural loans Commercial real estate loans Consumer loans Check with your local Reserve Bank if you have any questions About other types of collateral +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++The Federal Reserve System Discount Window Collateral Margins Table includes valuation margins for the most commonly pledged asset types. The Prisons are acting in the capacity of a fiduciary or custodian over Government Securities or otherwise for the account of a customer. I believe that the prisons are repository institutions or facilities for securities [prisoners] as collateral for the public and national debt. 11.S. 9. Sureties and Surety Bonds are covered in Title 31 sections 9301-9309. Sally Mae. Obligations of U. 4.The Miller Act is found in Title 40 U.S. The surety company issuing these bonds must be listed as a qualified surety on the Treasury List. The following types of assets are most commonly pledged to secure discount window advances. industrial.S. The office responsible for the regulations is the Office of the Commissioner. Money market instruments Residential real estate loans Commercial. 1. or repair of a public work or building. Corporate bonds 7. alteration. or your local Federal Reserve Bank. Assets accepted as collateral are assigned a lend able value [market or 22 . Performance. They function essentially the same way that a Depository Bank does under 17 CFR section 450.C. 78 c (a) (43)—(44). Government Obligations are defined as public debt obligations of the United States Government and an obligation whose principal and interest is unconditionally guaranteed by the Government. and that are not government securities brokers or dealers.S. 10. Performance and Payment Bonds. Department of the Treasury issues each year. The prisons are referred to as credit facilities.A. Ginnie Mae. The prisoners represent asset or repository money for the Bid. Asset backed securities 6. Obligations of the United States Treasury 2. The regulations in subchapter B are promulgated by the Assistant Secretary (Domestic Finance) pursuant to a delegation of Authority from the Secretary of The Treasury. who is the holder until the Bonds are sold. Fannie Mae. Payment Bonds and Affidavit of Individual Surety fall in the category of surety bonds under these provisions. performance. institutions or repositories. are also being pledged as collateral for funds and a line of credit at the discount window or the open-market trading desk of Freddie Mac. 8. Bureau of the Public Debt.
The published underwriting limitation is on a per bond basis but does not limit the amount of a bond that a company may write.W. the contractor then becomes the principal obligor.C. the corporation who is the owner and obligee. The National Association of 23 . performance and payment bonds. who is the director of underwriting for the Surety Association of America under circular 570 for the Department of the Treasury whose telephone # is 1-202-463-0600. Ohio is the transfer agent for bonds her telephone # 1-216-274-1606 and Holly Pattison of National City Bank is also a transfer agent. If you read De Lovio v.] Treasury refers to a bond of this type as an Excess Risk. Ohio 44115 telephone # 1-216-515-6662. Read pgs. This is termed assumed risk in insurance and represents a present peril. Her Telephone # 1-216-222-2552. 3. such reinsurance is to be effected by use of a Federal reinsurance form to be filed with the bond or within 45 days thereafter. 82) 89 says that all Revenue is of admiralty maritime law. D. supplies and cost factors involved with the guaranteed performance. or danger of loss. When Excess Risks on bonds in favor of the United States are protected by reinsurance. Companies are allowed to write bonds with a penal sum over their underwriting limitation as long as they protect the excess amount with reinsurance. Duties. Imposts and Excises imposed on the Colonists on imports from London. the prisoners are the actual reinsurance or surety and their sentence represents the valued and marketable risk involved with the materials. if the contractor is awarded the bid. I also found out that Lisa Jennings of J. you will find out that all insurance is of Admiralty Maritime Law and The Huntress [Federal Case No.914. SAA is licensed as a rating or advisory organization and has been designated as a statistical agent by all the states except Texas for the reporting of fidelity and surety experience. 988 & 989 of the Huntress. You can’t pay a debt or assume a risk with a debt instrument. The bid bond is a three party obligation with the obligee as the owner of the bid. and payment bonds.P. the underwriting limitation in force on the day in which the bond was provided will govern absolutely. and then a performance bond is issued to guarantee cost of material and supplies. or securities for the bid. [2 Ware (Dav.10-11.776]. nonprofit. 1978 [31 CFR 223. and payment relative to the bonds. collateral. England. Under King Charles 11. due to their dishonor and default judgment in court. That is why there is a penal sum or clause attached to each bond for non performance and payment of the bonds. He is then required to get a reinsurance company to act as surety on the bid bond. In protecting such excess risks. coinsurance or other methods as specified in Treasury Circular 297. I went through circular 570 of the Department of Treasury and called several of the admitted reinsurance companies through their underwriting department and found out they knew absolutely nothing about reinsurance relative to bid. Boit [ Federal Case No. performance. The Surety Association of America is a voluntary. When a corporation wants to build or perform construction. performance and payment bonds. SAA represents more than 500 companies that collectively underwrite the vast majority surety and fidelity bonds in the United States. This fact leads me to believe that in addition to being a Repository Bank with prisoners being the assets. 20036. The reinsurance company who is acting as surety for the bid bond also acts as the underwriter through a payment bond.face value multiplied by the margin] deemed appropriate by the Federal Reserve Bank. he receives bids from a contractor. hazard. as well as a number of foreign affiliates. [see the attached schedules] The Treasury Department issues certificates of authority to insurance companies who submit a financial statement to the Department of the Treasury. The reinsurance company’s limitation on liability is determined and predicated on 10% of the Policy Holders surplus retained by earnings from capitol surplus. 6. I spent 30 minutes on the phone with Robert Duke. N. revenue causes had been heard and tried in the colonies by the vice admiralty. then requires that the contractor submit a bid bond. Morgan Bank in Cleveland. His address is 1101 Connecticut Avenue. Since everybody on the public or debt side is bankrupt or insolvent how can they assume a liability or risk? They can’t that is why they have to look to the exempt priority private asset side of the accounting ledger to assume reinsurance or risk. Revised September 1. By talking with a broker named Jim McFadden for AG Edwards I found out that the Bond Register and paying agent for the County of Cuyahoga is Frank Lamb a Trustee for Huntington National Bank at 917 Euclid Avenue Cleveland. unincorporated association of companies engaged in the business of suretyship. performance and payment bonds. An Affidavit of Individual Surety is used as a surety for the bid. Charles Townshend who passed The Townshend Act in 1767 and who was the Lord High Admiral on the British Board of Trade caused the American Revolution due to the high Tariffs. This can only be done with Asset Collateral through goods [prisoners] under mercantile civil and commercial law. Suite 800 Washington.
The trustee under a trust indenture often also acts as registrar. provide performance and payment bonds for the construction industry. ISSUER = A state. See: DELIVERY DATE. TRUSTEE. D. Surety Bond producers Suite Suite 600. SETTLEMENT = Delivery of and payment for a security. See: BONDHOLDER. See: BOND REGISTER. for guaranteeing performance.C. 7. SUNDICATE. 20015 www. D. NEGOTIATED SALE. NW. Compare: REGISTRAR. WORD DEFINITIONS RELATIVE TO BONDS 1. and issue other types of surety bonds. 6. Compare: TRANSFER AGENT. and innovation in surety and to advocate its use worldwide.org sio@sio. BOND PROCEEDS = The money paid to the issuer by the purchaser or underwriter of a new issue of municipal securities.C. NASBP’s mission is to strengthen professionalism. 5. 9. Compare: CLEARANCE. Compare: PLACEMENT AGENT. 8. SURETY INFORMATION OFFICE National Association of 5225 Wisconsin Avenue NW. municipality. 2. This is all under the Executive Branch under the President and Military. See: NET PROCEEDS. See: REGISTERED BOND. (202) 686-7463 Fax (202) 686-3656 Washington. The trustee under a trust indenture often also acts as transfer agent. These moneys are used to finance the project or other purpose for which the securities were issued and to pay certain costs of issuance as may provided in the bond contract or bond purchase agreement. an official of the issuer or a third party engaged by the issuer to act as its agent. either directly or through their agents. 3. The underwriter may acquire the securities either by negotiation with the issuer or by award on the basis of competitive bidding. PRIMARY DISTRIBUTOR.Surety Bond Producers is the international organization of professional surety bond producers and brokers. REGISTERED BOND. that lists the names and addresses of the holders of the registered bonds. NASBP represents more than 5. expertise. such as license and permit bonds. TRANSFER AGENT = The person or entity that performs the transfer function for an issue of registered municipal securities. See: COMPETITIVE SALE.org I also believe that the Bid Bonds are being used to purchase commercial items [commercial paper] such as court judgments this is done through GSA SF form 1449 contract form and is a rated order under DPAS [Defense Priorities and Allocations System] see 15CFR 700 this is under the National Security Industrial Base Regulations. TRANSFER AGENT.000 personnel who specialize in surety bonding. political subdivision. REGISTRAR = The person or entity responsible for maintaining records on behalf of the issuer that identify the owners of a registered bond issue. Compare: SETTLEMENT. 20015 600 5225 Wisconsin Ave. UNDERWRITER = A Broker – dealer that purchases a new issue of municipal securities from the issuer for resale in a primary offering. HOLDER = The owner of a security. This person or entity may be the issuer. SEE BONDHOLDER. Washington.sio. CLEARANCE = The process of delivering securities from a seller to a buyer. or governmental agency or authority that raises funds through the sale of municipal securities. 4. PRIMARY OFFERING. TRANSFER. 24 . GOOD DELIVERY. BOND REGISTER = A record. REGISTRAR. kept by a transfer agent or registrar on behalf of the issuer. TRUSTEE.
CONDUIT BORROWER = A borrower of bond proceeds in a conduit financing. For example. 17. INDUSTRIAL DEVELOPMENT. See: BID. BOOK-ENTRY ONLY (BEO) or BOOK-ENTRY SECURITY. GLOBAL CERTIFICATE. The security for this type of issue is customarily the credit of the conduit borrower or pledged revenues from the project financed. prices and conditions upon which the underwriter purchases a new issue of municipal securities in a negotiated sale. A 501 (c) (3) organization can borrow funds to finance projects on a tax-exempt 25 . 11. Such certificates are often used in book-entry systems. or in the name of. Immobilized securities may be transferred when sold by entries on the records of the depository or by withdrawal of actual certificates.S. Compare: BONDHOLDER. PRIVATE ACTIVITY BOND.10. less commonly. The bond purchase agreement is sometimes referred to as the “purchase agreement” or. CONDUIT FINANCING = The issuance of municipal securities by a governmental unit (referred to as the “conduit issuer” to finance a project to be used primarily by a third party.Multi-family housing revenue bonds. a securities firm might hold securities in “street name” in its vaults or at a securities depository. multifamily housing revenue bonds and qualified 501 (c) (3) bonds are common type’s conduit financings. A conduit borrower also is frequently a party to the bond purchase agreement in a conduit financing. 14. Such securities do not constitute general obligations of the conduit issuer because the conduit borrower is liable for generating the pledged revenues. DEPOSITORY = A registered clearing agency that provides immobilization. Compare: VERBAL AWARD. Most municipal securities issued in recent years have been in bookentry only form. Compare: BOOK-ENTRY ONLY. rather than the credit of the conduit issuer. BENEFICIAL OWNER = The person to whom the benefits of ownership of given securities accrue. IMMOBILIZED SECURITY = A physical security that is held in a central depository for the account of its beneficial owner but that may be withdrawn from the depository in physical form. and no certificates can be obtained. Compare: CLEARING CORPORATION. See: GLOBAL CERTIFICATE. 13.” See: NEGOTIATED SALE. BOND PURCHASE AGREEMENT [BPA] – The contract between the underwriter and the issuer setting forth the final terms. See: CONDUIT FINANCING. The date of the award is generally considered the “sale date” of an issue. and transfers of ownership by. investors are reflected solely by appropriate books and record entries. See: HOUSING REVENUE BOND.A security that is not available top purchasers in physical form. the “underwriting agreement. UNDERWRITING AGREEMENT. another person or held in an account over which another person has investment discretion. safekeeping and book-entry clearance and settlement services to its participants. The securities are available to beneficial owners only in book-entry form. IMMOBLIZED SECURITY. Such a security may be held either as a computer entry on the records of a central holder (as is the case with certain U. The issuer issues a global certificate that is then lodged in the facilities of a depository or other book-entry agent and kept safely by the agent until maturity.” representing an entire maturity of an issue of securities. WRITTEN AWARD. BOND PURCHASE AGREEMENT. global certificate. with the beneficial owners of the securities only designated on the firm’s records. GLOBAL CERTIFICATE = A single certificate sometimes referred to as a “jumbo certificate. usually a for – profit entity engaged in private enterprise or a 501 (c) (3) organization (referred to as the “conduit borrower”). Ownership interests of. Government securities) or in the form of a single. 15. Industrial development bonds. 501 (c) (3) ORGANIZATION = An organization recognized by the Internal Revenue Service as a notfor-profit organization. See: BOOK-ENTRY ONLY. 18. AWARD = The official acceptance by the issuer of a bid or offer to purchase a new issue of municipal securities by an underwriter. Compare: CERTIFICATED SECURITY. See: REGISTERED CLEARING AGENCY. OBLIGOR. 19. 12. WRITTEN AWARD. Compare: IMMOBLIZED SECURITY. 16. even though the securities might be held by.
established to perform specialized functions. other than conduit authorities. 23. Compare: DEPOSITORY. Examples include not-for-profit colleges and universities. A municipal security also is a private activity bond if. The following categories of private activity bonds are qualified bonds under federal tax laws: 26 . fees or tolls. as described below. 22. registered with the Securities and Exchange Commission pursuant to section 17 A of the Securities Exchange Act of 1934. or it may depend upon other units for its creation. A municipal security is considered a private security bond if it meets either of two sets of conditions set out in section 141 of the Internal Revenue Code. MUNICIPAL SECURITIES = a general term referring to securities issued by local governmental subdivisions such as cities. more than 10% of the proceeds of the issue are used for any private business use (the “private business use text”) and the payment of the principal of or interest on more than 10 % of the proceeds of such issue is secured by or payable from property used for a private business use (the “private security or payment test”). See: CONDUIT BORROWER. A municipal security is a private activity bond if. In some cases. See: NATIONAL SECURITIES CLEARING CORPORATION. comparison. AUTHORITY = A unit or agency of government. although they also may have taxing powers.basis through a conduit issuer. Compare: TAXABLE MUNICIPAL SECURITY. usually are financed by service charges. villages. See: CONDUIT ISSUER. 21. CLEARING CORPORATION = A registered clearing agency that provides specialized comparison. Most categories of qualified private activity bonds are subject to the alternative minimum tax. hospitals. with certain exceptions. as well as securities issued by states political subdivisions or agencies of states. DEPOSITORY TRUST AND CLEARING CORPORATION (DTCC) = The entity formed by the merger of Depository Trust and National Securities Clearing Corporation. clearance and settlement of securities transactions. Interest on private activity bonds is not excluded from gross income for federal income tax purposes unless the bonds fall within certain defined categories (“qualified bonds” or “qualified private activity bonds”). Issuers of municipal securities are exempt from most federal securities laws. Conduit authorities generally are financed by fees payable by conduit borrowers. See: AUTHORITY. DEPOSITORY TRUST AND CLEARING CORPORATION. museums and retirement communities. In other cases. See: NATIONAL SECURITIES CLEARING CORPORATION. A prime feature of these securities is that interest or other investment earnings on them usually are excluded from gross income of the holder for federal income tax purposes. that provides specialized systems for the confirmation. or a separately established not-for-profit entity formed on behalf of a governmental entity. DTCC facilitates the clearance and settlement of securities transactions. 26. or special districts. NATIONAL SECURITIES CLEARING CORPORATION (NSCC) – A clearing corporation. Authorities. An authority may function independently of other governmental units. PRIVATE ACTIVITY – Qualified 501 (c) (3) bonds. A clearing corporation typically offers services such as automated comparison systems and transaction netting systems. the amount of proceeds of the issue used to make loans to non-governmental borrowers exceeds the lesser of 5 % of the proceeds or $ 5 million (the “private loan financing test”). 24. REGISTERED CLEARING AGENCY. authorities issue private activity bonds for the purpose of making the proceeds available to qualified private entities for use as permitted under the federal tax laws. REGISTERED CLEARING AGENCY = An organization. 25. funding or administrative oversight. clearance and settlement services for its members. Examples of such conduit authorities include health facilities authorities. towns. authorities have the power to issue debt that is secured by the lease rental payments made by a governmental unit using the facilities constructed with bond proceeds. See: CLEARING CORPORATION. 27. counties. either paid directly by the borrower or under the bond contract. Industrial development authorities and housing finance authorities. with certain exception. 20. CONDUIT ISSUER = An issuer of municipal securities in a conduit financing. PRIVATE ACTIVITY BOND (PAB) = A municipal security the proceeds of which are used by one or more private entities. CONDUIT FINANCING.
This explanation is not convincing. whence in mediaeval Latin “a seal” especially the seal appended to a charter etc. or banker’s acceptance which has a maturity at the time of issuance of not exceeding nine months. Enterprise zone bonds are also considered exempt facility bonds.. 32. Qualified student loan bonds = Private activity bonds issued to finance student loans for attendance at higher education institutions. a papal bull. and certain other local utility facilities. “a bill. HOUSING REVENUE BOND. a charter. passing into English y. 29. and. The ability of states to issue new and refunding qualified veterans’ mortgage bonds on a tax – exempt basis is limited. paper. A ‘bill’ on the other hand. “a document furnished with a seal. taking into account certain prior issues. Being a word of common use. and certain other types of facilities. so far as one can gather from the evidence of contemporary literature. a stud. See: TAX INCREMENT BOND. See: HOUSING REVENUE BOND – Single family mortgage revenue bonds.” This says it all if you have wisdom and understanding. draft. water. clearance. 31. Qualified redevelopment bonds = Private activity bonds issued to finance certain acquisition. rehabilitation and relocation activities for redevelopment purposes by a governmental entity in designated blighted areas. a boss. solid and hazardous waste disposal facilities. transferred sense. 34. Qualified redevelopment bonds are payable from general taxes or from tax increment revenues. Under Title 18 sections 513 (A) the term security as defined in the Electronic Fund transfer Act under 916 (c) has been amended and moved to Title 15 section 78 (c) subsection 10. schedule. and. taking into account certain capital expenditures incurred during the three years prior and the three years following the issuance of such bonds. A ‘bull’ was a sealed document setting forth something or other in an authoritative manner. At least up to the end of the fourteenth century the two words almost always carried meanings that were respectively inconsistent with each other. exclusive of days of grace. bille. certain residential rental projects (including multifamily housing revenue bonds). including airports. 27 . note.exempt basis in an amount up to $1 million.” It was in these later senses that bulla became in England billa. Qualified small issue bonds = Private Activity bonds issued to finance manufacturing facilities.Multiple-family housing revenue bonds. The word occurs several times in this sense. or any renewal thereof the maturity of which is likewise limited is not included in this definition of a security. memorandum. where it says that any currency.” e. and William Langland. Exempt facility bonds – Private activity bonds issued to finance various types of facilities owned or used by private entities. i. 33. INTERNATIONAL BILL OF EXCHANGE In the Open Market Trading Desk in the Investing Trading Glossary A bill of exchange is defined as a “General Term for a document demanding payment. sometimes the obvious escapes everybody. seems to have carried the meaning of a humble petition for remedy of a stated grievance. docks. The word Bill is an alteration of the Latin word Bulla in its mediaeval sense. note. bill of exchange. Qualified veterans’ mortgage bonds = Private activity bonds that are general obligations of a state issued to fund mortgage loans to finance owner – occupied residential property for veterans. in this sense only. Qualified mortgage bonds are often referred to as single family mortgage revenue bonds. and certain other transportation-related facilities. or an amount up to $10 million. in Gower. thence. Qualified 501 (c) (3) bonds are not subject to the federal alternative minimum tax. as far as I can find. sewer. any official or formal document. See: ENTERPRISE ZONE BOND. Qualified mortgage bonds = Private activity bonds issued too fund mortgages to finance owner-occupied residential property. an amulet for the neck”. Qualified 501 (c) (3) bonds = Private activity bonds issued to finance a facility owned and utilized by a 501 (c) (3) organization.28. 30. though no direct evidence of this has been found. nor would it be even if ‘bill’ and ‘bull’ had originally conveyed the same or similar meanings. So the Oxford English Dictionary. bulla was probably pronounced with u. by extension. In classical Latin bulla was ” a bubble. Qualified small issue bonds may be issued on a tax.g.
” defined in Section 3-103 (a) (8). An order is a written instruction to pay money signed by the person giving the instruction. 1988]. or “order. Also termed acceptance supra protest. “’Acceptance for honor supra protest’ is an exception to the rule that only the Drawee can accept a bill. to prevent the bill being sent back upon the drawer or indorser as unpaid) by a friend placing his own name upon it as acceptor of the whole. an antecedent claim against any person. [Cases: Bills and Notes key 71. the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. The drawer or maker of an instrument has a defense if the instrument is issued without consideration.e. 21st ed. the court held that if the United States is a party to an instrument..” 2 Stephen’s Commentaries on the Laws of England 202-03 (L. 318 U. (2) The transferee acquires a security interest or other lien in the instrument other than a lien obtained by judicial proceeding.. (4) The instrument is issued or transferred in exchange for a negotiable instrument. with the consent of the holder. A bill which has been dishonored by non-acceptance and is not overdue may. Money is defined in section 1-201(24) and is not limited to United States dollars. Honor 2. Crispin Warmington ed. If an instrument is issued for a promise of performance. It also includes a medium of exchange established by a foreign government or monetary units of account established by an intergovernmental organization or by agreement between two or more nations. [UNICTRAL CONVENTION ON INTERNATIONAL BILLS OF EXCHANGE OR INTERNATIONAL PROMISSORY NOTES] December 8. that has been accepted for payment. acceptance for honor supra protest. This type of acceptance inures to the benefit of all successors to the party for whose benefit it is made. United States. C. A promise is a written undertaking to pay money signed by the person undertaking to pay. Letters of Credit section 37].” defined in Section 3-103(a) (12). The definition of “negotiable instrument” defines the scope of Article 3 since Section 3-102 states: “This Article applies to negotiable instruments.Acceptance 4. its rights and duties are governed by federal common law in the absence of a 28 . by which the third party agrees to pay the debt when it becomes due if the original Drawee does not. Value 3.J. An instrument is either a “promise. 1950). Bills and Notes. Black’s Law Dictionary 8th edition a negotiable instrument.” The definition in Section 3-104 (a) incorporates other definitions in Article 3. or part only. the instrument is also issued for consideration. v. Similarly. 363 (1943). 3-303 Value and Consideration (a) An Instrument is issued or transferred for value if: (1) The instrument is issued or transferred for a promise of performance. where a bill has been dishonoured by non-payment and protested any person may intervene and pay it supra protest for the honor of any person liable thereon. There are three elements of an acceptance 1. especially a bill of exchange. but by a third party. after a protest has been drawn up declaratory of its dishonour by the Drawee.S. Thus the term “negotiable instrument” is limited to a signed writing that orders or promises payment of money. An acceptance for honor is an undertaking not by a party to the instrument. or as security for. for the purpose of protecting the honor or credit of one of the parties. Consideration. of the amount of the bill. whether or not the claim is due. to the extent the promise has been performed. the effect being to discharge all parties subsequent to the party for whose honour it is paid. or (5) The instrument is issued or transferred in exchange for the incurring of an irrevocable obligation to a third party by the person taking the instrument. If an instrument is issued for value as stated in subsection (a).S. (b) “Consideration” means any consideration sufficient to support a simple contract. be accepted in this way for the honor of either the drawer or an indorser (i. In Clearfield Trust Co. (3) The instrument is issued or transferred as payment of.
3. Convention Article 1 there is little chance that the Convention will apply accidentally to a transaction that the parties intended to be governed by this Article. “negotiable Instrument” means an unconditional promise or order to pay a Fixed amount of money. If the instrument falls within the definition of both “note And “draft. (b) “Instrument means a negotiable instrument. if it: (1) Is payable to bearer or to order at the time it is issued or first Comes into possession of a holder. Negotiable Instrument. (e) An instrument is a “note” if it is a promise and is a “draft” if it is An order. maintain.C. (d) A promise or order other than a check is not an instrument if. (ii) an authorization or power to The holder to confess judgment or realize on or dispose of collateral or (iii) a waiver of the benefit of any law intended for The advantage or protection of an obligor. 2(2). an international bill of exchange or promissory note that meets the definition of instrument in section 3-104 will not be governed by Article 3 if it is governed by the Convention. the convention will preempt state law with respect to international bills of exchange and notes governed by the Convention. the court stated a three prong test to ascertain whether the federal common law rule should follow the state rule. however expressed. (a) Except as provided in subsections (c) and (d). 715 (1979). (2) Is payable on demand or at a definite time. except paragraph (1). 29 . Convention Articles 1(3). Inc. (c) An order that meets all of the requirements of subsection (a). rules in formulating federal common law on the subject. That Convention applies only to bills and notes that indicate on their face that they involve cross-border transactions. to the effect that the promise or order is not negotiable or is not and instrument governed by this Article. Kim bell Foods.. If the United States becomes a party to this convention.S. Thus. because it applies only if the bill or note specifically calls for application of the Convention.C. with or without interest or other Charges Described in the promise or order. In Kimbell the Court adopted the priorities rules of Article 9. 2(1). and (3) Does not state any other undertaking or instruction by the Person promising or ordering payment to do any act in addition (1) An undertaking or power to give.104. Moreover.” a person entitled to enforce the instrument may treat It as either. it contains a conspicuous statement. In most instances courts under the Kimbell test have shown a willingness to adopt the U. or protect collateral to secure payment.specific federal statute or regulation In United States v. at the time it is issued or first comes into possession of a holder. It does not apply at all to checks. and otherwise falls within the definition of a “check” in subsection (f) is a negotiable instrument and a check. 440 U. In 1989 the United Nations Commission on International Trade Law [UNICTRAL] completed a convention on International Bills of Exchange and International Promissory Notes.
includes a “check” which is defined in subsection (f). types any member bank and any Federal or State branch or agency of a foreign bank subject to reserve requirements under section 3105 of this title (hereinafter in this section referred to as “institutions”).” Teller’s check. A teller’s check is always drawn by a bank and is usually drawn on another bank. or through a bank.” defined in subsection (e). Certificates of deposit are treated in former Article 3 as a separate type of instrument. Subsection (i) states the essential characteristics of a travelers check. a draft drawn on an insurance company payable through a bank is not a check because it is not drawn on a bank. (ii) is drawn on or payable at or through a bank. Postal money orders are subject to federal law.” Traveler’s checks are issued both by banks and nonbanks and may be in the form of a note or draft. There are some differences between the requirements of Article 3 and the requirements included in Article 3 of the Convention on International Bills of Exchange and International Promissory Notes. A draft is an instrument that is an order. defined in subsection (g). (i) “Traveler’s check” means an instrument that (i) is payable on demand. the requirements of 3-104 and Article 3 of the Convention are quite similar. The term “bill of exchange” is not used in Article 3.(f) “Check” means (i) a draft. The requirement that the instrument be “drawn on or payable at or through a bank” may be satisfied without words on the instrument that identify a bank as drawee or paying agent so long as the instrument bears an appropriate routing number that identifies a bank as paying agent. In some cases a teller’s check is drawn on a nonblank but is made payable at or through a bank. An instrument may be a check even though it is described on its face by another term. They vary in form and their form determines how they are treated in Article 3. It is generally understood to be a synonym for the term “draft. however. “Money orders” are sold both by banks and non-banks. In most respects. (h) “Teller’s check” means a draft drawn by a bank (i) on another bank.” A cashier’s check. (j) acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. Bankers Acceptance: Title 12 Section 372 (a) Institutions.” Subsections (f) through (j) define particular instruments that fall within the categories of draft or note.” ”cashier’s check. and does not permit documents payable to bearer that would be permissible under Section 3-104 (a)(1) and Section 3-109. Article 3 treats both types of teller’s checks identically. A certificate of deposit is a note of the bank. and both are included in the definition of “check. such as “money order. exclusive of days of grace – 30 . (iii) is designated by the term “traveler’s check” or by a substantially similar term. Instruments are divided into two general categories: drafts and notes. A note is an instrument that is a promise. See Convention Article 3. Most obviously the Convention does not include the limitation on extraneous undertakings set forth in Section 3104 (a)(3). The term “draft. The definitions in Regulation CC section 229.2 of the terms “checks. That kind of money order is a check under Article 3 and is subject to a stop order by the purchaser-drawer as in the case of ordinary checks. the rules applicable to teller’s checks apply. The most common form of money order of money order sold by banks is that of ordinary check drawn by the purchaser except that the amount is machine impressed. payable on demand and drawn on a bank or (ii) a cashier’s check or teller’s check.” (g) “Cashier’s check” (i) means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank. Section 3-104 (j) treats them as notes. Section 3-104(e). drafts and bills of exchange. If a money order falls within the definition of a tellers check. “Check” includes a share draft drawn on a credit union payable through a bank because the definition of bank (Section 4-105) includes credit unions. may accept drafts or bills of exchange drawn upon it having not more than six months’ sight to run. However. a countersignature by a person whose specimen signature appears on the instrument. is also included in the definition of “check. In revised Article 3. The seller bank is the drawee and has no obligation to a holder to pay the money order. and (iv) requires as a condition to payment. “Teller’s check” is separately defined in subsection (h).” and Travelers check” are different from the definitions of those terms in Article 3. other than a documentary draft.
foreign banks security no institution shall accept such bills. the board may Define any of the terms used in this section. any institution to accept such bills. in the case of a United States Branch or agency of a foreign bank. (c) Authorization for special ratio limit. including obligations for a participation share in such acceptances. with respect to Institutions which do not have capital or capital stock. or. or which are secured at the time of acceptance by a warehouse receipt or other document conveying or securing title covering readily marketable staples. the board shall define an equivalent measure to which the limitations contained in this section shall apply. or be obligated for a participation share in such bills. in an amount equal at any time in the aggregate to more than 150 per centum of its paid up and unimpaired capital stock and surplus or. including obligations for a participation share in such acceptances. no institution shall except such bills. its dollar equivalent as determined by the board under subsection (h) of this section. by regulation or order. the limitations contained in this section shall not apply to that portion of an acceptance which is issued by such institution and which is covered by a participation agreement sold to another institution (q) Definitions by board In order to carry out the purposes of this section. which grow out of transactions involving the domestic shipment of goods. with respect to any institution. under such conditions as it may prescribe. in the case of a United States branch or agency of a foreign bank. or be obligated for a participation share in such bills. in an amount not exceeding ay any time in the aggregate 200 per centum of its paid up and unimpaired capital stock and surplus or. unless the institution is secured either by attached documents or by some other actual security growing out of the same transaction as the acceptance. whether in a foreign or domestic transaction.(i) (ii) (iii) which grows out of transactions involving the importation or exportation of goods. its dollar equivalent as determined by the Board under subsection (h) of this section. (d) Ratio limit for domestic transactions Notwithstanding subsections (b) and (c) of this section. partnership. growing out of domestic transactions shall not exceed 50 per centum of the aggregate of all acceptances. in the case of a United States Branch or agency of a foreign bank. its dollar equivalent as determined by the board under subsection (h) of this section. and. corporation. (b) Ratio limit of bills to unimpaired capital stock and surplus Except as provided in subsection (c) of this section. the aggregate acceptances. foreign banks The Board. (h) Dollar equivalent of foreign bank paid-up capital stock and surplus 31 . association or other entity in an amount equal at any time in the aggregate to more than 10 per centum of it’s paid up and unimpaired capital stock and surplus. for any one person. (e) Ratio limit for single entity. may authorize. authorized for such institution under this section. (f) Exception for participation agreements With respect to an institution which issues an acceptance.
the clerk of the court is a public accountant and the docket sheet is an accounting ledger for intermediate accounting entries and practices. who in reality is the Secretary of the Treasury of Puerto Rico. one is a prefix and the other is a suffix letter. they both have 8 numbers or digits. located in the upper right and lower left sections of the note. This is where the accrual method of accounting is derived from. the business transacted by all such branches and agencies shall be aggregated in determining compliance with the limitation or restriction. this capital and interest is called accruals under GAAP. indictment. Prior to this on time deposit accounts [ these are accounts where the funds cannot be withdrawn for a fixed period of time and then only after notice] were given an exemption as a reserve requirement and this exemption was used or tendered through a Bill of Exchange. under this method of accounting the debits and credits have to be in balance. The 8 numbers on the front of Federal Reserve Notes have two identical series of numbers. liability. then the debt. The International Monetary Fund has replaced the office of the Secretary of the Treasury of the United States. by the Act of May 29. through reverse bookkeeping entries. which was or is being chaired by Nicholas Brady. 41 Stat. This is the reason you have run away inflation and wars in the public realms. information. or deficit. 2004 Congress reestablished the Department of The Treasury and the office of the Secretary of the Treasury. All monetized debt has to have a Principal from which Capital and Interest circulates. as determined by the board. also see 31 3301 Historical Notes and is the source for 12 USC 121. Guess what replaced the reserve requirements under time deposits? Your exemption as the Principal on the private side. with respect to a United States branch or agency of a foreign bank. The office of the Secretary of The Treasury of the United States was abolished in 1920. this is accomplished through reverse bookkeeping entries or matching principles. There are 12 letters and 8 numbers after the letter. and if the foreign bank has more than United States Branch or agency. in a recent conversation with Walker Todd exchief and legal counsel for the Federal Reserve. Why? Because the Public side is where the bankruptcy or insolvency is through contract and agreement under The Hague Conventions and the Public Policy of [HJR 192 codified at Title 31 section 5118 2 (d). If you study this in detail you will find out that your red number on the back of the SS card corresponds to these serial numbers on the front of Federal Reserve Notes. complaint. These letters designate which Federal Reserve district or bank is handling your account. After this the real Secretary of the Internal Revenue Code is Manual Diaz Faldana and John Snow is the Secretary of the Federal Reserve /IMF. 32 . he divulged to me that Reserve requirements were waived under Title 12 section 3105. I do not think that this is a coincidence. A: Boston E: Richmond B: New York F: Atlanta C: Philadelphia G: Chicago K: Dallas D: Cleveland H: St. Section 1 “Act of Congress Establishing The Treasury Department”. I have the legislative documentation of this. Louis L: San Francisco I: Minneapolis J: Kansas City The whole problem and nothing else is that the public and national debt or deficit is not being redeemed on the public side through your exemption on the private side. This would also make John Snow the Secretary of The Treasury. Bills of Exchange have not been discontinued or done away with they are called drafts. This can only be accomplished in the courtroom when you do an acceptance for honor of the charges or charging instruments. The letters below designate which district or bank is handling your account as the fiduciary trustee in bankruptcy. 214. They have to pass the credits or liabilities through your account to effectuate post settlement and closure of your account. The Social Security # on the front of your Social Security Card is assigned to the debtor or straw man. the red number on the back of the card is your exempt priority prepaid account number and is assigned to one of the 12 Federal Reserve Banks. However on November 14. and two letters. 1920 [ Chp. or summons. under Chapter XII. and was one of the instruments for loaning money. the 8 digit # is your account number. That’s right bunkies. all charge backs should be to this bank and not the Secretary of the Treasury. which is represented by the charging instrument can be zeroed out by transferring the credits or liabilities over to the debit or asset side of the accounting ledger by the clerk of the court. designated by the letter in front of the number. 654. to the dollar equivalent of the paid-up capital stock and surplus of the foreign bank.Any limitation or restriction in this section based on paid up and unimpaired capital stock and surplus of an institution shall be deemed to refer.
This case is quoted in LE CAUX v.R. As to the other ground. which in physics involves the Laws of Cause and Effect. The attached treatise and other attachments pretty well explains the IRS. and that of his owners.ED.ERIE FEDERAL COMMON LAW by John P. 473. 58 S.S. ED. This case says you have to have a interest or a lien before you can intervene with a claim in Admiralty under rule 24 of the F. the only rights they have are remedies as defined in 1-201 of the U. Any body who tries to run from the police is called an absconding debtor in admiralty maritime law and may be shot or captured under the law of Prize. that if there is a remedy. Joseph ALMEIDA 23 U. 1862 and the first Income Tax Act 33 .” Pg. In INTERPOOL LTD v. savings and credit card accounts are insured under the FDIA [Federal Depository Insurance Act] through the FDIC [Federal Depository Insurance Corporation] Title 12 section 1811 (a). the name of the article is “What Happened to Federal Jurisprudence” by Albert Schweppe of the Seattle Bar Association. RODNEY. 827. where the imprisonment was merely in consequence of taking a ship as prize. MANRO v. does not apply in the present instance. 1453 (1989). 10 Wheat 473. for the same multiplicity of suits may arise there. CT. under public compulsive authority.P. Prior to this the English Common Law was called the general federal common law. Why do you think the police are so quick to shoot people? This executes or eliminates both the debtor and the debt. 375 or at 2 DOUGLAS 595. if it succeeded. in one swift action or execution. which says they must have your consent before they prosecute you.C. 2 DOUGLAS. 1861 and July 17. 1006. Read the case of J. occupational government since 1861. It states that in maritime commercial transactions. would destroy the British Navy. What happened in 1938 is that they changed the Rules of Decisions under section 34 of the Judiciary Act of 1789. the argument of policy. This is why the United States has been divided into Internal Revenue Districts under title 26 section 7621 by the president of the United States and is what the zip code designates. “Besides. 375 of English Reports. LLB 31 L. The people did not have title to anything under the current system.A. This is also the occult or hidden meaning of the scriptures in regard to salvation and redemption. If an action at law should lie. 6 Led.The reason wars are fought is to kill or execute people to cancel the debt. “An action will not lie at common law for false imprisonment. CHAR YIGH MARINE (PANAMA) S. 12 Wheat 611. another excellent case is LINDO v. by the owners. Tompkins 304 U. Another excellent case is THE CARTONA 297 Federal Reporter 1st series pg. 6 L. not. although the ship has been acquitted. I have read over 250 Law Review articles and only one tells you what happened in 1938. When they execute the debtor to eliminate the debt. The Name of the Journal is the American Bar Association Journal Volume 24. Read this in conjunction with the Insurrection & Rebellion Acts of August 6. 1781. they also collect the insurance money.C. who acts voluntarily for his own private profit. 746. 817 (1938) decision.A. In the United States everything started with the Civil War and the Insurrection and Rebellion Acts of August 6.” The current Suits in Admiralty Act passed in 1920 gives injured parties the right to sue the government in Admiralty. EDEN Volume 99 English Reports Pg. Another excellent case is RAMSAY v. & 213. this is one of the best cases I have ever read on the Admiralty and Civil Law and how it is being applied in the courts. such as it is. it must not be sought in a Court of Common Law. 890 F. I have found that most people do not know the difference between Federal Common Law and English Common Law. the uniform commercial code is taken as indicative of federal common law of admiralty. Federal Common Law is that decisional body of law [rules of decision] [commercial] that came out of the Eire v. against the captor.S 64. 1862. and every man on board his ship.S. which. from the English Common Law to the Federal Common law. January. 25 U. 473. MD. but in the Court of Admiralty. Lord Mansfield said “that the action a new attempt. 1938. Ludington. you are actually worth more dead [debt] than alive. 595 or pg. You will find out that under Title 12 section 1811 and section 3104 [insurance of deposits] every demand deposit account including checking. This says it all.C. this is an extremely difficult case to find and research. 2d pg. provisional. 613. by Lord Mansfield possibly one of the greatest jurist of admiralty whoever sat on the Kings Bench. and every man on board a ship taken as prize. no man would dare to take a ship. The best article bar none is the SUPREME COURT AND THE POST. this case was decided the 7th day of February. ALLEGRE U. as officers in the Navy. which are still current law today under title 50 sections 212. 2d pg.C. This is all Karmic and involves the laws of Karma. we have been under a military. Title 46 U. 1861 & July 17.S. 611. The inconvenience will be just as great before the judicature. appendix sections 781-790. because this defendant is captain of a letter of marque. All the English Common Law was grounded in substance and ownership of property through Allodial Title. Title 46 appendix sections 741-752 and the Public Vessels Act enacted in 1925 to allow claims against the United States for damages caused by one of its vessels.S.
1862 Internal Revenue Act and reestablished by section 90 of this Act and which imposed an income tax on the annual rents. This should tell you something. 1862 chapter 50 37th Congress. I believe that the venue and jurisdiction of the District of Columbia was extended out into the states through section 7621 of title 26. When you refuse to pay the debt which you contracted to pay under the SS5 application. There is also an excellent treatise on Suretyship principles in the New Article 3 Clarifications and Substantive Changes by Neil B. The four kinds of indemnity are express agreement. 4614. everybody who is a passenger on the ship or vessel [the United States] has to pay for the loss or sacrifice through the doctrine of Contribution.approved August 5. implied agreement (contract). under sections 2 & 3 of this act the president divided the States and Territories into collection districts and further under section 3 the assessor is authorized to divide his district into convenient assessment districts. The origins of indemnity and contribution can be traced to the concepts of contract and restitution. In admiralty any time cargo [gold] is sacrificed to avert the peril of the sinking or loss of the ship. or vocation carried on in the United States or elsewhere. on secured transactions. An excellent treatise on this can be found in volume 55 pg. I believe also that the Act of March 25.R. trade.A. What Franklin Delano Roosevelt did in June of 1933. from any profession. CONTRACTORS TRANSPORT CORP. and statutory indemnity. designated by a Zip Code. 4652 and which established the law of Prize and the Prize Commissioners under title 10 sections 76517681 of the Military Code of Justice. stocks. This is basically all insurance. Public Law 86-682. 1864 c. which is mentioned throughout scripture. Cohen in Volume 42:2:595 of the Alabama Law Review. 1862 Internal Revenue Act. is he sold more gold contracts that the treasury had gold. CIA ATLANTICA PACIFICA. they accomplished this through FICA [Federal Insurance Contribution Act]. under the direction of the Secretary of The Treasury. and as a co-surety Wal Mart now subrogates itself to the creditor under the doctrine of suretyship. v. before you ever go to court on any charges. This is called general average contribution in admiralty maritime law. which is the court and is entitled to reimbursement from the creditor. Another thing that most people are not aware of is that everybody is a merchant at law under Article 2-104 (1).C. this created a marine peril or peril of the sea. due to the run on the Treasury.C. 4th and 5th and Misdemeanors. Every State has passed or adopted the Joint-Tort-Feasors Act under the doctrine of Contribution. Section 1 of the July 1. through the court and prison system. 578. Contribution is either pro rata or according to the degree of fault. Roosevelt outlawed gold and gold contracts to avert the apparent peril or loss of gold in the Treasury. 32. S. because of the run on the treasury. Everybody who has a SS number is a Co-debtor or Co-surety for the loss of the gold or money under the public policy of H. which is the insurance policy under Social Security. How many times have you heard a court order a defendant [debtor] to pay Restitution to the court? Indemnity is an extreme form of Contribution. An excellent case on Contribution is DAWSON v. SUPP. 2D 727 (1972). 884 (1967) is an excellent case on general average contributions.S. This is why you have degrees of a Felony 1st. do to the foreign gold contracts. 467 F. 74b Stat. (contract). HUMBLE OIL & REFINING CO.J. The SS-5 application is an express agreement or contract. that makes you a joint Tortfeasor under the doctrine of Contribution. securities. This is how all of your corporations are financing their operations. To avert the loss of gold. profits. gains. 274 F. The word Contribution comes from the word tribulation. established the office of the Commissioner of Internal Revenue. dividends. Grant Gilmore the co-author of the Law of Admiralty wrote Article 9 of the U. 1861 and was repealed by section 89 of the July 1. 2nd. and for the better Administration of the Law of Prize" was the predecessor for the Act of June 30. or from any other source whatever on the income of every person residing in the United States or any citizen of the United States. 174 sections 29. 3rd. 1960. 1165 of the TULANE LAW REVIEW. which means they are in a District [Internal Revenue District] within a Federal Regional Area. where the President divided the districts up into Internal Revenue Districts. I believe that this Act was the predecessor for title 26 section 7621. employment. because they use commercial paper in their every 34 . created by executive order 11649 and the Act of Congress creating the Zip Code approved September 2. restitution indemnity. which is of admiralty maritime law. "An Act to facilitate Judicial Proceedings in Adjudications upon captured Property. 33 of the R. 192 and title 31 section 5118 (2) (d). sections 4613. salaries. The Income Tax is passed on the Admiralty side of the court or military and is collected from the Prize side of War. They had to insure or indemnify their losses through a maritime insurance policy. We are still under the War Powers Acts of 1840 and 1861. There are four kinds of indemnity and two kinds of contribution. The IRS's return address is a Federal Regional address with a Zip Code. another Joint-Tortfeasor [a corporation like Wal Mart] pays your debt.
it becomes abandoned property and the corporations use it on a 1096 or 1098 tax return as prepaid interest to get your deduction and pass the tax on to you. these documents will list you as the Principal as the recipient or Fiduciary Creditor and the Corporation as the payor Fiduciary Debtor. If you look at any 1099 OID [original issue discount] or 1099 INT [interest] or 1099 PTR [patron] which are issued by banks to corporations. if they do settlement and closure and release the account they are giving you your deduction for the prepaid account as the principal. 20 % = 500 this is commodities and 10 % = 1000 and Franklin Delano Roosevelt sold more Gold 35 . or if the offender [debtor] is confined in any institution for the commission of any offense. capital. and control both sides of the accounting ledger. This is why in title 26 section 6305” says upon receiving a certification from the Secretary of Health and Human Services. credit or debt side. especially to avoid arrest. the probation agency. with the same powers. CO. A tax is nothing but a return of capital and interest back to the principal that is why a return is called a tax return. They cannot execute on a contract under the common law. this is what makes it a prepaid account and tax deductible. what merchants are collecting at the retail level is the tax. They are supposed to return your Capital and Interest back to you as the Creditor and Prinicpal. the Secretary shall assess and collect the amount certified by the Secretary of Health and Human Services.” An absconding debtor is defined in Black’s Law Dictionary 8th edition as a “A debtor who flees from creditors to avoid having to pay a debt. Page 668 of this case a debtor is referred to has an offender. 2.” The word Abscond means “To depart secretly or suddenly. prosecution. The bottom line to all this is that you only have what you lay claim to. An offender is defined or called a debtor in admiralty maritime law read the case of CONTINENTAL ILLINOIS NATIONAL BANK & TRUST CO. in the same manner. When you are refused access to a credit card by alleged bad credit they [the bank] are making a claim on your account by using your exemption. Absconding from a debt was formerly considered an act of bankruptcy. accrual or revenue on you as the principal. with another’s money or property. All of your state criminal statutes have this term in their statutes or codes. Under Title 26 section 163 all prepaid interest is tax deductible. 15 % of 85 = 72. This is what you are paying every time you make a purchase at the retail level on a retail contract under the truth in lending.07. Isn’t murder a Capital Offense and isn’t Capital interest or accruals from you as the Principal? An exemption is intellectual property under international law. this way they can use your exemption to pay the tax and release the merchandise to you in exchange. Remember that rights are defined under 1-201 (34) of the UCC as remedies. or the court to do so. This comes from a Federal Reserve Report which says that 15 % of 100 = 85. the private. The Jewish Passover is just an exchange of the future to the past or the past to the future. All merchandise is prepaid before it leaves the factory. redeem or effectuate post settlement and closure of your account. ROCK ISLAND & PACIFIC RY. debit or asset side and the public. total 100. To leave a place usually hurriedly.S. “If the offender [debtor] under community control ABSCONDS or otherwise leaves the jurisdiction of the court without permission from the probation officer. 648. interest.25 and so on you get 666. or service of process.25 etc. 85. Gold held in reserve is 15 % based on $100 deposit = 666. in the prisons or credit facilities as they are really called. because there is no money that is why they have to do an exchange using your exemption for the debt to discharge. We as Principals own. 294 U. hold. if you don’t use it. because you have abandoned your exemption as the Principal. In other words your treasury Bill is exchanged for a Treasury Bond making the Bill a future event or Futures Contract. and 72. When you don’t use your exemption in exchange for the debt or deficit they execute on you to eliminate the debt. They are assuming ownership of your name as the principal. v. under section 452 (b) of the Social Security Act with respect to any individual. CHICAGO.day transactions and hold themselves by occupation as having knowledge or skill peculiar to the practices or goods involved in the transaction or to which the knowledge or skill may be attributed. This is why the banks never close your account after you have withdrawn all your money. and (except as provided in this section) subject to the same limitations as if such amount were a tax imposed by subtitle C. This is one of the reasons the court never tells or disclose to you what is going on in the courtroom by way of a commercial transaction and that you are the goods or chattel involved in the transaction. the period of community control ceases to run until the time that the offender [debtor] is brought before the court for its further action. why? Because there is no money everything is insurance and you can’t pay a tax with a debt instrument. this is called the death or debt penalty. In Ohio it is in title 29 section 2951. which is why it is all commercial and why most people end up in prison or jail.” The inference here is that the Secretary is collecting an insurance premium as though it were a tax.
the judge of which is called the “The Dean of Arches” because his court was anciently held in the church of Saint Mary Le-Bow. the decurions of a city were charged 36 . This practice was written for private viewing only and not public as evidenced by its substance. as distinguished from such as belong to the Army and Navy or [in England] the church. CURIA = In old European Law. Phillip Moore on the 4th day of October. It’s proper jurisdiction is only over the thirteen peculiar parishes belonging to the Archbishop in London. Register = An officer authorized by law to keep a record called a “Register” or Registry” as the Register for the Probate of Wills. who was registrar of the Court of Arches during the reign of Queen Elizabeth: Arches Court = In English Ecclesiastical Law a Court of Appeal belonging to the Archbishop of Canterbury. or retinue of a sovereign. it receives and determines appeals from the sentences of all inferior Ecclesiastical Courts within the province. In Roman Law A division of the Roman people. said to have been made by Romulus. household. Esquire Date: 1809 This practice was used by Proctors in the Vice Admiralty Courts in the Colonies prior to the American Revolution and was delivered to the clerk of the Maryland district court. commonly called “Doctor’s Commons. in right of such added office. A manor. The palace. So named from the steeple. 31. the place where the decuriones assembled. The place or building in which each curia assembled to offer sacred rites. A decurion In the provincial administration of the Roman Empire. by Francis Clerke. a third edition was published in the year 1722 and a new edition in 1791 of which this is a exact and faithful copy of which Lord Hardwicke considered of “unquestionable character”. THE PRACTICE AND JURISDICTION OF THE COURT OF ADMIRALTY IN THREE PARTS by John E. 2. This is why they passed HJR 192 [Title 31 section 5118 2 (d)] and goes into the 33 % that provides funds for funding the public municipalities.] 454. Spelman.Contracts than the Treasury had Gold and was the reason for the passage of the Federal Reserve Act and why they had to take gold and silver out of circulation to cover up the fraud. The senate house of a province. having been for a long time united with that of the Archbishop’s principal official. the hall of a manor. but the office of the Dean of the Arches. as distinguished from the Ecclesiastical. Clarke 5 Howard. or student of the Civil Law. The first edition was printed in 1679. a yard or courtyard. They were divided into three tribes. which is raised upon pillars built arch wise 3 BL Commentary 64.S. [Sancta Maria de – Arcubus]. Cod. The tenants who did suit and service at the lord’s court. The place of meeting of the Roman senate. A piece of ground attached to a house. The judge of the Arches. professor.” It is now held in Westminster Hall. a nobleman’s house. the decurions were the chief men or official personages of the large towns. A Lord’s court held his manor. Taken as a body. A court of justice The civil power. Cowell. and each tribe into ten curiae. A manse. A court. a doctor. [46 U. 10. A judicial tribunal or court held in the Sovereign’s palace. 1809. Spelman. The court was formerly held in the hall belonging to the College of Civilians. Civilian = One who is called or versed in the Civil Law. Hall. making thirty curiae in all. This practice is quoted in Waring v. the senate house. DECURIO = Latin. First Part Historical Examination of Admiralty Second Part Translation of the Praxis [practice] Supremae Curiae Admiralitalis [The High Court of Admiralty]. Also a private citizen.
Hence the most ancient work. Commercial agents who are sent from one country to another are called Consuls.S. and they are detained unjustly possessed by some person. therefore. This is the same manner in which papers are filed and authenticated in the Ecclesiastical Courts. may consign certain goods to your use or benefit. 5. These consuls were civil judges. which is contrary to the ancient usage of the Court of Admiralty. The Civil Law distinguishes between a Letter and a Warrant of Attorney. n. proxy. which is extant. The former is called a procuration. In such cases you may obtain a Warrant to arrest the goods after this matter as your proper goods: and also a citation as well against those in particular thus occupying or detaining. 1794 is the supreme law of the land under the U. of the place to which they are sent. viz. who should be bound to the plaintiff. before the Judge shall decree the plaintiff to be put in possession of the goods of the defendant. as against all others in general. Fidejussores were the guarantors for payment of the Defendant [Debtor] debts. The district courts today possess the authority and jurisdiction of the High Court of Admiralty. A Letter Rogatory was called a patent writ [open writ one not sealed or closed] close writ [a royal writ sealed because the contents were not deemed appropriate for public inspection. Default mentioned above. decree a sequestration [removal of property from debtor] at the instance of the creditor alone. The judges were called consuls and the code which they operated by was called the consulate of the sea. Scacc. procuracy. a full proof of the debt is to be made to the Judge according to his discretion. in Ecclesiastical causes. yet here it is taken as a non appearance in Court at a day assigned” If you don’t make an appearance and pay the debt. “ It often happens. the attachment is granted upon the simple assertion of the creditor. Some of the courts were called admiralty. 3 F. in our authour’s time. and hold their offices at will. exercising admiralty and maritime jurisdiction. Four defaults are to be pronounced against the defendant. who have or 37 . usually directed. In this country the clerks of the District Courts of the United States are appointed by the Courts respectfully in which they Act. Constitution. and for the production of the plaintiff personally as often as he may be called. The right was first recognized in United States admiralty courts in Bradford v. commissions sub mutuoe or letters rogatory were. that your goods or vessel are taken by enemies or pirates. In France. or procuratory with the Proxy or Procuratory ad lites. “Before making the seizure. the Consulate of the sea. A suit upon juratory caution is the equivalent of a suit in forma pauperis. A defendant needs at least two Fidejussores. according to custom. In Italy. As all civil and maritime cause is summary. for the payment of the defendant’s costs if the plaintiff fail in his cause. The Lord High Admiral grants the office of Registrar of the Admiralty for life. Eq. Case 1129 (1878). Jur. The term Registrar is almost synonymous with Register does this ring a bell. without the existence of any suspicion. 54. who possess the same jurisdiction as the Lord High Admiral. Maritime Consuls. which was a debt contract to preserve the debt owed to the crown under this treaty and which we still are paying for today. on maritime and commercial law is called. Bonds were referred to as Fidejussory Security. or the factor or agent of your correspondents in parts beyond seas. Jay’s Treaty a commercial treaty entered into on November 19. Judges and Consuls. or cognizance of all commercial and maritime causes between subjects of their own nations. See 1 Spence. n. Bradford. and afterwards brought to this kingdom. the supremacy clause of the constitution. and at this day it seems that they might with propriety be directed to the Court or Judge.” “If he be declared in contumacy [contempt] Scacc. and especially in time of war or commotion. others were called consular courts. Constitutor by roman law is a person who by agreement becomes responsible for the payment of another’s debt. “commonly signifies an offence in omitting that which we ought to do. If nothing is proved to the Judge and nothing is sworn by the creditor. for the prosecution of the suit. or are possessed or detained by others in some other manner. if he does not appear within the term assigned to him by the Judge. because they formerly had a consular jurisdiction. The commercial Courts or Tribunals on the continent of Europe were formerly called Consuls.” A loan is a maritime contract. The Lords commissioners of the Admiralty. To these commercial and maritime Courts. the judges of our day. In Spain Priors and Consuls. in the sum for which the action was instituted. now you know why under Article 6 Section 2. you are in “contumacy [contempt] and in pain of their contumacy[contempt] be decreed to have incurred the first default.with the entire control and administration of its internal affairs. a juratory caution in maritime law is a court’s permission for an indigent to disregard filing fees an court costs. The Plaintiff is also obliged to find Fidejussores to these effects. having powers both magisterial and legislative. the mode of proceeding and the final sentencing are the same as in Ecclesiastical cases. 11.
That which is sealed with some publick or authentick seal. All writings whatsoever (though private) which are exemplified by the authority of the Judge or Magistrate. is equally applicable to the Admiralty Courts. Tit. Those writings which are subscribed by the person and witnesses. [a crimine seu querimonia]. 2. All such writings as are taken out of public registries. The oath to hold bail was an oath of calumny [oath to support plaintiff or defendant’s good faith and belief that there was a bone fide claim].” At the time this work was authored the Admiralty Court was merely a Civil Court of Instance. This term is a corruption of the Roman-law term intra praesidia. 4. There were arguments brought on various grounds such as infra praesidia [within the defenses] this is the international doctrine that someone who captures goods will be considered the owner of the goods if they are brought completely within the Captor’s power. London. Private letters betwixt one friend and another. [a conveniendo. or before a notary and witnesses within the 15 days which are allowed by the statutes of the kingdom for bringing appeals. Accounts 2. either in or out of Court. An appeal of an interlocutory decree may be done either viva voce [orally or by word of mouth] before the Judge or apud acta [recorded in writing and to appeals taken orally in front of the judge] when he delivers the sentence or interlocutory decree. matters of record. University or College. In respect of the subject matter of the libel. Which Warrant being executed and returned as above. Section 7 talks about Special maritime and territorial jurisdiction of the United States defined: The term “special maritime and territorial jurisdiction of the United States”. or other publick person. the prize jurisdiction was not vested in the High Court of Admiralty. there are only two sorts in use [pg. not for a debt as in the former case. as used in this title. the goods are to be adjudged to you. which referred to goods or persons taken by an enemy during war. or those made at publick acts. City. the goods belong to you. Instrument drawn under the hand of a Notary Public. and after the fourth default. Instruments are for the most part two-fold either publick or private Publick Instruments are: 1. If you read Title 18 section 7 says that Citizens of the United States are Commercial Vessels. to answer you in a certain cause of a civil and maritime nature. 3.] 5. And this is publick as to its effects. The fact is that until the 44th year of Elizabeth.” The purpose of attachment of debtor’s goods was to compel an appearance to obtain quasi in personam jurisdiction over the Res.pretend to have any interest in them. includes: 38 . Under the principle of postliminium. in Tit. called “The Commissioners for causes of depredations [plundering or pillaging]. 31. if no one appears. Private Inventories or Registers. you are to be put in possession of them. and they are either: 1. 1708. 3. one tradesman and another. from convening] the other criminal. the proceedings are to be in all things as above. Consetio’s Practice of the Ecclesiastical Courts. 33. but the decree is to be that in pain of the contumacy [contempt] of those who have not appeared. and being your property. This essay. & c. Private Instruments are such as are made without any solemnity. one of which is conventional or civil. the captured person’s rights or goods were restored too prewar status when the captured person returned. although it relates to the practice of the Ecclesiastical Court. (though written by a private) as of a Prince. but in a board of Commissioners. 123]. [that is to say.
” TITLE 46 SECTIONS 31301.. This is referred to in case law as the ebb and flow of the tide. 265 F. under the 4th section of the 14th amendment of the Constitution of the United States cannot challenge the validity of the public And national debt and why under the Bankruptcy Code of Title 11 Who may be a debtor section 109 (a) “Notwithstanding any other provision of this section. INC.COMMERICAL INSTRUMENTS 39 . N. Now the judicial power in cases of admiralty and maritime jurisdiction. District. This why under 26 CFR 1. trusts. and being on a voyage upon the waters of any of the Great Lakes. or upon the Saint Lawrence River where the same constitutes the International Boundary Line. It says that all citizens and residents of the United States have to make returns of income to the Secretary and why a citizen or resident of the United States. 2d 950 (1972). 249. can be extended to the lakes under the power to regulate commerce. “This power is as extensive upon land as upon water. 920 (M. over the cars engaged in transporting passengers or merchandise from one State to another.S. or to any corporation created by or under the laws of the United States. 2d 454 (1972). only a person that resides or has a domicile. 34 L.D. MEMBERSHIP CORP. in matters of contract and tort which the courts of the United States may lawfully exercise on he high seas. the same reason would justify the same exercise of power on land. HAASINGER V. 53 U. And if the admiralty jurisdiction. INC. SUPP. Territory. has never been supposed to extend to contracts made on land and to be executed on land. (12 HOW. 343 F. SUPP. commercial paper. v.D. and deny to the parties the trial by jury. All citizens of the United States are debtors. 268. The tidewater limitation has been abandoned in The Genesee Chief v.S. or commerce you have passed or qualified under the nexus and situs requirements.CT. licensed. any other waters within the admiralty and maritime jurisdiction of the United States and out of the jurisdiction of Any particular State.S. v.) 443 (1851). (12 Howard) 443 (1851). 409 U. AFF’D 468 F. Read EXECUTIVE JET AVIATION. may be debtor under this title. 352 (E. If you have a nexus or activity that bears a relationship to a traditional maritime activity.(1) The high seas.1 (a). This is because admiralty maritime law has been brought inland through the law of trusts and is so stated in Ruling Case Law on the Laws of Trusts. and any Vessel belonging in whole or part to the United States or any citizen thereof. and over the persons engaged in conducting them. This is one of the reasons all checks and drafts have a water mark on them. This has recently been changed to be the Situs or Locality test. be extended to contracts and torts on land when the commerce is between different States. or possession thereof. (2) Any vessel registered. and a new and extended admiralty jurisdiction beyond its heretofore known and admitted limits. or any of the waters connecting them. But if the power of regulating commerce can be made the foundation of jurisdiction in its courts. or a municipality. MAYER BOAT WORKS. And it may embrace also the vehicles and persons engaged in carrying it on. If you understand Admiralty Maritime Law you know that the High Water Mark defines the jurisdiction of the Law of Admiralty. FITZHUGH. or property in the United States. allegedly for security purposes. 781 F. a place of business. Ebb is the incoming or high tide and the flow is the outgoing or low tide. may be created on water under that authority. BRIGHT MARINE BASIN.6012. it can with the same propriety and upon the same construction. that house the birth certificates have a stake outside the building that has a high water mark on the stake. 53 U. 1986). such as insurance. AMERICAN COMMERCIAL BARGE LINES CO. 493. or of any States. Fitzhugh. TIDELAND ELEC.31343 Under CHAPTER 313 --. INC.. It would be in the power of Congress to confer admiralty jurisdiction upon its courts. 93 S. BLANCHARD v. 2d 1022 (4TH Cir.” – PROPELLER GENESSEE CHIEF v. 1972). 1966).Y. I have talked to Lee Brobst and he has informed me that he has researched and checked out the fact that all the buildings. or enrolled under the laws of the United States.ED. 504. The Constitution makes no distinction in that respect. CITY OF CLEVELAND. LA.
to exercise several types of subject matter jurisdiction historically exercised by separate courts.ED. Alfred W. BAYLINER MARINE CORP. must be filed with the Secretary of Transportation to be valid. whenever made. This is spelled out in 34 F. The hospital where you are born is the port or harbor of entry. VODUSEK v. and admiralty – each of which has its own traditional procedures. equity. In 1966 the Federal Rules of Civil Procedure were merged with the Admiralty maritime rules. assignment.R. Federal courts are authorized. mortgage. SUBCHAPTER 11 – COMMERCIAL INSTRUMENTS SECTION 31321. and to the nonspecialist lawyer who finds himself – sometimes to his surprise – involved in a case cognizable only on the admiralty “side” of the court. A debit card is directly tied to Depository Trust Company [DTC] a 40 .CT. 71 F. 69 S. 754 (1949).S. DECLARATION OF CITIZENSHIP (a) Except as provided by the Secretary of Transportation. 403. including courts of law. This is one of the reasons the Secretary of Transportation is the trustee or receiver in bankruptcy and admiralty under 46 USCS Appx section 1247. 2 Benedict on Admiralty iii-iv (6th edition (Knauth) 1940). 386. against any person except.” To the extent that admiralty procedure differs from civil procedure.S. single federal court has at least three separate departments – law.C. and discharge (a)(1) A bill of sale. a bank account with which the customer is permitted to write drafts against money held on deposit. 622. Filing.AND MARITIME LIENS SECTION 31306. 835). health laws and other local regulations. “Admiralty practice. in the form the Secretary may prescribe by regulation. Clearing under maritime law is the departure of a ship or vessel from port [hospital]. 808.” said Mr. Knauth a charter member of the rules committee stated this “The near approach of the common law-equity procedure to the relatively simple and untechnical state of the traditional Admiralty Practice has produced a new series of traps and pit-falls consisting of the remaining differences. 93 L. CREDIT CARD TRUST ACCOUNT NOW ACCOUNT = Negotiable order of withdrawal account. conveyance. with which members of this court are singularly deficient in experience. Clearance is the right of a ship or vessel to leave port or harbor [hospital]. or related instrument. Federal Rules Decisions page 325. and admiralty. CORP v. and as a result. to trap the unwary . the transferee shall file with the instrument a declaration. in one civil action. . that includes any part of a documented vessel [birth certificate] or a vessel for which an application for documentation [birth certificate application] is filed. recording. . STEWART & SONS. after complying with customs. to the extent the vessel is involved. 1916 (46 U.S. it is a mystery to most trial and Appellate judges. stating information about citizenship and other information the Secretary may require to show the transaction involved does not violate section 9 or 37 of the Shipping Act. BLACK DIAMOND S. 1995). Justice Jackson. 3d 148 (4TH Cir. when an instrument [birth certificate] transferring an interest in a vessel is presented to the Secretary for filing or recording. frequently subtle in their nature. 336 U. “Is a unique system of substantive law and procedure. [see clearance]. The birth certificate is issued by the port collector [Department of Health and Human Resources] evidencing the ship or vessel’s right to leave port or harbor [hospital].D. equity.
banks trust companies. banks trust companies. MBS Clearing Corporation. which is DTC’s partnership nominee. and Emerging Markets Clearing Corporation. Pursuant to a letter from the Security and Exchange Commission. in turn.S. the Bank is not required to respond to various items of form 10-K.com. The beneficial interest of each actual purchaser of security is in turn to be recorded on the direct and indirect participants’ records. (the “Bank”) is the transferor and servicer under the Pooling and Servicing Agreement dated as of June 1. from the direct or indirect participant through which the beneficial owner entered into the transaction. F. is owned by a number of direct participants of DTC and members of the National Securities Clearing Corporation. 1989 granting the Bank’s application. and the National Association of Securities Dealers. providing for the issuance from time to time of one or more Series of Asset Backed Certificates and is the originator of the Chevy Chase Master Credit Card Trust 11 (the “Registrant” or the “Trust”). the American Stock Exchange LLC. and certain other organizations. and will be deposited with DTC. also subsidiaries of DTCC. dated July 31. 41 . Direct participants include both United States and nonUnited States securities brokers and dealers. however. CC Master Credit Card Trust 11 10-K. however. DTC also facilitates the post-trade settlement among direct participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between direct participants. clearing corporations. as well as by the New York Stock Exchange. For 12/31/97 Chevy Chase Bank. except if the use of the book-entry system for the securities is discontinued. Transfers of beneficial interests in the securities are to be accomplished by entries made on the books of direct and indirect participants acting on behalf of beneficial owners.dtcc. DTC. Division of Corporation Finance. a “clearing corporation” within the meaning of the New York Uniform Commercial Code section 8-102 (5). Purchases of the securities under the DTC system must be made by or through direct participants.. 1995 (As amended and supplemented. the “Agreement”) by and between the Bank and the Bankers Trust Company.000 million. Access to the DTC system is also available to others such as both United States and non-United States securities brokers and dealers. one fully registered global security will be issued for each issue securities. and money market instruments from over 85 countries that its participants deposit with DTC. Inc. Office of Chief Council. Beneficial owners will not receive certificates representing their beneficial interests in the securities. one certificate will be issued with respect to each $500. is a limited purpose trust company organized under the New York Banking Law. This eliminates the need for physical movement of certificates representing certificates. The Certificates do not represent obligations of or interests in the Bank. Generally. a “banking organization” within the meaning of the New York Banking Law.Custodial Clearing Facility owned by the major banks and security firms and monitored by various banking regulatory agencies and the Securities and Exchange Commission. a member of the Federal Reserve System. DTC holds and provides asset servicing for over two million issues of United States and non-United States equity issues. If. each in the aggregate principal amount of the issue. The Certificates listed on page 1 hereof will be referred to collectively herein as the “Certificates”.B. A beneficial owner. Beneficial owners will not receive written confirmation from DTC of their purchase. either directly or indirectly. The DTC rules applicable to its participants are on file with the SEC. which will receive a credit for the securities on DTC’s records. corporate and municipal debt issues. Such items are designated herein as “Not Applicable”. The DTC and NSCC are a integrated holding company members that have DTC settling accounts and a DTC credit card billing facility to allow them to have their NSCC monthly bills automatically billed to a credit card. More information about the DTC can be found at www. is expected to receive written confirmations providing details of the transaction.. as the trustee. Government Securities Clearing Corporation. The securities will be issued as fully-registered securities registered in the name of Cede & Co. the world’s largest depository. as well as periodic statements of their holdings. and a “clearing agency” registered under Section 17 A of the Securities Exchange Act of 1934. DTC is a wholly owned subsidiary of the Depository Trust & Clearing Corporation (“DTCC”). and clearing corporations that clear through or maintain a custodial relationship with a direct participant. Inc.000 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of the issue. The DTC will act as securities depository for the securities. the aggregate principal amount of any issue exceeds $500. or any other name as may be requested by an authorized representative of DTC. DTCC. The Bank has made application for an exemption from certain requirements.
Each of the Certificates, representing investors’ interest in the Trust, are represented by a single certificate registered in the name of Cede & Co., the nominee of the Depository Trust Company. To the best knowledge of the Registrant, there is no established public trading market for the Certificates. Each of the Certificates, representing investor’s interests in the Trust, are represented by a single certificate registered in the name of Cede & Co., the nominee of the Depository Trust Company (“DTC”), an investor holding an interest in the Trust is not entitled to receive a Certificate representing such interest except in certain limited circumstances. Accordingly, Cede & Co is the sole holder of record of the Certificates, which it held behalf of approximately 50 brokers, dealers, banks and other direct participants in the DTC system at December 31, 1997. Such direct participants may hold Certificates for their own accounts or for the accounts of their customers. The following table sets forth, with respect to each of the Certificates, the identity of each direct DTC participant that holds positions in such Certificates in excess of 5% of the outstanding Principal amount thereof at December 31, 1997. First USA Bank, National Association (the “Bank”), a direct wholly owned subsidiary of BANK ONE CORPORATION (“BANK ONE), is the Transferor, with respect to the CC Master Credit Card Trust II (formerly Chevy Chase Master Credit Card Trust II) (the “Trust”) under the Pooling and Servicing Agreement dated as of June 1, 1995, among the Bank, as Transferor and Servicer, and Bankers Trust Company, as Trustee (the “Trustee”), as supplemented and amended (the “Pooling and Servicing Agreement”). The Certificates listed on page 1 hereof will be referred to collectively herein as the “Certificates”. The Certificates do not represent obligations of or interests in the Bank. The Bank will respond only to certain items of form 10-K. In doing so, the Bank will be relying on a letter dated July 31, 1989 from the Securities and Exchange Commission, Division of Corporate Finance, Office of Chief Counsel to Chevy Chase Bank, F.S.B., the then Servicer of the Trust, granting the Servicer of the Trust relief from the requirement to respond to various items of form 10-K. The items to which the Bank is not required to respond are designated herein as “Not Applicable”. The final payments with respect to class A Floating Rate Asset Backed Certificates, Series 1996-A and class B Floating Rate Asset Backed Certificates, Series 1996-A were made on September 15, 2001 and November 15, 2001, respectively. Information with respect to such Certificates is only included in Item 14 (a) (i) which contains the Summary of Annual Distributions on the Certificate holders for the year ended December 31, 2001. There are no material pending legal proceedings with respect to the Trust, involving the Trust, the Trustee or the Registrant. The Bank is a defendant in various lawsuits, including lawsuits seeking class action certification in both state and federal courts. These lawsuits challenge certain policies and practices of Bank’s credit card business. A few of these lawsuits have been conditionally certified as class actions. The Bank has defended itself against claims in the past and intends to continue to do so in the future. While it is impossible to predict the outcome of any of these lawsuits, the Bank believes that any liability which might result from these lawsuits will not have a material adverse effect on the Trust. Each of the Certificates, representing investors’ interests in the Trust, are represented by a single certificate registered in the name of Cede & Co., the nominee for the Depository Trust Company (“DTC). To the best knowledge of the Registrant, there is no established public trading market for the Certificates. PRISM = Parallel Risk Management System = monitoring & risk management system for the futures options market segment at NSCCL. NSCCL = Is wholly owned subsidiary of NSE. SGL = Subsidiary General Ledger.
U.C.C. = Law of agreement. Docket of apparent authority. This information came off of the 10-K form of Chase Credit Card Master Trust for 12/31/99 [formerly know as “Chemical Master Credit Card Trust 1] (issuer) Chase Manhattan Bank USA, National Association (depositor) (Exact name of registrant as specified in its charter) Securities are registered pursuant to Section 12 (b) of the Act. The Chase Master Credit Card Trust I (the predecessor of Chase Credit Card Master Trust (the “Trust”) was formed pursuant to a Pooling and Servicing agreement, as amended (the “Agreement”) between The Chase Manhattan Bank (formerly known as Chemical Bank), as seller and servicer, and an unrelated trustee (the “Trustee”). The trust files reports pursuant to section 13, 15 (d) and 16 of the Securities Exchange Act of 1934, as amended (the Exchange Act”), submitted to the Office of Chief Counsel on behalf of the originators of the Trust. Accordingly, responses to certain items have been omitted from or modified in this Annual Report on Form 10-K. The Chase Credit Card Master Trust is the Issuer of Asset Backed Certificates, Seriesn1995-2, Series 1995-3, Series 1995-4, Series !996-1, Series 1996-2, Series 1996-3, Series 1996-4, Series 1997-1, Series 1997-2, Series 1997-3, Series 1997-4, Series 1997-5, Series 1998-2, Series 1998 -3, Series 1998-5, Series -6 Series 1999-1, Series 1999-2 and Series 1999-3. Under Item 12 [Security Ownership of Certain Beneficial Owners and Management] of the 10-k shows the records of the DTC system that hold positions in Certificates representing interests in the Trust equal to more than 5 % of the total principal amount of one or more classes of Certificates outstanding on that date as follows. There are more than a hundred banks and companies listed as beneficiaries of the trust and Certificates. Most important Articles of UCC in order of importance is the following: 1. Article 2 Sales 2. Article 2A Leases 3. Article 1 [General Provisions] 4. Article 8 Investment Securities 5. Article 5 Letters of Credit 6. Article 4 Bank Deposits and Collections 7. Article 4A Funds Transfers 8. Article 3 Negotiable Instruments 9. Article 9 Secured Transactions 10. Article 7 Documents of Title 11. Article 6 Bulk Sales In order for there to be a secured interest there must be a sale, contract, or agreement under Article 2 section 2-106 (1). This means that a bill of sale must exist at the retail level. When a baby is born a birth certificate is issued and registered with the Bureau of Vital Statistics and is then registered with the Department of Commerce, after it is registered it becomes a Certificated Security and is sent to the DTC [Depository Trust Corporation], where it is deposited in a Trust Company and a Indenture trustee is appointed over the account. The trustee keeps an accounting of all of the bookkeeping entries and the paid out interest to direct participants as investors. This same procedure is followed in the Banking Industry on checking, saving accounts, or credit card accounts. The Birth Certificate now becomes a certificated security, financial asset, or possessory pledge under Article 8 “Investment Securities” to perfect a security interest in the property. Along with the revision of Article 8, significant changes have been made in the rules concerning security interests in securities. The revision returns to the pre-1978 structure in which the rules on securities interest in investment securities are set out in Article 9, rather than Article 8. The changes in Article 9 are, in part, conforming changes to adapt Article
9 to the new concept of a security entitlement. The Article 9 changes, however go beyond that to establish a simplified structure for the creation and perfection of security interests in investment securities, whether held directly or indirectly. The Revised Article 9 rules continue the long established principle that a security interest in security represented by a certificate can be perfected by possessory pledge. The Revised rules, however, do not require that all security interests in investment securities be implemented by procedures based on the conceptual structure of the common law pledge. Under the revised Article 9 rules, a security interest in securities can be created pursuant to Section 9-203 in the same fashion as a security interest in any other form of property, that is, by agreement between the debtor and secured party. There is no requirement of a “Transfer,” “delivery,” or any similar action, physical or metaphysical, for the creation of an effective security interest. A security interest in securities is, of course, a form of property interest, but the only requirements for creation of this form of property interest are those set out in Section 9-203. 9-102 (65) “Promissory note” means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgement by a bank that the bank has received for deposit a sum of money or funds. The perfection methods for security interests in investment securities are set out in Sections 9-309, 9-313, and 9-314. The basic rule is that a security interest may be perfected by “control.” The concept of control, defined in Section 8-106, plays an important role in both Article 8 And Article 9. In general, obtaining control means taking the necessary steps to place the lender in a position where it can have the collateral sold off without the further cooperation of the debtor. Thus, for certificated securities, a lender obtains control by taking possession of the certificate with any necessary indorsement. For securities held through a securities intermediary, the lender can obtain control in two ways. First, the lender obtains control if it becomes the entitlement holder; that is, has the securities positions transferred to an account in its own name. Second, the lender obtains control if the securities intermediary agrees to act on instructions from the secured party to dispose of the positions, even though the debtor remains the entitlement holder. Such an arrangement suffices to give the lender control even though the debtor retains the right to trade and exercise other ordinary rights of an entitlement holder. Except where the debtor is itself a securities firm, filing of an ordinary Article 9 financing statement is also a permissible alternative method of perfection. However, filing with respect to investment property does not assure the lender the same protections as for other forms of collateral, since the priority rules provide that a secured party who obtains control has priority over a secured party who does not obtain control. The details of the new rules on security interests, as applied both to the retail level and arrangements for secured financing of securities dealers, are explained in the Official Comments to Sections 9-309, 9-312, 9313, and 9-314, 9-309 Security Interest Perfected Upon Attachment. 9-309 (6) a security interest arising under Section 2-401, 2-505, 2-711(3), or 2A508(5), until the debtor obtains possession of the collateral; 2-401 (1) Title to goods cannot pass under a contract for sale prior to their identification to the contract [Section 2-501]. PERFORMANCE 2-501. Insurable Interest in Goods; Manner of Identification of Goods. (1) The buyer obtains a special property and an insurable interest in goods by identification of existing goods as goods to which the contract refers even if the goods so identified are nonconforming and the buyer has an option to return or reject them. Such identification may be made at any time and in any manner explicitly agreed to by the parties. In the absence of explicit agreement identification occurs:
(b) [Control of Commodity contract. or electronic documents may be perfected by control of the collateral under Section 7-106. Letter of Credit Rights. or 9-107. or security entitlement as provided in Section 8-106.] (b) [Control or Possession of certain Collateral. (c) when the crops are planted or otherwise become growing crops or the young to be born within 12 months after contracting or for the sale of crops to be harvested within 12 months or the next normal harvest season after contracting which ever is longer. if: (1) the secured party is the commodity intermediary with which the commodity contract is carried. letter-of –credit rights. or otherwise designated by the seller as goods to which the contract refers. (3) Nothing in this section impair any insurable interest recognized under any other statute or rule of law. Instruments. Control of Investment Property (a) [Control under Section 8-106] A person has control of a certificated security. Deposit Accounts. (a) [Perfection by Control. If the identification is by the seller alone. when goods are shipped. electronic chattel paper. Perfection by Control. and commodity intermediary have agreed that the commodity intermediary will apply any value distributed on account of the commodity contract as directed by the secured party without further consent by the commodity customer. 9-105. marked. (b) If the contract is for the sale of future goods other than those described in paragraph (c). or (2) the commodity customer. 45 . (2) The seller retains an insurable interest in goods so long as title to or any security in the goods remains in the seller.] (3) a security interest in money may be perfected only by the secured party’s taking possession under Section 9-313.(a) when the contract is made if it is for the sale of goods already existing and identified. a secured party may perfect a security interest in tangible negotiable documents. 9-106. Documents. (a) [Perfection by filing permitted. money. Perfection by Permissive Filing. 9-104. Investment Property. Temporary Perfection Without Filing or Transfer of Possession. goods. 9-314. When possession by or Delivery to Secured Party Perfects Security Interest Without Filing. Goods covered by Documents.] A security interest in investment property. the seller may until default or insolvency or notification to the buyer that the identification is final substitute other goods for those identified. deposit accounts. 9-313. (a) [Perfection by possession or delivery] Except as otherwise provided in subsection (b). uncertificated security.] A secured party has control of a commodity contract. instruments. or tangible chattel paper by taking possession of the collateral. and Money. 9-106. 9-309 (9) a security interest arising in the delivery of a financial asset under Section 9-206(c). 9-312 Perfection of Security Interest in Chattel Paper. secured party. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under section 8-301.
regulation. A “Financial asset. 9-107 Control of Letter-of-Credit Right. (c) If a condition of subsection (b) has been met. participation. (2) receives a financial asset from the person or acquires a financial asset for the person and. whether to a holder or nonholder. which is. a person acquires a security entitlement if a securities intermediary: (1) indicates by book entry that a financial asset has been credited to the person’s securities account. the term means either the interest itself or the means by which a person’s claim to it is evidenced. dealt in or traded on financial markets. 3-105 Issue of Instrument (a) “Issue” means the first delivery of an instrument by the maker or drawer. for the purpose of giving rights on the instrument to any person. or (iii) any property that is held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this Article. or other interest in a person or in property or an enterprise of a person. (d) If a securities intermediary holds a financial asset for another person. (e) Issuance of a security is not establishment of a security entitlement. (ii) an obligation of a person or share. As context requires. or which is recognized in any area in which is issued or dealt in as a medium for investment. a security certificate. or specially indorsed to the other person. or (3) becomes obligated under other law. A secured party has control of a letter of credit right to the extent of any right to payment or performance by the issuer or any nominated person if the issuer or nominated person has consented to an assignment of proceeds of the letter of credit under Section 5-114(c) or otherwise applicable law or practice.(b) [Effect of control of securities account or commodity account] A secured party having control of all security entitlements or commodity contracts carried in a securities account or commodity account has control over the securities account or commodity account. and the financial asset is registered in the name of. or a security entitlement. 46 .” (c) Except as otherwise provided in subsections (d) and (e). and has not been indorsed to the securities intermediary or in blank. or rule to credit a financial asset to the person’s securities account. a person has a security entitlement even though he securities intermediary does not itself hold the the financial asset. including a certificated or uncertificated security. This account is a “Securities account” which under Article 8 section 8-501 (a) means an account to which a financial asset is or may be credited in accordance with an agreement under which the person maintaining the account undertakes to treat the person for whom the account is maintained as entitled to exercise the rights that comprise the financial asset. in either case. or is of a type.” is defined in 8-102 (9) as a: (i) a security. accepts it for credit to the person’s securities account. payable to the order of. the other person is treated as holding the financial asset directly rather than as having a security entitlement with respect to the financial asset.
“If a promise or order at the time it is issued or first comes into possession of a holder contains a statement. its liability is governed by the law of the place where the branch or separate office is located. Also termed underwriter. Article 4 A-104. the promise or order is not thereby made conditional for the purposes of section 3-104 (a). (d) “Originator bank” means (i) the receiving bank to which the payment order of the originator is issued if the originator is not a bank. In the case of action or non-action by or at a branch or separate office of a bank. to make something public. but Article 8 governs this Article. made for the purpose of making payment to the beneficiary of the order. this article governs Article 3. by contract to assume the risk of anothers loss and to compensate for that loss. Issuer = One who agrees. but if the promise or order is an instrument. insurance underwriter carrier. Official Comment 47 . assurer [for life insurance]. A funds transfer is completed by acceptance by the beneficiary’s bank of a payment order for the benefit of the beneficiary of the originator’s payment order. required by applicable statutory or administrative law. they subject to those Articles. Applicability (a) To the extent that items within this Article are also within Article 3 and 8. but failure of the condition or special purpose to be fulfilled is a defense. If there is conflict. but nonissueance is a defense. (c) “Originator” means the sender of the first payment order in a funds transfer. The term includes any payment order issued by the originator’s bank or intermediary bank intended to carry out the originator’s payment order. 3-106 (d) Unconditional Promise or Order. is binding on the maker or drawer. An instrument that is conditionally issued or is issued for a special purpose is binding on the maker or drawer.(b) An unissued instrument. beginning with the originator’s payment order. or collection is governed by the law of the place where the bank is located.” Article 4-102. payment. (a) The liability of a bank for action or nonaction with respect to an item handled by it for purposes of presentment. Must have right in order to have interest. (c) “Issuer” applies to issued and unissued instruments and means a maker or drawer of an instrument. Funds transfer – Definitions In this Article: (a) “Funds transfer” means the series of transactions. to the effect that the rights of a holder or transferee are subject to claims or defenses that the issuer could assert against the original payee. or (ii) the originator if the originator is a bank. or an unissued incomplete instrument that is completed. (b) “Intermediary bank” means a receiving bank other than the originator’s bank or the beneficiary’s bank. there cannot be a holder in due course of the instrument.
12 CFR Pt. 4-301.g. the drawer. 128 N. The comments to this Article suggest in most instances the relevant Regulation CC provisions. Bank. Section 4-215(e) and (f). 4-302. 48 . Nicholas Bank of New York v. In the case of Article 7 documents of title frequently accompany items but they are not themselves items. and indorsers must know that action wil be taken with respect to it in other jurisdictions. and its implementing Regulation CC. In a case in which subsection (b) makes this Article applicable. Specifically the subsection applies to the initial act of a depository bank in receiving an item and to the incidents of such receipt.36(d). to action or nonaction of a bank with respect to an item under the rule of part 4 of Article 4.R. The routine and mechanical nature of bank collections makes it imperative that one law govern the activities of one office of a bank. 4-303) as well as action or non-action of a collecting bank (4-201 through 4-216). section 4001 et seq. In the case of conflict. Bonds and like instruments constituting investment securities under Article 8 may also be handled by banks for collection purposes. 2. See section 3-102 (b). 488.. payment and remittance or credit of proceeds. Section 4-210 deals specifically with overlapping problems and possible conflicts between this Article and Article 9. is rejected. e. and 4-208). The requirements found in some cases that to hold an indorser notice must be given in accordance with the law of the place of indorsement. presentment. b. 4-207. 1995. 173 N. 26. One federal law that does so is the Expedited Funds Availability Act. Adoption of what is in essence a tort theory of the conflict of laws is consistent with the general theory of this Article that the basic duty of a collecting bank is one of good faith and the exercise of ordinary care. 835 (1930). 13 L.Y. since that method of notice became an implied part term of the indorser’s contract. State Nat. Justification lies in the fact that. although not referred to in this Article. In addition. 229. The phrase “action or non-action with respect to nay item handled by it for purposes presentment. This is especially pertinent with respect to the law of the place of payment. The subsection applies to action or non-action of a payor bank in connection with handling an item (see Sections 4-215(a). similar reconciling provisions are not necessary in the case of Articles 5 and 7. the provisions of the EFFA and the Regulation CC control with respect to checks. applicable federal law may supercede provisions of this Article. payee.301 and 4-302 are consistent with section 5-112. This freedom of agreement follows the general policy of Section 1-105. Section 229. 849. their transfer. However . Sections 4.E. 12 U.E. In some instances this law is alluded to in the statute. 241 (1891). is rejected. Various sections of Article 8 prescribe rules of transfer some of which (see sections 8108 and 8-304) may conflict with provisions of this Article (Sections 4-205. The subsection applies to questions of possible vicarious liability of a bank for action or non-action of sub-agents (see Section 4-202(c)). Subsection (b) is designed to state a workable rule for the solution of otherwise vexatious problems of the conflicts of laws: a. Section 4-103 (a) leaves open the possibility of an agreement with respect to applicable law. The conflicts of rule of Weissman v. The conflicts rule of St. to action or non-action of a bank which suspends payment or is affected by another bank suspending payment (4-216). this Article governs. Amendments approved by the Permanent Editorial Board for Uniform Commercial Code November 4. 254 N. forwarding.. except between the depository bank and its customer. See section 4-104(a)(9).30(c). and the midnight deadline may be extended (Regulation CC.Y. For example. The rules of Article 3 governing negotiable instruments.C. is more theoretical than practical. and the contracts of the parties thereto apply to the items collected through banking channels where no specific provision is found in this Article In the case of conflict. all settlements are final and not provisional (Regulation CC. b. and tests these by the law of the state of the location of the bank which uses the subagent. payment or collection” is intended to make the conflicts rule of subsection (b) apply from the inception of the collection process of an item through all phases of deposit. Section 229. 27 N.A. Banque De Bruxelles.1. Article 8 governs. in using an ambulatory instrument. In other instances.S.
electric power production. Article 8 105.C. navigation development. Silence is acquiescence.Tennessee Valley Authority = Part of executive branch of Government. recreation improvement. That person is the Entitlement Holder 8-102 (8) “Entitlement Order” means a notification communicated to a Securities Intermediary directing transfer or redemption or redemption of a financial asset to which the entitlement has a security entitlement. If a person acquires a Security Entitlement by virtue of section 8-105 (b) (2) or (3). Under section 4 (h) of the TVC its officers can condemn real estate in condemnation proceedings under the right of eminent domain. or (2) six months after a date set for payment of money against presentation or surrender of the certificate. (b) Having knowledge that a financial asset or interest therein is or has been transferred by a representative imposes no duty of inquiry into the rightfulness of a transaction and is not notice of an adverse claim.C. and forest and wildlife development. the Authority’s other programs are financed primarily by congressional appropriations. U. Bank must be debtor to have secured interest. (2) the person is a aware of facts sufficient to indicate that there is a significant probability that the adverse claim exists and deliberately avoids information that would establish the existence of the adverse claim. A government owned corporation. to investigate whether an adverse claim exists. (b) An act or event that creates a right to immediate performance of the principal obligation represented by a security certificate or sets a date on or after which the certificate is to be presented or surrendered for redemption or exchange does not itself constitute notice of an adverse claim except in the case of a transfer more than: (1) one year after a date set for presentment or surrender for redemption or exchange. imposed by statute or regulation. a person who knows that a representative has transferred a financial asset or interest therein in a transaction that is. or whose proceeds are being used. Though its power program is financially self supporting. 1-201 (37) “Signed” includes using any symbol executed or adopted with present intention to adopt or accept a writing. if money was available for payment on that date. fertilizer development. for the individual benefit of the representative or otherwise in breach of duty has notice of an adverse claim. Notice of Adverse Claim (a) A person has notice of an adverse claim if: (1) the person has notice of the adverse claim. 8-102 (4) “Certificated Security” means a security that is represented by a certificate. The authorities activities include flood control. (3) The person has a duty. created in 1933. and the investigation so required would establish the existence of the adverse claim. However. that conducts a unified program of resource development to advance economic growth in the Tennessee Valley region. 8-102 (7) “Entitlement Holder” means a person identified in the records of a Securities intermediary as the person having a Security Entitlement against the Securities Intermediary. (d) A purchaser of a certificated security has notice of an adverse claim if the security certificate: 49 .
or promissory notes which is for the purpose of collection only. has been indorsed “for collection” or “for surrender” or for some other purpose not involving transfer. payment intangible. or electronic documents. Formal Requisites. or 9-107 pursuant to the debtor’s security agreement. and the secured has control under section 7-106. (e) Filing of a financing statement under Article 9 is not notice of a adverse claim to a financial asset. 9-105. electronic chattel paper. a description of the land concerned. but the mere writing of a name on the certificate is not such a statement. (b) [Enforceability] Except as otherwise provided in subsections (c) through (i). unless an agreement expressely postpones the time of attachment. Proceeds.3 (d) 50 . payment intangibles. (3) one of the following conditions is met: (A) the debtor has authenticated a security agreement that provides a description of the collateral and. investment property. chattel paper. (C) the collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under section 8-301 pursuant to the debtor’s security agreement.(1) whether in bearer or registered form. 9-203 Attachment and Enforceability of Security Interest. Supporting Obligations. or (2) is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor. if the security interest covers timber to be cut. a security interest is enforceable against the debtor and third parties with respect to the collateral only if: (1) value has been given. 12 CFR 201. (a) [Attachment] A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral. (B) the collateral is not a certificated security and is in the possession of the secured party under Section 9-313 pursuant to the debtor’s security agreement. letter-of-credit rights. Article 9-109 (5) “an assignment of accounts. Article 9 109 (d) this article does not apply to: Article 9-109 (7) “An assignment of a single account. or promissory note to an assignee in full or partial satisfaction of a preexisting indebtness. or (D) the collateral is deposit accounts. 9104. (2) the debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party. 9-106.
.. and corporations that are not depository institutions if.................... advance credit to individuals................................16 IV. and Treaties................30 VII........................14 III.... DTC’s response provides only a general overview of how DTC deals with certain risk management issues........ Securities Transfers. The Disclosure Framework was developed under the auspices of the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions.............. Diane Brennan 51 . Operational Risks.......24 VI............................ Therefore......33 VIII...... Requests for further information may be directed to: Ms.... Default Procedures ................. a Federal Reserve Bank may..................47 EXHIBITS 1.. Regulations.......... Perfection of Security Interests in property subject to certain Statutes.................. Title grants and agreements the rate applicable to such credit will be above the highest rate in effect for advances to depository institutions. this document should not be relied upon by DTC Participants or others as a complete discussion of these matters.................“Emergency credit for others...... Schedule of the Times of Significant Processing Events ....... Securities Overdrafts.......................] Except as otherwise provided in subsection (d)............ Relationships with other SSSs and Commercial Intermediaries .......4 II.................................... in the judgment of the Federal Reserve Bank credit is not available from other sources and failure to obtain such credit would adversely effect the economy............. Diagrams of the Organizational and Ownership Structures of DTC...38 IX.............. Rules and Procedures of the SSS. Funds Transfers and Linkages Between Transfers.....................53 2...... regulation or treaty of the United States whose requirements for a security interest’s obtaining priority over the rights of a lien creditor with respect to the property preempt Section 9-310(a): THE DEPOSITORY TRUST COMPANY RESPONSE TO THE DISCLOSURE FRAMEWORK FOR SECURITIES SETTLEMENT SYSTEMS JUNE 2002 -2Table of Contents Disclosure Framework Introduction ...................... Basic Information........ the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to: (1) a statute............... an affirmative vote of 5 or more members of the Board of Governors is required before credit may be extended.............21 V................ partnerships................. after consultation with the Board of Governors.......3 I.........54 -3Introduction The following document consists of the response made by The Depository Trust Company (“DTC”) to the questionnaire entitled Disclosure Framework For Securities Settlement Systems (the “Disclosure Framework”).......... Relationships with Participants........................................... In unusual and exigent circumstances.................. Article 9-311........... Risk Control Measures ......................... Where the collateral used to secure such credit consists of assets other than obligations of...... (a) [Security interest subject to other law.. Securities Lending and Back-to-Back Transactions ........ the United States or an agency thereof............................................. Consistent with the purpose of the Disclosure Framework.... or fully guaranteed as to principal and interest by...................
debt. etc. equities.g. What functions does the SSS perform? 1. New York (Eastern Time). BASIC INFORMATION A.. B. C. Federal Agency and Government Sponsored Enterprises Issues MUNICIPAL SECURITIES Auction Rate Notes Insured Custodian Receipts 52 .S.) The following types of instruments are eligible for deposit at DTC: DEBT (in addition to Government and Municipal Debt) Asset Backed Securities Auction Rate Notes Bank Notes Certificates of Deposit (Retail & Institutional CDs) Collateral Mortgage Obligations (CMOs) Commercial Paper (CP) Consumer Price Index-Linked Bonds (CPI Bonds) Convertible Debt Corporate Bonds Deposit Notes Discount Notes Insured Custodial Receipts Medium Term Notes (MTNs) Notes/Tender Rate Notes -5Variable Rate Demand Obligations (VRDOs) Zero Coupon Bonds EQUITY American Depositary Receipts (ADRs) Auction Rate Preferred Securities Closed End Funds Common Stock Limited Partnerships Preferred Stock Rights to Purchase Securities Unit Investment Trusts (UITs) Units Warrants GOVERNMENT SECURITIES Brady Bonds Non-U. Does the SSS serve as a securities depository and/or provide securities settlement services? Yes. Treasury. Government Debt U. DTC serves as a custodian of the securities deposited by its Participants and provides securities settlement services.S.Director-Risk Management Phone: (212) 855-3320 Fax: (212) 855-3274 -4I. warrants. with operating facilities in multiple locations. (a) What types of instrument are eligible for deposit at the SSS (e. Where and in which time zone is the SSS located? DTC’s principal offices are located in New York. What is the name of the SSS? The Depository Trust Company (“DTC”).
a service provider that is jointly owned by DTC’s parent.S. Does the SSS provide a trade matching service? Do others provide such services for securities settled at the SSS? DTC does not provide a trade matching service. 5. are performed? -7DTC itself does not provide a trade netting service as defined above. Currently. However. NSCC becomes the contra-party to each CNS transaction.Municipal Bonds Municipal Notes Variable Rate Demand Obligations (VRDOs) (b) What types of instrument are eligible for transfer within the SSS? All the types of instruments listed above are eligible for transfer among Participants of DTC by book-entry delivery within DTC. 4. NSCC Participants obligated to deliver securities deliver them to NSCC as free bookentry movements at DTC (referred to herein as “short covers”). Likewise. DTC’s payment order service provides a vehicle for the transfer of cash between securities borrowers and lenders to account for adjustments in the market value of the borrowed securities during the period the loan is outstanding. Does the SSS offer a securities lending or borrowing program? DTC provides services that facilitate securities lending and borrowing transactions initiated by its Participants. 6. Does the SSS provide cash accounts and/or provide funds transfers in conjunction with securities transfers? If so. Except for U. continually nets all trades due to settle the next day against each other and against prior days’ unsettled long and short positions in the same securities. -6(d) Does the SSS provide safekeeping for physical certificates? Yes. if any. (c) Please describe whether eligible securities are dematerialized. what types of netting (bilateral or multilateral). As part of NSCC’s guarantee of settlement of marketplace transactions in CNS-eligible securities. Treasury securities (and a small number of other issues) which are dematerialized. which is currently available only for DTC-eligible securities. NSCC provides a trade matching service. dividends. The Depository Trust & Clearing Corporation (“DTCC”). Does the SSS provide a trade netting service (as distinct from undertaking the settlement of securities transfers on a net basis)? Do others provide such services for securities settled at the SSS? In either case. which is also a whollyowned subsidiary of DTCC. most institutional trades that are to be settled at DTC are submitted for matching to Omgeo. NSCC’s CNS system provides for multilateral netting. 2. and Thomson Financial ESG. also as free book-entry movements at DTC (referred to herein as “long allocations”). in what currencies? DTC provides each of its Participants with both a securities account and a U. eligible securities are immobilized. 3. Does the SSS provide custodial and/or related services such as the collection of interest. principal or withholding tax reclamations? 53 . dollar money settlement account in order to permit Participants to effect deliveries of securities against payment. immobilized or transferred physically.S. NSCC Participants obligated to receive securities receive them from NSCC. trades netted in NSCC’s CNS system are settled by transfers to and from accounts at DTC. For trades netted in the Continuous Net Settlement (“CNS”) system of National Securities Clearing Corporation (“NSCC”). Securities lent by one Participant to another can be delivered by book-entry either free or against payment. The CNS system.
8. 7. Participants can accept tender and exchange offers for securities in their accounts and deliver them to offerors’ agents through DTC. In effect. rights to purchase additional shares.g. Cede & Co. DTC provides services for the custody. 3. D. When a security in the depository’s custody matures or is called by the issuer. DTC’s Dividend Reinvestment service allows Participants. Please indicate whether the SSS is organized on a for-profit or a nonprofit basis. Does the SSS act as a central counterparty or principal to transactions with its participants? No. the holder of record. For example. clearance and settlement by physical delivery of securities for which book-entry services are not made available. However. securities with certain transfer restrictions). Other services are described in DTC’s most recent annual report and in other DTC publications. DTC is a private sector company owned by members of the financial industry.. on behalf of interested customers.dtc.org. -9DTC is organized on a for-profit basis. DTC presents the security for redemption and distributes the proceeds to the appropriate Participants. DTC’s Proxy service permits Participants to exercise voting rights on securities in the depository’s custody. What type of organization is the SSS? 1..Which types of service are provided? DTC collects and distributes to Participants dividend and interest payments for securities in its custody. DTC provides the means for Participants to exercise warrants. which can be found on DTC’s website: www. -8With respect to withholding taxes applicable to dividends paid on foreign ordinary shares and American Depositary Receipts in DTC’s custody. a “banking organization” within the meaning of the New York 54 . When permitted by an issuer’s reinvestment plan. as well as securities issues that cannot be made eligible for book-entry services for legal or regulatory reasons (e. under a policy adopted by DTC’s Board of Directors. puts. rather than by refund. through arrangements with the taxing authorities in certain countries DTC provides a service for beneficial owners entitled to a reduced rate to obtain reduced withholding at source. 2. no dividends are paid to stockholders and each year substantially all revenues in excess of DTC’s current and anticipated needs are refunded to Participants. These securities include certificates that the Participant desires to have registered in its name or in the name of its customer. What is the legal basis for the establishment of the SSS and for securities transfers made through it? DTC is a limited-purpose trust company organized under the New York Banking Law. to reinvest dividends on shares without withdrawing them from DTC. Please indicate whether the SSS is a public sector or private sector entity. DTC’s Underwriting service permits underwriters of new and secondary issues of securities to distribute them by book-entry against payment through the depository. and other rights respecting securities in their DTC accounts. DTC offers a number of services that are related to its core custodial and securities settlement services. Similarly. DTC’s nominee. Other? Please specify. conversions. assigns each Participant the voting rights on securities credited to that Participant’s securities account as of the record date.
Jill M. if any. Does the SSS have a Board of Directors? Yes. in turn. DTC is also a “clearing corporation” within the meaning of Article 8 of the New York Uniform Commercial Code. DTC is registered as a clearing agency with the U. Who are the owners of the SSS? DTC is a wholly-owned subsidiary of DTCC. and a member of the Federal Reserve System.11 Mary M. Considine Chairman. Participants of DTCC. Beyman Chief Information Officer Lehman Brothers Frank J. Fenoglio Executive Vice President State Street Corporation George Hrabovsky 55 . President and Chief Executive Officer The Depository Trust & Clearing Corporation Dennis J. as amended (the “Exchange Act”). Casper Managing Director and Chief Operating Officer Fischer Francis Trees & Watts. 3. These shares are held by their self-regulatory organizations in a representative capacity for their members. Sachs & Co. E. DTCC. MBSCC and EMCC) are allocated entitlements to purchase the common stock of DTCC based upon their usage of all five registered clearing agencies. is industryowned.10 DTC carries on all of its own activities and has not outsourced its operations to third parties. Bodson Managing Director Morgan Stanley Stephen P. 2.S. What entity or entities operate the SSS? Which functions of the SSS. Attached as Exhibit 1 are diagrams of the organizational and ownership structures of DTC. have chosen not to purchase the shares to which they are entitled. such as some smaller broker-dealers. Bisignano Chief Administrative Officer and Senior Executive Vice President Citigroup/Salomon Smith Barney Corporate & Investment Bank Michael C.Banking Law. NSCC and the other registered clearing agencies that are subsidiaries of DTCC (GSCC. are outsourced to third parties? . Inc. Dirks Chief Operating Officer The Depository Trust & Clearing Corporation . Securities and Exchange Commission (“SEC”) pursuant to the provisions of Sections 17A and 19(a) of the Securities Exchange Act of 1934. Please describe and provide a diagram outlining the organizational and ownership structure of the SSS. 1. Jonathan E. Certain participants. (a) What is its composition? The following is a list of DTC’s current Directors and their affiliations: Bradley Abelow Managing Director Goldman.
$650 million in-transit coverage under Blanket Bond/All-Risk policies for securities in transit while in the custody of messengers or a .G. Please describe the financial resources of the SSS. Murray Managing Director Credit Suisse First Boston Thomas J. insurance coverage or other similar arrangements? On occasion. 2. the Board of Directors is responsible for supervising the business and affairs of DTC in order to promote DTC’s ability to serve its Participants. Inc. Thomas Senior Vice President and Chairman Merrill Lynch Securities Services Division James W. 1. Zeigon Managing Director Deutsche Bank AG (b) What are its responsibilities? Generally. $650 million on premises coverage under Blanket Bond/All-Risk policies. Amount of paid-in capital and retained earnings? As of December 31. Perna Senior Executive Vice President The Bank of New York Ronald Purpora Chief Executive Officer Garban LLC Peter Quick President American Stock Exchange Robert H.12 Thompson M. Guarantees. DTC had $77. Catherine R.8 million paid-in capital and $24 million in retained earnings. Silver Executive Vice President and President of PaineWebber Services UBS PaineWebber. Messenger Chief Executive Officer National Financial Services LLC Eileen K. 2001.13 - 56 . .President Alliance Global Investor Services Ronald J. Kessler Vice Chairman A. Madoff Investment Securities James H. Swayne Executive Vice President JP Morgan Chase Arthur L. DTC has required certain Participants to obtain a thirdparty guarantee of their obligations to DTC. Edwards. DTC currently maintains insurance coverage in the following amounts: . Inc. Madoff Senior Managing Director Bernard L. Kinney President and Co-Chief Operating Officer New York Stock Exchange Peter B. F. .
$25 million under Mail Policy covering registered securities lost after having been sent via registered or express mail or express courier. 3. Does other documentation provided to participants (e. 2. and approved or otherwise permitted by. . G.. user guides) have the same status as the rules and procedures? Yes. Credit lines or letters of credit? DTC currently maintains a $1. None of the amendments to DTC’s Rules and Procedures can become effective until filed with. Please describe whether the SSS or its operator is subject to authorization.14 II. the SEC (after review by the Fed) pursuant to the standards set forth in Section 19(b) of the Exchange Act. . Reference is made to the discussion of DTC’s Participants Fund in Section VI below.transportation company. 3. DTC also maintains a $50 million committed line of credit with a bank to provide funds so that DTC can distribute principal and income payments to its Participants when the payments are received too late to allocate on the payable date. including any need for regulatory approval. Powers to assess participants or equity holders? DTC has the right under its Rules to apply its Participants Fund to any uninsured loss suffered by DTC and to require its Participants to make additional deposits to the Participants Fund in order to replenish it. and how does this differ depending on the type of change involved? Approval by DTC’s Board of Directors is required to amend DTC’s Rules. Does the SSS maintain a complete list of the rules and procedures governing the rights and obligations of participants and the duties of the SSS? Yes. supervision or oversight by an external authority. (a) What authority is required. $1 million under Mail Policy covering registered securities lost after having been sent via first class mail. 1. additional transit coverage is available for non-negotiable securities. . the Board of Governors of the Federal Reserve System (the “Fed”). Any changes are also provided to Participants. The rights and responsibilities of DTC to its Participants and of DTC’s Participants to DTC are set forth in DTC’s Rules and Procedures.75 billion committed line of credit with a group of banks to provide liquidity in the event a Participant fails to pay its daily money settlement obligation to DTC.g.15 (c) Is there a procedure for participants or others to comment on proposed rule changes? 57 . . (b) How are participants notified of changes in rules and procedures? DTC notifies Participants of revisions to its Rules and Procedures by Important Notice. . 4. Describe the process for changing rules and procedures. RULES AND PROCEDURES OF THE SSS A. Changes in DTC’s Procedures are subject to approval by the Board of Directors or by the Chairman of the Board. DTC’s coverage under the Blanket Bonds/All-Risk policies provides secondary coverage for securities lost while in the custody of an armored carrier. DTC and its activities are regulated by the SEC. $800 million in-transit coverage provided by the insurer of the armored car carrier service used by DTC. and the New York State Banking Department. How can participants obtain a copy of the rules and procedures? DTC provides each Participant with a copy of DTC’s Rules and Procedures.
if any. It should be noted. Is the segregation optional or compulsory? . 2. Such additional accounts are subject solely to the instructions of the Participant. however. may not be required to make a Participants Fund deposit. Full service membership – “Participants” . proposed new services) are developed in close consultation with Participants. Are the rules and procedures binding on the SSS as well as its participants? Under what conditions and on whose authority can written rules and procedures be waived or suspended by the SSS? DTC’s Rules and Procedures are incorporated by reference into the Participant Agreement that is executed by the Participant and DTC. whenever such action is deemed necessary or expedient. How do the types differ? DTC has two categories of membership: .16 III. Within each membership category each Participant is subject to the same Rules and Procedures. 1. Participants or others may submit to DTC for its consideration their comments with respect to any proposal to revise its Rules or Procedures. A third party whose name may appear on an additional account has no rights under DTC’s Rules. Under SEC procedures. RELATIONSHIPS WITH PARTICIPANTS A. While each Participant is required to make at least the minimum deposit to DTC’s Participants Fund. 1. DTC’s Rules allow for the extension. C. Membership for certain services only – “Limited Participants”. Please describe participant requirements for each type of membership.Yes. the Chairman of the Board. waiver or suspension of any of DTC’s Rules by the Board of Directors. B. B. and are binding on both the Participant and DTC. 2.. are all participants subject to the same rules and procedures? Please describe important exceptions. If so. the President. Pledgees in DTC’s system are not required to be Participants. depending upon whether the services it utilizes could result in a settlement obligation to DTC. received by DTC must be submitted to the SEC as part of DTC’s filing. including both differences in rules across participants and the rationale for these differences. 58 . Please describe the types of membership offered by the SSS. 3. the SEC also solicits comments on proposals filed by DTC. DTC’s procedures are designed to facilitate its Participants’ segregation of securities so that they may comply with their legal or regulatory obligations. Does the fact that a sub-account at the SSS bears the name of a third party give any rights to that third party as a participant under the rules of the system? No. Can participants establish accounts for their customers’ assets that are segregated from their own asset accounts at the SSS? Participants can request DTC to provide an additional account in DTC’s system in order to segregate their assets from those of their customers. is this accomplished through a single omnibus customer account or through a multiplicity of accounts and/or sub-accounts? Participants have the option of segregating securities within their own account (omnibus) or of using additional accounts. Within each membership category. a Limited Participant. . or any Managing Director or Vice President. Written comments.g.17 The segregation of securities is not compulsory under DTC’s Rules and Procedures. that most DTC proposals (e.
D. Under what conditions can the SSS terminate a participant’s membership in the SSS? 59 . Are participants required to be domiciled or resident in a particular jurisdiction? No. The extent and nature of the business which the applicant intends to conduct through DTC is carefully analyzed so that the likely range of settlement obligations that the applicant will have in DTC and the degree of risk to DTC can be evaluated. Notwithstanding any such termination. DTC also evaluates the operational capability of the applicant . however. In no case. .g. does DTC admit brokers-dealers with less than $500.1. 4. DTC’s Participant admissions policy permits entities to become Participants only if they are subject to regulation in their home jurisdiction. operational capability. and transaction activity on a daily basis to assure that the Participant continues to be capable of meeting its obligations to DTC. please describe. F. please describe. The Rules also . operational. The Department also monitors Participants’ settlement obligations. etc.000 in excess net capital or banks with less than $2 million in equity. Yes. Are there financial. a Participant remains obligated to satisfy any obligations and liabilities arising out of its membership in DTC. Are participants required to be subject to a supervisory regime? If so. 2. and character.whether it has the personnel. Yes. Under what conditions can participants terminate their membership in the SSS? Does this mark the end of all liabilities of the participant? If not. capital adequacy.18 require all DTC Participants to demonstrate to DTC that these standards are met on an ongoing basis.. please describe. Each applicant is judged on its own merits. Financial statements filed with regulatory agencies. economic. minimum capital requirements. Does the SSS engage in oversight of its participants to ensure that their actions are in accordance with its rules and procedures? If so. to meet the technical demands of interfacing with the depository. DTC’s Rules provide that the admission of a Participant is subject to an applicant’s demonstration that it meets reasonable standards of financial responsibility. DTC monitors its Participants on an ongoing basis to assure that the Participants are in compliance with DTC’s Rules and Procedures. Are participants required to hold an equity stake in the SSS? No. information obtained from other self-regulatory organizations and information gathered from various financial publications are analyzed to assure that the Participant continues to be financially stable.19 E.. please describe what liabilities could remain. DTC’s Compliance Department obtains information daily from other internal DTC departments regarding settlement. DTC analyzes the capital and financial stability of the applicant as well as the business and market risks to which the applicant is subject and decides whether the applicant has the financial capability to meet its likely DTC obligations. personal or other requirements (e. or recordkeeping problems experienced with any DTC Participant. The Compliance Department reviews the financial condition of all DTC Participants at least quarterly. 3. “fit and proper” tests)? If so. DTC’s Rules set forth the basic standards for the admission of DTC Participants. A Participant may terminate its membership in DTC by so notifying DTC in writing. data processing capability. Yes.
and any limitation to the scope of liability of the SSS (e. (2) making a misstatement of a material fact or omitting to state a material fact to DTC in connection with its application to become a Participant or thereafter. in statute or contract)? As a general proposition.21 IV. the force majeure standard. judgment or decree of any court or other governmental authority of competent jurisdiction from acting as a broker.DTC will terminate a Participant’s membership (i. or in connection with the purchase. the Investment Advisers Act. The Participant has failed to make any other required deposit with DTC. The Participant has failed to pay any fine. . DTC’s Board of Directors. . cease to act for the Participant) upon determining that under DTC’s Rules the Participant is no longer qualified or is deemed to be insolvent. The Participant has failed to meet its settlement obligation to DTC. the Investment Company Act. DTC’s responsibilities to Participants for the manner in which DTC’s services are provided are a matter of contract between DTC and its Participants. Please identify each of the other SSSs used and the type of securities transferred via the linkages. Does the SSS maintain linkages (including sub-custodian or cash correspondent relationships) or other relationships with other SSSs? 1. fiduciary.. G. fraudulent acts or breach of fiduciary duty. fee or other charge provided under DTC’s Rules or Procedures. . In addition.e. has reasonable grounds to believe that the Participant or any person . or any rule or regulation thereunder. including the standard of liability (negligence. insurance company or other financial institution or from engaging in or continuing any conduct or practice in connection with any such activity.g.. gross negligence. investment adviser. (3) violating any Rule or any agreement with DTC or (4) the willful violation of the Securities Act. Please describe the scope of the SSS’s liability to participants. The Participant or any person associated with the Participant is permanently or temporarily enjoined by order. investment company. The Participant’s financial or operational condition has deteriorated to a point that its continuation as a Participant would jeopardize the interests of DTC and its other Participants.20 associated with the Participant is responsible for (1) fraud. strict liability or other). the Exchange Act. RELATIONSHIPS WITH OTHER SSSs AND COMMERCIAL INTERMEDIARIES A. (a) What is the name of the other SSS? Where is it located? (b) What securities are eligible for transfer via the linkage to the other SSS? 60 . sale or delivery of any security. Where are these liabilities and their limitations set out (e. trust company. indirect or consequential damages). The Participant has failed to make required deposits to the Participants Fund within the required ten business day period after demand. . DTC may terminate a Participant’s membership under any of the following circumstances: . or a committee authorized thereby. . dealer. The Participant or any person associated with the Participant is expelled or suspended from a national securities association or exchange registered under the Exchange Act.. and are set forth in DTC’s Procedures. . . bank.g. . underwriter. willful misconduct.
The transfers at DTC to and from the account of that Participant may be free or against payment. custodians and cash correspondents in order to assess any operational and financial risks arising from such linkages. Clearstream Banking Frankfurt (Germany). Hong Kong Securities Clearing Company Limited (Hong Kong). NECIGEF (The Netherlands) and the Tel Aviv Stock Exchange Clearinghouse (Israel) have each opened a Participant account at DTC.22 Transfers against payment are effected in the normal manner for such transfers at DTC. which is described in Section VIII below. please describe the timing of the transfers and the corresponding payments. DTC has indirect linkages with Euroclear and Clearstream Luxemburg. Please describe the standards used in approving or reviewing relationships with other SSSs. In DTC’s Depository Facility Program. C. (d) Does the other SSS provide custody services to the SSS and. including any financial or operational requirements or the presence of insurance or public supervision.S. reviews linkages with other securities settlements systems. a number of transfer agents hold balance certificates registered in the name of DTC’s nominee as custodians for DTC. SEC regulations require that the form of agreement that DTC executes with a securities custodian contain certain specified provisions relating to. The securities are shipped to DTC on the next business day. DTC ‘s Risk Management Committee. against payment. the quantities of securities represented by the applicable balance certificates in the FAST program are adjusted accordingly. In DTC’s Fast Automated Securities Transfer (FAST) Program. in the case of CDS. among other things. CAVALI (Peru). U.(c) Are transfers of securities made via the linkage to the other SSS limited to only those that are free of payment or are transfers against payment also made via the linkage to the other SSS? If against payment. Most transfer agents in the FAST Program and all banks in the Depository Facility Program are required to carry insurance in a form and 61 . Neither SSS provides custody services to DTC. The form of agreement must be filed with the SEC for approval. In each of those linkages. The Canadian Depository for Securities Canada (“CDS”).. Treasury securities) and which are eligible at DTC may be transferred to and from that account free of payment. . who bears any credit or custody risks? DTC maintains an account at the Federal Reserve Bank of New York. Does the SSS use securities custodians (other than the other SSSs addressed in the previous question) and/or commercial cash correspondents? Please identify the custodians or cash correspondents used and the duties that each performs. Monte Titoli (Italy). The Canadian. if so. German and Swiss (SIS Sega Intersettle) depositories provide custody services to DTC.g. As securities are deposited in and withdrawn from the DTC system. That Participant uses its DTC account to make and receive transfers of DTC-eligible securities between DTC Participants and the SSS. DTC’s ability to obtain its securities promptly. B. custodians or cash correspondents. DTC receives reports on the internal controls of its securities custodians from their independent accountants or internal auditors. Caja de Valores (Argentina). Issues which are transferred over the Federal Reserve System’s securities transfer system (e. Transfers of DTC-eligible securities to and from the DTC accounts of those central securities depositories may be made free of payment and. a DTC Participant acts on behalf of the SSS. certain banks (as well as regional offices of NSCC) hold securities overnight as custodians for DTC after the securities have been deposited in the DTC system. CRESTCo (the United Kingdom).
As described in Section I above.g. short positions). Does the SSS advance funds or securities to or on behalf of other intermediaries such as issuing or paying agents? If so. What procedure is used when instructions do not match? 3. E.amount satisfactory to DTC. Can securities be transferred within the SSS before registration in the buyer’s name is complete? If so. A transfer of securities at DTC can be effected on instructions to DTC only from the delivering Participant. including risk controls. collateral or alternative sources of funds and securities. please describe the consequences of failure by participants to meet obligations (e. How long does the registration process typically take? Are participants notified when registration is complete? 6. No. Is matching required for all transactions without exception? 2. No. Please describe measures in place to protect the SSS and its members against the failure of other SSSs or commercial intermediaries to meet obligations to the SSS. Please discuss whether and how settlement instructions are matched between participants prior to processing by the SSS. will it hold securities registered in the name of the beneficial owner? . Is it normal practice to register the securities in the name of the SSS (or its nominee) or in the name of the beneficial owner? Are there instances in which securities housed within the SSS are registered to neither the SSS (or its nominee) nor the beneficial owner? 3. Matching is not required for all transactions at DTC. 1. Participant accounts maintained by securities depositories are subject to all of DTC’s normal risk management controls. DTC does not advance securities or funds on behalf of other intermediaries. (c) Please provide a time line indicating the points at which matched instructions become binding. B. DTC does not advance securities or funds to or on behalf of other intermediaries. . do the rules and procedures of the SSS provide for an unwind or reversal of such transfers in case of bankruptcy or other events which result in the buyer’s name not being entered on the 62 . transfers of securities at DTC on the instructions of NSCC are the result of matching in the NSCC system. Under what circumstances does the SSS initiate registration of securities in the buyer’s name? 5. If the SSS offers custodial services. Securities and cash positions at all of DTC’s custodians and cash correspondents are balanced and confirmed daily. forced settlement. Who is the registrar? 2. as described in Section VIII below. Are matched settlement instructions binding on participants? (a) If so. please identify the circumstances in which such exposure could arise.25 4. (b) Please describe whether this is a feature of the SSS’s rules and procedures or of national law or regulations.. . SECURITIES TRANSFERS. penalties.24 V. as well as any pre-matching process that takes place. including collateral controls. such as issuing and paying agents. and agreed-on trades can then be settled at DTC. FUNDS TRANSFERS AND LINKAGES BETWEEN TRANSFERS A. Broker-dealers and their institutional customers can agree on the details of trades by using a matching service provider such as Omgeo.23 D. As noted above. Are securities transferred within the SSS registered? 1.
The Participant. Under what circumstances does the SSS provide credit extensions or advances of funds to its participants and thereby expose itself to credit risk? 63 . For these issues.M. Securities settlements occur daily. at what time or times is the processing initiated and completed? 4. . and the issuer does not make securities certificates available to Participants or their customers. On what entity (SSS or other) does the participant bear cash deposit risk? 3. Please indicate whether the transfers are processed as debits and credits to members’ accounts or via some other method. a Participant with securities on deposit within the DTC system can withdraw the securities physically and have them reregistered in the name of the Participant. For transfer agents required to register with the SEC.26 C. If continuous. is able to determine when registration is complete. upon inquiry. Generally. A large number of registered securities issues are issued in book-entry-only (“BEO”) form. at the central bank. Please describe whether final funds transfers in conjunction with the SSS are made as debits and credits to balances held at the SSS. deliveries of securities for value can be effected until 3:30 P. there are one or more global certificates registered in the name of Cede & Co. The source of the transfer instructions determines whether a batch method or real-time method is used. or in one or more batches? 3. D. at one or more commercial banks. On the instructions of the withdrawing Participant. Does the SSS maintain cash accounts for its participants? Are these accounts equivalent to deposit accounts at a commercial or central bank or do they serve only as “cash memorandum” accounts? 2. Cede & Co. or via some other method. securities certificates for registered issues deposited in the DTC system are sent by DTC to the issuer’s transfer agent for registration of transfer into the name of DTC’s nominee. The reregistered securities are then sent to the Participant or its customer. DTC debits the securities from the Participant’s account and instructs the transfer agent to register the transfer of the securities into the name designated by the Participant. and free deliveries can be effected until 6:00 P. For most registered securities issues. On a continuous (real-time) basis.register? With the exception of securities in DTC’s custody for which book-entry services are not available. Some transfers are processed in batches. A Participant depositing a security is given immediate credit for the deposit in the Participant’s DTC account and can use that credit to effect bookentry transactions. Transfer instructions received from Participants during the day are processed on a real-time basis. For example. The registration process usually takes 2-3 days. during what hours does the processing occur? If in batches. the time period for the registration process referred to in the preceding paragraphs is subject to SEC rules. 2. 1. and other transfers are processed on a real-time basis. Transfers of securities delivered against payment are effective simultaneously with payment. its customer or another party.M. Bearer securities can also be deposited at DTC. 1. Transfers of securities within the DTC system are processed by debits and credits to Participants’ accounts. Do securities settlements occur daily? Please identify securities for which settlement occurs only on specific days of the week or month. transfer instructions received early in the processing day from NSCC or from a trade matching service provider such as Omgeo are processed at that time in batches. Please describe how securities transfers are processed within the SSS.
The debits and credits arise from securities transfers against payment made and received by the Participant and from other transactions such as principal and income payments received in respect of securities credited to the Participant’s securities account.28 2. each Participant has a settlement account. Please discuss whether participants are notified of securities or funds transfers while they are still provisional. Where the SSS provides more than one alternative for settlement processing. DTC and NSCC net the settlement balances of each DTC Participant that is also a member of NSCC. A Settling Bank is not required to pay DTC a debit balance on behalf of a Participant and is not required to advance funds to a Participant. Each Participant must engage a Settling Bank.. Please also provide a diagram indicating the timing of events in the processing of securities and funds transfers in the SSS. When do securities transfers and funds transfers become final? (a) At what time do securities transfers become final? After what event or events? (b) At what time do funds transfers become final? After what event or events? Does this timing allow for same-day retransfer of funds received in exchange for securities? (c) If final delivery of securities precedes the final transfer of funds. what actions will be taken if securities are not received? (e) Does the timing of finality differ depending on the type of security transferred or the currency in which payment is to be made? Please describe. or both. can participants dispose freely of such securities prior to funds finality? If so. and the Participant pays any net debit balance to DTC. DTC neither advances funds nor provides intra-day credit extensions to its Participants. which is a DTC Participant bank with access to the Fedwire system. Payments are made to and from DTC’s account at the Federal Reserve Bank of New York through the Federal Reserve System’s money transfer system (sometimes called the Fedwire system). Are funds transfers and securities transfers processed within the same system or in different systems? If different. E. The DTC system is 64 . debits and credits are entered into the Participant’s settlement account. 3. In addition to a securities account at DTC. After netting with NSCC. to act on the Participant’s behalf in settling with DTC. Is the SSS a DVP system? If so. please provide a response for each alternative and indicate the relative importance of each alternative. can participants dispose freely of such funds prior to securities finality? If so. A Participant which qualifies as a Settling Bank may act as its own Settling Bank. how are they linked? (a) Please describe whether each securities transfer is linked to a specific funds transfer on a trade-by-trade basis or on a net basis or via some other method. Then. During the day. (b) Does the SSS “split” large transactions into multiple transactions or require participants to do so? . the debits and credits in the Participant’s settlement account are netted. what actions will be taken if funds are not received? (d) If final delivery of funds precedes the final transfer of securities. The DTC system provides a DVP mechanism. How long can such credit extensions last? How long do they typically last? DTC does not maintain cash accounts for its Participants. only when they are final. At the end of each day. please describe the DVP model used according to the models outlined in the DVP Report (see the Introduction).27 4. DTC pays any net credit balance in the account to the Participant. 1.
the receiving Participant can return (reclaim) the securities on the day of the transfer or the next day. DTC employs three principal risk management controls to protect DTC and its Participants against the risk that a Participant will fail to pay the net debit balance in its settlement account. At the end of the processing day.29 Securities transfers at DTC are final when made. Please discuss the events or circumstances that would constitute default of a participant under the rules and procedures of the SSS or that would lead the SSS to make use of exceptional settlement arrangements or unwind procedures.S. .30 VI. To the extent that the rules and procedures grant discretion in the determination of the use of default or other exceptional procedures. the debits and credits in each Participant’s settlement account are netted. At present. Under certain circumstances. As described in subsection D. 1. Large transactions are not split into multiple transactions. A receiving Participant is permitted to dispose of securities prior to money settlement with DTC subject to the application of DTC’s risk management controls. Participants are notified of securities or funds transfers by DTC when processed. Does the SSS itself “guarantee” funds or securities transfers? 1. are the collateral control. from the standpoint of the delivering Participant. which are discussed in Section VIII below. when a delivery of securities against payment is made at DTC. dollars. The timing of finality of securities transfers and funds transfers does not depend on the type of security transferred. Please indicate whether the guarantee is a feature of the SSS’s rules and procedures or of national law or regulations. Failure by a participant to meet a test of its solvency under the applicable laws of its jurisdiction? 2. What actions does the guarantee obligate the SSS to take? 3. however. the net debit cap control and the largest provisional net credit procedure applicable to money market instruments (“MMIs”). Those risk management controls. Funds transfers and securities transfers are processed within the same system at DTC. and the net credit balance or net debit balance is settled between DTC and the Participant. Under what circumstances and at what point are transfers guaranteed by the SSS? 2. all payments in DTC’s daily money settlement are made in U.similar to Model 2. above. there is a size limitation of $50 million on deliveries against payment of MMIs. Attached as Exhibit 2 is a schedule of the times of significant processing events. the corresponding debit and credit are entered in the settlement accounts of the receiving and delivering Participants. . Failure to make payments or deliveries of securities within the time specified? 3. The conditions under which DTC will cease to act for a Participant are set forth in Section III above. No. DTC will employ the default procedures 65 . which are described in Section VIII below. However. F. DTC does not itself guarantee any funds or securities transfers which its Participants are obligated to make. Funds transfers over the Fedwire between DTC and a Settling Bank acting on behalf of a Participant are final when made. DEFAULT PROCEDURES A. please discuss where the authority to exercise such discretion resides and the circumstances in which this authority would be used.
4. consisting of an all cash Participants Fund (the “Fund”) of $600 million and a committed bank line of credit of $1. DTC could charge the excess to its retained earnings or pro rata to the required Fund deposits of all other Participants. What procedures are followed by the SSS once it has determined that a default event has occurred or that exceptional settlement arrangements are to be employed? 1. including a loss resulting from a Participant’s failure to settle. if any). etc. If the loss exceeded the failing Participant’s deposit.. In addition to being a liquidity resource.32 (a) How and on what authority would a decision to unwind securities or funds transfers be made by the SSS? (b) When and how would participants be notified of a decision to unwind provisional securities or funds transfers? (c) How long would participants have to cover any debit positions in their own securities or funds accounts resulting from an unwind? (d) In the event of an unwind. participants fund. If the Fund is applied to a loss. when the SSS’s obligations to participants would be met. How and at what point are participants notified that this has occurred? Notification of DTC’s decision to cease to act for a Participant will be provided immediately to the SEC and to other clearing agencies in which the Participant is also a member.g. DTC is required to notify the SEC and each Participant promptly thereafter. Each Participant’s obligation to make an additional deposit to the Fund will be reflected as a debit in its money settlement account on the business day following such notification. would all transfers be unwound or 66 . loss-sharing arrangements. DTC would first charge the loss to that Participant’s deposit to the Fund (including its voluntary deposit. DTC may require an additional deposit to the Fund. the Participant must make an additional deposit to the Fund in an amount equal to the charge. . The minimum deposit is $10. In the event that DTC becomes concerned with a Participant’s operational or financial soundness. Would the SSS be expected to continue to meet all its obligations to participants under these circumstances? Please discuss the resources in place to ensure that this would occur (e. DTC has available liquidity resources of $2. DTC will be expected to continue to meet all its obligations. . publish an Important Notice to its Participants and submit a filing to the SEC. Should DTC make a charge against a Participant’s required deposit to the Fund (pro rata or otherwise).. Please describe and provide a time line indicating the order in which these resources would be used as well as the timing of participant notifications and important deadlines (e. collateral. B. Please describe all conditions under which provisional transfers of securities or funds could be unwound by the SSS. insurance.).g. entry of a court order adjudging the Participant a bankrupt or insolvent) or the Participant fails to settle with DTC.000.75 billion. In the event of such loss. DTC will broadcast such notification to its Participants over DTC’s Participant Terminal System (PTS).35 billion.31 3. the Fund is available to satisfy any uninsured loss incurred by DTC. Each Participant is required to make a deposit to the Fund based upon a sixty business-day rolling average of the Participant’s intra-day net debit peaks. including the completion of settlement.. In the event that it ceases to act for a Participant. 2. in order to complete settlement.g.described below only if DTC has determined that the Participant is insolvent as defined in DTC’s Rules (e. A Participant may make a voluntary deposit to the Fund in excess of the amount required. when participants would need to cover their loss-sharing obligations).
1. SECURITIES OVERDRAFTS.E. These funds will ordinarily be restored on the day following the failure to settle. on that day to wire the necessary settlement funds. 5.. . Have loss-sharing procedures been invoked? 2. only securities purchases or only those of a subset of participants) by unwound? (e) If only a subset of transfers.. to DTC’s account. Has a participant in the SSS ever been declared in default or become insolvent? 1.g. two processes initiated externally can cause short positions to arise. If the Participant fails to wire the necessary settlement funds. Please describe whether any of these defaults or insolvencies resulted in losses for the SSS or its participants and how they were absorbed. If the Fund is not sufficient. DTC will borrow from its line of credit banks.g. If that deduction results in a negative position in the Participant’s account (a “short position”). Deposit Rejects: Most short positions are the result of deposit rejects. The failing Participant has until 10:00 A. 67 . Debit positions (i. the Participant is required to provide a cash security deposit to DTC (the “short position penalty”) equal to 130% of the market value of the deposited security (marked to the market each day) until the matter is resolved. Is it possible for debit positions (overdrafts) in securities accounts at the SSS to arise? Yes. a Participant cannot overdraw its account at DTC. 6. and the deposited certificate is sent by DTC to the issuer’s transfer agent for registration of transfer into the name of DTC’s nominee. short positions) can occur. what procedure would be followed to determine which transfers and in what order? In the event of a Participant’s failure to settle. Under what conditions could such debit positions occur? Normally. when the failing Participant pays DTC. the deposited certificate rejected by the transfer agent is returned to the Participant and the quantity of the deposited security is deducted from the Participant’s DTC account.33 C. and could this cause provisional securities or funds transfers to be unwound? No. under a “zero-hour” rule). . SECURITIES LENDING AND BACK-TO-BACK-TRANSACTIONS A. Can bankruptcy or insolvency be declared retrospectively in the SSS’s jurisdiction (e. However.2 above would ever be unwound.e.would only a subset of transfers (e. As described in Section V above. Transfers of securities or funds so defined are final.M. Please describe any circumstances in which transfers of securities or funds that were defined as final in response to question V. VII. DTC will first use the Fund (including any voluntary deposits) as a liquidity resource to complete settlement. pledging collateral securities in the failing Participant’s account. including interest. a Participant depositing a registered security at DTC is given immediate credit for the deposit in the Participant’s DTC account.. Since the creation of the depository in 1973. DTC has never suffered a loss resulting from a Participant default or insolvency and has never made a charge against the Participants Fund. If the transfer agent refuses to register the security in the name of DTC’s nominee. DTC is authorized to sell the collateral securities in the failing Participant’s account. since deliveries are not processed by DTC unless the delivering Participant has a sufficient quantity of securities credited to its account prior to the delivery.
therefore. . the settlement obligations of the parties are reopened (i. because of deliveries effected by a Participant between the publication date and the date DTC is able to allocate called securities to its account. Partial Call Lotteries: Under DTC’s Procedures relating to a call (i. . the Participant will be left with a short position.. based upon Participants’ net long positions as of the close of business on the day prior to the publication of the call notice.. A Participant having a short position in a particular security as the result of a rejected deposit is permitted for a limited period of time to reverse book-entry deliveries of that security effected by the Participant between the date of the deposit and the date of the reject. must run its lottery after publication date.e. The processes described above result in short positions only. the Participant that reverses the book-entry delivery will still have an obligation to deliver to the receiving Participant securities in settlement of the original transaction). DTC also has a number of procedures to help reduce and eliminate short positions. the average age of a short position at DTC is between seven and eight days.e. A Participant having a short position in a particular security as the result of the partial call allocation process is permitted for a limited period of time to reverse book-entry deliveries of that security effected by the Participant between the publication date and the allocation date. 3.. How long can such debit positions last? How long do they typically last? While theoretically there is no limit to the time short positions can be outstanding. (b) Are these situations covered explicitly by the rules and procedures of the SSS? Yes. DTC allocates the called securities by means of an impartial lottery. particularly those that are outstanding for . the Participant’s remaining long position is less than the amount allocated.35 long periods because. please explain the basis for differential treatment by the SSS. The following briefly describes a few of these procedures: . rectified or managed? DTC discourages short positions by charging the short position penalty until the position is covered. If a book-entry delivery is reversed under this procedure. For the vast majority of partial calls of callable securities on deposit with DTC. To the extent that. Currently. 2. for example. If a book-entry delivery is reversed under this procedure. and do not create failed transactions. redemption) of part of an issue. the depository does not receive notice of the call in advance of the publication date and. (a) Do these conditions always result in debit positions in securities accounts rather than failed transactions? If not. DTC permits a Participant having a short position in a particular security to use DTC’s facilities to communicate with other Participants having long positions in that security in order to arrange to purchase a sufficient quantity to cover the short position.34 . the settlement obligations of the parties are re-opened. 68 . How are debit positions in securities accounts prevented. the issues are difficult to purchase on the open market. short positions in debt securities (which represent the vast majority of short positions at DTC) can be outstanding at most until the securities are redeemed or mature.
DTC’s retained earnings as well as the Participants Fund (involving loss sharing by Participants on a pro rata basis) would be available for such loss. (a) Application of loss-sharing provisions allocating the loss to participants? (b) Absorption of the loss by the SSS? (c) Other? Please specify. 69 . please describe the procedures used by the SSS to determine whether a securities loan will be made. Are lent securities identified by the SSS with specific participants as lenders or only with a common pool of securities available for lending? Does the participant whose securities are lent become a principal to the transaction? DTC itself does not provide for the lending of securities to ensure settlements. Which securities on deposit at the SSS are eligible for lending? Do participants have the option to make securities available for lending or is it mandatory? 4.. failure by a participant with a debit balance in a securities account or unavailability of the securities in the market). DTC itself is authorized to purchase a sufficient quantity of the security to cover the short position. using the Participant’s short position penalty to fund the purchase price. but when a third party has promised to deliver to the SSS securities of the same or greater value? Must the provider of the guarantee have itself received the securities through a final transfer? Please describe how the SSS evaluates such promises. C.g. 2. What procedures would be followed by the SSS in case the debit cannot be rectified (e. . With respect to a Participant short position that has been outstanding for 90 days or more. (e) Other? Please specify. 4. but when a matched receipt instruction exists for the same or greater value? Is such a practice limited to markets where matching is binding? (d) Before securities have been received either provisionally or finally. However. as described in Section I above. How does the SSS settle back-to-back transactions? 1. In the extremely unlikely event that the short position penalty and the failing Participant’s deposit to the Participants Fund are not sufficient to cover any loss suffered by DTC. Under what circumstances does the SSS provide for the lending of securities to ensure settlements? 1.. B. DTC provides services that facilitate securities lending by its Participants and their customers. Under what conditions are delivery instructions by participants receiving and redelivering securities on the same day under back-to-back transactions settled for same-day value? (a) Only if the participant has securities on deposit with the SSS that have been received pursuant to a final securities transfer? (b) If the participant has securities on deposit with the SSS that have been received pursuant to a provisional securities transfer? . Is the process for lending securities automatic? If not. and whether they are addressed by the written rules and procedures of the SSS. At what point are participants notified that securities are being lent to them in order to complete their settlements? 3.36 The short position penalty would be available to cover the obligation of a failing Participant.37 (c) Before securities have been received either provisionally or finally.
Does the SSS have a risk management function with clear independence from and authority over operational marketing functions? Yes. internal auditors and DTC’s independent accountant. including limits on amounts involved or related to the liquidity of the underlying securities.38 VIII. Is there a risk management policy that addresses the review and approval of new products and services offered by the SSS? At what level of the organization is risk management approval given for a new product or service? As a matter of DTC practice. 3. a project may be subject to risk assessment reviews by the Committee. DTC’s General Counsel acts as Chairman. Information Services. Under what conditions are payment instructions by participants in the SSS under back-to-back transactions settled for same-day value? Can participants use the proceeds of an on-delivery of securities without the need for an extension of credit? DTC does not settle “back-to-back” transactions as defined herein. DTC’s Board of Directors has an Audit Committee whose responsibilities include the review of DTC’s risk management policies and procedures. attorneys. net debit cap and Largest Provisional Net Credit (“LPNC”) controls applicable to both the redelivering Participant and the counterparty to the redelivery are satisfied. DTC continually performs risk assessments of its operations. data processing systems. Whenever a new or expanded service is proposed. The Committee is composed of nine officers. Please describe the roles and responsibilities of those areas of the SSS responsible for risk management and control. 1. a new product or service must receive risk management approval by DTC’s Chief Operating Officer. The Committee reports to the Audit Committee of DTC’s Board of Directors. B. Does the Board of Directors review risk management policies and procedures? Does the Board have a risk management or audit committee? Yes. However. Who performs the audit or examination? DTC’s Internal Audit Department and its independent accountant 70 . the project is reviewed by members of senior management. In appropriate cases. . before being offered. The Committee is independent from the operational and marketing functions. please address the following questions. communications networks and facilities. 3.39 4. a Participant receiving a delivery of securities intra-day is able to redeliver those securities for same-day value in advance of final settlement so long as DTC’s collateral. 1. representing the following areas: Finance. These controls are described in Section VIII below. Please describe limits or controls in place with respect to any of the above arrangements for the settlement of back-to-back transactions. Risk. Operations. RISK CONTROL MEASURES A. For each such audit or examination. DTC has a Risk Management Committee (the “Committee”) to evaluate and coordinate the risk management activities within the organization. International. . Please describe the process for the internal review of risk management policies and procedures. Auditing.2. Systems Processing and Legal. President or Chairman. Risk assessment is a crucial element of such reviews. Please describe any internal or external audits or supervisory/regulatory examinations that are performed with respect to the SSS. 2.
(b) Please indicate whether and how it addresses the SSS’s compliance with its own rules and procedures. Please discuss whether the SSS has a lien on the securities held in or transferred through it. 4. What are the sources for security valuations? (a) What outside price or data sources are used? DTC attempts to obtain an end-of-day price in an automated format from a third-party vendor for each of its eligible securities. All examinations are designed to test for compliance with DTC’s Rules and Procedures. the Federal Reserve Bank of New York and the New York State Banking Department each conduct annual reviews. In addition.e. the New York State Banking Department. DTC attempts to obtain pricing data from two outside sources. Any instances of noncompliance are reported to senior DTC management and are corrected. as well as the data processing environment. In addition. How frequently are securities revalued? Daily. Are audit or examination reports available for review by participants? DTC’s independent accountant issues a report on internal controls which is provided to all Participants and interested third parties. procedures and records. DTC monitors the value of the securities used as collateral to support a Participant’s net settlement debit. D. The Securities and Exchange Commission conducts an annual inspection of DTC’s data processing areas and has conducted an inspection of selected operating areas every other year. the Federal Reserve Bank of New York. 3. Such examinations cover all critical processing areas of the operation. which are complex.40 DTC’s independent accountant. highly interest-rate-sensitive securities. The above vendor data is supplemented with DTC’s mainframebased pricing models for Money Market Instruments. 1. What is the frequency of the audit or examination? .41 (b) If pricing models are used. . an annual audit of all critical areas. and the Securities and Exchange Commission routinely examine the depository. 3. on a rotation schedule. DTC’s Internal Audit Department conducts. please describe how the models are chosen and how the model inputs are obtained. Evaluations of DTC’s financial statements and internal controls over securities and related monies processed and/or held for Participants and others are conducted on a periodic basis. mark to market) the securities that it holds. C. pricing data is supplied by lead underwriters for new issues not yet priced by a vendor. 2. In the case of CMOs. Please describe how these valuations are used by risk control systems at the SSS. 2. The collateralization control is meant to assure that DTC has available sufficient collateral to cover the Participant’s net settlement debit in the event that it fails to settle. Does the lien apply only to the securities owned by the participants themselves or does it extend to the securities beneficially owned by customers 71 ..regularly review the adequacy of DTC’s internal controls. 1. What is the scope of the audit or examination? (a) Please indicate whether and how it addresses the sufficiency of and compliance with internal controls. Please discuss whether the SSS has the capacity to value (i.
DTC’s haircut policy is reviewed at least annually. . What are the policies with regard to the type of collateral used or haircuts required? All types of securities that are eligible for deposit may be used as collateral. Because DTC may have to finance a Participant’s failure to settle. Does the SSS manage its own collateral system? Yes. DTC’s Risk Management Committee is responsible for approving any changes in the 72 .. rating. 3. How are collateral valuation methodologies developed and reviewed? . less a haircut as determined by DTC. Collateral can be returned to the Participant intra-day as long as the returned collateral is excess (i. a DTC guarantee either to return the securities to NSCC or to compensate NSCC for these securities if the receiving DTC Participant (which is also a member of NSCC) redelivers the securities. usually in conjunction with the renewal of its agreement with its line-of-credit banks. Collateral includes: (1) the Participant’s deposit to the Participants Fund. The collateral value attributed to securities is equal to the prior business day’s closing market price. 4. In the event that a failing Participant is insolvent and unable to pay its settlement debit. together with the collateral controls applicable in DTC’s system. DTC and NSCC have entered into a limited cross-guaranty agreement which provides. E. at the time of the return the Participant’s net debit with DTC is fully supported by other collateral acceptable to DTC). What types of transaction at the SSS involve the use of collateral? Transactions that are processed in DTC’s end-of-day net settlement system are subject to DTC’s collateral requirements. including securities that are treated as collateral. DTC is not aware of the beneficial ownership of securities credited to the accounts of its Participants. with respect to CNS long allocations. DTC’s guarantee eliminates a potential NSCC risk. DTC manages its own collateral system. Can collateral at the SSS be posted and returned on the same day? Yes. Under what circumstances and in what manner would such a lien allow the SSS to use the securities? As indicated above. 5. the goal of DTC’s collateralization control is to assure that DTC has access to sufficient collateral of the Participant to cover any net debit in its money settlement account.e. DTC’s haircuts range from 2% to 100%. the haircut structure takes into consideration market fluctuations and the haircuts imposed on DTC by DTC’s line of credit banks. Not giving collateral value to long allocations. (2) securities in the Participant’s account that the Participant has designated as collateral. and (3) securities that have been delivered intra-day to the Participant’s account against payment.43 A security’s haircut is determined by the application of criteria relating to security type.of participants? 2. 6. Does the SSS share a collateral system with another SSS or payment system? No. market price and whether the security is traded on an exchange (including NASDAQ). DTC’s Rules give DTC the right to pledge such collateral securities to DTC’s line of credit banks in the event of a Participant failure to settle. Securities that are not acceptable to the banks receive no collateral value in DTC’s system.42 2. mitigates DTC’s risk in providing this guarantee. 1. Please discuss the circumstances in which the SSS requires collateral to limit or mitigate risks. DTC does not share its collateral system with any other SSS. DTC is authorized to sell the collateral securities in order to cover that debit.
nor is it used in the calculation of the Participant’s net debit. DTC maintains liquidity resources of $2. In such a case. . collateral requirements and the Largest Provisional Net Credit (“LPNC”) control.M. Please describe the SSS’s use of limits on exposures to monitor or control risks. 2. This credit is not available as collateral. in the absence of a refusal to pay. these debits and credits are only provisional because the paying agent has until that time to inform DTC of its refusal to pay for the maturity. DTC receives maturity proceeds from the issuer’s paying agent by Fedwire and does not credit these proceeds to Participants until they are received. including other SSSs that participate in DTC’s system. maturities are handled differently. however. DTC’s settlement system imposes net debit caps on all Participants. The LPNC control is lifted after 3:00 P. if any. from using the largest net settlement credit it has received with respect to any single MMI issuer. For most securities that pay principal at maturity. Each Participant’s net debit is limited throughout the processing day to a net debit cap that is the lesser of four amounts: (1) a net debit cap based on the three largest net debits that each Participant incurs over a rolling three-month period. Do limits apply to implicit as well as explicit extensions of credit or 73 . 7.M.. To help limit the risk to DTC arising from the combination of an issuer’s failure and a Participant’s failure to settle. DTC would invoke MMI issuer failure procedures which entail reversing all of that day’s activities in the issuer’s MMI. maturity proceeds are automatically debited to the paying agent’s Participant account and credited to the accounts of Participants that have positions in the MMI. 3. 4. 1. Do limits apply to participants individually or in the aggregate or both? Risk management controls are applied to Participants on an individual basis.44 The LPNC control is designed to address risks associated with DTC’s processing of maturity payments on MMIs. Early on the maturity date. As discussed above. however. DTC established the LPNC control. The issuer’s paying agent must be a DTC Participant. (2) an amount. This control operates by prohibiting the Participant prior to 3:00 P.8 billion (an amount that is $550 million less than the amount of DTC’s total liquidity resources). including a cash Participants Fund and a committed line of credit. Until 3:00 P. Do the limits apply to all participants and/or to other SSSs with which the SSS is linked? What are the exceptions to the limits? The risk management controls apply to all Participants. DTC also employs net debit caps.M.35 billion. In order to assure that DTC is able to complete settlement on the day of a Participant failure. for example corporate or municipal bonds. if any. determined by the Participant’s Settling Bank. determined by DTC. All of these reversals would be processed without regard to the system’s collateral and net debit cap controls. including any new issuances that day. To what extent are collateral policies described in the written rules and procedures of the SSS? DTC collateral policies are described in DTC’s Procedures. F. The market values of collateral securities are monitored daily based upon price and rating data provided by independent sources.established haircut levels. For MMIs. Please explain the types of limit used and the exposures to which they apply. DTC’s principal risk would arise from the failure of one or more of its Participants to settle their net debit obligations with DTC at the end of a business day. or (4) $1. DTC’s system requires that a Participant’s net settlement debit be fully collateralized. (3) an amount.
OPERATIONAL RISKS A. Does the SSS or its participants have the capacity to monitor participants’ accounts continuously during processing? Each DTC Participant has the capability to monitor its own account on a real-time basis. If a completed transaction will result in a net settlement debit that is either not fully collateralized or exceeds the Participant’s net debit. the transaction will be automatically blocked and pended. Is there a special risk control regime that the SSS would apply to a participant known to be experiencing financial difficulties? DTC maintains relationships with other self-regulatory organizations so that there is an exchange of vital information concerning Participants’ operational and financial soundness. G. DTC’s Compliance Department is responsible for the application of these policies.45 5. DTC does not maintain or administer loss-sharing arrangements other than as described in Section VI above. Please describe other controls to mitigate or reduce risks at the SSS. . . To what extent are limit policies described in the written rules and procedures of the SSS? Where does additional authority to set or amend limit policies reside? DTC’s limit policies are described in its written Procedures. DTC could raise the haircuts in its collateral valuation of those securities. The authority to set or amend these policies coincides with the authority to amend DTC’s Procedures (as described in Section I above). 1. Does the SSS automatically reject transactions that exceed limits or is compliance determined ex post? DTC’s collateral monitor control systematically reviews each transaction to assure that if completed there will be enough collateral in the accounts of both the deliverer and the receiver to support the net debit of each.g. How are limit policies developed and reviewed? DTC’s Risk Management Committee is responsible for developing limit policies. Require the Participant to settle its net debit earlier in the day. DTC has the capacity to monitor all of its Participants’ accounts on a real-time basis. If the troubled Participant is a primary market maker or the specialist in an issue or issues. . 3. Please provide assessments of the operational reliability of the computer and 74 .46 2. These policies are reviewed by DTC senior management and by the Audit Committee of DTC’s Board of Directors. 7. . Lower the Participant’s net debit cap. DTC could take the following possible courses of action: . Increase the Participant’s required deposit to the Participants Fund. .securities (e.47 IX. Request that the Participant arrange to clear its transactions through another DTC Participant and itself retire as a Participant. DTC carefully monitors a Participant’s daily activity and may exercise its right under its Rules to limit the Participant’s access to DTC services. 6. . In the event of financial inadequacy. . Does the SSS maintain or administer loss-sharing arrangements other than those applicable to events of default and addressed in Section VI above? Are these loss-sharing pools pre-funded by participants? No.. above.E. when on-deliveries of securities are permitted pursuant to provisional but not final delivery of securities)? Reference is made to information provided in response to subsection V. Depending upon the circumstances.
The system uses a remote 75 . to 5:00 p.Hardware Availability. Is this plan available for review by participants? 3.98%.866%. These reliability reports include hardware. 99. .m.865%. The period measured is 8:00 a.g. “Participant Terminal Availability” is defined as the availability of DTC’s Participant Terminal System (PTS) terminal network in Participant locations..m.865% during critical period processing. including communications networks. software applications. Outages are measured whenever a failure occurs that affects mission-critical systems that in turn delay Participant processing. been disrupted or otherwise failed because of operational problems during this period? (b) Please describe the nature of any such problems. How often is this plan tested? Does this involve participants in the SSS? 4. central processing facility)? (c) During critical processing periods? 2.. On-Time Settlement Performance. 99. and reports the monthly results quarterly to the DTC Board of Directors.m. Outages are . 99. . 1. Statistics for critical period processing (between 8:00 a. Over the period January 2000 through December 2001. to 5:00 p. in both cases exceeding DTC’s goals.m. the systems used by DTC were available at a rate of 99.) for major systems components are as follows -.other systems used by the SSS. The period measured is 8:00 a. Has the SSS experienced major operational problems during the past two years? (a) Have settlements been delayed. What are the major elements of the business continuity plan? 5. communications network.m. This capability provides for full recovery of DTC’s entire system within one hour. 1. What is the percentage uptime of the systems used by the SSS? (a) Whole system overall? (b) Broken down by major components (e.85%.m.. with no loss of data. including any criteria that the SSS uses internally for this purpose.m. DTC has never experienced a failure in its daily settlement. and 5:00 p. The period measured is 8:00 a. DTC has not experienced any major operational problems during the past two years. DTC conducts self-assessments of the operational reliability of the depository’s computer and other systems. on-time settlement performance and terminal systems performance.85% overall and 99.. which covers peak Participant use. Software Availability. B. “Hardware Availability” is defined as the readiness of production system hardware to process deliveries and complete settlement. which covers peak Participant use. How long would it take the SSS to resume operations if primary systems become unusable? DTC maintains an alternate data center and has a state-of-the-art disaster recovery capability.48 measured whenever a failure occurs that affects mission-critical systems that in turn delay Participant processing. Definitions of these metrics follow: . “Software Availability” is defined as the ability of DTC’s software to operate without downtime. . 99. Participant Terminal Availability. to 5:00 p. “On-Time Settlement Performance” is achieved if settlement cut-off and payment of credits are not later than 15 minutes beyond scheduled times and key prior cut-offs are not 30 minutes late. Does the SSS have a formal plan for business continuity in place? 2.m. Please describe contingency or disaster recovery planning at the SSS. which covers peak Participant use.
Any potential problems result in an alarm sounding and trigger supervisory intervention. 2. Are internal operational and security controls covered by regulatory requirements applicable to the SSS? Annual risk assessments include the review of DTC’s primary data centers. Internal systems contingency and disaster recovery testing is conducted weekly. the depository has developed a Business Continuity plan. DTC also switches primary and alternate processing sites on a quarterly basis thereby testing the disaster recovery processes with every Participant that utilizes the remote access capabilities of the depository.49 back-up system located at a separate site. change controls or those covering remote access)? 1. DTC conducts disaster recovery tests for each mission critical operation on an ongoing basis. To ensure its ability to sustain business processes in the event of fire. the back-up mainframe at a secondary site would be initialized for production using a complete duplicate set of production files maintained at the back-up site. Testing varies from tabletop testing to actually closing departments and resuming operations at the contingency site. seven days a week. The plan addresses a single catastrophic failure.. DTC periodically operates its production system and communications network from its alternate data center. Are internal operational and security controls included in the internal and/or external audits of the SSS? 3. or any other contingency affecting its operating premises. Each weekend DTC tests the system by comparing a portion of the data between the two sites. this plan is tested on an ongoing basis.g. Please describe controls or security procedures in place to ensure that the SSS acts only on authentic settlement instructions from valid participants.data facility under which mainframe-based disk drives connected to the production mainframe immediately replicate any changes to disk drives on the . in the event of a disaster at the primary production site data center. A command center for monitoring key environmental control systems is staffed 24 hours a day. Backup emergency generators and an uninterrupted power supply are available and tested periodically. The recovery processes are documented and practiced by DTC staff. New program code is extensively tested through established certification procedures before being moved to the production environment. Access to sensitive PTS functions requires the authorization of a DTC officer. instantaneous confirmation of recorded transactions is available to Participants through PTS. the integrity of DTC’s computer processing. User ID and password authentication is required in order to help prevent unauthorized transactions from entering DTC systems. such as the loss of one building. Most of the depository’s business processes rely on operational activities as well as computer facilities. The details of the disaster recovery plan are not available for review except by DTC’s regulators. electronic access to DTC’s computers is generally controlled via leased lines and dial-in/call-back networks. to prevent security breaches and to establish accountability for transactions entered. In many cases. In addition to verification procedures in place permitting Participants to verify that only valid settlement instructions have been received for compared trades.50 C. civil disturbance. flood. and possible security breaches. Thus. Extensive physical and environmental control systems are used in both the data centers. What are the key features of the internal controls covering operations and security at the SSS (e. . All systems activity is 76 . The plan details how critical operational units would displace less urgent functions in the event the critical operation’s facilities were not available.
Capacity planning processes. SEC technical staff makes annual on-site visits to DTC and confers with DTC staff from time-to-time throughout the year. and management participation in implementing the data security policy. DTC has from time-to-time retained outside consultants to provide independent assessments of DTC’s systems and systems security. company-wide awareness of the need for data security. Contingency planning processes. DTC works diligently to eliminate the possibility of access to sensitive data and records by unauthorized users and programs. How does the SSS ensure that such standards are met on a continuing basis and what sanctions are available to the SSS if they are not? 2. the depository is subject to the SEC’s Automation Review Policy (ARP). which addresses key areas of risk associated with Information Services and directs that appropriate actions be taken to minimize risk. which helps ensure the accuracy and integrity of company data. organizational structure. For example.51 into production. In this connection. How would the SSS allocate losses incurred due to operational problems 77 . prevention. Does the SSS impose minimum operational or performance standards on third parties (e. Formal escalation procedures exist for reporting. Systems development methodologies. the continuance of data processing in the event of an emergency. and other sensitive data. All securities transactions are included on daily activity statements given to Participants. communications providers)? 1. An independent Certification Unit is responsible for transferring all application programs from test to production libraries and source code is recompiled prior to being moved . Unauthorized access is prevented through awareness. The systems development and maintenance activities also are controlled through the use of a separate test machine. Security assessments. . Security violation reports are monitored and appropriate follow-up action is taken. The use of sensitive computer console commands is restricted via a console security system. An extensive Information Services Security Policy Statement (distributed to all employees annually). under which the SEC evaluates various aspects of DTC’s data processing environment. and violation monitoring. personal.. including: .52 D. In addition to the internal and external audits described above. A high-level Security Committee. . standards and procedures over the certification process have been developed. and reported differences are followed up until resolved by DTC personnel. and . investigating and resolving attempted security violations. In addition to the authentication and access procedures described above. . DTC’s internal operational and security controls are included in the internal and external audits of DTC and are covered by the regulatory requirements applicable to DTC. documented and adherence by employees is required. Finally. .g. the internal control structure includes: . The goal of DTC’s internal control structure is to ensure that the integrity of our production systems is never jeopardized. accountability.logged and is available for reporting purposes as the need arises. Participants are responsible for reporting to DTC any problems with recorded transactions. A variety of measures are taken by DTC to protect the Data Center and Communications areas. the confidentiality of proprietary.
Actual performance against standards is monitored as part of DTC’s ongoing systems reliability analysis and reporting. In the event that losses are incurred by the depository as the result of operational problems caused by systems or applications software packages or external data provided by vendors (third parties). DTC will pursue a claim against the vendor. Attachments . any remaining losses not covered by DTC’s insurance will be satisfied from DTC’s retained earnings or the Participants Fund.53 EXHIBIT I 78 .caused by third parties? DTC imposes both operational and performance standards on its software vendors as part of its contractual agreements. If DTC’s claim is not fully satisfied.
16 Ming the Mechanic The NewsLog of Flemming Funch The unknown 20 trillion dollar company 2003-10-30 17:37 13 comments 79 .5946.
of course. It turns out that this company holds 23 trillion dollars in assets. I will include it at the bottom too. as in thousands of thousands of millions. And the broker might tell you that it is just a fictitious name. owned by the same people (major U. banks) who own the Federal Reserve Bank. As it so turns out. And if you needed to trade them. and some of it is a little whacko. Starts with a nice litte Flash presentation and has a nice message from the CEO. Because legally they own them. and had 917 trillion dollars worth of transactions in 2002.000. if you ask anybody about this. And take a look at the numbers. and will explain why it is really more practical to do that than to put it in your name.S. the average American has no clue that this financial institution is the most powerful banking corporation in the world. 23. and there's a national U. DTCC seems like a nice and friendly company. Now. in case it should disappear. Which is all fine and dandy if everything goes right. You'll find very little about it on the net otherwise. what they typically do is to put the stocks into the name of "Cede and Company" or "Cede & Co" or some such variation. That's trillions. But if somebody at some point should decide otherwise. I'm sure that is all well and good. maybe it is. An fascinating article about this whole thing is here. the Depository Trust Company stated: 80 .000 dollars in assets. The general public has no knowledge of what the DTC is or what they do. And. and it would be impractical to invest via computer or over the phone. Something to think about. How can a private banking trust company hold assets of over $19 trillion and be unknown? In a recent press release dated April 19.e. the stocks were placed under their "street name". 1999. It is a private company. they process the vast majority of all stock transactions in the United States as well as for many other countries. To serve you better. when you owned stocks you would have the stock certificates lying in your safe. In the old days. it appears the rules were then changed so the brokers are not allowed any longer to put the stocks in their own name.S. So the shortcut was invented that the broker would hold your stocks instead of you. Headquartered at 55 Water Street in New York City. but an actual corporation that DTCC controls. Instead. And you're in reality the beneficiary rather than the owner.000. with a positive slogan and out there to make a little business. they're in the name of the brokerage. they will naturally tell you that it is all a formality. The Unknown $19 Trillion Depository Trust Company by Anthony Wayne Part I of II This exclusive report is a compilation of interviews and background research from October 1995 through April 1999. The Depository Trust Company (DTC) is the best kept secret in America. go and take a look at their annual report. And in order for him to legally be able to trade them for you. Rather it is because they seem to have a monopoly on what they do. but obviously he's been researching this quite a bit. And. government becomes unable to pay its debts. well. Its name is the Depository Trust & Clearing Corporation. but they're just holding them in trust and trading them for you. you needed to get them shipped off to a broker. I. And . You can even get a job there. it is not because DTCC has a nice website and says good things about saving their customers money that they are trusted with that kind of resources.by Flemming Funch There is a busy little private company you probably never have heard about. well. but which you should.000. Some kind of financial service thing. Now. In brief. emergency and/or the U. Nowadays that would be considered very cumbersome.S.S. See their website. who actually knows about it. Looks pretty boring.99% of all stocks in the U.and that's the real interesting part . And if they all stick to their job. appear to be legally owned by them. and just keep the money and your stocks flowing smoothly. well. The problem with that is that it appears that Cede isn't just some dummy name. they might just not give you your stocks back. Not that I can vouch for or agree with everything the guy is saying.
. Also. DTC processed over 164 million book-entry deliveries valued at more than $77 trillion. In dealing with the trust department of Midlantic Bank. I spoke with Ms.A. The DTC is a private bank that processes every stock and bond (paper securities) for all U. An Assistant Vice President from the Trust & Financial Management Office of Midlantic Bank said to me "it will take at least 6 weeks to do this as the majority of the stocks and bonds are not held in the name of the trust". at their request. Last year. Why did anyone feel it was necessary to illegally record our conversation without advising us? Was some federal alphabet agency monitoring DTC calls to safeguard National Security? That in itself is suspicious enough to warrant a big red warning flag. Inc. In July 1998. N. after encountering numerous "no comments" and a myriad of "that's not my department" excuses via telephone. He said he'd been employed there for 19 years and was "very proud" of his employer. every person who has a stock or bond in their portfolio had better read this report and act on the information we are disclosing here. Alan Greenspan. to transfer original trust assets comprising of common stocks and bonds to a new trust set up in another jurisdiction. also stated in a letter dated November 17. Jim McNeff said "There's no need for the public to know about us. Yes. "DTC is 35. this writer was authorized. you should visit or call a stock broker or bank and instruct them you want to purchase some shares of common 81 . Mr." (* these are not the actual figures quoted in the letter in order to protect the privacy of the account holder.. as they are more commonly called. Just who gave this private bank and trust company such a broad range of financial power and clout? The reason the public doesn't know about DTC is that they're a privately owned depository bank for institutional and brokerage firms only. either Jim's employer or some other unknown person or persons were illegally listening or taping our telephone conversation according to the electronic eavesdropping equipment we have installed on our end. As of April 19. We're a private bank for securities. This same Midlantic Bank Assistant V. It is a limited purpose trust company and is a unit of the Federal Reserve. the Depository Trust Company is really just a 'front' or a division of the Federal Reserve System. The Federal Reserve Board. according to the 1998 Federal Registry. we were asked not to name the Midlantic Assistant V. mandates that the DTC process every securities transaction in the US. you read that correctly. Jim informed me back then (1995) that "the DTC is the largest limited trust company in the world with assets of $ 9. Rose Barnabic of the DTC Finance Department who said that "DTC assets are currently estimated at around $11 trillion". now the Mortgage-Backed Securities Division of the DTC) is owned by the same stockholders as the Federal Reserve System.S. They process all of their book entry settlement transactions. let's see how this effects the average working American family. I eventually spoke with Mr. banks and brokerage houses. is also a private company and is not an agency or department of our federal government. 1995.P.]. so your assets are secure with DTC". With the advent of reported Y2K computer glitches and the possible collapse of our 'paper asset' economy.1% owned by the New York Stock Exchange on behalf of the Exchange's members. In other words. is nothing more than a liaison advisory panel between the owners and the Federal Government. McNeff had also stated "the DTC is a brokerage clearing firm and transfer center. Now. as trustee and power of attorney. In disbelief.A. headed by Mr. 1999. During my initial telephone interview.P. We handle the book entry transactions for all banks and brokers. it's required by the Federal Reserve that DTC handle all transactions". but they are not the owners..1 trillion". "Of the 11 municipal bonds. Every bank and brokerage firm must secure their membership with us in case they become insolvent." -New York Stock Exchange. In November 1995. If you're not aware how the system works. The FED. holding nearly $19 trillion in assets for its Participants and their customers. The Federal Reserve Board of Governors is listed. the can of worms we've opened up should frighten every American. 8 are held in book entry only. N..The Depository Trust Company (DTC) is the world's largest securities depository. The Federal Reserve Corporation. After 3 years.. It is operated by a separate management and has an independent board of directors. I brought this matter to the attention of our research assistants at the Christian Common Law Institute [formerly the North Bridge News] and we began our lengthy investigation into the matter. in order to protect her privacy Rights. The big question is this. It's no wonder that the DTC (including the Participants Trust Company. This means they cannot be physically re-registered with a certificate sent to the new trustees. We respect these requests with full moral compliance). a/k/a The Federal Reserve System. the DTC itself has stated that their assets total "nearly $19 trillion" (see above). Jim McNeff who told me his position was Director of Training for the DTC. in New Jersey [now PNC Bank.
The Securities Exchange Commission (SEC) issued a concept release in 1994 to 82 . According to Mr.. Simply put.000. Is this the collateral being held by the private Federal Reserve System to pay off the national debt owed to them by our federal government.. as shown on certificates we have personally examined from numerous certificate holders. The DTC's private holding company or street name. The assets must be held in the name of DTC's holding company. and keep them hidden where only you know their location. CUSIP number G09198105. whose address is: 85 Challenger Road.stock or a small municipal bond. We also have more than 95% of all municipals on deposit.March 16. By federal law (SEC).1% of the "ownership" of the DTC on behalf of their NYSE members. if stock and bond certificates you've purchased aren't in your name. All of the Series A Shares are held by Cede & Co. whom we refer to as participants. LLC. Remember. then the "holder" (the Federal Reserve System) could theoretically refuse to surrender them back to you under a "national emergency" according to the Trading with the Enemy Act (as amended). getting a stock or bond certificate these days is not so easy if possible at all: "For the most part. no bank or broker can place any stock or bond into their firm's own name due to Federal Trade Commission (FTC) and Security and Exchange Commission (SEC) regulations.000 equity issues and 170.000 corporate debt issues. we suggest you keep them there. we can't hold the certificates in our name. He was correct since we now know that the NYSE holds 35. it might be very wise to cancel your brokerage account and power of attorney status. "Cede Company" or "Cede & Co". Otherwise. for example. the DTC was a former member of the New York Stock Exchange (NYSE). equating to more than 78% of shares outstanding on the New York Stock Exchange (NYSE). but have been unable to get any background information on them. and the payment of the redemption price will be made to Cede & Co. That's how DTC has more than $19 trillion dollars of assets in trust. the Depository Trust Company absolutely controls every paper asset transaction in the United States as well as the majority of overseas transactions. and they now physically hold (as of April 1999) 99% of all stock and bond book-entrys in their street name. as paying agent. the "Group of 30" [business leaders] recommended that stock certificates be eliminated. and "Our sister company is the National Securities Clearing Corporation. The broker will place your stock or bond purchase into their safekeeping under a "street name". New Jersey 07660. However. because physical certificates create risk. McNeff gave us was correct when he confirmed that Cede Company was a controlled private holding company of the DTC. If not. The banks and brokers are merely custodians for their clients. Series A ("EPICS") of Bear Stearns Finance LLC. 1999 . so the DTC transfers the certificates to our own private holding company or nominee name. the NSCC" (they have since merged).. They will set up a brokerage account for you and act as your agent with full durable power of attorney (which you must legally sign over to them) to conduct business on your behalf. We have searched every source known to learn who CEDE really is. re-register the stocks and bonds in your name (if you still can). you have absolutely no control over them (see Part II of our exclusive research report on the DTC for more information on beneficial ownership status). liquidation preference of $25. We handle listed and unlisted equities. New York . or is it really in "trust" if the private Federal Reserve System is technically holding it in their "unknown" entity's name? Obviously. The broker or bank must then send the transaction to the DTC for ledger posting or book entry settlement under mandate by the Federal Reserve System. first initiated by Lincoln's debt bonds of 1864? According to Mr. The DTC was created in 1973 as a user-owned cooperative for post-trade settlement.00 per Series A Share.. McNeff of the DTC. upon your buy or sell instructions. CEDE & Co. as nominee of The Depository Trust Company. In the 1980s. Is Cede Company fictitious or is their identity perhaps a larger secret than DTC? We must presume that the information Mr. Ridgefield Park. "Since the DTC is a banking trust company.. since your bank or broker can't use their name on the certificate. McNeff.000 outstanding 8.00% Exchangeable Preferred Income Cumulative Shares. Our members are banks and broker/dealers.Bear Stearns Finance LLC today announced that it will redeem all of the 6. is shown as either "CEDE and Company". they cannot hold any assets in the customer's name. If you have stock or bond certificates in your name buried in your back yard or under your mattress. We have now found the following proof that CEDE is real from the Bear Stearns internet site: NEW YORK. issuers know little about the role of the Depository Trust Company (DTC). they use a fictitious street name." states Mr. by ChaseMellon Shareholder Services. McNeff. not the actual owner's names. including 51.
"This is the day that clearing house funds will no longer be accepted for stock or bond transactions" was my reply from Jim. "What switch?". This is the manifestation of the new international god. he replied "DTC's first controlled test was 4 or 5 years ago. Will Y2K be a manipulated and deliberate a financial meltdown? Too many facts already support this probability. 1995. We all asked ourselves how computers could have done this by themselves without someone knowing about it. Do you remember Black Monday? There were 535 million transactions on Monday. or a Fedwire..6% of its total value. Read these quotes again: He stated that Black Monday was a controlled test. and 400 million transactions on Tuesday". providing optional direct registration on the books of the issuer instead of a certificate. That's hard to do considering banks claim it takes 3 or more days to clear a check that you've submitted to pay for a stock purchase. or even when to do or not do it. are electronic computer ledger debit transfers between Federal Reserve System member banks. just like the scenario we are experiencing today. Faith. Just prior to the 1929 stock market crash.000 points. there's a reason for this new regulation and it coincides with the introduction of the new FRS "dollars". With the direct registration system. I call it the reality of the mark of the beast. and record profits. It's quite obvious that the stock markets are going to 'crash and burn' at some future date and for some 'unknown' reason since the controlled test was so successful. the New World Order [I prefer the 83 .. As of May 3. 1999. someone has to program a computer to tell it what to do. the Dow Jones Industrial Average (DJIA) went above a record 11. It coincided with the infamous Regulation CC that purportedly gave us faster three day availability of funds from deposited checks. just as Mr.. Fed Funds. what not to do.9% that began the great stock market crash of 1929 and foreshadowed the Great Depression. which the issuer or transfer agent then registers. without a doubt.gradually decrease certificates.. During my telephone conversation. I asked. The Dow's 1987 fall also triggered panic selling and similar drops in stock markets worldwide" -Source: Facts on File World News CD ROM The stock exchanges had dramatic record losses. McNeff. and it will be as deliberate and manipulated as the first one that began with the stock market crash of 1929. That fall far surpassed the one-day loss of 12.. We are. McNeff accurately stated. After all. losing 22. Wall Street was posting record prices. The Depository Trust Company (1996) Now we're about to reveal to you the most shocking discovery we came across during our research into this matter. This means that brokers and banks must get your stock or bond transaction into the street name (Cede & Co.when the Dow Jones Industrial Average plunged 508. and a record volume of shares were traded on that infamous Monday in October 1987.32 points. On June 7. McNeff was trying to assure me that they [the DTC] have "never lost a certificate or made a mistake in a book ledger transaction". He was very proud to inform me that "DTC cleared every transaction without a single glitch!". Black Monday was a deliberately manipulated disaster for many Americans at the whim of a controlled test by the DTC. Corporate Trust Services. 1987 -. so shares can be delivered electronically. But.October 19. the federal government issued a new regulation requiring stock and bond certificate transfers to be cleared in three days instead of the previous five day time period. No checks or drafts have been allowed from that day. What was the purpose of this test? Common sense tells you that you test something before you intend to use it. "Instead.32 Points in Panic on Wall Street "The largest stock-market drop in Wall Street history occurred on "Black Monday" -.) of the DTC within 3 working days. 1996." -John D. Mr. brokers transmit instructions to purchase through DTC. record earnings. only Fed Funds will be accepted". "the DTC will flip the switch" according to Mr. on the brink of the Mother of all economic Depressions. In attempting to give me an example of how trustworthy the DTC is when I asked him how he could back up such a statement. Most of us remember a few years back the purported computerized selling of stocks that resulted in Wall Street's "Black Monday": Dow Dives 508. Manager. On February 22. Was this just one of the planned tests for a Y2K internationally planned worldwide economic meltdown? The Great Depression is about to be repeated. This is more commonly called a 'cashless transaction'. this enhances the portability of shares between transfer agents and brokerage accounts..
All the Federal Reserve System has to do is hand it over. President Roosevelt declared a national emergency touted as a "Banking Holiday". 1933. some of Lincoln's gold backed bonds from 1864 have not been repaid yet. they have now blamed it on the purported drug dealers who are allegedly destroying our currency by money laundering schemes. In 1995. What people don't realize is that very soon. wallet or purse no different in theory than a credit card scanner. a machine-readable capability has been incorporated for the blind. 1998.S. then perhaps they'll cash them in for the federal government's failure to repay the loans that have become way overdue. No beeps. But. Just like we thought at the time.. all bullion gold and gold coins were forcibly taken from the hands of private citizens (see New York Times). 84 . international airport in 1998.. Where did this gold end up? Into the hands of the Federal Reserve System owners.. Treasury. they may be forced to share or relinquish their lifetime of hard-earned wealth. For the first time. These certificates are technically in the name of DTC's private holding company. what happens to the people counting on those pension fund investments in order to feed themselves in their retirement? Too bad for them. old U. $100 FRB notes issued by the Federal Reserve Bank are being exchanged for new $100 FRS issued by the Federal Reserve System. they're out of luck because for the 'good of the nation'. -U. The President can enforce any new emergency at any time under Executive Order or Presidential Directive. These new notes have scanable magnetic platinum encryption on the plastic strips embedded inside the bills. I told him "yes". I looked in my wallet and saw I had one new $100 FRS note. but much more sophisticated. RR-2449 released May 20. This writer knows firsthand of at least one machine. new $20 and $50 FRS's are replacing the older notes as well. "We are most gratified with the successful introduction of the new $100 and $50 notes and look forward to the same success with the new $20s.. he asked me to walk through what looked like a typical airport scanner.S." Chairman Greenspan said. The DTC is owned by the private Federal Reserve System owners (Click for a complete list of names). Heck. I participated in a 'test' of this machine at a U. No noise. we [the former North Bridge News] published that we expected a new national "dollar" emergency to be declared within a year or two. CEDE. and mutual funds. On March 6. He looked at a computer screen and said "Do you have a new $100 bill?". This is what happened to those Americans holding gold and gold coins after 1933. Under the War Powers Act. on no less than two occasions since 1995. I tried to ask him how the machine knew that. manufactured by Diebold. to pass legislation allowing pension funds to be used by the government as purported 'loans'. This can be done without the consent of Congress under an Executive Order based on the War and Emergency Powers Act and a state of National Emergency. as he introduced himself and flashed his ID quickly in my face so I couldn't read it) if I had any of the new $100 or $50 bills in my pockets. A new feature in the $20 will facilitate the development of convenient scanning devices that could identify the note as a $20. To me. but don't tell me how much". Is it any surprise that the DTC physically holds all the remaining non-book entry issued stock and bond certificates in the same place? Technically. After saying he would "really appreciate it" if I would help them with a test. then he said "Good. Since the Federal Reserve System already holds our stocks and bonds in their fictitious DTC "street name". but he ignored my question. (a/k/a InterBold) that scans the money in your pockets. bonds. CEDE and Company..S. It was declared due to the deliberately calculated stock market crash that preceded the Great Depression. Congress has attempted. I took a good look at the scanning system and believe I have now spotted them at Kennedy..S. Inc. just like we are already under (See further Executive Orders). When I confirmed that was true. the older FRB notes will no longer be 'legal' and there will be a penalty for hoarding them. The majority is stored in the impervious rock vaults they own beneath New York City. Office of Public Affairs. it looks much like the standard metal detector scanners you walk through at all airports. The U. and for a reason. The older FRB notes are not encoded to do this. Atlanta. he thanked me and told me to please move on. Why new paper 'money' and for what purpose? Because the new FRS notes in your pocket can be scanned and whoever scans them can know exactly how much money you have on you. Treasury Agent. I was asked (by who I believe was a U. Now.term 'New World DISorder' as a more accurate description]. Treasury claims this is for "the blind". Consider this my fellow Christian Americans: All pension funds and other institutional 'managed funds' are comprised of paper asset investments such as stocks. No sound at all.S. our entire nation is still under the Executive Order declaration of the War Powers Act and in a continual state of national emergency (See Clinton's 1994 Executive Order 12919). Since late 1996.
Obviously. This is the truth of reality.or any of your Bonds.. this amount was estimated by a DTC employee at more than $11 Trillion.S. The Depository Trust Company has grown since October 1995. What happened to 'supply and demand' with gold and silver? Normally. It appears that our startling discoveries of the inner-workings of the DTC had only scratched the surface. Every book-entry stock or bond is literally owned by the DTC. just like before.S. This is not speculation.. and their new system works. from a foreign country. West Africa. excerpts of which were first published in November 1995 by the former North Bridge News. This was confirmed to us by a gold and diamond mining Chief Executive from Rex Mining in Guinea. so to speak. In 3 1/2 years. The day has come when you must decide to accept or reject the beast and the New World Disorder.000 into the U.. Will the President call for the confiscation of all gold bullion and bullion coins as Roosevelt did? Who will end up with it? The Federal Reserve System owners.. Since June 1998. who supplies raw gold to a major Swiss Banking company smelter and processor The spot gold market has been manipulated to keep the price low so that the Federal Reserve System owners can purchase all that is available through their various trusts and corporations. the DTC itself has stated in a press release that their asset value is nearly $19 trillion. When supply is low. People will be at the mercy of the federal government for daily food and for jobs. Common sense dictates that they should be more concerned about people leaving with more than $10.. most bond and many stock issuers have converted from the issuance of certificates to book-entry systems administered and controlled by the DTC. their assets increased nearly $ 10 Trillion.S.. by Anthony Wayne In Part I of this series. precious metal prices increase. They control the circulation amounts of paper money in the U. As of March 1999. What will stocks and bonds purchased with old dollars be worth then? Pennies to the dollar. Since 1985. On July 1998. it is being held for you under a "street name" by the DTC 85 . Combine that with the new scanner to stop large amounts from entering into the U.Miami and Los Angeles airports. The latest trend over the past ten years is for stock and bond brokers to offer "book-entry ownership" only. That's a lot of stocks and bonds supposedly held in trust.S.1 Trillion Company. international gold supplies have been so low that some private Swiss Banks have been paying a premium above the market wholesale value for gold bullion. until you begin to realize that there must be some other hidden agenda: They are apparently going to stop money from entering the U. We'd like to add more fuel to this blazing fire by further exposing the DTC and those behind it. Just ask Jim McNeff of the DTC. there isn't one stock or bond issued that is not controlled by the DTC.. As of April 19. and the scenario amounts to a planned shortage of paper FRS notes. It's already been tested. Banks issue ATM debit cards and tell you they must charge more for your account if you use a real live human teller instead of the machine. Checks are soon to be totally phased out. once again. the banning of the older FRB notes. and the soon to be astronomical price of gold which most Americans will be forbidden to have or hoard.. when supply is high the price decreases. for a reason. The odd part about this is that these machines seem to all be located in the customs areas where you enter the U. 1999. Perhaps the private FED will peg the new dollar to gold prices.000 if they're really trying to thwart the drug dealers. World gold availability on the open market is now at a record low and mining production of gold is also at a record low output. Part II of IIYou don't own your Stocks. Practically. If you purchase any stock or bond through a broker. the National Securities Clearing Corporation (NSCC) and the Participants Trust Company (PTC) are now merged into the DTC..The Depository Trust Company does. Who ends up being the only winner? The Federal Reserve System stockholders. they want to know if someone is carrying more than $10. as many experts have already speculated. The facts we've presented in this report all point to this.S. we exposed The Depository Trust Company (DTC) as the Unknown $ 9. The switch is being turned on.
LargeCo is aware that the beneficial owner of about half the stock registered in Cede's name is the Small family.P. It's important to note that you have purchased that particular stock or bond without becoming a registered holder of the actual stock or bond certificate. Rather than in your name. you are considered the heir presumptive or heir at law to the stock or bond you paid for. Instead. however.A Dictionary of Law. This is the safest way to own a paper asset. which they hold on behalf of their customers. you only receive the benefit of ownership (interest and dividends) without holding title to your property. which is still actively involved in management. owner and purchaser. Most of the remainder of LargeCo's stock (26% of the total) is held by the Large family.A Beneficial Owner is nothing more than a beneficiary.. you possess it. The fact is. 1893. along with dividend and interest payments paid. You literally possess the fully registered certificate and only you can transfer or sell it. BENEFICIAL OWNER.A Registered Holder literally possesses. Your name appears nowhere on the book entry or certificate as the actual owner. "One who is entitled to the benefit of a contract". Take the time to absorb and understand the following definitions: REGISTERED HOLDER. the DTC. you hold it. If you're lucky. holds and owns your book-entry stock or bond. it's registered (as the legal Registered Owner or agent) in their "street name". If you don't believe this is true. The DTC owns that bond or stock. This is a difficult pill to swallow for those who have placed their assets in stocks and bonds over the past decade. The DTC is the legal property-holder. This is broker language for "your stocks and bonds are held by the DTC in their street name as the creditor". (In the past. and you keep it. as the Beneficial Owner. and holds. According to the DTC. Instead. Morgan's internet site: 86 . By all Rights and definition of law. Your broker sends you a fancy accounting every month of your purported holdings. possesses as creditor. who live next door to the Larges in downtown Rome. The company that issued the certificate has registered the owner's (holder's) name on their official books.: The common stock of LargeCo. Inc. 1893. you only have the right to "receive proceeds or other advantages as the beneficiary". not you. then you'll know the truth. The DTC is the Registered Owner . mutual funds and other active traders. Cede & Company.A Dictionary of Law. his stock or bond with his name appearing on the face of the certificate. the broker will tell you "why of course you're the Beneficial Owner". Nominees. You are at the mercy of the registered owner. You are not the owner. "One who has deposited with a third person an article of property for the benefit of a creditor". Cede is a depository company which holds the shares as nominee on behalf of brokerage firms. you are the consignee. we found the following examination question about Cede & Co.holder . is publicly traded on the New York Stock Exchange. you are the owner. The DTC controls. mutual funds. view the fund as the owner of the shares it holds and vote the shares themselves. under the US Security and Exchange Commission (SEC) rules. You have the complete control over it. From J. view the customer as the beneficial owner of the shares and consider the customer to be the one with the right to vote the shares. The owner of a book-entry stock or bond is the entity or name that it is registered under. it may have been registered in your broker's street name. You have it. share-holder. then call your broker right now and ask them who's name is listed as the Registered Holder of your book-entry stocks and bonds.unless you have specifically requested to hold the certificate yourself. such as Cede and brokerage firms holding for customers. but this is no longer allowed). He may emphasize to you that the stocks and bonds are being held in "safe keeping" for your own protection. At the University of Utah College of Law.of your stock or bond. you have become a beneficial owner.. not the registered holder. If you have a book entry stock or bond. stock-holder. you have been designated by the legal registered owner. All book-entry stocks and bonds you purchase make you the beneficial owner. and that the remainder of the Cede stock is beneficially owned by several well known mutual funds. The difference between the two is like night and day. This means that your lawful Rights in that stock or bond are confined to that of a successor or heir. The brokerage firms in turn are also nominees with respect to some of the shares. you won't be issued a certificate. Over 2/3rds of the shares are registered on LargeCo's books in the name of Cede & Co. In legal terms. the DTC. owns.
Our suggestion to you is this: If you don't literally have every stock and bond registered certificate in your possession.S. to assign. then promptly call your broker and tell him you want all your securities transferred and re-registered into your name as the Registered Holder and Owner. 3rd Edition of 1992 If Americans had any idea that they have relinquished the lawful ownership of their stocks and bonds to someone or something else. do something about it and get your assets back into your name.. Lists of beneficial shareholders who do not object to disclosing their holdings are available from banks and broker-dealers. The point is. who hold an ADR in physical form. the word Cede is defined as "To yield up. and settlement organization for securities traded in the United States." -American Heritage Dictionary of the English Language.with the Securities and Exchange Commission (SEC) disclosing the name and value of the positions in their portfolios. to withdraw. now that you know the truth. there would be a revolution. Have you made the connection yet? Your book-entry stocks and bonds and all stock and bond certificates purchased through your broker and held by them under your brokerage account are owned by CEDE & COMPANY (the DTC) as the registered owner.. especially by treaty. How ironic and sarcastic can they be? "CEDE. and 13-D . Sixth Edition. Beneficial shareholders. to grant. third-party broker-dealers or custodian banks hold their securities on their behalf.. Registered shareholders are listed directly with the issuer or its U. that's why we are exposing this paper asset scam to you. These shares are said to be held in street name because they are kept with the DTC in the name of the broker-dealer or the custodian bank . do not have physical possession of their certificates. The transfer agent handles the record-keeping associated with changes in share ownership. we strongly suggest. You have surrendered. 1990. Generally used to designate the transfer of territory from one government to another". generally in lots of 100 shares or fewer. CEDE & Co. the primary safekeeping. whose ADRs are held by third-parties and are listed under a "nominee" or "street" name. However. transfer agent. called NOBO for Non-Objecting Beneficial Owner.not the underlying shareholder. are required to make periodic filings . In a sense. which can include individual as well as institutional investors. this may not provide the level of shareholder identification required for a successful investor relations effort. to surrender. distribution of dividend payments. registered. 103 Fed. United States. and beneficial. Large holders. 13-G. for your own security. This is where the real irony comes.C. clearing. DTC uses electronic book-entry to facilitate settlement and custody rather than the physical delivery of certificates.. Their name says it all. See Synonyms at 'relinquish'.To surrender possession of. If he says he can't do that because your stock or bond is a book-entry transaction only. it also facilitates annual meetings. assigned and granted ownership to someone else other than yourself. but it's spelled C-E-D-E and pronounced "Seed". issuers use publicly available filings. which represent the aggregate position of the Depository Trust Company (DTC). The registered list also includes nominee names such as Cede & Co.Y. and designated by the DTC as the registered owner of over $19 Trillion (USD) of our stocks and bonds. and investor inquiries. An issuer's depositary bank can provide the identities of registered shareholders on a regular basis. To help identify institutional investors. it lists the following as supportive case law. typically provide the names of individual investors. In the Black's 1951 Fourth Edition. According to Black's Law Dictionary. including investment managers. Registered shareholders are typically individual investors who have physical possession of their share certificates. Which brings us to the street name used.such as 13-F. Goetze v.Registered and beneficial shareholders There are two types of shareholders: registered.N. Everyone in the brokerage business keeps pronouncing this name as "See Dee" and Company. C. who do not usually disclose their holdings. 72. These lists. that you sell your book-entry assets 87 .
immediately. Don't let the broker tell you that it's "safer" for you if they keep your certificates. Remember, you know the truth. Even if all your stock and bond certificates were burned in a fire, the process to have them replaced is simple. If someone were to steal your certificates, you simply report them stolen to the company that issued them and they're automatically cancelled, just like a stolen credit card. Replacement certificates are then issued to replace the lost or stolen originals. Most people don't realize that when they open a brokerage account, they have entered into an contractural agreement allowing the broker to assign the stocks and bonds to an undisclosed creditor, the DTC. (We suggest you read the small print on your brokerage agreement). This gives the broker your express written permission to place all your securities into the ownership of the DTC. Your broker is an agent for the DTC through mandatory Securities and Exchange Commission regulations and mandates by the Federal Reserve System private bank. Your broker represents them, not you. Your brokerage account is nothing more than a ledger of accounting. It reflects no assets held in your name. The assets are registered in a "street name" that is not you or your name. Sure.... you receive the interest and dividends, but you do so as a beneficiary to the real owner. Your brokerage account in no way, shape, or manner reflects who literally owns your securities. What you own is a brokerage account and nothing more. A greater consideration is just exactly who does the DTC hold these securities for? As the owner, who has the DTC pledged these securities to? Our research points to the Federal Reserve System, an international private banking cartel with major offices found in Moscow, London, Tokyo, and Peking. By treaty with the United Nations and in compliance with the Bretton Woods Agreement, the DTC under regulation of the Federal Reserve System has pledged all those stocks and bonds to the International Monetary Fund (IMF). These are the same paper securities found in your IRA and pension fund accounts, as well as in your brokerage account. Remember, you don't own them.... you're just a beneficiary. The truth is, the securities you purchased and paid for with your hard earned money is collateral for the United Nations which is backed by the Federal Reserve System and it's associated agencies, such as the International Monetary Fund. Is it any wonder that the UN can operate year after year with increasing budgets, but without sufficient funds? The UN has nearly $19 Trillion of backing and reserves, thanks to millions of duped Americans. We are financing the New World Dis-Order with our stocks and bonds. [< Back] [Ming the Mechanic] [Add a comment]
13 comments 31 Oct 2003 @ 14:33 by waalstraat : The way I see it DTC is merely stocking up for our falling............. 31 Oct 2003 @ 17:44 by koravya : Thanks for this Info I appreciate it, and so the Economics students I share it with. Clearly, we all need to know what kind of scenario we may be looking forward to. 6 Nov 2003 @ 09:14 by Stefanti @220.127.116.11 : Weak The more I learn about the "free" global economy over the years, the more unbelievable it looks and the more weaker I feel. What to do with the information now? Sell the few shares I hold? This sort of information makes long term planning increasingly difficult. Stefan Thiesen 6 Nov 2003 @ 14:17 by ming : Investing Well, if the little secret mentioned above actually resulted in all stocks being confiscated, the world economy would
crash. So, I don't really think that's what anybody has in mind. More likely it is being used as a collateral. So, I wouldn't really change my investment habits based on this. Diversification is always good, of course, so don't just have stocks. 10 Nov 2003 @ 03:13 by Stefanti @18.104.22.168 : Investing Well Ming - what I mean also is that by simply buying stocks, we all seem to hand over incredible power to an organization of tremendous size and with totally dubious goals and no democratic legitimation whatsoever. 10 Nov 2003 @ 05:29 by ming : Handing over power Yeah, but it is worse than that. By just using national currencies for anything whatsoever we all hand over incredible power to essentially the same unelected bunch of people. So, if we are to create an alternative, it would have to cover most aspects of what we need, or you'll just be feeding another arm of the same monster. We'd need an economic system that isn't tied in at all with dollars and the stock market and banks, but that would fill the same needs that are met for us from those. I.e. an easy way of gathering and transporting and storing and exchanging tokens of value. And that is not as unlikely a battle as it might seem. If somebody came up with some expanded PayPal type of scheme that really worked better than the alternatives, and which we could trust, and which was anchored into different bedrock, lots of people wouldn't look back at all. 22 Dec 2003 @ 14:11 by tony @22.214.171.124 : dtc/cede Bank deposits appear to be similar to stock "deposits" with cede. Check your state laws. For instance, in MA, funds on general deposit in a bank are the property of the bank. The bank account is the property of the depositor, and the relationship between the depositor and the bank is that of creditor to debtor. If you have your property in the hands of a third party, the third party might unlawfully (without a court order) deprive you of your asset. Of course you can then sue them, if you can still afford to do so! 26 Jun 2004 @ 15:02 by hscott @126.96.36.199 : Trying to verify I checked out the DTC annual report and cannot find the numbers you suggest. Their Asset column for 2002 shows $17.9 Billion NOT $23 Trillion as you state. And the Liability column shows approximately the same value, which would make sense if they are holding securities in trust. Where exactly did you get the $23 Trillion dollar number? 26 Jun 2004 @ 16:05 by ming : Verification Glad you're checking it out. Well, part of the trick is that DTC (which handles stock transfers) is a separate company from CEDE (which is the legal owner), but CEDE is a wholly owned subsidiary. The way I understand it. But let me see again where I found the number ... Yeah, the document called DTC Consolidated Financial Statements shows 17.9 billion in assets. I think it was the annual report. Which has changed since last year and now shows the 2003 report. ... So, it says its subsidiaries settled transactions worth $923 trillion, and it says that values of securities on deposit is 24.6 trillion, which sounds like that 23 trillion number for 2003 rather than 2002. Hm, I do seem to remember them saying it more directly, and using the word "assets". But it was in a somewhat promotional piece (like the annual report), where they were bragging about it, rather than in their actual financial statement. Anyway, a key to the argument is what the relation is between DTC and CEDE. If DTC owns CEDE and CEDE legally owns those now 24.6 trillion - that's what's remarkable. Even if everybody involved will say that "oh, it is just a formality, and of course it really is the stock holders' stocks". Oh, even if they didn't own them, it should be major news that they're even holding that amount of stocks for anybody. But the truly earth-shattering part would be the CEDE part. Unfortunately, the relationship between DTC and CEDE, or even the factual existence of CEDE, is based on heresay and rumors. I.e. I haven't seen any documentation of it. And obviously DTC don't even mention CEDE as far as I can see. Even if they do own CEDE, and CEDE does own all the stocks, I don't find it surprising that they can get away with ignoring it in their actual financial statement. If the auditors even knew that, they would probably be quite content with the explanation that, oh, it is just stuff we're temporarily holding, and it is of course all the customer's
money. All seems logical and reasonable. Except for that it isn't, if the legal reality, when it comes down to it, is that they own it and the customers don't. 28 Jun 2004 @ 09:38 by hscott @188.8.131.52 : re: verification I understand your concern but from a pure accounting perspective the $23 trillion dollars in assets would be offset by exactly the amount in liabilities such that in terms of book value its a wash. Neither company is "worth" $23 trillion. This facility is absolutely necessary in order to have a liquid marketplace and that liquidity is a big portion of the grease that keeps the machine of our economy moving. The best thing that could be done to stabalize the markets and defend us from bubbles that ultimately burst would be to eliminate the taxation of dividends. If all companies paid dividends, that would be a throttle switch which prevents irrational pricing. PE ratios would be held in check by Dividend Yeilds because stockholders would have two sources of value, the equity value of the stock AND the stream of cash flows from dividends. The lack of dividends by most companies is what creates upward price pressure beyond a rational valuation of a company because that's the only way a person can make a return in the markets. Every trade has a seller who think the stock is capped out and a buyer who thinks it has upside potential. 28 Jun 2004 @ 14:07 by ming : Economy It is probably very useful to have mechanisms like that in the economy. And, I'm sure, normal proper accounting wouldn't count the $23 trillion as an asset, even if it is in CEDE's name some or all of the time. For most people it matters not very much if CEDE owns their stocks, because they let you trade them and get the money. A bit like how most everything else works in the money system. You put your money in the bank without much hesitation, because you expect that you can use it when you feel like it, and most of the time you can. You trust the paper money others give you, even though it is only pieces of paper, because you expect them to convert to stuff you want, any time. But it can also get to look a bit like musical chairs. It is no problem at all as long as the music keeps playing. We hope it doesn't stop, and maybe it won't. But if it does, one might suddenly become painfully aware of a lot of small print one didn't pay attention to. Like that one's stocks are owned by somebody else. And I understand that it works in a very similar way the ownership of real estate and of motor vehicles. I'll have to write about that some other time. But, essentially, unless you have a land patent on your land, it is really owned by a government agency. Which gracefully lets you live there and use it and act like you're buying and selling it. Likewise with a car. There's a certain piece of paper that most people don't know about that the factory sends to the government, unless you insist that they don't and give it to you instead. Which legally (again, just as a formality, to serve you better) gives the government the ownership, so they can then issue you a pink slip which gives you the right to use it, including the ability to transfer that right to somebody else (=selling it). 30 Nov 2004 @ 18:03 by Kent @184.108.40.206 : Necessity? Any accountability to me? hscott said: "This facility is absolutely necessary in order to have a liquid marketplace and that liquidity is a big portion of the grease that keeps the machine of our economy moving." Let's assume your premise is correct; does the need also justify ignoring individual investors (me)? While I am not "old", I have been around long enough to know when something is not on the up-and-up. Why avoid me? This clearinghouse has no advocates for the individual investor. Its secondary reason for existence has become that of feeding the financial community whose livelyhood depends upon betting on the future values of stock. Translation: it benefits those who expect something for nothing. See my link above for my frustrating trial with this "necessary facility". 21 Dec 2004 @ 18:42 by di @220.127.116.11 : other trillion companies? What information! Thank you for all of the details.
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If the Bank gave value where did they get it from ? Debtor collector must have entitlement rights in order to collect a debt.) Enforcement. other than a security interest or other lien. remedies are written. became member of IMF [International Monetary Fund]. where the Birth Certificate is registered is an agency of District of Columbia or United States. Under Buck Act all States became an arm of the United States Government.php/__show_article/_a000010-000923. The term does not include investment property or accounts evidenced by an instrument. Title 22 section 286. Law is remedy. U. There has to be a sale or contract under Article 2 before there is a secured interest. just give you the note so I could get a loan of Capital and Interest ? Debtor is defined in Article 9-102 (28) “(A) as a person having an interest [ownership]. 1. Must be a Creditor and Debtor.) Possession 3. Control. Article 2 Sales. Bank commits deceptive trade practices by pretending to lend you there Capital and Interest or money. Article 9-102 (29) “Deposit account” means a demand. Authority. Consent comes from Accord. title. If bank claims ownership. Debtor has Entitlement Rights. Article 8 Investment or Entitlement Securities.” Organic Act of 1871 created District of Columbia and Bureau of Vital Statistics.tv opentopia UCC is not law. Filing Makes security agreement public filing. Signed shows intent.) Priority [who is first ?] Attachment is paramount. Article 3 Negotiable Instruments.htm Main Page: ming. it had to be sold to them by debtor. Entitlement Rights under Article 8 are Four major issues to understand under code as ascertained by Professor Grant Gilmore who wrote the book. Understand comes from the old French word which means to stand under. 1. Entitlement is only valid if value has been given. The Debtor does. When Did bank tell you that you were selling them note ? What did they give to you for note ? Did I. Article 4 is Bank Collections. Agreements are implied. passbook.) Entitlement 3. savings. whether or not the person is an obligor.tv/flemming2.) Attachment 2. where did they get ownership ?. 1-201 (370). Claims court is where common law is. Perfection equals filing.) Control [Attachment] 4. or similar account maintained with a bank. Possession is subject to provisions of Article 4-210. Attachment is the most aspect of UCC. the law of admiralty and Article 9 and they are 1. In order to have attachment rights they must be seller.) Control 3. time. Debtor had to have right. Article 1 is General Provisions.S. and interest in order to pass it to secured party or creditor.) Perfection [Attachment] 2.For verification.) Perfection and 4. Three elements of law Rules and Regulations.) Control 93 . in the collateral.) Attachment 2. Who has first control and attachment ?. please type the word you see on the left: Other stories in Information 2005-01-27 23:06: Central banks lose faith in the dollar 2004-12-08 17:10: Art Pad 2004-11-20 17:05: Intellectual Property Protection Act 2004-11-20 15:45: Toulouse sites 2004-10-07 20:25: Every movie ever made 2004-10-07 15:36: Grassroots TV Networking 2004-10-02 17:19: Happiness and dung huts 2004-08-31 23:59: Friendster vs Blogging 2004-08-19 01:51: Reusable Proofs of Work 2004-08-19 01:20: History of Online Communities [< Back] [Ming the Mechanic] þÿ [PermaLink]? [TrackBack]? Link to this article as: http://ming. Article 5 Letters of Credit.
this Article governs Article 3.C. Issue of Instrument. EXCHANGE OR PAYMENT. AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. Article 4A 104 (c) defines payment order “Originator” means the sender of the first payment order in a funds transfer. but Article 8 [Investment Securities] governs this Article. HAS AN INTEREST HEREIN. If there is a conflict. NEW YORK.3 states “UNLESS AND UNTIL IT [PROMISSORY NOTE] IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM. they are under a pooling and service agreement through a parent Trust Company for transferred Certificated Securities [also known as promissory notes] from you as the Originator under Article 4A-104 of U. 94 . being ” the first delivery of an instrument by the maker or drawer.C.” Under 4-102 Applicability (a) “To the extent that items [commercial paper] within this Article are also within Articles 3 and 8. (a) “Issue” means the first delivery of an instrument by the maker or drawer. [means the sender of the first payment order in a funds transfer] or Issue under 3-105 (a) of the U. Article 3 is governed by Article 4. 3. THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.” All banks file a Registration Statement Form S-3 under the Securities Act of 1933 with the Commodity & Securities Exchange. which gives attachment rights.C. THESE SECURITIES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF BANK ONE CORPORATION AND ARE NOT INSURED BY THE FEDERAL DEPOSITORY INSURANCE CORPORATION. for the purpose of giving rights on the instrument to any person” and 3-105 (c) “Issuer” issued and unissued instruments and means a maker or drawer of an instrument. CEDE & CO. for the purpose of giving rights on the instrument to any person. Promissory Note is order to pay. NEW YORK] TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER.C. they are subject to those Articles. Promissory Note is order for payment. (b) How are you entitled to stand here as the Plaintiff ? How can you have a lien on something that was never sold ? Loan Originator Will the real bank please stand up ? All Banks are nothing but a servicer or laundering machine and not Lenders.105. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY [55 WATER STREET. this form under Exhibit 4. You have to use cut off rule. ANY TRANSFER. Priority rule is purchaser or bill of sale. THE BANK INSURANCE FUND OR ANY GOVERNMENTAL AGENCY. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO. Security Intermediary is Bank. there is no sale agreement. whether to a holder or nonholder. whether to a holder or nonholder.4..) Priority They have to prove there case or claim. PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF..
” This is a reiteration of section 4A104 (c). (c) “Issuer” applies to issued and unissued instruments and means a maker or drawer of an instrument. Attention is further directed to the fact that a trust or other form of organization which issues periodic payment plan certificates and the assets of which are securities issued by an investment company is itself an investment company. or any organized groups of persons. or distributor of their securities. This is true even though such entities have been created under and pursuant to the same indenture of trust or contract of custodianship.Under an indenture agreement the bank is to make interest payments at maturity on the principal to the person in whose name the note or one or more predecessor Securities is registered at the close of business on the Regular Record Date for such interest. The Investment Company Act of 1940 section 8 (a) requires all investment companies organized or created under the laws of the United States to register with the Securities Exchange Commission by filing a Notification of Registration Form N-8A. For purposes of the Act. beginning with the originator’s payment order. funds. manager depositor. investment adviser. such as trusts. Funds Transfer-Definitions In this Article: (a) “Funds transfer” means the series of transactions. 3-105 (a) “Issue” means the first delivery of an instrument by the marker or drawer. or have the same corporate trustee. Any such interest not punctually paid or duly provided for shall forthwith cease to be payable to the holder on such Regular Record Date and may either be paid to the person in whose name this note [or one or more Predecessor Securities] is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee. made for the purpose of making payment to the beneficiary of the order. The term includes any payment order issued by the originator’s bank or an intermediary bank intended to carry out the originator’s payment 95 . In such cases it is the trust. notice whereof shall be given to the Holder of this Note not less than 10 days prior to such Special Record Date. whether to a holder or nonholder. for the purpose of giving rights on the instrument to any person. 4A104. are regarded as distinct entities. Investment Companies must also file a FORM S-3 REGISTRATION STATEMENT under section 12 of the Commodities Securities Exchange Act of 1934 as amended. unincorporated investment organizations. and has such must file a notification of registration independent of that of the investment company the securities of which constitute its assets. or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities. The word lender is defined in Mortgage Banking terms from the Mortgage Bankers Association as a “person or entity that originates mortgage loans. the fund or other unincorporated entity must file an individual notification of registration.
A funds transfer is completed by acceptance by the beneficiary’s bank of a payment order for the benefit of the beneficiary of the originator’s payment order. except that with respect to equipment-trust certificates or like securities. the term “issuer” means the person by whom the equipment or property is to be used. voting-trust certificates. 96 . except that in the case of an unincorporated association which provides by its articles for limited liability of any or all of its members. or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functioning) or of the fixed. Issuer is defined in the Securities Exchange Act of 1933 section 2 (4) as every person who issues or proposes to issue any security. except with respect to certificates of deposit. the term “issuer” the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which such securities are issued. or unit type. restricted management.order. and except that with respect to fractional undivided interests in oil. or in the case of a trust. or such right or of any interest in such right (whether whole or fractional) who creates fractional interests therein for the purpose of public offering. (d) “Originator bank” means (i) the receiving bank to which the payment order of the originator is issued if the originator is not a bank. or (ii) the originator if the originator is a bank. committee or other legal entity. (b) “Intermediary bank” means a receiving bank other than the originator’s bank or the beneficiary’s bank. (c) “Originator” means the sender of the first payment order in a funds transfer. or collateral-trust certificates. gas.