{"data":{"id":"us-ky/krs-286.11-015","jurisdiction":"us-ky","citation":"KRS 286.11-015","heading":"Permissible investments -- Power of commissioner to define permissible","body":"investments -- All permissible investments deemed to be held in trust for\nbenefit of purchasers and holders.\n(1) Every licensee shall, at all times, maintain permissible inves tments that have a\nmarket value that is computed in accordance with generally accepted accounting\nprinciples. These investments shall not be less than the aggregate amount of all\noutstanding payment instruments.\n(2) Except to the extent otherwise limited i n subsection (5) of this section, the\nfollowing investments are permissible for a licensee:\n(a) Cash, time deposits, savings deposits, demand deposits, a certificate of\ndeposit, or senior debt obligation of an insured depository institution as\ndefined in 12 U.S.C. sec. 1813 or as defined under 12 U.S.C. sec. 1781;\n(b) Banker's acceptance or bill of exchange that is eligible for purchase upon\nendorsement by a member bank of the federal reserve system and is eligible\nfor purchase by a federal reserve bank;\n(c) An investment bearing a rating of one (1) of the three (3) highest grades as\ndefined by a nationally recognized organization that rates securities;\n(d) An investment security that is an obligation of the United States or a\ndepartment, agency, or instrumentality thereof; an investment in an obligation\nthat is guaranteed fully as to principal and interest by the United States; or an\ninvestment in an obligation of a state or a governmental subdivision, agency,\nor instrumentality thereof;\n(e) Receivables that  are payable to a licensee from its agents, in the ordinary\ncourse of business, pursuant to contracts which are not past due or doubtful of\ncollection if the licensee does not hold, at one (1) time, receivables under this\nparagraph from any one (1) person aggregating more than ten percent (10%)\nof the licensee's total permissible investments. A receivable is deemed past\ndue or doubtful of collection if not remitted to the licensee in five (5) business\ndays or less; and\n(f) A share or certificate issued by an open-end management investment company\nthat is registered with the United States Securities and Exchange Commission\npursuant to the Investment Companies Act of 1940, 15 U.S.C. secs. 80a -1 et\nseq., and whose portfolio is restricted by the management compa ny's\ninvestment policy to investments specified in paragraphs (a) to (d) of this\nsubsection.\n(3) The following investments are permissible under this section, but only to the extent\nspecified as follows:\n(a) An interest -bearing bill, note, bond, or debentu re of a person whose equity\nshares are traded on a national securities exchange or on a national over -the-\ncounter market, if the aggregate of investments under this paragraph do not\nexceed twenty percent (20%) of the total permissible investments of a licensee\nand the licensee does not, at one (1) time, hold investments under this\nparagraph in any one (1) person aggregating more than ten percent (10%) of\nthe licensee's total permissible investments;\n(b) A share of a person traded on a national securities ex change or a national\nover-the-counter market or a share or certificate issued by an open -end\nmanagement investment company that is registered with the United States\nSecurities and Exchange Commission pursuant to 15 U.S.C. secs. 80a -1 to\n80a-64, and whose p ortfolios are restricted by the management company's\ninvestment policy to shares of a person traded on a national securities\nexchange or a national over-the-counter market, if:\n1. The aggregate of investments under this paragraph does not exceed\ntwenty percent (20%) of the total permissible investments of a licensee;\nand\n2. The licensee does not, at one (1) time, hold investments under this\nparagraph in any one (1) person aggregating more than ten percent\n(10%) of the licensee's total permissible investments; and\n(c) A demand -borrowing agreement made to a corporation or a sub sidiary of a\ncorporation whose securities are traded on a national securities exchange, if:\n1. The aggregate amount of principal and interest outstanding under\ndemand-borrowing agreements under this paragraph does not exceed\ntwenty percent (20%) of the tot al permissible investments of a licensee;\nand\n2. The licensee does not, at one (1) time, hold principal and interest\noutstanding under demand -borrowing agreements under this paragraph\nwith any one (1) person aggregating more than ten percent (10%) of the\nlicensee's total permissible investments.\n(4) The aggregate of investments under subsection (3) of this section shall not exceed\nfifty percent (50%) of the total permissible investments of a licensee.\n(5) The commissioner may limit the extent to which a typ e of investment within a class\nof permissible investments may be considered a permissible investment, except for\nmoney, time deposits, savings deposits, demand deposits, and certificates of deposit\nissued by a federally insured financial institution. The c ommissioner may by rule or\norder allow other types of investments that the commissioner determines to be\nsubstantially equivalent to other permissible investments in regards to safety and\nsoundness.\n(6) Permissible investments, even if commingled with other assets of the licensee, shall\nbe deemed by operation of law to be held in trust for the benefit of the purchasers\nand holders of the licensee's outstanding payment instruments in the event of\ninsolvency or bankruptcy of the licensee.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40255","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:15Z","sha256":"59609b413856642fb38359fb36e1627a1a9e126de12a8f2577c4982f340b95ea","source_id":"us-ky","stale":false,"prev":"us-ky/krs-286.11-013","next":"us-ky/krs-286.11-017"},"notice":"GroundRules: Original legal text. Not legal advice."}