82.04.650 - Exemptions -- Investment conduits and securitization entities.

Exemptions — Investment conduits and securitization entities.

(1) This chapter does not apply to amounts received by investment conduits or securitization entities from cash and securities.

     (2) For purposes of this section, the following definitions apply:

     (a) "Investment conduit" means an entity formed by a financial institution as defined in RCW 82.04.080 for the express purpose of holding or owning cash or securities if the entity formed:

     (i) Has no employees;

     (ii) Has no direct profit-making motive;

     (iii) Owns no tangible assets, other than cash or securities;

     (iv) Holds or owns cash or securities solely as a conduit, allocating its income to holders of its ownership interests; and

     (v) Has, within twelve months of its organization or initial capitalization date, issued ownership interests to other than affiliated persons, equal to or greater than twenty-five percent of its total issued ownership interests.

     (b) "Securities" has the same meaning as in section 2 of the securities act of 1933 and includes eligible assets as defined by Rule 3a-7 of the investment company act, as the law and rule exist on June 1, 2010, or such subsequent date as may be provided by the department by rule, consistent with the purposes of this section.

     (c) "Securitization entity" means an entity created by a bank holding company if the entity created:

     (i) Has no employees;

     (ii) Has no direct profit-making motive;

     (iii) Owns no tangible assets, other than cash, fixed or revolving discrete pools of credit or charge card receivables originated by a financial institution, or securities;

     (iv) Acts solely as a conduit, allocating its income to holders of its ownership interests; and

     (v) Has as its sole business activities the:

     (A) Acquisition of such discrete pools of credit or charge card receivables; and

     (B) Issuance or causing the issuance of securities primarily to persons not affiliated with the entity.

     (d) "Bank holding company" has the same meaning as provided in the bank holding company act of 1956, as existing on June 1, 2010, or such subsequent date as may be provided by the department by rule, consistent with the purposes of this section.

     (e) "No direct profit-making motive" means that all of an entity's income, less a reasonable servicing fee, is paid to holders of its ownership interests.

     (f) "Ownership interest" means interests categorized as debt or equity for purposes of federal tax or generally accepted accounting principles.

     (g) "Affiliated" has the same meaning as in RCW 82.04.645.

[2010 1st sp.s. c 23 § 111.]

Notes: Contingency -- Application -- 2010 1st sp.s. c 23 §§ 102-112: See notes following RCW 82.04.067.

Effective date -- 2010 1st sp.s. c 23: See note following RCW 82.04.4292.

Findings -- Intent -- 2010 1st sp.s. c 23: See notes following RCW 82.04.220.