By the Division of Banks
The Commonwealth of Massachusetts
OFFICE OF THE
COMMISSIONER OF BANKS
LIST OF LEGAL INVESTMENTS
As of July 1, 2012
David J. Cotney
LIST OF LEGAL INVESTMENTS
This Legal List of Investments is prepared as of July 1, 2012. Investors are advised to take note of changes to individual investments on this List that occur after this date.
The following is a list of stocks, bonds, notes, railroad equipment trust certificates and other interest-bearing obligations which, in the opinion of the Division of Banks, are now legal investments, under the provisions of Massachusetts General Laws chapter 167, section 15A.
"Legal" Investments, under section 15A, consist, as specified in that statute, of those issues which meet the requirements under any of the provisions of sections 42 to 48, inclusive, and paragraph 6 of section 49 of chapter 168 of the General Laws in effect on June 30, 1983.
The investments authorized under those sections of law, as well as those securities added under the authority of section 15B of chapter 167, now constitute the List of Legal Investments for the Commonwealth of Massachusetts.
Investments meeting the criteria set forth above but not yet on the List, including mutual funds investing solely in such legal investments, will be considered for addition to this List upon petition to the Commissioner of Banks, provided, however, that investments governed by said Section 15B must follow the process for inclusion on the List set out in that statute.
Approval of any security by the Commissioner of Banks for addition to the List should not in any way be construed as a recommendation by the Division for investment. Each investor has the responsibility of evaluating the merits of a particular investment for the individual institution as well as determining whether that investment meets the investor's financial objectives.
Prior to making investments in banks and other corporations which have loans to or produce armaments for use in specified countries, General Laws chapter 32 §23 should be reviewed.
For more information contact:
Andrea L. Cipolla, Chief Director
Commonwealth of Massachusetts Division of Banks
1000 Washington Street
Boston, Massachusetts 02118-6400
FEDERAL, STATE, AND INTERNATIONAL OBLIGATIONS
Statutory Requirements: (formerly General Laws chapter 168, section 42)
Any such corporations may invest in bonds, notes or other interest-bearing obligations of the following classes:
1. United States: Direct obligations of the United States, or in such obligations as are unconditionally guaranteed as to the payment of principal and interest by the United States.
2. Massachusetts: Legally issued, assumed or unconditionally guaranteed bonds, notes or other interest-bearing obligations of this commonwealth.
3. Other States: Legally issued, assumed or unconditionally guaranteed bonds, notes or other interest-bearing obligations of any state of the United States other than this commonwealth, which has not, within the twenty years prior to the making of such investment, defaulted for a period of more than one hundred and twenty days in the payment of any part of either principal or interest of any legally issued or assumed obligation; provided that the full faith and credit of such state is pledged for the payment of the principal and interest of such obligations.
4. Canada: Bonds, notes or other obligations issued, or guaranteed as to both principal and interest, by the Dominion of Canada; provided (a) that such bonds, notes or obligations shall be payable in United States funds either unconditionally or at the option of the holder thereof; and (b) that at the date of investment the said Dominion of Canada shall not have been in default in the payment of interest or principal of any of its obligations for a period in excess of thirty-one days at any time within the twenty years preceding such date of investment. Not more than five percent of the deposits of any such corporation may be invested in obligations authorized under this paragraph.
5. Other International Obligations: Bonds, notes or obligations issued, assumed or guaranteed by the International Bank for Reconstruction and Development (World Bank), the Inter-American Development Bank or the Asian Development Bank containing an unconditional promise to pay, or an unconditional guarantee of the payment of, the interest thereon regularly, and the principal thereof on or before a specified date, in lawful currency of the United States; provided that not more than three percent of the deposits of any such corporation shall be invested in such bonds, notes or obligations; and provided, further, that the commissioner may at any time on his own initiative, or shall, upon the written request of the directors of the Mutual Savings Central Fund, Inc.,1 suspend the authorization granted by this paragraph for such period or periods as he may determine.
6. Federal Agency Obligations:
- Obligations of, or instruments issued by, and fully guaranteed as to principal and interest by the Federal National Mortgage Association, established under the National Housing Act, as amended;
- Debentures, bonds or other obligations issued by any federal home loan bank or consolidated federal home loan bank debentures or bonds issued by the federal home loan bank board under the Federal Home Loan Bank Act, as amended;
- Debentures issued by the central bank for co-operatives or consolidated debentures issued by said central bank and the twelve regional banks for co-operatives under the Farm Credit Act of 1933, as amended;
- Collateral trust debentures or other similar obligations issued by any federal intermediate credit bank or consolidated debentures or other similar obligations issued by the twelve federal intermediate credit banks under the Federal Farm Loan Act, as amended;
- Farm loan bonds issued by any federal land bank under the Federal Farm Loan Act, as amended;
- Promissory notes representing domestic farm labor housing loans authorized by section five hundred and fourteen of the Federal Housing Act of nineteen hundred and forty-nine, as amended by the Federal Housing Act of nineteen hundred and sixty-one, when such notes are fully guaranteed as to principal and interest by the Farmers Home Administration of the United States Department of Agriculture;
- Bonds, notes or obligations issued, assumed or guaranteed by the Export-Import Bank of the United States;
- Obligations of any person, including any form of mortgage-backed security, as to which the payment of principal and interest according to the terms of such obligations is guaranteed by the Government National Mortgage Association under the provisions of the National Housing Act, as amended;
- Certificates issued by the Federal Home Loan Mortgage Corporation representing interests in mortgage loans made, acquired or participated in by said Federal Home Loan Mortgage Corporation;
- System-wide obligations issued under the provisions of the Farm Credit Act of 1971 (Public Law 92-181 Sec. 4.2) by the institutions included in the Federal Farm Credit System.
Statutory Requirements: (formerly General Laws chapter 168, section 43)
Any such corporation may invest in bonds, notes or other interest-bearing obligations of the following classes:
1. Massachusetts: Legally issued or assumed bonds, notes or other interest bearing obligations of a county, city, town or legally established district of this commonwealth.
2. Other States: Legally issued or assumed bonds, notes or other interest-bearing obligations of any city or town of any other state of the United States, which was incorporated as such at least ten years prior to the date of such investment; provided (a) that the population of such city or town at the date of such investment is not less than thirty thousand nor more than one hundred thousand, and the net indebtedness thereof does not exceed six per cent of the last preceding assessed valuation of the taxable real property therein, or (b) that the population of such city or town at the date of such investment is more than one hundred thousand, and the net indebtedness thereof does not exceed eight per cent of such assessed valuation. Said population shall be as established by the last national or state census or city or town census, taken in the same manner as the national or state census and certified by the clerk of said city or town. As used in this paragraph the words "net indebtedness" shall mean the indebtedness of a city or town, omitting debts created for supplying the inhabitants with water or electricity, or both, and debts created in anticipation of taxes to be paid within one year from date of issue, and deducting the amount of sinking funds available for the payment of the indebtedness included. The provisions of this paragraph shall not authorize investments in obligations of any city or town situated outside the commonwealth which has been in default for more than one hundred and twenty days in the payment of any part of principal or interest of such obligations within ten years immediately preceding the making of such investment.
3. Full Faith and Credit Requirement: The full faith and credit of the county, city, town or district shall be pledged for the full payment of principal and interest of all bonds, notes or other interest-bearing obligations legal for investment under any provision of this section.
Statutory Requirements: (formerly General Laws chapter 168, section 44)
Bonds, notes or other interest-bearing obligations of railroad corporations subject to the conditions, limitations and requirements of section 44.
RAILROAD EQUIPMENT TRUST CERTIFICATES
The outstanding Philadelphia Plan Equipment Trust Certificates of the following companies are legal.
Burlington Northern, Santa Fe
Norfolk Southern Railway Company
Union Pacific Railroad Company
TELEPHONE COMPANY OBLIGATIONS
Statutory Requirements: (formerly General Laws chapter 168, section 45)
Bonds, notes or other obligations of telephone companies subject to the conditions, limitations and statutory requirements of section 45.
All outstanding issues, which meet statutory requirements, of the following companies:
AT & T, Inc.2
Carolina Telephone & Telegraph Company
Indiana Bell Telephone Company
United Telephone Company of Pennsylvania
Verizon Florida, Inc. (formerly General Telephone Company of Florida)
Verizon New England, Inc. (formerly New England Telephone & Telegraph Company)
Verizon New Jersey, Inc. (formerly New Jersey Bell Telephone Company)
Verizon New York, Inc. (formerly New York Telephone Company)
Verizon, Northwest, Inc. (formerly General Telephone Company of the Northwest, Inc.)
Verizon Pennsylvania, Inc. (formerly Bell Atlantic Pennsylvania)
Verizon Virginia, Inc. (formerly Chesapeake & Potomac Telephone Company of Virginia)
Holders of obligations of companies affected by the mergers or acquisitions noted below should contact the appropriate service representative office of the company for further direction:
- The merger of Bell Atlantic and GTE was finalized on June 30, 2000 under the new name of Verizon Communications.
- SBC Communications completed the acquisition of Ameritech Corporation on October 8, 1999.
- SBC Communications completed the acquisition of AT & T Corporation on November 21, 2005. See footnote.
- AT & T completed the acquisition of Bell South Corporation on December 29, 2006.
- CenturyTel, Inc., and EMBARQ merged on July 1, 2009 to become CenturyLink, Inc.
- Frontier Communications Corporation acquired Verizon Communications, Inc. local exchange businesses in fourteen states effective July 1, 2010.
PUBLIC SERVICE COMPANY OBLIGATIONS
Statutory Requirements: (formerly General Laws chapter 168, section 46)
A. Massachusetts Public Service Companies
Bonds, notes or other interest-bearing obligations of a gas, electric light or water company incorporated or doing business in this commonwealth and subject to the control and supervision thereof; provided, that the net earnings of such company, after payment of all operating expenses, taxes and interest as reported to, and according to the requirements of, the proper authorities of the commonwealth, have been, in each of the three fiscal years preceding the making or renewing of such investment, equal to not less than four per cent on all its capital stock outstanding in each of said years; and provided, further, that the gross earnings of said company in the fiscal year preceding the making or renewing of such investment have been not less than one hundred thousand dollars. A list of the companies, the securities of which prima facie comply with the requirements of this subdivision A shall be furnished annually by the proper authorities of the commonwealth having supervision over such companies to the commissioner at such time after June sixteen in each year as he shall designate.
B. Other Public Service Companies
Bonds of a gas, electric light or water company, maturing not later than 40 years subsequent to the date of such investment, issued or assumed by any company incorporated under the laws of the United States or any state thereof subject to the conditions, limitations and requirements of the former Massachusetts General Laws chapter 168, § 46, subdivision B.
AEP Texas Central Company (formerly Central Power & Light Company)
AEP Texas North Company (formerly West Texas Utilities Company)
Allete (formerly Minnesota Power and Light)
Alliant Energy (formerly Interstate Power Company)
Atlantic City Electric Company
Carolina Power & Light Company (d/b/a Progress Energy Carolinas, Inc.)
Constellation Energy Group (formerly Baltimore Gas & Electric)
Delmarva Power & Light Company
Duke Energy Corporation
Empire District Electric Company
Florida Power & Light Company
Florida Power Corporation (d/b/a Progress Energy Florida, Inc.)
Gulf Power Company
Hawaiian Electric Company
Idaho Power Company
Kentucky Utilities Company
Louisville Gas and Electric Company
Madison Gas & Electric Company (formerly MGE Energy)
Mississippi Power Company
Narragansett Electric Company
New England Power Company
Northern States Power Company (Minnesota)
Northern States Power Company (Wisconsin)
OGE Energy (formerly Oklahoma Gas and Electric Company)
Potomac Electric Power Company
PPL Electric Utilities Corporation (formerly Pennsylvania Power & Light Company)
Public Service Company of Oklahoma
Public Service Electric & Gas Company
South Carolina Electric & Gas Company
Southern Indiana Gas & Electric Company
Southwestern Electric Power Company
Southwestern Public Service Company
Virginia Electric & Power Company
Wisconsin Electric Power Company
Wisconsin Power & Light Company
Wisconsin Public Service Corporation
Statutory Requirements: (formerly General Laws chapter 168, section 47)
Bank and Bank Holding Company common stock subject to the conditions, limitations and requirements of section 47.
BANK STOCKS IN MASSACHUSETTS
Cambridge Trust Company, Cambridge
Millbury National Bank, Millbury
BANK HOLDING COMPANIES - MASSACHUSETTS
State Street Corporation
BANKS AND HOLDING COMPANY COMMON STOCKS
LOCATED OUTSIDE OF MASSACHUSETTS
Fifth Third Bancorp, Ohio
Wells Fargo & Company, California4
M&T Bank Corporation, New York5
INSURANCE COMPANY STOCKS
Statutory Requirements: (formerly General Laws chapter 168, section 48)
Fire and Casualty Insurance Companies capital stock subject to the conditions, limitations and requirements of section 48.
BANK DEBENTURES AND NOTES
Statutory Requirements: (formerly General Laws chapter 168, section 49, paragraph 6)
Bank debentures, convertibles, notes or other evidences of indebtedness (e.g., Federal Funds) subject to the conditions, limitations and requirements of former Massachusetts General Laws chapter 168, section 49, paragraph 6.
Cambridge Trust Company
Bank of America6
State Street Bank and Trust Company
Legal under former section 50
(Now legal under provisions of chapter 167, section 15B)
Massachusetts Bay Transportation Authority: Various Issues8
Massachusetts Port Authority: Various Issues
Massachusetts Turnpike Authority: Various Issues9
Tennessee Valley Authority: Various Issues
Washington D.C. Metropolitan Area Transit Authority: 7.35 due July 1, 2012
COMMON AND PREFERRED STOCKS
Eligible under the provisions and limitations of former section 50
(Now legal pursuant to General Laws chapter 167, section 15B, paragraph 2)
Altria Group (formerly Philip Morris Companies)
American International Group, Inc.
Bank of America Corporation
Bristol Myers Squibb Company
Coca Cola Company
Eli Lilly & Company
Emerson Electric Company
General Electric Company
General Mills, Inc.
Johnson & Johnson
Merck & Co., Inc. (merged with Schering-Plough Corporation)
Procter & Gamble Company
Rockwell Automation (formerly Rockwell International Corporation)
Unilever N. V.
As provided under General Laws chapter 167, section 15A, such list shall include the name of any investment fund, approved by the commissioner, which invests only in such stocks, bonds, notes and other interest-bearing obligations which are legal investments as provided herein. The shares of any such investment fund so approved shall be legal investments pursuant to this section to the same extent as any such stocks, bonds, notes and other interest bearing obligations.
BLACKROCK PROVIDENT INSTITUTIONAL FUNDS:
Government Cash Management
Treasury & Agency Cash Management
Treasury Prime Cash Management
FEDERATED INVESTORS FUNDS:
Federated GNMA Trust
Federated Government Ultrashort Duration Fund
Federated Intermediate Government Fund, Inc.
(formerly Federated Limited Duration Government Fund, Inc.)
Federated U.S. Government Securities Fund: 2-5 yrs.
Fidelity Institutional Money Market Treasury Portfolio Fund
Fidelity U. S. Government Reserves
Fidelity U.S Treasury Money Market Fund
(Formerly Spartan U.S. Treasury Money Market Fund)
INSTITUTIONAL DAILY INCOME FUND:
Institutional U.S. Treasury Portfolio
ISI Total Return U.S. Treasury
RBC US Government Money Market Fund
(formerly Tamarack U.S. Government Money Market Fund)
TRUST FOR CREDIT UNIONS:
Ultra Short Duration Government Portfolio
(formerly Government Securities Portfolio)
UBS GLOBAL ASSET MANAGEMENT:
UBS Select Treasury Institutional Fund
(formerly UBS LIR Treasury Securities Fund)
1On August 26, 1999, the Mutual Savings Central Fund, Inc. was renamed the Depositors Insurance Fund, Inc.
2SBC Communications completed the acquisition of AT & T Corporation on November 21, 2005. Following the acquisition, SBC adopted AT&T, Inc. as its name.
3Independent Bancorp, parent of Rockland Trust Company, acquired the previously listed Slade's Ferry Bancorp effective March 1, 2008.
4Wells Fargo & Company acquired Wachovia Corporation effective December 31, 2008.
5M&T Bank Corporation acquired Wilmington Trust Company effective May 16, 2011.
6Bank of America Corporation's acquisition of FleetBoston Financial Corporation was effective as of April 1, 2004.
7Independent Bancorp, parent of Rockland Trust Company, acquired Slade's Ferry Bancorp effective March 1, 2008.
8Massachusetts transportation agencies, including the Massachusetts Bay Transportation Authority, were integrated into a new Massachusetts Department of Transportation, effective November 1, 2009.
9Massachusetts transportation agencies, including the Massachusetts Turnpike Authority, were integrated into a new Massachusetts Department of Transportation, effective November 1, 2009.