---
kind: "section"
citation: "50 C.F.R. § 270.16"
title: "50"
number: "270.16"
heading: "Deposit of funds."
url: "https://uscodex.org/cfr/50/270.16"
---

# §270.16. Deposit of funds.


All funds collected or received by a Council under this section must be deposited in an appropriate account in the name of the Council specified in its charter. Funds eligible to be collected or received by a Council must be limited to those authorized under the Act.

- (a) Pending disbursement, under an approved marketing plan and budget, funds collected through assessments authorized by the Act must be deposited in any interest-bearing account or certificate of deposit of a bank that is a member of the Federal Reserve System, or in obligations fully guaranteed as to principal and interest by the United States Government.
- (b) The Council may, however, pending disbursement of these funds, invest in risk-free, short-term, interest-bearing instruments.
  - (1) **Risk-free.** All investments must be insured or fully collateralized with Federal Government securities. In the absence of collateral, accounts established at financial institutions should, in aggregate, total less than $100,000 to assure both principal and interest are federally insured in full.
  - (2) **Short-term.** Generally, all investments should be for a relatively short time period (one year or less) to assure that the principal is maintained and readily convertible to cash.
  - (3) **Collateralization.** Investments exceeding the $100,000 insurance coverage level must be fully collateralized by the financial institution.
    - (i) Collateral must be pledged at face value and must be pledged prior to sending funds to the institution.
    - (ii) **Government securities are acceptable collateral.** Declining balance, mortgage backed securities such as Government National Mortgage Association (GNMA) and Federal National Mortgage Association (FNMA) are not acceptable collateral.
    - (iii) If an account has been established, collateral may be held at the local Federal Reserve Bank. Otherwise, another depository must hold the collateral.

## Notes

### Authority

Authority: 16 U.S.C. 4001-4017

### Source

Source: 72 FR 18111, Apr. 11, 2007, unless otherwise noted.