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Code · BILL · 119th Congress · S. 1645 (Introduced in Senate) — To establish a domestic ownership investment facility, and for other purposes. · Sec. 21

Sec. 21. Issuance and guarantee of trust certificates

567 words·~3 min read·/bill/119/s/1645/is/section-21·

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The Secretary may issue trust certificates representing ownership of all or a fractional part of debentures issued by licensees and guaranteed by the Department under this Act, provided that the trust certificates shall be based on and backed by a trust or pool approved by the Secretary and composed solely of guaranteed debentures. The Secretary may, upon such terms and conditions as are deemed appropriate, to guarantee the timely payment of the principal of and interest on trust certificates issued by the Department or its agent for purposes of this section.
Such guarantee shall be limited to the extent of principal and interest on the guaranteed debentures which compose the trust or pool. In the event that a debenture in such trust or pool is prepaid, either voluntarily or involuntarily, or in the event of default of a debenture, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest such prepaid debenture and priority payments represent in the trust or pool.
Interest on prepaid or defaulted debentures shall accrue and be guaranteed by the Department only through the date of payment on the guarantee. During the term of the trust certificate, it may be called for redemption due to prepayment or default of all debentures. The full faith and credit of the United States is pledged to the payment of all amounts that may be required to be paid under any guarantee of such trust certificates issued by the Secretary pursuant to this section.
The Secretary may not collect a fee for any guarantee under this section, provided that nothing herein shall preclude any agent of the Department from collecting a fee approved by the Department for the functions described in subsection (f)(2). In the event the Secretary pays a claim under a guarantee issued under this section, it shall be subrogated fully to the rights satisfied by such payment. No State or local law, and no Federal law, shall preclude or limit the exercise by the Secretary of the ownership rights of the Secretary in the debentures residing in a trust or pool against which trust certificates are issued.
The Secretary shall provide for a central registration of all trust certificates sold pursuant to this section. The Secretary shall contract with an agent or agents to carry out, on behalf of the Department, the pooling and the central registration functions of this section including, notwithstanding any other provision of law, maintenance on behalf of and under the direction of the Department, such commercial bank accounts or investments in obligations of the United States as may be necessary to facilitate trusts or pools backed by guaranteed under this Act, and the issuance of trust certificates to facilitate such poolings.
Such agent or agents shall provide a fidelity bond or insurance in such amounts as the Secretary determines to be necessary to fully protect the interests of the Government. Before any sale of a trust certificate, the Secretary shall require the seller to disclose to a purchaser of a trust certificate issued pursuant to this section, information on the terms, conditions, and yield of such instrument. The Secretary is authorized to regulate brokers and dealers in trust certificates sold pursuant to this section.
Nothing in this subsection shall prohibit the use of a bookentry or other electronic form of registration for trust certificates.
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