Section 51003 Of Division 20.5. Exchange Facilitators From California Financial Code >> Division 20.5.
51003
. (a) A person who engages in business as an exchange
facilitator shall at all times comply with one or more of the
following:
(1) Maintain a fidelity bond or bonds in an amount not less than
one million dollars ($1,000,000), executed by an insurer authorized
to do business in this state or an eligible surplus line insurer
pursuant to Section 1765.1 of the Insurance Code.
(2) Deposit an amount of cash or securities or irrevocable letters
of credit in an amount not less than one million dollars
($1,000,000) in an interest-bearing deposit account or a money market
account with the financial institution of the person's choice.
Interest on that amount shall accrue to the exchange facilitator.
(3) Deposit all exchange funds in a qualified escrow account or
qualified trust, as those terms are defined under Treasury Regulation
1.1031(k)-1(g)(3), with a financial institution and provide that any
withdrawals from that escrow account or trust require that person's
and the client's written authorization.
(b) A person who engages in business as an exchange facilitator
may maintain a bond or bonds or deposit an amount of cash or
securities or irrevocable letters of credit in excess of the minimum
required amounts.
(c) If the person engaging in business as an exchange facilitator
is listed as a named insured on one or more fidelity bonds that total
at least one million dollars ($1,000,000), the requirements of this
section shall be deemed satisfied.