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HomeFinancial CodeDiv. 1.1Ch. 16Art. 3§ 1574 Securities Exchange And Withdrawal

§ 1574 Securities Exchange And Withdrawal

Financial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 1574 Securities Exchange And Withdrawal

This law lets a trust company swap or take back some of the securities it has put in the state’s treasury, as long as it gets the commissioner’s okay and still meets the required deposit amount.

Key Takeaways

  • •A trust company can exchange its deposited securities for other securities of equal market value, but only with the commissioner’s approval.
  • •If the company has more securities deposited than the law requires, it can ask to withdraw the excess.
  • •The commissioner must issue a written order, and the Treasurer must follow that order right away.
  • •While the trust company remains solvent, it keeps any interest or dividends earned on the securities it still has deposited.

Example

A trust company has $5 million worth of bonds stored with the state, but the law only requires it to keep $3 million. It wants to pull out the extra $2 million or trade those bonds for other bonds of the same value.

The company writes to the commissioner asking for the $2 million back (or for an exchange). If the commissioner agrees, he sends a written order to the Treasurer, who then gives the money or makes the swap. As long as the trust company stays financially healthy, it still gets any interest or dividends on the bonds it left in the treasury.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 1574 Securities Exchange And Withdrawal

Securities deposited pursuant to this article may be exchanged from time to time, with the approval of the commissioner, for other like securities of equal market value. Upon written request to the commissioner, any trust company shall be entitled to withdraw from the Treasurer, from time to time, any amount of its securities so deposited in excess of the amount it is required to maintain on deposit in order to conform with the requirements of this article. Upon receiving a written request for such withdrawal or exchange, and satisfactory proof of the facts warranting the same, the commissioner shall forthwith deliver to the Treasurer a written order directing the withdrawal or exchange of such securities so as to conform with the provisions of this section. The Treasurer shall comply with such written order. So long as the trust company so depositing such securities shall continue solvent, it shall have the right and shall be permitted by the Treasurer to receive the interest and dividends on any securities deposited by it. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

Last verified: January 11, 2026

Key Terms

securitiescommissionertrust companyTreasurerwritten requestequal market valuesolvent

Related Statutes

  • § 1571 Trust Company Deposit Requirements
  • § 1573 Trust Fund Deposit Requirements
  • § 1578 Trust Company Penalties
  • § 1570 Trust Company Security Deposits
  • § 1572 Trust Company Security Requirements

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Financial Code. Section 1574.
View Official Source