A.Before a licensee is authorized to conduct business through an authorized delegate or allows a person to act as the licensee's authorized delegate, the licensee must:
1.Adopt, and update as necessary, written policies and procedures reasonably designed to ensure that the licensee's authorized delegates comply with applicable state and federal law.
2.Enter into a written contract that complies with subsection C of this section.
3.Conduct a reasonable risk-based background investigation sufficient for the licensee to determine whether the authorized delegate complies with applicable state and federal law.
B.An authorized delegate must comply with this article.
C.The written contract required by subsection A of this section must be signed by the licensee and the authorized delega
Free access — add to your briefcase to read the full text and ask questions with AI
A. Before a licensee is authorized to conduct business through an authorized delegate or allows a person to act as the licensee's authorized delegate, the licensee must:
1. Adopt, and update as necessary, written policies and procedures reasonably designed to ensure that the licensee's authorized delegates comply with applicable state and federal law.
2. Enter into a written contract that complies with subsection C of this section.
3. Conduct a reasonable risk-based background investigation sufficient for the licensee to determine whether the authorized delegate complies with applicable state and federal law.
B. An authorized delegate must comply with this article.
C. The written contract required by subsection A of this section must be signed by the licensee and the authorized delegate and must:
1. Appoint the person signing the contract as the licensee's authorized delegate with the authority to conduct money transmission on behalf of the licensee.
2. Describe the nature and scope of the relationship between the licensee and the authorized delegate and the respective rights and responsibilities of the parties.
3. Require the authorized delegate to agree to fully comply with all applicable state and federal laws relating to money transmission.
4. Require the authorized delegate to remit and handle money and monetary value in accordance with the terms of the contract between the licensee and the authorized delegate. For the purposes of this paragraph, "remit" means to make direct payments of money to a licensee or the licensee's representative or to deposit money in a bank in an account specified by the licensee.
5. Impose a trust on money and monetary value net of fees received for money transmission for the benefit of the licensee.
6. Require the authorized delegate to prepare and maintain records as required by this article or as reasonably requested by the director.
7. Acknowledge that the authorized delegate consents to examination or investigation by the director.
8. State that the licensee is subject to regulation by the director and that the director may suspend or revoke an authorized delegate designation.
9. Acknowledge receipt of the written policies and procedures required under subsection A, paragraph 1 of this section.
D. Within five business days after a licensee's license is suspended, revoked, surrendered or expired, the licensee must provide documentation to the director that the licensee has provided notice of the suspension, revocation, surrender or expiration to all applicable authorized delegates of the licensee whose names are in a record filed with the director. On suspension, revocation, surrender or expiration of a license, applicable authorized delegates shall immediately cease to provide money transmission as an authorized delegate of the licensee.
E. An authorized delegate of a licensee holds in trust for the benefit of the licensee all money net of fees received from money transmission. If any authorized delegate commingles any money received from money transmission with any other money or property owned or controlled by the authorized delegate, all commingled money and other property shall be considered held in trust in favor of the licensee in an amount equal to the amount of money net of fees received from money transmission.
F. An authorized delegate may not use a subdelegate to conduct money transmission on behalf of a licensee.