1. (a) A savings bank may not purchase for its own account any bond, note, or other evidence of indebtedness that is commonly designated as a security that is speculative in character or that has speculative characteristics. For the purposes of this subsection, a security is speculative or has speculative characteristics if at the time of purchase the security:

   1. (1) is rated below the first four (4) rating classes by a generally recognized security rating service;
   2. (2) is in default; or
   3. (3) is otherwise considered speculative by the director.

2. (b) A savings bank may purchase for its own account a security that is not rated by a generally recognized security rating service if:

   1. (1) the savings bank at the time of purchase obtains financial information that is adequate to document the investment quality of the security; and
   2. (2) the security is not otherwise considered speculative by the director.

As added by P.L.176-1996, SEC.20. Amended by P.L.89-2011, SEC.46.