Government securities as financial assurance are subject to the following requirements:

1. (1) The government securities are backed by the full faith and credit of the United States government and must be purchased from a United States bank or broker;
2. (2) The government securities have an approximate minimum initial maturity of five years from date of the board's acceptance of the security;
3. (3) The government securities must be registered to a bank or broker approved as a custody agent by the board;
4. (4) The government securities must be pledged to the board, and held in a joint account with the approved custody agent;
5. (5) All interest from the government securities must be paid to the operator;
6. (6) The board shall accept the value of the government securities at one hundred percent, applied to the lower of the face value or the market value of the government securities on an annual basis;
7. (7) The only authorized signatory on the joint account is the board chairperson;
8. (8) The operator shall provide to the board a book entry receipt and an assignment of the government securities to the board;
9. (9) Fees associated with the purchase and maintenance of the government securities are the responsibility of the operator;
10. (10) The custody agent shall provide monthly statements of the account to the department; and
11. (11) If the market value of the government securities drops below the required ninety percent of face value, the operator must submit additional funds or post additional financial assurance up to the required financial assurance amount.

Source: 52 SDR 24, effective September 10, 2025 .

General Authority: SDCL 45-6B-81 .

Law Implemented: SDCL 45-6B-20 , 45-6B-20.1 , 45-6B-21 , 45-6B-23 , 45-6B-24 , 45-6B-55 , 45-6B-91 .