§ 509. Restrictions on powers of investment companies. An investment
company shall not:

1. Exercise within this state the powers conferred by subdivision two
of section five hundred eight of this chapter, unless it shall have a
paid-up capital stock of at least two million dollars.

2. Deposit any of its funds with any other moneyed corporation unless
such other corporation has been designated as such depositary by a vote
of a majority of the directors of the investment company, exclusive of
any director who is an officer, director or trustee of the depositary so
designated; provided, however, that this limitation shall not apply to
the deposit of funds by an investment company with another moneyed
corporation, which owns all or a majority of the capital stock of such
investment company.

3. Be the holder of any shares of its own capital stock unless such
stock shall have been taken to prevent loss upon a debt previously
contracted in good faith, and stock so acquired shall, within six months
from the time of its acquisition, be sold or disposed of at public or
private sale; nor shall it, either directly or indirectly, make any
discount to any person for the purpose of enabling him to pay for or
hold shares of its stock either subscribed for or purchased by him. Any
investment company making any such discount shall forfeit to the people
of the state twice the amount of such discount.

4. Except as provided in section five hundred eight of this article,
engage in the business of receiving deposits; provided, however, that
nothing contained in this article shall prevent an investment company
from maintaining for the account of others credit balances incidental
to, or arising out of, the exercise of its lawful powers, but the
superintendent of financial services shall have power to prescribe, by
specific or general regulation, the extent to which, and the conditions
upon which, such credit balances may be established, maintained and paid
out.