(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 shall do all of the following:

(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 has complied and will likely comply with applicable state and federal law.

(b) An authorized delegate shall operate in full compliance with this chapter.

(c) The written contract required by subsection (a) of this section must be signed by the licensee and the authorized delegate and must include all of the following:

(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) Define 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, rules, and regulations pertaining to money transmission, including this chapter and regulations implementing this chapter, relevant provisions of the Bank Secrecy Act and the USA PATRIOT Act [P.L. 107-56].

(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.

(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 chapter or as the Commissioner reasonably requests.

(7) Acknowledge that the authorized delegate consents to examination or investigation by the Commissioner.

(8) Acknowledge that the licensee is subject to regulation by the Commissioner and that, as part of that regulation, the Commissioner may suspend or revoke an authorized delegate designation or require the licensee to terminate an authorized delegate designation.

(9) Acknowledge receipt of the written policies and procedures required under paragraph (a)(1) of this section.

(d) If a license is suspended, revoked, surrendered, or expired, the licensee shall, within 5 business days, provide documentation to the Commissioner confirming that all authorized delegates have been notified of the status change. Upon the occurrence of any such event, all authorized delegates shall immediately cease providing money transmission services on behalf of the former 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 funds received from money transmission with any other funds or property owned or controlled by the authorized delegate, all commingled funds and other property must 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.

5 Del. C. 1953, §  2311;  58 Del. Laws, c. 421;  70 Del. Laws, c. 186, §  1;  76 Del. Laws, c. 86, §  2;  85 Del. Laws, c. 338, § 2; 

A person may not engage in the business of money transmission on behalf of a person not licensed under this chapter or not exempt pursuant to subchapter II of this chapter. A person that engages in such activity provides money transmission to the same extent as if the person were a licensee and is jointly and severally liable with the unlicensed or nonexempt person.

5 Del. C. 1953, §  2303;  58 Del. Laws, c. 421;  85 Del. Laws, c. 338, § 2;