06-20-07 FPAC Minutes - Laserfiche WebLink

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• Fund Investments Each Fund is specifically designed for Minnesota Municipalities. Accordingly, each Fund may invest only in securities and instruments in which Municipalities are permitted to invest directly, as delineated in Minnesota Statutes, Section 118A("Deposit and Investment of Local Government Funds"). Permitted Investments include: (a) United States securities.Public funds may be invested in governmental bonds,notes,bills and other securities which are direct obligations or are guaranteed or insured issues of the United States, its agencies,its instrumentalities,or organizations created by an Act of Congress. (b) Commercial papers. Funds may be invested in commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and that matures in 270 days or less. (c) Any security which is a general obligation of the State of Minnesota or any of its municipalities. (d) Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. (e) Deposits in a national bank or in a state bank or thrift institution insured by the Federal Deposit Insurance Corporation, provided that any such deposit shall be insured, bonded, or collateralized as required by law and that any such bank or thrift institution shall meet criteria designated from time to time by the Trustees. • (f) Repurchase Agreements with "broker-dealers" (as more fully described below) and with "banks"(as more fully described below). I. Broker/Dealers: a. The Funds may only enter into repurchase agreements with broker- dealers which, in the judgment of the Investment Advisor (as defined below), have a reputation for sound management and ethical business practices. b. Each broker/dealer must be registered with the Securities and Exchange Commission and be a primary reporting dealer to the Federal Reserve Bank of New York. c. Broker/dealers must have at least $50 million in "Excess Capital." "Excess Capital" is that portion of a firm's permanent capital which is in excess of the minimum capital required under the Uniform Net Capital Rule of the Securities and Exchange Commission. Broker/dealer subsidiaries of companies having at least $1 billion in net worth shall also be considered creditworthy, in the event of a lack of publicly available financial information. The Investment Advisor will use its best efforts to monitor the creditworthiness of broker/dealers. d. Broker/dealers must have short-term, unsecured debt ratings of"Al" by Standard & Poor's Corporation ("S&P") or"P1" by Moody's Investors Service, Inc. ("Moody's"). • -4-