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The Finance Director and any other responsible person shall not knowingly <br /> engage in any personal business activities which could impair their ability to make • <br /> impartial investment decisions. <br /> Bonding of the Finance Director shall be required. The City Administer will <br /> establish specific bonding levels. <br /> 4. AUTHORIZED INVESTMENTS <br /> Investment instruments authorized and permitted by this policy are as follows: <br /> A. Obligations of the Untied States or its agencies under a repurchase <br /> agreement if the margin agreement under the repurchase agreement is ioi <br /> percent and with any of the following institutions. <br /> i) a bank qualified as depository of public funds, <br /> 2) any national or state bank in the United States which is a member of <br /> the Federal Reserve System and whose combined capital and surplus <br /> equals or exceeds $10,000,000, <br /> 3) a primary reporting dealer in the United States government securities <br /> to the Federal Reserve Bank of New York, <br /> 4) a securities broker--dealer licensed pursuant to Chapter 8oA regulated <br /> by the Securities and Exchange commission and maintaining a <br /> combined capital and surplus of $40,000,000 or more, exclusive of <br /> subordinated debt. <br /> B. Governmental bonds, notes, bills, mortgages and other securities, which • <br /> are direct obligations or are guaranteed or insured issues of the United <br /> States, its agencies, its instrumentalities, or organizations created by an <br /> act of Congress, excluding mortgage-backed securities defined as "high <br /> risk" (as defined below) or in certificates of deposit secured by letters of <br /> credit issued by federal Home Loan Banks. <br /> High risk mortgage-backed securities are as follows: <br /> 1) interest--only or principal-only mortgage-backed securities, <br /> 2) any mortgage derivative security that: <br /> a) has an expected average life greater than ten years, <br /> b) has an expected average life that: <br /> i) will extend by more than four years as the result of an <br /> immediate and sustained parallel shift in the yield <br /> curve of plus 30o basis points: or <br /> ii) will shorten by more than six years as the result of an <br /> immediate and sustained parallel shift in the yield <br /> curve of minus 30o basis points: or <br /> c) will have an estimated change in price of more than 17 percent <br /> as the result of an immediate and sustained parallel shift in the <br /> yield curve of plus or minus 30o basis points. <br /> IIP <br />