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3. Repurchase Agreement: An investment which consists of two simultaneous transactions, <br /> where an investor purchases securities from a bank or dealer. At the same time, the selling <br /> bank or dealer agrees to repurchase the securities at the same price plus interest at some <br /> agreed -upon future date. The security purchased is the collateral protecting the <br /> investment. <br /> 4. Prime Commercial Paper An investment used by corporations to finance receivables. A <br /> short-term (matures in 270 days or less) unsecured promissory note is issued for a <br /> maturity specified by the purchaser. Corporations market their paper through dealers who <br /> in turn market the paper to investors. <br /> 5. Any security which is a general obligation of the State of Minnesota or any of its <br /> municipalities. <br /> 6, Statewide investment pools which invest in authorized instruments according to MN <br /> Statutes 475,66. <br /> Z Money market mutual funds which invest in authorized instruments according to MN <br /> Statutes 475.66. <br /> Interest - bearing deposits in authorized depositories must be fully insured or collateralized. <br /> COLLATERALIZATION <br /> Collateralization will be required on two types of investments, Certificates of Deposit and <br /> Repurchase Agreements. In order to anticipate market changes and provide a level of security for <br /> a!1 funds, the collateralization level will be 110 percent of the market value of principal and <br /> accrued interest. When the pledged collateral consists of notes secured by first mortgages, the <br /> collateral level will be 140% of the market value of principal and accrual interest. Collateral shall <br /> be deposited in the name of the City of Centerville subject to release by the City's Deputy <br /> Clerk/Treasurer. All Certificates of Deposit and Repurchase Agreements purchase by the City <br /> shall be held in third parry safe keeping by an institution designated as primary agent. The <br /> primary agent shall issue a safe keeping receipt to the City listing the specific instrument rate <br /> maturity and other pertinent information. All deposits will be insured or collateralized in <br /> accordance with Minnesota Statutes Chapter 118. <br /> SAFEKEEPING AND CUSTODY <br /> When investments purchased by the City are held in safekeeping by a broker /dealer, they must <br /> provide asset protection of $500,000 through the Securities Investor Protection Corporation <br /> (SIPC) and at least another $2,000,000 supplemental insurance protection. <br /> 4 <br />