1999-003-CHAPTER 2256 OF THE TEXAS GOVERNMENT CODE, PUBLIC FUND INVESTMENT ACT

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as the Texas Municipal League or the Government Finance Officers Association. 6.0 CONFLICTS Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the City Manager any material fmancial interests in financial institutions that conduct business within this Jurisdiction, and they shall further disclose any large personal fmanciaVinvestment positions that could be related to the performance of the City, particularly with regard to the time of purchases and sales: 7.0 AUTIIORIZED FINANCIAL DEALERS AND INSTITUTIONS The Finance Director will maintain a list of fmancial institutions authorized to provide investment services. In addition, a list will also be maintained of approved security broker/dealers who are authorized to provide investment services in the State of Texas. These may include primary dealers or regional dealers that quality under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule). No public deposit shall be made except in a qualified public depository as established by state law. All fmancial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the Finance Director with the following: audited fmancial statement, proof of National Association of Security Dealers certification, trading resolution, proof of state registration, completed broker/dealer questiormaire if requested, certification of having read entity's investment policy. An annual review of the fmancial condition and registrations of qualified bidders will be conducted by the Finance Director. A current audited financial statement is required to be on file for each fmancial institution and broker/dealer in which the City of Paris invests. 8.0 AUTIIORIZED/SUITABLE INVESlMENTS J The City of Paris is empowered by statue to invest in the Types of securities authorized by Chapter 2256 of the Government Code. A eopy is attached as exhibit A. 9.0 COLLATERALIZATION Collateralization will be required on two types of investments: certificates of deposit and repurchase (and. reverse) agreements. In order to anticipate market changes and provide a level of security for all funds, the collateralization level will be 100% of market value of principal and accrued interest. The City of Paris chooses to limit collateral to the extent it is limited by Article 105 Revised Civil Statues of Texas. Collateral will always be held by an independent third party with whom the entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. The right of collateral substitution is granted. 10.0 SAFEKEEPING AND CUSTODY , All security transactions, including collateral for repurchase agreements, entered into by the City of Paris shall be conducted on a delivery-versus-payment (OVP) basis. Securities will be held by a third party custodian designated by the Finance Director and evidenced by safekeeping receipts. , , :.-.J-