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7.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The Finance Director will maintain a list of financial institutions authorized to provide investment services. No public deposit shall be made except in a qualified public depository as established by state law. All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the Finance Director with the following: audited financial statement, proof of National Association of Security Dealers certification, trading resolution, proof of state registration, completed broker/dealer questionnaire if requested, and certification of having read entity's investment policy. An annual review of the financial 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 financial institution and broker/dealer in which the City of Paris invests. 8.0 AUTHORIZED/SUITABLE INVESTMENTS The City of Paris is empowered by statue to invest in the Types of securities authorized by Chapter 2256 of the Government Code. Even if allowed by the Public Funds Investment Act, the City of Paris will not invest in securities known as "collateralized debt obligations" which are pools of debt that include sub -prime mortgages. 9.0 COLLATERALIZATION All monies which are deposited into the depository under the provisions of this proposal shall be continuously secured, in accordance with the laws of the State of Texas: The total value of eligible security to secure a deposit of public funds must be in an amount not less than the amount of the deposit of public funds increased by the amount of any accrued interest and reduced to the extent that the United States or an instrumentality of the United States insures the deposit. In addition, the Depository Bank agrees to meet the same security pledge for all funds on deposit by the Paris Economic Development Corporation. Evidence of pledged securities to the City and PEDC must be supplied to the City and retained until new evidence of pledged securities supersedes the previous evidence of pledged securities. 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 (DVP) basis. Securities will be held by a custodian designated by the Finance Director and evidenced by appropriate documentation. 11.0 DIVERSIFICATION The City of Paris will diversify its investments by security type and institution. With the exception of obligations of the United States or its agencies and authorized pools, no more than 50% of the City of Paris total investment portfolio will be invested in a single financial institution with the exception of its