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<br />investment policy. The qualified representative of the business organization offering to engage in an investment
<br />transaction with an investing entity shall execute a written instrument in a form acceptable to the investing entity and
<br />the business organization substantially to the effect that the business organization has:
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<br />(I) received and reviewed the investment policy of the entity; and
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<br />(2) acknowledged that the business organization has implemented reasonable procedures and controls in an effort to
<br />preclude investment transactions conducted between the entity and the organization that are not authorized by the
<br />entity's investment policy, except to the extent that this authorization is dependent on an analysis of the makeup of
<br />the entity's entire portfolio or requires an interpretation of subjective investment standards.
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<br />(1) The investment officer of an entity may not acquire or otherwise obtain any authorized investment described in
<br />the investment policy of the investing entity from a person who has not delivered to the entity the instrument
<br />required by Subsection (k).
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<br />(m) An investing entity other than a state agency, in conjunction with its annual fmancial audit, shall perform a
<br />compliance audit of management controls on investments and adherence to the entity's established investment
<br />policies.
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<br />(n) Except as provided by Subsection (0), at least once every two years a state agency shall arrange for a compliance
<br />audit of management controls on investments and adherence to the agency's established investment policies. The
<br />compliance audit shall be performed by the agency's internal auditor or by a private auditor employed in the manner
<br />provided by Section 321.020. Not later than January I of each even-numbered year, a state agency shall report the
<br />results of the most recent audit performed under this subsection to the state auditor. A state agency also shall report
<br />to the state auditor other information the state auditor determines necessary to assess compliance with laws and
<br />policies applicable to state agency investments. A report under this subsection shall be prepared in a manner the
<br />state auditor prescribes.
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<br />(0) The audit requirements of Subsection (n) do not apply to assets of a state agency that are invested by the
<br />comptroller under Section 404.024.
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<br />Amended by Acts 1995, 74th Leg., ch. 402, 9 I, eff. Sept. I, 1995; Acts 1997, 75th Leg., ch. 685, 9 1, eff. Sept. I,
<br />1997; Acts 1997, 75th Leg., ch. 1421,93, eff. Sept. I, 1997; Acts 1999, 76th Leg., ch. 1454,94, eff. Sept. 1, 1999.
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<br /><General Materials (GM) - References, Annotations, or Tables>
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<br />mSTORICAL AND STATUTORY NOTES
<br />2000 Main Volume
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<br />Acts 1997, 75th Leg., ch. 685, rewrote subsec. (h), which previously read:
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<br />"An officer or employee of a commission created under Chapter 391, Local Government Code, is ineligible to be
<br />designated as an investment officer under Subsection (t) ."
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<br />Acts 1997, 75th Leg., ch. 1421, in subsec. (b), in subd. (4), in par. (C), substituted "dollar-weighted average" for
<br />"average dollar-weighted", added pars. (D) and (E), and made other nonsubstantive changes; in subsec. (d), inserted
<br />"or group of funds"; in subsec. (e), inserted "The governing body shall adopt a written instrument by rule, order,
<br />ordinance, or resolution stating that it has reviewed the investment policy and investment strategies and that the
<br />written instrument so adopted shall record any changes made to either the investment policy or investment
<br />strategies."; in subsec. (t), deleted It. Unless otherwise authorized by law, a person may not deposit, withdraw,
<br />invest, transfer, or manage in any other manner funds of a state agency, local government, or investment pool
<br />without express written authority of the governing body, chief executive officer, or chief fmancial officer of the state
<br />agency, local government, or investment pool,", deleted "deposit, withdraw,", deleted It, transfer, or manage", and
<br />inserted "In the administration of the duties of an investment officer, the person designated as investment officer
<br />shall exercise the judgment and care, under prevailing circumstances, that a prudent person would exercise in the
<br />management of the person's own affairs. Unless authorized by law, a person may not deposit, withdraw, transfer, or
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<br />Copr. @ West 2001 No Claim to Orig. U.s. Govt. Works
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