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primary government securities dealer, as defined by the Federal Reserve, or a bank doing <br />business in Texas, not to exceed 90 days to the stated maturity; <br />Flexible repurchase agreements (flex repos) are authorized for investment of bond proceeds, <br />if collateralized in accordance with this Policy, safe -kept with an independent third party <br />approved by the City, with an executed master repurchase agreement, and placed through a <br />primary government securities dealer, as defined by the Federal Reserve. The term of the <br />flex repo may exceed two years but not exceed the anticipated expenditure schedule of the <br />bond proceeds and no party involved with the issuance of the debt shall be involved with the <br />funds reinvestment. <br />7. GGRstaRt ddollaF Investment Pools as defined and regulated by the Act. <br />8. Commercial paper rated not less than A1/P1 or its equivalent by two nationally recognized <br />rating agencies and not to exceed 270 days to stated final maturity. <br />9. AAA- rated, SEC registered money market funds. <br />10. FDIC insured brokered certificate of deposit securities from banks in any US state, delivered <br />versus payment to the City's safekeeping depository, not to exceed one year to maturity. <br />Before purchase the Investment Officer or adviser must verify the FDIC status of the bank on <br />www.2fdic.gov.idasp /main bankfind /asp to assure that the bank is FDIC insured. <br />XI. COLLATERALIZATION <br />Pledged Collateral <br />Collateralization is required on time and demand deposits. In order to anticipate market changes and <br />provide a level of security for all funds, the collateral ization margin level will be maintained ay a minimum <br />of 102% of deposits plus accrued. The counter party shall be made contractually liable for monitoring and <br />maintaining the collateral and required margins at all times. Collateral shall be priced at least monthly. <br />The custodian shall provide the required periodic reports directly to the City. <br />Owned Collateral <br />Repurchase agreements shall be collateralized to 102% of principal and accrued interest. The counter <br />party shall be made contractually liable for monitoring and maintaining the collateral and required <br />margins at all times. Collateral shall be priced daily. The Custodian shall provide the required periodic <br />reports directly to the City. <br />Authorized Collateral <br />Collateral shall be limited to the following: <br />- Obligations of the US Government, its agencies and instrumentalities to include mortgage- backed <br />securities which pass the bank test. <br />- Obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as <br />to investment quality by a nationally recognized investment rating firm not less than A or its <br />equivalent. <br />Collateral will always be held by an independent third party with whom the City has a current custodial <br />agreement. A clearly marked evidence of ownership (report or receipt) must be supplied to the City and <br />retained. The right of collateral substitution is granted with prior City approval. <br />XII. SAFEKEEPING <br />Safekeeping function will be provided by the City's banking services depository. In order to ensure <br />City of San Marcos Investment Policy Page 5 <br />