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Page 15 of 37 <br />governing body or designated investment committee of the entity <br />adopts as required by Section 2256.025; or <br />(ii) a depository institution with a main office <br />or branch office -in this state that the investing entity selects; <br />(B) the broker or depository institution selected as <br />described by Paragraph (A) arranges for the deposit of the funds in <br />the banking deposits in one or more federally insured depository <br />institutions, regardless of where located, for the investing entity's <br />account; <br />(C) the full amount of the principal and accrued <br />interest of the banking deposits is insured by the United States or <br />an instrumentality of the United States; and <br />(D) the investing entity appoints as the entity's <br />custodian of the banking deposits issued for the entity's account: <br />(i) the depository institution selected as <br />described by Paragraph (A); <br />(ii) an entity described by Section 2257.041(d); <br />or <br />(iii) a clearing broker dealer registered with the <br />Securities and Exchange Commission and operating under Securities and <br />Exchange Commission Rule 15c3-3 (17 C.F.R. Section 240.15c3-3). <br />(b) The following are not authorized investments under this <br />section: <br />(1) obligations whose payment represents the coupon <br />payments on the outstanding principal balance of the underlying <br />mortgage-backed security collateral and pays no principal; <br />(2) obligations whose payment represents the principal <br />stream of cash flow from the underlying mortgage-backed security <br />collateral and bears no interest; <br />(3) collateralized mortgage obligations that have a stated <br />final maturity date of greater than 10 years; and <br />(4) collateralized mortgage obligations the interest rate <br />of which is determined by an index that adjusts opposite to the <br />changes in a market index. <br />Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995; <br />Acts 1999, 76th Leg., ch. 1454, Sec. 7, eff. Sept. 1, 1999; Acts <br />2001, 77th Leg., ch. 558, Sec. 1, eff. Sept. 1, 2001. <br />4/18/2018 <br />