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X. AUTHORIZED AND SUITABLE INVESTMENTS <br />Authorized investments shall be limited to the instruments listed below as authorized and further <br />described by the Act. <br />1. Obligations of the United States, its agencies and instrumentalities, not to exceed three years <br />to the stated final maturity, excluding mortgage-backed securities; <br />2. Direct obligations of the State of Texas or its agencies and instrumentalities, not to exceed <br />three years to the stated final maturity; <br />3. Other obligations, the principal of and interest of which are unconditionally guaranteed or <br />insured by the full faith and credit of, the State of Texas or the United States or their respective <br />agencies and instrumentalities, not to exceed three years to the stated final maturity; <br />4. Obligations of states, agencies, counties, cities, and other political subdivisions of any state <br />rated as to investment quality by a nationally recognized investment rating firm not less than A <br />or its equivalent, not to exceed three years to the stated final maturity; <br />5. Fully insured or collateralized certificates of deposit or share certificates issued by state and <br />national banks or credit unions, not to exceed two year to the stated final maturity that are: <br />a. Guaranteed or insured by the Federal Deposit Insurance Corporation or the National <br />Credit Union Association, or other federal agency, or successors; or <br />b. Collateralized at 102% in accordance with this Policy (Section XI). <br />6. Fully collateralized direct repurchase agreements having a defined termination date, <br />collateralized in accordance with this Policy, safe -kept with an independent third party selected <br />or approved by the City, with an executed master repurchase agreement, and placed through <br />a primary government securities dealer, as defined by the Federal Reserve,or a bank doing <br />business in Texas, not to exceed one year to stated maturity; <br />7. Investment Pools as defined and regulated by the PFIA.. Investment pools maintaining a $1.00 <br />net asset value must calculate and report yield to investors in the pool in accordance with <br />federal regulations applicable to money market funds. <br />8. Commercial paper rated not less than A1/P1 or its equivalent by two nationally recognized <br />rating agencies and not to exceed 365 days to stated final maturity. <br />9. AAA -rated, SEC registered money market funds as described in Sec. 2256.014 of the PFIA. <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 />https://research2.fdlc.gov/bankfind/index.html 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 collateralization margin level will be maintained at a minimum of <br />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 />City of San Marcos Investment Policy <br />