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IX. AUTHORIZED INVESTMENTS <br /> <br />Authorized investments under this policy shall be limited to the instruments listed below as <br />authorized and described by the Public Funds Investment Act. <br /> <br /> 1. Obligations of the United States, its agencies and instrumentalities, not to exceed two <br /> years 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 <br /> exceed two years to the stated final maturity; <br />3. Other obligations, the principal ofm~d interest of which are unconditionally guaranteed <br /> or insured by the full faith and credit of, the State of Texas or the United States or their <br /> respective agencies and instrumentalities, not to exceed two years to the stated final <br /> maturity; <br />4. Obligations of states, agencies, counties, cities, and other political subdivisions of any <br /> state rated as to investment quality by a nationally recognized investment rating firm not <br /> less than A or its equivalent, not to exceed two years to the stated final maturity; <br />5. Fully collateralized certificates of deposit, not to exceed one year to the stated final <br /> maturity, issued by state and national banks doing business in this state that are: <br /> a. Guaranteed or insured by the Federal Deposit Insurance Corporation, or its <br /> successor; or <br /> b. Secured to 102% by obligations that are described by Subdivision (1) - (4) of this <br /> subsection, but intended to include all direct agency or instrumentality issued <br /> mortgage backed securities passing the bank test; and <br />6. Fully collateralized direct repumhase agreements having a defined termination date, <br /> secured by obligations described by subdivision (1) of this subsection, safe-kept with an <br /> independent third party selected or approved by the City, with an executed master <br /> repurchase agreement, and placed through a primary government securities dealer, as <br /> defined by the Federal Reserve, or a bank doing business in this state, not to exceed two <br /> years to the stated maturity; <br /> <br />Flex repurchase agreements are authorized for investment of bond proceeds, if secured <br />by obligations described in subdivision (1) of this section, safe-kept with an independent <br />third party selected or approved by the City, with an executed master repurchase <br />agreement, and placed tN'ough a primary government securities dealer, as defined by the <br />Federal Reserve. The term of the flex may exceed two years but not exceed the <br />anticipated expenditure schedule of the bond proceeds and no party involved with the <br />issuance of the debt shall be involved with the funds reinvestment. <br />Constant dollar Investment Pools as defined and regulated by Chapter 2256.016, Public <br />Funds Investment Act, of the Texas Government Code. <br />Commercial paper rated Al/P1 or its equivalent by two nationally recognized rating <br />agencies and not to exceed 270 days to stated final maturity. <br />AAA-rated, SEC registered money market funds as defined by the Public Funds <br />Investment Act. <br /> <br />City of San Marcos Investment Policy Page 5 <br /> <br /> <br />