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Xe <br /> <br />COLLATERAL1ZATION <br /> <br />I ~ ....... c; ...... , ..... , ..... ";~'~ cf time and demand <br /> Collateralization will be required on t.,vc ¥~ ................................ . <br /> deposits and repurchase agreements. In order to anticipate market changes and provide a level of <br /> security for all funds, the collateralization level will be a minimum of 102% of market value. All <br /> collateral c ......... , .............. +~ shall be priced and monitored daily bv the counter proW. <br /> <br />The City chooses to limit collateral on time deposits to those authorized investments listed in Section <br />IX, subdivision (1) - (4) mid to Section IX, subdivision (1) for repurchase agreements. Collateral will <br />always be held by an independent third party with whom the City has a current custodial agreement. <br />A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the City and <br />retained. The right of collateral substitution is granted with prior City approval. <br /> <br />XL SAFEKEEPING AND CUSTODY <br /> <br />In order to ensure custodial protection, the City has established delivery and possession procedures <br />for all transactions, except pools and money market funds, which have no book entry delivery. <br />Specifically: <br /> <br />All security transactions, including collateral for repurchase agreements, entered into by the City <br />shall be conducted on a delivery versus payment (DVP) basis to the City's depository or City <br />approved third party custodian. Securities will be held by a third party custodian approved by the <br />Investment Officer(s) and evidenced by proof of ownership (original safekeeping receipts). <br /> <br />XI][. DIVERSIFICATION <br /> <br />Diversification of the overall portfolio will be maintained in accordance with the following <br />diversification limits. <br /> <br />Security Type <br /> <br />Maximum % of Portfolio <br /> <br />US Government Treasury Obligations <br />US Government Agencies and Instrumentalities <br />Municipal Instruments <br />Certificates of Deposit <br />Repurchase Agreements <br /> Flex repurchase agreements for bond proceeds <br />Constant dollar investment pools <br />Commercial Paper <br /> Limit per commercial paper issuer <br /> Money Market Mutual Fund <br /> <br /> 90% <br /> 80% <br /> 20% <br /> 20% <br />100% <br />100% <br />100% <br /> 25% <br /> 10% <br /> 50% <br /> <br />City of San Marcos Investment Policy Page 6 <br /> <br /> <br />