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Title IV EXECUTIVE BRANCH

Chapter 30

Effective - 28 Aug 1997 bottom

  30.950.  Definitions — written investment policy required — state treasurer's duty. — 1.  As used in this section, the following terms shall mean:

  (1)  "Derivative securities", a financial instrument, contract or obligation which has a value or return based upon or linked to another asset or index, or both, separate from the financial instrument, contract or obligation itself;

  (2)  "Governing body", the board, body or persons in which the powers of a political subdivision as a body corporate, or otherwise, are vested;

  (3)  "Leveraging", using current assets as collateral to purchase other assets;

  (4)  "Political subdivision", any agency or unit of this state;

  (5)  "Speculation", contracting to sell securities not yet acquired in order to purchase other securities for purposes of speculating on developments or trends in the market.

  2.  Every political subdivision of this state which is responsible for the management and investment of public funds and which has existing authority to invest such funds in a manner other than in depositary accounts at financial institutions in this state shall promulgate, formally adopt and comply with a written investment policy containing, but not be limited to, the following components:

  (1)  A commitment to the principles of safety, liquidity and yield, in that order, when managing public funds;

  (2)  A prohibition on the purchase of derivative securities, either directly or through a repurchase agreement;

  (3)  A prohibition on the use of leveraging whether through a reverse repurchase agreement or otherwise;

  (4)  A prohibition on the use of public funds for speculation;

  (5)  A requirement that on a regular basis the investments of the political subdivision shall be revalued to reflect prevailing market prices;

  (6)  A requirement that investments which are downgraded below the minimum acceptable rating levels shall be reviewed for possible sale within a reasonable time period; and

  (7)  A requirement that the current status and performance of the investments of the political subdivision be reported regularly to the governing body of the political subdivision.

  3.  The state treasurer shall prepare a model form of an investment policy reflecting the principles set forth herein which shall be made available to political subdivisions in the state.  Any political subdivision which formally adopts such a model investment policy shall be deemed to be in compliance with the requirements of this section.

  4.  Notwithstanding any other law to the contrary, any political subdivision of the state which manages and invests public funds, but does not promulgate, formally adopt and comply with a written investment policy as described herein shall have its investment authority limited to those investments authorized by law as of January 1, 1997.  Except for those political subdivisions authorized by law to place public funds in the investments authorized by Section 15, Article IV of the Constitution of Missouri, and only then if the political subdivision complies with the requirements of this section, nothing in this section shall be deemed to expand the investment authority of a political subdivision beyond that currently permitted by law.

  5.  Any written investment policy promulgated and adopted in accordance with this section shall be deemed a public record.

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(L. 1997 S.B. 449)


---- end of effective   28 Aug 1997 ----

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