Any funds received from the sale of bonds, notes or
certificates of indebtedness heretofore or hereafter sold by an Issuer, which
are not immediately required for disbursement for the purpose for which issued
("Bond Funds"), may unless otherwise prohibited by law be invested by the
proper authorities in the following investments:
A. Certificates of Deposit or other interest
bearing accounts issued by a qualified depository of the State of Mississippi
as follows:
1.
Qualified
Depository of the State of Mississippi. A qualified depository of
the State of Mississippi is a financial institution qualified by the State
Treasurer as a depository in accordance with Section
27-105-5
of the Mississippi Code Annotated as amended. A list of qualified depositories
is available from the State Treasurer.
2.
Maturity. The
certificate of deposit must mature or be redeemable by the holder on or prior
to the date upon which such funds will be required for disbursements.
3.
Interest Rate.
Interest rates may be negotiated or determined by competitive bids. The
interest rate on a certificate of deposit shall bear interest at a rate per
annum not less than a simple interest rate numerically equal to the highest of:
a. the discount rate of United State Treasury
obligations of comparable maturity as published in the Wall Street
Journal on the date of investment;
b. the current rate of interest paid on
certificates of deposit; or
c. the
bond equivalent yield paid on United States Treasury obligations of comparable
maturity as published in the
Wall Street Journal on
the date of investment.
Provided, however, that the proceeds from the sale of bonds
issued pursuant to the joinder of supervisor's districts of adjacent counties
in establishing industrial enterprises as set out in 57-1-131 through 57-1-145,
Mississippi Code of 1972, or Chapter 3 of Title 57, Mississippi Code of 1972,
may be invested in certificates of deposit issued by qualified depositories of
the State of Mississippi bearing interest at any rate per annum which may be
mutually agreed upon, but in no event shall said rate be less than the discount
rate on United States Treasury obligations of comparable maturity.
4.
Security. Said certificates of deposit shall be
secured as otherwise required by applicable law.
B. Direct United States Treasury Obligations
guaranteed in full as to principal and interest by the United State of America,
limited to the following:
1. U.S. Treasury
Bills
2. U.S. Treasury Notes having
remaining maturities of no more than eighteen (18) months unless a longer term
is provided through compliance with Section 4 below.
3. U.S. Treasury Bonds having remaining
maturities of no more than eighteen (18) months unless a longer term is
provided through compliance with Section 4 below.
C. United States Government Agency
obligations having remaining maturities of no more than eighteen (18) months
unless a longer term provided through compliance with Section 4, the principal
and interest of which are fully guaranteed by the United States of America or
an agency thereof, however, limited to the following:
1. Farm Credit System Financial Assistance
Corporation Securities
2. Federal
Home Loan Bank
3. Federal National
Mortgage Association
4. Student
Loan Marketing Association
5.
Resolution Trust Corporation
Note 1: All investments in United States Government Agency
obligations may not exceed 50% in the aggregate of all Bond Funds invested for
30 days or more.
Note 2: In no event shall the remaining maturity of any
United State Government Agency obligation exceed 5 years.
Note 3: Pools consisting of Federal Home Loan Mortgage
Corporation (Freddie Mac) securities and/or Federal National Mortgage
Association (Fannie Mae) mortgage backed securities are not permissible
investments; however, such pools may be taken as collateral on deposits.
D. Direct Security
Repurchase Agreements and Reverse Direct Agreements of any federal book entry
of direct United States Treasury obligations and United States Government
Agency obligations guaranteed as to principal and interest; provided, however,
the Issuer must make a finding in writing that a Reverse Direct Security
Repurchase Agreement is in the Issuer's best interest. Such finding must be
spread upon the official minutes of the Issuer and provided to the State
Treasurer.
1.
Direct Security
Repurchase Agreement. "Direct Security Repurchase Agreement" means
an agreement under which the entity buys, holds for a specified time, and then
sells back certain securities and obligations.
2.
Reverse Direct Securities
Repurchase Agreement. "Reverse Direct Securities Repurchase
Agreement" means an agreement under which the entity sells and after a
specified time buys back certain securities and obligations.
3.
Dollar
Limitation. At least eighty percent (80%) of the total dollar
amount in all repurchase agreements by each Issuer at any one time shall be
pursuant to contracts with qualified state depositories.
4.
Maturity. The
repurchase agreement shall mature or be redeemable prior the time funds will be
needed for expenditure but in any event must have a term of 30 days or less.
Funds received from the sale and redemption of bonds, notes,
or certificates of indebtedness shall not be invested in securities of, or
interest in, any open-end or closed-end management type investment company or
investment trust, except that pursuant to 91-13-8, Mississippi Code of 1972, a
bank trustee acting in a fiduciary capacity that is authorized to invest in
direct obligations of the U.S. of America also may invest such public fund in
securities of, or other interests in, an open-end or closed-end management type
investment company or investment trust that meets the criteria set out in
91-13-8, Mississippi Code of 1972.
