La. Admin. Code tit. 71 § I-109

Current through Register Vol. 50, No. 11, November 20, 2024

Section I-109 - Investments of the Assets in Bonds

A. The state treasurer, by Section 2(a)(4) of Act 67, is authorized to invest the assets in marketable fixed income securities ("bonds"). The following rules shall apply to the investment of the assets in bonds.

1. Assets shall be invested in bonds which have been selected after consideration of the total return on such investment, including interest income and capital appreciation/loss.

2. Investment of the assets in bonds should be done so that the contents of each portfolio under management is diversified by maturity, security, sector, and credit quality.

3. Each portfolio of bonds forming a part of the assets may be actively managed.

4. The total portfolio of bonds which form a portion of the assets shall not contain a concentration of more than 10 percent of any issuer's securities (valued at cost of bonds compared to market value of total portfolio), except securities which are direct obligations of the U.S. Treasury or any U.S. agency.

5. All investment managers managing any portfolio of bonds which forms a part of the assets are restricted from using the assets to engage in any of the following activities:

a. the purchase of bonds on margin;

b. the short sale of any bond;

c. private or direct placement of any kind;

d. the purchase of debt securities of the custodian bank(s), investment manager(s), or their parent or any subsidiaries, or with any entity which is a part to a contractual relationship with the state treasurer or the LEQTF;

e. direct loans or extension of lines of credit;

f. the purchase of foreign bonds;

g. direct purchases of single family or commercial mortgages;

h. the purchase of collateralized mortgage obligation derivatives;

i. other investments which may be restricted or which may not be authorized by applicable law or rule from time to time.

La. Admin. Code tit. 71, § I-109

Promulgated by the Department of the Treasury, Office of the Treasurer, LR 21:475 (May 1995).

AUTHORITY NOTE: Promulgated in accordance with R.S. 17:3803(B)(1)(c)(b)(d).