N.J. Admin. Code § 17:4A-21.1

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:4A-21.1 - Permissible investments

(a) Subject to the limitations in this subchapter, the Board may enter into swap transactions, including index-based swap transactions, on behalf of the PFRSNJ provided that:

1. Swap transactions shall be listed on a securities exchange, traded on an over-the-counter market, or be bid/offered on a competitive basis with multiple broker dealers;

2. Credit default swap transactions may only be purchased for fixed-income securities held in the pertinent portfolio, except that index-based swaps may be purchased if the Board determines that a significant number of the underlying obligations contained in the index correspond to securities eligible for investment by, and are actually held in, the pertinent portfolio; and

3. At the time of each transaction, the counterparty (or any guarantor pledging its full faith and credit to the transaction) shall have a long-term credit rating of at least: Baa2 or higher by Moody's Investors Service, Inc, BBB or higher by Standard & Poor's Corporation, and BBB or higher by Fitch Ratings, except that two of the three ratings are sufficient and one of the three ratings is sufficient if only one rating is available.

(b) Notwithstanding the restrictions in this subchapter, the Board may approve swap transactions on a case-by-case basis if the Board determines such purchase to be in the financial best interest of the PFRSNJ and its beneficiaries and is consistent with the Board's fiduciary responsibility.

N.J. Admin. Code § 17:4A-21.1

Adopted by 53 N.J.R. 1147(a), effective 7/6/2021

Recodified from 17:4A-21.2 by 56 N.J.R. 795(a) effective 5/6/2024