N.M. Admin. Code § 2.60.21.10

Current through Register Vol. 35, No. 23, December 10, 2024

Section 2.60.21.10 - ASSET ALLOCATION

The funds available for investment in the certificate of deposit program will be allocated in accordance with the following criteria:

A. In order to have reasonable diversification as required by Section 6-8-7, economic stimulation as required by Section 7-27-5, and protection of the corpus as required by statutes referenced in Section I [now Section 2.60.21.3 NMAC] of these procedures, no more than 10 percent of the total amount required to be available for investment pursuant to Section 7-27-5.2 [repealed], 7-27-5.3, 7-27-5.4 and 7-27-5.5 in certificates of deposit may be invested at any one institution. If deposits in an institution exceed 10 percent of the severance tax permanent fund certificate of deposit investments on the effective date of these regulations, then deposits at that bank or savings and loan shall not be reinvested until the total amount of deposits are brought to or below 10 percent of the total investment in certificates of deposit or alternately, according to a plan approved by the council for a specific institution to come into compliance with these regulations.

B. No deposit is to be made that causes the financial institution to exceed the fund limitations in Section 7-27-5.2(G) [repealed] NMSA 1978, or in Section VI A [now Subsection A of 2.60.21.10 NMAC] of these rules. In addition, the total deposits in a class C or class D institution shall not exceed 100 percent of regulatory net worth or primary capital.

C. The first priority shall be to replace on maturity existing deposits of class A and class B institutions in such amounts and for such maturities as are appropriate. Reinvestment of certificates of deposits at class C institutions will be allowed secondarily.

D. For new deposits, eligible class A and class B institutions with no severance tax permanent fund deposits will have priority over other financial institutions.

E. If the demand is greater than the amount available for investment, the investment officer is directed to give priority to class A institutions, except as noted in Item D [now Subsection D of 2.60.21.10 NMAC] above.

F. If the demand by eligible class A institutions is greater than the amount available for investment, then the investment officer is directed to distribute the funds in such a manner as to promote both geographic and economic diversification around the state.

G. The distinction as to whether an institution is a bank or savings and loan is not to be considered in the allocation of state funds.

H. $2,000,000 of the total state funds allocated for investment in certificates of deposit will be made available for deposits with credit unions. At no time is the deposit in a credit union to exceed the amount of insurance on the deposit.

I. The investment officer may disqualify any institution from receiving new deposits or reinvestments of certificates of deposits if that institution does not comply with the requirements promulgated by the council and/or dictated by other pertinent statutes.

J. If an institution believes that exceptional circumstances exist that indicate it would not be appropriate for the investment officer to take any of the actions listed above, the institution shall appear at a meeting of the state investment council to present its position. The council may at that time vote on whether an exception to the policy should be allowed, or it may continue the issue in order to take further evidence, testimony or advice. In order to be placed on the council's agenda, the institution shall submit a written request stating its position to the investment office at least 10 calendar days prior to the meeting, including a bill of particulars, copies of any statutes or cases it intends to use in its presentation as well as a list of names, titles, business addresses and phone numbers of anyone whose testimony it deems necessary.

K. If at any time a financial institution is not in compliance with council regulations, the state investment officer will be responsible for establishing a plan to bring the financial institution into compliance.

L. If after all requests for deposits of state funds are honored in accordance with these regulations and applicable state law, the total funds on deposit at all institutions are less than the legislated floor, those institutions that qualify for additional deposits will be notified, either individually or through their associations, of the availability of state funds for deposit, and will be encouraged to accept such deposits.

N.M. Admin. Code § 2.60.21.10

Recompiled 10/1/01