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Texas Government Code - GOV'T § 2256.0115. Authorized Investments:  Securities Lending Program

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) A securities lending program is an authorized investment under this subchapter if it meets the conditions provided by this section.

(b) To qualify as an authorized investment under this subchapter:

(1) the value of securities loaned under the program must be not less than 100 percent collateralized, including accrued income;

(2) a loan made under the program must allow for termination at any time;

(3) a loan made under the program must be secured by:

(A) pledged securities described by Section 2256.009;

(B) pledged irrevocable letters of credit issued by a bank that is:

(i) organized and existing under the laws of the United States or any other state;  and

(ii) continuously rated by at least one nationally recognized investment rating firm at not less than A or its equivalent;  or

(C) cash invested in accordance with Section:

(i) 2256.009;

(ii) 2256.013;

(iii) 2256.014;  or

(iv) 2256.016;

(4) the terms of a loan made under the program must require that the securities being held as collateral be:

(A) pledged to the investing entity;

(B) held in the investing entity's name;  and

(C) deposited at the time the investment is made with the entity or with a third party selected by or approved by the investing entity;

(5) a loan made under the program must be placed through:

(A) a primary government securities dealer, as defined by 5 C.F.R. Section 6801.102(f), as that regulation existed on September 1, 2003;  or

(B) a financial institution doing business in this state;  and

(6) an agreement to lend securities that is executed under this section must have a term of one year or less.

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Cite this article: FindLaw.com - Texas Government Code - GOV'T § 2256.0115. Authorized Investments:  Securities Lending Program - last updated January 01, 2024 | https://codes.findlaw.com/tx/government-code/gov-t-sect-2256-0115/

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