30.950. Definitions--written investment policy required--state treasurer's duty.
Definitions--written investment policy required--state treasurer'sduty.
30.950. 1. As used in this section, the following terms shall mean:
(1) "Derivative securities", a financial instrument, contract orobligation which has a value or return based upon or linked to anotherasset or index, or both, separate from the financial instrument, contractor obligation itself;
(2) "Governing body", the board, body or persons in which the powersof a political subdivision as a body corporate, or otherwise, are vested;
(3) "Leveraging", using current assets as collateral to purchaseother assets;
(4) "Political subdivision", any agency or unit of this state;
(5) "Speculation", contracting to sell securities not yet acquired inorder to purchase other securities for purposes of speculating ondevelopments or trends in the market.
2. Every political subdivision of this state which is responsible forthe management and investment of public funds and which has existingauthority to invest such funds in a manner other than in depositaryaccounts at financial institutions in this state shall promulgate, formallyadopt and comply with a written investment policy containing, but not belimited to, the following components:
(1) A commitment to the principles of safety, liquidity and yield, inthat order, when managing public funds;
(2) A prohibition on the purchase of derivative securities, eitherdirectly or through a repurchase agreement;
(3) A prohibition on the use of leveraging whether through a reverserepurchase agreement or otherwise;
(4) A prohibition on the use of public funds for speculation;
(5) A requirement that on a regular basis the investments of thepolitical subdivision shall be revalued to reflect prevailing marketprices;
(6) A requirement that investments which are downgraded below theminimum acceptable rating levels shall be reviewed for possible sale withina reasonable time period; and
(7) A requirement that the current status and performance of theinvestments of the political subdivision be reported regularly to thegoverning body of the political subdivision.
3. The state treasurer shall prepare a model form of an investmentpolicy reflecting the principles set forth herein which shall be madeavailable to political subdivisions in the state. Any politicalsubdivision which formally adopts such a model investment policy shall bedeemed to be in compliance with the requirements of this section.
4. Notwithstanding any other law to the contrary, any politicalsubdivision of the state which manages and invests public funds, but doesnot promulgate, formally adopt and comply with a written investment policyas described herein shall have its investment authority limited to thoseinvestments authorized by law as of January 1, 1997. Except for thosepolitical subdivisions authorized by law to place public funds in theinvestments authorized by section 15, article IV of the Constitution ofMissouri, and only then if the political subdivision complies with therequirements of this section, nothing in this section shall be deemed toexpand the investment authority of a political subdivision beyond thatcurrently permitted by law.
5. Any written investment policy promulgated and adopted inaccordance with this section shall be deemed a public record.
(L. 1997 S.B. 449)