CHAPTER 2263. ETHICS AND DISCLOSURE REQUIREMENTS FOR OUTSIDE FINANCIAL ADVISORS AND SERVICE PROVIDERS
GOVERNMENT CODE
TITLE 10. GENERAL GOVERNMENT
SUBTITLE F. STATE AND LOCAL CONTRACTS AND FUND MANAGEMENT
CHAPTER 2263. ETHICS AND DISCLOSURE REQUIREMENTS FOR OUTSIDE
FINANCIAL ADVISORS AND SERVICE PROVIDERS
Sec. 2263.001. APPLICABILITY. (a) This chapter applies in
connection with the management or investment of any state funds
managed or invested:
(1) under the Texas Constitution or other law, including
Chapters 404 and 2256; and
(2) by or for:
(A) a public retirement system as defined by Section 802.001
that provides service retirement, disability retirement, or death
benefits for officers or employees of the state;
(B) an institution of higher education as defined by Section
61.003, Education Code; or
(C) another entity that is part of state government and that
manages or invests state funds or for which state funds are
managed or invested.
(b) This chapter applies in connection with the management or
investment of state funds without regard to whether the funds are
held in the state treasury.
(c) This chapter does not apply to or in connection with a state
governmental entity that does not manage or invest state funds
and for which state funds are managed or invested only by the
comptroller.
Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1,
2003.
Sec. 2263.002. DEFINITION. In this chapter, "financial advisor
or service provider" includes a person or business entity who
acts as a financial advisor, financial consultant, money or
investment manager, or broker.
Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1,
2003.
Sec. 2263.003. CONSTRUCTION WITH OTHER LAW. To the extent of a
conflict between this chapter and another law, the law that
imposes a stricter ethics or disclosure requirement controls.
Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1,
2003.
Sec. 2263.004. ETHICS REQUIREMENTS FOR OUTSIDE FINANCIAL
ADVISORS OR SERVICE PROVIDERS. (a) The governing body of a
state governmental entity by rule shall adopt standards of
conduct applicable to financial advisors or service providers who
are not employees of the state governmental entity, who provide
financial services to the state governmental entity or advise the
state governmental entity or a member of the governing body of
the state governmental entity in connection with the management
or investment of state funds, and who:
(1) may reasonably be expected to receive, directly or
indirectly, more than $10,000 in compensation from the entity
during a fiscal year; or
(2) render important investment or funds management advice to
the entity or a member of the governing body of the entity, as
determined by the governing body.
(b) A contract under which a financial advisor or service
provider renders financial services or advice to a state
governmental entity or other person as described by Subsection
(a) is voidable by the state governmental entity if the financial
advisor or service provider violates a standard of conduct
adopted under this section.
Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1,
2003.
Sec. 2263.005. DISCLOSURE REQUIREMENTS FOR OUTSIDE FINANCIAL
ADVISOR OR SERVICE PROVIDER. (a) A financial advisor or service
provider described by Section 2263.004 shall disclose in writing
to the administrative head of the applicable state governmental
entity and to the state auditor:
(1) any relationship the financial advisor or service provider
has with any party to a transaction with the state governmental
entity, other than a relationship necessary to the investment or
funds management services that the financial advisor or service
provider performs for the state governmental entity, if a
reasonable person could expect the relationship to diminish the
financial advisor's or service provider's independence of
judgment in the performance of the person's responsibilities to
the state governmental entity; and
(2) all direct or indirect pecuniary interests the financial
advisor or service provider has in any party to a transaction
with the state governmental entity, if the transaction is
connected with any financial advice or service the financial
advisor or service provider provides to the state governmental
entity or to a member of the governing body in connection with
the management or investment of state funds.
(b) The financial advisor or service provider shall disclose a
relationship described by Subsection (a) without regard to
whether the relationship is a direct, indirect, personal,
private, commercial, or business relationship.
(c) A financial advisor or service provider described by Section
2263.004 shall file annually a statement with the administrative
head of the applicable state governmental entity and with the
state auditor. The statement must disclose each relationship and
pecuniary interest described by Subsection (a) or, if no
relationship or pecuniary interest described by that subsection
existed during the disclosure period, the statement must
affirmatively state that fact.
(d) The annual statement must be filed not later than April 15
on a form prescribed by the governmental entity, other than the
state auditor, receiving the form. The statement must cover the
reporting period of the previous calendar year. The state auditor
shall develop and recommend a uniform form that other
governmental entities receiving the form may prescribe.
(e) The financial advisor or service provider shall promptly
file a new or amended statement with the administrative head of
the applicable state governmental entity and with the state
auditor whenever there is new information to report under
Subsection (a).
Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1,
2003.
Sec. 2263.006. PUBLIC INFORMATION. Chapter 552 controls the
extent to which information contained in a statement filed under
this chapter is subject to required public disclosure or excepted
from required public disclosure.
Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1,
2003.