Texas Register, Volume 44, Number 51, Pages 7779-8116, December 20, 2019 Page: 7,795
7779-8116 p. ; 28 cm.View a full description of this periodical.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
(g) [(4)] The SBOE may establish committees to administer the
affairs of the PSF. The duties and responsibilities of any committee es-
tablished shall be specified in the PSF Investment Procedures Manual.
() [(g)] The PSF shall have an executive administrator, with a
staff to be adjusted as necessary, who functions directly with the SBOE
through the SBOE Committee on School Finance/Permanent School
Fund concerning investment matters, and who functions as part of the
internal operation under the commissioner of education. At all times,
the PSF executive administrator and staff shall invest PSF assets as
directed by the SBOE according to the Texas Constitution and all other
applicable Texas statutes, as amended, and SBOE rules governing the
operation of the PSF. The PSF staff shall:
(1) administer the PSF, including investing and managing
assets and contracting in connection therewith, according to SBOE
goals and objectives;
(2) execute all directives, policies, and procedures from the
SBOE and the SBOE Committee on School Finance/Permanent School
Fund;
(3) keep records and provide a continuous and accurate ac-
counting of all PSF transactions, revenues, and expenses and provide
reports on the status of the PSF portfolio;
(4) advise any officials, investment firms, or other inter-
ested parties about the powers, limitations, and prohibitions regarding
PSF investments that have been placed on the SBOE or PSF investment
staff by statutes, attorney general opinions and court decisions, or by
SBOE policies and operating procedures;
(5) continuously research all internally managed securi-
ties held by the PSF and report to the SBOE Committee on School
Finance/Permanent School Fund and the SBOE any information
requested, including reports and statistics on the PSF, for the purpose
of administering the PSF;
(6) establish and maintain a procedures manual that imple-
ments this section to be approved by the SBOE;
(7) make recommendations regarding investment and
policy matters to the SBOE Committee on School Finance/Permanent
School Fund and the SBOE, except for formal recommendations for
benchmarks for internally managed PSF asset classes, which duties the
Committee will assign to an appropriate third party who will present
such recommendations after consultation with PSF staff; and
(8) establish and maintain accounting policies and internal
control procedures concerning all receipts, disbursements and invest-
ments of the PSF, according to the procedures adopted by the SBOE.
(i) The SBOE delegates to the SBOE Committee on School
Finance/Permanent School Fund, to which it has delegated certain
powers and duties relating to the investment of the PSF, the responsi-
bility of representing the SBOE at the joint annual meeting between
the School Land Board and the SBOE under Texas Natural Resources
Code, 32.0161. The chairs of the SBOE and the SBOE Committee
on School Finance/Permanent School Fund shall be responsible for
coordinating the joint annual meeting between the School Land Board
and the SBOE.
33.25. Permissible and Restricted Investments and General Guide-
lines for Investment Managers.
(a) Permissible investments. Any investment that satisfies the
prudence standard, is consistent with the Fund's investment policy and
portfolio objectives, and is used in executing investment strategies ap-
proved by the State Board of Education (SBOE).(b) Prohibited transactions and restrictions. Except as pro-
vided in subsection (a) of this section or as approved or delegated by
the SBOE, the following prohibited transactions and restrictions apply
to all Texas Permanent School Fund (PSF) investment managers with
respect to the investment or handling of PSF assets, except as other-
wise noted:
(1) short sales of any kind except for U.S. Treasury futures
for purposes of hedging fixed income portfolios ;
(2) purchasing letter or restricted stock;
(3) buying or selling on margin;
(4) engaging in purchasing or writing options or similar
transactions;
{{5) p irhaig er OnThg futures en emodities sen-
traets;1
(5) [(6)] borrowing by pledging or otherwise encumbering
PSF assets;
(6) [(7-)] purchasing the equity or debt securities of the PSF
investment manager's own organization or an affiliated organization;
(7) [(8)] engaging in any purchasing transaction, after
which the cumulative market value of common stock in a single
corporation exceeds 2.5% of the PSF total market value or 5.0% of the
manager's total portfolio market value;
(8) [(9)] engaging in any purchasing transaction, after
which the cumulative number of shares of common stock in a single
corporation held by the PSF exceeds 5.0% of the outstanding voting
stock of that issuer-
(9) [(-0)] engaging in any purchasing transaction, after
which the cumulative market value of fixed income securities or cash
equivalent securities in a single corporation (excluding the U.S. gov-
ernment, its federal agencies, and government sponsored enterprises)
exceeds 2.5% of the PSF total market value or 5.0% of the investment
manager's total portfolio market value with the PSF;
(10) [{1-)] purchasing tax exempt bonds;
(11) [{-1-2)] purchasing guaranteed investment contracts
(GICs) from an insurance company or bank investment contracts
(BICs) from a bank not rated at least AAA by Standard & Poor's or
Moody's;
(12) [--3)] purchasing any publicly traded fixed income
security not rated investment grade by Standard & Poor's (BBB-),
Moody's (Baa3), or Fitch (BBB-), subject to the provisions of the PSF
Investment Procedures Manual and the following restrictions:
(A) when ratings are provided by the three rating agen-
cies, the middle rating shall be used;
(B) when ratings are provided by two ratings agencies,
the lower rating is used; or
(C) when a rating is provided by one rating agency, the
sole rating is used;
(13) ["44)] purchasing short-term money market instru-
ments rated below A-I by Standard & Poor's or P-1 by Moody's;
(14) [-1-5)] engaging in any transaction that results in unre-
lated business taxable income (excluding current holdings);
(15) [{46)] engaging in any transaction considered a "pro-
hibited transaction" under the Internal Revenue Code or the Employee
Retirement Income Security Act (ERISA);PROPOSED RULES December 20, 2019 44 TexReg 7795
Upcoming Pages
Here’s what’s next.
Search Inside
This issue can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Periodical.
Texas. Secretary of State. Texas Register, Volume 44, Number 51, Pages 7779-8116, December 20, 2019, periodical, December 20, 2019; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1221934/m1/17/: accessed July 18, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.