2018-059 - Approving the City's Statement of Investment Policy

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second loans, in addition to fixed-rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. [Referenced page: 9] FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system or interest-bearing, and usually have a limited or nonexistent secondary market. Commercial paper is usually issued by companies with high credit ratings, meaning that the investment is almost always relatively low risk. [Referenced pages: 7, 9, 10, 26, 31, 32] FIDUCIARY: Person, company, or association holding assets in trust of a beneficiary. [Referenced pages: 14, 23] FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA): FINRA is a private corporation that acts as a self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD) and the member regulation, enforcement and arbitration operations of the New York Stock Exchange. It is a non-governmental organization that regulates member brokerage firms and exchange markets. The government agency which acts as the ultimate regulator of the securities industry, including FINRA, is the Securities and Exchange Commission. [Referenced page: 7] FUTURES CONTRACT: Agreement to buy or sell a specific amount of a commodity or financial instrument at a particular price on a stipulated future date. [Referenced pages: 9, 33] EX OFFICIO: Ex officio describe a position someone automatically gains because of another job or position he/she already holds. For example, the United States Vice President is the ex officio President of the Senate. In a like fashion, in accordance with the California Government Code the Chief Fiscal Officer of a city which does have a specified City Treasurer is "ex officio" City Treasurer. [Referenced page: 6] GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by full faith & credit of the U.S. Government. Ginnie Mae securities are backed by FHA, VA or FHA mortgages. The term "pass- throughs" is used to describe Ginnie Maes. [Referenced page: 9] GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES): Is a collection of commonly -followed accounting rules and standards for financial reporting. The acronym is pronounced "gap." GAAP specifications include definitions of concepts and principles, as well as industry -specific rules. [Referenced page: 2] GUARANTEED INVESTMENT AGREEMENTS OR CONTRACTS (GIC): An agreement or contract that guarantees repayment of principal and a fixed or floating interest rate for a predetermined period of time. [Referenced page: 14] INTEREST: The amount earned while owning a debt security, generally calculated as a percentage of the principal amount. [Referenced pages: 9, 12, 13, 14, 15, 16, 17, 26, 29, 32, 33, 34, 35] INVERSE FLOATER: A bond or other type of debt whose coupon rate has an inverse relationship to a benchmark rate. An inverse floater adjusts its coupon payment as the interest rate changes. (Referenced pages: 34] City of Santa - Annual p� July 1, 2018 - Statement of investment Policy 5�^D50-48 June 30, 2019