55A - ADOPT RESO FOR ANNUAL STATEMENT AND RECIEVE AND FILE

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Some investments, such as straight floater; or floating rate notes that are not otherwise prohibited, have the potential to result in zero interest accrual. Before purchasing these types of investments, the local agency should evaluate all possible outcomes, and, as a safeguard, should consider including in its investment policy a statement establishing an acceptable positive spread or floor for all securities, which pay interest based on a spread to an index. Also, while not expressly prohibited by statelaw,umegistered securities, such as Rule 144A securities, may not be purchased by local agencies because local agencies do not meet the Securities and Exchange Commission definition of Qualified Institutional Buyers (QIB) ' Public agencies should seeklegal counsel beforepucchasing l44A securities ' CD1AUs Issue Brie%Rule 144A Securities, provides a summary of secunhas in this class. On December 18,2019, the SECpioposedamendments to thedefinitionsof"accieditedinvtator"and "gmhfwdm hiutmalbuW,"mRuL144Awider Ow Semi ituaActofl933. Theproposal alongvith msb uctionsoahoru to submit comments, is anailabL on theSEC'swebsite. 7hedefinitionofQ113 used m this publication vas current as of the date of this publication, Januany 2020. Section 536352 states that all local agency money maybe invested in investments set forth in 53601 or deposited for safekeeping in state or national banks, public banks, savings associations, federal associations, creditunions, or federally insured industrial loan companies in this state. It also specifies certain requirements that such financial institutions must satisfy to hold local agency money. MINIMUM LEGAL REQUIREMENT: To be eligible to receive local agency money, a financial institution must receive an overall rating of not less than "satisfactory' from the appropriate federal supervisory agency for meeting the criteria specified in Section 2906 of Title 12 of the U.S. Code (CommunityRemorestmentActof 1977). The Community ReinvestmentActof 1977 (Act) requires financial institutions to demonstrate their commitment to meeting the credit needs of local communities in which they are chartered to do business. For the purpose of the Act, the appropriate federal supervisory agency includes: • The Comptroller of the Currency with respect to national banks; • The Board of Governors of the Federal Reserve System with respect to state chartered banks that are members of the Federal Reserve to state chartered banks, public banks, and savings banks that are not members of the Federal Reserve system and the deposits of which are insured by the FDIC; and • The Director of Office of Thrift system and bank holding companies; Supervisionwith respect to savings associations (the deposits ofwhich • The Federal Deposit Insurance are insured by the FDIC) and Corporation (FDIC) with respect savings holding companies. LOCALAGENCY INVESTMENT GUIDELINES 55A-64