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<br /> <br />City of Santa - Annual Page <br />42 July 1, 2021 - <br />Statement of Investment Policy June 30, 2022 <br />GOVERNMENT CODE <br />SECTION <br />53601.6. <br /> <br />(a) A local agency shall not invest any funds pursuant to this article or pursuant to Article 2 (commencing <br />with Section 53630) in inverse floaters, range notes, or mortgage-derived, interest-only strips. <br />(b) (1) Except as provided in paragraph (2), a local agency shall not invest any funds pursuant to this article <br />or pursuant to Article 2 (commencing with Section 53630) in any security that could result in zero-interest <br />accrual if held to maturity. However, a local agency may hold prohibited instruments until their maturity <br />dates. The limitation in this subdivision shall not apply to local agency investments in shares of beneficial <br />interest issued by diversified management companies registered under the Investment Company Act of <br />1940 (15 U.S.C. Sec. 80a-1 et seq.) that are authorized for investment pursuant to subdivision (l) of Section <br />53601. <br />(2) Notwithstanding the prohibition in paragraph (1), a local agency may invest in securities issued by, or <br />backed by, the United States government that could result in zero- or negative-interest accrual if held to <br />maturity, in the event of, and for the duration of, a period of negative market interest rates. A local agency <br />may hold these instruments until their maturity dates. <br />(c) This section shall remain in effect only until January 1, 2026, and as of that date is repealed. <br /> <br />(Amended by Stats. 2020, Ch. 235, Sec. 4. (SB 998) Effective January 1, 2021.) <br /> <br />. . . <br /> <br />GOVERNMENT CODE <br />SECTION <br />53601.6. <br /> <br />(a) A local agency shall not invest any funds pursuant to this article or pursuant to Article 2 (commencing <br />with Section 53630) in inverse floaters, range notes, or mortgage-derived, interest-only strips. <br />(b) A local agency shall not invest any funds pursuant to this article or pursuant to Article 2 (commencing <br />with Section 53630) in any security that could result in zero interest accrual if held to maturity. However, a <br />local agency may hold prohibited instruments until their maturity dates. The limitation in this subdivision shall <br />not apply to local agency investments in shares of beneficial interest issued by diversified management <br />companies registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.) that are <br />authorized for investment pursuant to subdivision (l) of Section 53601. <br />(c) This section shall become operative on January 1, 2026. <br /> <br />(Amended by Stats. 2020, Ch. 235, Sec. 5. (SB 998) Effective January 1, 2021.) <br /> <br />. . . <br /> <br />