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The Executive Director for FIVISA and his/her designees are not required to invest in <br />all the investment options authorized in this Statement of Investment Policy. <br />Selection will be based on cash flow characteristics, exposure to market risk, rate of <br />return, the technical ability of the staff responsible for administering the program, and <br />the availability of time and tools for staff to engage in conservative, but effective, <br />management of the City's investment portfolio. <br />9.0 PROHIBITED INVESTMENTS AND INVESTMENT PRACTICES <br />9.1 Ineligible Investments - State Law <br />Certain investments, however, are prohibited by California Government Code <br />Section 53601.6. Accordingly, the City shall not invest in any inverse floaters, range <br />notes, mortgage derived, or interest -only strips or other securities which could result <br />in zero -interest accrual if held to maturity. However, prohibited securities that were <br />purchased and are currently held in the City's portfolio, as of the date of this policy <br />adoption, which were previously allowed under the California Government Code, yet <br />are now prohibited due to changes in the Code maybe held until their maturity dates. <br />9.2 Disallowed Investments - Higher Perceived Risk <br />Besides investments prohibited by statute, this policy disallows investments in the <br />following due to a higher perceived risk: <br />Investment agreements — contracts regarding funds deposited by an investor <br />often separated into those offered by banks and those offered by insurance <br />companies commonly known as Guaranteed Investment Contracts (GICs) or <br />Guaranteed Investment Agreements (GIAs); <br />• Securities lending agreements — agreements allowing local agencies to earn <br />incremental income on their investment portfolio by loaning securities in their <br />portfolio to financial services companies for a limited time; <br />Unregistered securities — purchases of private resales of unregistered <br />securities to institutions, such as Securities Act of 1933, Section 5, Rule 144A <br />securities. <br />9.3 Prohibited Investment Practices <br />Assets of the City shall not be invested pursuant to the following investment <br />practices: <br />Trading of securities strictly for speculation or solely for the realization of <br />short-term trading gains. <br />• A contract providing for the compensation of an agent or fiduciary solely <br />based upon the performance of the invested assets. <br />If a fiduciary or other third party with custody of public investment <br />transaction records of the City fails to produce records within a reasonable <br />CitV Of Santa - Annual Page 13 duly 1. 2024 -- <br />Statement of Investment Policy June 30, 2025 <br />