Glendale City Council
July 16, 2024

326 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

SOJITZ CORP

SOLAR APPLIED MATERIALS TECH

SOLAR INDUSTRIES INDIA LTD

SOLAREDGE TECHNOLOGIES INC

SOLARIA ENERGIA Y MEDIO AMBI

SOLASTO CORP

SOLUM CO LTD

SOLVAY SA

SOMPO HOLDINGS INC

SONA BLW PRECISION FORGINGS

SONATA SOFTWARE LTD

SONGCHENG PERFORMANCE DEVE A

SONIC HEALTHCARE LTD

SONOSCAPE MEDICAL CORP A

SONOVA HOLDING AG REG

SONY GROUP CORP

SOOCHOW SECURITIES CO LTD A

SOPRA STERIA GROUP

SOTETSU HOLDINGS INC

SOULBRAIN CO LTD/NEW
SOUTH32 LTD

SOUTHERN PROVINCE CEMENT CO

SOUTHWEST SECURITIES CO LT A

SOVCOMFLOT OAO

SPAR GROUP LIMITED/THE
SPAREBANK 1 SMN
SPAREBANK 1 SR BANK ASA

SPARK NEW ZEALAND LTD

SPECTRIS PLC

SPIC INDUSTRY FINANCE HOLD A

SPIE SA

SPIRAX SARCO ENGINEERING PLC

SPIRENT COMMUNICATIONS PLC

SPORTON INTERNATIONAL INC

SPOTIFY TECHNOLOGY SA

SQUARE ENIX HOLDINGS CO LTD

SRF LTD

SRI TRANG AGRO INDUSTRY FOR

SRI TRANG GLOVES

SRISAWADCORP PCL FOREIGN

SSAB AB A SHARES

SSAB AB B SHARES
Shares
915,500
821,244
41,128
117,822
108,703
77,500
62,820
131,091
869,091
612,654
182,696
41,743
836,653
56,400
92,234
2,535,730
43,797
110,949
190,400
7,520
8,515,551
114,495
25,912
828,950
371,418
235,452
325,644
11,538,063
203,343
695,200
243,987
134,350
1,161,631
131,271
311,030
533,500
261,345
1,613,620
1,807,300
957,200
197,762
1,481,072
Book Value Market Value
13,132,643 20,123,455
1,223,780 1,011,245
1,937,280 1,875,160
22,333,839 31,700,009
1,998,315 1,665,667
760,477 356,038
1,510,477 1,399,284
14,035,935 14,630,979
33,511,142 38,838,058
4,717,582 3,852,414
1,601,062 2,248,061
79,879 71,152
14,774,882 19,809,576
412,649 422,527
17,453,096 24,557,245
137,260,340 227,458,674
45,271 41,781
19,659,177 22,127,098
3,892,294 3,340,085
766,089 1,432,490
16,806,039 21,313,096
1,729,684
1,633,157
14,705 13,001
0 0
2,756,454 2,064,389
2,311,210 3,098,761
3,120,427 3,954,458
30,494,223 35,980,170
5,366,634 9,293,804
561,141 413,787
5,299,054 7,879,221
12,998,116 17,704,039
3,140,711 2,416,111
821,690 1,070,585
44,808,133 49,935,867
27,717,473 24,686,394
4,412,313 7,293,560
811,282 773,700
2,038,254 379,760
1,318,386 1,275,637
1,299,356 1,402,843
9,368,698 10,242,848

327 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name
SSANGYONG C+E CO LTD

SSE PLC

SSP GROUP PLC

SSY GROUP LTD

ST BARBARA LTD

ST GALLER KANTONALBANK A REG

ST JAMES S PLACE PLC

ST PHARM CO LTD

ST SHINE OPTICAL CO LTD

STABILUS SE

STADLER RAIL AG

STANDARD BANK GROUP LTD

STANDARD CHARTERED PLC

STANDARD FOODS CORP

STANLEY ELECTRIC CO LTD

STANMORE RESOURCES LTD

STANTEC INC

STAR ENTERTAINMENT GRP LTD/T
STAR HEALTH + ALLIED INSURAN

STAR PETROLEUM REFINING PCL

STARHUB LTD

STARPOWER SEMICONDUCTOR LT A

STARTS CORP INC

STATE BANK OF INDIA
STATE GRID INFORMATION + C A
STCUBE

STEADFAST GROUP LTD

STEEL AUTHORITY OF INDIA

STELLA INTERNATIONAL

STELLANTIS NV

STERLITE TECHNOLOGIES LTD

STMICROELECTRONICS NV

STONECO LTD A

STORA ENSO OYJ R SHS

STOREBRAND ASA

STORSKOGEN GROUP AB B

STRAUMANN HOLDING AG REG

STRAUSS GROUP LTD

STRIKE CO LTD

STRIKE ENERGY LTD
STROEER SE + CO KGAA

STUDIO DRAGON CORP
Shares
227,428
1,968,440
1,418,570
2,714,888
1,462,506
5,482
964,752
15,903
80,000
47,616
95,724
2,462,066
5,078,987
772,900
265,500
486,887
212,100
2,508,164
389,318
2,629,900
1,697,940
2,600
54,000
3,191,339
155,300
86,536
1,542,089
2,569,245
826,000
4,962,739
344,698
1,202,717
579,241
1,098,208
857,065
2,463,303
193,953
68,249
25,100
4,365,776
46,966
11,650
Book Value Market Value
1,137,208 913,060
38,345,790 46,072,455
6,151,420 4,523,178
1,663,952 1,732,185
2,507,124 467,288
2,603,272 2,971,855
13,273,366 13,338,603
650,888 928,123
935,261 594,648
2,918,404 2,859,796
4,211,897 3,740,581
27,530,715 23,139,804
57,478,998 44,102,498
1,461,700 1,031,129
5,834,246 5,328,920
1,042,137 836,169
5,553,250 13,863,237
5,682,914 1,928,341
2,974,640 2,776,699
795,294 597,115
2,346,220 1,304,805
126,354
76,912
1,156,051 1,099,540
14,736,704 22,284,765
392,045 431,009
1,249,978 1,044,881
5,863,555 6,158,949
2,099,552 2,677,724
1,169,564 779,981
65,791,207 87,116,029
1,193,405 614,300
25,009,431 59,788,782
14,053,334 7,379,530
13,492,709 12,730,294
5,367,443 6,692,652
2,453,854 2,246,353
14,181,837 31,467,365
1,623,932 1,534,566
789,214 601,733
1,169,637 1,278,675
2,263,456 2,280,177
887,791 473,904

328 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

SUBARU CORP
SUBSEA 7 SA

SUGI HOLDINGS CO LTD

SULZER AG REG

SUMBER ALFARIA TRIJAYA TBK P

SUMCO CORP

SUMITOMO BAKELITE CO LTD

SUMITOMO CHEMICAL CO LTD

SUMITOMO CHEMICAL INDIA LTD

SUMITOMO CORP

SUMITOMO ELECTRIC INDUSTRIES

SUMITOMO FORESTRY CO LTD

SUMITOMO HEAVY INDUSTRIES

SUMITOMO METAL MINING CO LTD

SUMITOMO MITSUI CONSTRUCTION

SUMITOMO MITSUI FINANCIAL GR

SUMITOMO MITSUI TRUST HOLDIN

SUMITOMO OSAKA CEMENT CO LTD

SUMITOMO PHARMA CO LTD
SUMITOMO REALTY + DEVELOPMEN

SUMITOMO RUBBER INDUSTRIES

SUMITOMO WAREHOUSE CO LTD

SUMMARECON AGUNG TBK PT

SUMMERSET GROUP HOLDINGS LTD

SUMMIT REAL ESTATE HOLDING

SUN ART RETAIL GROUP LTD

SUN HUNG KAI PROPERTIES

SUN LIFE FINANCIAL INC

SUN PHARMACEUTICAL INDUS

SUN TV NETWORK LTD

SUNAC SERVICES HOLDINGS LTD

SUNCOR ENERGY INC

SUNCORP GROUP LTD

SUNDRAM FASTENERS LTD

SUNDRUG CO LTD

SUNEVISION HOLDINGS

SUNFLOWER PHARMACEUTICAL A

SUNGEEL HITECH CO LTD

SUNGROW POWER SUPPLY CO LT A

SUNNY FRIEND ENVIRONMENTAL T

SUNNY OPTICAL TECH

SUNPLUS TECHNOLOGY CO LTD
Shares
3,744,472
443,366
193,600
31,146
36,099,300
2,277,558
71,500
4,860,998
229,310
2,811,427
1,682,215
262,482
383,300
425,607
264,100
3,635,637
661,742
59,945
311,900
713,815
383,287
126,400
23,133,351
426,254
73,388
3,651,000
8,491,206
1,119,773
1,987,480
171,052
1,252,979
2,318,227
2,292,057
202,343
368,600
1,118,000
3,228,318
8,972
3,771,631
137,181
1,180,000
739,000
Book Value Market Value
85,002,901 70,026,691
3,426,000 5,530,927
8,150,890 8,599,384
2,479,125 2,677,167
5,431,035 6,212,186
33,716,127 31,956,880
2,783,145 2,951,814
23,247,052 14,680,359
1,450,773 1,219,558
43,589,489 59,152,105
21,064,600 20,449,384
3,443,106 6,325,283
9,900,162 9,117,414
13,004,225 13,636,739
1,167,984 676,078
150,471,669 154,923,640
24,084,224 23,409,464
1,967,603 1,577,271
3,902,425 1,378,933
21,109,851 17,547,201
4,332,961 3,696,697
1,627,499
2,070,884
1,586,644 1,018,377
1,837,405 2,504,376
1,089,548 939,165
1,518,708 941,099
124,552,676 106,944,597
45,150,969 58,440,600
14,891,743 25,476,956
1,200,382 915,871
2,190,414 353,353
78,626,454 68,079,578
21,623,858 20,581,797
1,752,149 3,001,616
8,585,972 10,884,456
892,012 570,656
11,664,323 10,801,295
1,103,519 919,227
61,524,379 60,466,999
900,407 640,878
15,627,303 11,767,476
941,686 682,183

329 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

SUNRESIN NEW MATERIALS CO A
SUNTORY BEVERAGE + FOOD LTD

SUNWODA ELECTRONIC CO LTD A

SUPALAI PCL NVDR

SUPALAI PUBLIC CO LTD FOR

SUPER GROUP LTD

SUPER HI INTERNATIONAL HOLDI

SUPER RETAIL GROUP LTD

SUPERB SUMMIT

SUPERMAX CORP BHD

SUPREME ELECTRONICS CO LTD

SUPREME INDUSTRIES LTD

SURGUTNEFTEGAS PJSC

SURGUTNEFTEGAS PREFERENCE

SURGUTNEFTEGAZ SP ADR PREF

SURUGA BANK LTD

SURYA CITRA MEDIA PT TBK

SURYA ESA PERKASA TBK PT

SUVEN PHARMACEUTICALS LTD

SUZANO SA

SUZHOU DONGSHAN PRECISION A

SUZHOU MAXWELL TECHNOLOGIE A

SUZHOU NANOMICRO TECHNOLOG A

SUZLON ENERGY LTD

SUZUKEN CO LTD

SUZUKI MOTOR CORP

SVENSKA CELLULOSA AB SCA B

SVENSKA HANDELSBANKEN A SHS

SWATCH GROUP AG/THE BR

SWATCH GROUP AG/THE REG

SWECO AB B SHS

SWEDBANK AB A SHARES

SWEDISH ORPHAN BIOVITRUM AB

SWIRE PACIFIC LTD CL A

SWIRE PACIFIC LTD CL B

SWIRE PROPERTIES LTD

SWISS LIFE HOLDING AG REG

SWISS PRIME SITE REG

SWISS RE AG

SWISSCOM AG REG

SWISSQUOTE GROUP HOLDING REG

SYDBANK A/S
Shares
64,554
878,976
29,456
52,500
2,330,600
650,308
233,400
319,117
15,630,000
2,750,700
712,656
113,325
14,970,110
48,672,672
1,563,713
338,600
32,908,200
16,151,500
185,228
1,311,050
45,700
4,624
6,500
14,662,986
433,000
815,456
1,063,175
2,660,037
51,834
103,728
367,348
1,884,124
291,333
2,900,161
2,662,500
7,073,561
56,822
518,267
519,840
144,359
17,061
114,028
Book Value Market Value
468,606 553,893
35,589,658 31,696,287
109,830 66,080
37,080 29,911
1,392,193 1,327,827
789,644 1,106,036
286,554 452,111
2,060,862 2,427,963
0 2
442,246 471,464
747,925 1,107,501
3,598,969 4,417,308
70,248 0
0 1
0 2
1,385,561 1,351,729
763,704 355,586
971,138 624,837
993,921 1,096,991
10,935,227 12,017,958
166,081 162,703
158,349
107,661
44,897 34,712
1,352,379 2,734,690
12,683,228 11,722,621
27,532,053 29,343,665
8,412,202 13,529,242
24,930,241 22,248,039
14,015,132 15,127,544
5,302,407 5,698,576
6,288,974 4,036,941
26,947,005 31,720,992
6,819,222 5,674,915
20,387,924 22,223,243
4,063,223 3,353,352
20,716,567 17,384,680
19,750,797 33,217,354
45,295,590 44,982,320
39,232,610 52,318,106
69,231,591 90,005,533
2,976,388 3,541,304
3,930,538 5,266,288

330 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

SYMRISE AG

SYNGENE INTERNATIONAL LTD

SYNNEX TECHNOLOGY INTL CORP

SYRAH RESOURCES LTD

SYSMEX CORP

SYSTENA CORP
T+D HOLDINGS INC
T3EX GLOBAL HOLDINGS CORP

TA CHEN STAINLESS PIPE CO

TABCORP HOLDINGS LTD

TADANO LTD

TAG IMMOBILIEN AG

TAICHUNG COMMERCIAL BANK

TAIHAN ELECTRIC WIRE CO LTD

TAIHEIYO CEMENT CORP

TAIJI COMPUTER CORP LTD A

TAIKISHA LTD

TAIMED BIOLOGICS INC

TAINAN SPINNING

TAISEI CORP

TAISHIN FINANCIAL HOLDING

TAISHO PHARMACEUTICAL HOLDIN

TAIWAN ASIA SEMICONDUCTOR CO

TAIWAN BUSINESS BANK

TAIWAN CEMENT

TAIWAN COGENERATION CORP

TAIWAN COOPERATIVE FINANCIAL

TAIWAN FERTILIZER CO LTD

TAIWAN GLASS IND CORP

TAIWAN HIGH SPEED RAIL CORP

TAIWAN HON CHUAN ENTERPRISE

TAIWAN MASK CORPORATION

TAIWAN MOBILE CO LTD

TAIWAN PAIHO LTD

TAIWAN SECOM

TAIWAN SEMICONDUCTOR CO LTD

TAIWAN SEMICONDUCTOR MANUFAC

TAIWAN SEMICONDUCTOR SP ADR

TAIWAN SURFACE MOUNTING TECH

TAIWAN UNION TECHNOLOGY CORP

TAIYO HOLDINGS CO LTD

TAIYO YUDEN CO LTD
Shares
760,296
242,342
9,672,327
1,224,545
342,588
502,100
1,301,180
15,000
2,846,320
4,858,165
229,300
280,964
6,252,821
65,296
537,858
24,200
55,200
350,000
2,089,265
329,751
73,033,651
304,100
699,000
21,115,671
36,274,794
778,128
63,651,362
1,269,000
2,598,000
3,906,000
520,642
343,000
10,370,312
428,299
567,680
439,000
74,334,853
508,690
606,711
445,000
58,700
563,400
Book Value Market Value
91,776,491 79,646,976
1,286,630 2,260,022
17,855,663 18,012,650
1,238,383 737,682
19,257,340 23,233,456
1,334,248 1,014,379
18,035,391 18,954,817
42,963 34,147
3,055,481 4,331,923
2,795,575 3,589,560
1,851,223 1,815,711
4,002,705 2,655,179
2,147,266 3,051,675
767,296 704,671
10,175,006 10,566,629
163,033 136,954
1,239,920 1,565,849
1,623,621 1,191,222
933,147 1,106,869
9,228,862 11,455,217
29,389,857 44,320,378
24,650,544
11,395,203
1,205,447 993,137
8,163,159 9,661,363
42,450,839 44,317,806
801,371 1,379,141
37,190,782 57,326,998
2,141,637 2,465,106
1,210,899 1,609,960
4,263,601 4,032,105
1,060,547 1,763,641
1,080,756 915,195
36,723,180 31,832,324
986,965 748,109
1,627,431 2,087,025
685,943 1,368,681
771,681,880 1,374,781,272
51,807,460 51,336,995
1,409,837 1,957,792
1,539,965 1,078,762
1,230,239 1,081,930
14,578,479 15,931,199

T
331 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

TAKARA BIO INC

TAKARA HOLDINGS INC

TAKARA STANDARD CO LTD

TAKASAGO THERMAL ENGINEERING

TAKASHIMAYA CO LTD

TAKEDA PHARMACEUTICAL CO LTD

TAKEUCHI MFG CO LTD

TAKUMA CO LTD

TAL EDUCATION GROUP ADR

TALANX AG

TANGSHAN JIDONG CEMENT INV A

TANGSHAN PORT GROUP CO LTD A

TANGSHAN SANYOU CHEMICAL I A

TANLA PLATFORMS LTD

TATA CHEMICALS LTD

TATA COMMUNICATIONS LTD

TATA CONSULTANCY SVCS LTD

TATA CONSUMER PRODUCTS LTD

TATA ELXSI LTD

TATA MOTORS LTD

TATA MOTORS LTD A DVR

TATA POWER CO LTD

TATA STEEL LTD

TATA TELESERVICES MAHARASHTR
TATE + LYLE PLC

TATNEFT PJSC

TATNEFT PJSC PREF

TATUNG CO LTD

TAYHO ADVANCED MATERIALS G A

TAYLOR WIMPEY PLC

TBEA CO LTD A

TBS HOLDINGS INC

TC ENERGY CORP

TCI CO LTD

TCL ELECTRONICS HOLDINGS LTD

TCL TECHNOLOGY GROUP CORP A

TCL ZHONGHUAN RENEWABLE EN A

TDK CORP

TEAMVIEWER SE

TECAN GROUP AG REG

TECH MAHINDRA LTD
Shares
71,700
338,400
92,000
120,300
943,069
7,731,426
91,800
139,700
789,770
207,233
21,200
7,170,910
11,832
104,457
295,670
209,489
1,888,627
1,090,203
60,818
3,234,519
817,770
2,922,228
15,175,590
898,790
716,425
176,387
510,344
12,245,000
132,700
6,474,053
5,606,253
55,500
1,896,895
179,428
1,345,333
343,390
57,053
2,129,400
260,903
23,822
1,099,723
Book Value Market Value
1,457,577 817,529
2,905,835 2,735,811
1,271,305 1,169,295
1,581,264 2,005,902
12,313,910 13,134,520
269,212,785 242,157,024
1,816,783 2,813,671
1,348,351 1,426,625
25,443,536 4,707,029
9,377,441 11,881,096
23,623 21,477
2,951,291 3,479,589
9,815 8,864
1,252,178 1,302,398
3,177,007 3,609,184
2,266,056 4,072,122
58,477,436 76,023,935
8,964,425 11,440,744
6,030,104 5,625,774
10,910,678 23,481,300
1,345,223 3,110,639
3,915,383 7,902,559
14,897,149
20,718,476
1,854,025 779,520
7,067,005 6,612,607
0 0
0 0
15,011,975 21,348,986
466,303 446,359
12,093,539 8,457,139
19,151,812 17,177,569
806,621 1,006,822
85,536,623 76,750,242
1,373,922 1,022,603
669,280 698,709
198,737 185,979
299,840 260,373
74,983,930 82,017,295
3,797,370 4,187,132
9,914,256 9,138,446
11,730,227 15,159,417
TECH PRO 18,653,192 0 2

332 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

TECHNIP ENERGIES NV

TECHNIPFMC PLC

TECHNOLOGY ONE LTD

TECHNOPRO HOLDINGS INC

TECHNOPROBE SPA

TECHTRONIC INDUSTRIES CO LTD

TECK RESOURCES LTD CLS B
TECO ELECTRIC + MACHINERY

TEIJIN LTD
TELE2 AB B SHS

TELECOM ITALIA RSP

TELECOM ITALIA SPA

TELECOM PLUS PLC
TELEFONICA BRASIL S.A.

TELEFONICA DEUTSCHLAND HOLDI

TELEFONICA SA

TELEKOM MALAYSIA BHD

TELENET GROUP HOLDING NV

TELENOR ASA

TELEPERFORMANCE

TELIA CO AB

TELIX PHARMACEUTICALS LTD

TELKOM INDONESIA PERSERO TBK

TELKOM SA SOC LTD

TELSTRA GROUP LTD

TELUS CORP

TEMENOS AG REG
TEMPLE + WEBSTER GROUP LTD

TENAGA NASIONAL BHD

TENARIS SA

TENARIS SA ADR

TENCENT HOLDINGS LTD

TENCENT MUSIC ENTERTAINM ADR

TERA RESOURCE CO LTD

TERA RESOURCE CO LTD RIGHTS

TERNA RETE ELETTRICA NAZIONA

TERUMO CORP

TESCO PLC

TEVA PHARMACEUTICAL IND LTD

TEXHONG INTERNATIONAL GROUP

TFI INTERNATIONAL INC

TGS ASA
Shares
257,979
902,426
1,262,312
191,500
807,753
2,759,016
813,300
12,561,000
1,033,600
3,400,217
9,584,155
19,850,219
129,358
2,800,057
5,990,871
29,210,763
2,077,071
86,324
3,781,940
104,204
14,124,748
322,273
293,044,400
515,872
25,704,187
2,735,484
106,324
198,521
19,669,193
2,196,635
32,131
15,073,668
2,628,351
163,468
5,349
8,049,122
2,692,404
13,119,124
2,083,475
523,000
157,300
214,338
Book Value Market Value
3,159,361 5,941,519
6,656,112 14,998,320
11,135,673 13,150,037
3,980,390 4,111,284
6,093,104 6,380,314
18,861,856 29,978,589
17,738,752 34,259,091
16,005,978 21,496,614
13,053,030 10,308,468
46,498,372 28,054,710
6,832,804 2,609,897
20,917,230 5,583,070
2,676,970 2,779,364
29,750,877 25,115,768
19,735,366 16,843,381
189,970,718 118,425,027
2,257,523 2,184,985
1,270,418 1,941,982
70,598,838 38,406,977
18,849,862 17,445,209
65,810,370 30,926,860
1,220,207 2,406,926
78,498,600 78,184,265
1,401,865 865,373
67,515,451 73,572,966
48,635,582 53,293,616
11,558,199 8,454,579
1,515,076 777,016
54,382,594 38,137,375
34,920,344 32,868,402
900,472 962,323
664,572,177 637,831,242
32,954,545 19,397,230
0 0
0 0
57,044,103 68,549,129
73,548,196 84,981,126
65,546,252 41,430,656
45,042,264 15,692,242
517,778 344,369
5,805,926 17,941,650
4,073,253 3,194,999

333 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

THAI AIRWAYS INTL PCL FOR

THAI LIFE INSURANCE PCL

THAI OIL PCL FOREIGN

THAI UNION GROUP PCL F

THAI UNION GROUP PCL NVDR

THAI VEGETABLE OIL PCL FOR

THAILAND FUTURE FUND FOREIGN

THALES SA

THANACHART CAPITAL FOREIGN

THANACHART CAPITAL PCL NVDR

THE FOSCHINI GROUP LTD

THE SAUDI NATIONAL BANK
THE SHANGHAI COMMERCIAL + SA

THEME INTERNATIONL HLDGS LTD

THERMAX LTD FOREIGN

THINKING ELECTRONIC INDUSTRI

THK CO LTD

THOMSON REUTERS CORP

THONBURI HEALTHCARE FOREIGN

THONBURI HEALTHCARE GRO NVDR

THORESEN THAI AGENCIES FOR

THULE GROUP AB/THE

THUNDER SOFTWARE TECHNOLOG A

THUNGELA RESOURCES LTD

THYSSENKRUPP AG

TIAN LUN GAS HOLDINGS LTD

TIANGONG INTL CO LTD

TIANHE CHEM

TIANJIN GUANGYU DEVELOPMT A

TIANMA MICROELECTRONICS A

TIANNENG POWER INTL LTD

TIANQI LITHIUM CORP A

TIANQI LITHIUM CORP H

TIANSHUI HUATIAN TECHNOLOG A

TIBET MINERAL DEVELOPMENT A

TIBET SUMMIT RESOURCES CO A

TIETOEVRY OYJ

TIGER BRANDS LTD

TILRAY BRANDS INC
TIM SA

TIME DOTCOM BHD

TIMES CHINA HOLDINGS LTD
Shares
1,211,100
2,800,700
2,033,802
5,128,960
146,700
929,009
3,637,953
589,527
1,474,011
88,300
577,157
16,597,257
23,129,395
9,040,000
68,622
147,000
299,049
934,089
1,388,400
44,600
2,849,600
188,774
6,513
264,430
867,962
804,500
2,152,000
5,054,767
21,100
9,570
2,050,000
39,000
163,800
44,300
61,400
8,600
810,107
289,299
997,617
93,600
1,942,000
1,571,000
Book Value Market Value
0 3
1,034,811 971,615
3,942,891 2,538,309
2,719,956 1,866,128
75,960 53,376
751,947 661,613
1,341,982 774,688
68,839,669 88,243,494
2,159,220 2,068,313
108,056 123,901
4,705,008 2,872,457
164,905,659 162,844,018
36,088,195 33,716,211
1,071,653 1,015,134
1,180,191 1,908,647
929,040 778,789
6,568,187 6,093,329
90,671,673 126,258,197
1,531,333 2,682,426
75,811 86,168
1,196,416 526,439
4,043,734
5,541,947
108,635 86,260
1,461,682 2,070,440
18,363,486 6,787,715
725,260 564,626
647,303 521,757
0 1
43,127 33,848
12,755 12,076
2,296,206 2,116,288
520,913 374,786
1,092,603 1,140,200
61,921 56,024
430,710 250,080
32,885 21,586
20,901,556 22,343,147
3,878,179 2,560,946
8,840,631 1,556,283
244,770 283,672
1,526,187 2,163,557
470,946 142,333

334 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

TIMKEN INDIA LTD

TINGYI (CAYMAN ISLN) HLDG CO

TIS INC

TISCO FINANCIAL FOREIGN

TISCO FINANCIAL GROUP NVDR

TITAN CO LTD

TITAN WIND ENERGY SUZHOU A

TKC CORP

TKG HUCHEMS

TKH GROUP NV DUTCH CERT

TMBTHANACHART BANK PCL

TMBTHANACHART BANK PCL NVDR

TMX GROUP LTD

TOA PAINT THAILAND PCL FOR

TOAGOSEI CO LTD

TOBU RAILWAY CO LTD

TOCALO CO LTD

TODA CORP

TOEI ANIMATION CO LTD

TOEI CO LTD
TOFFLON SCIENCE + TECHNOLO A

TOHO CO LTD

TOHO GAS CO LTD

TOHO HOLDINGS CO LTD

TOHO TITANIUM CO LTD

TOHOKU ELECTRIC POWER CO INC

TOKAI CARBON CO LTD

TOKAI CARBON KOREA CO LTD

TOKAI HOLDINGS CORP

TOKAI RIKA CO LTD

TOKAI TOKYO FINANCIAL HOLDIN

TOKEN CORP

TOKIO MARINE HOLDINGS INC

TOKUYAMA CORP

TOKYO CENTURY CORP

TOKYO ELECTRIC POWER COMPANY

TOKYO ELECTRON LTD

TOKYO GAS CO LTD

TOKYO KIRABOSHI FINANCIAL GR

TOKYO OHKA KOGYO CO LTD

TOKYO SEIMITSU CO LTD

TOKYO STEEL MFG CO LTD
Shares
60,759
11,142,000
1,395,000
1,131,478
2,689,600
761,326
23,400
55,300
37,508
75,168
76,876,280
13,725,774
1,305,125
969,900
293,800
1,462,028
93,200
384,700
6,000
12,784
100,200
702,189
160,800
107,100
58,600
2,111,500
351,400
7,807
224,100
91,900
451,200
12,950
10,736,422
134,100
112,700
2,962,859
999,100
2,672,979
41,700
67,600
276,000
142,200
Book Value Market Value
1,999,640 2,535,604
20,211,042 17,317,403
29,659,340 34,659,045
2,957,287 3,095,568
7,250,547 7,358,375
14,397,328 28,283,292
52,770 48,989
1,118,499 1,486,425
655,279 629,095
2,680,290 3,724,818
3,440,426 3,360,830
553,107 600,055
23,053,413 29,401,682
1,189,327 745,446
2,756,521 2,618,151
41,046,034 39,025,177
679,323 969,174
1,868,944 2,150,604
558,992 550,455
1,408,366 1,621,273
573,504 313,349
24,457,189
26,579,555
4,961,678 2,772,989
1,829,585 1,961,419
1,021,440 707,084
16,587,376 13,004,859
4,323,929 3,204,381
785,817 681,961
1,401,495 1,396,991
1,100,627 1,352,415
1,377,194 1,192,503
742,901 665,711
176,430,855 246,246,507
1,913,979 2,197,501
4,315,659 4,035,944
27,070,809 10,805,154
66,685,469 142,121,258
60,828,344 58,125,527
826,763 898,713
3,394,126 4,102,256
11,477,751 15,142,907
950,794 1,336,061

335 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

TOKYO TATEMONO CO LTD

TOKYOTOKEIBA CO LTD

TOKYU CORP

TOKYU FUDOSAN HOLDINGS CORP

TOMONY HOLDINGS INC

TOMRA SYSTEMS ASA

TOMY COMPANY LTD

TON YI INDUSTRIAL CORP

TONG HSING ELECTRONIC INDUST

TONG REN TANG TECHNOLOGIES H

TONG YANG INDUSTRY

TONGCHENG TRAVEL HOLDINGS LT

TONGDAO LIEPIN GROUP

TONGFU MICROELECTRONIC CO A

TONGKUN GROUP CO LTD A

TONGLING NONFERROUS METALS A

TONGWEI CO LTD A

TOP GLOVE CORP BHD

TOPCHOICE MEDICAL CORPORAT A

TOPCO SCIENTIFIC CO LTD

TOPCON CORP

TOPDANMARK A/S
TOPICUS.COM INC SUB VOTING

TOPPAN INC

TOPRE CORP

TOPSPORTS INTERNATIONAL HOLD

TORAY INDUSTRIES INC

TORIDOLL HOLDINGS CORP

TOROMONT INDUSTRIES LTD

TORONTO DOMINION BANK

TORRENT PHARMACEUTICALS LTD

TORRENT POWER LTD

TOSHIBA CORP

TOSHIBA TEC CORP

TOSOH CORP

TOTALENERGIES SE

TOTALENERGIES SE SPON ADR

TOTETSU KOGYO CO LTD

TOTO LTD

TOTVS SA

TOURMALINE OIL CORP

TOWA PHARMACEUTICAL CO LTD
Shares
863,100
25,800
3,419,967
1,141,200
19,200
424,785
166,800
1,400,000
250,482
1,209,000
953,450
2,098,400
283,412
30,500
35,456
145,193
2,406,822
9,456,900
5,459
305,296
464,900
81,073
162,934
733,426
81,100
4,992,000
3,050,864
82,100
152,833
3,872,216
179,862
392,671
1,716,532
47,500
613,600
6,869,387
60,717
49,400
310,000
770,100
516,800
44,500
Book Value Market Value
11,204,195 11,050,379
778,328 699,734
54,177,389 41,041,497
6,873,947 6,499,712
58,108 48,487
8,823,764 6,839,508
1,487,946 2,088,823
890,441 887,797
1,691,160 1,471,791
1,215,046 1,200,268
1,395,887 1,613,345
3,920,148 4,386,059
634,087 328,018
87,770 94,752
76,421 64,578
63,420 57,680
11,723,282 11,351,249
4,421,156 1,641,155
100,118 72,684
1,030,756 1,788,968
5,348,493 6,780,428
2,528,329 3,981,871
11,099,957 13,378,257
12,193,072 15,730,588
1,043,427 889,920
5,868,710 4,325,304
19,855,543 16,894,950
826,232 1,780,769
5,836,796 12,569,670
193,430,751 240,277,843
2,535,632 4,176,545
1,937,537 2,944,928
60,263,276 53,644,965
1,366,055 1,353,997
7,063,487 7,212,830
378,452,083 393,836,161
3,563,413 3,499,728
876,980 914,960
9,478,730 9,276,300
2,698,778 4,785,986
30,279,791 24,378,353
875,541 545,262

336 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

TOWER BERSAMA INFRASTRUCTURE

TOWER SEMICONDUCTOR LTD

TOWNGAS SMART ENERGY CO LTD

TOYO INK SC HOLDINGS CO LTD

TOYO SEIKAN GROUP HOLDINGS L

TOYO SUISAN KAISHA LTD

TOYO TIRE CORP

TOYOBO CO LTD

TOYODA GOSEI CO LTD

TOYOTA BOSHOKU CORP

TOYOTA INDUSTRIES CORP

TOYOTA MOTOR CORP

TOYOTA TSUSHO CORP

TP ICAP GROUP PLC

TPG TELECOM LTD

TPI POLENE PUB CO LTD FOR

TPK HOLDING CO LTD

TPR CO LTD

TQM ALPHA PCL FOREIGN

TRADA ALAM MINERA TBK PT

TRAINLINE PLC

TRANE TECHNOLOGIES PLC

TRANSACTION CAPITAL

TRANSCEND INFORMATION INC

TRANSCOSMOS INC

TRANSMISSORA ALIANCA DE UNIT

TRANSNEFT PJSC

TRANSURBAN GROUP

TRAVELSKY TECHNOLOGY LTD H

TRAVIS PERKINS PLC

TREASURY WINE ESTATES LTD

TRELLEBORG AB B SHS

TREND MICRO INC

TRENT LTD FOREIGN

TRES TENTOS AGROINDUSTRIAL S

TRI CHEMICAL LABORATORIES IN

TRIDENT LTD

TRIGANO SA

TRINA SOLAR CO LTD A
TRIP.COM GROUP LTD

TRIPOD TECHNOLOGY CORP

TRITON INTERNATIONAL LTD
Shares
8,418,700
705,319
2,160,000
61,000
312,900
624,870
151,400
163,490
147,200
115,700
369,829
21,236,955
832,744
1,507,660
675,524
16,442,800
599,000
34,400
551,746
77,349,300
832,865
447,356
1,083,641
1,225,071
46,200
1,095,273
3,321
5,527,784
1,785,000
395,075
1,347,875
411,508
781,616
345,047
922,731
48,200
2,173,886
15,027
33,800
1,009,227
2,548,000
127,492
Book Value Market Value
869,440 1,128,670
25,552,501 25,981,786
838,548 959,191
1,200,201 917,944
4,801,050 4,583,037
23,329,334 28,114,502
2,271,712 1,994,958
2,145,626 1,164,513
3,113,105 2,772,189
1,781,048 2,053,678
19,438,825 26,239,986
256,793,932 339,194,732
28,808,722 41,131,625
5,480,111 2,898,148
3,319,549 2,189,857
866,576 681,735
809,244 852,019
600,287 402,942
670,002 416,280
0 0
5,050,269 2,763,634
42,228,824 85,561,309
3,183,853 334,421
2,963,222 3,083,869
861,201 1,139,537
7,371,590 8,546,036
0 0
47,197,960 52,433,864
3,558,614 3,029,439
3,762,638 4,080,514
10,106,420 10,075,702
7,230,228 9,958,819
39,375,058 37,557,153
3,788,262 7,420,069
1,792,008 2,457,938
1,160,063 930,085
1,498,142 879,770
1,036,127 2,152,593
309,153 197,974
33,687,932 35,106,459
9,129,939 10,103,806
5,814,467 10,614,984

337 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name Shares
TRUE CORP PCL/NEW FOREIGN 18,360,577
TRULY INTERNATIONAL HOLDINGS 368,000
TRUSCO NAKAYAMA CORP 70,700
TRUWORTHS INTERNATIONAL LTD 1,880,144
TRYG A/S 1,465,582
TS TECH CO LTD 259,130
TSEC CORP 782,244
TSINGTAO BREWERY CO LTD A 14,587
TSINGTAO BREWERY CO LTD H 1,203,364
TSRC CORP 1,235,550
TSUBAKIMOTO CHAIN CO 67,400
TSUBURAYA FIELDS HOLDINGS IN 67,800
TSUGAMI CORP 76,600
TSUMURA + CO 135,479
TSURUHA HOLDINGS INC 255,779
TT HELLENIC POSTBANK S.A. 345,831
TTW PCL FOREIGN SHARES 2,296,000
TTY BIOPHARM CO LTD 364,827
TUBE INVESTMENTS OF INDIA LT 184,615
TUI AG 806,878
TUNG HO STEEL ENTERPRISE COR 1,136,100
TUNG THIH ELECTRONIC CO LTD 117,000
TUYA INC 428,259
TVS MOTOR CO LTD 443,809
TXC CORP 526,000
U MING MARINE TRANSPORT CORP 742,000
UACJ CORP 52,300
UBE CORP 163,521
UBISOFT ENTERTAINMENT 166,951
UBS GROUP AG REG 5,811,868
UCB SA 741,919
UCHIDA YOKO CO LTD 16,100
ULTRAPAR PARTICIPACOES SA 1,621,230
ULTRATECH CEMENT LTD 210,715
ULVAC INC 90,700
UMICORE 366,882
UNI PRESIDENT CHINA HOLDINGS 2,102,000
UNI PRESIDENT ENTERPRISES CO 27,220,010
UNICHARM CORP 2,251,140
UNICREDIT SPA 5,164,003
UNIGROUP GUOXIN MICROELECT A 20,893
UNILEVER INDONESIA TBK PT 10,398,100
Book Value Market Value
5,229,048 3,391,955
60,868 43,202
1,213,986 1,112,338
6,487,159 5,633,092
31,743,102 31,706,658
3,420,267 3,252,235
1,108,972 896,663
212,201 207,793
9,187,700 10,933,251
1,298,563 1,019,558
1,897,971 1,709,074
995,432 1,401,173
652,031 730,836
3,631,759 2,495,678
25,725,354 18,944,299
0 0
897,213 560,158
1,006,287 918,378
4,217,614 7,144,819
7,237,122 5,718,974
1,512,490 2,170,462
578,348 546,597
2,081,196 809,410
3,669,079 7,171,652
973,396 1,584,190
865,494 1,126,896
1,252,694 983,870
3,483,058 2,795,023
11,217,348 4,713,876
178,245,240 117,549,602
60,703,335 65,726,031
654,632 648,300
4,430,962 6,348,473
13,349,544 21,305,560
4,326,383 3,822,911
11,425,243 10,242,868
1,694,709 1,770,309
63,981,647 66,685,507
68,476,936 83,186,348
69,677,492 119,805,501
398,588 267,811
5,652,828 2,954,538

U
338 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

UNILEVER PLC

UNIMICRON TECHNOLOGY CORP

UNION BANK OF INDIA

UNION BANK OF TAIWAN

UNIPAR CARBOCLORO SA PREF B

UNIPOL GRUPPO SPA

UNIPRO PJSC

UNISPLENDOUR CORP LTD A

UNITED BREWERIES LTD

UNITED CO RUSAL INTERNATIONA

UNITED DEVELOPMENT CO

UNITED ELECTRONICS CO

UNITED ENERGY GROUP LTD

UNITED INTEGRATED SERVICES

UNITED INTERNET AG REG SHARE

UNITED MALT GRP LTD

UNITED MICROELECTRON SP ADR

UNITED MICROELECTRONICS CORP

UNITED OVERSEAS BANK LTD

UNITED RENEWABLE ENERGY CO L

UNITED SPIRITS LTD

UNITED SUPER MARKETS HOLDING

UNITED TRACTORS TBK PT

UNITED UTILITIES GROUP PLC

UNITY OPTO TECHNOLOGY CO LTD

UNIVERSAL MUSIC GROUP NV

UNIVERSAL ROBINA CORP

UNIVERSAL SCIENTIFIC INDUS A

UNIVERSAL VISION BIOTECHNOLO

UNO MINDA LTD

UOL GROUP LTD

UPC TECHNOLOGY CORP

UPI SEMICONDUCTOR CORP

UPL LTD

UPM KYMMENE OYJ

USHIO INC

USI CORP

USINAS SIDER MINAS GER PF A

USS CO LTD

UT GROUP CO LTD

UTI ASSET MANAGEMENT CO LTD

UWC BHD
Shares
5,882,695
2,505,034
2,204,969
4,536,000
87,180
973,472
20,540,000
28,509
119,510
5,249,931
3,273,254
68,726
15,600,000
904,600
140,375
487,648
1,059,298
100,465,201
7,783,387
2,359,673
517,106
108,400
2,831,708
1,245,286
990,971
1,313,428
1,590,150
9,180,630
96,000
303,754
2,875,772
1,620,034
90,000
935,919
946,486
171,719
1,575,467
814,700
1,428,100
48,900
146,177
622,000
Book Value Market Value
285,366,056 306,450,742
5,849,897 14,156,143
1,322,605 1,941,934
2,419,457 2,395,839
1,605,817 1,430,229
4,124,792 5,194,527
0 0
108,979 124,816
2,133,943 2,202,601
0 0
926,011 1,020,644
2,000,137 1,344,946
2,722,271 1,512,901
5,510,654 6,331,866
4,216,278 1,975,624
1,608,563 1,428,253
7,474,116 8,357,861
139,621,608 156,450,168
142,612,611 161,033,610
1,581,360 1,485,000
4,517,509 5,749,947
937,276
833,990
4,799,968 4,396,065
15,160,188 15,224,006
0 0
36,982,516 29,160,540
4,613,180 3,961,007
20,652,053 18,879,175
949,915 1,306,940
2,044,882 2,154,219
13,943,985 13,642,041
659,710 772,448
790,803 848,143
7,545,196 7,843,985
23,054,367 28,159,453
2,348,538 2,302,497
874,171 1,168,530
1,881,026 1,194,015
24,073,340 23,496,190
1,586,157 1,020,054
1,473,092 1,398,848
792,085 397,121

339 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

V GUARD INDUSTRIES LTD
V.I.P. INDUSTRIES LTD
V.S. INDUSTRY BERHAD

VAIBHAV GLOBAL LTD

VALE INDONESIA TBK

VALE SA
VALEO

VALIANT HOLDING AG REG

VALLOUREC SA

VALMET OYJ

VALOR HOLDINGS CO LTD

VALUE PARTNERS GROUP LTD

VAMOS LOCACAO DE CAMINHOES M

VANGUARD INTERNATIONAL SEMI

VAR ENERGI ASA

VARDHMAN TEXTILES LTD

VARUN BEVERAGES LTD

VAT GROUP AG

VAXCELL BIO THERAPEUTICS

VECTOR LTD

VEDANT FASHIONS LTD

VEDANTA LTD

VENTURE CORP LTD

VENUS MEDTECH HANGZHOU INC H

VEOLIA ENVIRONNEMENT

VERALLIA

VERMILION ENERGY INC

VESTAS WIND SYSTEMS A/S

VESUVIUS PLC

VGI PCL FOREIGN
VGP

VIA S/A

VIA TECHNOLOGIES INC

VIAPLAY GROUP AB

VIBHAVADI MEDICAL CENTER FOR

VIBRA ENERGIA SA

VICTORY GIANT TECHNOLOGY A

VICTREX PLC

VIDRALA SA

VINATI ORGANICS LTD

VINCI SA

VINDA INTERNATIONAL HOLDINGS
Shares
286,213
123,674
4,854,048
126,753
3,544,800
7,291,879
370,016
30,120
294,600
288,577
72,000
1,711,000
565,281
1,618,000
786,368
196,252
873,330
46,392
18,536
462,799
102,126
2,298,194
1,994,300
535,500
1,171,924
134,694
298,700
1,763,469
451,230
9,176,311
18,062
2,812,450
650,000
139,086
15,826,600
2,232,571
101,900
156,957
34,138
49,141
932,011
478,000
Book Value Market Value
872,662 985,603
1,018,840 925,185
820,531 946,370
1,259,907 475,423
972,411 1,489,561
134,938,835 97,073,895
9,706,658 7,924,387
3,861,793 3,137,745
2,820,137 3,479,249
9,975,720 8,022,062
1,151,790 993,808
1,174,617 539,286
1,429,947 1,419,062
3,396,007 4,571,722
2,867,351 2,142,528
1,270,181 876,644
3,879,924 8,543,674
9,509,877 19,186,319
1,789,033 495,878
1,140,911 1,136,971
1,515,092 1,542,417
5,965,101
7,786,595
23,981,423 21,676,693
4,305,358 420,249
34,359,493 37,014,586
4,663,187 5,052,182
6,843,906 3,729,094
28,450,503 46,887,343
2,108,605 2,285,508
1,911,653 786,800
3,727,989 1,763,656
1,257,729 1,253,476
911,095 1,690,507
3,636,259 795,785
1,164,502 1,107,036
11,897,106 8,353,629
383,772 337,715
3,280,287 2,777,700
3,429,109 3,221,655
912,184 1,091,976
80,284,983 108,169,771
1,150,121 1,189,419

V
340 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

VIPSHOP HOLDINGS LTD ADR

VIRBAC SA

VIRGIN AUSTRALIA INT HOLDINGS

VIRGIN MONEY UK PLC

VISCOFAN SA

VISERA TECHNOLOGIES CO LTD

VISIONCHINA MEDIA INC ADR

VISTRY GROUP PLC

VISUAL PHOTONICS EPITAXY CO

VITASOY INTL HOLDINGS LTD

VITESCO TECHNOLOGIES GROUP A

VITROLIFE AB

VITROX CORP BHD

VIVA BIOTECH HOLDINGS

VIVA ENERGY GROUP LTD

VIVENDI

VNET GROUP INC ADR

VOBILE GROUP LTD PARALLEL

VODACOM GROUP LTD

VODAFONE GROUP PLC

VODAFONE IDEA LTD

VODAFONE QATAR

VOLKSWAGEN AG

VOLKSWAGEN AG PREF

VOLTAS LTD

VOLTRONIC POWER TECHNOLOGY

VOLVO AB A SHS

VOLVO AB B SHS

VOLVO CAR AB B

VONOVIA SE

VONTOBEL HOLDING AG REG
VOPAK

VSTECS HOLDINGS LTD

VTB BANK PJSC

VTECH HOLDINGS LTD

VULCAN ENERGY RESOURCES LTD

VULCAN STEEL LTD

W SCOPE CHUNGJU PLANT CO LTD

W SCOPE CORP

WACKER CHEMIE AG

WACOAL HOLDINGS CORP

WACOM CO LTD
Shares
673,679
8,542
7,398,961
2,163,299
75,793
182,000
14,650
621,517
333,250
1,508,000
34,762
118,595
723,300
1,336,500
1,819,470
2,727,634
209,619
2,744,769
1,113,672
39,101,468
15,182,687
3,050,491
65,568
407,378
413,238
235,050
500,920
2,678,291
968,357
1,193,805
52,772
119,318
1,216,000
10,573,644,000
288,500
194,693
154,258
38,331
90,300
27,574
135,100
246,100
Book Value Market Value
7,097,127 11,115,704
3,499,644 2,520,877
0 5
2,712,691 4,113,091
3,390,859 5,234,289
1,341,263 1,525,213
0 0
6,486,292 5,219,047
936,859 1,246,564
5,688,425 1,878,121
1,340,176 2,861,468
2,342,433 2,299,149
1,180,008 1,236,622
1,395,412 255,819
2,965,893 3,645,502
57,694,359 25,014,992
2,839,923 607,895
2,119,817 837,097
9,710,308 6,909,144
103,115,996 36,771,730
2,699,363 1,378,793
1,240,502
1,547,873
12,117,063 10,937,657
60,332,973 54,640,626
4,527,592 3,827,059
13,298,345 14,830,010
9,573,104 10,647,906
40,293,248 55,295,093
5,269,113 3,838,894
49,783,682 23,307,193
2,925,178 3,344,517
4,893,572 4,255,453
737,007 625,332
224,830 118
2,691,011 1,892,262
1,843,108 543,013
801,796 844,045
1,575,568 2,123,601
1,568,785 813,440
3,194,243 3,782,968
2,762,011 2,701,813
1,313,714 1,001,189

W
341 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name Shares
WAFER WORKS CORP 933,710
WAH LEE INDUSTRIAL CORP 328,920
WALLENSTAM AB B SHS 601,924
WALMART DE MEXICO SAB DE CV 12,596,500
WALSIN LIHWA CORP 4,566,670
WALSIN TECHNOLOGY CORP 874,000
WALVAX BIOTECHNOLOGY CO A 25,928
WAN HAI LINES LTD 1,692,942
WANDA FILM HOLDING CO LTD A 34,100
WANGSU SCIENCE + TECHNOLOG A 25,783,892
WANHUA CHEMICAL GROUP CO A 705,668
WANT WANT CHINA HOLDINGS LTD 8,074,000
WANXIANG QIANCHAO CO LTD A 12,900
WARTSILA OYJ ABP 915,015
WASHINGTON H. SOUL PATTINSON 495,653
WASKITA KARYA PERSERO TBK PT 33,749,100
WASTE CONNECTIONS INC 1,578,291
WATCHES OF SWITZERLAND GROUP 418,290
WEBJET LTD 679,605
WEEBIT NANO LTD 344,361
WEG SA 2,830,204
WEIBO CORP SPON ADR 125,912
WEICHAI POWER CO LTD A 41,454
WEICHAI POWER CO LTD H 3,908,960
WEIFU HIGH TECHNOLOGY GROU B 315,201
WEIHAI GUANGWEI COMPOSITES A 10,880
WEIMOB INC 3,766,000
WEIR GROUP PLC/THE 455,249
WELCIA HOLDINGS CO LTD 661,100
WEMADE CO LTD 27,602
WENCAN GROUP CO LTD A 28,677
WENDEL 55,669
WENS FOODSTUFFS GROUP CO L A 19,500
WESFARMERS LTD 6,573,481
WEST AFRICAN RESOURCES LTD 1,851,679
WEST CHINA CEMENT LTD 4,252,000
WEST FRASER TIMBER CO LTD 143,771
WEST HOLDINGS CORP 38,700
WEST JAPAN RAILWAY CO 1,285,857
WESTERN MINING CO A 36,800
WESTERN SECURITIES CO LTD A 25,937
WESTERN SUPERCONDUCTING TE A 9,006
Book Value Market Value
1,057,649 1,418,051
674,546 875,515
2,190,702 2,035,150
39,690,424 49,738,199
2,984,400 6,011,767
4,886,533 2,677,185
144,375 94,270
1,921,205 3,207,102
55,506 58,780
25,127,340 25,199,795
9,103,263 8,520,630
5,864,440 5,357,528
9,516 9,664
9,844,221 10,297,275
10,199,847 10,485,220
1,281,612 454,715
134,659,895 225,821,149
3,005,043 3,246,598
2,508,881 3,125,939
1,714,340 1,162,165
10,698,589 22,147,637
5,563,837 1,650,706
72,161 71,001
5,353,147 5,726,318
589,027 377,681
72,069 46,138
3,610,429 1,826,149
10,167,553 10,163,397
20,898,192 13,701,353
2,122,440 818,015
291,638 172,697
5,358,263 5,709,080
59,261 49,187
176,141,310 215,893,960
1,506,173 1,066,173
647,056 428,640
7,262,860 12,365,447
915,649 667,782
78,814,141 53,290,092
62,007 53,165
24,535 22,640
87,820 68,992

342 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name Shares
WESTGOLD RESOURCES LTD 709,027
WESTLIFE FOODWORLD LTD 125,320
WESTON (GEORGE) LTD 377,744
WESTPAC BANKING CORP 6,350,918
WESTPORTS HOLDINGS BHD 1,594,900
WH GROUP LTD 18,739,000
WH SMITH PLC 226,071
WHA CORP PCL FOREIGN 13,105,020
WHA CORP PCL NVDR 125,400
WHARF HOLDINGS LTD 4,297,203
WHARF REAL ESTATE INVESTMENT 2,750,222
WHEATON PRECIOUS METALS CORP 2,810,409
WHIRLPOOL OF INDIA LTD 52,845
WHITBREAD PLC 354,354
WIHLBORGS FASTIGHETER AB 511,035
WILCON DEPOT INC 2,795,800
WILL SEMICONDUCTOR CO LTD A 52,699
WILLIS TOWERS WATSON PLC 546,568
WILMAR INTERNATIONAL LTD 7,841,434
WIN SEMICONDUCTORS CORP 696,000
WINBOND ELECTRONICS CORP 6,659,000
WINGTECH TECHNOLOGY CO LTD A 18,374
WINNING HEALTH TECHNOLOGY A 38,491
WIPRO LTD 2,627,827
WISDOM MARINE LINES CO LTD 913,000
WISE PLC A 1,282,131
WISETECH GLOBAL LTD 300,501
WISTRON CORP 20,887,754
WISTRON NEWEB CORP 563,521
WIWYNN CORP 162,000
WIX.COM LTD 101,863
WIZZ AIR HOLDINGS PLC 134,219
WOLONG ELECTRIC GROUP CO L A 7,600
WOLTERS KLUWER 1,571,789
WONIK IPS CO LTD 62,443
WOODSIDE ENERGY GROUP LTD 3,386,501
WOOLWORTHS GROUP LTD 2,245,676
WOOLWORTHS HOLDINGS LTD 1,784,370
WOORI FINANCIAL GROUP INC 1,272,959
WORKMAN CO LTD 70,900
WORLDLINE SA 437,171
WORLEY LTD 724,764
Book Value Market Value
857,843 679,628
1,117,954 1,307,411
38,764,111 44,709,817
119,282,640 90,214,606
1,532,948 1,243,800
15,184,234 9,923,545
3,449,286 4,449,192
1,569,399 1,700,271
16,852 16,270
12,428,496 10,210,285
12,820,480 13,739,529
74,339,024 121,676,427
1,401,108 949,598
11,437,152 15,254,208
2,660,353 3,690,364
1,018,436 1,223,174
678,450 710,206
94,115,035 128,716,764
24,142,296 22,017,548
5,001,271 3,664,981
6,296,875 5,869,080
187,243 123,507
50,860 57,249
10,335,887 12,465,451
2,468,792 1,430,570
8,983,983 10,712,611
8,845,955 15,964,274
25,648,062 60,897,046
1,394,469 1,724,335
3,777,190 7,386,216
13,899,586 7,969,761
8,569,912 4,666,988
13,434 15,263
114,442,057 199,433,837
1,146,841 1,554,381
79,635,819 77,635,488
53,271,661 59,389,764
6,639,822 6,739,353
14,468,685 11,390,116
2,774,201 2,550,801
29,370,225 15,977,949
8,889,633 7,617,714

343 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

WOWPRIME CORP

WPG HOLDINGS LTD

WPP PLC

WSP GLOBAL INC

WT MICROELECTRONICS CO LTD

WUCHAN ZHONGDA GROUP CO L A

WUHAN DR LASER TECHNOLOGY A

WUHAN GUIDE INFRARED CO LT A

WUHAN RAYCUS FIBER LASER T A

WUHU TOKEN SCIENCE CO LTD A

WULIANGYE YIBIN CO LTD A

WUS PRINTED CIRCUIT KUNSHA A

WUXI APPTEC CO LTD A

WUXI APPTEC CO LTD H

WUXI AUTOWELL TECHNOLOGY C A

WUXI BIOLOGICS CAYMAN INC

WUXI NCE POWER CO LTD A

WYNN MACAU LTD

WYSIWYG STUDIOS CO LTD

XCMG CONSTRUCTION MACHIN A
XD INC

XERO LTD

XI AN TRIANGLE DEFENSE CO A

XIABUXIABU CATERING MANAGEME

XIAMEN BANK CO LTD A
XIAMEN C + D INC A

XIAMEN FARATRONIC CO LTD A

XIAMEN ITG GROUP CORP LTD A

XIAMEN TUNGSTEN CO LTD A

XIAMEN XIANGYU CO LTD A

XIAOMI CORP CLASS B

XINHUA WINSHARE PUBLISHING H

XINJIANG DAQO NEW ENERGY C A
XINJIANG GOLDWIND SCI+TEC H
XINJIANG GOLDWIND SCI+TECH A

XINJIANG TIANSHAN CEMENT A

XINJIANG ZHONGTAI CHEMICAL A

XINTE ENERGY CO LTD H

XINTEC INC

XINYI ENERGY HOLDINGS LTD

XINYI GLASS HOLDINGS LTD

XINYI SOLAR HOLDINGS LTD
Shares
123,000
11,542,760
2,175,289
218,261
747,038
45,500
31,040
40,448
65,751
306,800
59,801
27,500
27,752
596,334
1,600
6,808,811
36,680
2,664,800
157,872
72,141
392,400
223,351
74,100
991,000
448,500
4,807,440
2,900
15,529,560
18,305
329,800
25,646,400
699,000
13,000
1,080,544
84,499
46,600
32,800
704,800
293,000
2,979,999
3,570,000
7,444,000
Book Value Market Value
1,115,387 1,257,863
19,405,932 20,272,888
24,978,097 22,771,582
12,608,298 28,868,347
1,097,807 1,631,061
32,197 30,897
530,271 276,914
57,100 43,201
312,383 275,484
397,060 254,303
1,543,072 1,344,594
59,696 79,157
332,781 237,701
5,286,652 4,756,001
41,529 41,436
49,257,550 32,625,227
359,762 219,431
4,769,939 2,424,524
1,279,622 373,218
70,708 67,135
1,902,439 986,433
12,879,705
17,681,750
494,315 344,078
598,149 465,365
340,934 309,489
8,370,717 7,209,706
80,193 54,733
19,226,385 16,522,625
59,659 47,884
421,530 394,411
81,786,440 35,082,741
514,510 511,098
86,903 72,284
1,394,442 740,439
166,548 123,355
55,523 52,142
39,395 29,081
1,606,855 1,492,954
750,994 1,208,897
1,257,646 973,483
4,336,723 5,557,767
10,538,440 8,596,611

X
344 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

XP INC CLASS A

XP LOG FII

XPEC ENTERTAINMENT INC

XPENG INC CLASS A SHARES

XTEP INTERNATIONAL HOLDINGS

XUJI ELECTRIC CO LTD A

YADEA GROUP HOLDINGS LTD

YAGEO CORPORATION

YAKULT HONSHA CO LTD

YAMADA HOLDINGS CO LTD

YAMAGUCHI FINANCIAL GROUP IN

YAMAHA CORP

YAMAHA MOTOR CO LTD

YAMAMA CEMENT CO

YAMATO HOLDINGS CO LTD

YAMATO KOGYO CO LTD

YAMAZAKI BAKING CO LTD

YAMAZEN CORP

YANBU CEMENT CO

YANBU NATIONAL PETROCHEMICAL

YANCOAL AUSTRALIA LTD

YANDEX NV A

YANG MING MARINE TRANSPORT

YANGLING METRON NEW MATERI A

YANGTZE OPTICAL FIBRE AND H

YANGZHOU YANGJIE ELECTRONI A

YANGZIJIANG FINANCIAL HOLDIN

YANGZIJIANG SHIPBUILDING

YANKUANG ENERGY GROUP CO A

YANKUANG ENERGY GROUP CO H

YANLORD LAND GROUP LTD

YANTAI CHANGYU PIONEER B

YANTAI EDDIE PRECISION MAC A

YANTAI JEREH OILFIELD A

YAOKO CO LTD

YARA INTERNATIONAL ASA

YASKAWA ELECTRIC CORP

YATSEN HOLDING LTD ADR

YEAHKA LTD

YEALINK NETWORK TECHNOLOGY A

YES BANK LTD

YFY INC
Shares
485,591
48,771
37,368
1,935,600
2,011,500
12,800
1,872,000
710,596
811,200
3,989,420
507,300
266,431
679,865
167,979
1,628,771
70,700
675,700
117,200
132,231
1,907,513
349,947
608,396
3,145,000
6,000
1,011,000
7,900
4,688,900
10,027,800
13,031,831
3,153,569
1,237,900
427,149
3,438
13,134
45,600
387,075
468,800
588,128
292,400
16,982
35,279,140
2,429,000
Book Value Market Value
17,251,282 11,391,965
999,486 1,154,469
0 0
35,814,424 12,349,744
2,552,848 2,048,308
35,159 40,556
4,476,454 4,256,826
10,472,037 11,214,113
45,354,806 51,101,643
15,607,338 11,714,186
3,938,346 3,391,945
8,630,359 10,149,577
13,108,061 19,389,100
1,446,926 1,686,194
26,310,624 29,333,317
2,189,073 2,998,519
8,426,340 9,120,910
841,591 896,018
1,180,925 1,508,915
26,005,787 24,131,893
1,305,142 1,066,875
0 61
12,845,008 6,361,797
47,418 35,770
1,955,000 1,535,219
68,590 44,057
2,275,770 1,177,985
8,982,800 11,114,420
65,368,289 53,597,677
5,164,934 9,034,227
1,156,355 699,740
978,582 597,941
9,155 9,698
58,466 45,370
2,406,315 2,277,870
15,582,034 13,693,073
12,084,639 21,351,994
684,249 594,009
1,725,850 652,962
115,267 81,866
11,315,968 6,988,204
1,172,415 2,905,176

Y
345 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

YG ENTERTAINMENT INC

YICHANG HEC CHANGJIANG PHA H

YIDU TECH INC

YIEH PHUI ENTERPRISE CO LTD

YIFAN PHARMACEUTICAL CO LT A

YIFENG PHARMACY CHAIN CO L A

YIHAI INTERNATIONAL HOLDING

YIHAI KERRY ARAWANA HOLDIN A

YINSON HOLDINGS BHD

YINTAI GOLD CO LTD A

YODOGAWA STEEL WORKS LTD

YOKOGAWA BRIDGE HOLDINGS COR

YOKOGAWA ELECTRIC CORP

YOKOHAMA RUBBER CO LTD

YOKOWO CO LTD

YONFER AGRICULTURAL TECHNO A

YONGXING SPECIAL MATERIALS A

YONYOU NETWORK TECHNOLOGY A

YOSHINOYA HOLDINGS CO LTD

YOUDAO INC ADR

YOUNGONE CORP

YOUNGOR GROUP CO A

YOUNGY CO LTD A

YTL CORP BHD

YTO EXPRESS GROUP CO LTD A

YUAN LONGPING HIGH TECH AG A

YUANTA FINANCIAL HOLDING CO

YUE YUEN INDUSTRIAL HLDG

YUEXIU PROPERTY CO LTD

YUEXIU TRANSPORT INFRASTRUCT

YUHAN CORP

YULON FINANCE CORP

YULON MOTOR COMPANY

YUM CHINA HOLDINGS INC

YUNDA HOLDING CO LTD A

YUNNAN ALUMINIUM CO LTD A

YUNNAN BAIYAO GROUP CO LTD A

YUNNAN BOTANEE BIO TECHNOL A

YUNNAN COPPER CO LTD A

YUNNAN ENERGY NEW MATERIAL A

YUNNAN TIN CO LTD A

YUNNAN YUNTIANHUA CO A
Shares
19,686
769,200
762,500
2,332,050
12,452
25,208
884,000
25,900
3,632,520
86,645
49,700
54,000
484,671
263,600
39,000
6,458
6,860
52,373
128,600
39,421
74,656
18,100
4,400
8,485,067
552,665
20,376
68,290,706
1,547,044
3,110,692
1,260,000
435,982
420,674
1,125,097
718,250
20,500
53,156
20,280
3,300
18,300
12,739
24,579
27,200
Book Value Market Value
756,441 1,148,904
1,288,754 664,508
2,576,115 559,474
1,074,050 1,175,591
25,261 24,990
141,335 128,209
5,006,323 1,892,851
168,545 142,374
1,988,929 1,992,341
140,805 139,350
1,097,789 1,165,690
649,477 943,370
6,992,482 8,887,954
4,180,637 5,744,906
981,780 499,187
10,227 9,126
93,870 59,040
169,457 147,584
2,109,826 2,271,976
901,078 190,009
1,895,044 3,654,470
17,296
15,700
72,433 40,421
2,116,920 1,890,620
1,550,117 1,106,120
45,859 42,994
36,293,046 50,651,489
4,030,980 2,021,506
3,385,201 3,616,161
857,818 623,842
15,158,984 19,985,059
1,223,081 2,681,173
1,584,363 2,983,930
35,761,981 40,474,083
48,153 26,940
91,978 93,016
163,710 146,299
62,801 40,318
30,261 27,797
316,913 168,720
57,190 52,538
85,576 63,824

346 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name

Z HOLDINGS CORP

ZAI LAB LTD

ZALANDO SE

ZANGGE MINING CO LTD A

ZEE ENTERTAINMENT ENTERPRISE

ZENKOKU HOSHO CO LTD

ZENSAR TECHNOLOGIES LTD

ZENSHO HOLDINGS CO LTD

ZEON CORP

ZERIA PHARMACEUTICAL CO LTD

ZHANGZHOU PIENTZEHUANG PHA A

ZHAOJIN MINING INDUSTRY H

ZHEFU HOLDING GROUP CO LTD A

ZHEJIANG CENTURY HUATONG A

ZHEJIANG CFMOTO POWER CO L A

ZHEJIANG CHINA COMMODITIES A

ZHEJIANG CHINT ELECTRICS A

ZHEJIANG CRYSTAL OPTECH A

ZHEJIANG DAHUA TECHNOLOGY A

ZHEJIANG DINGLI MACHINERY A

ZHEJIANG EXPRESSWAY CO H

ZHEJIANG HANGKE TECHNOLOGY A

ZHEJIANG HUAHAI PHARMACEUT A

ZHEJIANG HUAYOU COBALT CO A

ZHEJIANG JINGSHENG MECHANI A

ZHEJIANG JINGXIN PHARMACEU A

ZHEJIANG JINKE TOM CULTURE A

ZHEJIANG JIUZHOU PHARMACEU A

ZHEJIANG JUHUA CO A

ZHEJIANG NARADA POWER SOUR A

ZHEJIANG NHU CO LTD A

ZHEJIANG ORIENT GENE BIOTE A

ZHEJIANG SANHUA INTELLIGEN A

ZHEJIANG SUPCON TECHNOLOGY A

ZHEJIANG SUPOR CO LTD A

ZHEJIANG WEIXING NEW BUILD A

ZHEJIANG WOLWO BIO PHARMAC A

ZHEJIANG XINAN CHEMICAL A

ZHEJIANG YONGTAI TECH A

ZHEN DING TECHNOLOGY HOLDING

ZHENGZHOU COAL MINING MACH A

ZHIHU INC ADR
Shares
13,603,201
1,626,700
381,457
15,300
1,491,270
216,900
206,494
469,700
247,101
72,100
171,094
1,929,500
20,925
116,161
19,100
129,700
16,862
13,200
51,276
4,516
2,245,304
6,620
21,220
25,084
21,400
2,720,607
14,674,934
10,700
53,067
117,500
45,039
23,304
26,304
12,470
3,575
17,806
5,000
145,088
11,400
2,732,000
11,896
264,612
Book Value Market Value
40,692,633 32,602,130
11,120,667 4,359,123
20,969,867 10,970,234
62,657 47,468
6,069,541 3,223,901
7,670,985 7,500,372
1,371,158 973,994
11,974,668 20,801,534
2,257,722 2,375,527
1,240,787 1,218,669
6,956,821 6,734,821
2,015,006 2,407,997
15,118 11,879
100,782 121,194
418,685 425,069
148,476 152,079
81,130 64,089
22,438 21,665
131,021 139,207
29,953 34,770
1,988,297 1,704,765
38,652
27,727
64,729 53,700
245,686 158,301
215,813 208,564
4,929,883 4,794,384
14,762,235 13,091,813
69,100 40,271
115,426 100,520
390,338 312,696
123,864 95,343
541,206 120,832
102,114 109,413
104,281 107,613
25,079 24,571
52,611 50,274
30,466 23,114
628,427 217,987
54,123 23,960
9,235,138 9,210,615
22,897 20,359
312,242 299,012

Z
347 of 566

CalPERS 2022-2023 Annual Investment Report
International Equity
Security Name
ZHONGAN ONLINE P+C INSURAN H

ZHONGJI INNOLIGHT CO LTD A

ZHONGSHENG GROUP HOLDINGS

ZHONGTAI SECURITIES CO LTD A

ZHONGYU ENERGY HOLDINGS LTD

ZHOU HEI YA INTERNATIONAL HO

ZHUGUANG HOLDINGS GROUP CO

ZHUHAI HUAFA PROPERTIES CO A

ZHUZHOU CRRC TIMES ELECTRI A

ZHUZHOU CRRC TIMES ELECTRI H

ZHUZHOU HONGDA ELECTRONICS A

ZHUZHOU KIBING GROUP CO LT A

ZIBO QIXIANG TENGDA CHEMIC A

ZIJIN MINING GROUP CO LTD A

ZIJIN MINING GROUP CO LTD H

ZIM INTEGRATED SHIPPING SERV

ZINUS INC

ZIP CO LTD

ZJMI ENVIRONMENTAL ENERGY A

ZOJIRUSHI CORP

ZOMATO LTD

ZOOMLION HEAVY INDUSTRY H

ZOOMLION HEAVY INDUSTRY S A

ZOZO INC

ZTE CORP A

ZTE CORP H

ZTO EXPRESS CAYMAN INC

ZTO EXPRESS CAYMAN INC ADR

ZUOAN FASHION LTD SPON ADR

ZURICH INSURANCE GROUP AG

ZYDUS LIFESCIENCES LTD

ZYDUS WELLNESS LTD

ZYXEL GROUP CORP
Total
Shares
1,297,800
18,094
1,241,438
31,200
1,150,000
1,615,500
4,702,000
78,100
7,600
918,346
3,800
32,000
361,820
152,400
10,516,600
146,233
18,746
1,160,686
927,891
78,900
9,548,277
2,913,944
85,922
207,900
80,145
2,221,988
787,538
15,025
47,700
266,539
458,290
35,648
589,000
Book Value Market Value
4,119,453 3,527,440
266,264 366,740
4,550,092 4,744,541
30,692 29,635
1,077,051 849,667
1,128,349 632,875
790,858 420,004
121,514 105,747
61,984 43,731
4,052,985 3,421,854
26,846 23,360
49,485 37,917
645,463 316,819
228,678 238,190
12,938,385 15,432,828
4,036,665 1,811,827
981,125 389,816
3,032,066 316,770
2,364,717 2,116,032
1,101,892 966,223
7,708,906 8,735,141
2,114,858 1,505,943
79,423 79,724
4,222,950 4,273,504
365,583 501,705
5,538,699 8,903,150
20,644,652 19,747,239
380,214 376,827
0 0
82,522,971 126,588,522
1,941,473 3,257,170
886,471 644,879
616,324 879,401
70,773,884,576 79,077,241,380

348 of 566

CalPERS 2022-2023 Annual Investment Report
Domestic REITS
Security Name

AGNC INVESTMENT CORP

AGREE REALTY CORP

ALEXANDRIA REAL ESTATE EQUIT
AMERICAN HOMES 4 RENT A

AMERICAN TOWER CORP

AMERICOLD REALTY TRUST INC

ANNALY CAPITAL MANAGEMENT IN

APARTMENT INCOME REIT CO

AVALONBAY COMMUNITIES INC

BLACKSTONE MORTGAGE TRU CL A

BOSTON PROPERTIES INC

BRIXMOR PROPERTY GROUP INC

BROADSTONE NET LEASE INC

CAMDEN PROPERTY TRUST

COUSINS PROPERTIES INC

CROWN CASTLE INC

CUBESMART

DIGITAL REALTY TRUST INC

DOUGLAS EMMETT INC

EAGLE HOSPITALITY TRUST

EASTGROUP PROPERTIES INC

EQUINIX INC

EQUITY COMMONWEALTH

EQUITY LIFESTYLE PROPERTIES

EQUITY RESIDENTIAL

ESC WAR IND

ESSEX PROPERTY TRUST INC

EXTRA SPACE STORAGE INC

FEDERAL REALTY INVS TRUST

FIRST INDUSTRIAL REALTY TR

GAMING AND LEISURE PROPERTIE

HANNON ARMSTRONG SUSTAINABLE

HEALTHCARE REALTY TRUST INC

HEALTHPEAK PROPERTIES INC

HIGHWOODS PROPERTIES INC
HOST HOTELS + RESORTS INC

INDEPENDENCE REALTY TRUST IN

INNOVATIVE INDUSTRIAL PROPER

INVITATION HOMES INC

IRON MOUNTAIN INC

JBG SMITH PROPERTIES

KILROY REALTY CORP
Shares
1,097,874
472,325
753,118
571,303
1,616,573
499,129
695,933
254,732
343,215
310,379
313,409
531,778
252,101
306,937
289,863
2,445,616
405,770
835,225
345,863
1,719,500
80,480
426,535
883,793
588,150
884,576
72,030
214,494
392,138
151,058
233,662
462,746
137,649
2,002,940
1,020,452
208,919
1,418,546
366,963
53,715
1,114,230
585,081
211,229
222,098
Book Value Market Value
20,055,730 11,121,464
32,406,568 30,885,332
106,052,547 85,471,362
15,823,610 20,252,691
292,069,843 313,518,168
16,259,503 16,121,867
29,028,808 13,925,619
9,526,171 9,193,278
57,959,179 64,960,303
9,039,796 6,458,987
31,411,801 18,049,224
10,874,875 11,699,116
5,520,047 3,892,439
32,176,783 33,416,231
9,518,501 6,608,876
301,683,775 278,653,487
13,411,540 18,121,688
93,716,224 95,107,071
10,138,676 4,347,498
0 2
8,139,774
13,971,328
214,020,566 334,377,848
22,494,466 17,905,646
35,271,368 39,341,354
56,737,122 58,355,479
0 0
48,405,414 50,255,944
42,733,840 58,369,741
16,437,800 14,617,883
8,876,817 12,299,968
18,947,727 22,424,671
4,489,844 3,441,225
50,088,587 37,775,448
32,627,264 20,511,085
8,197,398 4,995,253
22,627,281 23,874,129
7,811,518 6,686,066
6,224,462 3,921,732
33,158,411 38,329,512
20,434,863 33,244,302
6,262,747 3,176,884
13,654,824 6,682,929

349 of 566

CalPERS 2022-2023 Annual Investment Report
Domestic REITS
Security Name

KIMCO REALTY CORP

KITE REALTY GROUP TRUST

LAMAR ADVERTISING CO A

LIFE STORAGE INC

LXP INDUSTRIAL TRUST

MEDICAL PROPERTIES TRUST INC

MID AMERICA APARTMENT COMM

NATIONAL STORAGE AFFILIATES

NNN REIT INC

OMEGA HEALTHCARE INVESTORS
PARK HOTELS + RESORTS INC
PHILLIPS EDISON + COMPANY IN

PHYSICIANS REALTY TRUST

POTLATCHDELTIC CORP

PROLOGIS INC

PUBLIC STORAGE

RAYONIER INC

REALTY INCOME CORP

REGENCY CENTERS CORP

REXFORD INDUSTRIAL REALTY IN

RITHM CAPITAL CORP

RYMAN HOSPITALITY PROPERTIES

SABRA HEALTH CARE REIT INC

SBA COMMUNICATIONS CORP

SIMON PROPERTY GROUP INC

SL GREEN REALTY CORP

SPIRIT REALTY CAPITAL INC

STAG INDUSTRIAL INC

STARWOOD PROPERTY TRUST INC

SUN COMMUNITIES INC

TERRENO REALTY CORP

UDR INC

VENTAS INC

VICI PROPERTIES INC

VORNADO REALTY TRUST

WELLTOWER INC

WEYERHAEUSER CO

WP CAREY INC
Total
Shares
1,132,350
422,999
179,265
158,166
1,245,601
1,180,478
217,225
150,140
329,541
449,869
392,060
79,050
1,452,454
164,136
1,744,096
987,299
311,032
2,553,806
333,759
344,675
963,694
105,414
482,004
503,043
624,074
119,047
276,400
332,189
580,602
231,251
148,223
661,211
766,966
1,864,493
367,564
1,001,790
1,446,767
959,038
Book Value Market Value
23,643,668 22,329,942
8,671,310 9,449,798
12,456,737 17,792,051
11,707,264 21,029,751
13,059,481 12,144,610
18,467,287 10,931,226
23,321,460 32,987,789
7,953,023 5,229,376
14,526,257 14,101,059
14,623,014 13,806,480
8,088,792 5,026,209
2,431,562 2,694,024
23,397,428 20,319,831
7,157,760 8,674,588
137,157,023 213,878,492
213,254,730 288,172,832
9,495,206 9,766,405
163,153,047 152,692,061
20,422,016 20,616,293
17,111,556 17,998,929
11,996,331 9,010,539
6,510,644 9,795,069
8,580,447 5,673,187
142,606,906 116,585,246
73,269,734 72,068,066
7,819,537 3,577,362
12,543,695 10,884,632
10,005,151 11,918,941
12,885,127 11,263,679
29,328,796 30,169,005
7,539,557 8,908,202
26,023,535 28,405,625
41,350,972 36,254,483
51,234,311 58,601,015
17,272,075 6,667,611
72,502,746 81,034,793
41,399,972 48,481,162
77,360,772 64,792,607
3,174,644,999 3,360,096,100

350 of 566

CalPERS 2022-2023 Annual Investment Report
International REITS
Security Name

ABACUS PROPERTY GROUP

ACTIVIA PROPERTIES INC

ADVANCE LOGISTICS INVESTMENT

ADVANCE RESIDENCE INVESTMENT

AEDIFICA

AEON REIT INVESTMENT CORP

AIMS APAC REIT

ALLIED PROPERTIES REAL ESTAT

AREIT INC

ARENA REIT

ARGOSY PROPERTY LTD

ASSURA PLC

AXIS REAL ESTATE INVESTMENT

BIG YELLOW GROUP PLC

BRITISH LAND CO PLC

BROOKFIELD INDIA REAL ESTATE

BWP TRUST

CAN APARTMENT PROP REAL ESTA

CAPITALAND ASCENDAS REIT

CAPITALAND ASCOTT TRUST

CAPITALAND CHINA TRUST

CAPITALAND INTEGRATED COMMER

CDL HOSPITALITY TRUSTS

CENTURIA CAPITAL GROUP

CENTURIA INDUSTRIAL REIT

CENTURIA OFFICE REIT

CHAMPION REIT

CHARTER HALL GROUP

CHARTER HALL LONG WALE REIT

CHARTER HALL RETAIL REIT

CHARTER HALL SOCIAL INFRASTR

COFINIMMO

COMFORIA RESIDENTIAL REIT IN

COVIVIO

CRE LOGISTICS REIT INC

CROMWELL PROPERTY GROUP

CROMWELL REIT EUR

DAIWA HOUSE REIT INVESTMENT

DAIWA OFFICE INVESTMENT CORP

DAIWA SECURITIES LIVING INVE

DERWENT LONDON PLC

DEXUS/AU
Shares
918,108
4,540
1,183
7,347
71,790
9,549
1,048,072
239,400
1,256,100
611,365
1,443,286
5,308,899
2,464,900
316,313
1,675,292
293,222
918,804
304,500
22,963,410
7,513,977
2,176,350
24,715,358
1,596,242
1,272,994
951,446
861,067
4,259,000
852,193
1,247,904
927,756
606,048
64,027
4,515
91,231
1,043
2,746,506
576,100
14,742
490
3,413
200,501
2,067,314
Book Value Market Value
2,023,458 1,643,963
14,927,169 12,642,958
1,491,315 1,097,591
19,614,590 17,486,201
6,851,477 4,597,555
11,232,295 10,266,818
1,056,709 960,291
7,302,586 3,929,543
1,012,634 789,621
1,189,506 1,530,151
1,228,725 985,916
4,378,666 3,064,261
1,099,006 966,420
3,271,693 4,315,013
13,187,559 6,449,288
1,188,360 955,338
2,248,055 2,220,115
9,090,910 11,703,661
45,916,601 46,152,492
4,885,964 5,996,302
2,066,492
1,640,283
44,109,816 34,881,098
1,613,748 1,438,959
1,933,113 1,398,158
2,125,738 1,963,323
1,447,424 785,242
2,502,855 1,543,470
6,797,923 6,075,379
4,321,410 3,330,976
2,508,594 2,229,394
1,207,235 1,186,043
8,214,722 4,805,919
11,331,959 10,777,147
7,963,397 4,297,837
1,891,802 1,286,657
2,161,110 978,093
1,452,969 980,499
35,262,203 28,171,311
2,971,165 2,122,254
2,778,997 2,701,402
8,761,585 5,225,595
14,354,668 10,733,639

351 of 566

CalPERS 2022-2023 Annual Investment Report
International REITS
Security Name

DIGITAL CORE REIT MANAGEMENT

EMBASSY OFFICE PARKS REIT

EQUITES PROPERTY FUND LTD

ESR KENDALL SQUARE REIT CO L

ESR LOGOS REIT

FIBRA MACQUARIE MEXICO

FORTRESS REAL ESTATE INVESTM

FORTUNE REIT

FRASERS CENTREPOINT TRUST
FRASERS LOGISTICS + COMMERCI

FRONTIER REAL ESTATE INVEST

FUKUOKA REIT CORP

GECINA SA

GLOBAL ONE REIT

GLP J REIT

GOODMAN GROUP

GOODMAN PROPERTY TRUST

GPT GROUP

GRANITE REAL ESTATE INVESTME

GREAT PORTLAND ESTATES PLC

GROWTHPOINT PROPERTIES AUSTR

GROWTHPOINT PROPERTIES LTD

HAMMERSON PLC

HANKYU HANSHIN REIT INC

HEIWA REAL ESTATE REIT INC

HMC CAPITAL LTD

HOMECO DAILY NEEDS REIT

HOSHINO RESORTS REIT INC

HULIC REIT INC

HYPROP INVESTMENTS LTD
ICADE

ICHIGO OFFICE REIT INVESTMEN
INDUSTRIAL + INFRASTRUCTURE

INGENIA COMMUNITIES GROUP

INMOBILIARIA COLONIAL SOCIMI

INVINCIBLE INVESTMENT CORP

JADWA REIT SAUDI FUND

JAPAN EXCELLENT INC

JAPAN HOTEL REIT INVESTMENT

JAPAN LOGISTICS FUND INC

JAPAN METROPOLITAN FUND INVE

JAPAN PRIME REALTY INVESTMEN
Shares
1,243,600
1,101,794
1,359,486
222,551
10,944,903
1,313,400
2,139,715
2,697,000
5,425,342
11,122,900
3,419
1,351
88,980
1,819
23,710
3,363,988
1,991,271
3,312,382
110,000
390,160
504,483
6,378,000
7,006,839
1,227
1,820
420,432
3,168,827
458
2,283
627,572
57,346
2,287
12,115
666,946
592,776
22,743
349,183
2,335
30,429
4,967
36,878
5,621
Book Value Market Value
983,513 590,710
5,268,065 3,917,161
1,751,103 830,462
878,501 677,289
3,555,994 2,709,235
1,769,970 2,307,381
1,164,851 1,456,586
2,451,301 1,941,031
8,719,107 8,779,325
11,098,930 10,273,488
12,916,246 11,070,620
1,930,473 1,550,703
12,356,945 9,469,882
1,861,268 1,434,711
30,424,778 23,310,555
27,212,719 44,941,519
2,140,756 2,708,294
10,844,508 9,128,232
5,079,717 6,515,624
2,987,263 2,058,525
1,297,109 936,907
8,839,713
3,936,610
2,983,593 2,218,129
1,518,308 1,228,401
2,333,603 1,839,707
1,906,473 1,416,094
2,732,742 2,478,462
2,484,826 1,958,308
3,253,505 2,543,073
937,352 1,020,194
4,453,022 2,388,713
1,727,850 1,414,590
16,524,938 12,707,192
2,050,743 1,766,931
5,656,171 3,586,056
8,980,862 9,000,585
1,275,696 1,249,376
2,778,186 2,024,254
15,734,430 15,473,979
12,210,212 10,739,181
30,437,303 24,570,875
16,960,050 13,553,247

352 of 566

CalPERS 2022-2023 Annual Investment Report
International REITS
Security Name

JAPAN REAL ESTATE INVESTMENT

KENEDIX OFFICE INVESTMENT CO

KENEDIX RESIDENTIAL NEXT INV

KENEDIX RETAIL REIT CORP

KEPPEL DC REIT

KEPPEL PACIFIC OAK US REIT

KEPPEL REIT

KINEA RENDIMENTOS IMOBILIARIOS

KIWI PROPERTY GROUP LTD

KLEPIERRE

LAND SECURITIES GROUP PLC

LASALLE LOGIPORT REIT

LENDLEASE GLOBAL COMMERCIAL

LINK REIT

LONDONMETRIC PROPERTY PLC

LOTTE REIT CO LTD

LXI REIT PLC

MANULIFE US REAL ESTATE INV

MAPLETREE INDUSTRIAL TRUST

MAPLETREE LOGISTICS TRUST

MAPLETREE PAN ASIA COM TRUST

MERLIN PROPERTIES SOCIMI SA

MINDSPACE BUSINESS PARKS REI

MIRAI CORP

MIRVAC GROUP

MITSUBISHI ESTATE LOGISTICS

MITSUI FUDOSAN LOGISTICS PAR

MORI HILLS REIT INVESTMENT C

MORI TRUST REIT INC

NATIONAL STORAGE REIT

NIPPON ACCOMMODATIONS FUND

NIPPON BUILDING FUND INC

NIPPON PROLOGIS REIT INC

NIPPON REIT INVESTMENT CORP

NOMURA REAL ESTATE MASTER FU

NTT UD REIT INVESTMENT CORP

ONE REIT INC
OPERADORA DE SITES MEX A 1

ORIX JREIT INC

OUE COMMERCIAL REAL ESTATE I

PARAGON REIT

PARKWAYLIFE REAL ESTATE
Shares
9,207
5,397
1,886
1,119
8,222,800
1,629,100
14,181,800
79,150
3,715,831
351,973
1,333,271
3,157
3,347,761
13,688,769
1,756,173
224,275
2,716,132
2,891,676
10,386,420
6,152,850
9,878,244
567,341
228,651
2,918
7,675,089
3,380
3,385
3,007
4,843
2,205,728
2,992
8,510
15,058
828
23,352
2,603
448
2,279,988
15,991
4,189,533
2,044,000
689,600
Book Value Market Value
49,804,010 34,908,057
13,923,320 12,938,461
3,413,741 3,057,320
2,573,060 2,249,071
13,223,321 13,123,913
1,109,015 513,167
11,026,886 9,431,130
1,460,582 1,602,197
3,274,668 2,071,619
12,580,452 8,724,540
16,732,549 9,733,006
4,816,686 3,300,396
1,869,962 1,632,632
124,134,047 75,984,668
4,305,604 3,692,905
1,018,522 622,111
4,579,268 2,973,168
2,229,509 500,260
18,271,991 16,960,866
7,174,586 7,365,144
13,531,233 11,824,550
6,738,132
4,852,719
1,011,990 861,522
1,397,092 932,726
13,231,446 11,546,166
11,477,793 9,658,145
13,582,736 11,709,966
3,907,579 3,066,605
2,999,672 2,412,537
3,030,562 3,450,371
14,880,119 13,434,864
47,586,072 33,325,215
38,214,479 30,139,962
2,873,730 1,956,357
29,616,901 26,836,179
3,221,291 2,429,479
1,096,525 772,109
1,631,567 2,165,593
22,864,481 19,627,103
1,610,301 1,021,573
1,413,172 1,442,362
1,515,721 1,987,246

353 of 566

CalPERS 2022-2023 Annual Investment Report
International REITS
Security Name

PRECINCT PROPERTIES NEW ZEAL

PRIMARY HEALTH PROPERTIES

PRIME US REIT

PROLOGIS PROPERTY MEXICO SA

REDEFINE PROPERTIES LTD

REGION RE LTD
REIT 1 LTD

RESILIENT REIT LTD

RIOCAN REAL ESTATE INVST TR

RURAL FUNDS GROUP

SAFESTORE HOLDINGS PLC

SCENTRE GROUP

SEGRO PLC

SEKISUI HOUSE REIT INC

SELLA CAPITAL REAL ESTATE LT

SHAFTESBURY CAPITAL PLC

SOSILA LOGISTICS REIT INC

STAR ASIA INVESTMENT CORPORA

STARHILL GLOBAL REIT

STOCKLAND

STRIDE PROPERTY GROUP

SUNLIGHT REAL ESTATE INVEST

SUNTEC REIT

SUNWAY REAL ESTATE INVESTMEN

SUPERMARKET INCOME REIT PLC

TF ADMINISTRADORA S DE RL DE

TOKYU REIT INC

TRITAX BIG BOX REIT PLC

TRUST FIBRA UNO

UNIBAIL RODAMCO WESTFIELD

UNITE GROUP PLC/THE

UNITED URBAN INVESTMENT CORP

VICINITY CENTRES

VITAL HEALTHCARE PROPERTY TR

VUKILE PROPERTY FUND LTD

WAREHOUSES DE PAUW SCA

WAYPOINT REIT

YUEXIU REAL ESTATE INVESTMEN
Total
Shares
2,405,162
2,460,102
1,068,200
1,024,782
12,312,066
1,971,373
368,134
513,150
548,000
671,909
394,940
9,366,214
2,146,476
27,595
396,182
2,599,756
1,255
3,053
2,810,100
4,464,192
883,545
2,068,000
11,154,900
3,564,000
2,256,993
1,454,200
1,778
3,494,051
5,347,200
178,717
576,674
17,550
7,213,219
867,536
1,673,560
285,849
1,279,008
3,305,838
Book Value Market Value
2,214,014 1,900,844
4,150,112 2,985,344
856,031 224,322
2,683,728 3,800,247
6,190,994 2,144,204
3,416,489 2,978,795
1,555,456 1,612,034
1,342,417 1,149,282
6,599,851 7,984,462
1,106,797 789,407
2,975,913 4,262,891
24,420,629 16,521,744
19,176,271 19,560,926
17,141,055 16,018,407
1,307,491 788,958
6,379,075 3,804,287
1,578,421 1,135,739
1,461,992 1,252,589
1,485,099 1,069,348
13,723,999 11,975,505
1,394,868 757,826
907,486 760,003
13,150,403 10,632,742
1,421,043 1,191,182
3,034,789 2,094,684
2,335,136 2,785,369
2,741,325 2,365,582
6,906,233 5,552,705
7,903,030 7,794,525
27,361,892 9,388,302
6,578,088 6,378,448
19,618,157 17,655,032
12,303,341 8,858,729
1,417,743 1,243,701
1,357,049 1,110,908
9,168,083 7,833,957
2,482,036 2,205,053
1,784,185 704,483
1,390,033,992 1,128,138,919

354 of 566

CalPERS 2022-2023 Annual Investment Report
Derivatives
Security Name
ADJ IR S+P 500 TR DEC23
B07947630 CDS USD P F 1.00000
B07947630 CDS USD R V 03MEVENT
B08073348 CDS USD P F 1.00000
B08073348 CDS USD R V 03MEVENT
B10118593 CDS USD P F 1.00000
B10118593 CDS USD R V 03MEVENT
B10164416 CDS USD P F 1.00000
B10164416 CDS USD R V 03MEVENT
BCP6710Y9 TRS USD P V 12MFEDL
BCP6710Y9 TRS USD R E
BCP6711H5 TRS USD P V 12MFEDL
BCP6711H5 TRS USD R E
BCP6711P7 TRS USD P V 12MFEDL
BCP6711P7 TRS USD R E
BCP6713P5 TRS USD P V 12MFEDL
BCP6713P5 TRS USD R E
BCP675ZZ9 TRS USD P V 12MFEDL
BCP675ZZ9 TRS USD R E
BCP67TUX7 TRS USD P V 12MFEDL
BCP67TUX7 TRS USD R E
BCP67TXJ5 TRS USD P V 12MFEDL
BCP67TXJ5 TRS USD R E
BCP67TXN6 TRS USD P V 12MFEDL
BCP67TXN6 TRS USD R E
BCP67TXR7 TRS USD P V 12MFEDL
BCP67TXR7 TRS USD R E
BCP67U1C2 TRS USD P V 12MFEDL
BCP67U1C2 TRS USD R E
BCP69P586 TRS USD P V 12MFEDL
BCP69P586 TRS USD R E
BCP69UU20 TRS USD P V 12MFEDL
BCP69UU20 TRS USD R E
BCP6APT39 TRS USD P V 12MFEDL
BCP6APT39 TRS USD R E
BCP6BUCU5 TRS USD P V 03MFEDL
BCP6BUCU5 TRS USD R E
BCP6C8HJ3 TRS USD P V 12MFEDL
BCP6C8HJ3 TRS USD R E
BCP6D93X4 TRS USD P V 12MFEDL
BCP6D93X4 TRS USD R E
BCP6D9488 TRS USD P V 12MFEDL
Par Value
6,250
(30,000,000)
30,000,000
(10,000,000)
10,000,000
(12,540,000)
12,540,000
(12,430,000)
12,430,000
(257,803,763)
35,302
(79,823,973)
159,858
(494,480,219)
56,852
(63,951,493)
7,054
(53,693,394)
2,161,100
(157,954,057)
21,705
(328,455,649)
36,490
(43,621,104)
4,629
(64,865,303)
129,557
(45,646,087)
1,911,894
(390,012)
120,000
(307,716,874)
603,583
(16,245,437)
642,300
(174,929,284)
7,353,554
(90,177,184)
3,910,427
(687,998)
80,543
(569,461)
Book Value Market Value
0 0
(30,000,000) (29,400,978)
31,411,383 30,000,000
(10,000,000) (9,800,326)
10,464,377 10,000,000
(12,540,000) (12,537,540)
12,633,767 12,540,000
(12,430,000) (12,427,562)
12,529,065 12,430,000
(257,803,763) (257,803,763)
257,803,763 257,316,702
(79,823,973) (79,823,973)
79,823,973 81,498,806
(494,480,219) (494,480,219)
494,480,219 543,486,359
(63,951,493) (63,951,493)
63,951,493 70,232,798
(53,693,394) (53,693,394)
53,693,394 48,915,710
(157,954,057) (157,954,057)
157,954,057 158,208,005
(328,455,649) (328,455,649)
328,455,649 348,832,358
(43,621,104) (43,621,104)
43,621,104 46,088,407
(64,865,303) (64,865,303)
64,865,303 66,050,750
(45,646,087) (45,646,087)
45,646,087 43,275,023
(390,012) (390,012)
390,012 399,254
(307,716,874) (307,716,874)
307,716,874 307,718,685
(16,245,437) (16,245,437)
16,245,437 14,538,226
(174,929,284) (174,929,284)
174,929,284 166,445,011
(90,177,184) (90,177,184)
90,177,184 88,511,088
(687,998) (687,998)
687,998 727,124
(569,461) (569,461)

355 of 566

CalPERS 2022-2023 Annual Investment Report
Derivatives
Security Name
BCP6D9488 TRS USD R E
BCP6D99X8 TRS USD P V 12MFEDL
BCP6D99X8 TRS USD R E
BCP6ENGF7 TRS USD P V 12MFEDL
BCP6ENGF7 TRS USD R E
BCP6ER0U2 TRS USD P V 12MFEDL
BCP6ER0U2 TRS USD R E
BCP6G2T67 TRS USD P V 12MFEDL
BCP6G2T67 TRS USD R E
BCP6G5KZ5 TRS USD P V 12MFEDL
BCP6G5KZ5 TRS USD R E
BCP6G5M18 TRS USD P V 12MFEDL
BCP6G5M18 TRS USD R E
BCP6G82M8 TRS USD P V 12MFEDL
BCP6G82M8 TRS USD R E
BCP6H7TN8 TRS USD P V 12MFEDL
BCP6H7TN8 TRS USD R E
BCP6H7TX6 TRS USD P V 12MFEDL
BCP6H7TX6 TRS USD R E
BCP6H7V13 TRS USD P V 12MFEDL
BCP6H7V13 TRS USD R E
BCP6HEEY5 TRS USD P V 12MFEDL
BCP6HEEY5 TRS USD R E
BCP6L70W4 TRS USD P V 12MFEDL
BCP6L70W4 TRS USD R E
BCP6LUBS0 TRS USD P V 12MFEDL
BCP6LUBS0 TRS USD R E
BCP6LUBV3 TRS USD P V 12MFEDL
BCP6LUBV3 TRS USD R E
BCP6LUBY7 TRS USD P V 12MFEDL
BCP6LUBY7 TRS USD R E
BCP6LUC18 TRS USD P V 12MFEDL
BCP6LUC18 TRS USD R E
BCP6LUC42 TRS USD P V 12MFEDL
BCP6LUC42 TRS USD R E
BCP6LV282 TRS USD P E
BCP6LV282 TRS USD R V 12MFEDL
BCP6LV290 TRS USD P E
BCP6LV290 TRS USD R V 12MFEDL
BCP6LV2A7 TRS USD P E
BCP6LV2A7 TRS USD R V 12MFEDL
BCP6LV2H2 TRS USD P E
Par Value
66,666
(2,833,635)
489,241
(2,527,902)
646,423
(47,830,227)
1,935,937
(272,127,974)
37,431
(69,838,035)
7,482
(578,769,507)
65,581
(107,772,000)
216,767
(406,458,198)
43,130
(270,931,600)
533,055
(188,505,776)
25,305
(46,624,730)
4,667
(2,010,132)
83,400
(5,804,400)
2,000,000
(864,600)
500,000
(2,965,710)
380,000
(4,257,282)
1,439,000
(1,841,127)
518,000
(1,700,000)
60,724,000
(5,270,000)
949,074,300
(500,000)
144,195,000
(1,400,000)
Book Value Market Value
569,461 601,846
(2,833,635) (2,833,635)
2,833,635 2,806,239
(2,527,902) (2,527,902)
2,527,902 2,588,908
(47,830,227) (47,830,227)
47,830,227 43,819,227
(272,127,974) (272,127,974)
272,127,974 272,835,008
(69,838,035) (69,838,035)
69,838,035 74,494,159
(578,769,507) (578,769,507)
578,769,507 626,932,718
(107,772,000) (107,772,000)
107,772,000 110,512,152
(406,458,198) (406,458,198)
406,458,198 412,308,567
(270,931,600) (270,931,600)
270,931,600 271,762,100
(188,505,776) (188,505,776)
188,505,776 184,448,449
(46,624,730) (46,624,730)
46,624,730 46,466,752
(2,010,132) (2,010,132)
2,010,132 1,887,729
(5,804,400) (5,804,400)
5,804,400 5,825,040
(864,600) (864,600)
864,600 865,464
(2,965,710) (2,965,710)
2,965,710 2,965,008
(4,257,282) (4,257,282)
4,257,282 4,361,147
(1,841,127) (1,841,127)
1,841,127 2,128,267
(60,724,000) (63,223,000)
60,724,000 60,724,000
(949,074,300) (1,022,221,900)
949,074,300 949,074,300
(144,195,000) (155,320,000)
144,195,000 144,195,000
(290,528,000) (366,478,000)

356 of 566

CalPERS 2022-2023 Annual Investment Report
Derivatives
Security Name
BCP6LV2H2 TRS USD R V 12MFEDL
BCP6LV2L3 TRS USD P E
BCP6LV2L3 TRS USD R V 12MFEDL
BCP6LV2P4 TRS USD P E
BCP6LV2P4 TRS USD R V 12MFEDL
BCP6MJNM4 TRS USD P E
BCP6MJNM4 TRS USD R V 12MFEDL
BCP6MJNQ5 TRS USD P E
BCP6MJNQ5 TRS USD R V 12MFEDL
BCP6MJNT9 TRS USD P E
BCP6MJNT9 TRS USD R V 12MFEDL
BCP6MJNW2 TRS USD P E
BCP6MJNW2 TRS USD R V 12MFEDL
BCP6MJNZ5 TRS USD P E
BCP6MJNZ5 TRS USD R V 12MFEDL
BCP6MJP00 TRS USD P E
BCP6MJP00 TRS USD R V 12MFEDL
BCP6MJP59 TRS USD P E
BCP6MJP59 TRS USD R V 12MFEDL
BCP6MJP83 TRS USD P E
BCP6MJP83 TRS USD R V 12MFEDL
BCP6MJPB6 TRS USD P E
BCP6MJPB6 TRS USD R V 12MFEDL
BCP6MJPE0 TRS USD P E
BCP6MJPE0 TRS USD R V 12MFEDL
BCP6MJPH3 TRS USD P E
BCP6MJPH3 TRS USD R V 12MFEDL
BCP6MJPL4 TRS USD P E
BCP6MJPL4 TRS USD R V 12MFEDL
BCP6MJPM2 TRS USD P E
BCP6MJPM2 TRS USD R V 12MFEDL
BCP6MJPR1 TRS USD P E
BCP6MJPR1 TRS USD R V 12MFEDL
BCP6MJPV2 TRS USD P E
BCP6MJPV2 TRS USD R V 12MFEDL
BCP6MJPY6 TRS USD P E
BCP6MJPY6 TRS USD R V 12MFEDL
BCP6MJQ09 TRS USD P E
BCP6MJQ09 TRS USD R V 12MFEDL
BCP6MJQ41 TRS USD P E
BCP6MJQ41 TRS USD R V 12MFEDL
BCP6MJQ58 TRS USD P E
Par Value
290,528,000
(1,000,000)
175,810,000
(550,000)
74,156,500
(250,000)
53,422,500
(2,615,000)
480,610,850
(900,000)
49,032,000
(285,000)
36,072,450
(327,000)
109,087,200
(4,000,000)
132,840,000
(400,000)
49,456,000
(2,100,000)
83,790,000
(153,000)
11,912,580
(2,200,000)
106,590,000
(282,000)
11,793,240
(300,000)
59,688,000
(4,000,000)
132,560,000
(1,309,000)
434,391,650
(355,000)
63,669,250
(350,000)
94,867,500
(4,000,000)
133,360,000
(85,000)
12,088,700
(800,000)
Book Value Market Value
290,528,000 290,528,000
(175,810,000) (180,020,000)
175,810,000 175,810,000
(74,156,500) (79,497,000)
74,156,500 74,156,500
(53,422,500) (52,815,000)
53,422,500 53,422,500
(480,610,850) (507,231,550)
480,610,850 480,610,850
(49,032,000) (49,230,000)
49,032,000 49,032,000
(36,072,450) (37,152,600)
36,072,450 36,072,450
(109,087,200) (111,507,000)
109,087,200 109,087,200
(132,840,000) (134,840,000)
132,840,000 132,840,000
(49,456,000) (47,880,000)
49,456,000 49,456,000
(83,790,000) (77,028,000)
83,790,000 83,790,000
(11,912,580) (11,791,710)
11,912,580 11,912,580
(106,590,000) (101,288,000)
106,590,000 106,590,000
(11,793,240) (11,883,480)
11,793,240 11,793,240
(59,688,000) (61,386,000)
59,688,000 59,688,000
(132,560,000) (134,840,000)
132,560,000 132,560,000
(434,391,650) (445,766,860)
434,391,650 434,391,650
(63,669,250) (65,777,950)
63,669,250 63,669,250
(94,867,500) (100,443,000)
94,867,500 94,867,500
(133,360,000) (134,840,000)
133,360,000 133,360,000
(12,088,700) (12,565,550)
12,088,700 12,088,700
(265,480,000) (272,432,000)

357 of 566

CalPERS 2022-2023 Annual Investment Report
Derivatives
Security Name
BCP6MJQ58 TRS USD R V 12MFEDL
BCP6MJQA7 TRS USD P E
BCP6MJQA7 TRS USD R V 12MFEDL
BCP6MJQD1 TRS USD P E
BCP6MJQD1 TRS USD R V 12MFEDL
BCP6MJQG4 TRS USD P E
BCP6MJQG4 TRS USD R V 12MFEDL
BCP6MJQK5 TRS USD P E
BCP6MJQK5 TRS USD R V 12MFEDL
BCP6MJQN9 TRS USD P E
BCP6MJQN9 TRS USD R V 12MFEDL
BCP6MJW85 TRS USD P V 12MFEDL
BCP6MJW85 TRS USD R E
BCP6MK8D8 TRS USD P E
BCP6MK8D8 TRS USD R V 12MFEDL
BCP6MK8G1 TRS USD P E
BCP6MK8G1 TRS USD R V 12MFEDL
BCP6MK8K2 TRS USD P E
BCP6MK8K2 TRS USD R V 12MFEDL
BCP6MK8N6 TRS USD P E
BCP6MK8N6 TRS USD R V 12MFEDL
BCP6MK8R7 TRS USD P E
BCP6MK8R7 TRS USD R V 12MFEDL
BCP6MK8U0 TRS USD P E
BCP6MK8U0 TRS USD R V 12MFEDL
BCP6MK8X4 TRS USD P E
BCP6MK8X4 TRS USD R V 12MFEDL
BCP6MK8Z9 TRS USD P E
BCP6MK8Z9 TRS USD R V 12MFEDL
BCP6MKKK8 TRS USD P E
BCP6MKKK8 TRS USD R V 12MFEDL
BCP6MKKN2 TRS USD P E
BCP6MKKN2 TRS USD R V 12MFEDL
BCP6MKKR3 TRS USD P E
BCP6MKKR3 TRS USD R V 12MFEDL
BCP6MKKU6 TRS USD P E
BCP6MKKU6 TRS USD R V 12MFEDL
BCP6MKLA9 TRS USD P V 12MFEDL
BCP6MKLA9 TRS USD R E
BCP6MKLY7 TRS USD P V 12MFEDL
BCP6MKLY7 TRS USD R E
BCP6MKM18 TRS USD P V 12MFEDL
Par Value
265,480,000
(184,000)
90,636,560
(1,500,000)
139,710,000
(302,000)
19,192,100
(500,000)
165,925,000
(350,000)
87,440,500
(19,501)
6,000
(1,000,000)
124,380,000
(100,000)
88,618,000
(800,000)
23,296,000
(578,000)
81,781,220
(360,000)
121,442,400
(75,000)
25,192,500
(442,000)
60,213,660
(421,000)
59,567,290
(550,000)
102,140,500
(750,000)
107,317,500
(3,000,000)
88,110,000
(705,000)
245,410,500
(1,044,049,708)
110,262
(67,378,117)
2,846,670
(89,942,201)
Book Value Market Value
265,480,000 265,480,000
(90,636,560) (88,437,760)
90,636,560 90,636,560
(139,710,000) (133,920,000)
139,710,000 139,710,000
(19,192,100) (20,578,280)
19,192,100 19,192,100
(165,925,000) (170,270,000)
165,925,000 165,925,000
(87,440,500) (91,619,500)
87,440,500 87,440,500
(19,501) (19,501)
19,501 20,122
(124,380,000) (120,970,000)
124,380,000 124,380,000
(88,618,000) (86,743,000)
88,618,000 88,618,000
(23,296,000) (22,952,000)
23,296,000 23,296,000
(81,781,220) (84,064,320)
81,781,220 81,781,220
(121,442,400) (122,594,400)
121,442,400 121,442,400
(25,192,500) (25,575,000)
25,192,500 25,192,500
(60,213,660) (59,550,660)
60,213,660 60,213,660
(59,567,290) (61,230,240)
59,567,290 59,567,290
(102,140,500) (101,871,000)
102,140,500 102,140,500
(107,317,500) (109,080,000)
107,317,500 107,317,500
(88,110,000) (86,070,000)
88,110,000 88,110,000
(245,410,500) (240,080,700)
245,410,500 245,410,500
(1,044,049,708) (1,044,049,708)
1,044,049,708 1,054,068,334
(67,378,117) (67,378,117)
67,378,117 64,433,336
(89,942,201) (89,942,201)

358 of 566

CalPERS 2022-2023 Annual Investment Report
Derivatives
Security Name
BCP6MKM18 TRS USD R E
BCP6MKM59 TRS USD P V 12MFEDL
BCP6MKM59 TRS USD R E
BCP6MKSG9 TRS USD P V 12MFEDL
BCP6MKSG9 TRS USD R E
BCP6N4496 TRS USD P E
BCP6N4496 TRS USD R V 12MFEDL
BCP6N44C9 TRS USD P E
BCP6N44C9 TRS USD R V 12MFEDL
BCP6N44F2 TRS USD P E
BCP6N44F2 TRS USD R V 12MFEDL
BCP6N44J4 TRS USD P E
BCP6N44J4 TRS USD R V 12MFEDL
BCP6N44M7 TRS USD P E
BCP6N44M7 TRS USD R V 12MFEDL
BCP6N44Q8 TRS USD P E
BCP6N44Q8 TRS USD R V 12MFEDL
BCP6N44T2 TRS USD P E
BCP6N44T2 TRS USD R V 12MFEDL
BCP6N44W5 TRS USD P E
BCP6N44W5 TRS USD R V 12MFEDL
BCP6N44Z8 TRS USD P E
BCP6N44Z8 TRS USD R V 12MFEDL
BCP6N7QW4 TRS USD P V 12MFEDL
BCP6N7QW4 TRS USD R E
BCP6N7R60 TRS USD P V 12MFEDL
BCP6N7R60 TRS USD R E
E-MINI RUSS 2000 SEP23
EURO STOXX 50 SEP23
FTSE 100 IDX FUT SEP23
MSCI EAFE SEP23
MSCI EMGMKT SEP23
S+P/TSX 60 IX FUT SEP23
S+P500 EMINI FUT SEP23
S92RFVDJ3 CDS USD P V 03MEVENT
S92RFVDJ3 CDS USD R F 1.00000
SPI 200 FUTURES SEP23
SWPC0LLL2 CDS USD P V 03MEVENT
SWPC0LLL2 CDS USD R F 1.00000
SWPC0LLT5 CDS USD P V 03MEVENT
SWPC0LLT5 CDS USD R F 1.00000
SWPC0LMV9 CDS USD P V 03MEVENT
Par Value
3,799,984
(514,456,174)
68,762
(133,888,410)
13,500
(143,430)
26,596,225
(250,000)
83,390,000
(275,000)
103,438,500
(1,000,000)
122,100,000
(165,301)
29,949,235
(257,490)
75,835,955
(353,320)
30,505,649
(275,000)
93,117,750
(642,710)
39,481,675
(1,151,319)
530,000
(1,373,201)
785,000
197,000
2,410
530
652,500
654,900
356,200
1,017,100
(10,000,000)
10,000,000
3,725
(50,000,000)
50,000,000
(23,000,000)
23,000,000
(45,000,000)
Book Value Market Value
89,942,201 86,011,251
(514,456,174) (514,456,174)
514,456,174 505,507,281
(133,888,410) (133,888,410)
133,888,410 134,412,075
(26,596,225) (26,566,105)
26,596,225 26,596,225
(83,390,000) (85,135,000)
83,390,000 83,390,000
(103,438,500) (108,157,500)
103,438,500 103,438,500
(122,100,000) (119,090,000)
122,100,000 122,100,000
(29,949,235) (31,089,812)
29,949,235 29,949,235
(75,835,955) (76,837,591)
75,835,955 75,835,955
(30,505,649) (30,173,528)
30,505,649 30,505,649
(93,117,750) (93,775,000)
93,117,750 93,117,750
(39,481,675) (38,703,996)
39,481,675 39,481,675
(1,151,319) (1,151,319)
1,151,319 1,279,054
(1,373,201) (1,373,201)
1,373,201 1,404,867
0 0
0 0
0 0
0 0
0 0
0 0
0 0
(10,000,000) (10,000,000)
9,661,991 9,673,770
0 0
(50,000,000) (50,000,000)
41,917,560 44,057,700
(23,000,000) (23,000,000)
21,732,081 22,519,714
(45,000,000) (45,000,000)

359 of 566

CalPERS 2022-2023 Annual Investment Report
Derivatives
Security Name
SWPC0LMV9 CDS USD R F 1.00000
SWPC0LMY3 CDS USD P V 03MEVENT
SWPC0LMY3 CDS USD R F 1.00000
SWPC0LN55 CDS USD P V 03MEVENT
SWPC0LN55 CDS USD R F 1.00000
SWPC0LN89 CDS USD P V 03MEVENT
SWPC0LN89 CDS USD R F 1.00000
SWPC0LSJ0 CDS USD P V 03MEVENT
SWPC0LSJ0 CDS USD R F 1.00000
SWPC0LSK7 CDS USD P V 03MEVENT
SWPC0LSK7 CDS USD R F 1.00000
SWPC0LTH3 CDS USD P V 03MEVENT
SWPC0LTH3 CDS USD R F 1.00000
SWPC0LUV0 CDS USD P V 03MEVENT
SWPC0LUV0 CDS USD R F 1.00000
TOPIX INDX FUTR SEP23
US 10YR NOTE (CBT)SEP23
US 10YR ULTRA FUT SEP23
US 2YR NOTE (CBT) SEP23
US 5YR NOTE (CBT) SEP23
US LONG BOND(CBT) SEP23
US ULTRA BOND CBT SEP23
Total
Par Value
45,000,000
(15,000,000)
15,000,000
(25,000,000)
25,000,000
(25,000,000)
25,000,000
(90,500,000)
90,500,000
(13,600,000)
13,600,000
(72,000,000)
72,000,000
(10,000,000)
10,000,000
1,230,000
2,495,400,000
2,139,600,000
517,200,000
(433,900,000)
1,494,500,000
2,316,300,000
Book Value Market Value
42,213,676 42,414,840
(15,000,000) (15,000,000)
15,061,819 15,182,715
(25,000,000) (25,000,000)
24,944,298 25,092,300
(25,000,000) (25,000,000)
23,028,939 23,919,575
(90,500,000) (90,500,000)
90,918,516 91,197,122
(13,600,000) (13,600,000)
13,662,893 13,675,806
(72,000,000) (72,000,000)
71,715,720 72,891,144
(10,000,000) (10,000,000)
10,041,394 10,106,540
19,549,237 19,470,993
0 0
0 0
0 0
0 0
0 0
0 0
7,416,716 (98,943,094)

360 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name
57 Stars Global Opportunities Fund 2 (CalPERS), LLC
57 Stars Global Opportunities Fund, LLC
AACP AP Investors, L.P.

AACP China Growth Investors
AACP India Investors B
AACP India Investors C
AACP India Venture Investors A
Advent Global Technology II Limited Partnership
Advent International GPE IX Limited Partnership
Advent International GPE V-D, L.P.

Advent International GPE VI-A, L.P.

Advent International GPE VII-C, L.P.

Advent International GPE VIII-B Limited Partnership
Advent International GPE X Limited Partnership
AHVF II Rand Warrant Co-Invest, L.P.

AlpInvest Secondaries Fund (onshore) VII, L.P.

AMZL, LP
AP DSB Co-Invest III, L.P.

AP IX Connect Co-Invest Holdings, L.P.

Apollo Co-Investors (MHE), L.P.

Apollo European Principal Finance Fund, L.P.

Apollo Investment Fund IV, L.P.

Apollo Investment Fund IX, L.P
Apollo Investment Fund V, L.P.

Apollo Investment Fund VI, L.P.

Apollo Investment Fund VIII, L.P.

Apollo Special Opportunities Managed Account, L.P.

ArcLight Energy Partners Fund III, L.P.

ArcLight Energy Partners Fund IV, L.P.

Ares Corporate Opportunities Fund II, L.P.

Ares Corporate Opportunities Fund III, L.P.

Ares Corporate Opportunities Fund V, L.P.

Ares Corporate Opportunities Fund VI, L.P.

Ares Corporate Opportunities Fund, L.P.

Ares Private Opportunities (CP), L.P.

Arlington Capital Partners VI, L.P.

Arsenal Capital Partners Growth LP
Arsenal Capital Partners VI LP
ASF VIII B L.P.

Asia Alternatives Capital Partners II LP
Asia Alternatives Capital Partners, LP
Book Value Market Value
63,393,470 363,534,914
0 19,440,163
10,091,962 57,666
15,010,975 1,153,473
573,314 2,330,665
4,691,886 6,777,495
3,269,445 229,378
54,802,569 62,372,722
498,263,766 704,971,479
3,984,684 2,207,989
110,405,338 51,264,131
161,717,875 86,041,025
388,225,126 614,848,427
151,125,000 142,213,008
50,081,731 50,202,228
234,888,179 292,694,160
2,142,857 2,142,857
8,425,810 9,983,878
37,146,998 37,129,427
1,232,678 0
439,730 157,750
0 79,774
367,109,354 515,525,600
0 2,126,085
62,810,231 9,365,074
115,734,846 130,179,442
0 18,956,559
23,415,905 0
19,782,688 481,668
2,538,601 0
28,556,215 3,991,226
265,698,144 411,023,737
181,812,909 202,070,685
4,491,167 119,770
145,101,963 206,547,131
38,386,173 42,198,213
9,865,609 4,783,676
43,737,019 43,542,258
117,953,604 196,613,560
9,246,936 15,865,473
11,561,648 4,038,083
Avenue Special Situations Fund V, L.P. 1

361 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name
Bain Capital Tech Opportunities Fund II, L.P.

Bain Capital Venture Fund 2022, L.P.

Baring Vostok Private Equity Fund IV L.P. / Supplement
Base10 Advancement Initiative II, L.P.

Base10 Partners III, L.P.

Bay State Partners, L.P.

BC CLP INVESTORS, L.P.

BDC III C LP

BDC IV D LP
BE VI 'H' L.P.

Bear Coast (Ventures) Fund, LP
Bear Technology Fund, L.P.

Berkshire Fund X, L.P.

Berkshire Spectre Co-Investor, L.P.

Beyond SPV I, L.P.

Birch Hill Equity Partners (US) III, LP
Birch Hill Equity Partners (US) IV, LP
Blackstone Arches Co-Invest L.P.

Blackstone Capital Partners V L.P.

Blackstone Capital Partners VI L.P.

Blackstone Capital Partners VII, L.P.

Blackstone Capital Partners VIII, L.P.

Blackstone Communications Partners I L.P.

Blackstone Core Equity Partners II, L.P.

Blackstone First Eagle Co-Invest L.P.

Blackstone GTS Co-Invest, L.P.

Blackstone RL Co-Invest, L.P.

Blackstone Tactical Opportunities Fund - C L.P.

Blackstone Tactical Opportunities Fund (KG Co-Invest) L Blackstone Tactical Opportunities Fund (T4U Co-Invest)
Blackstone Tactical Opportunities Fund II - C L.P.

Blackstone Tactical Opportunities Fund III-C (Surge) L.P Blackstone Tactical Opportunities Fund III-C L.P.

Blackwell Capital Partners, LP

BOND III, LP
Bridgepoint Europe III 'C' L.P.

Bridgepoint Europe III 'D' LP
Bridgepoint Europe IV 'B' L.P.

Bridgepoint Europe IV 'D' LP
BRV Lotus Fund III, L.P.

Butterfly II, LP
BVP Forge Institutional [A], L.P.

Book Value Market Value
27,902,091 26,172,245
8,260,572 8,249,998
47,616,906 1,066,762
6,750,000 5,944,941
12,562,683 10,950,288
90,909,091 90,848,091
24,904,589 24,904,589
65,351,780 122,969,881
78,282,977 78,236,123
348,604,695 519,832,723
15,000,000 15,000,000
65,092,900 63,635,795
196,614,505 202,919,446
300,891,503 302,288,241
51,206,847 50,450,061
73,746,186 1,106,784
46,584,247 54,817,506
40,006,424 86,909,115
8,672,207 2,240
131,565,119 129,013,769
280,755,821 360,023,093
163,179,555 185,181,010
43,378,691 772,011
301,467,312 329,326,208
66,890,555 54,075,997
43,542,563 92,514,318
19,522 0
204,441,371 93,376,692
94,910 18,607,045
79,754 273,635
124,808,079 101,178,761
398,848,790 420,544,940
141,848,962 165,114,942
17,048,488 17,048,488
4,500,000 3,378,762
11,389,533 6,024,166
87,867,005 35,820,572
30,380,079 18,259,514
74,715,000 69,288,332
86,419,619 82,372,838
57,598,730 62,061,792
1,750,000 1,750,000

362 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name Book Value Market Value
CA Co-Investment Limited Partnership 599,810,000 598,981,063 California Asia Investors, L.P. 29,799,768 42,456,196
California Community Venture Fund, LLC 20,148,723 4,921,003 California Emerging Ventures II, LLC 554,418,377 0
California Emerging Ventures IV, LLC 200,871,870 77,655,634 California Emerging Ventures, LLC 333,000,732 0
California Innovation Opportunities, L.P. 79,874,734 79,874,734 California Partners, L.P. 214,097,199 243,521,862
CalPERS Clean Energy & Technology Fund, LLC 363,762,600 38,250,365 CalPERS Corporate Partners, LLC 177,679,240 178
CalPERS Wellspring V, L.P. 14,422,782 8,660,769
Canaan Gold Coast L.P. 10,500,000 10,500,000
Capital Link Fund I, LLC 170,753,545 61,462,029
Capital Link Fund II, LLC 146,057,839 25,814,804
Capital Link Management, LLC 0 35,576
CapVest Equity Partners V SCSp 5,131,452 0
Carlyle Acosta Coinvestment, L.P. 100,346,005 0
Carlyle Asia Growth Partners III, L.P. 35,771,607 0
Carlyle Asia Partners III, L.P. 19,189,837 1,772,232
Carlyle Asia Partners V, L.P. 79,704,100 83,282,654
Carlyle Europe Partners II, L.P. 491,445 321,672
Carlyle Europe Partners III, L.P. 37,307,327 2,100,584
Carlyle Europe Partners V, S.C.Sp. 105,847,199 134,078,527 Carlyle Havasu Coinvestment, L.P. 72,440,633 79,502,581 Carlyle MC Partners, L.P. 13,185,533 0
Carlyle Mexico Partners, L.P. 7,885,333 0
Carlyle Partners IV L.P. 17,986,628 0
Carlyle Partners Kinder Morgan 15,686,877 0
Carlyle Partners V, L.P. 131,747,343 38,173,643
Carlyle Partners VI, L.P. 103,500,156 133,247,381
Carlyle Partners VII, L.P. 290,587,637 342,079,475
Carlyle Partners VIII, L.P. 103,244,695 98,860,118
Carlyle Strategic Partners IV, L.P. 133,131,008 125,232,821 Carlyle U.S. Equity Opportunities II, L.P. 149,825,103 125,160,902 CD&R Value Building Partners I, L.P. 244,328,003 269,371,868 CDH Fund V, L.P. 61,421,201 100,953,971
Cedar Street Partners LP 138,741,406 163,812,810
Centerbridge Capital Partners III, L.P. 122,593,005 147,618,802 Centinela Investment Partners, LLC 2,000,003 0
Cerberus CAL II Partners, L.P. 76,082,526 398,168,467
Cerberus CAL III Partners, L.P. 455,916,094 348,125,219 Cerberus Cloud Partners, L.P. 36,262,193 48,933,037

363 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name
Cerberus CP Partners LP
Cerberus Institutional Partners V, L.P.

China Privatization Fund (Del), L.P.

CHK Mid-Con Co-Invest Vehicle Preferred, L.P.

CHK Mid-Con Co-Invest Vehicle Royalty, L.P.

Clayton, Dubilier & Rice Fund X, L.P.

Clayton, Dubilier & Rice Fund XI, L.P.

Clearlake Capital Partners III, LP
Clearlake Capital Partners IV, L.P.

Clearlake Capital Partners V, L.P.

Clearlake Capital Partners VII, L.P.

Clearlake Opportunities Partners (P), L.P.

Clearwater Capital Partners Fund I, L.P.

Clearwater Capital Partners Fund III, L.P.

Clearwater ICPL Co-Investment Fund, L.P.

Coller International Partners V-A, L.P.

Craton Equity Investors I, L.P.

Crestline Pacific Co-Investment, L.P.

Crosspoint Capital Fund II, LP
Crosspoint Capital VC SPV, LP
CV Consortio Fund L.P.

CVC Capital Partners Asia V L.P.

CVC Capital Partners Strategic Opportunities Compoun
CVC Capital Partners VI, L.P.

CVC Capital Partners VII (A) L.P.

CVC Capital Partners VIII (A) L.P.

CVC Credit Strategic Investment A L.P.

CVC European Equity Partners III LP
CVC European Equity Partners IV (D) L.P.

CVC European Equity Partners Tandem Fund (B) L.P.

CVC European Equity Partners V (B) L.P.

Daytona Investco, LP
Dragoneer Opportunities Fund VI, L.P.

DS Opportunities (C) LP
EMAlternatives Investments, L.P.

EQT IX (No.2) USD SCSp
EQT X (No.2) USD SCSp
Essex Woodlands Health Ventures Fund VIII, L.P.

First Reserve Fund XI, L.P.

First Reserve Fund XIII, LP
Forbion Growth Opportunity Fund II
Forbion Ventures Fund VI Cooperatief U.A.

Book Value Market Value
0 524,919,427
0 177,872,592
1 0
32,893,596 0
7,271,170 0
119,124,134 199,633,739
350,546,231 368,400,006
22,069,933 3,459,793
34,276,060 44,679,222
59,876,033 93,224,768
179,807,057 186,288,742
50,702,648 53,273,323
19,752,657 0
0 12,745,228
2,002,448 0
33,325,359 63,063
33,994,490 0
2,448,959 0
81,084,334 70,239,223
11,499,206 0
265,434,550 265,434,550
137,632,690 174,058,282
668,985,828 1,150,229,223
323,203,042 472,941,066
439,408,077 755,387,365
457,177,365 502,580,567
2,648,905 91,991
24,588,005 13,891,165
103,542,142 425,514
95,852,041 227,240
56,212,363 10,572,503
175,000,000 189,357,175
12,164,249 9,781,815
106,694,002 183,217,336
42,107,333 13,911,337
665,620,613 802,910,855
2,157,199 2,157,199
41,491,730 0
330,549,235 225,435
304,820,246 185,380,826
2,544,420 2,603,849
10,880,734 11,021,665

364 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name
Forecastle, L.P.

Fourth Street Partners - CPS L.P.

Francisco Partners Agility II, L.P.

Francisco Partners II, L.P.

Francisco Partners III, L.P.

Francisco Partners VI, L.P.

Francisco Partners, L.P.

GC Customer Value Fund II, L.P.

GC Venture XI (S), LP
GCM Grosvenor DEM II, L.P.

GCM Grosvenor DEM III, L.P.

GCM Grosvenor DEM, L.P.

General Atlantic Managed Account
General Catalyst Group XI - Health Assurance, L.P.

Genstar Capital Partners X, L.P.

Genstar X Opportunities Fund I, L.P.

GPE IX Forescout Co-Investment Limited Partnership
GPE IX Gemstone Co-Investment SCSp
GPE IX Gemstone Co-Investment-A SCSp
GPE IX TKE Co-Investment Limited Partnership
Grandval II, L.P.

Grandval, L.P.

GranTain Co-Invest L.P.

Green Equity Investors CF II, L.P.

Green Equity Investors CF, L.P.

Green Equity Investors V, L.P.

Green Equity Investors VIII, L.P.

Greenleaf Co-Invest Partners, L.P.

GSO Energy Partners-C II LP
GSO Energy Partners-C LP
H&F ARROW 1, L.P.

H&F Hockey Partners, L.P.

H&F Spock 1, L.P.

H.I.G. Europe Middle Market LBO Fund, L.P.

Healthcare and Fintech, L.P.

Hellman & Friedman Capital Partners IX, L.P.

Hellman & Friedman Capital Partners VI
Hellman & Friedman Capital Partners VII
Hellman & Friedman Capital Partners VIII, L.P.

Hellman & Friedman Capital Partners X, L.P.

Hg Genesis 10 A L.P.

Hg Saturn 3 A L.P.

Book Value Market Value
452,098,222 530,009,213
450,215,826 485,999,880
31,825,000 40,737,782
55,041,708 393,957
24,605,032 42,734,568
211,875,000 238,932,285
22,845,936 0
82,068,965 82,068,965
250,251,251 250,237,737
170,912,802 234,457,840
356,079,160 525,379,134
54,043,513 48,924,782
608,923,999 641,174,584
31,954,377 31,954,377
63,525,628 66,893,884
95,891,091 101,204,225
82,061,582 119,954,256
58,789 61,875
1,514,899 1,514,899
37,843,069 55,873,348
601,513,959 848,349,423
49,754,644 76,180,430
112,373,445 111,851,358
60,708,143 70,500,245
157,837,743 141,665,549
0 6,137,785
532,050,241 606,670,287
446,695,822 505,687,812
79,805,174 25,672,925
233,678,108 42,107,487
52,537,845 101,434,870
56,271 0
98,004,268 312,152,512
25,755,309 31,117,477
69,454,156 118,762,926
627,637,699 862,105,895
115,974,374 0
43,186,743 61,160,504
387,381,584 611,198,243
715,882,283 730,262,210
15,174,006 15,212,356
18,356,759 18,356,759

365 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name
ICV Partners II, L.P.

Impower Five, L.P.

Insight Partners XI, L.P.

Insight Partners XII Buyout Annex Fund, L.P.

Insight Partners XII, L.P.

Insight Venture Partners Growth-Buyout Coinvestment
Insight Venture Partners IX, L.P.

Insight Venture Partners VI, L.P.

Insight Venture Partners X, L.P.

Ithaca L.P.

Jade Equity Investors, L.P.

K5 Private Investors, L.P.

Karakoram Fund C, L.P.

Khosla Ventures III, L.P.

Khosla Ventures Seed, L.P.

KKR 2006 Fund L.P.

KKR Asian Fund II L.P.

KKR Asian Fund IV SCSp
KKR Asian Fund L.P.

KKR European Fund II, L.P.

KKR European Fund III, L.P.

KKR European Fund V (USD) SCSp
KKR North America Fund XIII SCSp
KKR Pebble Co-Invest L.P.

KM Corporate Partners Fund II, LP
KPS Special Situations Fund III, LP
Lightspeed Opportunity Fund II, LP
Lightspeed Venture Partners Select V, L.P.

Lightspeed Venture Partners XIV-A (Inception), L.P.

Lightspeed Venture Partners XIV-B (Ignite), L.P.

Lime Rock Partners IV, LP
Lindsay Goldberg - Alpine Co-Inv. L.P.

Lindsay Goldberg IV, L.P.

Lindsay Goldberg V L.P.

LongRange Capital Fund I, L.P.

LRC Fund I PNP Coinvest, L.P.

Madison Dearborn Capital Partners IV, L.P.

Madison Dearborn Capital Partners V, L.P.

Madison Dearborn Capital Partners VIII, LP
MDCP Co-Investors (Tango), L.P.

MDCP Co-Investors (Vision), L.P.

Middlefield Road Private Opportunities Fund, L.P.

Book Value Market Value
12,154,282 0
20,196,000 20,196,000
388,295,273 561,389,540
108,480,208 100,381,943
449,729,570 391,687,921
287,879,329 867,166,391
76,348,209 244,776,571
9,666,265 0
237,583,190 512,311,798
65,274,334 122,745,579
102,022,042 128,009,301
82,523,221 88,273,357
186,113,458 206,656,289
141,883,455 30,293,566
58,224,216 101,255,056
138,835,897 297,586
267,252,552 150,728,874
137,597,256 143,344,207
56,828,911 162,781
59,671,742 735,637
62,541,051 6,008,767
253,846,126 271,408,470
210,385,270 216,124,370
75,000,000 77,708,400
92,985,997 37,267,955
67,213 26,154
72,000,000 71,333,640
34,000,000 30,850,118
18,450,000 17,384,882
20,900,000 19,272,329
24,498,587 99,929
50,434,342 59,715,774
92,044,945 98,046,611
117,750,968 149,839,882
587,925,026 588,771,638
174,483,200 201,113,698
29,834,491 0
49,942,686 10,519,425
296,999,315 283,775,124
97,269,244 103,261,905
99,656,056 112,526,038
106,456,220 107,589,127

366 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name Book Value Market Value
Minerva Partners, L.P. 274,830,354 283,539,178
Moreton Bay SPV, LP 481,070,122 480,903,672
Muir Woods Partners, L.P. 40,119,600 40,034,627
New Mountain Partners II, L.P. 17,993,461 0
New Mountain Partners III, L.P. 28,774,907 19,126,137
New Mountain Partners VI, L.P. 367,656,332 421,771,668
Newbridge Asia IV, L.P. 57,004,257 0
NM Pacific, L.P. 185,917,906 246,214,244
NMP III Continuation Fund, L.P. 57,628,767 78,525,188
Nordic Bear SCSp 665,304,295 699,602,062
Oak HC/FT Partners V, L.P. 27,406,469 30,244,847
Oak Hill Capital Partners II, L.P. 25,420,080 172,829
Oaktree Latigo Investment Fund, L.P. 312,500,000 445,724,375 Oaktree Opportunities Fund VIIIb, L.P. 0 68,992,686
OHA Black Bear Fund, L.P. 152,574,257 264,606,941
Onex Fox III LP 50,000,000 61,428,100
Onex North Star Co-Invest LP 49,835,080 69,604,208
Onex OD Co-Invest LP 50,000,000 75,611,200
Onex Partners IV, L.P. 200,471,508 192,636,881
Onex Partners V-B LP 403,086,572 499,436,691
Onex SIG Co-Invest LP 166,930 74,460
Orchard Park, L.P. 270,848,702 315,169,571
PAG Asia I LP 43,992,680 24,518,150
PAG Asia III LP 300,240,950 341,231,045
PAGAC Drone Holding I LP 15,578,308 18,628,463
Palladium Equity Partners III, L.P. 97,117,981 39,960
Palladium Equity Partners V, L.P. 59,528,187 65,286,481 Patience DF Holdings, LP 90,000,000 95,354,550
Patient Square Equity Partners, LP 122,377,628 113,138,484 Patria Brazilian Private Equity Fund V, L.P. 134,221,786 245,953,370 Permira Europe III 16,600,561 338,740
Permira Growth Opportunities I L.P. 1 177,517,828 164,038,237 Permira Growth Opportunities II SCSP 53,087,500 38,474,847 Permira IV L.P.2 35,690,347 62,367,765
Permira V, L.P. 141,280,529 174,276,050
Permira VI L.P. 1 369,431,680 619,513,997
Permira VII L.P.1 519,028,684 558,508,028
Permira VIII-2 SCSp 180,823,099 178,889,255
Project Metal Co-Invest Fund, L.P. 194,103,466 161,512,524 Project Quail Opportunities, L.P. 220,828,958 220,238,020 Project Stream Co-Invest Fund, L.P. 167,498,438 125,007,434 Proofpoint Co-Invest Fund, L.P. 75,042,033 86,429,662

367 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name Book Value Market Value
Prysm Capital Fund I, L.P. 74,161,981 48,901,224
PSG Encore L.P. 32,870,283 28,827,041
PSG V L.P. 53,711,452 55,916,039
Q-Street Capital, L.P. 195,291,695 213,216,739
RealPage Parent, LP 50,000,000 50,000,000
Red Admiral Fund LP 231,394,567 229,963,160
Redwood Lane Capital, L.P. 327,546,336 340,043,866
Redwood Opportunities SCSp 496,735,367 545,574,885
Riverstone Fieldwood Partners, L.P. 55,146,941 0
Riverstone Global Energy and Power Fund V, L.P. 336,676,358 121,672,903 Riverstone Global Energy and Power Fund VI, L.P. 434,965,352 303,994,675 RSK Aggregator, L.P. 35,806,452 38,984,990
Sacramento Private Equity Partners, L.P. 587,721 101,596,315 SAIF Partners III L.P. 4,410,604 79,988,949
SAIF Partners IV L.P. 47,999,742 106,711,810
Samson Brunello 1, L.P. 38,203,766 85,282,305
Samson Hockey 1, L.P. 38,498,786 90,684,083
Samson Hockey Partners 1, L.P. 86,011,708 203,137,721
Samson Partners, L.P. 165,653,947 217,460,562
Samson Shield 1, L.P. 170,705,376 177,744,241
Sequoia Capital China Growth Fund VII, L.P. 3,120,000 3,120,000 Sequoia Capital China Seed Fund III, L.P. 2,400,000 2,172,547 Sequoia Capital China Venture Fund IX, L.P. 4,160,000 3,698,332 Sierra Partners, L.P. 33,642,906 54,674,634
Silver Lake Partners II, L.P. 6,907,953 0
Silver Lake Partners III, L.P. 87,468,148 30,355,638
Silver Lake Partners IV, L.P. 231,676,618 507,705,856
Silver Lake Partners V, L.P. 325,211,359 456,825,100
Silver Lake Partners VI, L.P. 662,035,931 685,873,197
Silver Lake Tech Inv III 17,358,255 0
Silver Lake Technology Inv Sumeru 1,886,713 0
Silver Lake Technology Investors IV, LP 51,326,791 146,082,359 Silver Lake Technology Investors V, L.P. 75,232,536 122,505,501 Siris Partners IV, L.P. 76,784,471 117,456,514
SL SPV-1, L.P. 83,181,172 84,232,832
SL SPV-2, L.P. 49,190,647 89,339,560
SLP Ace Co-Invest, L.P. 113,420,246 117,725,905
SLP Emblem Co-Invest, L.P. 75,413,395 75,095,301
SLP Redwood Co-Invest, L.P. 96,981,587 125,486,997
SPRINGBLUE A, L.P. 27,499,224 23,421,309
SPRINGBLUE B, L.P. 38,750,000 35,646,513
Springblue B-III, L.P. 600,000 600,000

368 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name
SR One Capital Fund II-A, LP
Summit Partners Co-Invest (Indigo), L.P.

Summit Partners Growth Equity Fund X-A, L.P.

Summit Partners Growth Equity Fund XI-A, L.P.

Sunrise Boulevard PE Partners L.P.

TA Select Opportunities Fund II-A, L.P.

TA XIV-A, L.P.

Tailwind Capital Partners (PP), LP
Tailwind Capital Partners II, LP
Tailwind Capital Partners III, L.P.

TCC Opportunities, L.P.

TCP II Co-Invest B, L.P.

TCV X, L.P.

TCV XI, L.P.

The Rise Fund (A), L.P.

The Veritas Capital Fund VIII, L.P.

Thoma Bravo Fund XIV, L.P.

Thoma Bravo Fund XV, L.P.

Thomas H. Lee Equity Fund VI, L.P
Thrive Capital Partners VIII Growth, LLC
Tiger Global Private Investment Partners XV, L.P.

Top Castle Sidecar VII, L.P.

TowerBrook Investors II, L.P.

TowerBrook Investors IV (Onshore), L.P.

Towerbrook Investors V (Onshore) LP
Towerbrook Structured Opportunities Fund (Onshore),
Towerbrook Structured Opportunities Fund II (Onshore
TPG Asia V, L.P.

TPG Biotechnology Partners II, L.P.

TPG Biotechnology Partners III, L.P.

TPG Golden Bear Partners, L.P.

TPG Growth IV, L.P.

TPG Growth V, L.P.

TPG Healthcare Partners, L.P.

TPG Holdings LP
TPG Partners IV, L.P.

TPG Partners V, L.P.

TPG Partners VIII, L.P.

TPG STAR, L.P.

TPG Tech Adjacencies II, L.P.

Triangle Investment Opportunities, L.P.

Trident IX, L.P.

Book Value Market Value
18,527,466 17,462,044
68,615,146 68,553,461
210,828,816 253,596,917
97,626,576 101,327,990
343,364,726 385,794,305
26,250,000 25,563,011
99,000,000 91,352,844
35,090,688 0
29,544,903 90,896,143
108,726,736 203,838,928
208,369,094 238,546,148
31,595,505 76,548,520
119,879,576 233,712,905
153,554,264 139,486,390
47,179,826 78,727,129
267,239,314 257,834,628
590,862,589 592,365,743
407,362,118 405,559,948
18,104,873 0
500,643,564 500,278,094
270,000,000 217,046,250
90,031,791 118,995,738
32,506,028 1,892,108
221,927,074 356,375,944
345,350,076 394,764,837
160,321,890 163,098,825
179,395,510 182,227,986
111,125,722 20,906,550
43,121,644 0
56,237,366 57,194,136
446,062,002 708,868,798
59,503,964 80,184,448
134,671,538 163,580,669
79,378,217 95,655,549
0 11,914,164
67,780,016 393,201
262,149,933 601,233
128,642,537 174,930,630
78,122,553 17,546,225
69,093,763 65,667,403
335,343,118 335,307,907
163,146,025 151,917,174

369 of 566

CalPERS 2022-2023 Annual Investment Report
Private Equity
Security Name Book Value Market Value
Trident VI 129,543,985 323,485,452
Trident VII, L.P. 240,522,299 438,940,453
Trident VIII, L.P. 364,622,898 458,398,803
Triton Fund IV L.P. 57,709,862 35,900,302
Triton Fund V, LP 156,253,875 256,685,705
Trius Co-Investment Limited Partnership 859,778 0
T-VI Co-Invest-A LP 23,504,454 282,771,788
T-VIII Skopima Co-Invest LP 37,572,464 69,513,567
Valor Equity Partners IV L.P. 71,092,083 161,432,632
Vicente Capital Partners Growth Equity Fund, L.P. 568,602 422,878 VIP IV LP 245,247,781 275,703,953
Vista Equity Partners Fund VII-Z, L.P. 339,861,444 434,328,514 W Capital Partners II, L.P. 42,852,699 0
WCAS Blackjack Co-Investment LLC 50,000,000 80,394,950
WCAS Spartan Co-Investment LLC 79,503,808 56,208,874
WCAS XIII, L.P. 317,209,837 373,658,778
WCAS XIV, L.P. 53,601,461 41,494,499
Welsh, Carson, Anderson & Stowe XI, L.P. 32,865,455 8,657,877 Welsh, Carson, Anderson & Stowe XII, L.P. 176,815,075 323,650,317 Whitney Global Partners L.P. 554,182,833 621,547,750
Wigmore Street (BDC III) LP 17,969,181 26,798,363
Wigmore Street BDC IV Co-Investment No.1 LP 18,687,048 19,112,493 Wigmore Street Co-investment No. 1 LP 37,015,797 68,719,715 Wigmore Street VI Co-Investment No. 1 LP 91,768,771 145,281,879 Yucaipa American Alliance Fund I, L.P. 75,212,121 1,214,676 Yucaipa American Alliance Fund II, L.P. 195,724,536 299,339,561 Yucaipa Corporate Initiatives Fund I, L.P. 127,663,316 5,943,111 Yucaipa Corporate Initiatives Fund II, L.P. 44,977,793 1,321,734 Total 52,768,603,911 58,612,188,674

370 of 566

CalPERS 2022-2023 Annual Investment Report
Private Debt and Loans
Security Name
Antares Credit Opportunities CA LLC
Antares Credit Opportunities CA LLC - Series 2
Antares Credit Opportunities CA LLC - Series 3
Antares Credit Opportunities CA LLC - Series 4
Ares Capital Europe V (D) Levered
Ares Credit Investment Partnership (CP), L.P.

Ares European Credit Investments VII (CP), L.P.

Ares Senior Direct Lending Fund II
Ares SME (Parallel), L.P.

Blackstone Credit Series Fund-C LP - Series A
Blackstone Credit Series Fund-C LP - Series B
Blackstone Credit Series Fund-C LP - Series C
Blackstone Real Estate Debt Strategies IV - C L.P.

Federated Trade Finance
Mesa West Real Estate Income Fund V (PF)
Oaktree Gilead Investment Fund, L.P.-Series A
OHA Co-Invest Opportunities Fund
OHA Credit Opportunities CA (C), L.P.

OHA Credit Solutions Fund II
OHA Credit Solutions Fund II (CA Parallel)
OHA Senior Private Lending Fund (CA 3)
OHA Senior Private Lending Fund (CA 5)
OR Diversified Lending (CP), L.P.

OR Diversified Lending (CP), L.P. Co-Investment
OR Diversified Lending (CP), L.P. Overflow
PIMCO DISCO Fund III LP
Sixth Street Cottonwood Strategic Holdings I, L.P.

Sixth Street Fundamental Strategies Partners (A), L.P.

Sixth Street Mid-Stage Growth Partners (A), L.P.

Sixth Street TAO Partners (B), L.P.

West Street Co-Investment Partners (C), L.P.

West Street Mezzanine Co-Investment Partners (C), LP
West Street Mezzanine Partners VIII
West Street Mezzanine Partners VIII, pro rata co-invest West Street Strategic Solutions Fund I-(C), L.P.

West Street Strategic Solutions Fund I, L.P.

Book Value Market Value
619,775,566 578,950,950
510,356,292 466,973,456
354,912,181 310,029,277
407,744,798 368,339,118
808,484,872 852,590,147
112,977,405 114,258,455
256,932,280 291,048,005
671,029,743 655,585,323
223,587,427 239,252,857
117,344,352 121,270,577
29,821,264 30,585,345
11,215,345 11,215,345
688,549,003 620,054,485
1,515,465 897,951
112,715,823 94,848,224
470,000,000 534,776,649
425,186,107 463,528,873
137,497,924 164,785,978
130,578,421 136,940,593
132,572,167 141,618,892
143,959,743 155,985,564
143,902,157 155,419,222
265,094,810 270,682,214
159,056,886 163,015,335
22,277,722 22,426,003
696,760 11,281,345
295,047,445 335,338,545
221,490,147 236,725,728
34,643,511 33,859,909
623,697,721 726,656,343
198,728,533 194,538,043
240,489,103 252,355,076
250,000,000 271,714,750
62,500,000 69,397,688
255,000,000 281,340,534
1,030,412,295 1,125,245,788
Total 10,169,793,270 10,503,532,584

371 of 566

CalPERS 2022-2023 Annual Investment Report
Real Estate
Security Name
ARA China Long Term Hold
Blackstone Mileway Logistics L.P.

Blackstone Property Partners Europe, L.P.

Blackstone Property Partners Life Sciences L.P.

CalEast Canada Limited Partnership
CalEast Industrial Investors, LLC
CalEast Solstice (Original)
CalEast Solstice, LLC
CalWest CalPERS GIP
Canyon Catalyst Fund II, LLC
CCF II Industrial
CCF III Industrial

CCF III, LLC
CCP 2020
CIM Fund III, LP
Core Property Index Trust
DW Life Sciences Partners, LLC
FSP - Base
FSP - DT 2012 and Beyond
Gotham Office Realty Partnership
GRI - Base
GRI - DT 2012 and Beyond
HC Green Development Fund LP

HC LTH LLC
HCB Interests II LP
HCM Holdings II LP
Hearthstone Housing Partners II, LLC
Hines European Development Fund LP
IMI - Base
IMP - Base
IMP - DT 2012 and Beyond

IMP - ICMI
IMP Abaca
IMP DT 2020
IMP Fairmont Residential Owner, LLC
Institutional HSG Partners, L.P.

Institutional Logistics Partners, LLC
KC 2011, LLC
Land Management Company Resmark
National Office Partners, LLC (CWP)
ORA Multifamily Investments I, LLC
ORA Residential Investments I, L.P.

Book Value Market Value
586,636,245 908,846,203
724,469,433 770,045,805
757,153,442 1,015,691,814
681,476,718 845,621,289
186,007 186,007
(341,149) (341,149)
(3,108,450) (3,108,450)
7,018,525,920 11,392,766,052
8,291,432 8,291,432
270,505,581 240,956,634
27,349,595 77,874,882
126,045,363 189,324,421
313,807,611 293,934,803
100,593,823 95,601,553
207,886,308 250,217,157
449,190,654 449,190,654
400,065,092 367,709,028
5,091,805,122 5,863,447,821
562,119,954 579,364,670
434,520,130 449,824,798
2,833,681,951 4,804,963,970
24,478,911 37,806,406
157,244,836 275,850,527
556,738,652 474,467,711
53,707,655 133,193,588
(4,025) (4,025)
1,047,776 1,047,776
3,474,294 3,474,294
2,899,681,095 5,251,421,051
4,164,965,259 7,121,307,579
110,838,196 155,472,738
550,705,422 774,494,483
119,689,950 149,387,780
611,205,200 671,745,075
64,301,422 60,645,372
(166,214) (166,214)
2,798,621,718 4,494,813,168
(3,798,342) (3,798,342)
154,834,487 146,790,216
305,899 305,899
28,270 28,270
(3,418,147) 44,718,715

372 of 566

CalPERS 2022-2023 Annual Investment Report
Real Estate
Security Name Book Value Market Value
Pacific Multifamily Investors, LLC 2,374,881,683 2,897,899,501 PMI Tactical 857,765,151 814,070,594
Sacramento Venture Hines Base 48,191,254 49,265,437
Sacramento Venture Hines DT 50,222,856 47,585,202
Strategic Property Fund Asia SCSP 246,729,002 284,997,164 TechCore 2019 2,157,112,764 2,831,486,613
Total 38,590,245,807 55,318,715,971

373 of 566

CalPERS 2022-2023 Annual Investment Report
Infrastructure Partnerships
Security Name
Alinda Infrastructure Fund II, L.P.

Archmore International Infrastructure Fund II (B), L.P.

Archmore International Infrastructure Fund II (C), L.P.

Brookfield Infrastructure Fund V
Carlyle Infrastructure Partners, L.P.

CIM Infrastructure Fund, L.P.

Concession Investment Holdings, LLC
DB SAF C Strategic Partners, LP
DCP C Strategic Partners, LP
DigitalBridge Partners II, LP
DigitalBridge Strategic Assets Fund, LP
GIP Aquarius Fund, SCSp
GIP IV Gutenberg Co-Invest, SCSP
GIP IV Seaway Co-Invest 2, L.P.

Global Infrastructure Partners II, L.P. (GIP II)
Global Infrastructure Partners IV-A/B, L.P.

Golden Reef Infrastructure Trust
Harbert Gulf Pacific Power, LLC (HGPP)
Harbert Infrastructure Fund VI, L.P.

Harbert Power Fund V, L.P. (HPF V)
IFM Global Infrastructure (US), L.P.

IIF Hedged LP
Ivy Investment Vehicle LDC (SWPM)
Neptune Regional Transmission System, LLC
North Haven Infrastructure Partners II LP

SIERRA NEVADA INVESTMENT PARTNERS LP
Stonepeak Infrastructure Fund IV LP
Tower Bridge Infrastructure Partners, L.P.

Book Value Market Value
(100,998,648) 1,294,299
33,039,569 24,822,232
70,208,904 52,747,107
98,667,135 100,377,037
740,627 740,627
84,753,789 212,391,554
302,517,884 1,043,685,793
92,603,833 94,193,007
984,698,172 1,084,757,292
446,038,754 491,877,711
183,834,827 184,583,954
725,544,183 828,799,278
161,851,650 153,849,423
14,948,040 15,077,176
71,153,907 125,750,015
353,515,365 404,066,294
2,659,041,406 2,942,846,213
1,642,371,305 1,775,882,953
69,633,812 83,429,802
22,033,093 22,357,509
769,330,095 769,330,095
476,320,494 528,544,750
205,495 205,495
202,521,788 313,999,907
127,740,244 85,668,356
4,821,584 74,380,238
209,199,329 244,711,543
2,609,670,884 2,692,240,871
Total 12,316,007,520 14,352,610,529

374 of 566

CalPERS 2022-2023 Annual Investment Report
Forestland
Security Name Book Value Market Value
Lincoln Timber L.P. (251,940,155) 44,323,331
Southern Diversified 2,626,361 (665,167)
Sylvanus LLC 101,732,230 304,428,306
Total (147,581,565) 348,086,470

375 of 566

California Public Employees’
Retirement System
400 Q Street
P.O. Box 942701
Sacramento, CA 94229
-2701
(916) 795-3991
TTY: (877) 249-7442
www.calpers.ca.gov
376 of 566

CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION
Update for 2024
Reflects state law changes
effective as of January 1, 2024
CDIAC 23.07

LOCAL AGENCY

INVESTMENT

GUIDELINES
377 of 566

California Debt and Investment
Advisory Commission
The California Debt and Investment Advisory Commission ( CDIAC) pro- vides information, education, and technical assistance on debt issuance and pub- lic fund investments to local agencies and public finance professionals. CDIAC also serves as the State’s clearinghouse for public debt issuance information.

FIONA MA, CPA
State Treasurer and Chair

GAVIN NEWSOM
Governor
MALIA M. COHEN
State Controller

DAVID ALVAREZ
Assemblymember

AVELINO VALENCIA
Assemblymember

SANDIE ARNOTT
Treasurer-T ax Collector
County of San Mateo

NIKOLAI SKLAROFF
Capital Finance Director
San Francisco Public Utilities Commission

ROBERT BERRY
Executive Director
Additional information concerning this report or CDIAC programs may be ob- tained by contacting CDIAC directly via phone (916) 653-3269, fax (916) 654- 7440, e-mail ([email protected]) or by visiting CDIAC’s website: www. treasurer.ca.gov/cdiac.

All rights reserved. No part of the Local Agency Investment Guidelines: Update for 2024 may be reproduced without giving written credit to CDIAC. Permission to reprint with written credit given to CDIAC is hereby granted. 378 of 566

Contents
ABOUT THE LOCAL AGENCY INVESTMENT GUIDELINES ............ 1 SUMMARY OF CHANGES ...................................... 3 CHAPTER I. THE ANNUAL INVESTMENT POLICY ................... 5 A. Should local agencies produce an investment policy? Should the investment policy be presented to the local agency’s legislative body? ..... 5 B. When should the investment policy be reviewed and updated? How should the investment policy be rendered to the legislative body? ....... 6 C. What information should be included in the investment policy? ........ 7 D. How is the limit on a political contribution determined when selecting brokers and dealers? .............................. 8 E. What constraints can county pools place on voluntary depositors? ...... 9 CHAPTER II. FUND MANAGEMENT ............................. 10 A. Which investments are permissible? Which are prohibited? ........... 11 B. What requirements must a financial institution satisfy before a local agency may deposit its money in it? .................. 15 C. When must investments contained in a local agency
investment portfolio comply with state law? ..................... 16 D. What funds should a local agency use to calculate
portfolio concentration compliance with state law? .................. 17 E. Must bond proceeds be invested in the securities set forth in statute? .... 19 F. How does the Municipal Advisor (MA) Rule
affect investment of bond proceeds? .............................. 19 G. Are all U.S. Agency bonds legal investments
for California local agencies? ................................. 20 H. What are supranational securities? ............................. 22 I. Can a local agency invest in an investment
pool administered by another state? ............................ 23 J. What are “medium-term notes”? .............................. 23 379 of 566

K. Are bonds issued by departments and financing authorities of the State of California permissible investments for local agencies? ......... 25 L. What are the rules regarding the use of reverse repurchase agreements and securities lending agreements? Are “shorting” strategies allowed? .... 25 M. What are the rules regarding the use of mutual funds and money market funds? Are exchange-traded funds permissible investments? .... 27 N. What are the rules affecting the investment of
tax and revenue anticipation note (TRAN) and
grant anticipation note (GAN) proceeds? ....................... 29 O. What is an appropriate safekeeping arrangement for securities? ....... 29 P. How does the Municipal Advisor (MA) Rule affect a local agency’s relationship with an investment advisor? ................. 30 Q. What are the rules regarding the payment of interest earned on non-general fund deposits to an agency's general fund? .......... 31 R. Should local agencies invest in financial futures and option contracts? If so, in what manner should they be utilized? ............ 32 S. How long should a local agency retain trade ticket information? ...... 33 CHAPTER III. REPORTING REQUIREMENTS ...................... 34 A. What specific information regarding portfolio investments needs to be included in the report to the legislative body? ........... 35 B. Should the report include market value
measures for individual securities? ............................. 37 How should the market value of the portfolio be determined? ........ 37 How frequently should market value be checked? ................. 38 C. Should an analysis of cash flows be prepared by the local agency in order to validate the six-month liquidity certification? ............ 38 D. What tools can be used to measure interest rate risk? ............... 40 E. What action should the legislative body take with the report? ........ 43 F. How should agencies address difficulties in meeting
the 45-day requirement for submitting quarterly
investment reports to the legislative body? ....................... 43 CHAPTER IV. TREASURY OVERSIGHT COMMITTEES ............... 45 A. What options are available for structuring
the county treasury oversight committee? ....................... 45 B. Does the appointment of the treasurer to the county
treasury oversight committee create a conflict of interest? ........... 47 C. What is the role of the county treasury oversight committee? ........ 48 D. Should other local agencies have treasury oversight committees? ...... 48 380 of 566

CALIFORNIA GOVERNMENT CODE ............................ 50 GLOSSARY ............................................... 116

INDEX OF STATUTORY CHANGES
EFFECTIVE 1996 TO PRESENT ............................... 129 INDEX ................................................... 138

FIGURES
FIGURE 1: Allowable Investment Instruments Per State
Government Code (as of January 1, 2024)–
Applicable to All Local Agencies ........................ 13 FIGURE 2: Government Code Requirements for Local Agency Investment in Money Market and Mutual Funds ........... 28 FIGURE 3: Calculation of Weighted Average Maturity ................. 41 FIGURE 4: Duration—Gain/Loss of Market Value Matrix
for a $1000,000,000 Portfolio .......................... 42 FIGURE 5: Approaches to Establishing the County
T reasury Oversight Committee ......................... 47 381 of 566

1 LOCAL AGENCY INVESTMENT GUIDELINES
About the Local Agency
Investment Guidelines
The Local Agency Investment Guidelines is intended to aid local officials in their efforts to implement existing laws pertaining to the investment of public funds.

Each year, CDIAC staff convenes a working group of public- and private-sector professionals to support its efforts to revise and update these Guidelines.

THOSE PARTICIPATING IN THE 2024 GUIDELINES INCLUDE:
• Constantine Baranoff, Attorney, Lozano Smith
• Bill Blackwill, Managing Director, Stifel
• Deborah Higgins, President, Higgins Capital Management • John Johnson, Asst. Auditor-Controller/Treasurer/T ax Collector, San Bernardino County
• Carol Lew, Shareholder, Stradling, Yocca, Carlson & Rauth, P .C. • Philip Marr, Senior Portfolio Manager, City of Los Angeles • Kent Morris, MBA, CTP , Director of Treasury, Irvine Ranch Water District • Laura Parisi, CPA, CFIP , City Treasurer, City of Laguna Beach • Rick Phillips, CCM, Chief Investment Strategist, Meeder Public Funds • Monique Spyke, Managing Director, Head of California Practice, PFM Asset Management LLC
This document briefly describes each issue, offers an interpretation of the mini- mum compliance requirements, and provides consensus recommendations where the working group deemed them necessary. These interpretations represent the best judgment of CDIAC and the professionals involved and are intended only as a guide for local agencies in their compliance. Agencies should rely only on their legal counsel for legal advice.

The Local Agency Investment Guidelines: Update for 2024 reflects current invest- ment statutes. It is divided into chapters on investment policy, fund manage- ment, reporting requirements, and the treasury oversight committee. Please note that an issue may not fit neatly into the following four chapters. 382 of 566

2 LOCAL AGENCY INVESTMENT GUIDELINES
Generally speaking, all local agencies are subject to the reporting, fund manage- ment, and investment policy requirements. Only county governments may be subject to the county oversight committee requirements. Any jurisdiction that assumes it is not covered by these provisions should seek legal counsel. California Government Code Section 53600 states:

As used in this article, “local agency” means a county, city, city and county, in- cluding a chartered city or county, school district, community college district, public district, county board of education, county superintendent of schools, or any public or municipal corporation.
383 of 566

3 LOCAL AGENCY INVESTMENT GUIDELINES
Summary of Changes
The 2024 Local Agency Investment Guidelines incorporates the following Califor- nia statutory changes: Government Code Section 53601 and 27000.7.

STATUTORY CHANGES

LOCAL FUNDS
Chapter 187, Statutes of 2023 (SB 882), Local Government Omnibus Act of 2023, amended Government Code section 53601 to clarify limitations imposed on public investment in a privately issued mortgage passthrough security, col- lateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond (“mortgage pass–through and asset-backed securities”) that are not issued or guaranteed by a public agency or issuer identi- fied in subdivision (b) or (f). These types of securities, issued by private compa- nies, are permissible investments under subdivision (o) so long as they meet the following limitations: 1. rated in a rating category of “AA” or its equivalent or better; 2. have a maximum remaining maturity of five years or less; and, 3. do not exceed the 20% of the local agency’s portfolio (see Figure 1).

A provision of this bill also amended 27000.7 to eliminate one of the options for a person to demonstrate eligibility to be elected or appointed to the office of county treasurer, county tax collector, and county treasurer-tax collector. The op- tion to possess a valid certificate issued by the T reasury Management Association showing the person to be designated a Certified Cash Manager, with a minimum of 16 college semester units, or their equivalent, in accounting, auditing, or fi- nance, was eliminated.

This bill made additional changes to various legislative code sections not related to public debt issuance or public fund investments.

FEDERAL AND REGULATORY CHANGES
No changes.
384 of 566

4 LOCAL AGENCY INVESTMENT GUIDELINES

OTHER CHANGES
The 2024 Local Agency Investment Guidelines includes changes to Chapter II:

Fund Management:

New guidance has been added to Chapter 2, Fund Management, II.D. What funds should a local agency use to calculate portfolio concentration compliance with state law? [Section 53601], to help an agency determine what funds are available for investment and what funds to include when calculating portfolio concentra- tion limitations.

Chapter 2, II.M. What are the rules regarding the use of mutual funds and money market funds? [Sections 53601(l) And 53601.6(b)] now includes statements re- garding the impermissibility of exchange-traded funds (ETFs) for public invest- ment portfolios.

Glossary. The term, LIBOR, has been updated and the term, SOFR, has been added to the glossary.

All references to statutory code "sections" throughout this document shall refer to California Government Code unless otherwise stated.
385 of 566

5 LOCAL AGENCY INVESTMENT GUIDELINES
Chapter I. The Annual Investment Policy
A good investment policy encompasses the cash, treasury, and investment man- agement functions of an agency. It serves as a guide for setting and achieving program objectives, defines rules and establishes benchmarks, and reduces the exposure to liability of both the investment staff and the governing board. It is also important to note that rating agencies pay close attention to an agency’s investment policy and portfolio in determining its credit rating.

From this point forward, all references to the word “section” refers to the Califor- nia Government Code unless otherwise stated.

I. A Should local agencies produce an investment policy? Should the investment policy be presented to the local
agency’s legislative body? [Section 53646(a)]1
The investment policy serves as the foundation of a local agency’s investment goals and priorities. If the investment policy is carefully researched, effectively drafted, and reviewed regularly to assure that it continues to meet the agency’s goals/priorities for its portfolio, it can help protect the assets of the organization.

The existence of an approved investment policy demonstrates that the governing body is performing its fiduciary responsibilities, thereby, inspiring trust and con- fidence among the public that it serves.

MINIMUM LEGAL REQUIREMENTS:

Section 53646(a)(1) states that the treasurer of a county government may annually render to their board of supervisors and oversight committee an investment policy, which the board shall review and approve at a public meeting. In addition, the board shall review and approve any changes to the investment policy at a public meeting.

Section 53646(a)(2) states that the treasurer or chief fiscal officer of any other local agency may annually render to their legislative body and any oversight com- mittee an investment policy, that the legislative body shall consider at a public 1 All statutory references are to the California Government Code unless otherwise noted. 386 of 566

6 LOCAL AGENCY INVESTMENT GUIDELINES
meeting. This raises questions about whether or not the policy should be adopted officially by the legislative body, and the time during the year that this “consid- eration” should take place.

CONSENSUS RECOMMENDATION:

An investment policy should always be in place. While not required by statute, it is in the best interest of the local agency to present and discuss the policy with the agency’s legislative body or oversight committee, and then have the policy ap- proved by a vote of the legislative body. A public vote signifies that the legislative body shares fiduciary responsibility with the treasurer, increases the authority and legitimacy of the investment policy, and provides transparency and disclosure.

I. B When should the investment policy be reviewed and
updated? How should the investment policy be rendered
to the legislative body? [Section 53646(a)]
The size and complexity of the investment policy, portfolio, agency and the agen- cy’s staff are factors that may affect the frequency of the investment policy review and revision.

MINIMUM LEGAL REQUIREMENT:

Section 53646(a) provides that if an investment policy is submitted to the lo- cal agency’s legislative body, it must be an agenda item at a public meeting. If submitted to a county board of supervisors, the board is required to review and approve the investment policy and any changes to it at the public meeting. The statute does not place the same specific approval requirements on other local agencies, but it does require consideration. The statute does not specify, however, when during the year that consideration or approval should occur.

CONSENSUS RECOMMENDATION:

Both the Association of Public T reasurers of the United States & Canada and the Government Finance Officers Association have established policy standards that recommend investment policies be reviewed annually. At a minimum, the inter- nal treasury staff should conduct a review annually. Ideally, the review should be timed to coincide with the end of the state legislative cycle so that consideration may be given to any changes in statute that may impact the agency’s policy.

An update in the investment policy is warranted if treasury staff’s review results in a material change in policy due to either a change in statute or a change in the agency’s goals and objectives for safety, liquidity and yield. A change in statute, however, may not necessarily require a change in the policy. Many agencies’ policies are already more restrictive than statute. Likewise, an agency may choose to update its policy to restrict the purchase of a new investment product that is allowable by statute but that the agency deems to be too risky for its investment portfolio. 387 of 566

7 LOCAL AGENCY INVESTMENT GUIDELINES
Although rendering the investment policy to the legislative body or oversight committee is not required, it is highly recommended. If it is done, it should be done annually, on an established schedule, such as after the annual review and update.

For newly-elected legislative body members, election terms may not coincide with the investment policy review. But, because of the fiduciary responsibility of the legislative body, any newly-elected members should be made aware of the exis- tence of the investment policy and its contents as soon as possible.

I. C What information should be included in the
investment policy? [Section 27133]
MINIMUM LEGAL REQUIREMENTS:

Except for county governments, the California Government Code does not contain any provisions specifying what must be included in the investment policy of a local agency. Section 27133 provides that county investment policies must contain:
• A list of securities or other in-
struments in which the county
treasury may invest, according to
the law, including the maximum
percentage by type of security,
and the maximum term of any
security purchased;
• The manner of calculating and
apportioning the authorized costs
of investing, depositing, banking,
auditing, reporting, handling, and
managing of funds;
• Limits on the receipt of honoraria,
gifts, and gratuities for county
treasury oversight members from
advisors, brokers, dealers, bankers,
or other persons with whom the
county treasury conducts business;
• Criteria for selecting brokers and
dealers (including prohibitions
against selecting any broker, dealer,
or security firm within any consec-
utive 48-month period of making
a campaign contribution exceeding
the limitations contained in Rule
G-37 of the Municipal Securities
Rulemaking Board);
• A requirement that the treasurer
provide the county treasury
oversight committee with an
investment report as required
by the Board of Supervisors;
• T erms and conditions under
which other local agencies that are
not required to deposit funds may
deposit funds in the county trea-
sury if they so choose; and
• Criteria for considering requests
to withdraw funds from the
county treasury.
388 of 566

8 LOCAL AGENCY INVESTMENT GUIDELINES
I. D How is the limit on a political contribution
determined when selecting brokers and dealers?
[Section 27133 (c) and MSRB Rule G-37]
The county treasury shall not select brokers and dealers who individually, or as a firm, have contributed more than the current limit established under Municipal Securities Regulatory Board (MSRB) Rule G-37.

MINIMUM LEGAL REQUIREMENT:

The county treasury is prohibited from selecting those brokers, brokerage firms, dealers, or securities firms having made political contributions within the last four years, which exceed the amount set forth in MSRB Rule G-37. For 2024, the limit is $250. This limit applies to the local treasurer, any member of the governing board of the local agency, or any candidate for those offices.

In addition to the provisions outlined in Section 27133 and MSRB Rule G-37, local agencies, the state, and the Fair Political Practices Commission (FPPC) may adopt additional standards on acceptable political contribution limits. For reference, the local treasurer, any member of the governing board of the local agency, and treasury staff are required to report any gift of $50 or more on his or her annual Form 700 submission to the FPPC.

The last two of the above elements directly refer to the duties counties have in maintaining a local government investment pool.

CONSENSUS RECOMMENDATION:

Although statute does not specify the contents of the investment policy for local agencies other than counties, it should include at a minimum, the first five ele- ments required of counties. In addition, the policy should specify the funds to which the policy will and will not apply. For instance, bond proceeds are usually guided by the bond documents and thus, may not be a part of the investment policy. Similarly, pension funds are guided by other code sections and may have different investment objectives.

The Association of Public T reasurers of the United States & Canada offers an Investment Policy Program that provides public investors with guidance and technical assistance in developing a comprehensive written investment policy at www.aptusc.org. The California Municipal T reasurers Association (CMTA) has sample investment policies that were certified through CMTA's Investment Policy Certification Program. Additional sources for recommended elements of an investment policy can be found in CDIAC’s California Public Fund In- vestment Primer and Investment Policy Reporting Practices: An Informative Guide, and the Government Investment Officers Association’s Investment Pol- icy Certification Program and Application.
389 of 566

9 LOCAL AGENCY INVESTMENT GUIDELINES
CONSENSUS RECOMMENDATION:

All treasury staff should be knowledgeable of the specific state and local laws and ordinances governing their receipt of political contributions, gifts, and honoraria.

Although the MSRB Rule G-37 applies to the local treasurer and the governing board of the local agency, treasury staff are likely subject to additional rules set forth by the FPPC and the local agency. If there is no policy on the receipt of political contributions, gifts, or honoraria at the local agency level, establish one and educate all agency employees who affect treasury decisions.

I. E What constraints can county pools place on
voluntary depositors? [Section 27133(g)]
County treasurers have difficulty predicting withdrawals of voluntary funds made by pool participants. As a result, questions commonly arise regarding how county pools should treat funds from voluntary depositors. In the absence of informa- tion on a depositor’s cash flow, an unanticipated withdrawal can create potential liquidity problems for the pool.

MINIMUM LEGAL REQUIREMENT:

State law does not require county pools to accept voluntary deposits.

CONSENSUS RECOMMENDATION:

Allow voluntary deposits only under a clearly written contract or memorandum of understanding. This agreement should spell out the exact rules for partici- pating in the pool and provide the county treasurer with reasonable predefined discretion to establish the frequency and amount of voluntary funds that can be removed from the pool at a particular time. Another option is to ban voluntary deposits altogether if the county has confidence that other local agencies have reasonable investment alternatives.
390 of 566

10 LOCAL AGENCY INVESTMENT GUIDELINES
Chapter II. Fund Management
For the investment of county funds in a county treasury, Section 27000.3 estab- lishes the Board of Supervisors as a fiduciary that is subject to the prudent inves- tor standard unless it delegates its investment duties to the county treasurer. For other local agencies’ funds invested in the county treasury, the county treasurer serves as a fiduciary and is subject to the prudent investor standard.

Except as provided for in Section 27000.3, Section 53600.3 declares as a trustee each person, treasurer, or governing body authorized to make invest- ment decisions on behalf of local agencies. As trustees these individuals are subject to the prudent investor standard. That is, they shall act with care, skill, prudence, and diligence under the circumstances then prevailing when investing, reinvesting, purchasing, acquiring, exchanging, selling, and man- aging funds. Section 53600.5 further stipulates that the objectives of any person investing public funds is to, first, safeguard principal; second, to meet the liquidity needs of the depositor; and lastly, to achieve a return or yield on the funds under its control (Section 27000.5 specifies the same objectives for county treasurers and boards of supervisors).

Risk is inherent throughout the investment process. There is investment risk as- sociated with any investment activity and opportunity risk related to inactivity.

Market risk is derived from exposure to overall changes in the general level of interest rates while credit risk is the risk of loss due to the failure of the issuer of a security. The market value of a security varies inversely with the level of interest rates. If an investor is required to sell an investment with a 5% yield in a compa- rable 7% rate environment, that security will be sold at a loss. The magnitude of that loss will depend on the amount of time until maturity.

Purchasing certain allowable securities with a maturity of greater than five years from the settlement date, requires approval of the governing board (see Section 53601). Part of that approval process involves assessing and disclosing the risk and possible volatility associated with longer-term investments.

Another element of risk is liquidity risk. Instruments with extraordinary or spe- cial call features, sinking fund redemption structures, or those issued by little known issuers, are examples of “story bonds” and often are thinly traded. Their uniqueness often makes finding prospective buyers in a secondary market more difficult and, consequently, the securities’ marketability and prices may be dis- 391 of 566

11 LOCAL AGENCY INVESTMENT GUIDELINES
counted. However, under certain market conditions, gains may also be possible with these types of securities.

Default risk represents the possibility that the borrower may be unable to repay the obligation as scheduled. Generally, securities issued by the federal government and its agencies are considered the most secure, while securities issued by private corporations, or negotiable certificates of deposit issued by commercial banks have a greater degree of risk. Securities with additional credit enhancements, such as bankers’ acceptances, collateralized repurchase agreements, and collateralized bank deposits, are somewhere between the two on the risk spectrum.

The vast majority of local agency portfolios are managed with a buy and hold investment strategy. Investments are purchased with the intent and capacity to hold them until maturity. At times, market forces or operations may dictate ex- changing one security for another or selling a security before maturity. Continu- ous analysis and fine tuning of the investment portfolio are considered part of prudent investment management. This passive investment strategy is different from one in which securities are purchased with the intent to sell them before maturity at a profit or the use of leverage to enhance yield.

California Government Code contains specific provisions regarding the types of investments and practices permitted after considering the broad requirement of preserving principal and maintaining liquidity before seeking yield. These provi- sions are intended to promote the use of reliable, diverse, and safe investment in- struments to better ensure a prudently managed portfolio worthy of public trust.

II. A Which investments are permissible? Which are prohibited? [Sections 16340, 16429.1, 27133, 53601, 53601.6, 53601.8, 53635, 53635.2, 53635.8, 53638, 53684, and 57603]
MINIMUM LEGAL REQUIREMENT:

Local agencies may invest only in those instruments specified in State law.

Sections 16340, 16429.1, 27133, 53601, 53601.6, 53601.8, 53635, 53635.2, 53635.8, 53638, 53684, and 57603 include a number of requirements on how and where public money may be invested. Figure 1 provides a synopsis of the permitted investment instruments and limitations on each, in which all local agencies may invest.

Section 53601 places limits on permissible securities. A five-year maximum maturity applies to all permissible securities unless otherwise stated in the code. A permissible security may exceed this limitation only if the legislative body has approved the investment either specifically or as a part of an invest- ment program no less than three months prior to the investment. A permis- 392 of 566

12 LOCAL AGENCY INVESTMENT GUIDELINES
sible investment’s term or remaining maturity is to be measured from the investment’s settlement date to final maturity. Any forward settlement that exceeds 45 days from the time of investment is prohibited.

Prohibited investments include securities not listed in Figure 1, as well as inverse floaters, range notes, and interest only strips derived from a pool of mortgages. This restriction does not apply to local agency investments in shares of beneficial inter- est issued by diversified management companies registered under the Investment Company Act of 1940 that are authorized for investment pursuant to subdivision (l) of Government Code Section 53601. Section 53601.6(b) prohibits investment by a local agency in any security that could result in a zero-interest accrual if held to maturity. However, beginning January 1, 2020, Section 53601.6(b), as amended by the Legislature, authorized local agencies to invest in securities issued by, or backed by the United States government that could result in zero- or negative-interest ac- crual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. A local agency may hold these instruments until their maturity date. This limited code exception allows local agencies the option of buying and holding onto zero- or negative-interest accrual United States government securities, if it would preserve more principal. This provision will sunset January 1, 2026.

Section 53601 provides that public agencies may invest in bonds issued by the local agency itself, but IRS rules may not support maintenance of the tax-exempt status. In 2008, the Legislature added Section 5925 to clarify that the purchase of bonds by the local agency that issued the bonds does not cancel, defease, or otherwise affect the bonds. With the addition of Section 5925 the repurchased or acquired bonds may be treated as outstanding bonds under state law to the extent provided by the issuer or the documents defining the rights of the bondhold - ers. However, IRS rules that supported the maintenance of the tax-exempt status upon a purchase by a municipal issuer of its own debt sunset in 2010.

In 2019, the Legislature added Section 57600 et seq. authorizing local agencies to form a public bank. Furthermore, under 57603, local agencies that do not pool money in deposits or investments with other local agencies that have separate gov- erning bodies as well as local agencies that pool money in deposits or investments with other local agencies, including local agencies that have the same governing body, are permitted to invest in debt securities or other obligations of a public bank.

CONSENSUS RECOMMENDATION:

Local agencies should include the list of permissible securities in the investment policy and modify the list to meet its unique needs. These modifications may in- clude additional restrictions on the type and amount of specific authorized securities to reflect current federal tax and securities regulations and an agency’s risk tolerance.

The addition of Section Code 5925 authorizing state and local agencies to pur- chase their own bonds was intended to be complementary to Internal Revenue Service (IRS) Notice 2008-41 and 2008-88 that allowed municipal issuers to temporarily hold certain types of their own tax-exempt debt without extinguish- 393 of 566

13 LOCAL AGENCY INVESTMENT GUIDELINES

INVESTMENT
TYPE

MAXIMUM

MATURITYC

MAXIMUM

SPECIFIED
% OF

PORTFOLIOD

MINIMUM

QUALITY

REQUIREMENTS
GOV'T
CODE

SECTIONS
Local Agency Bonds 5 years None None 53601(a)
U.S. Treasury Obligations 5 years None None 53601(b)
State Obligations—
CA And Others 5 years None None 53601(c)
53601(d)
CA Local Agency Obligations 5 years None None 53601(e)
U.S Agency Obligations 5 years None None 53601(f)
Bankers’ Acceptances 180 days 40%E None 53601(g)
Commercial Paper—Non-Pooled FundsF
(under $100,000,000 of investments)
270 days
or less
25% of the
agency’s moneyG
Highest letter and
number rating by an
NRSROH
53601(h)(2)(c)
Commercial Paper—Non-Pooled FundsI
(min. $100,000,000 of investments)
270 days
or less
40% of the
agency’s moneyG
Highest letter and
number rating by an
NRSROH
53601(h)(2)(c)
Commercial Paper—
Pooled FundsJ
270 days
or less
40% of the
agency’s moneyG
Highest letter and
number rating by an
NRSROH
53635(a)(1)
Negotiable Certificates of Deposit 5 years 30%K None 53601(i) Non-negotiable Certificates of Deposit 5 years None None 53630 et seq.

Placement Service
Deposits 5 years 50%L None 53601.8 and 53635.8
Placement Service
Certificates of Deposit 5 years 50%L None 53601.8 and 53635.8 Repurchase Agreements 1 year None None 53601(j)
Reverse Repurchase Agreements and
Securities Lending Agreements 92 daysM 20% of the base
value of the portfolio NoneN 53601(j)
Medium-Term NotesO 5 years
or less 30% “A” rating category or
its equivalent or better 53601(k)
Mutual Funds And Money
Market Mutual Funds N/A 20%P MultipleQ, R 53601(l) and
53601.6(b)
Collateralized Bank DepositsS 5 years None None 53630 et seq. and 53601(n)
Mortgage Pass–Through and
Asset–Backed SecuritiesT
5 years
or lessT 20% “AA” rating category or
its equivalent or betterT 53601(o)
County Pooled
Investment Funds N/A None None 27133
Joint Powers Authority Pool N/A None MultipleU 53601(p) Local Agency Investment Fund (LAIF) N/A None None 16429.1 Voluntary Investment Program FundV N/A None None 16340
Supranational ObligationsW 5 years
or less 30% “AA” rating category or
its equivalent or better 53601(q)
Public Bank Obligations 5 years None None 53601(r), 53635(c) and 57603
FIGURE 1

ALLOWABLE INVESTMENT INSTRUMENTS PER STATE GOVERNMENT
CODE (AS OF JANUARY 1, 2024)A APPLICABLE TO ALL LOCAL AGENCIESB See “Table of Notes for Figure 1” on the next page for footnotes related to this figure. 394 of 566

14 A Sources: Sections 16340, 16429.1, 27133, 53601,
53601.6, 53601.8, 53630 et seq., 53635, 53635.8,
and 57603.

B Municipal Utilities Districts have the authority under the Public Utilities Code Section 12871 to invest in
certain securities not addressed here.

C Section 53601 provides that the maximum term of
any investment authorized under this section, unless
otherwise stated, is five years from the settlement
date. However, the legislative body may grant express
authority to make investments either specifically or
as a part of an investment program approved by the
legislative body that exceeds this five year remain-
ing maturity limit. Such approval must be issued no
less than three months prior to the purchase of any
security exceeding the five-year maturity limit.

D Percentages apply to all portfolio investments regard- less of source of funds. For instance, cash from a
reverse repurchase agreement would be subject to
the restrictions.

E No more than 30% of the agency’s money may be in
bankers’ acceptances of any one commercial bank.

F Applies to local agencies, other than counties or a
city and county, with less than $100 million of invest- ment assets under management. Includes agencies
defined as a city, a district, or other local agency that do not pool money in deposits or investment with
other local agencies, other than local agencies that
have the same governing body.

G Local agencies, other than counties or a city and
county, may purchase no more than 10% of the out-
standing commercial paper and medium-term notes
of any single issuer.

H Issuing corporation must be organized and operating
within the U.S., have assets in excess of $500 million, and debt other than commercial paper must be in a
rating category of "A" or its equivalent or higher by a na- tionally recognized statistical rating organization, or the issuing corporation must be organized within the U.S.
as a special purpose corporation, trust, or LLC, have
program wide credit enhancements, and have commer-
cial paper that is rated “A-1” or higher, or the equivalent, by a nationally recognized statistical rating organization.

I Applies to counties or a city and county, and the City of Los Angeles that have $100 million or more of
investment assets under management.

J Includes agencies defined as a county, a city and
county, or other local agency that pools money in
deposits or investments with other local agencies,
including local agencies that have the same govern-
ing body. Local agencies that pool exclusively with
other local agencies that have the same governing
body must adhere to the limits set forth in Section
53601(h)(2)(C).

K No more than 30% of the agency’s money may be in
negotiable certificates of deposit that are authorized
under Section 53601(i).

L Effective January 1, 2020, no more than 50% of
the agency’s money may be invested in deposits,
including certificates of deposit, through a place-
ment service as authorized under 53601.8 (excludes
negotiable certificates of deposit authorized under
Section 53601(i)). On January 1, 2026, the maximum
percentage of the portfolio reverts back to 30%. In-
vestments made pursuant to 53635.8 remain subject
to a maximum of 30% of the portfolio.

M Reverse repurchase agreements or securities lending
agreements may exceed the 92-day term if the agree-
ment includes a written codicil guaranteeing a mini-
mum earning or spread for the entire period between
the sale of a security using a reverse repurchase
agreement or securities lending agreement and the
final maturity dates of the same security.

N Reverse repurchase agreements must be made with
primary dealers of the Federal Reserve Bank of New
York or with a nationally or state chartered bank that
has a significant relationship with the local agency.

The local agency must have held the securities used
for the agreements for at least 30 days.

O “Medium-term notes” are defined in Section 53601 as
“all corporate and depository institution debt securities with a maximum remaining maturity of five years or
less, issued by corporations organized and operating
within the United States or by depository institutions
licensed by the United States or any state and operat-
ing within the United States.”
P No more than 10% invested in any one mutual fund.

This limitation does not apply to money market
mutual funds.

Q A mutual fund must receive the highest ranking by not less than two nationally recognized rating agencies
or the fund must retain an investment advisor who is
registered with the SEC (or exempt from registration),
has assets under management in excess of $500 mil-
lion, and has at least five years' experience investing in instruments authorized by Sections 53601 and 53635.

R A money market mutual fund must receive the highest
ranking by not less than two nationally recognized
statistical rating organizations or retain an investment advisor registered with the SEC or exempt from reg-
istration and who has not less than five years' experi- ence investing in money market instruments with
assets under management in excess of $500 million.

S Investments in notes, bonds, or other obligations
under Section 53601(n) require that collateral be
placed into the custody of a trust company or the trust department of a bank that is not affiliated with the
issuer of the secured obligation, among other specific
collateral requirements.

T Security types authorized under Section 53601(o)
that are issued or guaranteed by an issuer identified
in subdivisions (b) or (f), are not subject to the limita- tions placed on privately issued securities authorized
in Section 53601(o)(2)(A)(B).

U A joint powers authority pool must retain an invest-
ment advisor who is registered with the SEC (or
exempt from registration), has assets under manage-
ment in excess of $500 million, and has at least five
years' experience investing in instruments authorized
by Section 53601, subdivisions (a) to (o).

V Local entities can deposit between $200 million and
$10 billion into the Voluntary Investment Program
Fund, upon approval by their governing bodies.

Deposits in the fund will be invested in the Pooled
Money Investment Account.

W Only those obligations issued or unconditionally
guaranteed by the International Bank for Reconstruc-
tion and Development (IBRD), International Finance
Corporation (IFC), and Inter-American Development
Bank (IADB), with a maximum remaining maturity of
five years or less.

TABLE OF NOTES FOR FIGURE 1
395 of 566

15 LOCAL AGENCY INVESTMENT GUIDELINES
II. B What requirements must a financial
institution satisfy before a local agency
may deposit its money in it? [Section 53635.2]
Section 53635.2 states that all local agency money may be invested in invest- ments set forth in 53601 or deposited for safekeeping in state or national banks, public banks, savings associations, federal associations, credit unions, or federally insured industrial loan companies in this state. It also specifies certain require- ments that such financial institutions must satisfy to hold local agency money.

MINIMUM LEGAL REQUIREMENT:

T o 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 (Community Reinvestment Act of 1977). The Community Reinvestment Act of 1977 (Act) requires financial institutions to demonstrate their commitment to meet- 2 Refer to CDIAC publication Issue Brief: Rule 144A Securities for a summary of securities in this class. ment or loss of tax-exempt status. However, these IRS provisions were meant to be temporary and sunset on December 31, 2010, with some remaining ex- ceptions for certain variable rate debt subject to a qualified tender. Given the incongruity between Section 5925 and IRS rules, a local agency should seek legal guidance on the potential tax implications of purchasing its own debt especially if that debt does not clearly fall within the remaining IRS exceptions.

As a result of amendments to Government Code Sections 53601.8 and 53635.8, local agencies should review portfolio limitations for CDs and negotiable CDs in their investment policies.

Some investments, such as straight floaters or floating rate notes that are not otherwise prohibited, have the potential to result in zero-interest accrual. Be- fore purchasing these types of investments, the local agency should evaluate all possible outcomes, and, as a safeguard, should consider including in its invest- ment 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 State law, unregistered securities, such as Rule 144A securities, may not be purchased by local agencies that do not meet the thresh- old of $5 million investments and $100 million in securities. On August 26, 2020 the Securities and Exchange Commission expanded the definition of Qualified Institu- tional Buyers (QIB)2 to include any institution that qualifies as an accredited investor under Rule 501(a) under the Securities Act that are not otherwise stated in the defini- tion of “qualified institutional buyer” provided they satisfy the $100 million threshold. 396 of 566

16 LOCAL AGENCY INVESTMENT GUIDELINES
II. C When must investments contained in a
local agency investment portfolio comply
with state law? [Section 53601]
California Government Code provides a description of the types of instruments permissible for local agency investment and specifies the timing of compliance with state law. Questions arise concerning the timing of any test of compliance with these requirements.

MINIMUM LEGAL REQUIREMENT:

Where Section 53601 specifies a percentage restriction on a certain category of investment, this share of the investment portfolio must be in compliance with state law at the time that investment is purchased. The law does not specify that the entire portfolio must be in compliance when new instruments are pur - chased. It also does not require “rebalancing” when subsequent maturities, sales, withdrawals, or similar non-purchase activities result in the remaining portfolio having one or more of the categories of investment rise above the percentage restrictions applicable at the time of purchase.

CONSENSUS RECOMMENDATION:

A local agency should contact the appropriate federal supervisory agency to de- termine if its financial institution meets the overall rating requirement.

Local agencies should be aware that in some instances ratings from federal su- pervisory agencies may not be current, as financial institutions are evaluated only every year or two. Additional inquiry may be necessary to obtain updated infor- mation if the last published rating is more than one year old. • The Comptroller of the Currency
with respect to national banks;
• The Board of Governors of the Fed-
eral Reserve System with respect to
state chartered banks that are mem-
bers of the Federal Reserve system
and bank holding companies;
• The Federal Deposit Insurance
Corporation (FDIC) with respect
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
Supervision with respect to savings
associations (the deposits of which
are insured by the FDIC) and sav-
ings holding companies.
ing 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:
397 of 566

17 LOCAL AGENCY INVESTMENT GUIDELINES
II. D What funds should a local agency use to calculate portfolio concentration compliance with state law? [Section 53601]

California Government Code provides a description of the types of instruments permissible for local agency investment and specifies the timing of compliance with state law. Questions arise about how to determine what local agency funds are available for investment, as well as what funds to include when calculating port- folio concentration for those permissible investments that are limited by state law.

MINIMUM LEGAL REQUIREMENT:

Section 53601 states that, “The legislative body of a local agency having moneys in a sinking fund or moneys in its treasury not required for the immediate needs of the local agency may invest any portion of the moneys that it deems wise or expedient in those investments set forth below” [Section 53601(a) through (r)].

Statute establishes portfolio concentration limitations for certain permissible in- vestments; however, it does not specify the calculation methods for calculating these limitations at the time of investment.

CONSENSUS RECOMMENDATION:

T erms such as “base value”, “moneys”, “agency’s moneys”, or “agency’s surplus moneys” used when describing a portfolio limitation for a specific permissible investment in Section 53601 are referring to the agency’s determination of funds available for investment (as defined above in Minimum Legal Requirement). The determination as to whether to include certain agency funds, such as funds in an Where Section 53601 clarifies that the settlement date is to be used to measure final maturity, it does not change the date of purchase. T o determine when an investment portfolio must be in compliance with state law, the date of purchase must be used, despite the length of maturity starting from the settlement date.

When local agencies purchase securities, the date of purchase and the date the purchase is settled may not always be the same.

CONSENSUS RECOMMENDATION:

In the event the portfolio or individual investments are deemed to be out of compliance with either statute or the investment policy, the local agency should have procedural guidelines in place that outline actions to take under various scenarios. Due to its fiduciary responsibility, early communication with and involvement of the legislative body concerning a major or critical event is of utmost importance. Therefore, the procedural guidelines should identify circumstances under which communication and discussion of the treasurer’s analysis and recommended course of action to the legislative body or oversight committee is warranted.
398 of 566

18 LOCAL AGENCY INVESTMENT GUIDELINES
Although the statute does not specify how an agency’s portfolio should be calculated at the time of investment, local agencies should consider its cash flow needs each time it considers purchasing securities to determine the available amount of moneys in its treasury not required for the immediate needs of the local agency. A cash flow analysis is intended to help an agency understand and, to the extent possible, control the organization’s cash resources. The goal is to ensure that cash is available to pay expenditures when needed and that temporarily unneeded cash can be invested opti- mally to maximize earnings on invested funds.3
When calculating portfolio compliance, it is recommended that the agency value its portfolio based on book value rather than market value. The book value of in- vestments along with the agency’s funds available for investment should be used for portfolio compliance calculations. Percentages apply to all portfolio investments re- gardless of source of funds.
agency checking account, as part of the funds available for investment should rely on agency practices. For example, if the agency uses funds in its checking account for the immediate, day-to-day needs of the agency, it is recommended to not in- clude the funds in the checking account when calculating portfolio compliance.

A determination of funds available for investment under Section 53601 may vary agency to agency but generally are those accounted for in a local agency’s annual financial report. It is recommended that a local agency’s investment policy should specify the funds to which the policy will and will not apply. See Chapter 1, I.C.

What information should be included in the investment policy? ([Section 27133]).

Examples of moneys that can be available to invest under 53601 by local agency type:

CITIES/DISTRICTS
• General funds
• Reserve funds
• Bond Proceeds funds
• Debt Service funds
• Excess Enterprise funds

COUNTIES
• General funds
• Reserve funds
• Bond Proceeds funds
• Debt Service funds
• Excess Enterprise funds
• Voluntary Pool funds
3 Refer to CDIAC publication California Public Fund Investment Primer for more information on the purpose of cashflow forecasts.
399 of 566

19 LOCAL AGENCY INVESTMENT GUIDELINES
II. E Must bond proceeds be invested in the securities
set forth in statute? [Section 53601(m)]
Section 53601(m) allows greater flexibility with respect to the types of invest- ments that may be made with bond proceeds. Specifically, the law permits money from bond proceeds, obligations under a lease, installment sales, or other agreements of a local agency to be invested in any security that meets the statutory provisions governing the issuance of the bond or other agree- ments made by the issuing agency. In so doing, this section of the code recognizes that outstanding contracts between issuers and bond holders may not comply with the investment statutes and gives local agencies greater discretion in how to invest bond proceeds.

MINIMUM LEGAL REQUIREMENT:

Bond proceeds may be invested in accordance with statutes or they may be in- vested in alternative vehicles if authorized by bond documents.

CONSENSUS RECOMMENDATION:

The agency’s investment policy should either require that bond proceeds be in- vested in accordance with statutes, reference applicable bond documents (such as, the indenture or rating agency requirements), or specify the types of investments authorized for bond proceeds. Bond proceeds may be invested in instruments with maturities longer than five years. Applying the five-year maturity limitation found in statute may result in less yield. When investing bond proceeds, maturi- ties should match the cash flow needs of the project or fund.

As a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203) (Dodd-Frank Act), the Securities and Exchange Com- mission (SEC) enacted regulations addressing the apparent conflict of interest between municipal bond underwriters providing both underwriting and advice on the investment of bond proceeds for the same debt issue. These regula- tions were incorporated in the Municipal Advisor Rule (MA Rule). The MA Rule states that broker-dealers providing advice to government clients have a fiduciary duty to their clients and must be registered as a municipal advisor. In order to avoid becoming a fiduciary to municipal issuers, many broker-dealers, who have a significant municipal underwriting business, have adopted policies prohibiting brokers from providing investment advice. The MA Rule provides II. F How does the Municipal Advisor (MA) Rule
affect investment of bond proceeds?
400 of 566

20 LOCAL AGENCY INVESTMENT GUIDELINES
specific exemptions to public agencies seeking to receive investment advice from broker-dealers, including receiving advice through a request for proposal (RFP) process or by entering into a formal relationship with an independent registered municipal advisor for advice.

MINIMUM LEGAL REQUIREMENT:

The MA Rule places no legal obligations on public agencies. The regulations ad- dress only the responsibilities of broker-dealers with respect to the bond proceeds.

CONSENSUS RECOMMENDATION:

Although the MA Rule does not specifically regulate the investment of bond proceeds by a local agency, it has materially affected the investment processes of many agencies. For example, treasury staff may have to adopt procedures, includ- ing the use of a mini-RFP that would exempt their brokers-dealer from being defined as a fiduciary. Local agency treasury staff should understand the MA Rule and its exemptions; have knowledge of the limitations of their broker-dealer firms as a result of the MA Rule; and address the MA Rule by adopting a policy regarding the investment of bond proceeds. Visit CDIAC’s Municipal Advisor Rule webpage for more information.

There has been a lot of discussion about the risk profile of certain products and derivatives issued by U.S. Agencies and U.S. government sponsored enter- prises (GSEs). These Agencies and GSEs issue both traditional fixed-income securities (notes and bonds) as well as more complex, structured products including customized mortgage- and asset-backed securities and derivatives. 4 The State’s investment laws, however, place no restrictions on these types of investments other than the prohibitions against inverse floaters, range notes, and interest-only strips derived from mortgage pools. Until January 1, 2026, local agencies are authorized to invest in securities, issued by, or backed by, the United States government that could result in zero- or negative-interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. A local agency may hold these instruments until their maturity dates.

II. G Are all U.S. Agency bonds legal investments for California local agencies? [Sections 53601(f) and 53601.6]
4 Refer to CDIAC publication Issue Brief Securitized Investments for a discussion of mortgage pass-through obligations and asset-backed securities.
401 of 566

21 LOCAL AGENCY INVESTMENT GUIDELINES
5 SLMA (Sallie Mae) terminated its ties to the federal government in 2004; bonds issued prior to 2005 are GSE debt; bonds issued in 2005 and after are corporate debt issued by the SLM Corporation.

In recent years, some GSE debt has been privatized and is now structured like corporate debt yet still falls under the limits of 53601(f) and 53601.6. The most commonly traded GSE debt includes that from the Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Federal Home Loan Mortgage Cor- poration (Freddie Mac), Federal National Mortgage Association (Fannie Mae) and Federal Agricultural Mortgage Corporation (Farmer Mac). Other less com- mon GSEs include Government National Mortgage Association (Ginnie Mae), Community Development Corporation ( CDC), Student Loan Marketing As- sociation (Sallie Mae)5, Small Business Administration ( SBA), Overseas Private Investment Corporation (OPIC), and T ennessee Valley Authority (TVA).

MINIMUM LEGAL REQUIREMENT:

Obligations, including bonds, notes, certificates of participation, or other instru- ments issued as U.S. Agencies or GSE debt are permissible investments under Section 53601(f). These investments are, however, subject to the prohibition against inverse floaters, range notes, and interest-only strips derived from a pool of mortgages in Section 53601.6. Until January 1, 2026, local agencies are au- thorized to invest in securities, issued by, or backed by, the United States govern- ment that could result in zero- or negative-interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. A local agency may hold these instruments until their maturity dates.

CONSENSUS RECOMMENDATION:

Local agencies should institute restrictions that recognize the different character- istics and risk profile of the variety of U.S. Agency and GSE debt instruments.

Factors such as the repayment pledge, size of the issue, prominence of the issuer in the market, and the complexity of the issue (such as call features, timing of interest and principal payments, or other options) will impact the risk profile and, thus, the balance of safety, liquidity, and yield in a local agency’s portfolio. With SBA loans or pools, for example, the principal and interest may be guaranteed by the U.S.

Government, but the prepayment or premium risk can be substantial. Investments in these types of products should only be entered into with a clear awareness, by both the legislative body and treasurer, of the risks involved and only if the local agency's staff have sufficient expertise and resources to manage such investments. 402 of 566

22 LOCAL AGENCY INVESTMENT GUIDELINES
II. H What are supranational securities? [Section 53601 (q)] A supranational organization is formed by a group of countries through an in- ternational treaty with specific objectives such as promoting economic develop- ment. Supranational organizations also issue debt in the United States. The most commonly recognized supranational debt is issued by the International Bank for Reconstruction and Development (IBRD or World Bank).

Section 53601 (q) allows local agencies to invest in bonds issued by one of three supranationals: World Bank, International Finance Corporation (IFC) and Inter- American Development Bank (IADB), which were established by international treaties, incorporated into U.S. federal law by Congressional Acts and headquar- tered in Washington, D.C. Currently, these entities carry the highest credit rat- ings (AAA) based on their financial structure, policies, performance and capi- tal support from shareholders. Securities issued by these supranationals include benchmark bonds, global bonds, structured notes, plain fixed and floating rate notes, discount notes as well as green bonds
MINIMUM LEGAL REQUIREMENT:

In order for local agencies to invest in bonds issued by supranationals, the bonds must meet the following criteria:
• Maturity of five years or less;
• Eligible for purchase and sale
within the US;
• In a rating category of "AA" or its
equivalent or better by a nationally
recognized statistical rating orgini-
zation (NRSRO); and
• Cannot exceed 30% of the agen-
cy's investment portfolio.
403 of 566

23 LOCAL AGENCY INVESTMENT GUIDELINES
II. I Can a local agency invest in an investment pool
administered by another state? [Section 53601 (d)]
Section 53601 is prescriptive of the types of investments permissible for local agency investment. It specifies, among other things, the issuer of the security, the type of obligation and the maturity of the security.

MINIMUM LEGAL REQUIREMENT:

Section 53601 (d) allows local agencies to invest in the debt of another state or de- partment, board, agency or authority and 53601(p) allows joint powers authorities (JPA) established pursuant to Section 6509.7 to invest in securities and obligations authorized under 53601 (a)-(q) as long as each member of the JPA has an equal proportional interest in the purchased securities. Furthermore, members of the JPA may include public agencies outside of California. However, local agencies are not permitted to invest in an investment pool administered by another state.

CONSENSUS RECOMMENDATION:

Local agency permissible investments do not include investment pools adminis- tered by another state as an investment option.

II. J What are “medium-term notes?” [Section 53601(k)]
Until recently, the statutes defined medium-term notes as those instruments meeting certain term-length and quality requirements. Amendments to Section 53601(k) have attempted to clarify some of the ambiguity surrounding this defi- nition. A variety of reasons account for this past confusion. One is that the SEC treats “corporate notes” slightly differently than “medium-term notes.” Another is that brokers often refer to corporate obligations that have an original term to maturity longer than five years as corporate rather than medium-term notes, even though the remaining term to maturity for these notes may be less than five years.

MINIMUM LEGAL REQUIREMENT:

Section 53601(k) defines medium-term notes as “all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating in the United States.” There- fore, investments in any corporate or depository institution debt securities that mature within five years from the time of purchase are legal as long as they meet the minimum quality standards. Moreover, the statute specifies that local agencies may not classify investments as medium-term notes if they satisfy the definition of 404 of 566

24 LOCAL AGENCY INVESTMENT GUIDELINES
• Organized – An entity organized as
a corporation in the United States.
• Operating – Engaged in business
activities for which it was organized
and maintaining a functioning office
(other than a representative office).
• Licensed – Permitted by the ap-
propriate regulatory agency to
operate and conduct business in
the United States (federal license)
or a specific state (state license).

Given that even the above interpretations do not provide certainty, local agencies should establish a method of determining whether a purchase of medium-term notes meets the requirements of Section 53601(k) in consultation with their legal counsel. The following provides additional general guidance and recom- mendations to consider:
other allowable investments authorized under state law. For example, a local agency could not consider a security that satisfies the definition of commercial paper as a medium-term note in its portfolio. In addition, a local agency, other than a county or a city and a county, may invest no more than 10% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

CONSENSUS RECOMMENDATION:

With many companies and depository institutions operating worldwide, the interpre- tation of the phrases “organized and operating in the United States” and “licensed by the United States or any state” comes into question. The terms organized, operating, and licensed are not specifically defined by statutes nor are they legal terms that hold specific meaning. For the purpose of applying Section 53601(k), the following inter- pretations, based upon usage and context, are offered as guidance to local agencies. • If an issuing entity is incorporated
in the U.S., but is a subsidiary of a
foreign-owned parent company the
stability of either the parent compa-
ny or the economy of the country
of the parent company should be
considered when purchasing debt
issued by these types of entities.
• Alternately, a local agency may
hold securities in a U.S. company
that is subsequently purchased by
or merges with a foreign company
(for example, the InBev merger
with Anheuser Busch in 2008).

The local agency should monitor
the merger or purchase to deter-
mine if it remains a prudent for
the agency to hold the security.
• Identifying the venue for any
legal recourse in the event of a
bankruptcy or credit event would
assist the local agency in deter-
mining whether the organization
is organized and operating in the
U.S. If the security is backed by
assets that are in the U.S., then
the investor may attempt to at-
tach a claim on them in a U.S.
court in the event of a bankruptcy
or default. If the security is not
backed by assetsin the U.S., then
the initial financing documents
of the underlying security may
provide a possible source to assist
with determining the legal venue.
405 of 566

25 LOCAL AGENCY INVESTMENT GUIDELINES
II. K Are bonds issued by departments and financing
authorities of the State of California permissible
investments for local agencies?[Section 53601(c)]
Securities issued by the State of California are permissible investments for lo - cal agencies under Section 53601(c). However, questions arise when considering whether bonds issued by departments or financing authorities of the State are also permissible under this section.

MINIMUM LEGAL REQUIREMENTS:

Section 53601(c) permits a local agency to invest in registered state warrants or treasury notes or bonds of this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state.

CONSENSUS RECOMMENDATION:

There are two conditions that a bond could meet to be a permissible investment under Section 53601(c). The first part of Section 53601(c), ”state warrants, trea- sury notes and bonds of this state”, refers to bonds issued by the State of Califor- nia, for instance, general obligation bonds. This was the operative code section prior to the state’s issuance of revenue bonds.

The last part of the code section broadens the definition of permissible investments to include, “bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the state or a department, board, agen- cy, or authority of the state”. This describes state-issued revenue bonds. Issuance by a state authority or instrumentality alone is inadequate to meet the conditions in Section 53601(c) as the source of revenue for repayment must meet the qualifier in- cluded in the code section. For a security issued by a state authority or department, are the underlying agreements considered property owned/controlled/operated by the state? In general, if a public agency intends to purchase bonds issued by a state authority or department that are not clearly revenue bonds, an agency should con- sult counsel on the permissibility of such an investment.

II. L What are the rules regarding the use of reverse
repurchase agreements and securities lending agreements? Are shorting strategies allowed? [Section 53601(j)]
The intent of Section 53601(j) is to limit the imprudent use of reverse repurchase agreements (reverse repos) and securities lending agreements. In 1995, the Leg- islature, concerned about the use of reverse repurchase agreements for enhancing yield, imposed a number of restrictions on local governments. 406 of 566

26 LOCAL AGENCY INVESTMENT GUIDELINES
Section 53601(j) also applies the above restrictions to securities lending agreements with the exception that a local agency portfolio may not hold more than 20% of its base value in reverse repos and securities lending agreements combined.

Section 53601(j)(5) provides specific definitions for repurchase agreements, re- verse repurchase agreements, and securities lending agreements. Agreements not meeting these specific definitions are therefore not authorized.

CONSENSUS RECOMMENDATION:

Both reverse repurchase agreements and securities lending agreements may be used to take advantage of certain short-term opportunities to improve yield and mitigate cash flow shortages. They should be entered into only when there is a clear understanding by both the legislative body and treasurer of the risks inher- ent in these types of agreements. The agency’s staff (or their municipal/invest- ment advisor) must have sufficient expertise in the arrangement and manage- ment of these transactions.7
Although reverse repurchase agreements and securities lending agreements can be an effective short-term portfolio management tool in certain circumstances, they should not be confused with "short selling" or "margin selling." Reverse repurchase agreements are used to address cash flow concerns by entering into an agreement in which a counterparty will buy securities from a local agency. At the end of the agreement, the counterparty that purchased the securities will resell the securities to the local agency at a specified date and price. With a securities lending agreement, securities owned by the local agency are loaned to a bor- rower who provides an agreed-upon return and collateral to the local agency. At the conclusion of the agreement, the loaned securities are returned to the local agency and the collateral is returned to the borrower.
"Short selling" or "margin selling" is a practice where a margin account is estab- lished with delivery versus payment (DVP) settlement and securities are loaned • Reverse repos cannot constitute
more than 20% of the “market value”
of an agency’s portfolio;6
• Reverse repos are limited to 92 days
unless the minimum spread between
the rate on investment and cost of
funds is guaranteed in writing; and
• Securities used to make reverse
repos must be held for a minimum
of 30 days prior to the transaction.
6 For reverse repos purchased under Section 53601, the calculation is based upon the “base value” of the agency’s portfolio, which is defined as the dollar amount obtained by totaling all cash balances in the portfo- lio from all sources, excluding any amounts from reverse repos or similar borrowing methods. 7 Refer to CDIAC Issue Brief, Securities Lending Agreements, for a detailed discussion of these types of transactions.

MINIMUM LEGAL REQUIREMENTS:

Section 53601(j) imposes the following restrictions on reverse repos:
407 of 566

27 LOCAL AGENCY INVESTMENT GUIDELINES
II. M What are the rules regarding the use of mutual funds and money market funds? Are exchange-traded funds permissible investments? [Sections 53601(l) And 53601.6(b)]
8 Mutual fund as defined in Government Code Section 53601(1)(1). 9 Nationally Recognized Statistical Rating Organization.

Local agencies have the authority to invest in shares of mutual funds as described in Section 53601 (l) and 53601.6 (b) and in money market mutual funds as specified in the federal Investment Company Act of 1940. The permissible in- vestments and strategies of the mutual fund or money market fund should be reviewed to determine whether or not they adhere to the parameters contained in both federal and state law. Questions arise about whether exchange-traded funds (ETFs) are a permissible investment under 53601(l) since they have characteris- tics similar to mutual funds.

MINIMUM LEGAL REQUIREMENT:

Local agencies can invest in shares of mutual funds that invest in the securities and obligations as authorized by subdivisions (a) to (k), inclusive, and subdivi- sions (m) to (q), inclusive, of Section 53601 and that comply with the invest- ment restrictions of Section 53630. Local agencies can also invest in shares of mutual funds that are defined as money market mutual funds that follow regu- lations specified by the SEC under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1, et seq.). The purchase price of shares shall not include any commission that the fund manager may charge and shall not exceed 20% of the agency’s funds that may be invested pursuant to this Section 53601.

In addition, no more than 10% of the agency’s funds may be invested in shares of any single mutual fund.8 Both mutual and money market mutual funds require that they have attained the highest ranking or the highest letter and numerical rating provided by not less than two NRSROs.9 In addition they have retained an investment advisor registered or exempt from registration with the SEC with not less than five years’ experience managing their specific category of fund and have assets under management in excess of $500,000,000.

Local agencies may invest only in those instruments specified in State law. by a broker/dealer to the local agency. The loaned securities may be immediately sold with the intent of purchasing the securities back when market prices are lower to close out the margin position, thus profiting on the decline in value of the securities. Shorting strategies carry a high degree of risk of not only a zero re- turn, but significant loss of asset value. They do not meet the risk-limiting intent of the legislature in the adoption of 53601(j), and are not considered a prudent investment for the public portfolio.
408 of 566

28 LOCAL AGENCY INVESTMENT GUIDELINES

CONDITIONS ALLOWING FOR INVESTMENT
MONEY
MARKET
FUNDS
MUTUAL
FUNDS
I. Must receive the highest ranking or the highest letter and numerical rating by no less than two nationally recognized rating services;
—or—
Must retain an investment advisor who is registered or exempt from registration with the SEC and has at least five years' experience investing in specified securities and managing assets in excess of $500 million.A
II. Must abide by the same investment restrictions and
regulations that apply to public agencies in California [Section 53601(a-k, m-o)].

III. Must follow regulations specified by the SEC under the investment company act of 1940 (15 U.S.C. Section 80a-1, et seq.).

FIGURE 2

GOVERNMENT CODE REQUIREMENTS FOR LOCAL AGENCY

INVESTMENT IN MONEY MARKET AND MUTUAL FUNDS
A The requirement for mutual funds is an investment advisor with experience investing in securities and obligations authorized in Sections 53601 and 53635. For money market funds, the advisor must have experience in managing the types of investments that can be purchased by money market funds as specified in SEC Regulation 2a-7.

CONSENSUS RECOMMENDATION:

The investment policy should specify criteria for selection of both mutual funds and money market funds by the investment official. Local agencies should review the permissible investments and strategies of the mutual fund or money market fund to determine whether or not they adhere to both federal and state law.

While similar to mutual funds, exchange-traded funds (ETFs) are not specifi- cally addressed in Section 53601 nor contemplated under 53601(l); there- fore, ETFs are not a permissible investment for local agencies. See Chapter 2, II. A. Which investments are permissible? Which are prohibited? [Sections 16340, 16429.1, 27133, 53601, 53601.6, 53601.8, 53635, 53635.2, 53635.8, 53638, 53684, and 57603])
409 of 566

29 LOCAL AGENCY INVESTMENT GUIDELINES
Sections 53601 and 53608 address the appropriate safekeeping arrangements for securities. While a third party institution is the standard used in safekeeping arrangements, securities may be held by the same firm from which they were purchased as long as the securities for safekeeping are in the name of or under the control of the local agency and kept in a legally separate trust department.

II. O What is an appropriate safekeeping arrangement
for securities? [Sections 53601 and 53608]
Existing statutes prevent agencies from using the proceeds of their temporary borrowing, specifically TRANs and GANs, to purchase long-term securities in order to achieve higher investment yields in a manner which could limit liquid- ity needed to ensure sufficient cash to repay the temporary borrowing when due.

MINIMUM LEGAL REQUIREMENT:

Government Code Sections 53821.5, 53841.5, 53852.5 and 53859.02(b) pro- hibit the investment of the proceeds of temporary borrowing in securities that have terms exceeding those of the temporary borrowing itself. In other words, proceeds from a temporary borrowing due June 20 may not be invested in securities that mature after June 20. The minimum legal requirements are clear for securities that have an identifiable term to maturity. However, the law is ambiguous when an agency invests the proceeds of temporary borrowing in items that do not have a specific maturity date, such as investments in county pools or other funds that may have an average maturity that is longer than the temporary borrowing.

CONSENSUS RECOMMENDATION:

The proceeds of temporary borrowing can be placed in investments that have no specific term to maturity so long as the proceeds can be removed within the term of the temporary borrowing without a penalty. Therefore, cash equivalent shares in liquid funds such as LAIF or county pools—where an agency has rela- tively quick access to its deposits—are legitimate investments for the proceeds of temporary borrowing, as long as withdrawals in amounts sufficient to repay the temporary borrowing when due are not restricted or penalized.

II. N What are the rules affecting the investment of
tax and revenue anticipation note (TRAN) and
grant anticipation note (GAN) proceeds?
[Sections 53821.5, 53841.5, 53852.5 and 53859.02(b)]
410 of 566

30 LOCAL AGENCY INVESTMENT GUIDELINES
II. P How does the Municipal Advisor (MA) Rule affect
a local agency’s relationship with an investment
advisor? [Section 53600.3]
The MA Rule states that broker-dealers providing advice to government clients on the investment of bond proceeds have a fiduciary duty to their clients and must be registered as a municipal advisor. In order to avoid becoming a fiduciary to mu- nicipal issuers, many broker-dealers, who have a significant municipal underwrit- ing business, have adopted policies prohibiting brokers from providing investment advice. The MA Rule provides specific exemptions to public agencies seeking to receive investment advice from broker-dealers, including receiving advice through a request for proposal (RFP) process or by entering into a formal relationship with another independent registered municipal advisor who provides investment advice.

MINIMUM LEGAL REQUIREMENT:

The MA Rule places no legal obligations on public agencies. The regulations address only the responsibility of broker-dealers with respect to bond proceeds.

It is important to note that a local agency’s fiduciary responsibilities cannot be delegated regardless of the fiduciary standards imposed on other members of the municipal market. Section 53600.3 provides that a finance officer or treasurer MINIMUM LEGAL REQUIREMENT:

Section 53601 specifically allows local agencies to use a counterparty bank’s trust de- partment or separate safekeeping department for the physical delivery of a security if the security is held in the name of the local agency. Section 53608 authorizes general safekeeping arrangements that allows local agencies to use for deposit for safekeep- ing a federal or state association (as defined by Section 5102 of the Financial Code), a trust company or a state or national bank located within this state or with the Federal Reserve Bank of San Francisco or any branch thereof within this state, or with any Federal Reserve bank or with any state or national bank located in any city designated as a reserve city by the Board of Governors of the Federal Reserve System, the bonds, notes, bills, debentures, obligations, certificates of indebtedness, war- rants, or other evidences of indebtedness in which the money of the local agency is invested pursuant to this article or pursuant to other legislative authority. The local agency shall take from such financial institution a receipt for securities so deposited.

CONSENSUS RECOMMENDATION:

Industry standard is to set up a third-party (an institution other than the party that sold the agency the investment) safekeeping agreement. In order for the securities to be held by the same institution that sold the security, they must be kept in a separate area of the institution such as its trust department. The security must be in the local agency’s name or “perfected” by transferring the security through a signed agreement that contains a description of the security. 411 of 566

31 LOCAL AGENCY INVESTMENT GUIDELINES
can delegate duties to an external investment manager via a principal-agent rela- tionship, but they cannot delegate fiduciary responsibility.

CONSENSUS RECOMMENDATION:

Local agencies rely on municipal advisors to help make decisions about issuing municipal securities and investing bond proceeds. Registered investment advisors hold a fiduciary responsibility to their clients by virtue of their registration with the SEC under the Investment Advisor Act of 1940. Nonetheless, the fiduciary responsibility that ultimately rests with the legislative body and the treasurer can- not be wholly delegated to an external investment manager.

Under the MA Rule, when an investment adviser consents to act in the capacity of an Independent Registered Municipal Advisor (IRMA), the local agency is able to exchange information with broker-dealers that do not have a fiduciary duty to the agency. When a local agency retains an IRMA, it agrees to consult the IRMA when considering information provided by broker-dealers. Further, when a local agency has an IRMA they should communicate that information to the market. Local agencies should ensure that the professionals they use are registered with the SEC and MSRB by checking the MSRB’s Municipal Advisor Registration webpage.

II. Q What are the rules regarding the payment of
interest earned on non-general fund deposits to an
agency's general fund? [Section 53647]
Many local agencies have the opportunity to earn interest on funds held in gov- ernmental accounts other than the general fund.

MINIMUM LEGAL REQUIREMENT:

Section 53647 provides that interest earned on a local agency's deposits shall be paid quarterly to the general fund of the agency unless otherwise directed by law.

Alternatively, if directed by the governing body of the local agency, interest shall be paid to the fund containing the principle upon which the interest accrued.

CONSENSUS RECOMMENDATION:

Although all interest earned on its deposits should be paid to the agency's general fund on a quarterly basis, the governing body may direct that the interest be al- located to the fund in which the interest earning principle was deposited. It is important to note that other directives provided in law or contract for the payment of interest to a specific fund (e.g., funds held by a trustee) are overriding exceptions. 412 of 566

32 LOCAL AGENCY INVESTMENT GUIDELINES
II. R Should local agencies invest in financial futures and option contracts? If so, in what manner
should they be utilized? [Sections 53601.1]
In addition to the permitted investments in Section 53601 such as treasuries, agencies, money markets, medium-term notes, and pooled investments, local agencies are permitted to invest in financial futures and option contracts in rela- tion to any of these authorized investments. Local agencies can use a financial futures contract to potentially hedge risk because the buyer/seller are obligated to purchase/sell an asset at a predetermined future date and price thereby limiting a local agency's exposure to price fluctuations.10 Financial options contracts, which allows the buyer to buy or sell an obligation at a specified price for a specified time, are more risky and usually expire with a zero value.11 MINIMUM LEGAL REQUIREMENT:

Section 53601.1 states that the authority of a local agency to invest funds pur- suant to Section 53601 includes, in addition thereto, authority to invest in fi- nancial futures or financial option contracts in any of the investment categories enumerated in that section.

CONSENSUS RECOMMENDATION:

Although the language in Section 53601.1 is very broad in its application to execute option and futures contracts on any investment categories enumerated in Section 53601, extreme care should be taken when using these strategies. Option and futures strategies are complicated and should only be used to hedge matched positions in securities currently held in the portfolio as a means to limit the risk of adverse price movements of a given security. Option and futures contracts should not be utilized in the public portfolio as a high-yield strategy.

An imprudent high-yield options and future strategy involves taking “naked” positions. “Naked” positions are those option and futures contract strategies placed on securities that are not covered by matched positions held in the portfolio. A “naked” position will require acquisition of securities in the mar- ketplace at the prevailing market price in order to close out the position, which could result in unlimited risk and large asset losses. A high-risk, high-yield op- tion and futures strategy is not consistent with the prudent investor standards established in Section 53600.3 and safety-liquidity-yield objectives established under Section 53600.5.
10 Brian Beers. "How are Futures Used to Hedge a Position?" Investopedia (Updated October 3, 2021)). Ac- cessed January 2023. www.investopedia.com/ask/answers/06/futureshedge.asp. 11 Beth Gaston Moon. "Understanding Options Risk." InvestorPlace (April 12, 2012). Accessed February 2018. https://investorplace.com/2012/04/understanding-options-risk/#.WnSdQK6nG70. 413 of 566

33 LOCAL AGENCY INVESTMENT GUIDELINES
II. S How long should a local agency
retain trade ticket information?
Pursuant to SEC’s Rules 17a-3 and 17a-4 detailing the record-keeping require- ments for broker-dealers, trade blotters or records of sales and purchases are re- quired to be retained for six years. T rade confirmations, on the other hand, are required to be kept for three years. Given that there is no specific state require- ment requiring a period of time that trade ticket information should be retained, local agencies may consider adopting such guidelines.

MINIMUM LEGAL REQUIREMENT:

There are no existing legal requirements pertaining to the retention of trade tickets.

CONSENSUS RECOMMENDATION:

T rade ticket information includes the price, yield, Committee on Uniform Securities Identification Procedures (CUSIP) reference number of the se- curity as well as net money including principal, accrued interest, and total money. It also identifies the broker-dealer with whom the trade was done. It is important to retain trade ticket information for several reasons, most im- portantly for compliance and audit reasons. In addition, if there are any ques- tions regarding a particular trade, it would be beneficial to have documenta- tion. T o be prudent, trade tickets should be kept for at least six years. Local agencies should consider adopting their own agency guidelines for retention of financial records, including trade ticket information. 414 of 566

34 LOCAL AGENCY INVESTMENT GUIDELINES
Chapter III. Reporting Requirements
Reporting requirements and recommendations are imposed on local agencies in Sections 53646 and 53607.

Section 53646 states that the treasurer or chief fiscal officer of a local agency may file reports on the status of their investment portfolios with their respec- tive legislative body, internal auditor, and chief executive officer. These reports generally are intended to provide the legislative body the ability to meet its fiduciary obligations as a trustee and to increase the disclosure of the agency’s investment activities to those outside the agency. Section 53646 states that if the quarterly investment portfolio report is submitted, it must contain, among other things, a listing of investments, fund balances, activity, and return on investments made by the local agency. Quarterly reports should reflect the cur- rent positions and past performance of a portfolio of investments for the period of time under consideration.

Section 53646(e) states that for local agency funds that have been placed in a county investment pool, LAIF , FDIC-insured bank deposits, National Credit Union Shared Insurance Fund-insured accounts in a credit union, accounts in- sured or guaranteed pursuant to California Financial Code Section 14858, or some combination of the above, the treasurer may substitute the most recent ac- count statement received from those entities in lieu of the information on these investments that is otherwise required by this section. Section 53646(f) states that securities, investments, or monies held by a school district or county office of education in individual accounts that are less than twenty-five thousand dollars ($25,000) may be excluded from the report.

Local agency treasurers to whom the authority to invest or reinvest funds or to sell or exchange securities has been delegated by the legislative body of a local agency are required by Section 53607 to submit a monthly report of transactions to the legislative body.
415 of 566

35 LOCAL AGENCY INVESTMENT GUIDELINES
III. A What specific information regarding portfolio investments needs to be included in the report to the legislative
body? [Section 53646(b)(1-4) and 53607]
Section 53646 specifically encourages treasurers to prepare the quarterly invest- ment report to enable the legislative body to perform its fiduciary duty and pro- vide full disclosure of the public entity's investment activities.

MINIMUM LEGAL REQUIREMENTS:

If the treasurer or chief fiscal officer of a local agency elects to submit or if the legislative body mandates the submission of a quarterly investment report to the legislative body pursuant to Section 53646, it must do so within 45 days after the end of the quarter and include the following information:
12 Refer to CDIAC publication California Public Fund Investment Primer for definitions of investment types.
13 “Dollar amount invested” is defined as cost, however, best practice uses amortized cost or book value. Confu- sion exists as to the meaning of the words “held by the local agency” found in Government Code Section 53646(b)(1). Several standards have been suggested to clarify this phrase, including “ownership,” “control,” “under direct management by,” “possession,” and “accountability for the funds.” Each of these suggestions would lead to different determinations as to the specific funds required to be reported. The apparent intent of the Legislature in enacting this requirement was to provide for comprehensive disclosure of local agency investments. • Type of investment (i.e. U.S.

T reasury security, commercial
paper); 12
• Issuer name;
• Date of maturity;
• Par amount;
• Dollar amount invested in all secu-
rities, and investments and monies
held by the local agency;13
• A description of the funds, invest-
ments, and programs (including
lending programs) managed by
contracted parties (i.e. LAIF , invest-
ment pools, outside money manag-
ers, and securities lending agents);
• Current market value as of the
date of the report of all funds
held by the local agency and un-
der the management of any out-
side party that is not also a local
agency or LAIF and the source of
the valuation;
• A statement of compliance with
the investment policy or an expla-
nation for non-compliance; and
• A statement of the local agency’s
ability to meet its pool’s expendi-
ture requirements for the next six
months, as well as an explanation
of why sufficient money will not
be available if that is the case.

The legislative body of the local agency may elect to require this report on a monthly basis. Furthermore, the legislative body may require the treasurer to provide additional information beyond that listed above. 416 of 566

36 LOCAL AGENCY INVESTMENT GUIDELINES

1. A listing of individual securities held
at the end of the reporting period
by authorized investment category.

2. Average life and final maturity of all
investments listed.

3. Coupon, discount or earnings rate.

4. Par value, amortized book value and
market value.

5. Percentage of the portfolio repre-
sented by each
investment category.

6. A description of the funds, invest-
ments, and programs (including
lending programs) managed by
contracted parties (i.e. LAIF , invest-
ment pools, outside money manag-
ers, and securities lending agents).

7. A statement of compliance with the
investment policy or an explanation
for non-compliance.

8. A statement of the local agency’s
ability to meet its pool’s expendi-
ture requirements for the next six
months, as well as an explanation
of why sufficient money will not be
available if that is the case.

Local agency funds that have been placed in a county investment pool, LAIF , FDIC insured bank deposits, National Credit Union Shared Insurance Fund- insured accounts in a credit union, accounts insured or guaranteed pursuant to California Financial Code Section 14858, or some combination of the above, may substitute the most recent account statement received from those entities in lieu of the information recommended above.

In addition to the reporting requirement set forth by Section 53646, a local agency treasurer who has been delegated authority to invest or reinvest funds of the local agency by the legislative body under Section 53607 must submit a report to the legislative body accounting for transactions made during the month.

This reporting requirement is separate and distinct from the quarterly report sub- mitted under Section 53646. If the legislative body has delegated authority to the treasurer and has elected to require the quarterly report under Section 53646 on a monthly basis, it may be very practical and efficient to merge the elements of If the local agency’s legislative body delegates, to the local agency’s treasurer, its authority to invest or reinvest the agency’s funds or sell or exchange the agency’s securities, the treasurer shall make a monthly report of those transactions to the legislative body, pursuant to Section 53607. The delegation of authority may be made for a period of one year. The requirement to submit the transaction report lasts until the authority is revoked or expires. In contrast to the specific informa- tion required in the quarterly report under Section 53646(b), the contents of the monthly report of transactions required under Section 53607 are not enumerated.

CONSENSUS RECOMMENDATION:

Based upon the public benefits achieved by reporting, it is recommended that the treasurer or designated official provide the local agency’s legislative body a quarterly investment report that provides a clear picture of the status of the current invest- ment portfolio. The quarterly investment report should include the following:
417 of 566

37 LOCAL AGENCY INVESTMENT GUIDELINES
III. B Should the report include market value measures
for individual securities? [Section 53646(b)(1)]
The market value of each security in a portfolio must be computed before deter- mining the portfolio’s overall market value.

MINIMUM LEGAL REQUIREMENT:

Section 53646(b)(1) states: “With respect to all securities held by the local agen- cy, and under management of any outside party that is not also a local agency or the LAIF , the report shall also include a current market value as of the date of the report, and shall include the source of this same valuation.” CONSENSUS RECOMMENDATION:

The law is not clear whether “all” securities implies the market value of the over- all portfolio or each security. The level of detail to be presented in the report depends on the portfolio activity and the audience. The report for internal trea- sury staff and the oversight committee should list the individual market value for each security. This approach gives a more complete picture of the health of a portfolio and brings individual investment performance to the attention of those responsible for compliance oversight. For the legislative body, the report should be a summary with aggregate market value listed and include a footnote stating that data on particular investments is available upon request.

HOW SHOULD THE MARKET VALUE OF
THE PORTFOLIO BE DETERMINED?
In establishing market value of the portfolio as required by Section 53646(b)(1), the Government Finance Officers Association recommends that local entities obtain independent third-party assessment of investments and risk from a reputable source.

The most common approach is to request pricing information from the agency’s safekeeping service, custodial service, or trustee. Agencies may need to contract with pricing service companies for more complex securities. These companies specialize in giving the current market price for a broad range of securities.

An alternative way to determine the value of securities in a portfolio is to perform an in-house analysis by collecting information from different sources such as dealer quotes, online computer information, and certain publications that pro- vide price estimates. These sources may not be as up-to-date or accurate as a pric- the quarterly report with the month’s transactions and provide a combined report on a monthly basis. While the elements of each reporting requirement may be different they may be combined in one report.
418 of 566

38 LOCAL AGENCY INVESTMENT GUIDELINES
ing service, but they offer a relatively inexpensive method to make price estimates.

Finally, to assess the value of securities where specific prices are not available, a treasurer can either tie the spread of a recent investment to a benchmark security that is easy to value or use a matrix pricing formula. A matrix pricing formula displays the prices of a variety of different securities which are then used as a basis for approximating the value of the security in question. These formulas are particularly useful for short-term securities that mature between 90 and 180 days.

MINIMUM LEGAL REQUIREMENT:

Section 53646(b)(1) provides that the agency shall include the current market value as of the reporting period date and the source of the valuation.

CONSENSUS RECOMMENDATION:

T o provide the most unbiased method of reporting current market values, the local agency should obtain an independent valuation of the portfolio from a reputable source, such as, a broker or other financial institution, custodial bank, available publications or other pricing services. The independent sources should not be a party to the transaction. For example, the broker that sold the security should not be used to provide the valuation. The agency should use the best sources of market price information available. Prices for securities are estimates that carry a certain degree of error regardless of the approach used and will fluctuate over time due to market conditions. It is imperative that local officials pay extra attention to esti- mates on complex, infrequently traded, or highly customized securities.

HOW FREQUENTLY SHOULD MARKET VALUE BE CHECKED?
MINIMUM LEGAL REQUIREMENT:

None. Government Code does not specify frequency of market valuation.

CONSENSUS RECOMMENDATION:

Frequency of market valuation will be dependent on the complexity of the se- curities in the portfolio and the frequency of trading. For infrequent or passive investors, market value should be “marked-to-market” quarterly at a minimum.

For a more active portfolio, the industry standard is monthly.

III. C Should an analysis of cash flows be prepared by the local agency in order to validate the six-month
liquidity certification? [Section 53646]
A public agency is required to include a statement indicating that the projected cash flow is adequate to meet expected obligations over the next six months or provide an explanation as to why sufficient money may or may not be available. 419 of 566

39 LOCAL AGENCY INVESTMENT GUIDELINES
MINIMUM LEGAL REQUIREMENT:

Section 53646(b)(3) addresses the requirement for the local agency to include a statement denoting the ability of the local agency to meet its pool’s expenditure requirements for the next six months or provide an explanation as to why suf- ficient money may or may not be available. There are no other requirements for identifying cash flows and setting liquidity targets at the local agency.

Section 53646(c) requires the treasurer or chief fiscal officer to report whatever addi- tional information or data may be required by the legislative body of the local agency.

CONSENSUS RECOMMENDATION:

An analysis of cash flows is not required. However, the treasurer should be prepared to discuss cash flow projections and methodology at the request of legislative or oversight bodies. This analysis may list basic projections—based on historical data, market sensitivity or other relevant information—that sup- port the cash flow liquidity statement. There are no guarantees when it comes to predicting future obligations. A sound justification for the expenditure state- ment gives the finance officer added protection against decisions that originally looked good but turned out poorly because of unforeseen circumstances.

The nature of the analysis will vary greatly depending on the size, sophistication, and complexity of the local agency staff and portfolio. Best practices dictate that cash flow statements should be prepared on a regular basis. However, in some agen- cies it may not be practicable or necessary, for instance, for LAIF-only participants.

An analysis of cash flows is the precursor to portfolio management and should be prepared and updated, as needed, at least for internal investment staff use.

Those who manage investment pools need to pay close attention to the needs and accuracy of the requests of participants to ensure accurate cash flow projec- tions. Incomplete information about a pool’s investors not only compromises the legitimacy of the six-month cash flow statement, but also adds substantially to the liquidity risk of the pool.

In the case of investment pools, all participants’ cash flow needs must be taken into account in preparing the six month cash flow statement. The pool admin- istrator or manager should keep close tabs on mandatory and voluntary pool participants’ cash flows needs and establish clear criteria for the deposit and with- drawal of their funds. Also, the pool administrator or manager should obtain expected deposit/disbursement information from pool participants at the time of major fund deposits or updates of cash flow projections. 420 of 566

40 LOCAL AGENCY INVESTMENT GUIDELINES
III. D What tools can be used to measure interest rate risk? Interest rate risk, also known as market risk, is the risk that a security’s value or price will decline as interest rates rise in the general market. Weighted average maturity (WAM) and duration are commonly used measures of interest rate risk.

WAM measures the portfolio’s “average life.” Duration considers all of the cash flow receipts not just the last cash flow as in WAM and provides an approximate percentage change in the value of a security or portfolio for a given change in interest rates.14 Some local agencies have inquired whether they should include this information in their report.

MINIMUM LEGAL REQUIREMENT:

Existing statutes do not require local agencies to report an interest rate risk mea- sure in their portfolios. Section 16480.7 requires the State T reasurer to submit a quarterly report to the Pooled Money Investment Board that includes the weighted average maturity of the investments in the Pooled Money Investment Account.

CONSENSUS RECOMMENDATION:

Local agencies should consider including the WAM or duration measurement in the report. The type of duration measure (e.g. modified and/or effective dura- tion) used will depend on the type of investments being analyzed and the capac- ity of the agency to perform or source the calculations. While duration will pres- ent greater precision than WAM in the measurement of interest rate risk, given the need for specialized software to perform calculations or an external source for duration information, an agency may find greater utility in the easier to calcu- late WAM. The decision on which metric to use will be based on the needs and resources of the local agency.

Local agencies also should consider whether their investment policies should provide guidance on acceptable ranges or limits for the respective measure used.

These figures trigger a number of valuable considerations about the status of the portfolio for both internal and external purposes including liquidity, cash flow, and average maturity (for example, WAM). WAM is a relatively simple calcula- tion which may be determined by dividing the sum of the days to maturity mul- tiplied by the book value for each security by the total book value of the portfolio.

Figure 3 shows an example of how WAM is calculated:
14 Refer to CDIAC publications California Public Fund Investment Primer and Duration Basics. 421 of 566

41 LOCAL AGENCY INVESTMENT GUIDELINES
15 Refer to CDIAC publication Investing in Callable Securities – September 2020 Update for a summary of callable securities. Refer to CDIAC publication Issue Brief: Benefits and Limitations of Option-Adjusted Spread Analysis for general guidance about option-adjusted spread (OAS) and how to interpret OAS values.

PAR
VALUE

SECURITY

DESCRIPTION

DAYS TO

MATURITY
BOOK
VALUE

DAYS BY

BOOK VALUE
$1,350,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
Repurchase Agreements
Local Agency Inv. Fund
Fed Natl. Mtg. Assn.

Fed Home Loan Bank
U.S. Treasury Note
Fed Natl. Mtg. Assn.

Fed Farm Credit Bank
1 1
185
550
720
822
910
$1,350,000
5,000,000
4,886,108
5,000,000
4,985,156
5,000,000
4,988,941
1,350,000
5,000,000
903,930,041
2,750,000,000
3,589,312,500
4,1 10,000,000
4,539,936,255
TOTAL $31,210,206 15,899,528,796
FIGURE 3

CALCULATION OF WEIGHTED AVERAGE MATURITY
Duration is a more complex computation and requires the proper software to perform the specific calculations for each security and then for the entire portfo- lio. Three types of duration are commonly used.

MACAULAY DURATION. The simplest method of calculating duration which measures the number of years required to recover the true cost of a security and is the only type of duration measurement quoted in “years.” MODIFIED DURATION. Builds upon Macaulay duration to measure the price sensitivity of an investment to interest rate changes and assumes the cash flows of an investment do not change as interest rates change. Modified duration is quoted as a percentage of value change as interest rates change. Figure 4 is an example of a basic modified duration application.

EFFECTIVE DURATION. Further refines modified duration using an iterative estima- tion process and is typically used with floating rate, asset-backed, and pass-through securities and more generally, with securities that have call option features. Effective duration takes into account embedded options of a security (e.g., call features or sinking fund schedule) and adjusts the price of the investment to reflect changes in the value of those embedded options.15 Thus, effective duration requires simulations of many possible interest rate scenarios to calculate the duration to call and provides a wider assessment of risk for a portfolio containing more than fixed rate securities.

Due to the complexity of calculating effective duration, no example appears below.

WAM =
∑ Days to Maturity Multiplied
by Book Value of Each Investment = 15,899,528,796 =
509 Days
or 1.42
YearsT otal Book Value $31,210,206
422 of 566

42 LOCAL AGENCY INVESTMENT GUIDELINES

PORTFOLIO MODIFIED DURATION

1.2 2.7 5.0 6.0
RATE
CHANGE
.25%
.50%

1.50%

2.00%

5.00%
$300,000
600,000
1,800,000
2,400,000
6,000,000
$675,000
1,350,000
4,050,000
5,400,000
13,500,000
$1,250,000
2,500,000
7 ,500,000
10,000,000
25,000,000
$1,500,000
3,000,000
9,000,000
12,000,000
30,000,000
FIGURE 4
DURATION—GAIN/LOSS OF MARKET VALUE MATRIX
FOR A $100,000,000 PORTFOLIO
Modified duration measures the approximate change in the market value of assets as a result of a change in market interest rates. Thus, for a portfolio with a market value of $100,000,000 and a duration of 1.2, as interest rates increase by 1.5%, the portfolio’s market value would be expected to decrease by $1,800,000. Specifically:
$100,000,000 x 1.2 x 0.015 = $1,800,000
portfolio size duration interest rate increase portfolio market value decrease
$100,000,000 x 1.2 x 0.02 = $2,400,000
portfolio size duration interest rate increase portfolio market value increase
Conversely, for the same portfolio, if interest rates were to decrease by 2 %, the portfolio’s market value increases by approximately $2,400,000. Specifically:

Securities or portfolios with higher duration carry more interest rate risk and have higher price volatility (i.e., sensitivity of the security’s price to changes in market interest rates) than those with lower durations. For example, if the same $100,000,000 portfolio had a duration of 2.7, a 1.5% increase in market inter- est rates will produce a greater change in the portfolio’s market value:

For a 2% decrease in interest rates:
$100,000,000 x 2.7 x 0.015 = $4,050,000
portfolio size duration interest rate increase portfolio market value decrease
$100,000,000 x 2.7 x 0.02 = $5,400,000
portfolio size duration interest rate increase portfolio market value decrease
423 of 566

43 LOCAL AGENCY INVESTMENT GUIDELINES
III. F How should agencies address difficulties in meeting the 45-day requirement for submitting quarterly investment
reports to the legislative body? [Section 53646(b)]
It can be difficult for an agency to collect all the appropriate information for the report, have an oversight committee (if a jurisdiction has one) review or approve it, and present it to the legislative body within 45 days of the quarter’s end. Vari- ous factors such as the length and diversity of the portfolio, size of staff, and type and availability of computer software can influence the amount of time it takes to compile a report.

MINIMUM LEGAL REQUIREMENT:

Section 53646(b) requires that if the quarterly investment report is submitted to the legislative body, it may be rendered within 45 days of the end of the quarter.

III. E What action should the legislative body take
with the report? [Section 53646]
Section 53646(b) states that the “treasurer or chief fiscal officer may render a quarterly report to the chief executive officer, internal auditor, and the legisla- tive body” within 45 days of the quarter’s end. Questions arise as to whether the legislative body needs to discuss and approve the report during a regular meeting, have it placed on the consent calendar, or only receive a copy.

MINIMUM LEGAL REQUIREMENT
Section 53646(b) only states that the report may be rendered to the legislative body. It does not require the legislative body to take action on this report.

CONSENSUS RECOMMENDATION
If presented to the legislative body of the local agency, it should discuss the report as necessary and take action on the report in public session. The report could be listed as a consent calendar item or as a non-consent calendar item, depending on the preferences of the legislative body. Possible actions of the governing body on the report could include: receiving and filing the report, approving or disapprov- ing the report (with or without amendments), or asking staff for further informa- tion/clarification. In addition, if presented to an investment oversight body, the oversight body should discuss the reports at their own meetings. 424 of 566

44 LOCAL AGENCY INVESTMENT GUIDELINES
CONSENSUS RECOMMENDATION:

A report, as complete as possible, should be submitted within the allotted 45 days. If current values for certain investments are not available within the time frame to complete the report in a timely fashion, submit the report on time and indicate in the report the most recent valuation and its date and then submit updated values to the legislative body at the soonest possible date thereafter. It should be available for individual legislative body members to review within 45 days of quarter end. This may include providing a copy to each member, includ- ing it in agenda materials for a public meeting, or actually presenting the report at a public meeting of the legislative body.
425 of 566

45 LOCAL AGENCY INVESTMENT GUIDELINES
Chapter IV. Treasury
Oversight Committees
Section 27131 and 27132 through 27132.4 consider the formation, compo- sition, and role of a county treasury oversight committee. These code sections provide that the function of the treasury oversight committee is to monitor and review the county investment policy by conducting or causing an annual audit and discussing its findings at a public meeting. The rationale behind the creation of an oversight committee is to give local agencies and private sector citizens a say in the policies governing the investment pool.

IV. A What options are available for structuring the county treasury oversight committee? [Sections 27131 and
27132 through 27132.4]
The statutes governing the structure of county treasury oversight committees are meant to bring together a representative and knowledgeable committee while limiting conflicts of interest with the treasurer and the treasury functions sub- ject to oversight. However the composition is subject to specific requirements that can make it difficult for local agencies to recruit and staff a committee.

Specifically, the statutes prohibit individuals from employment with or securing employment within one year of serving on a county treasury oversight commit- tee with underwriting, bond counsel or broker-dealer firms doing business with the county treasurer. Committee members are also prohibited from making in- dividual political contributions to, or being employed by an entity that makes political contributions to, or from doing any fund raising on behalf of any can- didate for office of the governing board of any agency that deposits funds in the county treasury in the previous three years.

MINIMUM REQUIREMENT:

Section 27131(a) states that the board of supervisors in any county that invests surplus money may establish a treasury oversight committee. If established, the committee must consist of three to eleven members, the exact number deter- mined by the board of supervisors in consultation with the county treasurer.

Members must be appointed from the following categories:
426 of 566

46 LOCAL AGENCY INVESTMENT GUIDELINES
• Be employed by an entity that
has contributed to the campaign
of a candidate for the office of
local treasurer;
• Be employed by an entity that has
contributed to the campaign of a
candidate for membership on a
legislative body of any local agency
that has deposited funds in the
county treasury in the previous
three years or during the period
the employed person is a member
of the committee;
• Directly or indirectly raise money
for a candidate for local treasurer
or a member of the governing
board of any local agency that
has deposited funds in the county
treasury while a member of the
committee; and
• Secure employment with, or be
employed by, bond underwriters,
bond counsel, security brokerages
or dealers, or financial services
firms, with whom the treasurer is
doing business during the period
that the person is a member of the
committee or for one year after
leaving the committee.

CONSENSUS RECOMMENDATION:

County legislative bodies should decide if an oversight committee is necessary and if they should have private sector individuals from the restricted firm types serve on the committee. If so, the county may choose one of three options to compose the committee (Figure 5).

If the committee is composed of public and private sector members (Option 1), the members, for their term of service and one year following, cannot work for firms doing business with the treasurer. As a way to obtain the participation of private sector professions employed by firms doing business with the treasurer, a county may create an advisory board of the county treasury oversight commit- tee (Option 2). However, a county that chooses Option 2 and forms an advi-

1. County treasurer.

2. County auditor, auditor-con-
troller, or finance director as
the case may be.

3. A representative appointed by
the board of supervisors.

4. A representative selected by a
majority of the presiding officers
of the governing bodies of the
school districts and community
college districts in the county.

5. County superintendent of
schools or their designee.

6. A representative selected by a
majority of the presiding of-
ficers of the legislative bodies of
the special districts that are re-
quired or authorized to deposit
funds in the county treasury.

A majority of the public members of the committee shall have expertise in or an academic background in public finance. The other public members shall be economically diverse and bipartisan in political registration. Committee members cannot:
427 of 566

47 LOCAL AGENCY INVESTMENT GUIDELINES

VARIOUS OPTIONS AVAILABLE TO LOCAL GOVERNMENTS

1. A committee of both public and private sector members.

2. A committee of public sector officials that has an advisory board made up of private sector professionals and citizens.

3. A committee that only consists of individuals who work for agencies that have funds invested in the pool.

FIGURE 5

APPROACHES TO ESTABLISHING THE COUNTY

TREASURY OVERSIGHT COMMITTEE
IV. B Does the appointment of the treasurer to the county treasury oversight committee create a conflict of interest?
[Sections 27131 and 27132]
Since the oversight committee’s central task is to oversee the treasurer’s policies, some believe that allowing the treasurer to sit on the oversight committee rep- resents a conflict of interest. Others claim that a treasurer who donates money to their own campaign cannot be on the county treasury oversight committee because the law bars those who contribute to the campaign of someone run- ning for treasurer while serving on the committee from participation.

MINIMUM LEGAL REQUIREMENT:

None. Sections 27131 and 27132 do not specify whether or not the county treasurer should be a member of the oversight committee. Section 27132 specifically lists the county treasurer as a potential member of the county treasury oversight committee.

CONSENSUS RECOMMENDATION:

The question of whether or not a county treasurer should sit on the treasury oversight committee must be made by the county board of supervisors and the treasurer. Their answer should consider the advantages and disadvantages of having someone with the treasurer’s influence and expertise sit on the commit- tee and the future employment implications to the treasurer since any person who serves on a county treasury oversight committee is prohibited from seeking employment with the financial services industry for one year after leaving the sory board whose membership criteria is less stringent than the criteria used to compose an oversight committee is advised to consult legal counsel. Finally, the county may establish an oversight committee composed exclusively of individu- als unaffiliated with private sector firms doing business with the treasurer. The easiest way to do so is to draw members of the committee from the public agen- cies investing funds with the county treasurer (Option 3). 428 of 566

48 LOCAL AGENCY INVESTMENT GUIDELINES
IV. C What is the role of the county treasury oversight committee? [Sections 27134 and 27137]
MINIMUM LEGAL REQUIREMENT:

Sections 27134 and 27137 limit the oversight committee’s functions to monitor- ing and reviewing the county treasury’s compliance with the investment policy and reporting provisions of the Government Code through an annual audit.

CONSENSUS RECOMMENDATION:

The statutes address concerns that individuals serving on the treasury oversight committees may try to micro-manage decisions that should be left to the treasurer.

Considerations by the committee regarding the risk and structure of a portfolio are permitted in the law, however, any attempts to direct individual investment decisions, select individual investment advisors, brokers, or dealers, or impinge on the day-to-day operations of the county treasurer are discouraged. The local agency should clearly stipulate that the responsibilities of the treasury oversight committee are to focus on investment policy issues and to audit the portfolio for compliance with the policy.
committee. It should not in any way hinge on whether a treasurer donated mon- ey to his or her own campaign. Contributing money to one’s own campaign does not represent a legitimate conflict of interest in the context of the treasury oversight committee.

Specifying that the treasurer does not serve as the chair of the oversight commit- tee is one approach to lessening the “conflict of interest” concern.

IV. D Should other local agencies have
treasury oversight committees?
It is not uncommon to find treasury oversight committees in cities and other lo- cal agencies even though the law does not require them to have such a committee.

An important issue in the decision to establish a committee is the level of discre- tion accorded the agency treasurer in making investment decisions: the more discretion, the greater the need for oversight procedures. However, even in situ- ations where an agency has a great deal of discretion, some believe an oversight committee merely duplicates work that can be better performed by the governing board or auditors. Others support the view that an oversight committee provides valuable information to the investment staff and involves members of the com- 429 of 566

49 LOCAL AGENCY INVESTMENT GUIDELINES
munity in an important government function. If other local agencies decide that they want to engage an oversight committee, its role with respect to reviewing investment policies and quarterly investment reports should be clearly specified.

MINIMUM LEGAL REQUIREMENT:

There are no legal requirements for local agencies to have oversight committees.

CONSENSUS RECOMMENDATION:

Local agencies that are not counties should consider if an oversight commit- tee is appropriate based on its current oversight procedures, complexity of its portfolio, frequency with which it purchases securities, and skill level of its staff. The limitations and restrictions associated with membership on a county treasury oversight committee do not apply to committees formed by other lo- cal government entities.
430 of 566

50 LOCAL AGENCY INVESTMENT GUIDELINES
CODE

SECTION
TITLE

DESCRIPTION

ACQUISITION OF BONDS
5925 Repurchase investment

LOCAL AGENCY INVESTMENT FUND (LAIF)
16340 Voluntary Investment Program Fund
16429.1 Creation, maintenance, and operation
16429.2 Local investment advisory board
16429.3 Deposits; prohibited transfers and loans; impoundment or seizure 16429.4 Right of withdrawal

COUNTY TREASURER - DUTIES GENERALLY
27000 Custody and payment of moneys
27000.1 Investment of county funds; delegation and revocation of authority by board of supervisors; responsibility for transactions 27000.3 Prudent investor standard; use in transactions with public funds 27000.5 Objectives; managing public funds
27000.6 Effective date of specified provisions; candidate eligibility and continuing education programs; county ordinances; authority to repeal ordinances
27000.7 Eligibility for offices of county treasurer and tax collector; criteria; application of section
27000.8 County treasurers and tax collectors serving on January 1, 1996; service for remaining term; continuing education; certification; violation
27000.9 Continuing education; requirements beginning in 2000; certification; violation
27001 Certificates of auditor; filing; preservation
27002 Accounts of receipts and expenditures; requisites 27002.1 Photographic records of receipts and expenditures 27003 Separate accounts; general account
California Government Code
431 of 566

51 LOCAL AGENCY INVESTMENT GUIDELINES
27005 Disbursements on warrants; checks or
electronic funds transfers; exception
27006 Disbursements on warrants based on orders; payment of warrants 27007 Possession of money; special deposits
27008 Certificates of auditor necessary for receipt of money 27009 Receipt for deposit of moneys into county treasury 27010 Receipt of gifts and bequests
27011 Deposit of private money prohibited; penalty
27012 Conferences between controller and treasurers regarding administration of applicable law; expenses
27013 Administrative cost of investing, depositing or handling funds; reimbursement of county

COUNTY TREASURY OVERSIGHT COMMITTEES
27130 Legislative findings and declarations
27131 Establishment; determinations of size and membership 27132 Membership; pool of candidates
27132.1 Member employment by campaign contributors
27132.2 Member fundraising
27132.3 Member employment in financial services industry 27132.4 Open meetings; Ralph M. Brown Act
27133 Periodic investment policy; preparation by treasurer; committee review and oversight
27134 Periodic audits by committee; article compliance
27135 Costs of compliance; reimbursement
27136 Withdrawal of funds from county treasury pool;
requests; evaluation; approval criteria
27137 Day-to-day operations and decisions; committee involvement

INVESTMENT OF SURPLUS
53600 Local agency
53600.3 Prudent investor standard; investments on behalf of local agencies 53600.5 Objectives; managing public funds
53600.6 Legislative findings and declarations;
solvency and creditworthiness
53601 Local agencies; authorized investments
53601.1 Investment in financial futures or financial option contracts 53601.2 Limited liability corporation
53601.5 Investments; qualified purchase agent
53601.6 Prohibited investments
53601.8 Investment in placement service assisted deposits, including certificates of deposit
432 of 566

52 LOCAL AGENCY INVESTMENT GUIDELINES
53602 Investment in legal investments for savings banks; securities of public districts
53603 Direct purchase of securities
53604 Sale or exchange of securities; reinvestment of proceeds 53605 Sale of securities; application of proceeds to original purposes 53606 Cancellation of bonds issued by purchaser; resale 53607 Delegation of duties to treasurer; monthly report 53608 Deposit of securities; receipt; delegation of authority 53609 Eligible securities for investment of funds held by local agency pursuant to deferred compensation plans
53610 Proposition 1A receivables; purchase by local agency 57603 Investments in public bank obligations

HEALTH FUND INVESTMENTS
53620 Investment funds designated for employee
retiree health benefits' payments
53621 Delegation of the governing body's investment
authority to designated officers
53622 Funds to pay employee retiree health benefits; discharge of duties of the governing body or designated officer

DEPOSIT OF FUNDS
16340 The Voluntary Investment Program Fund
53630 Definitions
53630.1 Legislative findings and declarations;
solvency and creditworthiness
53630.5 Additional definitions
53631 Deposits to pay principal, interest or warrants of bonds; electronic funds disbursement
53632 Classes of deposits
53632.5 Classes of security for deposits
53633 Determination of amounts to be deposited in each class 53634 T ransfers from inactive to active deposits
53635 Local agency investments; commercial paper;
concentration limits
53635.2 Deposit of money belonging to or in custody of local agency 53635.7 Agency consideration when borrowing funds
in excess of $100,000
53635.8 Investment in placement service assisted deposits, including certificates of deposit
53636 Deposited money as in treasury of local agency
53637 Selection of depositary; interest
53638 Maximum deposits
53639 Expense of transporting money
433 of 566

53 LOCAL AGENCY INVESTMENT GUIDELINES
53640 Checks, drafts, and other exchange
53641 Receipt or other evidence of deposit
53642 Withdrawals; check or order
53643 Deposit by treasurer
53644 Withdrawals on demand; penalties; notice
53645 Interest; computation; payment
53646 Investment policy statement; review and approval; legislative body or oversight committee; reports
53647 Interest; payment into fund
53647.5 Interest on bail money on deposit
53648 Deposits and contracts pursuant to federal law or rule 53648.5 T ermination of agreement with depository
53649 Contracts with depositories; contents; filing
53651 Eligible securities to be used as security for deposits 53651.2 Eligible security; promissory note
53651.4 Report of independent certified public accountant; depository using eligible securities; state bank; national bank; fee 53651.6 Letter of credit; terms
53652 Value required to secure active or inactive deposits; market value 53653 Waiver of security on federally insured deposits; interest 53654 Addition or substitution of securities;
withdrawal or release of securities
53655 Perfection of security interest in favor of local agencies 53656 Authorization for holding of security by agent of depository; agents of depository; securities subject to order of depository; exception; release of security; conditions
53657 Authorization to act as agent of depository;
application; form; fee; approval or denial
53658 Maintenance of separate pool for each depository; security interest of local agency
53659 Placement of securities with Federal Reserve or other approved bank; authority by contract
53660 Certification and report by agent of depository
53661 Administrator
53663 Determination of amounts to be deposited as inactive and active deposits
53664 Individual reports; privileged status
53665 Default by depository; payment by agent of depository; excess funds; drawing on letter of credit
53666 Liability of administrator
53667 Expenses of administrator; levy of assessment
on depositories; payments; penalty
53669 Responsibility for money on deposit
434 of 566

54 LOCAL AGENCY INVESTMENT GUIDELINES
53676 T reasurer’s responsibility for securities
53678 Charges for handling and safekeeping of securities 53679 Money under control or coming into possession
of officers and employees other than treasurer
53679.1 Accounting practices; declaration of existing law 53680 Money under control of tax collectors
53681 Deposit in other than prescribed manner; forfeiture of office 53682 Contracts for services by depository; requirements 53683 Consideration as costs applied pro rata against earned interest 53684 Local agencies; excess funds; investment by county treasurer 53686 Local agency fund audit reports
57600 Public bank deposits

TEMPORARY BORROWING
53821.5 Tax and Revenue Anticipation Notes
53840 County Short-term Loans
53841 Limitations on short-term borrowing
53841.5 Tax and Revenue Anticipation Notes
53850 Local agency definition
53851 Local agency borrowing power
53852 Use of proceeds
53852.5 Tax and Revenue Anticipation Notes
53859 Definitions
53859.01 Local agency borrowing power
53859.02 Grant Anticipation Notes
435 of 566

55 LOCAL AGENCY INVESTMENT GUIDELINES
Government Code Section 5925
5925
The purchase or other acquisition of bonds by or on behalf of the state or local government that issued the bonds does not cancel, extinguish, or otherwise affect the bonds and the bonds shall be treated as outstanding bonds for all purposes except to the extent otherwise determined by the issuer or otherwise provided in the constituent instruments defining the rights of the holders of the bonds.

Government Code Section 16340
16340
(a) (1) The Voluntary Investment Program Fund is hereby created within the State T reasury, for the receipt of voluntary deposits from local entities. (2) For purposes of this section, a “local entity” includes, but is not limited to, any city, county, school district, or special district. (b) Each local entity that is approved by its governance body to deposit moneys in the fund shall deposit no less than a total of two hundred million dollars ($200,000,000). The total amount of moneys that may be deposited in the fund from all eligible sources shall not exceed, at any point in time, a total of ten bil- lion dollars ($10,000,000,000), or lesser amount as determined by the Director of Finance, in consultation with the T reasurer.
(c) The terms and conditions of deposits made into the fund shall be set by the Director of Finance, in consultation with the T reasurer. Those terms shall in- clude, but not be limited to, the size of the deposit from a particular local entity, the length of time those moneys shall be held in deposit in the fund, the avail- ability of funds for withdrawal by the local entity depositing the funds, and the annual rate of interest paid on deposits, as described in subdivision (e). However, the director and the T reasurer may only permit deposits that do not exceed funds needed to address an actual or anticipated cash shortfall in the General Fund not exceeding the amounts of existing appropriations, including continuing and continuous appropriations, to which resulting proceeds are to be applied. (d) Moneys held in the Fund shall be invested by the T reasurer in investments authorized pursuant to Sections 16430 and 16480 through the Pooled Money Investment Account, and whenever the Controller determines that moneys in the General Fund, after allowing for internal borrowing from other funds are, or are expected to be, insufficient for the payment of all appropriations made by the Legislature which are to be paid out of the moneys in the General Fund, the State Controller may, based upon his or her estimate of the probable income to the General Fund during the then fiscal year and the probable dates of receipt thereof, may draw a demand or demands against appropriations made from the General Fund to be paid in the then current fiscal year prior to the receipt of the income, and deliver the demand or demands to the T reasurer. The T reasurer 436 of 566

56 LOCAL AGENCY INVESTMENT GUIDELINES
shall register the demand or demands for nonpayment and may borrow moneys from the fund in an amount or amounts that is no greater than the demand or demands provided. The borrowing, together with the interest owed upon the account thereon, shall be paid exclusively from moneys in the General Fund on probable or reasonably anticipated revenues that are expected to be forthcoming within a short period of time, but not excepting recourse to internal borrowing from other funds in the event insufficient moneys are available from the General Fund. Repayment of any of those borrowings shall be considered a priority pay- ment, equivalent to any other loan repayment made from the General Fund to another state fund.
(e) Notwithstanding any other law, the rate of interest to be earned by the depositors shall be the base apportionment rate based on their pro rata share of the earnings of the Pooled Money Investment Account on a quarterly basis at the end of each quarter plus an enhanced amount. The pro rata share shall be determined by a dollar day participation. The base apportionment rate ap- plied to dollar day participation in the fund shall be the quarter-to-date average yield of the Pooled Money Investment Account for the current quarter. The enhancement amount paid to depositors in the fund shall be determined by the Director of Finance, in consultation with the T reasurer, and shall be added to the base rate earned by the Pooled Money Investment Account at the time the apportionment is made. The total interest cost described in this subdivi- sion shall not exceed that provided for in paragraph (1) of subdivision (d) of Section 16731.
(f) Notwithstanding Section 13340, moneys in the fund are hereby continu- ously appropriated for payment of interest expenditures to depositors calcu- lated in accordance with subdivision (e), other related expenses as determined by the Department of Finance, and return of deposits to depositors according to terms and conditions set by the Director of Finance, in consultation with the T reasurer. The amounts paid for interest and other related expenses shall be attributable to the fiscal year in which the borrowing occurred which is also the fiscal year upon which the appropriations against which the demand or demands were made.
(g) The Department of Finance shall determine the budget items to be used for the recording and reporting of interest expenditures and other related expenses pursuant to this section.
(h) Deposits in the fund shall be tracked separately for each participant in the state’s accounting system, and shall be deemed to be assets of each participant. These as- sets shall be reflected as such on each participant’s individual financial statements. (i) These deposits are, and may only be used, to cover short-term cash needs of the state and are, and shall be, in compliance with the provisions of Proposition 58 of March 2004 as stated in subdivision (c), Section 1.3 of Article XVI of the California Constitution. Deposits and borrowing from the fund shall comply with the state’s debt limit restrictions.
(j) Actions by the Director of Finance, in consultation with the T reasurer, in implementing and administering the investment program provided for in this 437 of 566

57 LOCAL AGENCY INVESTMENT GUIDELINES
section and the T reasurer’s and Controller’s actions in borrowing from the fund shall be exempt from the provisions of the Administrative Procedure Act (Chap- ter 3.5 (commencing with Section 11340) of Part 1 of Division 3). (k) Upon projection of insufficient cash in the General Fund, the Director of Finance, in consultation with the T reasurer and Controller, may utilize provisions similar to Section 16381 to facilitate the implementation of the program.

Government Code Section 16429.1-16429.4
16429.1
(a) There is in trust in the custody of the T reasurer the Local Agency Investment Fund, which fund is hereby created. The Controller shall maintain a separate ac- count for each governmental unit having deposits in this fund. (b) Notwithstanding any other provisions of law, a local governmental official, with the consent of the governing body of that agency, having money in its trea- sury not required for immediate needs, may remit the money to the T reasurer for deposit in the Local Agency Investment Fund for the purpose of investment. (c) Notwithstanding any other provisions of law, an officer of any nonprofit cor- poration whose membership is confined to public agencies or public officials, or an officer of a qualified quasi-governmental agency, with the consent of the governing body of that agency, having money in its treasury not required for immediate needs, may remit the money to the T reasurer for deposit in the Local Agency Investment Fund for the purpose of investment.
(d) Notwithstanding any other provision of law or of this section, a local agency, with the approval of its governing body, may deposit in the Local Agency Invest- ment Fund proceeds of the issuance of bonds, notes, certificates of participa- tion, or other evidences of indebtedness of the agency pending expenditure of the proceeds for the authorized purpose of their issuance. In connection with these deposits of proceeds, the Local Agency Investment Fund is authorized to receive and disburse moneys, and to provide information, directly with or to an authorized officer of a trustee or fiscal agent engaged by the local agency, the Lo- cal Agency Investment Fund is authorized to hold investments in the name and for the account of that trustee or fiscal agent, and the Controller shall maintain a separate account for each deposit of proceeds.
(e) The local governmental unit, the nonprofit corporation, or the quasi-govern- mental agency has the exclusive determination of the length of time its money will be on deposit with the T reasurer.
(f) The trustee or fiscal agent of the local governmental unit has the exclusive determination of the length of time proceeds from the issuance of bonds will be on deposit with the T reasurer.
(g) The Local Investment Advisory Board shall determine those quasi-governmen- tal agencies which qualify to participate in the Local Agency Investment Fund. 438 of 566

58 LOCAL AGENCY INVESTMENT GUIDELINES
(h) The T reasurer may refuse to accept deposits into the fund if, in the judgment of the T reasurer, the deposit would adversely affect the state’s portfolio. (i) The T reasurer may invest the money of the fund in securities prescribed in Section 16430. The T reasurer may elect to have the money of the fund invested through the Surplus Money Investment Fund as provided in Article 4 (com- mencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2. (j) Money in the fund shall be invested to achieve the objective of the fund which is to realize the maximum return consistent with safe and prudent treasury management.
(k) All instruments of title of all investments of the fund shall remain in the T reasurer’s vault or be held in safekeeping under control of the T reasurer in any federal reserve bank, or any branch thereof, or the Federal Home Loan Bank of San Francisco, with any trust company, or the trust department of any state or national bank.
(l) Immediately at the conclusion of each calendar quarter, all interest earned and other increment derived from investments shall be distributed by the Controller to the contributing governmental units or trustees or fiscal agents, nonprofit corpora- tions, and quasi-governmental agencies in amounts directly proportionate to the respective amounts deposited in the Local Agency Investment Fund and the length of time the amounts remained therein. An amount equal to the reasonable costs incurred in carrying out the provisions of this section, not to exceed a maximum of 5 percent of the earnings of this fund and not to exceed the amount appropriated in the annual Budget Act for this function, shall be deducted from the earnings prior to distribution. The amount of this deduction shall be credited as reimbursements to the state agencies, including the T reasurer, the Controller, and the Department of Finance, having incurred costs in carrying out the provisions of this section. (m) The T reasurer shall prepare for distribution a monthly report of investments made during the preceding month.
(n) As used in this section, “local agency,” “local governmental unit,” and “local governmental official” includes a campus or other unit and an official, respec- tively, of the California State University who deposits moneys in funds described in Sections 89721, 89722, and 89725 of the Education Code. 16429.2
There is created the Local Investment Advisory Board consisting of five members.

The chairman shall be the State T reasurer or his or her designated representa- tive. T wo members who are qualified by training and experience in the field of investment or finance, shall be appointed by the State T reasurer. T wo members who are treasurers, finance or fiscal officers or business managers, employed by any county, city or local district or municipal corporation of this state, shall be appointed by the T reasurer.

The term of office of each appointed member of the board is two years, but each appointed member serves at the pleasure of the appointing authority. A vacancy 439 of 566

59 LOCAL AGENCY INVESTMENT GUIDELINES
in the appointed membership, occurring other than by expiration of term, shall be filled in the same manner as the original appointment, but for the unexpired term only.

Members of the board who are not state officers or employees shall not receive a salary, but shall be entitled to a per diem allowance of fifty dollars ($50) for each day’s attendance at a meeting of the board, not to exceed three hundred dollars ($300) in any month. All members shall be entitled to reimbursement for expenses incurred in the performance of their duties under this part, including travel and other necessary expenses.

The board’s primary purpose shall be to advise and assist the State T reasurer in formulating the investment and reinvestment of moneys in the Local Agency Investment Fund, and the acquisition, retention, management, and disposition of investments of the fund. The board, from time to time, shall review those policies and advise therein as it considers necessary or desirable. The board shall advise the State T reasurer in the management of the fund and consult the State T reasurer on any matter relating to the investment and reinvestment of moneys in the fund.
16429.3
Moneys placed with the T reasurer for deposit in the Local Agency Investment Fund by cities, counties, special districts, nonprofit corporations, or qualified quasi-governmental agencies shall not be subject to either of the following:
(a) T ransfer or loan pursuant to Sections 16310, 16312, or 16313. (b) Impoundment or seizure by any state official or state agency. 16429.4
The right of a city, county, city and county, special district, nonprofit corpora- tion, or qualified quasi-governmental agency to withdraw its deposited moneys from the Local Agency Investment Fund, upon demand, may not be altered, impaired, or denied, in any way, by any state official or state agency based upon the state’s failure to adopt a State Budget by July 1 of each new fiscal year.

Government Code Section 27000-27013
27000
The county treasurer shall receive and keep safely all money belonging to the county and all other money directed by law to be paid to him and apply and pay it out, rendering the account as required by law.
27000.1
Subject to Section 53607, the board of supervisors may, by ordinance, delegate to the county treasurer the authority to invest or reinvest the funds of the county 440 of 566

60 LOCAL AGENCY INVESTMENT GUIDELINES
and the funds of other depositors in the county treasury, pursuant to Chapter 4 (commencing with Section 53600) of Part 1 of Division 2 of title 5. The county treasurer shall thereafter assume full responsibility for those transactions until the board of supervisors either revokes its delegation of authority, by ordinance, or decides not to renew the annual delegation, as provided in Section 53607. Noth- ing in this section shall limit the county treasurer’s authority pursuant to Section 53635 or 53684.
27000.3
(a) With regard to county funds deposited in the county treasury, the board of su- pervisors is the agent of the county who serves as a fiduciary and is subject to the prudent investor standard, unless a delegation has occurred pursuant to Section 53607 in which case the county treasurer shall be the agent of the county with respect to these funds, serve as a fiduciary, and be subject to the prudent investor standard and the board of supervisors shall not be the agent, serve as a fiduciary, or be subject to the prudent investor standard.
(b) With regard to funds deposited in the county treasury that are deposited by local agencies other than the county and at the discretion of those local agencies, the county treasurer serves as a fiduciary subject to the prudent investor standard. (c) When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, the county treasurer or the board of supervisors, as applica- ble, shall act with care, skill, prudence, and diligence under the circumstances then prevailing, specifically including, but not limited to, the general economic condi- tions and the anticipated needs of the county and other depositors, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the county and the other depositors. Within the limitations of this section and considering individual investments as part of an overall investment strategy, investments may be acquired as authorized by law.

Nothing in this chapter is intended to grant investment authority to any person or governing body except as provided in Sections 53601, 53607, and 53635. 27000.5
When investing, reinvesting, purchasing, acquiring, exchanging, selling, or man- aging public funds, the primary objective of the county treasurer or the board of supervisors, as the case may be, shall be to safeguard the principal of the funds under the treasurer’s or the board’s control. The secondary objective shall be to meet the liquidity needs of the depositor. The third objective shall be to achieve a return on the funds under his or her control.
27000.6
The provisions of Sections 27000.7, 27000.8, and 27000.9 shall become effec- tive only in those counties in which, prior to the first date of the period for filing declarations of candidacy for the office of county treasurer, county tax collector, or county treasurer-tax collector, the board of supervisors by majority vote at 441 of 566

61 LOCAL AGENCY INVESTMENT GUIDELINES
a regular meeting with all members present, enact an ordinance adopting the provisions of those sections. That ordinance may be repealed by the board of supervisors at any time.
27000.7
(a) A person shall not be eligible for election or appointment to the office of county treasurer, county tax collector, or county treasurer-tax collector of any county unless that person meets at least one of the following criteria:
(1) The person has served in a senior financial management position in a county, city, or other public agency dealing with similar financial responsibilities for a continuous period of not less than three years, including, but not limited to, treasurer, tax collector, auditor, auditor-controller, or the chief deputy or an as- sistant in those offices.
(2) The person possesses a valid baccalaureate, masters, or doctoral degree from an accredited college or university in any of the following major fields of study:
business administration, public administration, economics, finance, accounting, or a related field, with a minimum of 16 college semester units, or their equiva- lent, in accounting, auditing, or finance.
(3) The person possesses a valid certificate issued by the California Board of Ac- countancy pursuant to Chapter 1 (commencing with Section 5000) of Division 3 of the Business and Professions Code, showing that person to be, and a permit authorizing that person to practice as, a certified public accountant. (4) The person possesses a valid charter issued by the Institute of Chartered Financial Analysts showing the person to be designated a Chartered Financial Analyst, with a minimum of 16 college semester units, or their equivalent, in accounting, auditing, or finance.
(b)(1) This section shall only apply to any person duly elected or appointed as a county treasurer, county tax collector, or county treasurer-tax collector on or after January 1, 1998.
(2) The amendments made by the act adding this paragraph apply to any person duly elected or appointed as a county treasurer, county tax collector, or county treasurer-tax collector on or after January 1, 2024.
27000.8
Any duly elected county treasurer, county tax collector, or county treasurer-tax collector serving in that office on January 1, 1996, may serve for his or her re- maining term of office during which period of time the requirements of this sec- tion shall not apply. After the election of a county treasurer, county tax collector, or county treasurer-tax collector to office, that person shall complete a valid con- tinuing course of study as prescribed in this section, and shall during the person’s four-year term of office on or before June 30 of the fourth year, render to the Controller a certification indicating that the person has successfully completed a continuing education program consisting of, at a minimum, 48 hours, or an 442 of 566

62 LOCAL AGENCY INVESTMENT GUIDELINES
equivalent amount of continuing education units within the discipline of treasury management, tax collection, public finance, public administration, governmental accounting, or directly related subjects, offered by a recognized state or national association, institute, or accredited college or university, or the California Debt and Investment Advisory Commission, that provides the requisite educational programs prescribed in this section. The willful or negligent failure of any elected county treasurer, county tax collector, or county treasurer-tax collector to comply with the requirements of this section shall be deemed a violation of this section. 27000.9
Notwithstanding any other requirement of law, any duly appointed county of- ficer serving in the capacity of county treasurer, county tax collector, or county treasurer-tax collector shall, beginning in 2000, complete a valid continuing course of study as prescribed in this section, and shall, on or before June 30 of each two-year period, render to the Controller, a certification indicating that the county officer has successfully completed a continuing education program consisting of, at a minimum, 24 hours or an equivalent amount of continuing education units within the discipline of treasury management, tax collection, public finance, public administration, governmental accounting, or directly re- lated subjects, offered by a recognized state or national association, institute, or accredited college or university, or the California Debt and Investment Advi- sory Commission, that provides the requisite educational programs prescribed in this section. The willful or negligent failure of any county officer serving in the capacity of county treasurer, county tax collector, or county treasurer-tax collector to comply with the requirements of this section shall be deemed a violation of this section.
27001
The treasurer shall file and keep the certificates of the auditor delivered to him or her when money is paid into the treasury.

Notwithstanding Sections 26201, 26202, and 26205, the treasurer may destroy any certificate pursuant to this section under either of the following circumstances:
(a) The certificate has been filed for more than five years. (b) The certificate has been filed for more than one year, and all of the following conditions are complied with:
(1) The record, paper, or document is photographed, microphotographed, repro- duced by electronically recorded video images on magnetic surfaces, or recorded on optical disk or reproduced on any other medium that does not permit additions, deletions, or changes to the original document and is produced in compliance with Section 12168.7 for recording of permanent records or nonpermanent records if the copy is kept or maintained for five years from the date of the document. (2) The device used to reproduce the record, paper, or document on film or any other medium is one that accurately reproduces the original thereof in all details.

A duplicate copy of any record reproduced in compliance with Section 12168.7 443 of 566

63 LOCAL AGENCY INVESTMENT GUIDELINES
for recording of permanent or nonpermanent records, whichever applies, shall be deemed an original.
(3) The photographs, microphotographs, or other reproductions on film or any other medium are placed in conveniently accessible files and provision is made for preserving, examining, and using the same.
(4) The record, paper, or document is reproduced and preserved utilizing other information technology.
27002
The treasurer shall keep an account of the receipt and expenditure of all money received or paid out by him or her in books provided for the purpose. He or she shall enter in the books the amount, the time, from whom, and on what account all money was received by him or her, and the warrant number, the amount, time, and on what account all disbursements were made by him or her. 27002.1
(a) The treasurer may, in lieu of entering in books an account of the receipt and expenditure of all money received or paid out by him or her as provided in Section 27002, photograph, microphotograph, photocopy, or enter into an electronic data-processing system that utilizes optical transmission and filing, all receipts for money received by him or her and all warrants paid out by him or her. (b) Every reproduction described in subdivision (a) shall be deemed and con- sidered an original, and a transcript, exemplification, or certified copy of any of those reproductions shall be deemed and considered a transcript, exemplifica- tion, or certified copy, as the case may be, of the original. (c) All reproductions described in subdivision (a) shall be properly indexed and placed in convenient, accessible files. Each roll of microfilm shall be deemed and constitute a book, and shall be designated and numbered, and provision shall be made for preserving, examining, and using it. A duplicate of each roll of micro- film shall be made and kept in a safe and separate place. 27003
The treasurer shall keep his or her books or any other authorized form of record so that the amounts received and paid out on account of separate funds or spe- cific appropriations are exhibited in separate and distinct accounts, and the whole receipts and expenditures shown in one general or cash account. 27005
The treasurer shall disburse the county money and all other money placed in his or her custody by official authority only on county warrants, checks, or electronic fund transfers issued by the county auditor, except for the making of legal investments.
444 of 566

64 LOCAL AGENCY INVESTMENT GUIDELINES
27006
The treasurer shall disburse the money in the treasury on county warrants only when they are based on orders of the board of supervisors, upon order of the su- perior court, or as otherwise provided by law. In the payment of the warrants he may issue his order, check, or draft drawn upon proper funds that are on deposit in any bank.
27007
The treasurer shall keep all money belonging to the State, or any county of the State in his own possession until disbursed according to law. He shall not place the money in the possession of any person to be used for any purpose, nor shall he loan or in any manner use, or permit any person to use it, except as provided by law. This section does not prohibit him from making special deposits for the safe-keeping of public money, but he is liable therefore on his official bond. 27008
(a) The treasurer shall not receive money into the treasury or for deposit with him or her as treasurer, unless it is accompanied by the certificate of the auditor. (b) Notwithstanding subdivision (a), the auditor and treasurer may establish al- ternate control procedures for the treasurer to receive or deposit money without the certificate of the auditor.
27009
The treasurer shall give a receipt to each person who deposits money into the county treasury.
27010
The treasurer may receive any money constituting gift, bequest, or devise, and pay it out in accordance with the terms thereof, or, if none are fixed, according to law.
27011
Any county officer who knowingly accepts or allows any deposit in the county treasury of money from any private and unofficial source is guilty of a misde- meanor, punishable by imprisonment in the county jail for not less than six months nor more than one year, or by a fine of not less than five hundred dollars ($500) and not more than five thousand dollars ($5,000), or by both that fine and imprisonment, and shall forfeit his or her office.
27012
The Controller may summon county treasurers or the authorized representa- tive of any county treasurer to meet with the Controller or his or her duly 445 of 566

65 LOCAL AGENCY INVESTMENT GUIDELINES
authorized representatives, in those groups and at that place or those places within the state as may be designated by the Controller for the purpose of dis- cussing the interpretation, procedures, uniformity of operation, and efficient administration of the Revenue and Taxation Code and the Government Code.

The actual and necessary expenses of any county officer or his or her autho- rized representative that are incurred while traveling to and from or while attending any meeting called pursuant to this section by the Controller shall be a charge against the county, to be paid in the same manner as other county charges are paid, provided that prior approval of the board of supervisors has been obtained.
27013
Notwithstanding any other provision of law, any treasurer, or other authorized county officer, who invests, deposits or otherwise handles funds for public agen- cies for the purpose of earning interest or other income on such funds as permit- ted by law, may deduct from such interest or income, before distribution thereof, the actual administrative cost of such investing, depositing or handling of funds and of distribution of such interest or income. Such cost reimbursement shall be paid into the county general fund.

Government Code Section 27130-27137
27130
The Legislature finds and declares that local agencies, including school dis- tricts, should participate in reviewing the policies that guide the investment of those funds. The Legislature further finds and declares that by pooling de- posits from local agencies and other participants, county treasuries operate in the public interest when they consolidate banking and investment activities, reduce duplication, achieve economies of scale, and carry out coherent and consolidated investment strategies. The Legislature further finds and declares that the creation of county treasury oversight committees will promote the public interest by involving depositors in the management of their funds and by enhancing the security and investment return on their funds by providing a more stable and predictable balance for investment by establishing criteria for the withdrawal of funds.
27131
(a) The board of supervisors in each county or city and county may, if the county or city and county is investing surplus funds, establish a county treasury oversight committee. The board of supervisors, in consultation with the county treasurer, shall determine the exact size of the committee, which shall consist of from 3 to 11 members, and the categories from which the members shall be represented, as specified in subdivisions (a) to (g), inclusive, of Section 27132. Members shall be nominated by the treasurer and confirmed by the board of supervisors. 446 of 566

66 LOCAL AGENCY INVESTMENT GUIDELINES
(b) In recognition of the state and local interests served by the action made op- tional in subdivision (a), the Legislature encourages local agencies to continue taking the action formerly mandated by this section. However, nothing in this subdivision may be construed to impose any liability on a local agency that does not continue to take the formerly mandated action.
27132
The county treasury oversight committee, pursuant to Section 27131, shall con- sist of members appointed from the following:
(a) The county treasurer.
(b) The county auditor, auditor-controller, or finance director, as the case may be. (c) A representative appointed by the county board of supervisors. (d) The county superintendent of schools or his or her designee. (e) A representative selected by a majority of the presiding officers of the govern- ing bodies of the school districts and community college districts in the county. (f) A representative selected by a majority of the presiding officers of the legisla- tive bodies of the special districts in the county that are required or authorized to deposit funds in the county treasury.
(g) Up to five other members of the public.
(1) A majority of the other public members shall have expertise in, or an aca- demic background in, public finance.
(2) The other public members shall be economically diverse and bipartisan in political registration.
27132.1
A member may not be employed by an entity that has (a) contributed to the campaign of a candidate for the office of local treasurer, or (b) contributed to the campaign of a candidate to be a member of a legislative body of any local agency that has deposited funds in the county treasury, in the previous three years or during the period that the employee is a member of the committee. 27132.2
A member may not directly or indirectly raise money for a candidate for local treasurer or a member of the governing board of any local agency that has depos- ited funds in the county treasury while a member of the committee. 27132.3
A member may not secure employment with, or be employed by, bond under- writers, bond counsel, security brokerages or dealers, or financial services firms, 447 of 566

67 LOCAL AGENCY INVESTMENT GUIDELINES
with whom the treasurer is doing business during the period that the person is a member of the committee or for one year after leaving the committee. 27132.4
Committee meetings shall be open to the public and subject to the Ralph M.

Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5).
27133
In any county that establishes a county treasury oversight committee pursuant to this article, the county treasurer shall annually prepare an investment policy that will be reviewed and monitored by the county treasury oversight committee. The investment policy shall include all of the following:
(a) A list of securities or other instruments in which the county treasury may invest, according to law, including the maximum allowable percentage by type of security.
(b) The maximum term of any security purchased by the county treasury. (c) The criteria for selecting security brokers and dealers from, to, or through whom the county treasury may purchase or sell securities or other instruments.

The criteria shall prohibit the selection of any broker, brokerage, dealer, or secu- rities firm that has, within any consecutive 48-month period following January 1, 1996, made a political contribution in an amount exceeding the limitations contained in Rule G-37 of the Municipal Securities Rulemaking Board, to the local treasurer, any member of the governing board of the local agency, or any candidate for those offices.
(d) Limits on the receipt of honoraria, gifts, and gratuities from advisors, brokers, dealers, bankers, or other persons with whom the county treasury conducts busi- ness by any member of the county treasury oversight committee. These limits may be in addition to the limits set by a committee member’s own agency, by state law, or by the Fair Political Practices Commission. (e) A requirement that the county treasurer provide the county treasury oversight committee with an investment report as required by the board of supervisors. (f) The manner of calculating and apportioning the costs, authorized by Section 27013, of investing, depositing, banking, auditing, reporting, or otherwise han- dling or managing funds.
(g) The terms and conditions under which local agencies and other entities that are not required to deposit their funds in the county treasury may deposit funds for investment purposes.
(h) Criteria for considering requests to withdraw funds from the county treasury, pursuant to Section 27136. The criteria shall include an assessment of the effect of a proposed withdrawal on the stability and predictability of the investments in the county treasury.
448 of 566

68 LOCAL AGENCY INVESTMENT GUIDELINES
27134
The county treasury oversight committee shall cause an annual audit to be con- ducted to determine the county treasury’s compliance with this article. The audit may include issues relating to the structure of the investment portfolio and risk. 27135
The costs of complying with this article shall be county charges and may be included with those charges enumerated under Section 27013. 27136
(a) Notwithstanding any other provision of law, any local agency, public agency, public entity, or public official that has funds on deposit in the county treasury pool and that seeks to withdraw funds for the purpose of investing or depositing those funds outside the county treasury pool, shall first submit the request for withdrawal to the county treasurer before withdrawing funds from the county treasury pool.
(b) The county treasurer shall evaluate each proposed withdrawal for its consis- tency with the criteria adopted pursuant to subdivision (h) of Section 27133.

Prior to approving a withdrawal, the county treasurer shall find that the proposed withdrawal will not adversely affect the interests of the other depositors in the county treasury pool.
27137
Nothing in this article shall be construed to allow the county treasury oversight committee to direct individual investment decisions, select individual investment advisors, brokers, or dealers, or impinge on the day-to-day operations of the county treasury.

Government Code Section 53600-53610
53600
As used in this article, “local agency” means county, city, city and county, includ- ing a chartered city or county, school district, community college district, public district, county board of education, county superintendent of schools, or any public or municipal corporation.
53600.3
Except as provided in subdivision (a) of Section 27000.3, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When invest- ing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public 449 of 566

69 LOCAL AGENCY INVESTMENT GUIDELINES
funds, a trustee shall act with care, skill, prudence, and diligence under the cir- cumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and main- tain the liquidity needs of the agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.
53600.5
When investing, reinvesting, purchasing, acquiring, exchanging, selling, or man- aging public funds, the primary objective of a trustee shall be to safeguard the principal of the funds under its control. The secondary objective shall be to meet the liquidity needs of the depositor. The third objective shall be to achieve a re- turn on the funds under its control.
53600.6.

The Legislature hereby finds that the solvency and creditworthiness of each in- dividual local agency can impact the solvency and creditworthiness of the state and other local agencies within the state. Therefore, to protect the solvency and creditworthiness of the state and all of its political subdivisions, the Legislature hereby declares that the deposit and investment of public funds by local officials and local agencies is an issue of statewide concern.
53601.

This section shall apply to a local agency that is a city, a district, or other local agency that does not pool money in deposits or investments with other local agencies, other than local agencies that have the same governing body. However, Section 53635 shall apply to all local agencies that pool money in deposits or investments with other local agencies that have separate governing bodies. The legislative body of a local agency having moneys in a sinking fund or moneys in its treasury not required for the immediate needs of the local agency may invest any portion of the moneys that it deems wise or expedient in those investments set forth below. A local agency purchasing or obtaining any securities prescribed in this section, in a negotiable, bearer, registered, or nonregistered format, shall require delivery of the securities to the local agency, including those purchased for the agency by financial advisers, consultants, or managers using the agency’s funds, by book entry, physical delivery, or by third-party custodial agreement.

The transfer of securities to the counterparty bank’s customer book entry account may be used for book entry delivery.

For purposes of this section, “counterparty” means the other party to the trans- action. A counterparty bank’s trust department or separate safekeeping depart- ment may be used for the physical delivery of the security if the security is held in the name of the local agency. Where this section specifies a percentage limitation for a particular category of investment, that percentage is applicable 450 of 566

70 LOCAL AGENCY INVESTMENT GUIDELINES
only at the date of purchase. For purposes of compliance with this section, an investment’s term or remaining maturity shall be measured from the settlement date to final maturity. A security purchased in accordance with this section shall not have a forward settlement date exceeding 45 days from the time of investment. Where this section does not specify a limitation on the term or re- maining maturity at the time of the investment, no investment shall be made in any security, other than a security underlying a repurchase or reverse repurchase agreement or securities lending agreement authorized by this section, that at the time of the investment has a term remaining to maturity in excess of five years, unless the legislative body has granted express authority to make that in- vestment either specifically or as a part of an investment program approved by the legislative body no less than three months prior to the investment:
(a) Bonds issued by the local agency, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency or by a department, board, agency, or authority of the local agency. (b) United States T reasury notes, bonds, bills, or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for the pay- ment of principal and interest.
(c) Registered state warrants or treasury notes or bonds of this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state.
(d) Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue- producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California. (e) Bonds, notes, warrants, or other evidences of indebtedness of a local agency within this state, including bonds payable solely out of the revenues from a rev- enue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. (f) Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaran- teed as to principal and interest by federal agencies or United States government- sponsored enterprises.
(g) Bankers’ acceptances otherwise known as bills of exchange or time drafts that are drawn on and accepted by a commercial bank. Purchases of bankers’ accep- tances shall not exceed 180 days’ maturity or 40 percent of the agency’s moneys that may be invested pursuant to this section. However, no more than 30 percent of the agency’s moneys may be invested in the bankers’ acceptances of any one commercial bank pursuant to this section.

This subdivision does not preclude a municipal utility district from investing moneys in its treasury in a manner authorized by the Municipal Utility District Act (Division 6 (commencing with Section 11501) of the Public Utilities Code). 451 of 566

71 LOCAL AGENCY INVESTMENT GUIDELINES
(h) Commercial paper of “prime” quality of the highest ranking or of the high- est letter and number rating as provided for by a nationally recognized statistical rating organization (NRSRO). The entity that issues the commercial paper shall meet all of the following conditions in either paragraph (1) or (2):
(1) The entity meets the following criteria:
(A) Is organized and operating in the United States as a general corporation. (B) Has total assets in excess of five hundred million dollars ($500,000,000). (C) Has debt other than commercial paper, if any, that is rated in a rating category of “A” or its equivalent or higher by an NRSRO. (2) The entity meets the following criteria:
(A) Is organized within the United States as a special purpose corporation, trust, or limited liability company.
(B) Has program wide credit enhancements including, but not limited to, over- collateralization, letters of credit, or a surety bond. (C) Has commercial paper that is rated “A-1” or higher, or the equivalent, by an NRSRO. Eligible commercial paper shall have a maximum maturity of 270 days or less. Local agencies, other than counties or a city and county, that have less than one hundred million dollars ($100,000,000) of investment assets un- der management, may invest no more than 25 percent of their moneys in eli- gible commercial paper. Local agencies, other than counties or a city and county, that have one hundred million dollars ($100,000,000) or more of investment assets under management may invest no more than 40 percent of their moneys in eligible commercial paper. A local agency, other than a county or a city and a county, may invest no more than 10 percent of its total investment assets in the commercial paper and the medium-term notes of any single issuer. Counties or a city and county may invest in commercial paper pursuant to the concentration limits in subdivision (a) of Section 53635.
(i) Negotiable certificates of deposit issued by a nationally or state-chartered bank, a savings association or a federal association (as defined by Section 5102 of the Financial Code), a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank. Purchases of negotiable certificates of deposit shall not exceed 30 percent of the agency’s moneys that may be invested pursuant to this section. For purposes of this section, negotiable certificates of deposit do not come within Article 2 (commencing with Section 53630), except that the amount so invested shall be subject to the limitations of Section 53638.

The legislative body of a local agency and the treasurer or other official of the local agency having legal custody of the moneys are prohibited from investing local agency funds, or funds in the custody of the local agency, in negotiable certificates of deposit issued by a state or federal credit union if a member of the legislative body of the local agency, or a person with investment decision-making authority in the administrative office manager’s office, budget office, auditor- controller’s office, or treasurer’s office of the local agency also serves on the board of directors, or any committee appointed by the board of directors, or the credit 452 of 566

72 LOCAL AGENCY INVESTMENT GUIDELINES
committee or the supervisory committee of the state or federal credit union issu- ing the negotiable certificates of deposit.
(j)(1) Investments in repurchase agreements or reverse repurchase agreements or securities lending agreements of any securities authorized by this section, as long as the agreements are subject to this subdivision, including the delivery require- ments specified in this section.
(2) Investments in repurchase agreements may be made, on an investment au- thorized in this section, when the term of the agreement does not exceed one year. The market value of securities that underlie a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities and the value shall be adjusted no less than quarterly. Since the market value of the underlying securities is subject to daily market fluctuations, the investments in repurchase agreements shall be in compliance if the value of the underlying securities is brought back up to 102 percent no later than the next business day. (3) Reverse repurchase agreements or securities lending agreements may be uti- lized only when all of the following conditions are met:
(A) The security to be sold using a reverse repurchase agreement or securi- ties lending agreement has been owned and fully paid for by the local agency for a minimum of 30 days prior to sale.
(B) The total of all reverse repurchase agreements and securities lending agree- ments on investments owned by the local agency does not exceed 20 percent of the base value of the portfolio.
(C) The agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security. (D) Funds obtained or funds within the pool of an equivalent amount to that ob- tained from selling a security to a counterparty using a reverse repurchase agree- ment or securities lending agreement shall not be used to purchase another secu- rity with a maturity longer than 92 days from the initial settlement date of the reverse repurchase agreement or securities lending agreement, unless the everse repurchase agreement or securities lending agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security.
(4)(A) Investments in reverse repurchase agreements, securities lending agree- ments, or similar investments in which the local agency sells securities prior to purchase with a simultaneous agreement to repurchase the security may be made only upon prior approval of the governing body of the local agency and shall be made only with primary dealers of the Federal Reserve Bank of New York or with a nationally or state-chartered bank that has or has had a significant banking relationship with a local agency.
453 of 566

73 LOCAL AGENCY INVESTMENT GUIDELINES
(B) For purposes of this chapter, “significant banking relationship” means any of the following activities of a bank:
(i) Involvement in the creation, sale, purchase, or retirement of a local agency’s bonds, warrants, notes, or other evidence of indebtedness. (ii) Financing of a local agency’s activities.
(iii) Acceptance of a local agency’s securities or funds as deposits. (5)(A) “Repurchase agreement” means a purchase of securities by the local agency pursuant to an agreement by which the counterparty seller will repurchase the securities on or before a specified date and for a specified amount and the coun- terparty will deliver the underlying securities to the local agency by book entry, physical delivery, or by third-party custodial agreement. The transfer of underly- ing securities to the counterparty bank’s customer book-entry account may be used for book-entry delivery.
(B) “Securities,” for purposes of repurchase under this subdivision, means securi- ties of the same issuer, description, issue date, and maturity. (C) “Reverse repurchase agreement” means a sale of securities by the local agency pursuant to an agreement by which the local agency will repurchase the securities on or before a specified date and includes other comparable agreements. (D) “Securities lending agreement” means an agreement under which a local agen- cy agrees to transfer securities to a borrower who, in turn, agrees to provide col- lateral to the local agency. During the term of the agreement, both the securities and the collateral are held by a third party. At the conclusion of the agreement, the securities are transferred back to the local agency in return for the collateral. (E) For purposes of this section, the base value of the local agency’s pool portfolio shall be that dollar amount obtained by totaling all cash balances placed in the pool by all pool participants, excluding any amounts obtained through selling securities by way of reverse repurchase agreements, securities lending agreements, or other similar borrowing methods.
(F) For purposes of this section, the spread is the difference between the cost of funds obtained using the reverse repurchase agreement and the earnings obtained on the reinvestment of the funds.
(k) Medium-term notes, defined as all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by cor- porations organized and operating within the United States or by depository insti- tutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subdivision shall be rated in a rating category of “A” or its equivalent or better by an NRSRO. Purchases of medium- term notes shall not include other instruments authorized by this section and shall not exceed 30 percent of the agency’s moneys that may be invested pursuant to this section. A local agency, other than a county or a city and a county, may invest no more than 10 percent of its total investment assets in the commercial paper and the medium-term notes of any single issuer.
454 of 566

74 LOCAL AGENCY INVESTMENT GUIDELINES
(l)(1) Shares of beneficial interest issued by diversified management companies that invest in the securities and obligations as authorized by subdivisions (a) to (k), inclusive, and subdivisions (m) to (q), inclusive, and that comply with the investment restrictions of this article and Article 2 (commencing with Sec- tion 53630). However, notwithstanding these restrictions, a counterparty to a reverse repurchase agreement or securities lending agreement is not required to be a primary dealer of the Federal Reserve Bank of New York if the com- pany’s board of directors finds that the counterparty presents a minimal risk of default, and the value of the securities underlying a repurchase agreement or securities lending agreement may be 100 percent of the sales price if the securi- ties are marked to market daily.
(2) Shares of beneficial interest issued by diversified management companies that are money market funds registered with the United States Securities and Ex- change Commission under the Investment Company Act of 1940 (15 U.S.C.

Sec. 80a-1 et seq.).
(3) If investment is in shares issued pursuant to paragraph (1), the company shall have met either of the following criteria:
(A) Attained the highest ranking or the highest letter and numerical rating pro- vided by not less than two NRSROs.
(B) Retained an investment adviser registered or exempt from registration with the United States Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by subdi- visions (a) to (k), inclusive, and subdivisions (m) to (q), inclusive, and with assets under management in excess of five hundred million dollars ($500,000,000). (4) If investment is in shares issued pursuant to paragraph (2), the company shall have met either of the following criteria:
(A) Attained the highest ranking or the highest letter and numerical rating pro- vided by not less than two NRSROs.
(B) Retained an investment adviser registered or exempt from registration with the United States Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under man- agement in excess of five hundred million dollars ($500,000,000). (5) The purchase price of shares of beneficial interest purchased pursuant to this subdivision shall not include any commission that the companies may charge and shall not exceed 20 percent of the agency’s moneys that may be invested pursuant to this section. However, no more than 10 percent of the agency’s funds may be invested in shares of beneficial interest of any one mutual fund pursuant to paragraph (1).
(m) Moneys held by a trustee or fiscal agent and pledged to the payment or security of bonds or other indebtedness, or obligations under a lease, install- ment sale, or other agreement of a local agency, or certificates of participation in those bonds, indebtedness, or lease installment sale, or other agreements, may be invested in accordance with the statutory provisions governing the issuance of 455 of 566

75 LOCAL AGENCY INVESTMENT GUIDELINES
those bonds, indebtedness, or lease installment sale, or other agreement, or to the extent not inconsistent therewith or if there are no specific statutory provisions, in accordance with the ordinance, resolution, indenture, or agreement of the lo- cal agency providing for the issuance.
(n) Notes, bonds, or other obligations that are at all times secured by a valid first priority security interest in securities of the types listed by Section 53651 as eligible securities for the purpose of securing local agency deposits having a market value at least equal to that required by Section 53652 for the pupose of securing local agency deposits. The securities serving as collateral shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank that is not affiliated with the issuer of the secured obliga- tion, and the security interest shall be perfected in accordance with the require- ments of the Uniform Commercial Code or federal regulations applicable to the types of securities in which the security interest is granted. (o)(1) A mortgage passthrough security, collateralized mortgage obligation, mort- gage-backed or other pay-through bond, equipment lease-backed certificate, con- sumer receivable passthrough certificate, or consumer receivable-backed bond. (2) For securities eligible for investment under this subdivision not issued or guaranteed by an agency or issuer identified in subdivision (b) or (f), the follow- ing limitations apply:
(A) The security shall be rated in a rating category of “AA” or its equivalent or bet- ter by an NRSRO and have a maximum remaining maturity of five years or less. (B) Purchase of securities authorized by this paragraph shall not exceed 20 per- cent of the agency’s surplus moneys that may be invested pursuant to this section. (p) Shares of beneficial interest issued by a joint powers authority organized pursu- ant to Section 6509.7 that invests in the securities and obligations authorized in subdivisions (a) to (r), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority.

T o be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:
(1) The adviser is registered or exempt from registration with the United States Securities and Exchange Commission.
(2) The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (q), inclusive. (3) The adviser has assets under management in excess of five hundred million dollars ($500,000,000).
(q) United States dollar denominated senior unsecured unsubordinated obliga- tions issued or unconditionally guaranteed by the International Bank for Re- construction and Development, International Finance Corporation, or Inter- American Development Bank, with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this subdivision shall be rated in a rating category of “AA” or its equivalent 456 of 566

76 LOCAL AGENCY INVESTMENT GUIDELINES
or better by an NRSRO and shall not exceed 30 percent of the agency’s moneys that may be invested pursuant to this section.
(r) Commercial paper, debt securities, or other obligations of a public bank, as defined in Section 57600.

This section shall remain in effect only until January 1, 2026, and as of that date is repealed.
53601.1
The authority of a local agency to invest funds pursuant to Section 53601 in- cludes, in addition thereto, authority to invest in financial futures or financial option contracts in any of the investment categories enumerated in that section. 53601.2
As used in this article, “corporation” includes a limited liability company. 53601.5
The purchase by a local agency of any investment authorized pursuant to Section 53601 or 53601.1, not purchased directly from the issuer, shall be purchased either from an institution licensed by the state as a broker-dealer, as defined in Section 25004 of the Corporations Code, or from a member of a federally regu- lated securities exchange, from a national or state-chartered bank, from a savings association or federal association (as defined by Section 5102 of the Financial Code) or from a brokerage firm designated as a primary government dealer by the Federal Reserve bank.
53601.6
(a) A local agency shall not invest any funds pursuant to this article or pursuant to Article 2 (commencing with Section 53630) in inverse floaters, range notes, or mortgage-derived, interest-only strips.
(b) (1) Except as provided in paragraph (2), a local agency shall not invest any funds pursuant to this article or pursuant to Article 2 (commencing with Sec- tion 53630) in any security that could result in zero interest accrual if held to maturity. However, a local agency may hold prohibited instruments until their maturity dates. The limitation in this subdivision shall not apply to local agency investments in shares of beneficial interest issued by diversified management companies registered under the Investment Company Act of 1940 (15 U.S.C.

Sec. 80a-1 et seq.) that are authorized for investment pursuant to subdivision (l) of Section 53601.
(2) Notwithstanding the prohibition in paragraph (1), a local agency may invest in securities issued by, or backed by, the United States government that could result in zero- or negative-interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. A local agency may hold these instruments until their maturity dates.
457 of 566

77 LOCAL AGENCY INVESTMENT GUIDELINES
(c) This section shall remain in effect only until January 1, 2026, and as of that date is repealed.
53601.8
Notwithstanding any other provision of this code, a local agency that has the authority under law to invest funds, at its discretion, may invest a portion of its surplus funds in deposits at a commercial bank, savings bank, savings and loan association, or credit union that uses a private sector entity that assists in the placement of deposits. The following conditions shall apply:
(a) The local agency shall choose a nationally or state-chartered commercial bank, savings bank, savings and loan association, or credit union in this state to invest the funds, which shall be known as the “selected” depository institution. (b) The selected depository institution may use a private sector entity to help place local agency deposits with one or more commercial banks, savings banks, savings and loan associations, or credit unions that are located in the United States and are within the network used by the private sector entity for this purpose. (c) The selected depository institution shall request that the local agency in- form it of depository institutions at which the local agency has other deposits, and the selected depository institution shall provide that information to the private sector entity.
(d) Any private sector entity used by a selected depository institution to help place its local agency deposits shall maintain policies and procedures requiring all of the following:
(1) The full amount of each deposit placed pursuant to subdivision (b) and the in- terest that may accrue on each such deposit shall at all times be insured by the Fed- eral Deposit Insurance Corporation or the National Credit Union Administration. (2) Every depository institution where funds are placed shall be capitalized at a level that is sufficient, and be otherwise eligible, to receive such deposits pursu- ant to regulations of the Federal Deposit Insurance Corporation or the National Credit Union Administration, as applicable.
(3) At the time of the local agency’s investment with a selected depository insti- tution and no less than monthly thereafter, the private sector entity shall ensure that the local agency is provided with an inventory of all depository institutions in which deposits have been placed on the local agency’s behalf, that are within the private sector entity’s network.
(4) Within its network, the private sector entity shall ensure that it does not place additional deposits from a particular local agency with any depository institu- tion identified pursuant to subdivision (c) as holding that local agency’s deposits if those additional deposits would result in that local agency’s total amount on deposit at that depository institution exceeding the Federal Deposit Insurance Corporation or the National Credit Union Administration insurance limit. 458 of 566

78 LOCAL AGENCY INVESTMENT GUIDELINES
(e) If a selected depository uses two or more private sector entities to assist in the placement of a local agency’s deposits, the selected depository shall ensure that it does not place additional deposits from a particular local agency with a depository institution if those additional deposits would result in that local agency’s total amount on deposit at that depository institution exceeding the Federal Deposit Insurance Corporation or the National Credit Union Admin- istration insurance limit.
(f) The selected depository institution shall serve as a custodian for each such deposit.
(g) On the same date that the local agency’s funds are placed pursuant to sub- division (b) by the private sector entity, the selected depository institution shall receive an amount of insured deposits from other financial institutions that, in total, are equal to, or greater than, the full amount of the principal that the local agency initially deposited through the selected depository institution pursuant to subdivision (b).
(h) Notwithstanding subdivisions (a) to (g), inclusive, a credit union shall not act as a selected depository institution under this section unless both of the following conditions are satisfied:
(1) The credit union offers federal depository insurance through the National Credit Union Administration.
(2) The credit union is in possession of written guidance or other written communication from the National Credit Union Administration authorizing participation of federally insured credit unions in one or more deposit place- ment services and affirming that the moneys held by those credit unions while participating in a deposit placement service will at all times be insured by the federal government.
(i) It is the intent of the Legislature that this section shall not restrict compe- tition among private sector entities that provide placement services pursuant to this section.
(j) The deposits placed pursuant to this section shall be subject to Section 53638 and shall not, in total, exceed 30 percent of the agency’s funds that may be in- vested for this purpose.
(k) This section shall become operative on January 1, 2026. 53602
The legislative body shall invest only in notes, bonds, bills, certificates of in- debtedness, warrants, or registered warrants which are legal investments for savings banks in the State, provided, that the board of supervisors of a county may, by a four-fifths vote thereof, invest in notes, warrants or other evidences of indebtedness of public districts wholly or partly within the county, whether or not such notes, warrants, or other evidences of indebtedness are legal invest- ments for savings banks.
459 of 566

79 LOCAL AGENCY INVESTMENT GUIDELINES
53603
The legislative body may make the investment by direct purchase of any issue of eligible securities at their original sale or after they have been issued. 53604
The legislative body may sell, or exchange for other eligible securities, and rein- vest the proceeds of, the securities purchased.
53605
From time to time, the legislative body shall sell the securities so that the pro- ceeds may be applied to the purposes for which the original purchase money was placed in the sinking fund or the treasury of the local agency. 53606
The bonds purchased, which were issued by the purchaser, may be canceled either in satisfaction or sinking fund obligations or otherwise. When canceled, they are no longer outstanding, unless in its discretion, the legislative body holds then uncanceled. While held uncanceled, the bonds may be resold. 53607
The authority of the legislative body to invest or to reinvest funds of a local agency, or to sell or exchange securities so purchased, may be delegated for a one- year period by the legislative body to the treasurer of the local agency, who shall thereafter assume full responsibility for those transactions until the delegation of authority is revoked or expires, and shall make a monthly report of those transac- tions to the legislative body. Subject to review, the legislative body may renew the delegation of authority pursuant to this section each year. 53608
The legislative body of a local agency may deposit for safekeeping with a federal or state association (as defined by Section 5102 of the Financial Code), a trust com- pany or a state or national bank located within this state or with the Federal Reserve Bank of San Francisco or any branch thereof within this state, or with any Federal Reserve bank or with any state or national bank located in any city designated as a reserve city by the Board of Governors of the Federal Reserve System, the bonds, notes, bills, debentures, obligations, certificates of indebtedness, warrants, or other evidences of indebtedness in which the money of the local agency is invested pursu- ant to this article or pursuant to other legislative authority. The local agency shall take from such financial institution a receipt for securities so deposited. The author- ity of the legislative body to deposit for safekeeping may be delegated by the legisla- tive body to the treasurer of the local agency; the treasurer shall not be responsible for securities delivered to and receipted for by a financial institution until they are withdrawn from the financial institution by the treasurer. 460 of 566

80 LOCAL AGENCY INVESTMENT GUIDELINES
53609
Notwithstanding the provisions of this chapter or any other provisions of this code, funds held by a local agency pursuant to a written agreement between the agency and employees of the agency to defer a portion of the compensation otherwise receivable by the agency’s employees and pursuant to a plan for such deferral as ad- opted by the governing body of the agency, may be invested in the types of invest- ments set forth in Sections 53601 and 53602 of this code, and may additionally be invested in corporate stocks, bonds, and securities, mutual funds, savings and loan accounts, credit union accounts, life insurance policies, annuities, mortgages, deeds of trust, or other security interests in real or personal property. Nothing herein shall be construed to permit any type of investment prohibited by the Constitution.

Deferred compensation funds are public pension or retirement funds for the purposes of Section 17 of Article XVI of the Constitution. 53610
(a) For purposes of this section, “Proposition 1A receivable” means the right to payment of moneys due or to become due to a local agency, pursuant to clause (iii) of subparagraph (B) of paragraph (1) of subdivision (a) of Section 25.5 of Article XIII of the California Constitution and Section 100.06 of the Revenue and Taxation Code.
(b) Notwithstanding any other law, a local agency may purchase, with its rev- enue, Proposition 1A receivables sold pursuant to Section 53999. (c) A purchaser of Proposition 1A receivables pursuant to this section shall not offer them for sale pursuant to Section 6588.

Government Code Section 53620-53622
53620
Notwithstanding Section 53601 or 53635, the governing body of a local agency may invest funds designated for the payment of employee retiree health benefits in any form or type of investment deemed prudent by the governing body pursu- ant to Section 53622.
53621
The authority of the governing body to invest or to reinvest funds intended for the payment of employee retiree health benefits, or to sell or exchange securi- ties purchased for that purpose, may be delegated by the governing body to designated officers.
461 of 566

81 LOCAL AGENCY INVESTMENT GUIDELINES
53622
(a) Funds intended for the payment of employee retiree health benefits shall only be held for the purpose of providing benefits to participants in the retiree health benefit plan and defraying reasonable expenses of administering that plan. (b) The governing body or designated officer, when making investments of the funds, shall discharge its duties with respect to the investment of the funds. (1) Solely in the interest of, and for the exclusive purposes of providing benefits to, participants in the retiree health benefit plan, minimizing employer contribu- tions thereto, and defraying reasonable expenses of administering the plan. (2) With the care, skill, prudence, and diligence under the circumstances then pre- vailing that a prudent person acting in a like capacity and familiar with these mat- ters would use in the conduct of an enterprise of a like character and with like aims. (3) Shall diversify the investments of the funds so as to minimize the risk of loss and to maximize the rate of return, unless under the circumstances it is clearly prudent not to do so.

Government Code Section 53630-53686
53630
As used in this article:
(a) “Local agency” means county, city, city and county, including a chartered city or county, a community college district, or other public agency or corporation in this state.
(b) “T reasurer” means treasurer of the local agency.
(c) “Depository” means a state or national bank, savings association or federal association, a state or federal credit union, or a federally insured industrial loan company, in this state in which the moneys of a local agency are deposited. (d) “Agent of depository” means a trust company or trust department of a state or national bank located in this state, including the trust department of a depository where authorized, and the Federal Home Loan Bank of San Francisco, which is authorized to act as an agent of depository for the purposes of this article pursu- ant to Section 53657.
(e) “Security” means any of the eligible securities or obligations listed in Section 53651.
(f) “Pooled securities” means eligible securities held by an agent of depository for a depository and securing deposits of one or more local agencies. (g) “Administrator” means the Administrator of Local Agency Security of the State of California.
462 of 566

82 LOCAL AGENCY INVESTMENT GUIDELINES
(h) “Savings association or federal association” means a savings association, sav- ings and loan association, or savings bank as defined by Section 5102 of the Financial Code.
(i) “Federally insured industrial loan company” means an industrial loan com- pany licensed under Division 7 (commencing with Section 18000) of the Finan- cial Code, the investment certificates of which are insured by the Federal Deposit Insurance Corporation.
(j) “Corporation” includes a limited liability company. 53630.1
The Legislature hereby finds that the solvency and creditworthiness of each in- dividual local agency can impact the solvency and creditworthiness of the state and other local agencies within the state. Therefore, to protect the solvency and creditworthiness of the state and all of its political subdivisions, the Legislature hereby declares that the deposit and investment of public funds by local officials and local agencies is an issue of statewide concern.
53630.5
(a) The definitions in Section 1750 of, and Chapter 1 (commencing with Section 99) of Division 1 of, the Financial Code apply to this section. (b) In this article, for purposes of being a depository of moneys belonging to or being in the custody of a local agency, the phrases “state or national bank located in this state,” “state or national bank,” “state or national bank in this state,” and “state or national banks in the state” include, without limitation, any of the following:
(1) Any California branch office of a foreign (other state) state bank that the bank is authorized to maintain under the law of its domicile and federal law. (2) Any California branch office of a foreign (other state) national bank that the bank is authorized to maintain under federal law.
(3) Any California branch office of a foreign (other nation) bank that the bank is licensed to maintain under Article 3 (commencing with Section 1800) of Chap- ter 20 of Division 1.1 of the Financial Code.
(4) Any California federal branch of a foreign (other nation) bank that the bank is authorized to maintain under federal law.
53631
Under those conditions as the treasurer of a local agency fixes with the approval of the legislative body, he or she may establish accounts at banks within or with- out the state and deposit money in those accounts to the extent necessary to pay the principal and interest of bonds to pay any warrant that has been presented for payment, or to fund any electronic disbursement of funds from the treasury of the local agency. This article does not apply to deposits for those purposes. 463 of 566

83 LOCAL AGENCY INVESTMENT GUIDELINES
53632
There are three classes of deposits:
(a) Inactive deposits.
(b) Active deposits.
(c) Interest-bearing active deposits.
53632.5
There are three classes of security for deposits:
(a) Securities described in subdivision (m) of Section 53651. (b) Securities described in subdivision (p) of Section 53651. (c) Securities enumerated in Section 53651, except for those described in subdi- visions (m) and (p) of that section.
53633
The treasurer shall determine the amounts of money to be deposited as inac- tive, active, and interest-bearing active deposits, except as otherwise provided in Section 53679.
53634
The treasurer may call in money from inactive deposits and place it in active deposits as current demands require. When there is money in his possession for which there is no demand as inactive deposits, he may place it as active deposits. 53635
(a) This section shall apply to a local agency that is a county, a city and a county, or other local agency that pools money in deposits or investments with other local agencies, including local agencies that have the same govern- ing body. However, Section 53601 shall apply to all local agencies that pool money in deposits or investments exclusively with local agencies that have the same governing body.

This section shall be interpreted in a manner that recognizes the distinct charac- teristics of investment pools and the distinct administrative burdens on manag- ing and investing funds on a pooled basis pursuant to Article 6 (commencing with Section 27130) of Chapter 5 of Division 2 of Title 3.

A local agency that is a county, a city and county, or other local agency that pools money in deposits or investments with other agencies may invest in commercial paper pursuant to subdivision (h) of Section 53601, except that the local agency shall be subject to the following concentration limits:
464 of 566

84 LOCAL AGENCY INVESTMENT GUIDELINES
(1) No more than 40 percent of the local agency’s money may be invested in eligible commercial paper.
(2) No more than 10 percent of the total assets of the investments held by a local agency may be invested in any one issuer’s commercial paper. (b) Notwithstanding Section 53601, the City of Los Angeles shall be subject to the concentration limits of this section for counties and for cities and counties with regard to the investment of money in eligible commercial paper. (c) A local agency subject to this section may invest in commercial paper, debt securities, or other obligations of a public bank, as defined in Section 57600. 53635.2
As far as possible, all money belonging to, or in the custody of, a local agency, including money paid to the treasurer or other official to pay the principal, inter- est, or penalties of bonds, shall be deposited for safekeeping in state or national banks, public banks, savings associations, federal associations, credit unions, or federally insured industrial loan companies in this state selected by the treasurer or other official having legal custody of the money; or may be invested in the investments set forth in Section 53601. T o be eligible to receive local agency money, a bank, savings association, federal association, or federally insured indus- trial loan company shall have received an overall rating of not less than “satisfac- tory” in its most recent evaluation by the appropriate federal financial supervisory agency of its record of meeting the credit needs of California’s communities, including low- and moderate-income neighborhoods, pursuant to Section 2906 of Title 12 of the United States Code. Sections 53601.5 and 53601.6 shall apply to all investments that are acquired pursuant to this section. 53635.7
In making any decision that involves borrowing in the amount of one hundred thousand dollars ($100,000) or more, the legislative body of the local agency shall discuss, consider, and deliberate each decision as a separate item of business on the agenda of its meeting as prescribed in Chapter 9 (commencing with Sec- tion 54950). As used in this section, “borrowing” does not include bank over- drafts or security lending.
53635.8
Notwithstanding any other provision of this code, a local agency that has the authority under law to invest funds, at its discretion, may invest a portion of its surplus funds in deposits at a commercial bank, savings bank, savings and loan association, or credit union that uses a private sector entity that assists in the placement of deposits. The following conditions shall apply:
(a) The local agency shall choose a nationally or state-chartered commercial bank, savings bank, savings and loan association, or credit union in this state to invest the funds, which shall be known as the “selected” depository institution. 465 of 566

85 LOCAL AGENCY INVESTMENT GUIDELINES
(b) The selected depository institution may use a private sector entity to help place local agency deposits with one or more commercial banks, savings banks, savings and loan associations, or credit unions that are located in the United States and are within the network used by the private sector entity for this purpose. (c) The selected depository institution shall request that the local agency inform it of depository institutions at which the local agency has other deposits, and the selected depository institution shall provide that information to the private sec- tor entity.
(d) Any private sector entity used by a selected depository institution to help place its local agency deposits shall maintain policies and procedures requiring all of the following:
(1) The full amount of each deposit placed pursuant to subdivision (b) and the in- terest that may accrue on each such deposit shall at all times be insured by the Fed- eral Deposit Insurance Corporation or the National Credit Union Administration. (2) Every depository institution where funds are placed shall be capitalized at a level that is sufficient, and be otherwise eligible, to receive such deposits pursu- ant to regulations of the Federal Deposit Insurance Corporation or the National Credit Union Administration, as applicable.
(3) At the time of the local agency’s investment with a selected depository insti- tution and no less than monthly thereafter, the private sector entity shall ensure that the local agency is provided with an inventory of all depository institutions in which deposits have been placed on the local agency’s behalf, that are within the private sector entity’s network.
(4) Within its network, the private sector entity shall ensure that it does not place additional deposits from a particular local agency with any depository institution identified pursuant to subdivision (c) as holding that local agen- cy’s deposits if those additional deposits would result in that local agency’s total amount on deposit at that depository institution exceeding the Federal Deposit Insurance Corporation or the National Credit Union Administra- tion insurance limit.
(e) If a selected depository uses two or more private sector entities to assist in the placement of a local agency’s deposits, the selected depository shall ensure that it does not place additional deposits from a particular local agency with a depository institution if those additional deposits would result in that local agency’s total amount on deposit at that depository institution exceeding the Federal Deposit Insurance Corporation or the National Credit Union Admin- istration insurance limit.
(f) The selected depository institution shall serve as a custodian for each such deposit.
(g) On the same date that the local agency’s funds are placed pursuant to sub- division (b) by the private sector entity, the selected depository institution shall receive an amount of insured deposits from other financial institutions that, in total, are equal to, or greater than, the full amount of the principal that the local 466 of 566

86 LOCAL AGENCY INVESTMENT GUIDELINES
agency initially deposited through the selected depository institution for invest- ment pursuant to subdivision (b).
(h) Notwithstanding subdivisions (a) to (g), inclusive, a credit union shall not act as a selected depository institution under this section unless both of the following conditions are satisfied:
(1) The credit union offers federal depository insurance through the National Credit Union Administration.
(2) The credit union is in possession of written guidance or other written commu- nication from the National Credit Union Administration authorizing participa- tion of federally insured credit unions in one or more deposit placement services and affirming that the moneys held by those credit unions while participating in a deposit placement service will at all times be insured by the federal government. (i) It is the intent of the Legislature that this section shall not restrict compe- tition among private sector entities that provide placement services pursuant to this section.
(j) The deposits placed pursuant to this section shall be subject to Section 53638 and shall not, in total, exceed 30 percent of the agency’s funds that may be in- vested for this purpose.
53636
Money so deposited is deemed to be in the treasury of the local agency. 53637
The money shall be deposited in any bank, savings association or federal associa- tion, state or federal credit union, or federally insured industrial loan company with the objective of realizing maximum return, consistent with prudent finan- cial management, except that money shall not be deposited in any state or federal credit union if a member of the legislative body of a local agency, or any person with investment decision making authority of the administrative office, man- ager’s office, budget office, auditor-controller’s office, or treasurer’s office of the local agency, also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or supervisory committee, of the state or federal credit union.
53638
(a) The deposit shall not exceed the shareholder’s equity of any deposito- ry bank. For the purposes of this subdivision, shareholder’s equity shall be determined in accordance with Section 463 of the Financial Code, but shall be deemed to include capital notes and debentures.
(b) The deposit shall not exceed the total of the net worth of any depository sav- ings association or federal association, except that deposits not exceeding a total of five hundred thousand dollars ($500,000) may be made to a savings associa- 467 of 566

87 LOCAL AGENCY INVESTMENT GUIDELINES
tion or federal association without regard to the net worth of that depository, if such deposits are insured or secured as required by law. (c) The deposit to the share accounts of any regularly chartered credit union shall not exceed the total of the unimpaired capital and surplus of the credit union, as defined by rule of the Commissioner of Business Oversight, except that the deposit to any credit union share account in an amount not exceeding five hundred thousand dollars ($500,000) may be made if the share accounts of that credit union are insured or guaranteed pursuant to Section 14858 of the Finan- cial Code or are secured as required by law.
(d) The deposit in investment certificates of a federally insured industrial loan company shall not exceed the total of the unimpaired capital and surplus of the insured industrial loan company.
53639
Except as otherwise provided in Section 53682, the depository shall bear the expenses of transportation of money to and from the depository. 53640
Except as otherwise provided in Section 53682, the depository shall handle, collect, and pay all checks, drafts, and other exchange without cost to the local agency.
53641
When money is deposited in a depository, the treasurer or other authorized of- ficial shall take and preserve a receipt, certificate of deposit, or other evidence of the deposit as he or she requires.
53642
The money deposited may be drawn out by check or order of the treasurer or other official authorized to make such deposit.
53643
The treasurer may deposit any part of the money as agreed upon between the treasurer and the depository.
53644
If an agreement is not made:
(a) Active deposits and interest thereon are subject to withdrawal upon the de- mand of the treasurer or other authorized official, subject to any penalties which may be prescribed by federal law or regulation.
(b) Inactive deposits are subject to notice of at least thirty days before withdrawal. 468 of 566

88 LOCAL AGENCY INVESTMENT GUIDELINES
53645
Interest shall be computed and paid by the depository, as follows:
(a) For active deposits upon which interest is payable, interest shall be computed on the average daily balance for the calendar quarter, and shall be paid quarterly. (b) For inactive deposits, interest shall be computed on a 360-day basis, and shall be paid quarterly.
53646
(a)(1) In the case of county government, the treasurer may annually render to the board of supervisors and any oversight committee a statement of invest- ment policy, which the board shall review and approve at a public meeting.

Any change in the policy shall also be reviewed and approved by the board at a public meeting.
(2) In the case of any other local agency, the treasurer or chief fiscal officer of the local agency may annually render to the legislative body of that local agency and any oversight committee of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting.

Any change in the policy shall also be considered by the legislative body of the local agency at a public meeting.
(b)(1) The treasurer or chief fiscal officer may render a quarterly report to the chief executive officer, the internal auditor, and the legislative body of the local agency.

The quarterly report shall be so submitted within 45 days following the end of the quarter covered by the report. Except as provided in subdivisions (e) and (f), this report shall include the type of investment, issuer, date of maturity par and dollar amount invested on all securities, investments and moneys held by the local agency, and shall additionally include a description of any of the local agency’s funds, invest- ments, or programs, that are under the management of contracted parties, including lending programs. With respect to all securities held by the local agency, and under management of any outside party that is not also a local agency or the State of Cali- fornia Local Agency Investment Fund, the report shall also include a current market value as of the date of the report, and shall include the source of this same valuation. (2) The quarterly report shall state compliance of the portfolio to the statement of investment policy, or manner in which the portfolio is not in compliance. (3) The quarterly report shall include a statement denoting the ability of the local agency to meet its pool’s expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available. (4) In the quarterly report, a subsidiary ledger of investments may be used in ac- cordance with accepted accounting practices.
(c) Pursuant to subdivision (b), the treasurer or chief fiscal officer shall report whatever additional information or data may be required by the legislative body of the local agency.
469 of 566

89 LOCAL AGENCY INVESTMENT GUIDELINES
(d) The legislative body of a local agency may elect to require the report specified in subdivision (b) to be made on a monthly basis instead of quarterly. (e) For local agency investments that have been placed in the Local Agency In- vestment Fund, created by Section 16429.1, in National Credit Union Share Insurance Fund-insured accounts in a credit union, in accounts insured or guar- anteed pursuant to Section 14858 of the Financial Code, or in Federal Deposit Insurance Corporation-insured accounts in a bank or savings and loan associa- tion, in a county investment pool, or any combination of these, the treasurer or chief fiscal officer may supply to the governing body, chief executive officer, and the auditor of the local agency the most recent statement or statements received by the local agency from these institutions in lieu of the information required by paragraph (1) of subdivision (b) regarding investments in these institutions. (f) The treasurer or chief fiscal officer shall not be required to render a quarterly report, as required by subdivision (b), to a legislative body or any oversight com- mittee of a school district or county office of education for securities, invest- ments, or moneys held by the school district or county office of education in individual accounts that are less than twenty-five thousand dollars ($25,000). (g) In recognition of the state and local interests served by the actions made op- tional in subdivisions (a) and (b), the Legislature encourages the local agency offi- cials to continue taking the actions formerly mandated by this section. However, nothing in this subdivision may be construed to impose any liability on a local agency that does not continue to take the formerly mandated action. 53647
(a) Interest on all money deposited belongs to, and shall be paid quarterly into the general fund of, the local agency represented by the officer making the de- posit, unless otherwise directed by law.
(b) Notwithstanding the provisions of subdivision (a), and except as otherwise directed by law, if the governing body of the local agency represented by the of- ficer making the deposit so directs, such interest shall be paid to the fund which contains the principal on which the interest accrued.
53647.5
Notwithstanding any other provision of law, interest earned on any bail money de- posited by a court in a bank account pursuant to Section 1463.1 of the Penal Code and Section 53679 of this code shall, be allocated for the support of that court. 53648
Notwithstanding this article, the treasurer may deposit moneys in, and enter into contracts with, a state or national bank, savings association or federal association, federal or state credit union, or federally insured industrial loan company, pursu- ant to a federal law or a rule of a federal department or agency adopted pursuant to the law if the law or rule conflicts with this article in regulating the payment of interest on deposits of public moneys by any of the following:
470 of 566

90 LOCAL AGENCY INVESTMENT GUIDELINES
(a) Banks which are Federal Reserve System members or whose deposits are in- sured by the Federal Deposit Insurance Corporation.
(b) Savings associations or federal associations which are federal home loan bank members or whose deposits are insured by the Federal Savings and Loan Insurance Corporation.
(c) State or federal credit unions whose accounts are insured by the National Credit Union Share Insurance Fund or guaranteed by the California Credit Union Share Guaranty Corporation or insured or guaranteed pursuant to Sec- tion 14858 of the Financial Code, unless a member of the legislative body of a local agency, or any person with investment decision making authority of the administrative office, manager’s office, budget office, auditor-controller’s office, or treasurer’s office of the local agency, also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or supervisory committee, of the state or federal credit union. (d) A federally insured industrial loan company.
53648.5
Upon the removal by federal law of the conflicting federal law or rule the agree- ment between the treasurer or other authorized official and a depository may be terminated by either party.
53649
The treasurer is responsible for the safekeeping of money in his or her custody and shall enter into any contract with a depository relating to any deposit which in his or her judgment is to the public advantage. The depository, and the agent of depository to the extent the agent of depository has been notified of deposits and the amount thereof, are responsible for securing moneys deposited pursuant to such a contract in accordance with Section 53652. One copy of each contract shall be filed with the auditor, controller, secretary, or corresponding officer of the local agency. The contract shall:
(a) Fix the duration of deposits, if appropriate.
(b) Fix the interest rate, if any.
(c) Provide conditions for withdrawal and repayment.
(d) Provide for placement of pooled securities in a named agent of depository in accordance with Section 53656.
(e) Grant authority for agent of depository to place securities for safekeeping in accordance with Section 53659.
(f) Set forth in accordance with Section 53665 the conditions upon which the administrator shall order pooled securities converted into money for the benefit of the local agency, and the procedure therefor.
471 of 566

91 LOCAL AGENCY INVESTMENT GUIDELINES
(g) Provide for compliance in all respects with the provisions of this article and other applicable provisions of law.
(h) Provide, upon notice to the treasurer from the administrator, that a trea- surer may withdraw deposits in the event a depository fails to pay the as- sessments, fines, or penalties assessed by the administrator or may withdraw authorization for the placement of pooled securities in an agent of depository in the event that the agent of depository fails to pay the fines or penalties as- sessed by the administrator.
53651
Eligible securities are any of the following:
(a) United States T reasury notes, bonds, bills or certificates of indebtedness, or ob- ligations for which the faith and credit of the United States are pledged for the pay- ment of principal and interest, including the guaranteed portions of small business administration loans, so long as the loans are obligations for which the faith and credit of the United States are pledged for the payment of principal and interest. (b) Notes or bonds or any obligations of a local public agency (as defined in the United States Housing Act of 1949) or any obligations of a public housing agen- cy (as defined in the United States Housing Act of 1937) for which the faith and credit of the United States are pledged for the payment of principal and interest. (c) Bonds of this state or of any local agency or district of the State of California having the power, without limit as to rate or amount, to levy taxes or assessments to pay the principal and interest of the bonds upon all property within its bound- aries subject to taxation or assessment by the local agency or district, and in addi- tion, limited obligation bonds pursuant to Article 4 (commencing with Section 50665) of Chapter 3 of Division 1, senior obligation bonds pursuant to Article 5 (commencing with Section 53387) of Chapter 2.7, and revenue bonds and other obligations payable solely out of the revenues from a revenue-producing property owned, controlled or operated by the state, local agency or district or by a depart- ment, board, agency or authority thereof.
(d) Bonds of any public housing agency (as defined in the United States Housing Act of 1937, as amended) as are secured by a pledge of annual contributions un- der an annual contribution contract between the public housing agency and the Public Housing Administration if such contract shall contain the covenant by the Public Housing Administration which is authorized by subsection (b) of Section 22 of the United States Housing Act of 1937, as amended, and if the maximum sum and the maximum period specified in the contract pursuant to that subsec- tion 22(b) shall not be less than the annual amount and the period for payment which are requisite to provide for the payment when due of all installments of principal and interest on the obligations.
(e) Registered warrants of this state.
(f) Bonds, consolidated bonds, collateral trust debentures, consolidated deben- tures, or other obligations issued by the United States Postal Service, federal land 472 of 566

92 LOCAL AGENCY INVESTMENT GUIDELINES
banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended, debentures and consolidated debentures issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended, consolidated obligations of the federal home loan banks established under the Federal Home Loan Bank Act, bonds, debentures and other obligations of the Federal National Mortgage Association or of the Government National Mortgage Association established under the Na- tional Housing Act, as amended, bonds of any federal home loan bank estab- lished under that act, bonds, debentures and other obligations of the Federal Home Loan Mortgage Corporation established under the Emergency Home Fi- nance Act of 1970, and obligations of the T ennessee Valley Authority. (g) Notes, tax anticipation warrants or other evidence of indebtedness issued pursuant to Article 7 (commencing with Section 53820), Article 7.5 (commenc- ing with Section 53840) or Article 7.6 (commencing with Section 53850) of this Chapter 4.
(h) State of California notes.
(i) Bonds, notes, certificates of indebtedness, warrants or other obligations is- sued by: (1) any state of the United States (except this state), or the Common- wealth of Puerto Rico, or any local agency thereof having the power to levy taxes, without limit as to rate or amount, to pay the principal and interest of such obligations, or (2) any state of the United States (except this state), or the Commonwealth of Puerto Rico, or a department, board, agency or authority thereof except bonds which provide for or are issued pursuant to a law which may contemplate a subsequent legislative appropriation as an assurance of the continued operation and solvency of the department, board, agency or author- ity but which does not constitute a valid and binding obligation for which the full faith and credit of such state or the Commonwealth of Puerto Rico are pledged, which are payable solely out of the revenues from a revenue-produc- ing source owned, controlled or operated thereby; provided the obligations issued by an entity described in (1), above, are rated in one of the three highest grades, and such obligations issued by an entity described in (2), above, are rated in one of the two highest grades by a nationally recognized investment service organization that has been engaged regularly in rating state and munici- pal issues for a period of not less than five years.
(j) Obligations issued, assumed or guaranteed by the International Bank for Re- construction and Development, Inter-American Development Bank, the Gov- ernment Development Bank of Puerto Rico, the Asian Development Bank, the International Finance Corporation, or the African Development Bank. (k) Participation certificates of the Export-Import Bank of the United States. (l) Bonds and notes of the California Housing Finance Agency issued pursuant to Chapter 7 (commencing with Section 51350) of Part 3 of Division 31 of the Health and Safety Code.
(m) Promissory notes secured by first mortgages and first trust deeds which com- ply with Section 53651.2.
473 of 566

93 LOCAL AGENCY INVESTMENT GUIDELINES
(n) Any bonds, notes, warrants, or other evidences of indebtedness of a nonprofit corporation issued to finance the construction of a school building or school buildings pursuant to a lease or agreement with a school district entered into in compliance with the provisions of Section 39315 or 81345 of the Education Code, and also any bonds, notes, warrants or other evidences of indebtedness issued to refinance those bonds, notes, warrants, or other evidences of indebted- ness as specified in Section 39317 of the Education Code. (o) Any municipal securities, as defined by Section 3(a)(29) of the Securities Ex- change Act of June 6, 1934, (15 u.s.c. Sec. 78, as amended), which are issued by this state or any local agency thereof.
(p) With the consent of the treasurer, letters of credit issued by the Federal Home Loan Bank of San Francisco which comply with Section 53651.6. 53651.2
(a) T o be an eligible security under subdivision (m) of Section 53651, a promis- sory note placed in a securities pool on or after January 1, 1987, shall comply with all of the following provisions:
(1) Each promissory note shall be secured by a first mortgage or first trust deed on improved 1 to 4 unit residential real property located in California, shall be fully amortized over the term of the note, and shall have a term of no more than 30 years. Any first mortgage or first trust deed which secures a promissory note providing for negative amortization shall be removed from the securities pool and replaced with an eligible security under subdivision (m) of Section 53651 if the loan to value ratio exceeds 85 percent of the original appraised value of the security property as a consequence of negative amortization. (2) Each promissory note shall be eligible for sale to the Federal National Mort- gage Association, the Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation; provided, however, that up to 25 percent of the total dollar amount of any promissory note securities pool established pursuant to Section 53658 may consist of promissory notes with loan amounts which exceed the maximum amounts eligible for purchase by the Federal Na- tional Mortgage Association, the Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation, but which do not exceed: (i) five hundred thousand dollars ($500,000) in the case of a single family dwelling; (ii) one million dollars ($1,000,000) in the case of a 2, 3, or 4 unit dwelling. (b) The following shall not constitute eligible securities under subdivision (m) of Section 53651:
(1) Any promissory note on which any payment is more than 60 days past due. (2) Any promissory note secured by a mortgage or deed of trust as to which there is a lien prior to the mortgage or deed of trust. For the purposes of this paragraph, no lien specified in Section 766 of the Financial Code shall be considered a prior encumbrance unless any installment or payment thereunder (other than a rental or royalty under a lease) is due and delinquent.
474 of 566

94 LOCAL AGENCY INVESTMENT GUIDELINES
(3) Any promissory note secured by a mortgage or deed of trust as to which a notice of default has been recorded pursuant to Section 2924 of the Civil Code or an action has been commenced pursuant to Section 725a of the Code of Civil Procedure.
(c) The depository may exercise, enforce, or waive any right granted to it by the promissory note, mortgage, or deed of trust.
(d) For purposes of this article, the market value of a promissory note which is an eligible security under subdivision (m) of Section 53651, shall be determined in accordance with the regulations adopted by the T reasurer under paragraph (2) of subdivision (m) of Section 53651, as the regulations and statute were in effect on December 31, 1986. However, if and when regulations on the subject are ad- opted by the administrator, the market value shall be determined in accordance with those regulations of the administrator.
53651.4
(a) A depository that uses eligible securities of the class described in subdivision (m) of Section 53651 shall, within 90 days after the close of each calendar year or within a longer period as the administrator may specify, file with the administra- tor a report of an independent certified public accountant regarding compliance with this article and with regulations and orders issued by the administrator un- der this article with respect to eligible securities of that class. The report shall be based upon the audit, shall contain the information, and shall be in the form the administrator may prescribe. The depository shall provide a copy of the report to the treasurer on request.
(b) If a depository that is a state bank files with the administrator, not less than 90 days before the beginning of the calendar year, a notice that it elects to be ex- amined by the administrator instead of filing a report of an independent certified public accountant under subdivision (a) for that calendar year, the depository shall be exempt from subdivision (a) for that calendar year and shall for that cal- endar year be subject to examination by the administrator regarding compliance with this article and with regulations and orders under this article with respect to eligible securities of the class described in subdivision (m) of Section 53651. The administrator shall provide a report to a treasurer with deposits in the examined state bank upon request of the treasurer.
(c) A national bank may apply to the administrator to be examined, and the administrator, in his or her discretion, may examine a national bank for the pur- poses of satisfying the requirements of subdivision (a). The administrator shall provide a report to a treasurer with deposits in the examined national bank upon request of the treasurer.
(d) Whenever the administrator examines a depository pursuant to subdivision (b) or (c), the depository shall pay, within 30 days after receipt of a statement from the administrator, a fee of seventy-five dollars ($75) per hour for each ex- aminer engaged in the examination.
475 of 566

95 LOCAL AGENCY INVESTMENT GUIDELINES
53651.6
(a) T o be an eligible security under subdivision (p) of Section 53651, a letter of credit shall be in such form and shall contain such provisions as the administrator may prescribe, and shall include all of the following terms:
(1) The administrator shall be the beneficiary of the letter of credit. (2) The letter of credit shall be clean and irrevocable and shall provide that the administrator may draw upon it up to the total amount in the event of the fail- ure of the depository savings association or federal association or if the deposi- tory savings association or federal association refuses to permit the withdrawal of funds by a treasurer.
53652
T o secure active or inactive deposits a depository shall at all times maintain with the agent of depository eligible securities in securities pools, pursuant to Sections 53656 and 53658, in the amounts specified in this section. Uncollected funds shall be excluded from the amount deposited in the depository when determin- ing the security requirements for the deposits.
(a) Eligible securities, except eligible securities of the classes described in sub- divisions (m) and (p) of Section 53651, shall have a market value of at least 10 percent in excess of the total amount of all deposits of a depository secured by the eligible securities.
(b) Eligible securities of the class described in subdivision (m) of Section 53651 shall have a market value at least 50 percent in excess of the total amount of all deposits of a depository secured by those eligible securities. (c) Eligible securities of the class described in subdivision (p) of Section 53651 shall have a market value of at least 5 percent in excess of the total amount of all deposits of a depository secured by those eligible securities. For purposes of this article, the market value of a letter of credit which is an eligible security under subdivision (p) of Section 53651 shall be the amount of credit stated in the letter of credit.
53653
When in his or her discretion local conditions so warrant, the treasurer may waive security for the portion of any deposits as is insured pursuant to federal law, notwithstanding this article. For deposits equivalent to and not less than the maximum amount insured pursuant to federal law for which a treasurer has waived security under this section, a treasurer at his or her discretion may also waive security for the interest accrued on the deposits which, when added to the deposits, would cause the sum of the interest and deposits to exceed the maximum amount insured pursuant to federal law, provided that the interest is computed by the depository on the average daily balance of the deposits, paid monthly and computed on a 360-day basis.
476 of 566

96 LOCAL AGENCY INVESTMENT GUIDELINES
53654
(a) The depository may add securities to the pool or substitute securities of equal value for those in the pool at any time, but shall not interchange classes of secu- rity, as defined in Section 53632.5, without prior approval of the treasurer. (b) Withdrawal of securities from the pool without replacement at equal value may be ordered only by two duly authorized officers or employees of the deposi- tory who satisfy the requirements as may be set by the administrator. (c) The agent of depository is responsible for the safekeeping and disbursement of securities placed in its custody by a depository. It shall release securities only upon presentation by the depository of the most reasonably current statement of the total deposits subject to this article held by the depository, such statement to be verified and countersigned by two duly authorized officers, other than those who ordered the withdrawal of securities. A copy of this statement shall be forwarded to the administrator concurrently by the agent of depository. 53655
A placement of securities by a depository with an agent of depository pursuant to this article shall have the effect of perfecting a security interest in those securities in the local agencies having deposits in that depository notwithstanding provi- sions of the Uniform Commercial Code to the contrary and notwithstanding that the agent of depository may be the trust department of the depository. 53656
(a) At the time the treasurer enters into a contract with the depository pursuant to Section 53649, he or she shall authorize the agent of depository designated by the depository, but including the trust department of the depository only when acceptable to both the treasurer and the depository, to hold securities of the de- pository in accordance with this article to secure the deposit of the local agency. (b) Only those trust companies and trust departments, or the Federal Home Loan Bank of San Francisco, which have been authorized by the administrator pursuant to Section 53657 shall be authorized by treasurers to act as agents of depository. (c) The securities are subject to order of the depository in accordance with Sec- tion 53654 except when the provisions of subdivision (i) of Section 53661 and Section 53665 are in effect.
(d) An agent of depository shall not release any security held to secure a local agency deposit in a depository unless the administrator issues an order authoriz- ing the release where either of the following occurs:
(1) A state or federal regulatory agency has taken possession of the depository. (2) A conservator, receiver, or other legal custodian has been appointed for the depository.
477 of 566

97 LOCAL AGENCY INVESTMENT GUIDELINES
53657
(a) No person shall act as an agent of depository unless that person is a trust company located in this state, the trust department of a bank located in this state, or the Federal Home Loan Bank of San Francisco, and is authorized by the administrator to act as an agent of depository.
(b)(1) An application for authorization shall be in such form, shall contain such information, shall be signed in such manner, and shall (if the administrator so requires) be verified in such manner, as the administrator may prescribe. (2) The fee for filing an application for authorization with the administrator shall be five hundred dollars ($500).
(3) If the administrator finds, with respect to an application for authorization, that the applicant is competent to act as an agent of depository and that it is rea- sonable to believe the applicant will comply with all applicable provisions of this article and of any regulation or order issued under this article, the administrator shall approve the application. If the administrator finds otherwise, the adminis- trator shall deny the application.
(4) When an application for authorization has been approved, the applicant shall file with the administrator an agreement to comply with all applicable provisions of this article and of any regulation or order issued under this article. The agree- ment shall be in such form, shall contain such provisions, and shall be signed in such manner as the administrator may prescribe.
(5) When an application for authorization has been approved, the applicant has complied with paragraph (4), and all conditions precedent to authorizing the applicant to act as agent of depository have been fulfilled, the administrator shall authorize the applicant to act as agent of depository.
53658
An agent of a depository may hold and pool securities to secure deposits for one or more depositories pursuant to Section 53656, but shall maintain a separate pool for each said depository. Each local agency shall have an undivided security interest in the pooled securities in the proportion that the amount of its deposits bears to the total amount of deposits secured by the pooled securities. 53659
Whenever an agent of depository accepts securities pursuant to Section 53656 it may, with the authorization of the depository, place such securities for safekeep- ing with a Federal Reserve Bank or branch thereof or with any bank located in a city designated as a reserve city by the Board of Governors of the Federal Reserve System or with the Federal Home Loan Bank of San Francisco or with a trust company located in this state. Authority for such placement together with the names of the banks or, including the Federal Home Loan Bank of San Francisco, trust companies to be so used, shall be contained in the contract between the treasurer and the depository required in Section 53649. 478 of 566

98 LOCAL AGENCY INVESTMENT GUIDELINES
53660
When deposits of a local agency are secured by pooled securities pursuant to Section 53656, the agent of depository shall make available to the treasurer for review at a mutually agreed upon time and location all of the following information which may be in the form of a copy of the report required in subdivision (e) of Section 53661:
(a) A certification that there are securities in the pool in the amounts required by Section 53652 to secure deposits.
(b) A certified report of the individual securities then on deposit in the pool with the location and total market value thereof.
(c) The total amount of deposits then reported by the depository to be secured by the pool.
53661
(a) The Commissioner of Business Oversight shall act as Administrator of Lo- cal Agency Security and shall be responsible for the administration of Sections 53638, 53651, 53651.2, 53651.4, 53651.6, 53652, 53654, 53655, 53656, 53657, 53658, 53659, 53660, 53661, 53663, 53664, 53665, 53666, and 53667. (b) The administrator shall have the powers necessary or convenient to adminis- ter and enforce the sections specified in subdivision (a). (c)(1) The administrator shall issue regulations consistent with law as the admin- istrator may deem necessary or advisable in executing the powers, duties, and responsibilities assigned by this article. The regulations may include regulations prescribing standards for the valuation, marketability, and liquidity of the eligible securities of the class described in subdivision (m) of Section 53651, regulations prescribing procedures and documentation for adding, withdrawing, substitut- ing, and holding pooled securities, and regulations prescribing the form, content, and execution of any application, report, or other document called for in any of the sections specified in subdivision (a) or in any regulation or order issued under any of those sections.
(2) The administrator, for good cause, may waive any provision of any regulation adopted pursuant to paragraph (1) or any order issued under this article, where the provision is not necessary in the public interest.
(d) The administrator may enter into any contracts or agreements as may be necessary, including joint underwriting agreements, to sell or liquidate eligible securities securing local agency deposits in the event of the failure of the deposi- tory or if the depository fails to pay all or part of the deposits of a local agency. (e) The administrator shall require from every depository a report certified by the agent of depository listing all securities, and the market value thereof, which are securing local agency deposits together with the total deposits then secured by the pool, to determine whether there is compliance with Section 53652. These re- ports may be required whenever deemed necessary by the administrator, but shall be required at least four times each year at the times designated by the Comptrol- 479 of 566

99 LOCAL AGENCY INVESTMENT GUIDELINES
ler of the Currency for reports from national banking associations. These reports shall be filed in the office of the administrator by the depository within 20 busi- ness days of the date the administrator calls for the report. (f) The administrator may have access to reports of examination made by the Comptroller of the Currency insofar as the reports relate to national banking as- sociation trust department activities which are subject to this article. (g)(1) The administrator shall require the immediate substitution of an eligible security, where the substitution is necessary for compliance with Section 53652, if (i) the administrator determines that a security listed in Section 53651 is not quali- fied to secure public deposits, or (ii) a treasurer, who has deposits secured by the securities pool, provides written notice to the administrator and the administrator confirms that a security in the pool is not qualified to secure public deposits. (2) The failure of a depository to substitute securities, where the administrator has required the substitution, shall be reported by the administrator promptly to those treasurers having money on deposit in that depository and, in addition, shall be reported as follows:
(A) When that depository is a national bank, to the Comptroller of the Currency of the United States.
(B) When that depository is a state bank, to the Commissioner of Business Oversight.
(C) When that depository is a federal association, to the Office of the Comptroller of the Currency.
(D) When that depository is a savings association, to the Commissioner of Busi- ness Oversight.
(E) When that depository is a federal credit union, to the National Credit Union Administration.
(F) When that depository is a state credit union or a federally insured industrial loan company, to the Commissioner of Business Oversight. (h) The administrator may require from each treasurer a registration report and at appropriate times a report stating the amount and location of each deposit together with other information deemed necessary by the administrator for ef- fective operation of this article. The facts recited in any report from a treasurer to the administrator are conclusively presumed to be true for the single purpose of the administrator fulfilling responsibilities assigned to him or her by this article and for no other purpose.
(i)(1) If, after notice and opportunity for hearing, the administrator finds that any depository or agent of depository has violated or is violating, or that there is reasonable cause to believe that any depository or agent of depository is about to violate, any of the sections specified in subdivision (a) or any regulation or order issued under any of those sections, the administrator may order the depository or agent of depository to cease and desist from the violation or may by order suspend or revoke the authorization of the agent of depository. The order may 480 of 566

100

LOCAL AGENCY INVESTMENT GUIDELINES
require the depository or agent of depository to take affirmative action to correct any condition resulting from the violation.
(2)(A) If the administrator makes any of the findings set forth in paragraph (1) with respect to any depository or agent of depository and, in addition, finds that the vio- lation or the continuation of the violation is likely to seriously prejudice the inter- ests of treasurers, the administrator may order the depository or agent of depository to cease and desist from the violation or may suspend or revoke the authorization of the agent of depository. The order may require the depository or agent of deposi- tory to take affirmative action to correct any condition resulting from the violation. (B) Within five business days after an order is issued under subparagraph (a), the depository or agent of depository may file with the administrator an application for a hearing on the order. The administrator shall schedule a hearing at least 30 days, but not more than 40 days, after receipt of an application for a hearing or within a shorter or longer period of time agreed to by a depository or an agent of depository. If the administrator fails to schedule the hearing within the specified or agreed to time period, the order shall be deemed rescinded. Within 30 days after the hearing, the administrator shall affirm, modify, or rescind the order; otherwise, the order shall be deemed rescinded. The right of a depository or agent of depository to which an order is issued under subparagraph (a) to petition for judicial review of the order shall not be affected by the failure of the depository or agent of depository to apply to the administrator for a hearing on the order pursuant to this subparagraph.
(3) Whenever the administrator issues a cease and desist order under paragraph (1) or (2), the administrator may in the order restrict the right of the depository to withdraw securities from a security pool; and, in that event, both the deposi- tory to which the order is directed and the agent of depository which holds the security pool shall comply with the restriction.
(4) In case the administrator issues an order under paragraph (1) or (2) suspend- ing or revoking the authorization of an agent of depository, the administrator may order the agent of depository at its own expense to transfer all pooled securi- ties held by it to such agent of depository as the administrator may designate in the order. The agent of depository designated in the order shall accept and hold the pooled securities in accordance with this article and regulations and orders issued under this article.
(j) In the discretion of the administrator, whenever it appears to the administra- tor that any person has violated or is violating, or that there is reasonable cause to believe that any person is about to violate, any of the sections specified in sub- division (a) or any regulation or order issued thereunder, the administrator may bring an action in the name of the people of the State of California in the supe- rior court to enjoin the violation or to enforce compliance with those sections or any regulation or order issued thereunder. Upon a proper showing a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted, and the court may not require the administrator to post a bond. (k) In addition to other remedies, the administrator shall have the power and authority to impose the following sanctions for noncompliance with the sec- 481 of 566

101

LOCAL AGENCY INVESTMENT GUIDELINES
tions specified in subdivision (a) after a hearing if requested by the party deemed in noncompliance. Any fine assessed pursuant to this subdivision shall be paid within 30 days after receipt of the assessment.
(1) Assess against and collect from a depository a fine not to exceed two hundred fifty dollars ($250) for each day the depository fails to maintain with the agent of depository securities as required by Section 53652.
(2) Assess against and collect from a depository a fine not to exceed one hundred dollars ($100) for each day beyond the time period specified in subdivision (b) of Section 53663 the depository negligently or willfully fails to file in the office of the administrator a written report required by that section. (3) Assess against and collect from a depository a fine not to exceed one hundred dollars ($100) for each day beyond the time period specified in subdivision (e) that a depository negligently or willfully fails to file in the office of the adminis- trator a written report required by that subdivision.
(4) Assess and collect from an agent of depository a fine not to exceed one hun- dred dollars ($100) for each day the agent of depository fails to comply with any of the applicable sections specified in subdivision (a) or any applicable regulation or order issued thereunder.
(l)(1) In the event that a depository or agent of depository fails to pay a fine assessed by the administrator pursuant to subdivision (k) within 30 days of receipt of the assessment, the administrator may assess and collect an addi- tional penalty of 5 percent of the fine for each month or part thereof that the payment is delinquent.
(2) If a depository fails to pay the fines or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository. (3) If an agent of depository fails to pay the fines or penalties assessed by the administrator, the administrator may notify local agency treasurers who have authorized the agent of depository as provided in Sections 53649 and 53656, and may by order revoke the authorization of the agent of depository as pro- vided in subdivision (i).
(m) The amendments to this section enacted by the Legislature during the 1999– 2000 Regular Session shall become operative on January 1, 2001. 53663
(a) Each agent of depository shall report in writing to the administrator within two business days after any withdrawal, substitution or addition of pooled se- curities and shall state the name and market value of the securities withdrawn, substituted or added together with the total deposits then secured by the pool.

This information shall be available from the administrator to the treasurer upon request.
(b) Each depository shall report in writing to the administrator weekly, giving the total amount of all deposits held by the depository pursuant to this article. 482 of 566

102

LOCAL AGENCY INVESTMENT GUIDELINES
The report shall be as of close of business on Wednesday of each week and shall be delivered to the office of the administrator, deposited in the United States mail, postage prepaid, or delivered electronically via email, or other electronic means approved by the administrator, addressed to the office of the administra- tor, within five business days. Where there has occurred no change in the deposits required to be held by the depository pursuant to this article, the report required by this subdivision need only state that fact.
53664
The individual reports specified in Sections 53654, 53660, 53661, and 53663 are not public documents and are not open to inspection by the public. 53665
If a depository fails to pay all or part of the deposits of a local agency secured by pooled securities in accordance with the contract provided for in Section 53649, and on demand of its treasurer or other authorized official and the treasurer files a report with the administrator, or if the depository fails:
(a) In case the pooled securities consist of securities other than securities of the class described in subdivision (p) of Section 53651, the administrator shall order the agent of depository holding the pooled securities to convert into money that portion of the pooled securities necessary to produce an amount equal to the sum of (i) the deposits of the local agency, (ii) any accrued interest due on the deposits, and (iii) the reasonable expenses of the agent of depository in complying with the order of the administrator and to pay the sum of items (i) and (ii) to the treasurer in satisfaction of the deposits. The agent of deposi- tory shall be reimbursed out of the proceeds of the conversion for its reason- able expenses in complying with the order of the administrator, as approved by the administrator. Any excess moneys resulting from the conversion shall be retained by the agent of depository as part of the securities pool until the depository substitutes for the excess moneys securities having a market value sufficient to bring the total of pooled securities up to the amount required by Section 53652.
(b) In case the pooled securities consist of a security of the class described in subdivision (p) of Section 53651, the administrator shall draw on the letter of credit an amount equal to the sum of (i) the deposits of the local agency, (ii) any accrued interest on the deposits, and (iii) the reasonable expenses of the adminis- trator in paying the deposits and pay the sum of items (i) and (ii) to the treasurer in satisfaction of the deposits.
53666
The only liability that shall attach to the administrator as the result of the opera- tion of this article is that which would attach as a result of other laws of this state. 483 of 566

103

LOCAL AGENCY INVESTMENT GUIDELINES
53667
(a) Expenses incurred by the administrator in carrying out the duties and respon- sibilities assigned to the administrator by the sections specified in subdivision (a) of Section 53661, shall be borne by the Local Agency Deposit Security Fund, which is hereby created and continuously appropriated to the administrator for the administration of the sections specified in subdivision (a) of Section 53661.

This fund shall consist of fines levied pursuant to Section 53661, fees collected pursuant to the sections specified in subdivision (a) of Section 53661, and assess- ments levied pursuant to this section.
(b) Each fiscal year the administrator shall levy an assessment on a pro rata basis on those depositories which at any time during the preceding fiscal year held local agency deposits. The total assessment levied on all of those deposito- ries shall be in an amount which, when added to the amount of fines and fees that the administrator estimates will be collected during the fiscal year when the assessment is levied, is sufficient in the judgment of the administrator to meet the expenses of the administrator in administering the sections specified in subdivision (a) of Section 53661 and to provide a reasonable reserve for contingencies. The basis of the apportionment of the assessment among the depositories assessed shall be the proportion that the average amount of local agency deposits held by each of those depositories bears to the average total amount of local agency deposits held by all of those depositories as shown by the reports of depositories to the administrator for the preceding fiscal year, as required in subdivision (e) of Section 53661; provided, however, that the amount of the assessment levied on each of those depositories shall be not less than twenty-five dollars ($25).
(c) The administrator shall notify each depository by mail of the amount levied against it. The depository shall pay the amount levied within 20 days after such notice into the Local Agency Deposit Security Fund for the admin- istration of the sections specified in subdivision (a) of Section 53661. If pay- ment is not made to the administrator within such time, the administrator shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent. If a depository fails to pay the assessment or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository.
53669
The treasurer or other authorized official is not responsible for money while it is deposited pursuant to this article.
53676
The treasurer is not responsible for securities delivered to and receipted for by any bank, savings and loan association, credit union, federally insured industrial loan company, or trust company.
484 of 566

104

LOCAL AGENCY INVESTMENT GUIDELINES
53678
The charges for the handling and safekeeping of any such securities are not a charge against the treasurer but shall be paid by the depository owning the securities. 53679
So far as possible, all money belonging to a local agency under the control of any of its officers or employees other than the treasurer shall, and money deposited as bail coming into the possession of a judge or officer of a superior court may, be deposited as active deposits in the state or national bank, inactive deposits in the state or national bank or state or federal association, federal or state credit union, or federally insured industrial loan company in this state selected by the officer, employee, or judge of the court. For purposes of this section, an officer or em- ployee of a local agency and a judge or officer of a superior court are prohibited from depositing local agency funds or money coming into their possession into a state or federal credit union if an officer or employee of the local agency, or a judge or officer of a superior court, also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or su- pervisory committee, of the particular state or federal credit union. That money is subject to this article except:
(a) Deposits in an amount less than that insured pursuant to federal law are not subject to this article.

For deposits in excess of the amount insured under any federal law a contract in accordance with Section 53649 is required and the provisions of this article shall apply.
(b) Interest is not required on money deposited in an active deposit by a judge or officer of a superior court.
(c) Interest is not required on money deposited in an active deposit by an officer having control of a revolving fund created pursuant to Chapter 2 (commencing with Section 29300) of Division 3 of Title 3.
(d) Interest is not required on money deposited in an active deposit by an officer having control of a special fund established pursuant to Article 5 (commencing with Section 29400) or Article 6 (commencing with Section 29430) of Chapter 2 of Division 3 of Title 3.
53679.1
Notwithstanding any other provision of law, the accounting practices of each county utilized prior to the effective date of this section relating to interest on trust funds shall be deemed appropriate and to have been made under the direc- tion of the board of supervisors of that county. This section is declaratory of the law in existence prior to the enactment of this section. 485 of 566

105

LOCAL AGENCY INVESTMENT GUIDELINES
53680
A tax collector of a local agency shall immediately deposit with the treasurer all money under his control, unless he deposits the money in a depositary pursuant to this article under permission and instructions of the treasurer having authority to make such deposit.
53681
An officer or employee of a local agency who deposits money belonging to, or in the custody of, the local agency in any other manner than that prescribed in this article is subject to forfeiture of his office or employment. 53682
Notwithstanding any other provision in this article except Section 53652, the treasurer may deposit moneys in and enter into contracts with any depository, as defined in subdivision (c) of Section 53630, for services to be rendered by that depository that in the treasurer’s judgment are to the public advantage. One copy of each contract entered into under this section shall be filed with the auditor or corresponding officer of the local agency. The contract shall:
(a) Fix the duration of compensating deposits, if any.
(b) Fix the interest rate of that compensating deposit, if any. (c) Specify the services to be rendered by the depository. (d) Indicate whether the depository shall bear the expenses of transportation of the money to and from the depository.
(e) Fix the consideration payable by the agency for such services. (f) Specify who may deposit moneys into the treasurer’s active account and how those persons are to make those deposits.
53683
Notwithstanding any other provision in this article, the consideration payable by the agency as specified in subdivision (e) of Section 53682 shall be paid by the treasurer by applying such consideration as costs applied on a pro rata basis against the interest earned by all the agencies for which the treasurer invests. 53684
(a) Unless otherwise provided by law, if the treasurer of any local agency, or other official responsible for the funds of the local agency, determines that the local agency has excess funds which are not required for immediate use, the treasurer or other official may, upon the adoption of a resolution by the legislative or gov- erning body of the local agency authorizing the investment of funds pursuant to this section and with the consent of the county treasurer, deposit the excess funds in the county treasury for the purpose of investment by the county trea- 486 of 566

106

LOCAL AGENCY INVESTMENT GUIDELINES
surer pursuant to Section 53601 or 53635, or Section 20822 of the Revenue and Taxation Code.
(b) The county treasurer shall, at least quarterly, apportion any interest or other increment derived from the investment of funds pursuant to this sec- tion in an amount proportionate to the average daily balance of the amounts deposited by the local agency and to the total average daily balance of de- posits in the investment pool. In apportioning and distributing that interest or increment, the county treasurer may use the cash method, the accrual method, or any other method in accordance with generally accepted account- ing principles. Prior to distributing that interest or increment, the county treasurer may deduct the actual costs incurred by the county in administering this section in proportion to the average daily balance of the amounts depos- ited by the local agency and to the total average daily balance of deposits in the investment pool.
(c) The county treasurer shall disclose to each local agency that invests funds pur- suant to this section the method of accounting used, whether cash, accrual, or other, and shall notify each local agency of any proposed changes in the accounting method at least 30 days prior to the date on which the proposed changes take effect. (d) The treasurer or other official responsible for the funds of the local agency may withdraw the funds of the local agency pursuant to the procedure specified in Section 27136.
(e) Any moneys deposited in the county treasury for investment pursuant to this section are not subject to impoundment or seizure by any county official or agency while the funds are so deposited.
(f) This section is not operative in any county until the board of supervisors of the county, by majority vote, adopts a resolution making this section operative in the county.
(g) It is the intent of the Legislature in enacting this section to provide an alternative procedure to Section 51301 for local agencies to deposit money in the county treasury for investment purposes. Nothing in this section shall, therefore, be construed as a limitation on the authority of a county and a city to contract for the county treasurer to perform treasury functions for a city pursuant to Section 51301.
53686
(a) Any audit conducted relating to the investment of local agency funds and other funds by the county treasurer in the county fund maintained pursuant to Section 53684 shall be rendered to the depositary, the auditor, the controller, the secretary, or the corresponding officer of the local agency, the treasurer or other official responsible for the funds of any local agency that has funds on deposit in the county treasury, and the presiding judge of any superior court that has ordered, pursuant to Section 3412, Section 3413, or Section 3611 of the Probate Code, that assets of an estate be deposited with the county treasurer for deposit or investment.
487 of 566

107

LOCAL AGENCY INVESTMENT GUIDELINES
(b) Any report rendered pursuant to Section 53646 shall be provided to the trea- surer or other official responsible for the funds of any local agency that has funds on deposit in the county treasury.

Government Code Section 53820 – 53821.5
53820
As used in this article, “local agency” means county, city, regional park district, school district, community college district, or any other municipal or public cor- poration or district.
53821.

Subsequent to approval of the final budget and levy of taxes, if funds are needed for the immediate requirements of a local agency in any fiscal year to pay obliga- tions lawfully incurred in the fiscal year and before the receipt of income for the fiscal year sufficient to meet the payments, money may be borrowed by:
(a) The legislative body of a county on the recommendation of the auditor and treasurer.
(b) The legislative body of the county having the largest area within the regional park district on the recommendation of the auditor and treasurer. (c) A school district, county board of education, or community college district on the request of two-thirds of the members of its governing board, approved by the county auditor and treasurer.
(d) A regional park district on the request of four-fifths of the members of its legislative body, approved by the auditor and treasurer of the county having the largest area within the district.
(e) The legislative body of a city on the recommendation of the city treasurer and chief accounting officer.
(f) The legislative body of any other municipal or public corporation or dis- trict on the recommendation of the officers performing the functions of audi- tor and treasurer.
53821.5
Proceeds of sales or funds set aside for the repayment of any notes issued pursuant to this article shall not be invested for a term that exceeds the term of the notes. 488 of 566

108

LOCAL AGENCY INVESTMENT GUIDELINES
Government Code Section 53840-53841.5
53840
It is hereby declared the intention of the Legislature by the enactment of this article to provide an alternative procedure under which short term loans may be procured by those counties in which the board of supervisors has declared it to be county policy to make advances of current operating requirements to subsidiary political subdivisions required by law to deposit their funds in the county treasury as such advances are authorized by the provisions of Section 25 of Article XIII of the State Constitution. In any such county the board of supervisors, upon recommendation of the county treasurer with the approval of the county auditor, may borrow on July 1st or thereafter such amounts as may be required to meet current obligations payable by the county treasury, pending collection of the revenue provided for the year in progress. Amounts so borrowed shall be evidenced by notes signed by the chairman of the board of supervisors, the county auditor and the county treasurer, and the liability created thereby shall be secured by a lien on all revenue to accrue to the county treasury from any source during the year then in progress. 53841
Any amounts borrowed by a county as provided in the preceding section shall not exceed 85 percent of the total of taxes levied for all purposes on said county’s tax roll for the next preceding fiscal year, and at no time during the year for which borrowed shall the unpaid total of the amounts so borrowed as shown by the auditor’s accounts at the close of any month be allowed to remain at more than 85 percent of the uncollected balance of taxes for the current year as shown by said accounts.
53841.5
Proceeds of sales or funds set aside for the repayment of any notes issued pursuant to this article shall not be invested for a term that exceeds the term of the notes.

Government Code Section 53850-53851.5
53850
(a) As used in this article, “local agency” means a county, city and county, city, school district of any type, community college district, county board of educa- tion, or any other municipal or public corporation or district. (b) For purposes of this article only, “local agency” also includes a charter school.

This subdivision does not make a charter school a local agency for any purpose other than for this article.
489 of 566

109

LOCAL AGENCY INVESTMENT GUIDELINES
53851
The powers conferred by this article are in addition to and an alternative to any power conferred by any other law for borrowing by a local agency and any amount borrowed hereunder shall not be considered in any limitation on the amount which may be borrowed by any such local agency under any other law. 53852
On or after the first day of any fiscal year a local agency may borrow money pursuant to this article, the indebtedness to be represented by a note or notes issued to the lender pursuant to this article. The money borrowed may be used and expended by the local agency for any purpose for which the local agency is authorized to use and expend moneys, including but not limited to current ex- penses, capital expenditures, investment and reinvestment, and the discharge of any obligation or indebtedness of the local agency.
53852.5
Proceeds of sales or funds set aside for the repayment of any notes issued pursuant to this article shall not be invested for a term that exceeds the term of the notes.

Government Code Section 53859-53859.02
53859
As used in this article: (a) “local agency” means county, city and county, city, school district, community college district, or any other municipal or public cor- poration or district.
(b) “Grant anticipation note” means a note issued upon the security of speci- fied accounts receivable from state or federal governments, including, without limitation, grants, loans, or a combination of both, for which funds have been appropriated and committed to a local agency.
(c) “Loan” includes, but is not limited to, a borrowing by a local agency repre- sented or to be represented by bonds of a local agency. 53859.01
The powers conferred by this article are in addition to an alternative to any pow- ers conferred by any other law for borrowing by a local agency and any amount borrowed hereunder shall not be considered in any limitation on the amount which may be borrowed by any such local agency under any other law. 53859.02
(a) A local agency may borrow money pursuant to this article, the indebtedness to be represented by a grant anticipation note or notes issued to the lender pursu- 490 of 566

110

LOCAL AGENCY INVESTMENT GUIDELINES
ant to this article. The money borrowed may be used and expended by the local agency solely for the purpose for which the grant or loan is to be received. (b) Proceeds of sales or funds set aside for the repayment of any notes issued pursu- ant to this article shall not be invested for a term that exceeds the term of the notes.

Government Code Section 57600-57607
57600
For purposes of this division:
(a) “Local financial institution” means a certified community development finan- cial institution, a credit union, as defined in Section 165 of the Financial Code, or a small bank or an intermediate small bank, as defined in Section 25.12 of Title 12 of the Code of Federal Regulations.
(b) (1) “Public bank” means a corporation, organized under the Nonprofit Mu- tual Benefit Corporation Law (Part 3 (commencing with Section 7110) of Di- vision 2 of Title 1 of the Corporations Code) or the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code) for the purpose of engaging in the commercial banking business or industrial banking business, that is wholly owned by a local agency, local agencies, or a joint powers authority formed pursuant to the Joint Exercise of Powers Act (Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1) that is composed only of local agencies. (2) A local agency located within a county with a population of less than 250,000 may organize a public bank only if it does so as part of a joint powers authority formed for those purposes.
(3) For purposes of paragraph (2), population shall be based on the most recent estimate of population data determined by the Demographic Research Unit of the Department of Finance.
(c) “Public bank license” means a certificate of authorization to transact business as a bank as described in Section 1042 of the Financial Code. 57601
(a) If a public bank is organized as a nonprofit mutual benefit corporation, the articles of incorporation shall include the following purpose statement: “This corporation is a nonprofit mutual benefit corporation organized under the Non- profit Mutual Benefit Corporation Law as a public bank. The purpose of the cor- poration is to engage in the commercial banking business or industrial banking business and any other lawful activities which are not prohibited to a public bank by applicable laws or regulations.”
(b) If a public bank is organized as a nonprofit public benefit corporation, the articles of incorporation shall include the following purpose statement: “This corporation is a nonprofit public benefit corporation and is not organized for 491 of 566

111

LOCAL AGENCY INVESTMENT GUIDELINES
the private gain of any person. It is organized under the Nonprofit Public Benefit Corporation Law for the public purpose of engaging in the commercial banking business or industrial banking business as a public bank.” (c) Notwithstanding Sections 5410 and 7411 of the Corporations Code, a public bank may make distributions to its members.
(d) All provisions of law applicable to nonprofit corporations generally, includ- ing, but not limited to, the Nonprofit Corporation Law (Division 2 (commenc- ing with Section 5000) of Title 1 of the Corporations Code) shall apply to public banks. Whenever a provision of this division applicable to public banks is incon- sistent with a provision of law applicable to nonprofit mutual benefit corpora- tions or nonprofit public benefit corporations generally, the provision of this division shall apply, and the inconsistent provision of law applicable to nonprofit mutual benefit corporations or nonprofit public benefit corporations generally shall not apply to a public bank.
57602
(a) A public bank shall obtain and maintain deposit insurance provided by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.).
(b) In seeking and retaining insurance, a public bank may do all things and assume and discharge all obligations required of it that are not in conflict with state law. 57603
(a) Before engaging in business, a public bank shall obtain a certificate of autho- rization to transact business as a bank pursuant to Division 1.1 of the Financial Code (commencing with Section 1000).
(b) A local agency shall comply with the requirements of Section 53638 with re- spect to its deposits in a public bank unless, with the prior approval of the Com- missioner of Business Oversight, the public bank and the local agency depositor agree otherwise.
(c) Notwithstanding Section 23010, a county may lend any of its available funds to any public bank.
(d) Notwithstanding Section 53601, any local agency that does not pool money in deposits or investments with other local agencies that have separate governing bodies may invest in debt securities or other obligations of a public bank. (e) Notwithstanding Section 53635, any local agency that pools money in de- posits or investments with other local agencies, including local agencies that have the same governing body, may invest in debt securities or other obligations of a public bank.
(f) Notwithstanding Section 53635.2, a public bank shall be eligible to receive local agency money.
492 of 566

112

LOCAL AGENCY INVESTMENT GUIDELINES
57604
(a) As used in this section:
(1) “Conducted in partnership with” means pursuant to a written agreement with a local financial institution to provide financial products and services to the public located within the jurisdiction of the public bank. (2) “Infrastructure lending” means granting a loan or extending credit to a local agency for the purpose of building or improving public infrastructure, including housing projects, as defined in Section 34212 of the Health and Safety Code, and affordable housing, as defined in subdivision (a) of Section 62250. (3) “Local agency banking” means providing any of the following services to a local agency:
(A) Accepting a deposit of any kind.
(B) Granting a loan or extension of credit of any kind. (4) “Participation lending” means purchasing or selling an interest in a loan or loans originated by or sold to a local financial institution, or originating, leading, or directing a loan transaction involving a local financial institution pursuant to a written agreement with the local financial institution. (5) “Person” means a person as defined in Section 127 of the Financial Code, except that a person does not mean a local agency as defined in Section 50001 of the Government Code, but includes any individual employed by a local agency. (6) “Retail activities” means providing any kind of financial product or service to a person that is typically offered or provided by a local financial institution, including, but not limited to, all of the following:
(A) Accepting a deposit of any kind from a person, including the issuance of shares by a credit union.
(B) Granting a loan or extension of credit, of any kind, to a person. (7) “Wholesale lending” means granting a loan or extension of credit to a local financial institution.
(b) Except as provided in paragraph (2) of subdivision (c), a public bank shall conduct retail activities in partnership with local financial institutions and shall not compete with local financial institutions.
(c) A public bank may do both of the following:
(1) Engage in all of the following banking activities:
(A) Local agency banking.
(B) Infrastructure lending.
(C) Wholesale lending.
493 of 566

113

LOCAL AGENCY INVESTMENT GUIDELINES
(D) Participation lending.
(2) Engage in retail activities without partnering with a local financial institution, if those retail activities are not offered or provided by local financial institutions in the jurisdiction of the local agency or agencies that own the public bank. 57605
For the purposes of Section 1280 of the Financial Code, any person or entity, including a local agency, that owns, controls, or holds an ownership interest in a public bank is not a bank holding company by reason of that ownership interest. 57606
(a) Before submitting an application to organize and establish a public bank pur- suant to Section 1020 of the Financial Code, a local agency shall conduct a study to assess the viability of the proposed public bank. The study shall include, but is not limited to, all of the following elements:
(1) A discussion of the purposes of the bank including, but not limited to, achieving cost savings, strengthening local economies, supporting commu- nity economic development, and addressing infrastructure and housing needs for localities.
(2) A fiscal analysis of costs associated with starting the proposed public bank. (3) An estimate of the initial amount of capital to be provided by the local agency to the proposed public bank.
(4) Financial projections, including a pro forma balance sheet and income state- ment, of the proposed public bank for at least the first five years of operation.

The financial projections shall include an estimate of the time period for when expected revenues meet or exceed expected costs and an estimate of the total operating subsidy that the local agency may be required to provide until the proposed public bank generates sufficient revenue to cover its costs. In addition to projections that assume favorable economic conditions, the analysis shall also include a downside scenario that considers the effect of an economic recession on the financial results of the proposed public bank. The projections may include the downside scenario of continuing to do business with the local government’s current banker or bankers.
(5) A legal analysis of whether the proposed structure and operations of the pub- lic bank would likely comply with Section 6 of Article XVI of the California Constitution, but nothing herein shall compel the waiver of any attorney-client privilege attaching to that legal analysis.
(6) An analysis of how the proposed governance structure of the public bank would protect the bank from unlawful insider transactions and apparent conflicts of interest.
(b) The study may include any of the following elements:
494 of 566

114

LOCAL AGENCY INVESTMENT GUIDELINES
(1) A fiscal analysis of benefits associated with starting the proposed public bank, including, but not limited to, cost savings, jobs created, jobs retained, economic activity generated, and private capital leveraged.
(2) A qualitative assessment of social or environmental benefits of the proposed public bank.
(3) An estimate of the fees paid to the local agency’s current banker or bankers. (4) A fiscal analysis of the costs, including social and environmental, of continu- ing to do business with the local agency’s current banker or bankers. (c) (1) The study required by subdivision (a) shall be presented to and approved by the governing body of the local agency, and a motion to move forward with an application for a public banking charter shall be approved by a majority vote of the governing body at a public meeting prior to the local agency submitting an application pursuant to Section 1020 of the Financial Code. In addition, the local agency shall include a copy of the study required by subdivision (a) in the application submitted to the Commissioner of Business Oversight. (2) Before the local agency submits an application pursuant to Section 1020 of the Financial Code, the motion to move forward with an application for a public banking charter shall be subject to voter approval at the next regularly scheduled election held at least 180 days following the vote of the governing body. (3) The voter approval requirement described in paragraph (2) shall apply to a local agency entering into a joint powers authority formed pursuant to the Joint Exercise of Powers Act (Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1) after the study required in subdivision (a) has been com- pleted and before submitting an application to organize and establish a public bank pursuant to Section 1020 of the Financial Code.
(4) As used in paragraphs (2) and (3), “local agency” does not include a charter city. (d) The local agency shall make available to the public the financial models and key assumptions used to estimate the elements described in paragraphs (2) through (4) of subdivision (a) before presenting the study to the governing body of the local agency as required by subdivision (c).
57607
(a) The Commissioner of Business Oversight shall not issue more than two pub- lic bank licenses in a calendar year.
(b) The Commissioner of Business Oversight shall not issue a public bank license if issuing that public bank license would cause there to be more than 10 public banks authorized to transact business pursuant to Division 1.1 (commencing with Section 1000) of the Financial Code.
(c) The Commissioner of Business Oversight shall conduct a study of public banking in California within two years after the date upon which the commis- sioner issues the 10th public bank license.
495 of 566

115

LOCAL AGENCY INVESTMENT GUIDELINES
(d) The Commissioner of Business Oversight shall not issue a public bank license after the expiration of a period of seven years from the date upon which the commissioner first promulgates regulations for the purpose of carrying out the commissioner’s duties under this division.
496 of 566

116

LOCAL AGENCY INVESTMENT GUIDELINES
Glossary
A

ACTIVE MANAGEMENT STRATEGY
Investment strategy based on a manag-
er or a team of managers actively man-
aging a fund's portfolio with the goal
of outperforming benchmarks through
analytical research, forecasts, and their
own judgment and experience.

ACCRETION
The accumulation of value that occurs
during the duration or time between a
bond's issuance and maturity.

ACCRUED INTEREST
Coupon interest accumulated on a
bond or note since the last interest
payment or, for a new issue, from the
dated date to the date of delivery.

AMORTIZATION OF COSTS
Reconciliation of the purchase price
of a security and par value resulting in
net interest.

ARBITRAGE
T ransactions by which securities are
bought and sold in different markets
at the same time for the sake of the
profit arising from a yield difference
in the two markets. The 1986 Tax
Reform Act made this practice by
municipalities illegal solely as a bor-
rowing tactic, except under certain
safe-harbor conditions.

ASSET ALLOCATION
The division of an investment port-
folio among different asset categories,
such as stocks, bonds, and cash.

ASSET-BACKED SECURITIES
Securities that are supported by
pools of assets, such as installment
loans or leases, or by pools of revolv-
ing lines of credits. Asset-backed
securities are structured as trusts in
order to perfect a security interest in
the underlying assets.

AVERAGE
An arithmetic mean of selected stocks
intended to represent the behavior of
the market or some component of it.

B

BANK DEPOSITS
Deposits in banks or other deposi-
tory institutions that may be in the
form of demand accounts (checking)
or investments in accounts that have
a fixed term and negotiated rate of
interest.

BANK NOTES
A senior, unsecured, direct obliga-
tion of a bank or U. S. branch of a
foreign bank.
497 of 566

117

LOCAL AGENCY INVESTMENT GUIDELINES
BANKERS’ ACCEPTANCE
A draft or bill or exchange accepted
by a bank or trust company. The
accepting institution, as well as the
issuer, guarantees payment of the bill.

BASIS POINTS
Refers to the yield on bonds. Each
percentage point of yield in bonds
equals 100 basis points (1/100% or

0.01%). If a bond yield changes from

7.25% to 7.39%, that is a rate of 14
basis points.

BENCHMARK
A passive index used to compare the
performance, relative to risk and
return, of an investor’s portfolio.

BOND PROCEEDS
The money paid to the issuer by the
purchaser or underwriter of a new
issue of municipal securities. These
moneys are used to finance the project
or purpose for which the securities
were issued and to pay certain costs
of issuance as may be provided in the
bond contract.

BONDS
A debt obligation of a firm or public
entity. A bond represents the agree-
ment to repay the debt in principal
and, typically, in interest on the
principal.

BOOK RETURN
Book return includes interest, amor-
tization/accretion of premiums/dis-
counts, realized gains and losses, over
a given period of time.

BOOK VALUE
The value at which an asset is carried
on a balance sheet.

BROKER
A person or firm that acts as an in-
termediary by purchasing and selling
securities for others rather than for its
own account.

BUY AND HOLD STRATEGY
A strategy based on holding all securi-
ties until maturity, regardless of fluc-
tuations in the market.

C

CALL OPTION
The terms of the bond contract giving
the issuer the right to redeem or call
an outstanding issue of bonds prior to
its stated date of maturity.

CALL RISK
The risk to a bondholder that the
bond issuer will exercise a callable
bond feature and redeem the issue
prior to maturity.

CALLABLE SECURITIES
An investment security that contains
an option allowing the issuer to
retire the security prior to its final
maturity date.

CASH FLOW
A comparison of cash receipts (rev-
enues) to required payments (debt
service, operating expenses, etc.).

CERTIFICATE OF DEPOSIT
A short-term, secured deposit in a fi-
nancial institution that usually returns
principal and interest to the lender at
the end of the loan period. Certifi-
cates of Deposit (CDs) differ in terms
of collateralization and marketability.

Those appropriate to public agency
investing include:
498 of 566

118

LOCAL AGENCY INVESTMENT GUIDELINES
Negotiable Certificates of Deposit
Generally, short-term debt instru-
ment that usually pays interest and is
issued by a bank, savings or federal
association, state or federal credit
union, or state-licensed branch of a
foreign bank. The majority of nego-
tiable CDs mature within six months
while the average maturity is two
weeks. Negotiable CDs are traded in
a secondary market and are payable
upon order to the bearer or initial
depositor (investor). Negotiable
CDs are insured by FDIC up to
$250,000, but they are not collateral-
ized beyond that amount.

Non-Negotiable
Certificates of Deposit
CDs that carry a penalty if redeemed
prior to maturity. A secondary mar-
ket does exist for non-negotiable
CDs, but redemption includes a
transaction cost that reduces returns
to the investor. Non-negotiable
CDs issued by banks and savings
and loans are insured by the Federal
Deposit Insurance Corporation up
to the amount of $250,000, includ-
ing principal and interest. Amounts
deposited above this amount may be
secured with other forms of collateral
through an agreement between the
investor and the issuer. Collateral
may include other securities includ-
ing T reasuries or agency securities
such as those issued by the Federal
National Mortgage Association.

CDARS (CERTIFICATE

OF DEPOSIT ACCOUNT

REGISTRY SYSTEM)
A private CD placement service that
allows local agencies to purchase
more than $250,000 in CDs from a
single financial institution (must be a
participating institution of CDARS)
while still maintaining FDIC insur-
ance coverage. CDARS is currently
the only entity providing this service.

CDARS facilitates the trading of
deposits between the California insti-
tution and other participating institu-
tions in amounts that are less than
$250,000 each, so that FDIC cover-
age is maintained.

CD PLACEMENT SERVICE
A service that allows local agencies to
purchase more than $250,000 in CDs
from a single financial institution
while still maintaining FDIC insur-
ance coverage. See “CDARS”.

COLLATERALIZATION

OF DEPOSITS
Process by which a bank or financial
institution pledges securities, or other
deposits for the purpose of securing
the repayment of deposited funds.

COMMERCIAL PAPER
An unsecured short-term promissory
note issued by corporations or munici-
palities, with maturities ranging from 2
to 270 days.

CONVEXITY
A measure of the price sensitivity of
a fixed income security to changes in
interest rates. Convexity is influenced
by such factors as the coupon rate,
maturity, and any call options that may
or may not exist. Prices rise at increas-
ing rates as yields fall and prices decline
at decreasing rates as yields rise.

CORPORATE NOTES AND BONDS
Debt instruments, typically unse-
cured, issued by corporations, with
original maturities in most cases
greater than one year and less than
ten years.

499 of 566

119

LOCAL AGENCY INVESTMENT GUIDELINES

COUNTY POOLED

INVESTMENT FUNDS
The aggregate of all funds from public
agencies placed in the custody of the
county treasurer or chief finance of-
ficer for investment and reinvestment.

COUPON
The annual rate of interest that a
bond’s issuer promises to pay the
bondholder on the bond’s face value; a
certificate attached to a bond evidenc-
ing interest due on a payment date.

CREDIT RATING
Various alphabetical and numerical
designations used by credit rating or
nationally recognized statistical rating
organizations (NRSROs), institutional
investors, Wall Street underwriters,
and commercial rating companies to
give relative indications of bond and
note creditworthiness.

Long-term Ratings
The three most commonly used
NRSROs are Standard & Poor's,
Fitch Ratings, and Moody's. Stan-
dard & Poor’s and Fitch Ratings
use the same system, starting with
their high¬est rating, of AAA, AA,
A, BBB, BB, B, CCC, CC, C, and
D for default. Moody’s Investors
Service uses Aaa, Aa, A, Baa, Ba, B,
Caa, and Ca. Each of the services
use pluses (+), minuses (-), or nu-
merical modifiers to indicate steps
within each category. The S&P rat-
ings from AA to CCC may be modi-
fied by the addition of a plus (+)
or minus (-) sign to show relative
standing within the major rating
categories. Moody's appends nu-
merical modifiers 1, 2, and 3 to each
generic rating classification from Aa
through Caa. The modifier 1 indi-
cates that the obligation ranks in
the higher end of its generic rating
category; the modifier 2 indicates a
mid-range ranking; and the modifier
3 indicates a ranking in the lower
end of that generic rating category.

The top four letter categories are
considered investment grade ratings.

Short-term Ratings
Standard & Poor's short-term ratings
system is A-1+, A-3, B, C, and / for
default. Fitch Ratings use F1+, F3, B,
C, and / for default. Finally, Moody's
uses P1 and P3, anything below P3 is
considered not prime.

CREDIT RISK
The chance that an issuer will be un-
able to make scheduled payments of
interest and principal on an outstand-
ing obligation. Another concern for
investors is that the market’s percep-
tion of an issuer/borrower’s credit will
cause the market value of a security to
fall, even if default is not expected.

CUSIP NUMBER
The Committee on Uniform Security
Information Procedures (CUSIP)
Number refers to a security’s identifica-
tion number assigned to each publicly
traded security by the CUSIP Service
Bureau operated by Standard & Poor’s
for the American Bankers Association.

The CUSIP Number is a nine-charac-
ter identifier unique to the issuer, the
specific issue and the maturity, if appli-
cable (the first six characters identifying
the issuer, the next two identifying the
security and the last digit providing a
check digit to validate the accuracy of
the preceding CUSIP number).

CUSTODIAN
A bank or other financial institution
that keeps custody of stock certificates
and other assets.

500 of 566

120

LOCAL AGENCY INVESTMENT GUIDELINES
D
DEALER
Someone who acts as a principal in all
transactions, including underwriting,
buying, and selling securities, includ-
ing from their own account.

DEFAULT RISK
The risk that issuers/borrowers will be
unable to make the required payments
on their debt obligations.

DEFEASED BOND ISSUES
Issues that have sufficient money to
retire outstanding debt when due so
that the agency is released from the
contracts and covenants in the bond
document.

DELIVERY VS. PAYMENT (DVP)
The payment of cash for securities as
they are delivered and accepted for
settlement.

DERIVATIVE
Securities that are based on, or derived
from, some underlying asset, reference
date, or index.

DISCOUNT
Discount means the difference be-
tween the par value of a security and
the cost of the security, when the
cost is below par. Investors purchase
securities at a discount when return
to the investor (yield) is higher than
the stated coupon (interest rate) on
the investment.

DISCOUNT RATE
The interest rate used in discounted
cash flow (DCF) analysis to determine
the present value of future cash flows.

The discount rate in DCF analysis
takes into account not just the time
value of money, but also the risk or
uncertainty of future cash flows; the
greater the uncertainty of future cash
flows, the higher the discount rate.

DIVERSIFICATION
The allocation of different types of as-
sets in a portfolio to mitigate risks and
improve overall portfolio performance.

DURATION
A measure of the timing of the cash
flows to be received from a security
that provides the foundation for a
measure of the interest rate sensitiv-
ity of a bond. Duration is a volatil-
ity measure and represents the ap-
proximate percentage change in price
divided by the percentage change in
interest rates. A high duration mea-
sure indicates that for a given level of
movement in interest rates, prices of
securities will vary considerably.

E

EFFECTIVE DURATION
Duration measures the weighted aver-
age of the present value of the cash
flows of a fixed-income investment.

Effective duration measures the price
sensitivity of fixed-income investments,
especially for those with embedded
option features such as call options. As
yields rise, the effective duration of a
callable investment rises to reflect the
fact that it has become less likely to be
called. The more rates rise, the longer
the effective duration will become,
approaching the duration to maturity.

The converse is true in a declining
interest rate environment (that is, the
more rates fall, the shorter the effective
duration will become, approaching the
duration to call). For securities without
an embedded option, the duration to
call, maturity, and effective duration
501 of 566

121

LOCAL AGENCY INVESTMENT GUIDELINES
are all the same. The calculation for
effective duration is complicated and
involves averaging the duration under
a simulation of many possible interest
rate scenarios in the future.

EVENT RISK
The risk associated with a changing
portfolio value due to a market event
causing swings in market prices and/
or spreads.

EXTENDABLE NOTES
Securities with maturity dates that
can be extended by mutual agree-
ment between the issuer and inves-
tor. When investing in these types
of securities, the maturity date plus
the stated extendable option must
not exceed the time frames that are
allowed in California Government
Code or the investment policy for
the investment type.

F

FIDUCIARY
An individual who holds something
in trust for another and bears liability
for its safekeeping.

FIRST TIER SECURITIES
Securities that have received short-
term debt ratings in the highest cat-
egory from the requisite nationally
recognized statistical-rating organiza-
tions (NRSROs), or are comparable
unrated securities, or are issued by
money market funds, or government
securities. [See SEC Rules: Paragraph
(A)(12) of rule 2A-7.]

FLOATING RATE SECURITY
A security that has a variable or “float-
ing” interest rate.

G

GOVERNMENT ACCOUNTING

STANDARDS BOARD (GASB)
A standard-setting body, associ-
ated with the Financial Accounting
Foundation, which prescribes stan-
dard accounting practices for gov-
ernmental units.

GOVERNMENT SPONSORED

ENTERPRISES (GSE)
Privately held corporations with
public purposes created by the U.S.

Congress to reduce the cost of capital
for certain borrowing sectors of the
economy. Securities issued by GSEs
carry the implicit backing of the U.S.

Government, but they are not direct
obligations of the U.S. Government.

For this reason, these securities will of-
fer a yield premium over T reasuries.

GUARANTEED INVESTMENT

CONTRACT (GIC)
An agreement acknowledging receipt
of funds for deposit, specifying terms
for withdrawal, and guaranteeing a
rate of interest to be paid.

I
IRMA
An independent registered munici-
pal advisor (IRMA) is registered as a
municipal advisor with the SEC and
MSRB and has a fiduciary duty to the
issuer(s) that he/she advises on the issu-
ance of municipal securities and invest-
ment of the proceeds of issued debt.

IRMA EXEMPTION
Pursuant to the Municipal Advisor
Rule (MA Rule), underwriters may
provide advice to municipal issu-
ers only where certain exceptions or
502 of 566

122

LOCAL AGENCY INVESTMENT GUIDELINES
exemptions apply. The Independent
Registered Municipal Advisor Exemp-
tion (IRMA Exemption) applies where:
(1) the issuer has retained an IRMA
that is not recently associated (within
the last two years of seeking to use
the exemption) with the underwriter,
(2) the underwriter receives a written
notice from the issuer that they are
represented by the IRMA and will rely
on their advice, and the underwriter
can reasonably rely on that notice, and
(3) the underwriter provides a written
notice to the issuer and IRMA stating
that the underwriter is not a municipal
advisor and has no fiduciary duty to
the issuer, and the issuer must have
adequate time to review that notice.

INDEX
An index is an indicator that is pub-
lished on a periodic basis that shows
the estimated price and/or yield levels
for various groups of securities.

INTEREST
The amount a borrower pays to a
lender for the use of his or her money.

INTEREST RATE RISK
Interest rate risk is the risk that an
investment's value will change due to a
change in the absolute level of interest
rates, spread between two rates, shape
of the yield curve, or any other interest
rate relationship.

INVESTMENT AGREEMENTS
Investment agreements are contracts
with respect to funds deposited by an
investor. Investment agreements are
often separated into those offered by
banks and those offered by insurance
companies. In the former case, they
are sometimes referred to as “bank
investment contracts.”

INVESTMENT OVERSIGHT

COMMITTEE
A committee of three to eleven mem-
bers formed under Section 27131 to
monitor and review a county’s invest-
ment policy by causing an annual audit
and discussing its finding at an open
meeting. Although cities and other
local agencies are not required to com-
pose an investment oversight commit-
tee, the State Legislature has declared
that all local agencies “should par-
ticipate in reviewing the policies that
guide the investment of those funds.”

INSTITUTIONAL ACCOUNT
As defined by the Financial Industry
Regulatory Authority (FINRA), an
institutional account includes one of
the following: (1) a bank, savings and
loan association, insurance company
or registered investment company; (2)
an investment adviser registered either
with the SEC under Section 203 of
the Investment Advisers Act or with
a state securities commission (or any
agency or office performing like func-
tions); or (3) any other person (wheth-
er a natural person, corporation, part-
nership, trust or otherwise) with total
assets of at least $50 million.

L
LIBOR
Acronym for “London Interbank
Offered Rate,” which represented
the average rate at which a leading
bank can obtain unsecured funding
in the London interbank market.

LIBOR served as a benchmark for
various interest rates. Obligations of
parties to such transactions are typi-
cally expressed as a spread to LIBOR.

In response to concerns that the
benchmark was being manipulated,
the publication for one-week and
503 of 566

123

LOCAL AGENCY INVESTMENT GUIDELINES
two-month LIBOR ceased at the end
of 2021 and the remaining tenors of
LIBOR ceased after June 30, 2023.

LIQUIDITY
The measure of the ability to convert
an instrument to cash on a given date
at full face or par value.

LIQUIDITY RISK
The risk that a security, sold prior to
maturity, will be sold at a loss of value.

For a local agency, the liquidity risk of
an individual investment may not be as
critical as how the overall liquidity of
the portfolio allows the agency to meet
its cash needs.

LOCAL AGENCY

INVESTMENT FUND
A voluntary investment fund open
to government entities and certain
non-profit organizations in Cali-
fornia that is managed by the State
T reasurer’s Office.

LOCAL GOVERNMENT

INVESTMENT POOL (LGIP)
Investment pools that range from the
State T reasurer’s Office Local Agency
Investment Fund (LAIF) to county
pools, to Joint Powers Authorities
(JPAs). These funds are not subject
to the same SEC rules applicable to
money market mutual funds.

M

MARKET RISK
The chance that the value of a security
will decline as interest rates rise. In
general, as interest rates fall, prices of
fixed income securities rise. Similarly,
as interest rates rise, prices fall. Market
risk also is referred to as systematic
risk or risk that affects all securities
within an asset class similarly.

MARKET VALUE
The price at which a security is trading
and presumably could be purchased or
sold at a particular point in time.

MATURITY
The date on which the principal or
stated value of an investment becomes
due and payable.

MEDIUM-TERM NOTE
Corporate or depository institution
debt securities meeting certain mini-
mum quality standards (as specified
in the California Government Code)
with a remaining maturity of five
years or less.

MONEY MARKET

MUTUAL FUNDS
MMF’s are mutual funds that invest
exclusively in short-term money
market instruments. MMF’s seek the
preservation of capital as a primary
goal while maintaining a high degree
of liquidity and providing income
representative of the market for short-
term investments.

MORTGAGE BACKED SECURITIES
Mortgage-backed securities (MBS) are
created when a mortgagee or a pur-
chaser of residential real estate mort-
gages creates a pool of mortgages and
markets undivided interests or par-
ticipations in the pool. MBS owners
receive a prorata share of the interest
and principal cash flows (net of fees)
that are “passed through” from the
pool of mortgages. MBS are complex
securities whose cash flow is deter-
mined by the characteristics of the
mortgages that are pooled together.

Investors in MBS face prepayment
risk associated with the option of the
underlying mortgagors to pre-pay or
payoff their mortgage. Most MBS are
504 of 566

124

LOCAL AGENCY INVESTMENT GUIDELINES
issued and/or guaranteed by federal
agencies and instrumentalities (e.g.,
Government National Mortgage As-
sociation (GNMA), Federal National
Mortgage Association (FNMA), and
Federal Home Loan Mortgage Corpo-
ration (FHLMC)).

MORTGAGE PASS-THROUGH

OBLIGATIONS
Securities that are created when
residential mortgages (or other mort-
gages) are pooled together and undi-
vided interests or participations in the
stream of revenues associated with the
mortgages are sold.

MUNICIPAL ADVISOR

RULE (MA RULE)
A regulation of non-dealer "municipal
advisors" such as financial advisors,
swap advisors, GIC brokers, etc. In
addition, the rule pertains to banks
and broker dealers acting as municipal
advisors. Municipal advisors have a
fiduciary responsibility to the govern-
ment agency receiving their services
and they must register with the Securi-
ties Exchange Commission (SEC).

Municipal finance professionals that
do not have a fiduciary duty to issuers
cannot provide advice to governments
unless certain exemptions are met. The
SEC has published a list of frequently
asked questions: www.sec.gov/info/
municipal/mun-advisors-faqs.pdf.

MUNICIPAL NOTES, BONDS, AND

OTHER OBLIGATIONS
Obligations issued by state and local
governments to finance capital and
operating expenses.

MUTUAL FUNDS
An investment company that pools
money and can invest in a variety of
securities, including fixed-income secu-
rities and money market instruments.

N

NET ASSET VALUE
Net asset value (NAV) is a term used in
the mutual fund industry to determine
the average price per share of a pool or
mutual fund. How this measure var-
ies over time provides information on
whether the pool is stable or variable.

NAV is the market value of all securi-
ties in a mutual fund, less the value
of the fund’s liabilities, divided by the
number of shares in the fund outstand-
ing. Shares of mutual funds are pur-
chased at the fund’s offered NAV.

NET PRESENT VALUE
An amount that equates future cash
flows with their value in present terms.

NEW ISSUE
Securities sold during the initial distri-
bution of an issue in a primary offer-
ing by the underwriter or underwrit-
ing syndicate.

NOTE
A written promise to pay a specified
amount to a certain entity on demand
or on a specified date. Usually bearing
a short-term maturity of a year or less
(though longer maturities are issued—
see “Medium-T erm Note”).
505 of 566

125

LOCAL AGENCY INVESTMENT GUIDELINES
O

OPTIONS
An option is a contract that gives the
buyer the right to buy or sell an obliga-
tion at a specified price for a specified
time. Exchange T raded Options are
standardized option contracts that are
actively traded on the Chicago Board
of Exchange on a daily basis whereas
Over-the-Counter Options are traded
directly between the buyer and seller at
agreed upon prices and conditions (the
former type of option is therefore more
liquid than the latter).

P

PAR AMOUNT OR PAR VALUE
The principal amount of a note or
bond which must be paid at matu-
rity. Par, also referred to as the “face
amount” of a security, is the principal
value stated on the face of the security.

A par bond is one sold at a price of
100% of its principal amount.

PLACEMENT SERVICE

CERTIFICATES OF DEPOSIT
Certificates of deposit placed with
a private sector entity that assists in
the placement of certificates of de-
posit with eligible financial institu-
tions located in the United States.

PLACEMENT SERVICE DEPOSIT
Deposits at depository institutions
placed by a private sector placement
service entity.

PORTFOLIO
Combined holding of more than one
stock, bond, commodity, real estate
investment, cash equivalent, or other
asset. The purpose of a portfolio is to
reduce risk by diversification.

PREMIUM
Premium means the difference be-
tween the par value of a security and
the cost of the security, when the cost
is above par. Investors pay a premium
to purchase a security when the return
to the investor (yield) is lower than
the stated coupon (interest rate) on
the investment.

PRICE
Price is the amount of monetary con-
sideration required by a willing seller
and a willing buyer to sell an invest-
ment on a particular date.

PRINCIPAL
The face value or par value of a debt
instrument, or the amount of capital
invested in a given security.

PROSPECTUS
A disclosure document that must be
provided to any prospective purchaser
of a new securities offering registered
with the SEC that typically includes
information on the issuer, the issuer’s
business, the proposed use of pro-
ceeds, the experience of the issuer’s
management, and certain certified
financial statements (also known as an
“official statement”).

PRUDENT INVESTOR STANDARD
A standard of conduct where a per-
son acts with care, skill, prudence,
and diligence when investing, re-
investing, purchasing, acquiring,
exchanging, selling, and managing
funds. The test of whether the stan-
dard is being met is if a prudent per-
son acting in such a situation would
engage in similar conduct to ensure
that investments safeguard principal
and maintain liquidity.
506 of 566

126

LOCAL AGENCY INVESTMENT GUIDELINES

PUBLIC BANK
A corporation, organized as either a
nonprofit mutual benefit corporation
or a nonprofit public benefit corpora-
tion for the purpose of engaging in
the commercial banking business or
industrial banking business, that is
wholly owned by a local agency, as
specified, local agencies, or a joint
powers authority.

Q

QUALIFIED INSTITUTIONAL
BUYER
Federal regulations define qualified
institutional buyer (QIB) as any of the
following entities, acting for its own
account or the accounts of other QIBs,
that in the aggregate owns and invests
on a discretionary basis at least $100
million in securities of issuers that are
not affiliated with the entity: insurance
company, investment company, small
business investment company, a Rural
Business Investment Company, a plan
(established and maintained by a public
agency) for the benefit of its employees,
employee benefit plan, trust fund (bank
or trust company), business develop-
ment company, 501(c)(3), investment
adviser, and dealer, an institution that
qualifies as an accredited investor. 17
CFR § 230.144A and 230.145
R

REINVESTMENT RISK
The risk that interest rates may be
lower than the yield on a fixed in-
come security when the investor
seeks to reinvest interest income or
repaid principal from the security.