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 Funds
J
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 days
M 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 Multiple
U 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.
ATTACHMENT NO. 6
A Sour ces: Sections 16340, 16429.1, 27133, 53601,
53601.6, 53601.8, 53630 et seq., 53635, 53635.8,
and 57603.
B Municipal Utilities Dis tricts have the authority under the Public Utilities Code Section 12871 to invest in
certain securities not addressed here.
C Section 5360 1 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 P ercentages 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 N o more than 30% of the agency’s money may be in
bankers’ acceptances of any one commercial bank.
F Applies t o 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 ag encies, 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 Issu ing 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 t o 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 ag encies 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 N o more than 30% of the agency’s money may be in
negotiable certificates of deposit that are authorized
under Section 53601(i).
L Ef fective 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 R everse 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 R everse 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 “Mediu m-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 N o more than 10% invested in any one mutual fund.
This limitation does not apply to money market
mutual funds.
Q A mu tual 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 mone y 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 In vestments 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 Secur ity 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 po wers 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 be tween $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 Onl y 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