xt7wpz51gt7z https://exploreuk.uky.edu/dips/xt7wpz51gt7z/data/mets.xml Lexington, Kentucky University of Kentucky 20080123 minutes English University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Minutes of the University of Kentucky Board of Trustees Minutes of the University of Kentucky Board of Trustees, 2008-01-23ic. text Minutes of the University of Kentucky Board of Trustees, 2008-01-23ic. 2008 2011 true xt7wpz51gt7z section xt7wpz51gt7z 

Minutes Investment Committee Board of Trustees January 23, 2008
IN ATTENDANCE:
Investment Committee Mr. Billy B. Wilcoxson, Chair
Members: Mr. Stephen P. Branscum
Mr. James F. Hardymon Ms. Myra Leigh Tobin
Ms. JoEtta Y. Wickliffe (attended meeting until 11:45am)
Board of Trustees Ms. Mira S. Ball Members:
Investment Staff & Mr. Marc A. Mathews
Consultants: Ms. Susan I. Krauss
Ms. Donna A. Counts*
Mr. Steve Voss (Ennis, Knupp & Associates)*
Mr. Matt Russ (Ennis, Knupp & Associates)*
Mr. Steve Cummings (Ennis, Knupp & Associates)*
Others: Mr. Henry Clay Owen
Mr. Sergio Melgar* Mr. John Deans**
*Attended open session only. ** Attended closed session only.
The meeting was called to order at 8:35 a.m.
Mr. Wilcoxson asked for a motion to approve the September 11, 2007 and October 15, 2007 minutes. Mr. Hardymon made a motion to approve the minutes, Mr. Branscum seconded the motion and all approved.
Mr. Mathews introduced Ms. Donna Counts, Director of Treasury Operations, noting that Ms. Counts began in July 2007. Ms. Counts has the responsibility of overseeing the cash management function for the University, which includes the overnight and short term investment programs. Mr. Mathews provided background on IC1, which is a recommendation that the Committee approve a new Overnight and Short Term Investment Policy. Ms. Counts drafted the new policy to clearly define the investment objectives and other matters related to the overnight and short term investment program in a format similar to the endowment investment policy. Additionally, the new policy allows the Office of the Treasurer to make direct investments in a broader range of securities or to invest in the fixed income pools managed by the Commonwealth of Kentucky Office of Financial Management, consistent with KRS 42.500 (9) and Kentucky Administrative Regulations (200 KAR 14:011). Ms. Counts stated that the policy should enable the Office of the Treasurer to maximize returns on the University's operating assets, however the primary objective is maintaining a high degree of safety and liquidity. Ms. Counts stated that an annual report on the performance of the overnight and short term investments would be provided to the Committee. Mr. Wilcoxson requested that a quarterly report be provided. After some discussion by the Committee, Mr. Hardymon made a motion to approve IC1, Ms. Tobin seconded the motion and all approved.


 

Ms. Krauss presented IC2, which is a recommendation that the Committee approve investment guideline changes requested by PIMCO, one of the University's core-plus fixed income managers. Specifically, PIMCO has requested an increase in the emerging markets sector limit from 10% to 15% due to the firm's economic outlook for strong growth in developing countries. Additionally, PIMCO has requested an increase in the foreign currency exposure limit from 5% to 10% due to the firm's expectation that the U.S. dollar will depreciate, particularly relative to developing market currencies. The increase to the emerging markets sector limit would necessitate an increase in the maximum combined limit of below BBB, non-U.S. dollar denominated and emerging market investments from 30% to 35%. Ms. Krauss reviewed the guidelines for both fixed income managers, noting the guidelines are different in some sectors due to the managers' particular investment strategies and sector expertise. Ms. Krauss stated that PIMCO's proposed guideline changes were reviewed with Ennis Knupp and the consultants are supportive of the changes. The investment guideline changes should allow PIMCO to enhance long-run performance while maintaining risk similar to the Lehman Brothers Aggregate Bond Index. Ms. Wickliffe made a motion to approve IC2, Mr. Branscum seconded the motion and all approved.
Mr. Krauss provided an update on three administrative items as follows:
• The Endowment Investment Policy was updated to reflect asset allocation and manager changes approved by the Investment Committee since January 2006, when the policy was last reviewed and approved by the Committee. The updated policy was posted on the University's website for access by donors and other interested parties.
• The University executed a contract amendment effective January 1, 2008 with Wellington in order to implement a performance-based fee structure for the global equity portfolio. Under the new fee structure, Wellington will reduce the current asset-based fee of 71 basis points by 25 basis points and implement a performance fee calculated at 12.5% participation in outperformance over the MSCI All Country World index, capped at 50 basis points. This fee structure will result in fees in the range of 46 to 96 basis points, with the University paying lower fees (by 25 basis points) if Wellington underperforms the Index and higher fees (up to 25 basis points) if Wellington exceeds the Index by 200 to 400 basis points.
• The University executed a Conversion Agreement consenting to the conversion of the legal structure of the UBS real estate investment from an insurance company separate account (formed by Aetna in 1991) to a private REIT structure with UBS Realty Investors serving as the investment advisor of the new limited partnership fund. The conversion, scheduled for January 31, 2008, will not change how the real estate fund is managed, as the fund will continue to be managed by the same investment team using the same investment process and strategy. The new LP structure will be the same legal structure as the University's real estate investment with RREEF.
Ms. Krauss reported on the endowment asset allocation, reporting the endowment pool had a market value of $958.9 million as of December 31, 2007, comprised of 68.3% equities, 1.1% private equities, 22.2% fixed income and 8.4% real estate. Ms Krauss reported that the Legg Mason portfolio was transitioned to the Russell 3000 Enhanced Index Fund at the end of September, utilizing State Street Global Markets as a transition manager. Additionally, $6.0 million of new gifts/RCTF funds was invested on December 19th and allocated to the managers based on their undertarget positions. Ms. Krauss concluded that the December 31st asset allocation is within established asset class ranges and that no rebalancing action is needed at this time.
Mr. Russ reviewed the December flash report, noting the endowment pool had returned -0.53% for the six months ended December 31, 2007, compared to the policy benchmark return of 0.75%. The underperformance is mainly due to due to poor performance of Legg Mason's whole-stock strategy for the period July through September and Capital Guardian's whole-stock strategy for the period October through December. Capital underperformed the Wilshire 5000 by 562 basis points for the quarter ended December 31, 2007, contributing to an underperformance of 497 basis points for the six months ended
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December 31, 2007. Mr. Russ commented that Capital's exposure to certain financial stocks such as Ambac, Washington Mutual, MBIA and Sallie Mae contributed to the poor performance. Mr. Voss commented that Ennis Knupp is concerned about the performance of Capital Guardian, however still has confidence in the managers' ability to generate outperformance in the future. Mr. Owen inquired if Ennis Knupp is still committed to the whole-stock strategy in light of both Legg Mason and Capital Guardian's performance in this strategy. Mr. Voss stated that Ennis Knupp still likes the idea of whole-stock and loosening the constraints on managers, however the U.S. equity market is very efficient and has been a difficult space for active managers to outperform in the last couple of years. Mr. Voss commented that it may make more sense to index the U.S. equity allocation and focus the Committee's efforts on the non-U.S. and alternative investment areas, for which the markets are less efficient. Mr. Wilcoxson expressed concern about Capital Guardian's performance and asked the staff and consultants to monitor and report back to the Committee.
At 9:30 a.m. Mr. Wilcoxson indicated that the committee needed to go into closed session in order to hear presentations from finalists in the endowment investment consultant search. Mr. Wilcoxson made a motion that the investment committee go into closed session pursuant to KRS 61.810(1) (g). (This statutory citation is the exception in the open meetings law that permits a closed session to discuss a specific proposal with a business entity, if, an open discussion would jeopardize the selection of the business entity.) Ms. Wickliffe seconded the motion and all approved.
Following the closed session, Mr. Wilcoxson announced that the closed meeting had concluded, that no matters other than the announced matter were discussed during the closed session and that no action was taken during the closed session. Mr. Wilcoxson indicated that the committee was now back in open session.
Ms. Tobin made a motion to request that the University's Purchasing Division enter into contract negotiations with R. V. Kuhns & Associates, contingent on additional reference checks, Mr. Branscum seconded the motion and all approved.
With no further business, Mr. Hardymon made a motion that the meeting be adjourned, Mr. Branscum seconded the motion and all approved. The meeting adjourned at 2:45 p.m.
Susan I. Krauss Office of the Treasurer
3


 

IC 1
Office of the Treasurer January 23, 2008
Members, Investment Committee
APPROVAL OF OVERNIGHT AND SHORT-TERM INVESTMENT POLICY
Recommendation: that the Investment Committee approve the attached Overnight and Short-Term Investment Policy.
Background: On December 12, 1995, the Investment Committee approved the Statement of Objectives and Policies for short-term current funds investments for the University of Kentucky. Under the current policy, investments are limited to the Commonwealth of Kentucky's University pool, U.S. treasury and agency securities, repurchase agreements of U.S government obligations, and certificates of deposit collateralized by U.S. government obligations or general obligations of the University of Kentucky. Additionally, investments are limited to periods up to 24 months.
This action is recommended to allow the Office of the Treasurer to make direct investments in a broader range of securities or to invest in the fixed income investment pools managed by the Commonwealth of Kentucky Office of Financial Management, consistent with KRS 42.500(9) and Kentucky Administrative Regulations (200 KAR 14:011). Approval of this policy will enable the Office of the Treasurer to maximize returns on current funds, consistent with the primary objective to maintain a high degree of safety and liquidity.
Action Taken:     EZf Approved       □ Disapproved        □ Other


 

UNIVERSITY OF KENTUCKY Office of the Treasurer
Overnight and Short-Term Investment Policy
University of Kentucky University of Kentucky Research Foundation University of Kentucky Athletic Association The Fund for Advancement of Education and Research in the UK Medical Center University of Kentucky Business Partnership Foundation, Inc. University of Kentucky Mining Engineering Foundation, Inc. University of Kentucky Equine Research Foundation, Inc.
University of Kentucky Humanities Foundation, Inc. University of Kentucky Center on Aging Foundation, Inc.


 

Table of Contents
■ Overview
■ Board of Trustees Investment Committee
■ Delegation of Authority
■ Treasury Services Operations
■ Treasury Investment Advisory Group
■ Investment Objectives
■ Permissible Investments
■ Safekeeping and Collateralization
■ Investment Custodian
■ Financial Institutions and Broker/Dealers
■ Reporting Requirements
■ Ethics and Disclosure of Conflicts of Interest


 

Overnight and Short-Term Investment Policy University of Kentucky
Overview
The Office of the Treasurer manages the overnight and short-term investment programs of the University of Kentucky and its affiliated corporations consistent with this Overnight and Short-Term Fund Investment Policy.
This policy applies to the investment of short-term operating funds. Longer term funds including endowments and trusts are covered by a separate policy. Bond proceeds are invested pursuant to investment guidelines in bond documents. The purpose of the overnight and short-term investment program is to invest all collected cash balances on a daily basis (including "float" representing outstanding checks) in either overnight or short-term investments.
Except for cash in certain restricted and special funds, the University will consolidate cash balances from all funds to maximize investment earnings. Investment earnings will be allocated to the various funds in accordance with University policy.
Board of Trustees Investment Committee
The Board of Trustees has established an Investment Committee ("Committee") with members appointed annually by the Chair of the Board of Trustees. The Investment Committee is responsible for the review and oversight of investments of the University of Kentucky and its affiliated corporations. The Investment Committee also approves the Overnight and Short-Term Investment Policy of the University of Kentucky.
Delegation of Authority
The Office of the Treasurer is responsible for the custody, investment and disbursement of all funds of the University in accordance with established policies and procedures. The Treasurer shall establish additional specific written procedures and policies for the operation of the investment program which are consistent with the approved investment policy. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer. The Treasurer will ensure the establishment of a system of controls to regulate investment activities. The controls shall be designed to prevent and control losses of funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets or imprudent actions by officers or employees.
Treasury Services Operations
The treasury staff ("Staff) includes the Treasurer, the Treasury Operations Director and employees in the Treasury Services department of the Office of the Treasurer. Staff will manage the daily cash and short-term investments and prepare analysis and recommendations for the Treasury Investment Advisory Group. Staff will prepare daily, monthly, quarterly and annual assessments of investment balances and performance for the total overnight and short-term investments.
Treasury Investment Advisory Group
The Treasury Investment Advisory Group will consist of the Treasurer, the Controller, the Assistant Treasurer for Investments and the Treasury Operations Director. The Treasury Investment Advisory Group will meet periodically as needed to review short-term investments and to advise on investment allocations. Staff will prepare investment reports and make recommendations to the Treasury Investment Advisory Group.
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Overnight and Short-Term Investment Policy University of Kentucky
Investment Objectives
The primary investment objective is to achieve and maintain a high degree of safety and liquidity. The secondary objective is to maximize investment income taking into consideration investment risk constraints and liquidity needs. Investments will be made in a manner that seeks to balance these goals for the overall portfolio.
Safety of Capital: Credit risk will be minimized by limiting investments to the safest types of securities, pre-qualifying the financial institutions, broker/dealers, and advisors and diversifying the investment portfolio so that potential losses will be minimized. Total portfolio management will seek to ensure capital losses are avoided, whether they be from securities defaults or erosion of market value.
Investment risk can result from changes in credit quality underlying a security, issuer defaults, market price changes or temporary liquidity problems. In order to reduce investment risk while attaining market average rates of return, the investment portfolio will be diversified with respect to the type of securities in the portfolio, the concentration of investments held by any financial institution, and the length of maturities of investments.
Interest rate risk, the risk that the market value of securities will fall due to changes in general market rates, will be minimized by structuring the portfolio so that securities mature to meet cash flow requirements, thereby avoiding the need to sell securities before maturity. Operating funds will be invested primarily in shorter-term securities, money market mutual funds or similar investment pools.
Securities will not be sold prior to maturity unless a security with declining credit may be sold early to minimize loss of principal, a security swap would improve the quality, yield or target duration, or liquidity needs of the portfolio require that the security be sold.
Liquidity: The investment portfolio will maintain sufficient liquidity to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs. Cash flow forecasts, based on reasonable knowledge of future fiscal events and historical fiscal trends, will be developed by Staff. Investment maturities will be based on these forecasts so that cash may be available to meet anticipated expenditures.
Since all cash needs cannot be anticipated, the portfolio will consist largely of securities with active secondary or resale markets. A portion of the portfolio will be placed in money market mutual funds or investment pools which offer same-day liquidity for short-term funds.
Yield: The investment portfolio shall be designed with the objective of attaining a market rate of return taking into account the investment risk constraints and liquidity needs. The investment portfolio shall be designed with the objective of regularly exceeding the average return on the three-month U.S. Treasury bills. This index is considered riskless investment transactions and therefore comprise a minimum standard for the portfolio's rate of return. The investment program shall seek to augment returns above this threshold, consistent with risk limitations identified herein and prudent investment principles.
The standard of prudence to be used by staff shall be the "prudent person" standard and shall be applied in the context of managing the overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the liquidation and sale of securities are carried out in accordance with the terms of this policy.
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Overnight and Short-Term Investment Policy University of Kentucky
Permissible Investments
The overnight and short-term investments will be invested in any security permitted by KRS 42.500(9) and Kentucky Administrative Regulations (200 KAR 14:011) which identifies the permitted investments and maturities for state funds (Appendix).
Investments Purchased Directly by the Office of the Treasurer - The Office of the Treasurer may invest in the following securities directly.
1. U.S. Treasury securities.
2. Securities issued by U.S. government agencies or by government sponsored entities, including, Government National Mortgage Association, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Small Business Administration, and Student Loan Marketing.
3. Money market securities, including:
(a) Commercial paper rated the highest (A-1/P-1) by a nationally recognized rating agency, with maturities limited to nine (9) months ;
(b) Collateralized Certificates of Deposit; and
(c) Bankers' acceptances for banks rated A or higher with maturities limited to one year.
4. Repurchase and reverse repurchase agreements collateralized at 102 percent (marked to market daily) with treasuries, and agencies that meet the requirements established by this policy.
5. Municipal obligations rated A1 or higher by a nationally-recognized rating agency.
6. Money market mutual funds whose portfolios consist of government securities or broadly diversified money market instruments listed as eligible investments above and regulated by the Securities and Exchange Commission.
Limits of Investment Purchased Directly by the Office of the Treasurer
1. The amount of money invested at any time in commercial paper, bankers acceptances and municipal obligations shall not exceed twenty (20) percent.
2. No investment shall be purchased on a margin basis or through the use of any similar leveraging technique.
Investment Pools Managed by the Commonwealth of Kentucky Office of Financial Management: The
State Investment Commission is charged with oversight of the Commonwealth's investment programs. The day-to-day management of the Commonwealth's investments is delegated to the Office of Financial Management. OFM manages a variety of investment pools including those described below.
1. Short-Term Proceeds Pool - This pool invests in direct obligations of the United States Treasury, its agencies and instrumentalities, repurchase agreements relating to such obligations issued by approved financial institutions and broker/dealers and in money market instruments including, but not limited to Certificates of Deposit, Commercial Paper, Bankers Acceptances.
2. Intermediate-Term Proceeds Pool - This pool includes all investments outlined above and collateralized mortgage obligations (CMO's), asset backed securities rated in the highest category, U.S. dollar denominated corporate and Yankee securities issued by foreign and domestic issuers and U.S. dollar denominated sovereign debt rates A1 or Higher. The pool maintains a modified duration of 1.5 years or less.
3. Long-Term Proceeds Pool - This pool can invest in all the same securities as the Intermediate-Term Pool, but the modified duration is 2.5 to 3.5 years.
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Overnight and Short-Term Investment Policy University of Kentucky
Safekeeping and Collateralization
All investment securities purchased shall be held in third-party safekeeping by an institution designated as primary agent. All cash deposits in excess of FDIC insurable amounts and investments maintained by any financial institution will be collateralized. Collateralized securities shall be purchased using the delivery versus payment procedure. Collateral shall be marked to market daily.
Investment Custodian
The bank selected as the primary depository for the University will serve as the Custodian ("Custodian") for the University's bank deposits, overnight and short-term investments and perform standard custodial functions, including security safekeeping, collection of income, settlement of trades, maintenance of collateral levels and collection of proceeds of maturing securities, distribution of income. The Custodian will provide monthly account statements and other reports as requested by the Office of the Treasurer. Staff may also establish a collateral account with the Federal Reserve Bank in the name of the University of Kentucky for collateral requirements for short-term securities.
Financial Institutions and Broker/Dealers
In selecting financial institutions, the credit-worthiness of the institution shall be considered. Banks and savings and loan associations seeking to be eligible for the University's certificate of deposit purchase program, security transactions, repurchase agreements and safekeeping agreements shall annually submit audited financial statements and regulatory reports on financial condition. Security broker-dealers will be selected by creditworthiness. These may include "primarily" dealers or regional dealers that qualify under the Securities and Exchange Commission (SEC) Rule 15C3-1 (uniform net capital rule).
All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply audited financial statements, proof of National Association of Security Dealers (NASD) certification, proof of state registration and a certification of having read and understood and agreeing to comply with the University's investment policy.
The Office of the Treasurer shall formulate a program to provide specific criteria to determine the qualification of a financial institutions or broker/dealers.
Reporting Requirements
The Office of the Treasurer will generate daily, monthly, quarterly and annual reports for management purposes and will submit quarterly status reports to the Treasurer and will submit annual reports to the Investment Committee.
Ethics and Disclosure of Conflicts of Interest
Members of the Investment Committee, Treasury Investment Advisory Group or Staff involved in the investment process will refrain from personal business activity that could conflict with the proper execution and management of the investment program or that could impair their ability to make impartial decisions. Disclosure shall be made of any material financial interests in financial institutions that conduct business with the University or personal financial interests or investments that could be related to the performance of the University's portfolio that could reasonably be considered a conflict of interest.
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Overnight and Short-Term Investment Policy University of Kentucky
Appendix
1. KRS 42.500
2. 200 KAR 14:011
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Overnight and Short-Term Investment Policy University of Kentucky
Appendix 1
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Overnight and Short-Term Investment Policy University of Kentucky
42.5(H)  Sl;iit luvistmriil Commission - 1'owjts.
(1) 1 Iojv shall he a State Investment Com mission composed of the {io\enor who shall be chairman; the State Treasurer who shall he vice chairman and serve as chairman in the absence of Ihe Governor; the secretary of the Finance and Adm mistral ion Cabinet, and two (2) persons appointed by the Governor,
(2) The individuals appointed by the Governor shall He selected as follows; one (1) to be selected from a list of live {5) submitted In the Governor by the Kentucky Hankers Association, and one (1) to be selected from a list of live (5) submitted to the Governor by the Independent Community Rankers Association,
(3) Hie State Investment Commission shall meet at least quarterly to review investment performance and conduct other business, '["his provision shall not prohibit the commission From meeting more frequently as the need arises,
(4) The Governor, Stale Treasurer, and secretary of the Finance and Administration Cabinet shall each have ihe authority to designate. b\ an instrument in writing over his or her signature and filed with ihe secretary of the commission as a public record of the commission, an alternate with full authority to:
(a) Attend in the member's absence, for any reason, any properfv convened meeting of the commission; and
(h) Participate in the consideration of. and vole upon, business and transactions of the commission,
Each alternate shall he a person on the start" of the appointing member or in the employ of the appointing member'* slate agency or department,
(5) Any designation of an alternate may. at the appointing member's direction:
(ii)   13e limited upon the face of (he appointing instrument to he effective for only
a specific meeting or specified business:
(b) He shown on the lace of the appointing instrument to be a continuing designation, for a period of no more than four (4) years, whenever the appointing member is unable to attend, or
(e) 15c revoked at any time by the appointing member in an instrument in writing, over his or her signature. Hied with the secretary of the commission as a public record of the commission.
(6) Any person transacting business with, or materially affected by. the business of the commission may accept and rely upon a joint certificate of the secretary of the commission and any member of the commission concerning the designation of any alternate, the time and scope of the designation, and. if it is of a continuing nature, whether and when the designation has been revoked. The joint certificate shall be made and delivered to the person requesting it within a reasonable time after it has been requested in writing, with acceptable identification of the business or transaction io which it refers and the requesting person's interest in the business or transaction.
(7) Any three (3) persons who are members of the commission or alternates authorized under subsections (4) and (5) of this section shall constitute a quorum and may, by
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Overnight and Short-Term Investment Policy University of Kentucky
majority vole. transact any business of (he commission. Any three (3) members of
the commissi™ may call a meeting. (X)   The provisions ol KRN 61,07!) shall not apph to members of the commission. (*)   The commission shall have authority and may, if in its opinion the cash in the Slate
Treasury is in excess of Hie amount required to meet current expenditures, invest
any and all of the excess cash in:
(it) Obligations and contracts lor future delivery of obligations backed by (lie lull faith and credit of the I nited States or a I 'nited States go\ eminent agency, including but not limited to:
1. t nited Stales Treasury;
2. F\port-lmporl Bank of the I "nited Slates;
3. Farmers Home Administration:
4. Government National Mortgage Corporation, and
5. Merchant Murine bonds:
(bj Obligations of any corporation oft he United Stale* government, including bul not limited to:
1. Federal Home Loan Mortgage Corporation:
2. Federal Farm Credit Banks; a,     Bank for Cooperatives:
h.     Federal Intermediate Credit Banks: and c,     Federal 1 and Banks;
3. Federal Home Loan Hanks;
4. Federal National Mortgage Association: and
5. Tennessee \ alley Authority obligations;
(e) Collateralized or imcollaterufi/.ed certificates of deposit, issued by banks rated in one (1) of the three (3) highest categories by a nationally recognized rating agency or oilier interest-bearing accounts in depository institutions chartered by this stale or by the I 'nited States, except for shares in mutual -savings
banks:
(dj   Bankers acceptances tor banks rated in one (1) of the three (3) highest
categories by a nationally recognized rating agency: (e)   Commercial paper rated in the highest category by a nationally recognized
rating agency:
(I) Securities issued by a state or local government, or any instrumentality or agency thereof, in the I nited Stales, and rated in one (1) of the three (3) highest categories by a nationally recognized rating agency;
(g) 1 "nited Stales denominated corporate, Yankee, and Furodollar securities, excluding corporate stocks, issued by foreign and domestic issuers, including sovereign and supranational governments, rated in one (1) of the three (3) highest categories by a nationally recognized rating agency;
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Overnight and Short-Term Investment Policy University of Kentucky
(h) Asset-backed securities ralcd in the highest category by a nationally recognized rating agency: and
(i) Shares of mutual funds, not to exceed ten percent (ICS"o) of the total funds available for investment as described in subsection (9) of this .section, eaeli of which shall have the following characteristics:
1. The mutual fund shall be an open-end diversified in\ estment company
registered under Federal Investment Company Act of 1940. as amended:
2. The management company of the investment company shall have been in operation for at least live (5 J years:
3. At least ninety percent {90° d) of the securities in the mutual fund shall be eligible investments pursuant to this section: and
(j) State and local delinquent property tax claims which upon purchase shall become certificates of dchnquencv secured by interests in real property not to exceed fwcnlv -live million dollars (S25.00O.OOU) in the aggregate. For any certificates of delinquent thai have been exonerated pursuant to KRS 132.220(5). the Department of Revenue s