Louisiana Administrative Code › Title 71 - TREASURY-PUBLIC FUNDS › Part I - Public Funds Investments › Chapter 5 - Permissible Investments › Section I-503 - Time Certificates of Deposit

Current through Register Vol. 50, No. 6, June 20, 2024
A. Noncompetitive Bid Procedures for Time
				Certificates of Deposit. The state treasurer shall designate the amount of
				state funds available for time certificates of deposit to financial
				institutions in the state of Louisiana .
1.
				Frequency of Rate Setting. Each Tuesday, or in the case of a holiday, the first
				business day following the holiday, the state treasure shall set interest rates
				to be paid on certificates of deposit. This interest rate shall remain in
				effect until the next Tuesday or first business day following the
				holiday.
2. Procedure for Time
				Certificates of Deposit Maturing One Year or Less. The interest rate shall be
				determined by the following procedure for certificates of deposit maturing one
				year or less.
a. The following interest rates
				shall be surveyed on the day the interest rate is set and averaged to determine
				the interest rate.
i. National Certificates of
				Deposit which is the average of the top rates paid by major New York money
				banks on primary new issues of negotiable certificates of deposits, usually on
				amounts of $1,000,000 or more with similar length of maturity as quoted from
				the
Wall Street Journal
or a nationally recognized quotation
				system or the National Average of Jumbo Certificates of Deposit as compiled by
				Banxquote Money Markets cited in the
Wall Street Journal
or a
				nationally recognized quotation system, less 15 basis points.
ii. U.S. Treasury Obligation with similar
				length of maturity at the bond equivalent rate adjusted for a 360-day basis
				obtained from the current auction or
Wall Street
				Journal
.
iii. Survey of
				Financial Institution Rates of Interest on a weekly rotating basis shall be
				conducted. Two small and two large financial institutions from those eligible
				to receive public funds deposits shall be polled as to the interest rate
				offered on published jumbo certificates of deposits of $100,000. The highest
				rate from each of the small and large financial institutions polled shall then
				be averaged, 15 basis points shall be deducted from the averaged figure and the
				result shall be the interest rate for this category. To establish the ranking
				of a financial institution as small or large, annually in April, the state
				treasurer shall compile a list of financial institutions by total assets based
				on the latest annual financial statements available, as ranked by Sheshunoff
				Bank Rankings, the Louisiana Banker's Association, or other listing. The
				financial institution shall be ranked by size as follows:
(a). small: $0-$100 million in total
				assets;
(b). large: greater than
				$100 million in total assets.
b. Minimum Interest Rate. For maturities of
				one year or less, the minimum interest rate shall be the discount rate on U.S.
				Treasury bills with a similar length of maturity.
c. Determination of Rate. The interest rate
				shall be an equally weighted average of those interest rates obtained in §503.
				A.2.a i, ii and iii. This interest rate shall be compared to the minimum
				interest rate in §503. A.2.b Whichever rate is higher shall be the rate of
				interest on the time certificates of deposit.
d. Calculation and Interest Payment. All
				certificates of deposit maturing in one year or less shall be calculated on a
				360-day basis with interest paid at maturity. The treasurer reserves the right
				to collect interest on a more frequent basis in cases of unusual circumstances,
				such as a financial emergency of the state or if a financial institution's
				financial position is deteriorating and collection of interest on a more
				frequent basis is determined appropriate by the treasurer to protect state
				funds.
3. Procedure for
				Time Certificates of Deposit Maturing Greater than One Year. The interest rate
				shall be determined by the following procedure for certificates of deposit
				maturing greater than one year.
a. The
				following interest rates shall be surveyed on the day the interest rate is set
				and averaged to determine the interest rate.
i. U.S. Treasury Obligation with similar
				length of maturity calculated on yield to maturity obtained from the current
				auction or
Wall Street Journal
.
ii. Agencies. Any one of the agencies listed
				in
				§501 with similar length of maturity
				calculated on yield to maturity obtained from the
Wall Street
				Journal
.
iii. Survey of
				Financial Institution Rates of Interest on a weekly rotating basis shall be
				conducted. Two small and two large financial institutions from those eligible
				to receive public funds deposits shall be polled as to the interest rate
				offered of jumbo certificates of deposits of $100,000. The highest rate from
				each of the small and large financial institutions polled shall then be
				averaged, 15 basis points shall be deducted from the averaged figure and the
				result shall be the interest rate for this category. To establish the ranking
				of a financial institution as small or large, annually in April, the state
				treasurer shall compile a list of financial institutions by total assets based
				on the latest annual financial statements available, as ranked by Sheshunoff
				Bank Rankings, the Louisiana Banker's Association, or other listing. The
				financial institutions shall be ranked by size as follows:
(a). small: $0-$100 million in total
				assets;
(b). large: greater than
				$100 million in total assets.
b. Minimum Interest Rate. For maturities of
				greater than one year, the minimum interest rate shall be the yield to maturity
				on U.S. Treasuries with similar length maturities.
c. Determination of Rate. The interest rate
				shall be an equally weighted average of those interest rates obtained in §503.
				A.3.a i, ii and iii. This interest rate shall be compared to the minimum
				interest rate in §503. A.3.b Whichever rate is the higher shall be the rate of
				interest on the time certificates of deposit.
d. Calculation and Interest Payment. All
				certificates of deposit maturing in greater than one year shall be calculated
				on a 360-day basis with interest paid semi-annually from date of inception. The
				state treasurer reserves the right to collect interest on a more frequent basis
				in cases of unusual circumstances, such a financial emergency of the state or
				if a financial institution's financial position is deteriorating and collection
				of interest on a more frequent basis is deemed appropriate by the treasurer to
				protect state funds.