New Mexico Administrative Code › Title 2 - PUBLIC FINANCE › Chapter 60 - INVESTMENT AND DEPOSIT OF PUBLIC FUNDS › Part 21 - ADMINISTRATIVE PROCEDURES FOR NEW MEXICO FINANCIAL INSTITUTIONS APPLYING FOR DEPOSITS OF SEVERENCE TAX PERMANENT FUND › Section 2.60.21.10 - ASSET ALLOCATION

Current through Register Vol. 35, No. 13, July 16, 2024
The funds available for investment in the certificate of
				  deposit program will be allocated in accordance with the following
				  criteria:
A. In order to have
				reasonable diversification as required by Section
				6-8-7,
				economic stimulation as required by Section
				7-27-5,
				and protection of the corpus as required by statutes referenced in Section I
				[now Section 2.60.21.3 NMAC] of these procedures, no more than 10 percent of
				the total amount required to be available for investment pursuant to Section
				7-27-5.2 [repealed],
				7-27-5.3,
				7-27-5.4
				and
				7-27-5.5
				in certificates of deposit may be invested at any one institution. If deposits
				in an institution exceed 10 percent of the severance tax permanent fund
				certificate of deposit investments on the effective date of these regulations,
				then deposits at that bank or savings and loan shall not be reinvested until
				the total amount of deposits are brought to or below 10 percent of the total
				investment in certificates of deposit or alternately, according to a plan
				approved by the council for a specific institution to come into compliance with
				these regulations.
B. No deposit is
				to be made that causes the financial institution to exceed the fund limitations
				in Section 7-27-5.2(G) [repealed] NMSA 1978, or in Section VI A [now Subsection
				A of 2.60.21.10 NMAC] of these rules. In addition, the total deposits in a
				class C or class D institution shall not exceed 100 percent of regulatory net
				worth or primary capital.
C. The
				first priority shall be to replace on maturity existing deposits of class A and
				class B institutions in such amounts and for such maturities as are
				appropriate. Reinvestment of certificates of deposits at class C institutions
				will be allowed secondarily.
D. For
				new deposits, eligible class A and class B institutions with no severance tax
				permanent fund deposits will have priority over other financial
				institutions.
E. If the demand is
				greater than the amount available for investment, the investment officer is
				directed to give priority to class A institutions, except as noted in Item D
				[now Subsection D of 2.60.21.10 NMAC] above.
F. If the demand by eligible class A
				institutions is greater than the amount available for investment, then the
				investment officer is directed to distribute the funds in such a manner as to
				promote both geographic and economic diversification around the
				state.
G. The distinction as to
				whether an institution is a bank or savings and loan is not to be considered in
				the allocation of state funds.
H.
				$2,000,000 of the total state funds allocated for investment in certificates of
				deposit will be made available for deposits with credit unions. At no time is
				the deposit in a credit union to exceed the amount of insurance on the
				deposit.
I. The investment officer
				may disqualify any institution from receiving new deposits or reinvestments of
				certificates of deposits if that institution does not comply with the
				requirements promulgated by the council and/or dictated by other pertinent
				statutes.
J. If an institution
				believes that exceptional circumstances exist that indicate it would not be
				appropriate for the investment officer to take any of the actions listed above,
				the institution shall appear at a meeting of the state investment council to
				present its position. The council may at that time vote on whether an exception
				to the policy should be allowed, or it may continue the issue in order to take
				further evidence, testimony or advice. In order to be placed on the council's
				agenda, the institution shall submit a written request stating its position to
				the investment office at least 10 calendar days prior to the meeting, including
				a bill of particulars, copies of any statutes or cases it intends to use in its
				presentation as well as a list of names, titles, business addresses and phone
				numbers of anyone whose testimony it deems necessary.
K. If at any time a financial institution is
				not in compliance with council regulations, the state investment officer will
				be responsible for establishing a plan to bring the financial institution into
				compliance.
L. If after all
				requests for deposits of state funds are honored in accordance with these
				regulations and applicable state law, the total funds on deposit at all
				institutions are less than the legislated floor, those institutions that
				qualify for additional deposits will be notified, either individually or
				through their associations, of the availability of state funds for deposit, and
				will be encouraged to accept such deposits.