Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 4 - TREASURY ADMINISTRATION › Subchapter A - POOLED COLLATERAL PROGRAM › Section 4.108 - Acceptable Collateral

Current through Reg. 49, No. 28; July 12, 2024
(a) To properly
				  secure the deposit of public funds and to preserve the integrity and viability
				  of the pooled collateral program, the comptroller will designate those
				  instruments in this section and on its website that it deems acceptable to
				  pledge as collateral. The comptroller's decision regarding whether an
				  instrument is deemed acceptable collateral, either on its own determination or
				  upon petition by a participating depository institution, is final and not
				  subject to review.
(b) The
				  comptroller will designate acceptable collateral for the program from those
				  instruments allowed as eligible collateral under Government Code, §
										2257.02(4).
				  The comptroller will designate acceptable collateral based upon its associated
				  risks, its preservation of market value, its operational efficiencies, and such
				  other appropriate criteria that may be developed by the comptroller.
(c) The comptroller will review its
				  designation of acceptable collateral each state fiscal year and more often if
				  needed. At its discretion the comptroller may add or remove its designation of
				  acceptable collateral from time to time as appropriate to protect the deposit
				  of public funds and the integrity of the pooled collateral program. The
				  comptroller will provide at least 180 days notice of the same to participating
				  depository institutions to allow substitution of a pledged instrument that is
				  no longer deemed acceptable collateral, unless a shorter notice is required to
				  adequately secure the deposit of public funds.
(d) A participating depository institution
				  may make a written request that the comptroller approve an instrument that is
				  not currently deemed as acceptable collateral. The participating depository
				  institution will provide appropriate documentation to substantiate its request.
				  The comptroller will review the request and notify the participating depository
				  institution of its decision of whether to add the instrument to the designation
				  of acceptable collateral that may be pledged by a participating depository
				  institution and the rationale for its decision. The comptroller may accept or
				  reject a proposed instrument based on the criteria for designating acceptable
				  collateral.
(e) Except as provided
				  in subsection (c) or (f) of this section, the following instruments are deemed
				  acceptable to be pledged as collateral in the pooled collateral program:
(1) United States Treasury
				  obligations;
(2) Mortgage-backed
				  securities (Federal National Mortgage Association discount notes, primary debt
				  instruments or debentures) with a remaining maturity of 15 years or
				  less;
(3) Federal Home Loan Bank
				  system consolidated bonds and discount notes issued in book-entry
				  form;
(4) Federal Home Loan Bank
				  Beneficiary Standby Letters of Credit that are fully collateralized;
(5) Federal Farm Credit Banks consolidated
				  system-wide bonds and discount notes issued in book-entry form;
(6) Government National Mortgage Association
				  securities;
(7) Federal Home Loan
				  Mortgage Corporation discount notes and primary debt instruments or debentures,
				  and only those mortgage-backed securities with a remaining maturity of 15 years
				  or less;
(8) State of Texas bonds
				  issued by various state agencies and four year educational institutions of the
				  State of Texas; and
(9) Municipal
				  bonds issued by governmental entities of the State of Texas with a rated
				  investment quality by a nationally recognized investment rating firm of not
				  less than "A" or its equivalent. By way of illustration, and not limitation,
				  governmental entities include independent school districts, junior colleges,
				  incorporated cities, certain road districts, certain municipal water and/or
				  utility districts, hospital districts (excluding health facility bonds), and
				  water and air pollution control districts.