No. 29222 (New Rule): R628-17. Limitations on Commercial Paper and Corporate Notes

DAR File No.: 29222
Filed: 11/14/2006, 02:15
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The five-year review filing date was missed and the rule expired and was removed the Utah Administrative Code on 11/10/2006. This rule provides limits on the investment in any one issuer of commercial paper and needs to be in place. The Money Management Council (MMC) reviewed the rule and approved it as it was. Therefore, the MMC is proposing to put the rule back in place.

Summary of the rule or change:

The proposed rule is the same rule that has been in place. There are no changes.

State statutory or constitutional authorization for this rule:

Subsection 51-7-18(2)(b)

Anticipated cost or savings to:

the state budget:

None--The rule is currently being followed so any costs are ongoing.

local governments:

None--The rule is currently being followed so any costs are ongoing.

other persons:

None--The rule is currently being followed so any costs are ongoing.

Compliance costs for affected persons:

As the rule is already being followed and no changes were made, there should be no additional costs.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule was being followed so any fiscal impact is already dealt with. Bruce B. Cohne, Chair

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Money Management Council
Administration
Room E315 EAST OFFICE BLDG
STATE CAPITOL COMPLEX
PO BOX 142315
SALT LAKE CITY UT 84114-2315

Direct questions regarding this rule to:

Ann Pedroza at the above address, by phone at 801-538-1883, by FAX at 801-538-1465, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

01/02/2007

This rule may become effective on:

01/09/2007

Authorized by:

Bruce B. Cohne, Chair

RULE TEXT

R628. Money Management Council, Administration.

R628-17. Limitations on Commercial Paper and Corporate Notes.

R628-17-1. Authority.

This rule is issued pursuant to Section 51-7-18(2)(b).

 

R628-17-2. Scope.

This rule establishes limits on the dollar amount of public funds that a public treasurer may invest in commercial paper or corporate obligations of a single issuer.

 

R628-17-3. Purpose.

The purpose of this rule is to provide guidelines for treasurers when investing public funds in commercial paper or corporate obligations. The guidelines established by this rule are designed to be flexible enough to allow public treasurers to receive competitive market rates on funds placed in these types of investment instruments while maintaining sufficient protection from loss.

 

R628-17-4. Definitions.

For the purpose of this rule:

Commercial paper means: an unsecured promissory note that matures on a specific date, and is issued by industrial, utility, and finance companies. The commercial paper must meet the criteria for investment as described in Section 51-7-11(3).

Corporate obligation means: A secured or unsecured note with original term to maturity ranging from nine months to thirty years that is issued by an industrial, utility or finance company. The corporate obligation must meet the criteria for investment as described in Section 51-7-11(3).

 

R628-17-5. General Rule.

The maximum amount of any public treasurer's portfolio which can be invested in a single issuer of commercial paper and corporate obligations shall be as follows:

1. Portfolios of $10,000,000 or less may not invest more than 10% of the total portfolio with a single issuer.

2. Portfolios greater than $10,000,000 but less than $20,000,000 may not invest more than $1,000,000 in a single issuer.

3. Portfolios of $20,000,000 or more may not invest more than 5% of the total portfolio with a single issuer.

The amount or percentages used in determining the amount of commercial paper and or corporate obligations a treasurer may purchase, shall be determined by the book value of the portfolio at the time of purchase.

 

KEY: public investments, securities, securities regulations

Date of Enactment or Last Substantive Amendment: 2007

Authorizing, and Implemented or Interpreted Law: 51-7-18(2)(b)