N.Y. General Municipal Law § 39: Investment policies for local governments

§ 39. Investment policies for local governments. 1. Each local

government, which for purposes of this section shall include counties,

cities, towns, villages, school districts including boards of

cooperative educational services and district corporations, within the

meaning of that term as set out in subdivision three of section

sixty-six of the general construction law, or any other governmental

subdivision of the state, shall by resolution adopt a comprehensive

investment policy which details the local government's operative policy

and instructions to officers and staff regarding the investing,

monitoring and reporting of funds of the local government. The

investment policy shall be annually reviewed by the local government.

2. Funds of the local government, for purposes of this section, shall

consist of all moneys and other financial resources available for

investment by the local government on its own behalf or on behalf of any

other entity or individual.

3. The investment policy adopted by the local government shall

include, but not be limited to, the following:

(a) A list of the permitted types of investments of the local

government, which shall be consistent with the appropriate provisions of

law relating to the local government and any additional requirements

pursuant to any contract with bondholders and noteholders or established

by the local government.

(b) Procedures and provisions to secure in a satisfactory manner the

local government's financial interest in investments.

(c) Standards for written agreements pursuant to which investments are

made. Such standards shall be consistent with the appropriate provisions

of law relating to the local government and any additional requirements

pursuant to any contract with bondholders and noteholders or established

by the local government.

(d) Procedures for the monitoring, control, deposit and retention of

investments and collateral.

(e) Standards for security agreements and custodial agreements with

banks or trust companies authorized to do business in the state of New

York, pursuant to which obligations and collateral are held by such

banks and trust companies for the local government. Such standards shall

be consistent with the appropriate provisions of law relating to the

local government and any additional requirements pursuant to any

contract with bondholders and noteholders or established by the local

government.

(f) Standards for the diversification of investments, including

diversification with respect to the permitted types of investments

listed in accordance with paragraph (a) of this subdivision and to the

firms with whom the local government transacts business. Such standards

may also specify the maximum percentage of moneys available for

temporary investment or the maximum dollar amount that the local

government is authorized to invest in any one permitted type of

investment or pursuant to transactions with any one firm.

(g) Standards for the qualification of firms with whom the local

government transacts business, such as criteria covering

creditworthiness, experience, capitalization, size and any other factors

that make a firm capable and qualified to transact business with the

local government.

(h) For purposes of this section, the term "firm" shall include, but

not be limited to, a bank or trust company as defined in subdivision one

of section ten of this chapter, the lead participant of a cooperative

investment agreement as defined in subdivision one of section

forty-nine-c of this chapter, and the seller of an obligation that is

purchased pursuant to a repurchase agreement.

4. Each local government shall have the power to amend its investment

policy from time to time in accordance with the provisions of this

section.