Tex. Gov't Code Section 2256.011
Authorized Investments: Repurchase Agreements


(a)

A fully collateralized repurchase agreement is an authorized investment under this subchapter if the repurchase agreement:

(1)

has a defined termination date;

(2)

is secured by a combination of cash and obligations described by Section 2256.009 (Authorized Investments: Obligations Of, or Guaranteed by Governmental Entities)(a)(1) or 2256.013 (Authorized Investments: Commercial Paper) or, if applicable, Section 2256.0204 (Authorized Investments: Independent School Districts);

(3)

requires the securities being purchased by the entity or cash held by the entity to be pledged to the entity either directly or through a joint account approved by the entity, held in the entity’s name either directly or through a joint account approved by the entity, and deposited at the time the investment is made with the entity or with a third party selected and approved by the entity; and

(4)

is placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in this state.

(a-1)

A repurchase agreement made by an investing entity under this section may be submitted for clearing and settlement to a covered clearing agency, as defined by the Securities and Exchange Commission in Rule 17Ad-22 (17 C.F.R. Section 240.17Ad-22).

(b)

In this section:

(1)

“Joint account” means an account maintained by a custodian bank and established on behalf of two or more parties to engage in aggregate repurchase agreement transactions.

(2)

“Repurchase agreement” means a simultaneous agreement to buy, hold for a specified time, and sell back at a future date obligations described by Section 2256.009 (Authorized Investments: Obligations Of, or Guaranteed by Governmental Entities)(a)(1) or 2256.013 (Authorized Investments: Commercial Paper) or, if applicable, Section 2256.0204 (Authorized Investments: Independent School Districts), at a market value at the time the funds are disbursed of not less than the principal amount of the funds disbursed. The term includes a direct security repurchase agreement and a reverse security repurchase agreement.

(c)

Notwithstanding any other law, the term of any reverse security repurchase agreement may not exceed 90 days after the date the reverse security repurchase agreement is delivered.

(d)

Money received by an entity under the terms of a reverse security repurchase agreement shall be used to acquire additional authorized investments, but the term of the authorized investments acquired must mature not later than the expiration date stated in the reverse security repurchase agreement.

(e)

Section 1371.059 (Validity and Incontestability)(c) applies to the execution of a repurchase agreement by an investing entity.

(f)

An investing entity that contracts with an investment management firm under Section 2256.003 (Authority to Invest Funds; Entities Subject to This Chapter)(b) may authorize the firm to invest the entity’s public funds or other funds under the entity’s control in repurchase agreements as provided by this section using a joint account.

(g)

An investment management firm responsible for managing a repurchase agreement transaction using a joint account on behalf of an investing entity as authorized under Subsection (f) must ensure that:

(1)

accounting and control procedures are implemented to document the investing entity’s aggregate daily investment and pro rata share in the joint account;

(2)

each party participating in the joint account retains the sole rights of ownership to the party’s pro rata share of assets invested in the joint account, including investment earnings on those assets; and

(3)

policies and procedures are implemented to prevent a party participating in the joint account from using any part of a balance of the joint account that is credited to another party.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 1004 (H.B. 2226), Sec. 6, eff. June 17, 2011.
Acts 2017, 85th Leg., R.S., Ch. 773 (H.B. 1003), Sec. 3, eff. June 14, 2017.
Acts 2019, 86th Leg., R.S., Ch. 1133 (H.B. 2706), Sec. 1, eff. September 1, 2019.
Acts 2023, 88th Leg., R.S., Ch. 1093 (S.B. 1246), Sec. 7, eff. June 18, 2023.

Source: Section 2256.011 — Authorized Investments: Repurchase Agreements, https://statutes.­capitol.­texas.­gov/Docs/GV/htm/GV.­2256.­htm#2256.­011 (accessed Mar. 23, 2024).

2256.001
Short Title
2256.002
Definitions
2256.003
Authority to Invest Funds
2256.004
Applicability
2256.005
Investment Policies
2256.006
Standard of Care
2256.007
Investment Training
2256.008
Investment Training
2256.009
Authorized Investments: Obligations Of, or Guaranteed by Governmental Entities
2256.010
Authorized Investments: Certificates of Deposit and Share Certificates
2256.011
Authorized Investments: Repurchase Agreements
2256.012
Authorized Investments: Banker’s Acceptances
2256.013
Authorized Investments: Commercial Paper
2256.014
Authorized Investments: Mutual Funds
2256.015
Authorized Investments: Guaranteed Investment Contracts
2256.016
Authorized Investments: Investment Pools
2256.017
Existing Investments
2256.019
Rating of Certain Investment Pools
2256.020
Authorized Investments: Institutions of Higher Education
2256.021
Effect of Loss of Required Rating
2256.022
Expansion of Investment Authority
2256.023
Internal Management Reports
2256.024
Subchapter Cumulative
2256.025
Selection of Authorized Brokers
2256.026
Statutory Compliance
2256.051
Electronic Funds Transfer
2256.052
Private Auditor
2256.053
Payment for Securities Purchased by State
2256.054
Delivery of Securities Purchased by State
2256.055
Deposit of Securities Purchased by State
2256.0115
Authorized Investments: Securities Lending Program
2256.0201
Authorized Investments
2256.0202
Authorized Investments: Municipal Funds from Management and Development of Mineral Rights
2256.0203
Authorized Investments: Ports and Navigation Districts
2256.0204
Authorized Investments: Independent School Districts
2256.0205
Authorized Investments
2256.0206
Authorized Investments: Hedging Transactions
2256.0207
Authorized Investments: Public Junior College District Funds from Management and Development of Mineral Rights
2256.0208
Local Government Investment of Bond Proceeds and Pledged Revenue

Accessed:
Mar. 23, 2024

§ 2256.011’s source at texas​.gov