Texas Education Code

§ 43.018 — PARTICIPATION IN FULLY SECURED SECURITIES LOAN PROGRAMS

ED § 43.018Title 2. PUBLIC EDUCATION · Part I. SCHOOL FINANCE AND FISCAL MANAGEMENT · Ch. 43. PERMANENT SCHOOL FUND AND AVAILABLE SCHOOL FUND · Art. A. GENERAL PROVISIONS

Statute text

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(a)The State Board of Education may contract with a commercial bank to serve both as a custodian of securities in which the state permanent school funds are invested and to lend those securities, under the conditions prescribed by Subsection (b), to securities brokers and dealers on short-term loan.

(b)The State Board of Education may contract with a commercial bank pursuant to this section only if:

(1)the bank is located in a city having a major stock exchange;

(2)the bank is experienced in the operation of a fully secured securities loan program;

(3)the bank has adequate capital in the prudent judgment of the State Board of Education to assure the safety of the securities entrusted to it as a custodian;

(4)the bank will require of any securities broker or dealer to which it lends securities owned by the state permanent school fund that the broker or dealer deliver to it cash collateral for the loan of securities, and that the cash collateral will at all times be not less than 100 percent of the market value of the securities lent;

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Legislative history

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 5.06, eff. Sept. 1, 1997.