Sarasota County Investment Policy 2018

Sarasota County Investment Policy 24 and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker-dealers, banks, and a few unregulated firms. 97. PRIME RATE: A preferred interest rate charged by commercial banks to their most creditworthy customers. Many interest rates are keyed to this rate. 98. PRINCIPAL: The face value or par value of a debt instrument. Also may refer to the amount of capital invested in a given security. 99. PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody State - the so-called legal list. In other States the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital. In conjunction with Florida State Statute 218.415(4) the Prudent Person Rule is herewith understood to mean the following: "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived from the investment." 100. QUALIFIED PUBLIC DEPOSITORIES (QPD): A bank or savings association that has: a branch office(s) authorized to receive deposits in Florida, has FDIC deposit insurance, meets the requirements of Chapter 280, F.S., and has been designated by the Florida Division of Treasury as a QPD. 101. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return. 102. REPURCHASE AGREEMENT (RP OR REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is, increasing bank reserves. 103. RESOLUTION FUNDING CORPORATION (REFCORP): A mixed-ownership government corporation established by Congress in 1989 in conjunction with the Resolution Trust Corporation (RTC). The two corporations were established to rescue savings and loan (S&L) institutions that failed during the savings and loan crisis. REFCORP provided liquidity to these organizations by issuing bonds. 104. RULE 2a-7 OF THE INVESTMENT COMPANY ACT: Applies to money market mutual funds and mandates such funds to maintain certain standards, including a 13- month maturity limit and a 90- day average maturity on investments, to help maintain a constant net asset value of one dollar ($1.0000). This rule was amended in August of 2014 as a result of the Financial Crisis. There are a number of additional restrictions placed upon funds that are managed to this rule to preserve the investor’s investment. 105. SAFEKEEPING/CUSTODIAL: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection.