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regional dealers that qualify under Securities &Exchange Commission Rule 15c3-1 (uniform net capital <br /> rule). All brokers doing business with the city shall have a Broker Certification form on file with the <br /> Finance Director in accordance with Minnesota Statutes �118A.04, Subd 9. All investments must be <br /> placed with brokers whose office is in the State of Minnesota. No investments may be made with out of <br /> state brokers. <br /> Investment instruments authorized and permitted by this policy are as follows: <br /> 1. Repurchase Agreements <br /> Repurchase agreements consisting of collateral allowable in Section 118A.04. <br /> 2. United States Securities <br /> Governmental bonds,notes,bills, mortgages (excluding high-risk mortgage-backed securities), and <br /> other securities,which are direct obligations or are guaranteed or insured issues of the United <br /> States,its agencies,its instrumentalities, or organizations created by an act of Congress. <br /> High risk mortgage-backed securities are as follows: <br /> a. interest-only or principal only mortgage-backed securities; or, <br /> b. any mortgage derivative security that: <br /> i. has an expected average life greater than 10 years; <br /> ii. has an expected average life that: <br /> 1. will extend by more than 4 years as the result of an immediate and <br /> sustained parallel shift in the yield curve of plus 300 basis points; or <br /> 2. will shorten by more than 6 years as the result of an immediate and <br /> sustained parallel shift in the yield curve of minus 300 basis points; or <br /> 3. will have an estimated change in price of more than 17% as the result of an <br /> immediate and sustained parallel shift in the yield curve of plus or minus <br /> 300 basis points. <br /> 3. Minnesota Joint Powers Investment Trust <br /> Agreements or Contracts for Shares of a Minnesota Joint Powers Investment Trust whose <br /> investments are restricted to securities authorized for investment by the government entity and <br /> shares of an investment company registered under the Federal Investment Company Act of 1940, <br /> whose shares are registered under the Federal Securities Act of 1933, as long as the investment <br /> company's fund receives the highest credit rating and is rated in one of the two highest risk rating <br /> categories by at least one nationally recognized statistical rating organization and is invested in <br /> financial instruments with a final maturity of no longer than 13 months. <br /> 4. State and Local Securities <br /> State and local government obligations as follows: <br /> a. any security which is a general obligation of any state or local government with taxing <br /> powers which is rated "A" or better by a national bond rating service; <br /> b. any security which is a revenue obligation of any state or local government with taxing <br /> powers which is rated "AA" or better by a national bond rating service; and, <br /> Financial Management Policies Page 4 <br />