La. Admin. Code tit. 71 § I-107

Current through Register Vol. 50, No. 9, September 20, 2024

Section I-107 - Investment of the Assets in Equity Securities

A. The state treasurer, by Section 2(a)(5) of Act 67 of the 1986 Regular Session of the Legislature ("Act 67"), as amended by Act 136 of the 1994 Third Extraordinary Session, is authorized to invest as much as 35 percent of the market value of the assets in certain stocks ("equity securities"), and to promulgate rules governing such investment. The following rules shall apply to the investment of the assets in equity securities.

1. The prudent investor standard or rule shall govern all investments of the assets. The prudent investor standard shall be the standard of care against which actual investment decisions with regard to the assets made by any person or entity investing all or any portion of the assets are judged.

2.

a. The state treasurer shall allocate assets to be invested in equity securities in an amount calculated on the last day of each fiscal year when added to any assets already invested in equity securities that fall within the range of the market value of the assets for the applicable fiscal year as set out in the following table.

FY '95 - '96	5 percent to 7 percent
FY '96 - '97	10 percent to 14 percent
FY '97 - '98	15 percent to 21 percent
FY '98 - '99	20 percent to 28 percent
FY '99 - '00 and after	25 percent to 35 percent

b. For the purposes of determining the dollar amount of assets which must be invested in equity securities, the market value of the assets shall be the market value on the last day of the fiscal year immediately prior to the fiscal year in which the assets are to be allocated to be invested in equity securities.

3. The assets invested in equity securities shall not exceed an amount equal to 5 percent of the ownership of any entity or company.

4. No individual investment manager managing a portfolio of equity securities which form a part of the assets shall be permitted to concentrate more than 25 percent of the market value of that portfolio in any single industry.

5. All investment managers managing any portfolio which is part of the assets are prohibited from using the assets to engage in any of the following activities:

a. the purchase of stock warrants;

b. the purchase of any stock on margin;

c. the short sale of any security;

d. the purchase of any direct interest in oil, gas, or other mineral exploration program;

e. private or direct placement of any kind;

f. direct ownership of real estate or real estate investment trusts;

g. direct or indirect ownership of collectibles (including coins, stamps, or art);

h. direct investment in the equity securities of the LEQTF custodian bank(s), investment advisor(s), or the parent company of any of them;

i. other investments which may be restricted or which may not be authorized by applicable law or rule from time to time.

La. Admin. Code tit. 71, § I-107

Promulgated by the Department of the Treasury, Office of the Treasurer, LR 21:475 (May 1995).

AUTHORITY NOTE: Promulgated in accordance with R.S. 17:3801(A)(5).