(a) Prudence.

1. (1) The Treasurer of State and designated investment officers shall perform their duties in a manner consistent with the standard of a prudent investor, as set forth by the Arkansas Code: “The Treasurer of State shall apply the prudent investor rule while serving in a fiduciary capacity for fund participants. The prudent investor rule means that, in making investments, the fiduciaries shall exercise the judgment and care under the prevailing circumstances that an institutional investor of ordinary prudence, discretion, and intelligence exercises in the management of large investments entrusted to it, not for speculation but for investment, considering the permanent disposition of funds, and the probable safety of capital as well as probable income.”
2. (2) Arkansas Code § 19-3-605.

(b) Ethics and conflicts of interest.

1. (1) The Treasurer of State and investment officers authorized by the Treasurer of State shall seek to act responsibly as custodians of the public trust.

2. (2) They will refrain from personal business activity that could:

   1. (A) Conflict with proper execution of the investment program; or
   2. (B) Impair their ability to make impartial investment decisions.
3. (3) They will adhere to the laws regarding ethics, conflicts of interest, and disclosure requirements contained in Arkansas Code § 21-8-101 et seq.

(c) Authorized financial dealers and institutions.

1. (1) The Treasurer of State shall select financial dealers and institutions authorized to provide investment services to the state.

2. (2) Authorized financial dealers or institutions will be qualified as one (1) or more of the following:

   1. (A) Financial institutions authorized by Arkansas Code § 19-3-507; and
   2. (B) Dealers who are:

(i) Specifically approved by the State Board of Finance; or

1. (ii) Approved by the Treasurer of State in accordance with eligibility requirements as established by the board.
2. (3) Each authorized dealer or institution will regularly submit semiannual and annual reports, including audited financial statements, and other information as determined by the Treasurer of State.
3. (4) The Treasurer of State shall maintain the approved list of authorized dealers.