(a) To provide for the safety and liquidity of State Treasury funds, the investment portfolio is subject to the following restrictions:

1. (1) The weighted average maturity of the total portfolio shall not exceed ten (10) years;

2. (2) The expected maturity of any security shall not exceed ten (10) years, with the exception of the following:

   1. (A) Securities used as collateral in repurchase agreements, Arkansas Capital Corporation bonds, State Board of Finance and State Building Services certificates of indebtedness, direct obligations of the United States Government, and obligations of agencies and instrumentalities created by act of the United States Congress and authorized thereby to issue securities or evidences of indebtedness, regardless of guarantee of repayment by the United States Government; and
   2. (B)

(i) United States agency mortgage-backed securities, collateralized mortgage obligations, and municipal bonds that return principal in scheduled payments prior to final maturity shall not have, at the time of purchase, an average life exceeding fifteen (15) years using average life assumptions while employing prepayment speed assumption (PSA) and/or conditional prepayment rate (CPR) analysis models.

1. (ii) Average life at the time of purchase shall be used as opposed to maturity.

   1. (iii) United States agency mortgage-backed securities and collateralized mortgage obligations that have an average life greater than ten (10) years shall not exceed five percent (5%) of the total portfolio at the time of purchase;
2. (3) No investment in corporate debt shall be made in any single issuer that, at the time of purchase, exceeds five percent (5%) of the total portfolio of the State Treasury, including both commercial paper and bonded debt of that issuer; and
3. (4) The maturity of repurchase agreements shall be calculated by the date of repurchase, not the maturity of the underlying instrument.

(b) Investments in nongovernment securities shall not exceed the following percentages of the total portfolio: Total debt of corporations, including bonds and commercial paper*, thirty percent (30%). *Second-tier commercial paper, including but not limited to commercial paper rated A2 by S&P Global Ratings and P2 by Moody’s Investors Service, shall not exceed five percent (5%) of the total portfolio.

1. (c) Repurchase agreements are subject to the following additional restrictions:
2. (1) Transactions shall be documented with master repurchase agreements;
3. (2) Securities accepted as collateral shall be readily marketable;
4. (3) Repurchase agreements with any dealer or financial institution are not to exceed fifty percent (50%) of the total portfolio; and

5. (4) Repurchase agreements are not to exceed one hundred eighty (180) days, and the share of the portfolio allocated to repurchase agreements with maturities beyond thirty (30) days are not to exceed thirty percent (30%) of the total portfolio.

   1. (d)
6. (1) Pursuant to Arkansas Code § 25-1-501 et seq., a public entity shall not invest in companies that boycott Israel.

7. (2) In a good-faith effort to comply with this law, the State Treasury may rely on the list of entities that:

   1. (A) Is published by the New York Office of General Services; and
   2. (B) May be located online at the following web address: New York OGS - Israel Boycott List.

(e) All purchases and sales of securities shall be made with the goals of:

1. (1) Obtaining the optimal price and value for securities; and
2. (2) Not showing preference for any securities broker.

(f)

1. (1) Pre-trade analysis shall be performed for all bond purchases and sales.

2. (2) Where appropriate, that analysis should include:

   1. (A) Market conditions;
   2. (B) How the security fits the State Treasury’s investment strategy; and
   3. (C) Any other securities reviewed at the time of execution.