Senator Rosen Proposes Changes to State Treasurers’ Investments

For Immediate Release

March 3, 2008

Augusta – Senator Rosen filed a bill that would tighten the laws governing investments made by the Treasurer of State. Senator Rosen’s Bill does the following:

· Limits the Treasurer of State to investing money in the cash pool to United States government backed securities.

· Provides that the purpose of cash investments made by the Treasurer of State is the preservation of capital and the maintenance of maximum liquidity.

· Provides that at least 90% of investments made by the Treasurer of State must be in instruments with maturities of 9 months or less and may not be subject to a call option. Not more than 5% of investments made by the Treasurer of State may be in instruments with maturities that exceed 9 months and may be subject to a call option.

· Requires that investment decisions are made by individuals or firms able to demonstrate sufficient investment experience and professional skills and qualifications suitable to make such decisions.

· Provides that the Treasurer of State shall identify an appropriate index to track and compare investment performance.

· Provides that a contract for investment advisory services entered into by the Treasurer of State may not exceed a term of 3 years.

“These are important changes that need to be made to make sure that the State’s cash pool is protected from aggressive marketing of questionable investments,” Senator Rosen said.

Senator Rosen continued, “The financial services industry continues to peddle new and exotic products which are not suitable for public cash reserve accounts.”

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