25.18 (2) (intro.) In addition to the powers set forth in sub. (1) and s. 25.17, but subject to s. 25.183, the investment board may:

25.18 (2) (e) Contract with and delegate to investment advisers the management and control over assets from any fund or trust delivered to such investment advisers for investment in real estate, mortgages, equities, debt of foreign corporations and debt of foreign governments, and pay such advisers fees from the current income of the fund or trust being invested. No more than 10% 15% of the total assets of the fixed retirement investment trust or 10% 15% of the total assets of the variable retirement investment trust may be delivered to investment advisers. The board shall set performance standards for such investment advisers, monitor such investments to determine if performance standards are being met and if an investment adviser does not consistently meet the performance standards then terminate the contract with such investment adviser.

25.183 Certain investments prohibited. (1) Definitions. In this section:

(a) “Derivative" means any financial contract or other instrument that derives its value from the value or performance of any security, currency exchange rate or interest rate or of any index or group of any securities, currency exchange rates or interest rates, but does not include any of the following:

1. Any security that is traded on a national securities exchange or on an automated interdealer quotation system sponsored by a securities association registered under 15 USC 78o-3, et seq.

2. Any forward contract which has a maturity at the time of issuance not exceeding 270 days.

3. Any contract of sale of a commodity, as defined under 7 USC 2, for future delivery, or any option on such a contract, traded or executed on a designated contract market and subject to regulation under 7 USC 1 to 26.

4. Any security of an open-end management investment company or investment trust, if the investment company or investment trust is registered under 15 USC 80a-1 to 80a-64.

5. Any deposit held by a financial institution.

6. Any investment specifically authorized under s. 25.17 (3) (b) and (ba).

6e. Any collateralized mortgage obligation or other asset-backed security which either has one of the 2 highest ratings given by a nationally recognized rating service or is backed or collateralized by insured instruments, guarantees or pledges of the federal government, this state or an agency of the federal government or this state.

6m. Any transaction permitted under s. 25.18 (1) (n), if all of the following conditions are met at the time the transaction is entered into:

a. The counterparty to the transaction is rated in, or has outstanding long-term debt which is rated in, one of the 2 highest ratings given by a nationally recognized rating service.

b. The transaction is used only for specified hedging or interest rate risk reduction purposes.

c. All of the board's payment obligations under the transaction are fully backed by distinctly identified assets held in the state investment fund.

7. Any financial contract or instrument that the board determines, by rule, is not a derivative.

(b) “Reverse repurchase agreement" means an agreement for the sale of securities by the board under which the board will repurchase those securities on or before a specified date and for a specified amount.

(2) Derivative investments. After the effective date of this subsection .... [revisor inserts date], the board may not purchase or acquire any derivative in the state investment fund except in accordance with rules promulgated by the board. Rules promulgated under this subsection may not permit the purchase or acquisition of derivatives in the state investment fund unless the purchase or acquisition is made for the purpose of reducing risk of price changes or of interest rate or currency exchange rate fluctuations with respect to investments held or to be held by the board.

(3) Reverse repurchase agreements. After the effective date of this subsection .... [revisor inserts date], the board may not enter into any reverse repurchase agreement unless the repurchase of securities under the agreement is required to occur no later than the next business day.

25.50 (5) Investment policies. (intro.) The investment board shall formulate policies for the investment and reinvestment of moneys in the fund and the acquisition, retention, management and disposition of such investments. The board shall provide a copy of the investment policies, together with any guidelines adopted by the board to direct staff investment activity, to each local government having an investment in the fund upon the local government's request and at least annually to all investors. The board shall distribute at least annually performance information over the preceding one-year, 5-year and 10-year periods, compared with appropriate indices or benchmarks in the private sector. The investment policies shall include all of the following:

25.50 (5) (a) Any types of prohibited investments.

(b) Any restrictions on allocation of assets among various asset types.

(c) Credit standards for private companies in which the fund may invest.

(d) Dollar or percentage limits on investments in a single company or bank.

25.50 (5m) Monthly reporting requirements. (a) The board, in cooperation with the department of administration, shall provide information necessary for the state treasurer to provide a monthly report to each local government having an investment in the fund. The board shall use all reasonable efforts to provide the information to the state treasurer in time to allow the treasurer to mail or electronically transmit the report to the local government no later than 6 business days after the end of the month covered by the report. The report shall include information on the fund's earnings for the month, with comparison to appropriate indices or benchmarks in the private sector.

(b) Upon request of any local government having an investment in the fund, the board shall provide a summary of securities held by the fund, including for each type of security, its cost, current value and, in the case of debt instruments, the average maturity. The board shall provide the information as soon as practicable after receiving the request.