SB402-SSA1,7,2319 25.17 (14r) Upon adopting any change in the board's investment policies or
20guidelines, submit to the joint legislative audit committee, to the joint committee on
21finance and to the chief clerk of each house, for distribution to the appropriate
22standing committees under s. 13.172 (3), a report summarizing the change in the
23investment policies or guidelines.

SB402-SSA1,8,8

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125.17 (51) Annually, have the legislative audit bureau conduct a financial audit
2to include, including an assessment of the fair presentation of the financial
3statements and an evaluation of accounting controls and accounting records the
4internal control structure of the board. As part of the financial audit, the legislative
5audit bureau shall identify certain statutes and policies and guidelines adopted by
6the board and shall determine the extent of compliance by the board with the
7statutes, policies and guidelines. The board shall reimburse the legislative audit
8bureau for the cost of audits required to be performed under this subsection.

SB402-SSA1,8,1310 25.17 (51m) Biennially, have the legislative audit bureau conduct a
11performance evaluation audit that includes an audit of the board's policies and
12management practices. The board shall reimburse the legislative audit bureau for
13the cost of audits required to be performed under this subsection.

SB402-SSA1,8,1615 25.18 (1) (intro.) In addition to the powers and duties enumerated in s. 25.17,
16but subject to s. 25.183, the investment board may:

SB402-SSA1,8,2019 25.18 (2) (intro.) In addition to the powers set forth in sub. (1) and s. 25.17, but
20subject to s. 25.183, the investment board may:

SB402-SSA1,9,722 25.18 (2) (e) Contract with and delegate to investment advisers the
23management and control over assets from any fund or trust delivered to such
24investment advisers for investment in real estate, mortgages, equities, debt of
25foreign corporations and debt of foreign governments, and pay such advisers fees

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1from the current income of the fund or trust being invested. No more than 10% 20%
2of the total assets of the fixed retirement investment trust or 10% 20% of the total
3assets of the variable retirement investment trust may be delivered to investment
4advisers. The board shall set performance standards for such investment advisers,
5monitor such investments to determine if performance standards are being met and
6if an investment adviser does not consistently meet the performance standards then
7terminate the contract with such investment adviser.

SB402-SSA1,9,9 925.183 Certain investments prohibited. (1) Definitions. In this section:

SB402-SSA1,9,1310 (a) "Derivative" means any financial contract or other instrument that derives
11its value from the value or performance of any security, currency exchange rate or
12interest rate or of any index or group of any securities, currency exchange rates or
13interest rates, but does not include any of the following:

SB402-SSA1,9,1614 1. Any security that is traded on a national securities exchange or on an
15automated interdealer quotation system sponsored by a securities association
16registered under 15 USC 78o-3, et seq.

SB402-SSA1,9,1817 2. Any forward contract which has a maturity at the time of issuance not
18exceeding 270 days.

SB402-SSA1,9,21193. Any contract of sale of a commodity, as defined under 7 USC 2, for future
20delivery, or any option on such a contract, traded or executed on a designated contract
21market and subject to regulation under 7 USC 1 to 26.

SB402-SSA1,9,2422 4. Any security of an open-end management investment company or
23investment trust, if the investment company or investment trust is registered under
2415 USC 80a-1 to 80a-64.

SB402-SSA1,9,2525 5. Any deposit held by a financial institution.

SB402-SSA1,10,1

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

SB402-SSA1,10,62 6e. Any collateralized mortgage obligation or other asset-backed security
3which either has one of the 2 highest ratings given by a nationally recognized rating
4service or is backed or collateralized by insured instruments, guarantees or pledges
5of the federal government, this state or an agency of the federal government or this
6state.

SB402-SSA1,10,87 6m. Any transaction permitted under s. 25.18 (1) (n), if all of the following
8conditions are met at the time the transaction is entered into:

SB402-SSA1,10,119 a. The counterparty to the transaction is rated in, or has outstanding long-term
10debt which is rated in, one of the 2 highest ratings given by a nationally recognized
11rating service.

SB402-SSA1,10,1312 b. The transaction is used only for specified hedging or interest rate risk
13reduction purposes.

SB402-SSA1,10,1514 c. All of the board's payment obligations under the transaction are fully backed
15by distinctly identified assets held in the state investment fund.

SB402-SSA1,10,1716 7. Any financial contract or instrument that the board determines, by rule, is
17not a derivative.

SB402-SSA1,10,2018 (b) "Reverse repurchase agreement" means an agreement for the sale of
19securities by the board under which the board will repurchase those securities on or
20before a specified date and for a specified amount.

SB402-SSA1,11,3 21(2) Derivative investments. After the effective date of this subsection ....
22[revisor inserts date], the board may not purchase or acquire any derivative in the
23state investment fund except in accordance with rules promulgated by the board.
24Rules promulgated under this subsection may not permit the purchase or acquisition
25of derivatives in the state investment fund unless the purchase or acquisition is

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1made for the purpose of reducing risk of price changes or of interest rate or currency
2exchange rate fluctuations with respect to investments held or to be held by the
3board.

SB402-SSA1,11,7 4(3) Reverse repurchase agreements. After the effective date of this subsection
5.... [revisor inserts date], the board may not enter into any reverse repurchase
6agreement unless the repurchase of securities under the agreement is required to
7occur no later than the next business day.

SB402-SSA1,11,1910 25.50 (5) Investment policies. (intro.) The investment board shall formulate
11policies for the investment and reinvestment of moneys in the fund and the
12acquisition, retention, management and disposition of such investments. The board
13shall provide a copy of the investment policies, together with any guidelines adopted
14by the board to direct staff investment activity, to each local government having an
15investment in the fund upon the local government's request and at least annually to
16all investors. The board shall distribute at least annually performance information
17over the preceding one-year, 5-year and 10-year periods, compared with
18appropriate indices or benchmarks in the private sector. The investment policies
19shall include all of the following:

SB402-SSA1,11,2121 25.50 (5) (a) Any types of prohibited investments.

SB402-SSA1,11,2222 (b) Any restrictions on allocation of assets among various asset types.

SB402-SSA1,11,2323 (c) Credit standards for private companies in which the fund may invest.

SB402-SSA1,11,2424 (d) Dollar or percentage limits on investments in a single company or bank.

SB402-SSA1,12,9

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125.50 (5m) Monthly reporting requirements. (a) The board, in cooperation
2with the department of administration, shall provide information necessary for the
3state treasurer to provide a monthly report to each local government having an
4investment in the fund. The board shall use all reasonable efforts to provide the
5information to the state treasurer in time to allow the treasurer to mail or
6electronically transmit the report to the local government no later than 6 business
7days after the end of the month covered by the report. The report shall include
8information on the fund's earnings for the month, with comparison to appropriate
9indices or benchmarks in the private sector.

SB402-SSA1,12,1410 (b) Upon request of any local government having an investment in the fund,
11the board shall provide a summary of securities held by the fund, including for each
12type of security, its cost, current value and, in the case of debt instruments, the
13average maturity. The board shall provide the information as soon as practicable
14after receiving the request.