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VI. <br /> <br />Instruments known as Structured Notes (e.g. inverse floaters, leveraged <br />floaters, and equity-linked securities) are not permitted. Investment in any <br />instrument, which is commonly considered a "derivative" instrument (e.g. <br />options, futures, swaps, caps, floors and collars) is prohibited. <br /> <br />Contracting to sell securities not yet acquired in order to purchase other <br />securities for purposes of speculating on developments or trends in the <br />market is prohibited. <br /> <br />Collateralization <br />Collateralization will be required on two types of investments: certificates of <br />deposit and repurchase agreements. The market value (including accrued interest) <br />of the collateral should be at least 100%. <br /> <br />For certificates of deposit, the market value of collateral must be at least 100% or <br />greater of the amount of certificates of deposits plus demand deposits with the <br />depository, less the amount, if any, which is insured by the Federal Deposit <br />Insurance Corporation, or the National Credit Unions Share Insurance Fund. <br /> <br />Depository institutions pledging collateral against deposits must, in conjunction <br />with the custodial agent, furnish the necessary custodial receipts within five <br />business days from the settlement date. <br /> <br />The City of University City/General Fund shall have a deposito~y contract and <br />pledge agreement with each safekeeping bank that will comply with the Financial <br />Institutions, Reform, Recovery, and Enforcement Act Of 1989 (FIRREA). This <br />will ensure that the City of University City/General Fund's security interest in <br />collateral pledged to secure deposits is enforceable against the receiver of a failed <br />finm~cial institution. <br /> <br />Repurchase Agreements <br />The securities for which repurchase a~eements will be transacted will be !ir,~ited <br />to U.S. Treasury and government agency securities that are eligible to be delivered <br />via the Federal Reserve's Fedwire book entry system. <br /> <br />Investment Parameters <br /> <br />Diversification <br />The investments shall be diversified to minimize the risk of loss resulting from <br />over concentration of assets in specific maturity, specific issuer, or specific class <br />of securities. Diversification strategies shall be established and periodically <br />reviewed. <br /> <br /> <br />