§321.1. Treasury securities lending

            A. Notwithstanding any provision of law to the contrary, the treasurer may engage in securities lending and may engage one or more financial institutions to act as securities lending agents for the state. For the purposes of this Section, the term "securities lending" shall mean a contract by which securities are supplied to a securities lending agent for a fee and secured by a pledge of collateral with a value equal to or greater than the securities supplied, and the term "securities lending agent" shall mean a bank or a registered securities broker-dealer.

            B. Each securities lending agent shall indemnify the state for any losses resulting from the insolvency of a borrower. Such indemnification shall be in writing and contained in the securities lending contract.

            C. If securities from any fund administered by the state treasury are used for securities lending, all of the following requirements shall be met:

            (1) The collateral for the securities lending contract shall be in the form of either cash or securities.

            (a) If the borrower provides cash as collateral, the contract between the borrower and the securities lending agent shall require the following:

            (i) The funds pledged as collateral to be in United States currency.

            (ii) The borrower to maintain the total value of all pledged collateral at an amount equal to or greater than one hundred percent of the total market value of the securities on loan from the state for the transaction, plus any accrued interest.

            (b) If the borrower provides securities as collateral, the contract between the borrower and the securities lending agent shall require the following:

            (i) The total value of the initial collateral pledged for the loan to be at least equal to one hundred and two percent of the total market value of the securities on loan from the state for the transaction.

            (ii) If after the initial pledge of collateral the total market value of securities pledged as collateral falls below one hundred percent of the total market value of the securities on loan from the state for the transaction, plus accrued interest, the borrower shall transfer additional collateral sufficient to bring the total value of pledged collateral to at least one hundred and two percent of the total market value of the securities on loan from the state for the transaction, plus accrued interest.

            (iii) Only securities authorized for investment by the treasurer pursuant to R.S. 49:327(B) or R.S. 17:3803(B) may be provided as collateral.

            (2) The securities lending agent, or the custodian of the collateral securities and the custodian of the securities on loan, shall determine the market value of the collateral securities and the securities on loan each business day and report these market values to the treasurer.

            D. Cash collateral pledged for a securities lending contract executed pursuant to the provisions of this Section may be invested in any securities authorized for investment by the treasurer pursuant to R.S. 17:3803(B) or R.S. 49:327(B).

            Acts 2003, No. 560, §3, eff. June 27, 2003; Acts 2021, No. 376, §1.