State investment policy.

ORIGINAL
House
Bill No
.
HB0060

ENROLLED ACT NO. 35,

HOUSE OF REPRESENTATIVES

SIXTY-FOURTH LEGISLATURE OF THE STATE OF WYOMING
2017 General Session

AN ACT relating to public funds; amending restrictions on the investment of permanent funds; providing for a strategy to evaluate the risks of investments; requiring the state loan and investment board to establish metrics for managing and mitigating the risks of investments; requiring evaluations of the risks of investments as specified; requiring reports; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section
1
.

W.S. 9
‑
4
‑
715(
b)
and (d) and
9
‑
4
‑
716(b) by creating a new paragraph (ix)
,
(d)(i)
(A) and by creating a new subparagraph (C)

are
amended to read:

9
‑
4
‑
715
.

Permissible investments.

(b)

The state treasurer, or his designee, which shall be registered under the Investment Advisor
'
s Act of 1940 as amended if required to be registered by the terms of that act as amended, upon written authority, may invest
monies

up to seventy percent (70%)
of the permanent funds in
securities bu
t not more than fifty
‑
five percent (55%) shall be invested in common stocks

equities,
including stocks of corporations
.

The state treasurer shall report at least annually to the select committee on capital financing and investments
and the joint appropriations committee
on the analysis conducted pursuant to paragraph (d
)(
ii) of this section and W.S. 9
‑
4
‑
716(b)(ix).

(d)

When approving, acquiring, investing, reinvesting, exchanging, retaining, selling and managing investments of the state of Wyoming, the members of the board, the state treasurer, designees of the state treasurer or any other fiduciary appointed by the state treasurer or the board shall
:

(
i
)

E
xercise the judgment and care of a prudent investor as specified by the Uniform Prudent Investor Act, W.S. 4
‑
10
‑
901 through 4
‑
10
‑
913
;
.

(ii)

E
valuate
the risk
of
investments
using
a
strategy
based on the principles of the capital market theory
which are

generally accepted and followed by institutional investors including long
‑
term investors
. Th
is
strategy
includes a consideration of the following
:

(A)

Risk
s

shall
be mitigated through diversification of asset classes and investment approaches and
through
diversification of individual securities;

(
B
)

Prudent risk taking is a necessary element of long
‑
term investing and is needed to achieve the long
‑
term objectives
of a fund
.

9
‑
4
‑
716
.

State investment policy; investment consultant.

(b)

The investment policy statements shall include the following:

(
ix
)

Two (2)
risk mitigation
metrics for
managing and mitigating
the risks of
investments
consistent with the strategy specified in W.S. 9
‑
4
‑
715(d)(ii)
:

(A)

One (1) metric shall
specify the maximum percentage of
monies in the state fund or state funds
that may be invested in securities
in consideration of all the factors developed for the
fund
'
s
investment policy
statement
under this subsection; and

(B)

O
ne (1) metric shall
measure
risk

in the state fund or state funds
using a value at risk
measurement technique
or other simil
ar risk measurement technique.

(d)

The board:

(i)

Shall procure the services of a qualified entity to evaluate:

(A)

At least annually, the reasonableness and comprehensiveness of the investment policy statements required under this section;
and

(C)

At least annually or when market conditions warrant a change or reallocation
of investments
,
the risks of investing state funds using the metrics specified in the investment policy statements
pursuant to paragraph (b)(ix) of this section
.

Section 2
.

This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

1