This is not the way LGIP participants work, and therefore, the money in these pools is "stickier."
Some participants might have been misled into thinking their LGIP was a 2a-7-1ike money market fund when in fact it was more like "cash on steroids," or in fact a variable NAV short bond fund.
(2.) Florida SBA Local Government Investment Pool (LGIP) Participant Advisory Committee Statement of Position,June 2009, http://www.Sbafla.com.
LGIPs are state- or county-operated short-term investment pools that are available to cities, school districts, and other governmental entities.
Topics include LGIPs
, arbitrage bonds, qualified tuition plans and the regulation of political contributions.
Many of these subprime mortgages have been repackaged and sold to corporate investors, structured investment vehicles and financial institutions, and are held in bond funds, enhanced cash funds, money market funds and local government investment pools (LGIPs).
Some companies that manage their own portfolios are moving their short-term cash into funds, bank deposits or Treasury securities; exiting enhanced cash funds and LGIPs and investing in money market funds, bank deposits or Treasuries; moving cash from bank deposits into money market funds and Treasuries, and shifting investments from money market funds to Treasuries.
However, it is possible that governments use local government investment pools (LGIPs) or money markets as an indirect way to use active portfolio management.
Survey questions pertained to the management of individual securities held by the government, excluding commingled funds such as LGIPs or money markets.
Thus, despite the fact that most respondents rely on passive management for the short-term funds they directly manage, it is highly likely that they use active management indirectly, by participating in money market mutual funds and LGIPs. (This assumes that such commingled fund managers typically actively manage their commingled portfolios.)
The board's inquiry, related to local government investment pools (LGIPs) and state higher education trusts, was spurred by an SEC opinion that some interests in such pools and trusts might be municipal securities and therefore subject to MSRB jurisdiction.
The Board rules would apply to LGIPs and higher education trusts only if the following three conditions are met: 1) a dealer is engaged in transactions in such interests; 2) such interests constitute municipal securities; and 3) such interests are issued by an issuer that, except for the exemptions under the securities laws, would otherwise be considered an investment company subject to regulation.