N.J. Admin. Code § 17:16-83.2

Current through Register Vol. 56, No. 24, December 18, 2024

Section 17:16-83.2 - Permissible investments

(a) Subject to the limitations contained in this subchapter, the Director may enter into swap transactions, including index-based swap transactions, on behalf of any eligible fund provided that:

1. Swap transactions shall be listed on a securities exchange, traded on an over-the-counter market or be bid/offered on a competitive basis with multiple broker dealers;

2. Credit default swap transactions may only be purchased for fixed income securities held in the pertinent portfolio of any eligible fund, except that index-based swaps may be purchased if the Director determines that a significant number of the underlying obligations contained in the index correspond to securities eligible for investment by, and are actually held in the portfolio of, an eligible fund; and

3. The counterparty (or any guarantor pledging its full faith and credit to the transaction) has been approved by and is included on a list maintained by the Director. At the time of each transaction, the counterparty (or any guarantor pledging its full faith and credit to the transaction) shall have a long term credit rating of Baa2 or higher by Moody's Investors Service, Inc., BBB or higher by Standard & Poor's Corporation, and BBB or higher by Fitch Ratings, or the counterparty must be approved by the Council, except that two of the three ratings are sufficient and one of the three ratings is sufficient if only one rating is available.

(b) Notwithstanding the restrictions in this subchapter, the Council may approve swap transactions on a case-by-case basis.

N.J. Admin. Code § 17:16-83.2