2017/03/08 Council Agenda Packet

r„ NET WORTH -A financial institutions' available funds after their total liabilities have been deducted from their total assets. OFFER-The indicated price at which a seller is willing to sell a security or commodity. (See BID) When buying a security an offer is obtained. PAR VALUE -The nominal or face value of a debt security;that is,the value at maturity. PREMIUM - The amount by which a bond'sells above its par value. PRIMARY DEALERS -A pre-approved bank, broker/dealer or other financial institution that is able to make business deals with the U.S. Federal Reserve, such as underwriting new government debt.These dealers must meet certain liquidity requirements as well as provide a valuable flow of information to the Fed about the state of the worldwide markets. PRINCIPAL-An invested amount on which interest is charged or earned. PRUDENCE - The ability to govern and discipline oneself by the use of reason. Shrewdness in the management of affairs.Able to use skill and good judgment in the use of resources. QUALIFIED PUBLIC DEPOSITORY-A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state,which has segregated,for the benefit of the commission, eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. REPURCHASE AGREEMENT (REPO) -The Repo is a contractual transaction between an investor and an issuing financial institution (not a secured loan).The investor exchanges cash for temporary ownership of specific securities,with an agreement between the parties that on a future date, the financial institution will repurchase the securities at a prearranged price. An "Open Repo" does not have a specified repurchase date and the repurchase price is established by a formula computation. REPRICING -The revaluation of the market value of securities. SAFEKEEPING -A service to customers rendered by banks for a fee whereby all securities and valuables of all types and descriptions are held in the bank's vaults for protection, or in the case of book entry securities, are held and recorded in the customer's name and are inaccessible to anyone else. SECURITIES - Bonds, notes, mortgages, or other forms of negotiable or non-negotiable instruments. SECURITY AND EXCHANGE COMMISSION UNIFORM NET CAPITAL RULE (15C3-1) - The net capital rule focuses on liquidity and is designed to protect securities customers, 11 City of Everett Investment Policy(2017) 25