Reso 2024-3599 - Laserfiche WebLink

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2023 Summary of Legislation Passed Committee on Banking and Insurance powers" to inspect, examine, supervise, or regulate the affairs of federally -chartered banks or savings associations. Only the federal regulator has visitorial powers. Government Investments to be Based Solely on Pecuniary Factors The bill codifies and expands the program adopted by the State Board of Administration (SBA) in 2022 that requires, with limited exceptions, investments of certain state and local funds to be based solely on pecuniary factors. The term "pecuniary factor" is defined as a factor that is expected "to have a material effect on the risk or return of an investment based on appropriate investment horizons consistent with applicable investment objectives and funding policy. The term does not include the consideration of the furtherance of any social, political, or ideological interests." The expansion applies to all funds of state Treasury, all local government retirement plans, investments of local government surplus funds, and investment of funds raised by citizen support or direct -support organizations. The bill prohibits the person or entity responsible for making investment decisions from subordinating the interests of the beneficiaries to other objectives, and requires the weight given to any pecuniary factor to appropriately reflect a prudent assessment of its impact on risk or returns. Investment policies are required to be updated to incorporate these requirements. Investment restrictions do not apply to individual member -directed investment accounts established as part of a defined contribution plan. The bill requires state and local retirement systems to report compliance with the law on a biennial basis, beginning December 15, 2023. Local government retirement plans must report to the Department of Management Services (DMS); the SBA, on behalf of the Florida Retirement System, must report to the Governor, the Attorney General, the CFO, and the Legislature. Reports must describe governance policies and standards for the exercise of shareholder rights. DMS is directed to report incidents of noncompliance to the Attorney General, who may seek an injunction against any agency violating the reporting provisions and recover attorney fees and costs when an enforcement action is successful. Investment managers who invest public funds on behalf of state and local government entities must include a specified disclaimer in certain external communications that discuss social, political, or ideological interests that such communication does not reflect the views or opinions of the people of the State of Florida. On or after July 1, 2023, contracts with investment managers may be unilaterally terminated for failure to provide such disclaimer. The bill requires investment managers and investment advisors to annually certify compliance with the fiduciary standards set forth in the state's investment policy. Failure to timely file the certification is grounds for terminating any contract with the investment advisor or manager. Submission of a materially false certification, would be subject to sanction if they fail to timely file the required certification or if they submit a certification that is materially false. If an investment manager or advisor who does not comply with the state's fiduciary standards, the SBA must report such noncompliance to the Attorney, General, who may bring a civil or This summary is provided for information only and does not represent the opinion of any Senator, Senate Officer, or Senate Office. CS/CS/HB 3 Page: 3 57