Established in 1996…
The Texas Cooperative Liquid Assets Securities System Trust (Texas CLASS) was created as a local government investment pool (LGIP) pursuant to Section 2256.016 of the Public Funds Investment Act, Texas Government Code (PFIA). Per state code, entities may pool any of their funds, or funds under their control, to preserve principal, maintain the liquidity of the funds, and maximize yield. The Texas CLASS Trust Agreement is an agreement of indefinite term regarding the investment, reinvestment, and withdrawal of local government funds. The parties to the Trust Agreement are Texas local government entities that choose to participate in the Trust (the Participants), Public Trust Advisors, LLC (Public Trust) as Program Administrator, and UMB Bank, N.A. as Custodian.
Under the Trust Agreement, Texas CLASS has four general objectives:
- To invest only in investments legally permitted under Texas State Law (Public Funds Investment Act).
- To minimize risk by managing portfolio investments to preserve principal and maintain a stable Net Asset Value (NAV).
- To maintain the highest rating for Texas CLASS from a nationally recognized statistical rating organization as long as such rating is required by Texas State Law.
- To manage portfolio investments in a way that ensures that cash will be available as required to finance Participants’ operations.
- To maximize current income to the degree consistent with legality, safety, and liquidity.
Any local government that becomes a Participant has the same rights and obligations under the Trust Agreement as other Participants. Each such Participant shall have the right to invest funds for credit to such Participant’s account. There is no minimum amount that must be invested pursuant to the Trust Agreement nor is there any limitation on the aggregate amount of funds that any Participant may invest at one time. Similarly, each Participant has the right from time-to-time to request payment of an amount equal to or less than the amount of funds in the Participant’s account. Subject to meeting the daily times for giving notice (times may be adjusted by the Program Administrator), there is no limitation on the period of time that funds may be invested through the Trust prior to such payment.