Law:Title 10. General Government. Subtitle F. State And Local Contracts And Fund Management from Chapter 2263. Ethics And Disclosure Requirements For Outside Financial Advisors And Service Providers (Texas)

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Subtitle F. State And Local Contracts And Fund Management

Contents

Chapter 2263. Ethics And Disclosure Requirements For Outside Financial Advisors And Service Providers

Section  2263.001.  Applicability.

(a) This chapter applies in connection with the management or investment of any state funds managed or invested:

(1)  under the Texas Constitution or other law, including Chapters 404 and 2256; and

(2)  by or for:

(A)  a public retirement system as defined by Section 802.001 that provides service retirement, disability retirement, or death benefits for officers or employees of the state;

(B)  an institution of higher education as defined by Section 61.003, Education Code; or

(C)  another entity that is part of state government and that manages or invests state funds or for which state funds are managed or invested.

(b)  This chapter applies in connection with the management or investment of state funds without regard to whether the funds are held in the state treasury.

(c)  This chapter does not apply to or in connection with a state governmental entity that does not manage or invest state funds and for which state funds are managed or invested only by the comptroller.

Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1, 2003.



Section  2263.002.  Definition.

In this chapter, "financial advisor or service provider" includes a person or business entity who acts as a financial advisor, financial consultant, money or investment manager, or broker.

Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1, 2003.



Section  2263.003.  Construction With Other Law.

To the extent of a conflict between this chapter and another law, the law that imposes a stricter ethics or disclosure requirement controls.

Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1, 2003.



Section  2263.004.  Ethics Requirements For Outside Financial Advisors Or Service Providers.

(a) The governing body of a state governmental entity by rule shall adopt standards of conduct applicable to financial advisors or service providers who are not employees of the state governmental entity, who provide financial services to the state governmental entity or advise the state governmental entity or a member of the governing body of the state governmental entity in connection with the management or investment of state funds, and who:

(1)  may reasonably be expected to receive, directly or indirectly, more than $10,000 in compensation from the entity during a fiscal year; or

(2)  render important investment or funds management advice to the entity or a member of the governing body of the entity, as determined by the governing body.

(b)  A contract under which a financial advisor or service provider renders financial services or advice to a state governmental entity or other person as described by Subsection (a) is voidable by the state governmental entity if the financial advisor or service provider violates a standard of conduct adopted under this section.

Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1, 2003.



Section  2263.005.  Disclosure Requirements For Outside Financial Advisor Or Service Provider.

(a) A financial advisor or service provider described by Section 2263.004 shall disclose in writing to the administrative head of the applicable state governmental entity and to the state auditor:

(1)  any relationship the financial advisor or service provider has with any party to a transaction with the state governmental entity, other than a relationship necessary to the investment or funds management services that the financial advisor or service provider performs for the state governmental entity, if a reasonable person could expect the relationship to diminish the financial advisor's or service provider's independence of judgment in the performance of the person's responsibilities to the state governmental entity; and

(2)  all direct or indirect pecuniary interests the financial advisor or service provider has in any party to a transaction with the state governmental entity, if the transaction is connected with any financial advice or service the financial advisor or service provider provides to the state governmental entity or to a member of the governing body in connection with the management or investment of state funds.

(b)  The financial advisor or service provider shall disclose a relationship described by Subsection (a) without regard to whether the relationship is a direct, indirect, personal, private, commercial, or business relationship.

(c)  A financial advisor or service provider described by Section 2263.004 shall file annually a statement with the administrative head of the applicable state governmental entity and with the state auditor. The statement must disclose each relationship and pecuniary interest described by Subsection (a) or, if no relationship or pecuniary interest described by that subsection existed during the disclosure period, the statement must affirmatively state that fact.

(d)  The annual statement must be filed not later than April 15 on a form prescribed by the governmental entity, other than the state auditor, receiving the form. The statement must cover the reporting period of the previous calendar year. The state auditor shall develop and recommend a uniform form that other governmental entities receiving the form may prescribe.

(e)  The financial advisor or service provider shall promptly file a new or amended statement with the administrative head of the applicable state governmental entity and with the state auditor whenever there is new information to report under Subsection (a).

Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1, 2003.



Section  2263.006.  Public Information.

Chapter 552 controls the extent to which information contained in a statement filed under this chapter is subject to required public disclosure or excepted from required public disclosure.

Added by Acts 2003, 78th Leg., ch. 932, Sec. 2, eff. Sept. 1, 2003.


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