(a) A securities lending program is an authorized investment under this subchapter if it meets the conditions provided by this section.
(b) To qualify as an authorized investment under this subchapter:
(1) the value of securities loaned under the program must be not less than 100 percent collateralized, including accrued income;
(2) a loan made under the program must allow for termination at any time;
(3) a loan made under the program must be secured by:
(A) pledged securities described by Section 2256.009;
(B) pledged irrevocable letters of credit issued by a bank that is:
(i) organized and existing under the laws of the United States or any other state; and
(ii) continuously rated by at least one nationally recognized investment rating firm at not less than A or its equivalent; or
(C) cash invested in accordance with Section:
(i) 2256.009;
(ii) 2256.013;
(iii) 2256.014; or
(iv) 2256.016;
(4) the terms of a loan made under the program must require that the securities being held as collateral be:
(A) pledged to the investing entity;
(B) held in the investing entity's name; and
(C) deposited at the time the investment is made with the entity or with a third party selected by or approved by the investing entity;
(5) a loan made under the program must be placed through:
(A) a primary government securities dealer, as defined by 5 C.F.R. Section 6801.102(f), as that regulation existed on September 1, 2003; or
(B) a financial institution doing business in this state; and
(6) an agreement to lend securities that is executed under this section must have a term of one year or less.