The Acts of Convention

House of Deputies

Original Text of Resolution:

(A068)

Whereas, the existing Section (1) of Canon 6 relates only to the custody and safekeeping of funds that are permanent in nature and securities of whatsoever kind, and it does not purport to direct how such funds shall be invested; and

Whereas, the proposed amendment also is concerned only with the custody and safekeeping of permanent funds, and is intended to eliminate any possible impediment to the use of investment vehicles that have become popular since the Canon was adopted; and

Whereas, the reference to "securities" represented by physical evidence of ownership or indebtedness reflects the fact that some securities are now issued in book entry form: examples include certain United States Treasury Securities, certain corporate stocks, shares of regulated investment companies (mutual funds, including money market funds) or securities held by a central depository, such as a clearing corporation defined in Article Eight of the Uniform Commercial Code--in such cases the investor does not receive a certificate evidencing ownership of the security that can be deposited as required by the first paragraph of Section (1); and

Whereas, the purpose of the third paragraph of the proposed amendment is to make it clear that investment in such types of securities is not prohibited by the first paragraph, requiring that permanent funds be deposited with an approved agency; and

Whereas, the proposed amendment clarifies the definition of the funds to which it applies and also expands the class of eligible depository institutions; and

Whereas, this amendment is also intended to make it clear that the investment of permanent funds in certificates of deposit is not barred; and

Whereas, it is recommended that any amendment be as broad and flexible as possible--a narrowly restrictive provision may be expected to cause more problems than it will avoid; therefore be it

Resolved, the House of Bishops concurring, That Subsection (1) of Canon I.6.1 be amended

1. by deleting the present Paragraph one (1) of Subsection (1) and inserting a new Paragraph one (1) as follows:
   
   (1) Funds held in trust, endowment and other permanent funds, and securities represented by physical evidence of ownership or indebtedness, shall be deposited with a National or State Bank, or a Diocesan Corporation, or with some other agency approved in writing by the Finance Committee or the Department of Finance of the Diocese, under a deed of trust, agency or other depository agreement providing for at least two signatures on any order of withdrawal of such funds or securities.
   
2. by adding a new Paragraph three (3) to Subsection (1) as follows:
   
   This paragraph shall not be deemed to prohibit investments in securities issued in book entry form or other manner that dispenses with the delivery of a certificate evidencing the ownership of the securities or the indebtedness of the issuer.

Motion carried

Resolution adopted

(Communicated to the House of Bishops in HD Message #125)