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 revision 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
