The $83 billion Texas Teacher Retirement System, Austin, approved a ban on pay-to-play practices by money managers, confirmed spokesman Howard Goldman.
Effective July 1, money managers seeking new investments, additional contributions, an increase in fees or an extension of an existing contract will be required to disclose in writing contacts they have had with Texas state officials and TRS board members as well as any political contributions made to those state officials, according to documents of the June 12 board meeting provided by Mr. Goldman.
Managers must also disclose any relationships they have with placement agents and are prohibited from paying fees to placement agents not registered with the SEC or the Financial Industry Regulatory Authority.
“In adopting this new policy, TRS trustees reaffirmed their expectation that TRS staff obtain full disclosure on matters that could harm the system's reputation or the integrity of our investment processes,” Mr. Goldman wrote in an e-mail. “Our new policy, which basically has formalized what we have been doing in the past, also provides guidance to staff to avoid potential unethical or unlawful conduct during our due diligence process.”
Also at the June 12 meeting, Reinhart Boerner Van Deuren was selected as the fund's first fiduciary counsel. The board retained Gabriel, Roeder, Smith & Co. to provide actuarial services after conducting a search to rebid the contract, according to a news release from the fund.