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with a purchase or sale. Soft dollar credits may only be used and accepted by Trustee or
a sub-advisor to acquire research for use in the investment decision-making process for
the benefit of the Permanent Fund. As set out in Section 28(e) of the Securities Exchange
Act of 1934, prior to accepting or utilizing any soft dollars the Trustee or sub-advisor
receiving the soft dollar credit must have first determined in good faith that the
commissions to be paid on the securities transaction are reasonable in relation to the value
to the Permanent Fund of the brokerage and research provided. If the trade is executed
through Trustee’s selected broker/dealer, Trustee will receive the soft dollar credit. The
Permanent Fund may, as a result, pay somewhat higher commissions for the securities
transaction than what might have been obtainable on a non-soft dollar basis. Trustee may
not utilize or accept soft dollars except in strict compliance with the foregoing terms.

The Trustee shall refrain from activity that could conflict with the proper execution and
management of the Permanent Fund or that could impair their ability to make impartial
investment decisions. Any business or personal relationships with investment counter-
parties shall be disclosed to the CFO and the Texas Ethics Commission.

Investment Committee
The City’s Investment Committee will perform a strategy and performance review at
least semi-annually. The Committee will review and act on any potential need for
refinement or revision of the Permanent Fund’s policies or strategies. Annually the
Committee will approve all broker/dealers in accordance with the Act.

VII. AUTHORIZED COUNTER PARTIES

Certification

The Act requires

(1) that a written copy of the investment policy be presented to a business organization
offering to engage in an investment transaction with the Permanent Fund with
“business organization” defined as “an investment pool or investment management
firm under contract with an investing entity to invest or manage the entity’s investment
portfolio that has accepted authority granted by the entity under the contract to exercise
investment discretion in regard to the investing entity’s funds.”

and

(2) that the person or business organization receiving the policy provide a written
Policy Certification, acceptable to both the investing entity and the business
organization and executed by a representative of the business firm, substantially
acknowledging that the business organization has:
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