BidTX Guidelines
(Amended 10/1/2013)

BidTX is an innovative and efficient way to invest in State of Texas time deposits. The program is designed to provide approved state depositories the opportunity to interactively compete for State of Texas investment dollars monthly in six-month maturities or semi-annually in one-year maturities.

Bids will be accepted online at www.BidTX.com on the first Wednesday of each month for 6-month term BidTX deposits and on the third Wednesday of February and August for 1-year term BidTX deposits. The settlement date for the funding will occur on the fourth business day following the auction. The auction will begin at 10:00 a.m. and end at 10:30 a.m. CST. The Comptroller of Public Accounts ("the Comptroller") will make funds available as noted on the BidTX website.

Depository institutions that choose not to participate in the electronic auction will be able to receive funds by direct placement in a time deposit up to $237,500.00 by contacting Cindy McCarver in the Trust Company at (512) 463-3205. The interest rate for direct placement of time deposits will be the average interest rate of the winning bids from the most recent BidTX auction. Direct placement of time deposits is not a part of the BidTX electronic auction program; therefore, depository institutions must participate in the BidTX electronic auction to receive more than the direct placement amount of $237,500.00 in a time deposit. This direct placement of $237,500.00 time deposits is only for 6-month terms.

Approved State Depository

• To participate in the BidTX program, a financial institution must be an approved state depository with the Comptroller.

Capital-to-Asset Ratio Policy

• Effective January 3, 2012, in addition to the statutory requirements, depositories must meet the following capital-to-asset ratio requirements:

  No more than current Deposit Insurance levels less five percent (to allow for accrued interest) can be held in time deposits with a depository whose capital-to-asset ratio is less than 5%.

  If financial institution's time deposits are above deposit insurance levels and the most recent capital-to-asset ratio drops below 5%, immediate action will be taken to reduce time deposits to deposit insurance levels less five percent (to allow for accrued interest).

  Upon approval of a financial institution as a depository under Section II of the State Depository Application, a financial institution is eligible to receive time deposits up to the amount of its Deposit Insurance level less five percent (to allow for accrued interest) regardless of its capital-to-asset ratio.

Registration

• Bidders must register on the BidTX website by 5 p.m. CST the business day prior to the auction. No more than three representatives may register per institution. To register, bidders should go to www.BidTX.com and click on registration. Upon completion of the registration requirements, bidders will be required to enter a BidTX password, and will be assigned an ID number. The bidders will be responsible for protecting the confidentiality of the password and ID. Registration is only required initially and not for each auction.

• The Comptroller reserves the right to deny access to any BidTX auction, at any time and for any reason whatsoever, in its sole discretion.

• The minimum bid is $250,000.00. Bids may increase in increments of $50,000.00 to a maximum of $7,000,000.00 per parent institution per auction.

• The floor for the minimum rate will be equivalent to a U.S. Treasury security with a comparable term, and will be displayed on the auction page prior to the auction. Bids below the minimum rate will not be accepted.

• Multiple bids from the same bidder are permissible. Each bidder may make up to five acceptable bids, the total of which (subject to approval limits) may not exceed $7,000,000.00 per parent institution per auction. There is no limit to the number of times any bid may be improved/updated.

• Settlement date is the fourth business day after the auction occurs and will be displayed on the auction page.

• The maturity date for a given auction (either 6 months or 1 year) will be displayed on the auction page.

• If qualified bids submitted in the same auction by the same or different bidders result in a tie, the first bid submitted prevails. Any change to a bid constitutes a new bid.

• Winning bidders must confirm their awards before they can receive any funds per their instructions on the Confirmation Page immediately after the auction ends.

• Winning bidders will be assessed an annualized fee equal to .040% (0.02% for 6-month auction) of the principal amount awarded. Payment will be made to Grant Street Group by ACH debit on the settlement date of the auction. Completion of the ACH Debit Authorization on the Confirmation Page represents winning bidders authorization for Grant Street Group to debit their account. Failure to make funds available for timely payment of the Grant Street Group fee will result in exclusion from subsequent auctions for six months.

Collateral Requirements

• All state deposits at an approved state depository, including BidTX Time Deposits, must be collateralized pursuant to collateral requirements in Chapter 404 of the Tex. Govt. Code, following currently established guidelines as described in detail in the State Depository Handbook. Sufficient collateral to cover total state deposits must be pledged and held in safekeeping by an approved custodian no later than 11:00 am CST on settlement date in order for a BidTX Time Deposit to be funded on that day. For further information about the collateralization process, please contact Jonathan Gonzales in the Cash & Securities Management Division at (512) 463-5902 or if you need information on how to apply to become an approved state depository, please contact Pamela Ibarra in the Cash & Securities Management Division at (512) 463-6002.

• The Comptroller will fund BidTX Time Deposits via the Federal Reserve Bank wire transfer before 2:00 p.m. CST on the settlement date provided collateral requirements have been met.

• If collateral requirements are not met by 11:00 a.m. CST on the settlement date, the Comptroller will not fund the BidTX Time Deposits until the collateral is received (provided it is received by 11:00 a.m. CST) not to exceed two (2) business days following the settlement date. If the collateral has not been submitted within two (2) business days following the settlement date, the bid will be denied and will result in the exclusion from the BidTX auctions for a period of six months. Collateral received after 11:00 a.m. CST will be considered for the next business day's activity.

• Interest accrues from settlement date through and including the day before maturity. Interest does not accrue on the maturity date. Interest will accrue from settlement date whether the approved collateral has been submitted or not. Once the collateral is placed, the funds will be released. If collateral has not been submitted within two business days following the settlement date, the bid will be denied and will result in the exclusion from BidTX auctions for a period of six months.

• Interest on the time deposit will be calculated on a 365-day basis payable at maturity.

• Time deposits will be book-entry in the name of the Comptroller.

• Transactions will be completed by wire transfer, which will include principal and interest collections. The wiring instructions will be included on a maturity notice issued by the Comptroller.

• The Comptroller will send settlement instructions to each institution which will include principal and interest payment and an ID number for verification.

• The Comptroller reserves the right to reject any BidTX bid for any reason at its discretion. The Comptroller also reserves the right to award a portion of a depository's bid subject to the minimum and multiple amounts described above.

• Each bidder must acknowledge that he or she has read amendments to the Guidelines in each auction and indicate their agreement with the amendment electronically in order to enter the auction.

• Submitted bids must also be verified. The bidder understands that in verifying the bid, the bidder has made a formal offer.

• Bids that generate error messages are not accepted until the error is corrected and the bid is resubmitted. Error messages will indicate the reason for the error such when the bidder has entered a bid that is lower than the minimum bid requirement.

• The bidder understands that the submitted bid may initially be a leading bid, but may be replaced by other more competitive bids throughout the auction. Bidders will know immediately if their bid continues to be a winning bid by updating their bids. A bid's status when "in the money" may change at any given time due to new bids by other bidders. It is the responsibility of the bidder to update his or her bid status. There is no limit to the number of times a bid may be updated.

• A bidder submitting a winning bid is irrevocably obligated to provide the time deposit at the specified rate, amount and maturity, if acceptable to the Comptroller, as herein set forth. The bidder understands that an award has not been made until posted on the Results Page on the BidTX site. Discrepancies should be reported to Cindy McCarver in the Investments Division at 512-463-3205 within 15 minutes of the posting of the Results Page. Failure to provide the time deposit at the specified rate, amount and maturity may result in exclusion from subsequent BidTX auctions for six months.

• In the event of a web site failure, the auction will be attempted at the top of every hour on the day of the scheduled auction between the hours of 10:00 a.m. CST and 4:00 p.m. CST. If the auction is not completed on the scheduled day, the next attempt will be 10:00 a.m. CST the next business day. The Comptroller and/or Grant Street Group will inform registered bidders of a change in the bidding format via phone, fax, or e-mail.

• The Grant Street Group software, supplied by Grant Street Group, used in connection with this web site serves only as a medium through which the BidTX auctions are conducted. Grant Street Group is not liable or responsible for the terms, rates, collateral or any other condition by which financial institutions are awarded monthly deposits. Grant Street Group is not responsible for any defect or inaccuracy in the Guidelines as they appear on the BidTX web site.

• Neither the Comptroller nor Grant Street Group is responsible for technical difficulties that result in the loss of bidders' Internet connection with BidTX, slowness in transmission of bids or other technical problems. Neither the Comptroller nor Grant Street Group is responsible for individual computer failures.

• This web site is provided "as is" without warranty whatsoever. Grant Street Group hereby disclaims any and all warranties, including without limitation any implied warranties of merchantability and/or fitness for a particular purpose.

• In no event will Grant Street Group be liable for indirect, special, incidental, economic, cover, consequential, tort or other damages (including without limitation damages or costs relating to the loss of profits, business, goodwill, data or computer programs, even if advised of the possibility of such damages), without regard to the legal theory of such damages, arising out of the use of or inability to use this web site.

• All references on the BidTX website to Certificates of Deposits are synonymous with Time Deposits as identified by the Comptroller.

• Bidder accepts and agrees to abide by all terms and conditions specified in the Guidelines.

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