Local Government Investment Pools (LGIPs)
Chapters in this video
- 0:00 Government entities only: the velvet rope rule
- 1:15 Who runs the pool and the SEC exemption trap
- 3:23 Stable NAV versus variable NAV: aims for $1 is not guaranteed
- 5:07 LGIP versus 529 plan: same MSRB bucket, different audience
- 6:20 Pause and test: who is allowed to invest
- 6:48 Rapid-fire exam recap
What this video covers
- Who is allowed to invest in a Local Government Investment Pool (LGIP), and why individual retail investors like Ivy are always rejected at the door
- Why LGIPs are exempt from Securities and Exchange Commission (SEC) registration despite looking identical to SEC-registered money market funds
- The difference between stable net asset value (NAV) pools and variable NAV pools, and which one acts more like a short-term bond fund
- Why "stable NAV" does NOT mean guaranteed, and the absence of Federal Deposit Insurance Corporation (FDIC) insurance on these pools
- The typical high-quality, short-term investments held inside an LGIP, from U.S. government obligations to commercial paper and certificates of deposit
- How LGIPs differ from 529 plans in terms of available investors, purpose, time horizon, and tax treatment
- Why the Municipal Securities Rulemaking Board (MSRB) classifies LGIPs, 529 plans, and Achieving a Better Life Experience (ABLE) accounts all as municipal fund securities
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete SIE course in the app is free too, including adaptive practice questions and spaced-repetition flashcards.