(a) A no-load money market mutual fund is an authorized investment under this subchapter if the mutual fund:
(1) is registered with and regulated by the Securities and Exchange Commission;
(2) provides the investing entity with a prospectus and other information required by the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) or the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.); and
(3) complies with federal Securities and Exchange Commission Rule 2a-7 (17 C.F.R. § 270.2a-7), promulgated under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.).

(b) In addition to a no-load money market mutual fund permitted as an authorized investment in Subsection (a), a no-load mutual fund is an authorized investment under this subchapter if the mutual fund:
(1) is registered with the Securities and Exchange Commission;
(2) has an average weighted maturity of less than two years; and
(3) either:
(A) has a duration of one year or more and is invested exclusively in obligations approved by this subchapter; or
(B) has a duration of less than one year and the investment portfolio is limited to investment grade securities, excluding asset-backed securities.
(c) An entity is not authorized by this section to:
(1) invest in the aggregate more than 15 percent of its monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service, in mutual funds described in Subsection (b);
(2) invest any portion of bond proceeds, reserves and funds held for debt service, in mutual funds described in Subsection (b); or
(3) invest its funds or funds under its control, including bond proceeds and reserves and other funds held for debt service, in any one mutual fund described in Subsection (a) or (b) in an amount that exceeds 10 percent of the total assets of the mutual fund.