2014-01-02 Budget Attachments

2013/14 INVESTMENT POLICY




Portfolio investment parameters and credit requirements
The following table shows the credit ratings and counterparty limits for Council:

Short Term Rating (Standard & Poor’s) or equivalent             Individual          Total Limit
                                                                Counterparty
                                                                Limit
A1+ - Financial Institutions                                    35%                 100%
A1+ - Bond Mutual Funds                                         30%                 50%
A1 – Financial Institutions                                     30%                 30%
A2 – Financial Institutions                                     10%                 30%
A3 – Financial Institutions                                     5%                  10%
Unrated                                                         Nil                 Nil
QIC / QTC Pooled Cash Management Fund                           100%                100%

It is noted that for the purposes of this investment portfolio, the percentage limits apply effective
from the date of purchase as a percentage of the market value of the portfolio. No more than 20
per cent of the portfolio is to be invested in Floating Rate Notes.
Maturity
The maturity structure of the portfolio will reflect a maximum term to maturity of no longer than
twelve (12) months.
Liquidity requirement
Given the nature of the funds invested, no more than 20 per cent of the investment portfolio will be
held in illiquid securities and at least 10 per cent of the portfolio can be called at no cost or will
mature within 0-7 days.
Approved lists
The Financial Services Co-ordinator shall prepare and maintain the following approved
counterparty lists for the investment of funds:

      approved banks;
      approved commercial paper and medium term note issuers;
      approved brokers/dealer and direct issuers for purchase or sale of security with a minimum
       credit rating of A+; and
      approved credit unions.

New investment products
A new investment product requires a full risk assessment by the Financial Services Co-ordinator
(including compliance with the Act) and requires approval by the Director Organisational Services.
Breaches
Any breach of this Investment Policy is to be reported to the Director Organisational Services and
rectified within 24 hours of the breach occurring.

Where Council holds an investment that is downgraded below the minimum acceptable rating
level, as prescribed under regulation for the investment arrangement, Council shall within 28 days
after the change becomes known to the local government, either obtain Treasurer’s approval for
continuing with the investment arrangement or sell the investment arrangement (including, for
example, withdrawing a deposit).

Where limits for different risk categories or where counterparty limits are breached, the Financial
Services Co-ordinator will bring the matter to the attention of the Director Organisational Services
with a recommendation on potential options (e.g. continuing with the investment through until
maturity, or withdrawing a deposit).



Noosa Shire Council                                                                         Page 5 of 7