2017-06-29 Special Meeting Agenda

INVESTMENT OF SURPLUS FUNDS 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                                         15%                 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.

When considering investment options, the investment officer will establish a margin of 10 basis
points in interest rate returns to give preference to those institutions considered to be responsible
investors (e.g. do not invest in fossil fuel companies).

Maturity
The maturity structure of the portfolio will reflect a maximum term to maturity of no longer than 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.

Breaches
Any breach of this policy is to be reported to the CEO 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 Manager
Financial Services will bring the matter to the attention of the Director Corporate Services with a
recommendation on potential options (e.g. continuing with the investment through until maturity, or
withdrawing a deposit).

Safekeeping and custody
Each transaction will require written confirmation by the broker / dealer / bank. Council will hold
security documents, or alternatively a third party custodian authorised by the Manager Financial
Services and evidenced by safekeeping receipts may hold security documents.




                                                                                                     Page 5