Meeting papers

INVESTMENT PARAMETERS
Investable funds
For the purposes of this policy, investable funds are the moneys available for investment at any one
time and include Council’s bank account balance. Included in this balance is any moneys held by
Council on behalf of external parties (for example cash performance bonds).

Investable funds will be determined against the cash flow needs of Council following the adoption of
the annual budget.

Authorised investments
Without specific approval from Council or the Treasurer, investments are limited to those prescribed
by Section 6 of the Statutory Bodies Financial Arrangements Act 1982 for local governments with
Category 1 investment power, which include:
•       deposits with a financial institution
•       interest bearing deposits;
•       commercial paper;
•       bank accepted/endorsed bank bills;
•       bank negotiable certificates of deposit;
•       short term bonds;
•       floating rate notes;
•       QIC Cash Fund; and
•       QTC Capital Guaranteed Cash Fund, Debt Offset Facility, Fixed Rate Deposit (up to 12
        months) and QTC Working Capital Facility.

Prohibited investments
This Policy prohibits any investment carried out for speculative purposes. The Financial Services
Manager may include a prohibited investments list within the Investment Guidelines.

The following investments are prohibited by this investment policy:
•     derivative based instruments (excluding floating rate notes)
•     principal only investments or securities that provide potentially nil or negative cash flow
•     stand-alone securities issued that have underlying futures, options, forward contracts and
      swaps of any kind; and
•     securities issued in non-Australian dollars.

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.


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