2026/27 FINANCIAL POLICIES · Attachment 2 - Investment Policy

Attachment 2 – Investment Policy


ETHICS AND CONFLICTS OF INTEREST
Prudent Person Standard
The standard of prudence is to be used by investment officers when managing the overall portfolio.
Investments will be managed with the care, diligence and skill that a prudent person would exercise
in managing the affairs of other persons. This includes having in place appropriate reporting
requirements that ensure the investments are being reviewed and overseen regularly.
Investment officers are to manage investment portfolios not for speculation, but for investment and
in accordance with the spirit of this policy. Investment officers are to avoid any transactions that might
harm confidence in Council and will consider the safety of capital and income objectives when making
investment decisions.

Ethics and conflicts of interest
Consideration will be given to ethical investment principles in determining the approved counterparty
for investment of funds.

Investment officers shall refrain from personal activities that would conflict with the proper execution
and management of Council’s investment portfolio. This includes activities that would impair the
investment officer’s ability to make impartial decisions. This policy requires that employees and
investment officials disclose to the Chief Executive Officer (CEO) any conflict of interest or any
investment positions that could be related to the investment portfolio.

Delegation of authority
Authority for implementation of this policy is delegated by Council to the CEO in accordance with
section 257 (1) (b) of the Local Government Act 2009, Delegation of local government powers.

Authority for the day-to-day management of Council’s Investment Portfolio is delegated by the CEO
to the Director Corporate Services and to the Financial Services Manager in accordance with section
259 of the Local Government Act 2009 and is subject to regular review by the Chief Executive Officer.

GUIDING PRINCIPLES
Council’s overall objective is to invest its funds at the most advantageous rate of interest available
to it at the time, for that investment type, and in a way that it considers most appropriate given the
circumstances. In priority, the order of investment activities shall be preservation of capital, liquidity,
and return.

Preservation of capital
Preservation of capital shall be the principal objective of the investment portfolio. Investments are to
be performed in a manner that seeks to ensure security of principal of the overall portfolio. This would
include managing credit and interest rate risk within given risk management parameters and avoiding
any transactions that would prejudice confidence in Council or its associated entities.

Credit Risk
Council will evaluate and assess credit risk prior to investment. The investment officer will minimise
credit risk in the investment portfolio by prequalifying all transactions and counterparties, diversify the
portfolio and limit transactions to secure investments.

Interest Rate Risk
The investment officer shall seek to minimise the risk of a change in the market value of the portfolio
because of a change in interest rates. This would be achieved by measuring the investment term
against the cash flow requirements of Council and structuring the portfolio accordingly. This will avoid
having to break investments prior to maturity. Secondly, interest rate risk can be mitigated by favouring
shorter term investments where appropriate.

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