08 - City Investment Policy - Laserfiche WebLink

Home Browse Search

invest in securities known as "'collateralized debt obligations" which are pools of debt that include sub-, prime mortgages. 9.0 COLLA"VERALIZATION Collateralization will be required on two types of invest in e tits: certificates of deposit and repurchase (and reverse) agreements. In order to anticipate market changes and provide a level of security for all funds,, the collateralization level will be 100%, of market value of principal and accrued interest. '['he City of Paris, chooses to limit collateral to the extent it is limited by Article 105 Revised Civil Statues ofTexas. Collateral will always be held by all independent third party with whom lite entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. The right of collateral substitution is granted. 10.0 SAFEKEEPING AND CUSTODY All security transactions, including collateral for repurchase agreements, entered inter by the City of Paris shall be conducted on a delivery -versus -payment (DVP) basis. Securities will be held by a third party custodian designated by the Finance Director and evidenced by safekeeping receipts. 11.0 DIVERSIFICATION The ity of Paris will diversify its investments by security type and institution. With the c, cc tion o N 1) obligations of the United States or its agencies all(] authorized pools, no more than 50% of the City of Paris total investment portfolio will be invested in a single financial institution with the exception of' its local depository. 12.0 MAXIMUM MATURITIES To the extent possible, the City of Paris will attempt to match its invest uents with anticipated cash flow requirements. Unless matched to a specific cash flow, the City of Paris will not directly invest in securities maturing more than 10 ),cars frown the date of purchase. Hovvever, the City ofParis may collateralise its repurchase agreements using longer -dated investments not to exceed 15 years to maturity. Reserve funds may be invested in securities exceeding 10 years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of the funds, 13.0 INTERNAL CONTROL The Finance Director shall establish all annual process of independent review by an external auditor, This review will provide internal control by assuring compliance with policies and procedures. 14.0 PERFORMANCE STANDARDS The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs. 14.1 MARKETYIELD (ITT NC City of Paris investniclitstrategy` is active. (:liven this