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					BYRON SHIRE COUNCIL

   POLICY NO. 2.5

  INVESTMENT POLICY

                      #906111
                                                                                    Policy – Investment Policy

                                   INFORMATION ABOUT THIS DOCUMENT
                                         (INTERNAL USE ONLY)

Date Commenced                28 February 2006

Policy Responsibility         Finance

Date Adopted                  28/2/06                  Resolution No.

Review Timeframe

Last Review Date:             9/4/09                   Next Scheduled
                                                       Review Date


Document History
Doc No.                  Date Amended                 Details Comments eg Resolution No.

#574352                  7/3/06                       Res 06-86

#711341                  27/9/07                      Res 07-533

#838120                  9/4/09                       Draft amendments reported to Council – further amendments see
                                                      Res 09-181

#847260                  21/4/09                      Incorporating amendments 09-181 - On public Exhibition

#906111                  8/10/09                      Res 09-805


Further Document Information and Relationships
Related Legislation           Local Government Act 1993 - Section 625;
                              Local Government Act 1993 – Investment Order (of the Minister) dated 31 July
                              2008(attached to policy);
                              The Trustee Amendment (Discretionary Investments) Act 1997–Sections 14A(2),14C(1) &
                              (2);
                              Local Government (General) Regulation 2005 – Clause 206(2) and 212

Related Policies

Related Procedures/
Protocols, Statements,
documents




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                                                                                                    Policy – Investment Policy


                                                  TABLE OF CONTENTS

1.   OBJECTIVES............................................................................................................................ 1
2.   AUTHORITY FOR INVESTMENT............................................................................................. 1
3.   DELEGATION OF AUTHORITY ............................................................................................... 1
4.   AUTHORISED INVESTMENTS ................................................................................................ 1
5.   GUIDELINES ............................................................................................................................ 2




#906111
                                                                        Policy – Investment Policy



                                                                                      Policy No. 2.5

POLICY TITLE               INVESTMENT POLICY

FILE REFERENCE             COR050505



1.   OBJECTIVES

     To undertake investment of surplus funds in line with Council’s current Investment Strategy.

     To maximise earnings from authorised investments and ensure the security of Council
     Funds.


2.   AUTHORITY FOR INVESTMENT

     All investments are to be made in accordance with:

           Local Government Act 1993 - Section 625(2);
           Local Government Act 1993 – Investment Order (of the Minister) dated 31 July
           2008(attached to policy);
           The Trustee Amendment (Discretionary Investments) Act 1997–Sections 14A(2),14C(1)
           & (2);
           Local Government (General) Regulation 2005 – Clause 206(2) and 212 and any
           subsequent Ministerial Investment Orders issued by the Minister.


3.   DELEGATION OF AUTHORITY

     The General Manager or his/her delegated representative has authority to invest surplus
     funds.


4.   AUTHORISED INVESTMENTS

     All investments must be denominated in Australian Dollars. Authorised Investments include:

     (a)    Any public funds or securities issued by or guaranteed by the Commonwealth, any state
            of the Commonwealth or a territory;

     (b)    Any debentures or securities issued by a council (within the meaning of the Local
            Government Act 1993 (NSW));

     (c)    Mortgage of land in any State or Territory of the Commonwealth (restricted to first
            mortgages over land with a loan to value ratio of no greater than 60%)

     (d)    Interest bearing deposits with, or any debenture or bonds issued by, an authorised
            deposit-taking institution (as defined in the Banking Act 1959 (Cwth)), but excluding
            subordinated debt obligations;

     (e)    Any bill of exchange which has a maturity date of not more than 200 days and if
            purchased for value confers on the holder in due course a right of recourse against a

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                                                                       Policy – Investment Policy



           bank which has been designated as an authorised deposit-taking institution by the
           Australian Prudential Regulation Authority;

     (f)   A deposit with the Local Government Financial Services Pty Ltd;

     (g)   A deposit with the New South Wales Treasury Corporation or investments in an Hour-
           Glass investment facility of the New South Wales Treasury Corporation.

     All investment instruments (excluding short term discount instruments) referred to above
     include both principal and investment income.


5.   GUIDELINES

     (a)   Council’s Direct Investments

           (i) Quotations on Investments

           Not less than three (3) quotations shall be obtained from authorised institutions when
           an investment in a term deposit is proposed. Where existing securities are purchased
           from the market, reference must be made to an independent institution for a separate
           valuation of the security.

           “Where a sustainable investment opportunity competes with other instruments, should
           the financial analysis be comparable, preference will be given to the sustainable
           investment.”

           (ii) Term to Maturity

           The term to maturity of any Council’s direct investments may range from “at Call” to
           seven years, unless specifically approved by Council.

     (b)   General Policy Guidelines

           Diversification/Credit risk

           (i) Direct Investments

           The amount invested with any one financial institution should not exceed the following
           percentages of average annual funds invested.


               Long Term Rating           Short Term Rating          Maximum
              (Standard & Poors)         (Standard & Poors)     Percentage of Total
                                                                   Investments
             AAA to AA-                       A1+                       80%
             A+ to A-                         A1                        40%
             BBB+ to NR                       A2, NR                    20%




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                                                                       Policy – Investment Policy



          (ii) Credit Ratings

          If any of Council’s investments are downgraded such that they no longer fall within
          these investment policy guidelines, they will be divested as soon as is practicable,
          taking into consideration advice from an independent financial advisor.

    (c)   Performance Benchmarks

                    Investment                             Performance Benchmark
      Cash / Direct Investments                  Average 90 day Bank Bill Index

    (d)   Reporting

          (i) A monthly report must be provided to Council, detailing the investment portfolio in
              terms of performance. This report will be prepared in accordance with the
              provisions of clause 212 of the Local Government (General) Regulation 2005.

          (ii) For audit purposes, certificates must be obtained from the banks/fund managers
               confirming the amounts of investment held on Council’s behalf at 30th June each
               year.

    All changes to this policy are to be reported to Council within 30 days.




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