06-20-07 FPAC Minutes - Laserfiche WebLink

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• Investment-grade obligations of state,provincial and local governments and public authorities; • Repurchase agreements whose underlying purchased securities consist of the aforementioned • instruments; • Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of dollar-denominated securities; and • Local government investment pools either state-administered or developed through joint powers statutes and other intergovernmental agreement legislation. Investment in derivatives of the above instruments shall require authorization by the appropriate governing authority. (See the GFOA Recommended Practice on "Use of Derivatives by State and Local Governments,"2002.) 2. Collateralization Where allowed by state law and in accordance with the GFOA Recommended Practices on the Collateralization of Public Deposits, full collateralization will be required on all demand deposit accounts, including checking accounts and non-negotiable certificates of deposit. (See GFOA Recommended Practices in Appendix.) 3. Repurchase Agreements Repurchase agreements shall be consistent with GFOA Recommended Practices on Repurchase Agreements. (See GFOA Recommended Practices in Appendix.) VIII.Investment Parameters 1. Diversification • The investments shall be diversified by: • limiting investments to avoid overconcentration in securities from a specific issuer or business sector(excluding U.S.Treasury securities), • limiting investment in securities that have higher credit risks, • investing in securities with varying maturities,and • continuously investing a portion of the portfolio in readily available funds such as local government investment pools(LGJPs),money market funds or overnight repurchase agreements to ensure that appropriate liquidity is maintained in order to meet ongoing obligations. (See the GFOA Recommended Practice on "Diversification of Investments in a Portfolio" in Appendix.) Alternative samples: 1. Diversification It is the policy of the [entity] to diversify its investment portfolios. To eliminate risk of loss resulting from the over-concentration of assets in a specific maturity,issuer, or class of securities, all cash and cash equivalent assets in all [entity] funds shall be diversified by maturity, issuer, and class of security. Diversification strategies shall be determined and revised periodically by the investment committee/investment officer for all funds except for the employee retirement fund. In establishing specific diversification strategies,the following general policies and constraints shall apply: Portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Maturities selected shall provide for stability of income and reasonable liquidity. •