06-20-07 FPAC Minutes - Laserfiche WebLink

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policy. Such procedures shall include delegation of authority to persons responsible for investment transactions. The Finance Director and/or City Administrator shall be • responsible for all transactions undertaken and shall establish a system of internal controls designed to prevent losses from fraud, employee error, unanticipated changes in financial markets and imprudent actions by employees and officers of the City. CONFLICT OF INTEREST Any City official (elected or appointed) involved in the investment process shall refrain from personal business activity that could conflict, or give the appearance of a conflict, with proper execution of the investment program or which could impair his/her ability to make impartial investment decisions. AUTHORIZED FINANCIAL INSTITUTE AND DEALER In accordance with Minnesota Statutes §118.02, the responsibility for conducting investment transactions resides with the City Council of the City of Forest Lake. Also, the Council shall be responsible for designating the depositories of the funds. Depositories shall be selected through a banking services procurement process, which shall include a comprehensive review of credit characteristics and financial history by the Finance Director or reliance on selection criteria by an independent third party. In selecting depositories, the creditworthiness of the institutions under consideration shall be examined. The City Council shall designate depositories after a recommendation from staff. • Only approved security broker/dealers selected by creditworthiness shall be utilized (minimum capital requirement $10,000,000 and at least five years of operation.) These may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission Rule 15c3-1 (uniform net capital rule.) All financial institutions and broker/dealers must supply the following as appropriate: ➢ audited financial statements; ➢ proof of National Association of Securities Dealers(NASD) certification, ➢ proof of state registration; ➢ completed broker/dealer questionnaire for firms who are not major regional or national firms; ➢ certification of having read the City's investment policy. BROKER REPRESENTATIONS Municipalities must obtain from their brokers certain representations regarding future investments. The City of Forest Lake will provide each broker with information regarding the municipality's investment restrictions. Before engaging in investment transactions with the City of Forest Lake the supervising officer at the securities broker/dealer shall submit a certification stating that the officer has reviewed the • - 3 -