Draft Investment Policy 2019

In accordance with the NSW Office of Local Government Investment Policy Guidelines, a review of Council’s Investment Policy should be conducted on an annual basis.

As part of the annual review, the management of Council conducted the following:

1. Performed a significant review of internal procedures;

2. Engaged independent investment advisors ‘Imperium Markets’ (it is noted that the advisors do not receive broker fees for investments placed);

3. Acquired an Investment Portfolio management tool;

4. Reviewed the Investment Policy.

The review of the investment policy has resulted in a number of changes, the more significant ones summarised as follows:

• The following sections have been added: ‘Funds for Investment’, ‘Legislative Authority for Investments’, ‘Investment Governance’, ‘Breaches of Criteria’;
• The following components have been included in the mandatory investment criteria: ‘scope’, ‘currency’, ‘ownership’, ‘term / maturity’;
• The performance management section has been expanded to provide more information and guidance;
• Investment authorisation requirements and detail of responsibilities attached to individual staff have been removed as they relate to strategy rather than policy matters;
• The short-term credit rating approval category has been added with S&P rating descriptions removed;
• The minimum portfolio exposure requirement has been removed;
• Portfolio exposure: changed A rating to 60% (from 55%) and BBB rating to 30% (from 15%);
• Institutional exposure: changed AAA rating to 40% (from 45%), AA rating to 30% (from 40%) and A rating to 20% (from 15%);
• Maturity requirement: changed 3 to 5 years from 30% to 40% (and to 5.5 years);
• Maturity requirement: changed 5 years and greater from 15% to 20% (and to 5.5. years);
• Inclusion of Floating Rate Notes as an investment option.

In relation to risk management framework criteria, Council management performed a benchmarking exercise of these criteria against a number of other councils to ensure that the proposed framework is consistent with industry standards. No significant outliers were noted.

Council is now seeking feedback from the community on the revised draft Investment Policy which can be viewed in the Document Library to the right of this window.

To share your views about amendments to the policies, use the Submission tab below.

For more information contact Nicole Spencer on (02) 6581 8111