Laserfiche WebLink
8.3 Suitability Of Investments <br />Suitability, not simply return, is the standard for selecting investments for the <br />portfolio. The Executive Director for FMSA, and all other authorized investment <br />officials and supporting staff shall review the following when selecting or <br />recommending investments for the City: <br />• Sufficient liquidity to meet current obligations <br />• Appropriate level of market risk <br />• Diversified portfolio <br />• Legal investments <br />• Market rate of return <br />The Executive Director for FMSA and his/her designees are not required to invest <br />in all the investment options authorized in this Statement of Investment Policy. <br />Selection will be based on cash flow characteristics, exposure to market risk, rate of <br />return, the technical ability of the staff responsible for administering the program, <br />and the availability of time and tools for staff to engage in conservative, but <br />effective, management of the City's investment portfolio. <br />9.0 PROHIBITED INVESTMENTS AND INVESTMENT PRACTICES <br />9.1, Ineligible Investments - State Law <br />Certain investments, however, are prohibited by California Government Code <br />Section 53601.6. Accordingly, the City shall not invest in any inverse floaters, <br />range notes, or mortgage derived, interest -only strips. In addition, the City shall not <br />invest any funds in any security that could result in zero interest accrual if held to <br />maturity. However, prohibited securities that are in the City's portfolio, as of the <br />date of this policy adoption, may be held until their maturity dates. <br />9.2 Disallowed Investments - Higher Perceived Risk <br />Besides investments prohibited by statute, this policy disallows investments in the <br />following due to a higher perceived risk: <br />• Asset-backed securities (ABS) — securities supported by pools of installment <br />loans or leases or by pools of revolving lines of credit; <br />Derivatives — financial instruments which have a principal and/or interest <br />payment subject to uncertainty as to timing and/or amount including financial <br />instruments whose return profile is linked to, or derived from, the movement <br />of one or more underlying index or security, and may include a leveraging <br />City of Santa - Annual July 1, 2018 - <br />Statement of Investment Policy5b131 9 June 30, 2019 <br />