Item 59 - Annual Statement of Investment Policy

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City of Santa - Annual Statement of Investment Policy July 1, 2022 - June 30, 2023 Page J CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SERVICE (CDARS): A program with an approved depository that removes the need for collateral by providing full FDIC insurance for certificates of deposit. COLLATERALIZED BANK DEPOSITS: Collateralized bank deposits can be broadly defined as notes, bonds, and other obligations (such as nonnegotiable CDs) that are secured at all times by valid first party interest in collateral. For California local agencies, the collateral must meet specified Government Code requirements. CONVEXITY: Is the measure of the curve in the relationship between a bond's price and its yield. Consider the price and yield of Bond A on a graph, where price is marked on the vertical axis, and yield on the horizontal. A bond's price and yield are inversely related, so as its price decreases, its yield increases. CURRENT YIELD (CURRENT RETURN): A yield calculation determined by dividing the annual interest received on a security by the current market price of that security. CUSTODIAN BANK: A financial institution that holds customers' securities for safekeeping to minimize the risk of their theft or loss. A custodian holds securities and other assets in electronic or physical form. CUSIP: CUSIP or CUSPIC number stands for Committee on Uniform Securities Identification Procedures. A CUSIP number identifies most financial instruments, including: stocks of all registered U.S. and Canadian companies, commercial paper, and U.S. government and municipal bonds. The CUSIP system (formally known as CUSIP Global Services)—owned by the American Bankers Association and managed by Standard & Poor’s - facilitates the clearance and settlement process of securities. CUSIP numbers consist of nine characters (including letters and numbers) that uniquely identify a company or issuer and the type of financial instrument. A similar system is used to identify foreign securities (CUSIP International Numbering System or CINS). CINS employs the same nine character identifier as CUSIP, but also contains a letter in the first position to signify the issuer's country or geographic region. DEBENTURE: A bond secured only by the general credit of the issuer. DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued a discount and redeemed at maturity for full face value (e.g. - U.S. Treasury Bills). FAIR VALUE: The amount at which an investment could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S&L's, small business firms, students, farmers, farm cooperatives, and exporters. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.