Res 2017-092/adopting revised Investment Policies for Operating Funds and Reserve Funds

Home Browse Search

person may engage in an investment transaction except as provided under the terms of this Policy and the procedures established by the Investment Officer(s). Investment Committee will make the recommendation when to contract with an Investment Advisor/ Manager firm depending on market conditions and review/ analysis of contract cost versus investment portfolio return. All investment purchases will be executed using the competitive bidding process and settled on a delivery versus payment(DVP) basis.A minimum of three competitive offers on the purchase/sale of every security will be obtained or approval from an Investment Committee officer on a competitive offer due to market conditions and time constraints. All investment purchases will be executed in compliance with the Internal Revenue Service's Fair Market Rules. VIII. ETHICS AND CONFLICTS OF INTEREST Investment officers and employees involved in the investment process shall refrain from any personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Investment officers shall disclose in writing to the City Manager any material financial interests in financial institutions that conduct business with the City, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the City's portfolio. Investment officers involved in the investment process with personal business relationships or relatives within the second degree of affinity or consanguinity seeking to sell investments/securities to the City shall disclose the relationship and file a statement with the Texas Ethics Commission and the City Council. Personal business relationships are defined in the Act. IX. AUTHORIZED BROKER/DEALERS AND FINANCIAL INSTITUTIONS The objective of safety requires that the City transact business with financially strong broker/dealers and financial institutions. Therefore, financial broker/dealers and institutions shall be subject to a screening process by the Investment Officers and/or City contracted Investment Advisor/Manager to eliminate those dealers and institutions that lack economic viability or whose past practices put the safety of public capital at risk. The Investment Advisor/Manager under contract will observe the instructions of the City with respect to broker/dealers who are approved to execute transactions involving the City's Managed Funds and in the absence of such instructions will engage broker/dealers which the Advisor/Manager reasonably believes to be reputable, qualified and financially sound. These broker/dealers may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (uniform net capital rule). Authorized dealers and institutions shall provide proof of Financial Institutions Regulatory Authority(FINRA)certification,an annual audited financial statement, and a completed broker/dealer questionnaire. Additional financial institutions may be used for time or demand deposits designed for investment purposes (i.e. not as the primary depository of the City). These institutions may be approved by the Investment Officer(s) on an ongoing basis to accommodate the need for timely action. Action by the Investment Committee is not required before use of such institutions. Each financial institution will provide policy certification and execute a depository agreement. The City may utilize third-party rating agencies in order to assess the overall financial strength of potential depositories. The depository, or its brokerage subsidiary, from which the City obtains banking services including safe- keeping, will not be used for brokerage services in order to perfect ownership on delivery versus payment settlement. The bank may be used for time deposits but all time deposits will be bid competitively. City of San Marcos Investment Policy Page 3