Agenda - Council - 10/22/1996 - Laserfiche WebLink

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I i I I I I I I I City of Ramsey Investment Policy II. Commercial Paper - prime Bankers Acceptances - prime Money Market Funds whole portfolios consist of Unites States Treasury obligations and Federal Agency issues. B. .,~upplemental Depositories Annually the City Council will designate official depositories for investment purposes. Vendor Aspects The vendor aspects of investment activity focus upon protection of taxpayer dollars and investment income, consistent with statutory authorization and financial prudence. The City of Kamsey shall seek to conduct its investment transactions with several competing, reputable' investment security dealers and qualifying banks. Special care should be exercised when considering new services. A. pe~rfecting Collateral in Repurchase Agreements Repo's are considered secured loans with securities as underlying collateral. The collateral in each repo transaction shall be perfected. [Perfection is a legal concept bYr which a lender attains the right to take delivery and ownership of the collateral involved in a loan in the event that a debtor defaults and files bankruptcy.] With collateral perfection there is less principal risk for the lender since the claim against the collateral is in place in relation to those of other parties. For repo's with maturities of 21 days or less, collateral is considered perfected without security delivery. For repos with maturities extending past 21 days, perfection occurs only by taking possession of' securities. It is the City of Ramsey's policy to insist on delivery of securities if the repo transaction is for greater than 21 days. B. Sel~ction of Repo Vendors The City of Ramsey will purchase repos from vendors who meet certain criteria. 1. Repo transactions restricted to: Reporting dealers who are monitored by the New York Federal Reserve Bank or Nationally supervised commercial banks whose combined capital and surplus equals or exceeds $10,000,000. 2