City of Plymouth Proposed 2022-2023 Budget - Flipbook - Page 270
4.10
4.11
4.12
SAFEKEEPING AND CUSTODY
1.
All securities purchased by the City of Plymouth will be properly designated as an
asset of the City and held in safekeeping. No withdrawal of such securities, in
whole or in part, will be made from safekeeping except by the investment officer
as authorized herein.
2.
Transactions in negotiable instruments which have a value exceeding SIPC
insurance protection, and other insurance protection as may be applicable, with any
one dealer will be required to be settled on a delivery vs. payment basis. A trust
receipt from the contra party and proof of SIPC and other insurance will be
required when the transaction is covered by insurance. Non-negotiable, noncollateralized certificates of deposit, as is the law in the State of Michigan, will be
evidenced by a safekeeping receipt from the issuing bank.
3.
Securities may be held by a third-party custodian designated by the Finance
Director and evidenced by safekeeping receipts as determined by the Finance
Director.
DIVERSIFICATION
1.
It is the policy of the City of Plymouth to diversify its investment portfolio. The
diversification objective is to reduce overall portfolio risks while attaining average
market rate of return.
2.
Assets held in the common cash fund and other investments will be diversified to
eliminate the risk of loss resulting from over-concentration of assets in a specific
maturity, individual financial institution or a specific class of securities.
3.
Diversification strategies will be determined and revised by the investment officer
as needed.
4.
Investment maturities for operating funds will be scheduled to coincide with
projected cash flow needs, taking into account large routine expenditures (i.e. debt
service) as well as considering sizable blocks of anticipated revenue (i.e. property
taxes and state revenue sharing payments).
MAXIMUM MATURITIES
1.
INVPOL22
2
To the extent possible, the investment officer will attempt to match investments with
anticipated cash flow requirements. Unless matched to a specific cash flow
requirement, the investment office will not directly invest in securities maturing more
than five years from the date of purchase.
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