Short-term Cash Management Investment Policies

ShareThis
Translate

I. Purpose

This policy establishes the types of acceptable investments and various limits on these investments which can be purchased in the Short-term Cash Management Program administered by the Administrative Services Division.

Rhodes will purchase acceptable investments which will maintain a high level of return within an acceptable level of risk.

II. Prescribed Types of Investment Securities and Limitations

A. The following investment securities are acceptable for the Cash Management Program:

a. U. S. Government Treasury Bills
  • No limit on amount.
  • Current maturities will not exceed 365 days.
b. U.S. Government Treasury Notes
  • No limit on amount.
  • Current maturities will not exceed two years.
c. Obligations of Agencies of the U.S. Government
  • No limit on amount.
  • Current maturities will not exceed 365 days.
d. Certificates of Deposit with Shelby County financial institutions (Deposits Insured)
  • The amount of certificates of deposit from any one institution will not exceed the lesser of $500,000 or 1% of net assets.
  • Total direct obligations of any one institution including certificates of deposit, are subject to the limitations discussed in Section III.
  • Maturities will not exceed one year.
e. Certificates of Deposit with non-local financial institutions (Deposits Insured)
  • The amount of certificates of deposit from any one institution is not to exceed the amount of federal deposit insurance.
  • The Subcommittee on Investments may approve a select list of major U.S. capital market financial institutions with which the College may invest amounts in excess of federal deposit insurance limits.
  • Total direct obligations of any one institution, including certificates of deposit, are subject to the limitations discussed in Section III.
  • Maturities will not exceed one year.
f. Repurchase Agreements and Reverses
  • Total amount of repo′s will not exceed the greater of $25,000,000 or 5% of net assets.
  • Direct obligations of any one institution, including repo′s with more than a one day maturity are subject to the limitations discussed in Section III.  Overnight repo’s with a daily maturity are excluded from the limitations discussed in Section III.
  • Maturities will not exceed thirty days for repo′s.
  • No limitations apply to reverses.
  • Actual delivery of collateral to Depository Bank will be required on each transaction.
g. Domestic Bankers Acceptances
  • Total amount of banker′s acceptances from any one bank will not exceed the lesser of $2,000,000 or 2% of net assets.
  • Purchases are limited to the fifty largest domestic banks (ranked according to deposits).
  • Other domestic banks may be specifically approved by the Subcommittee on Investments.
  • Total direct obligations of any one institution, including bankers′ acceptances, are subject to the limitations discussed in Section III.
  • Current maturities will not exceed six months.
h. Commercial Paper
  • The total amount of paper which can be purchased from any one institution will not exceed $2,000,000 or 2% of net assets.
  • Paper will only be purchased that is rated by Moody′s as P-l or by Standard & Poor′s as either A-l or A-2.
  • The Subcommittee on Investments may specially approve certain institutions which will be exempted from (b) above.
  • Current maturities will not exceed thirty days.

B. Investment in equity securities is prohibited.

C. Deposit rankings and amount of equity as referenced above in II. A., will be determined as of the latest available audited financial statements.

III. General Limitations

A. The College will not purchase investment securities from any one organization that will cause the total cost of all securities issued by that organization and held by the College to exceed the greater of $3,000,000 or 25% of the total cash and cash equivalents as of the beginning of the month.

B. Total direct obligations of any one institution shall not exceed the lesser of $1,000,000 or 2% of net assets.

C. There is no limitation on the amount of U.S. Government or Agency securities.

D. Net assets are defined as the combined net assets in the audited financial statements for the preceding fiscal year.

IV. Investment Review

A. The Comptroller will distribute a monthly performance report on the activities of the Short-term Cash Management Program to the Vice President for Finance and Business Affairs.

B. The Comptroller may request the Subcommittee on Investments to add specific investment instruments, with appropriate limitations, to Section II. A. as market characteristics change over time.

In effect February 13, 2008.
Vice President for Finance and Business Affairs.