Specified and non-specified investments categories                          Annex B

A variety of investment instruments will be used, subject to the credit quality of the institution, to place the council’s surplus funds. The criteria, time limits and monetary limits applying to institutions or investment vehicles are listed in the tables below.

 

Investments are split into two categories of specified investments and non-specified Investments. Specified investments are relatively high security and high liquidity investments, which must be sterling denominated  and with a maturity of no more than a year.  Non-specified investments are those investments with a maturity period of greater than one year or are still regarded as prudent but may require more detailed scrutiny and assessment procedures.

 

Accounting treatment of investments.  The accounting treatment may differ from the underlying cash transactions arising from investment decisions made by this council. To ensure that the council is protected from any adverse revenue impact, which may arise from these differences, treasury officers will review the accounting implications of new transactions before they are undertaken.

 

Specified investments:

 

Counterparty type

 

Minimum ‘high’ credit criteria/colour band

Maximum investment limit per counterparty institution

Maximum maturity period

 

DMADF – UK Government

 

UK sovereign rating

£15m

6 months

 

UK Government Treasury Bills

 

UK sovereign rating

£15m

1 year

 

UK Government Gilts

 

UK sovereign rating

£15m

1 year

 

Term deposits - local authorities

 

UK sovereign rating

£15m

1 year

Part-nationalised UK Banks

Blue

 

£15m

1 year

 

Term Deposits - UK Banks and Building Societies

 

 

Orange

Red

Green

 

£15m

£15m

£8m

 

1 year

6 months

100 days

 

Term Deposits - Non-UK Banks (with a sovereign rating of AA-)

 

Orange

 

£15m

 

1 year

 

 

Certificates of Deposits issued by Banks and Building Societies

 

 

Orange/Blue

 

£15m

 

1 year

 

 

Collective investment schemes structured as open ended investment companies (OEICs) as below:-

    1. Money Market Funds CNAV*

AAA

£15m

Liquid

    2. Money Market Funds LVNAV*

AAA

£15m

Liquid

    3. Money Market Funds VNAV*

AAA

£15m

Liquid

4. Ultra-Short Dated Bond Funds

AAA

£15m

Liquid

    5. Bond Funds

AAA

£15m

Liquid

 

*CNAV – constant net asset value

*LVNAV – low volatility net asset value
*VNAV – variable net asset value

 

 

NON-SPECIFIED INVESTMENTS:

 A maximum of 100% can be held in aggregate in non-specified investment

 

1.  Maturities of ANY period

 

Counterparty type

Minimum credit criteria

Maximum investment limit per counterparty institution

 

Maximum Maturity Period

 

Fixed term deposits with variable rate and variable maturities: -Structured deposits

 

 

Orange

Blue

Red

Green

 

£15m

£15m

£15m

£8m

1 Year

1 year

6 months

100 days

 

Certificates of Deposits issued by Banks and Building Societies

 

 

Red

Green

 

£15m

£8m

6 months

100 days

Floating Rate Notes

Long-term AAA

£15m

1 year

Property Funds: the use of these investments may constitute capital expenditure

AAA-rated

£15m

5 years

 

 

2.  Maturities in excess of 1 year

 

 

Term Deposits– local authorities

 

UK Sovereign Rating

£15m

> 1 year

Term deposits – Banks and Building Societies

 

Yellow

Purple

 

£15m

£15m

5 years

2 years

 

Certificates of Deposits issued by Banks and Building Societies not covered by UK Government guarantee

 

Yellow

Purple

£15m

£15m

5 years

2 years

 

UK Government Gilts

 

 

UK sovereign rating

 

£15m

 

> 1 year

Collective investment schemes structured as open ended investment companies (OEICs) as below:-

    1. Bond Funds

Long-term AAA

£15m

> 1 year

    2. Gilt funds

Long-term AAA

£15m

> 1 year