Internally Managed Investments (Aust.)
Parent Policy
Treasury Management
To manage the day to day liquidity of Monash University and such other approved funds so as to provide an ongoing income stream above that which may normally be expected, while maintaining the capital value of the portfolio through minimising the risk associated with the types of investment undertaken and the strategies adopted.
Definition of terms
Portfolio: All investments held under the title of Monash University Internally Managed Investments
Investment Management
- The prior approval of the Vice President Finance & Chief Financial Officer (VPF & CFO) or nominee must be received prior to making an investment outside the normal investment portfolios maintained by Monash University.
- The Treasurer may transact any business related to Internally Managed Investments in accordance with the Treasury Policy, but excluding any financial arrangement involving futures contracts, swap agreements, options or other approved derivative product transaction, for a term not exceeding 12 months.
- For any transaction for an investment term exceeding 12 months, or financial arrangement involving futures contracts, swap agreements, options or other approved derivative product transaction, the approval of the VPF & CFO, must be obtained prior to making the transaction.
- All transactions undertaken by the Treasurer must be immediately reported to the VPF & CFO, and subsequently Resources and Finance Committee.
- Under no circumstances should the Officer authorised to place the investment also transact the settlement of that transaction.
Responsibility
Treasurer
Credit Risk Management
- Any investment undertaken must have an acceptable credit rating provided by Standard & Poor's Australian Ratings and/or its Moody's equivalent.
- The minimum acceptable credit rating for any investment shall be A2 (short term) and A- (long term).
- The amount of funds that can be invested in any individual investment is limited to the following investment thresholds:
|
Investment Grade
|
Maximum Investment Level
|
|
Short Term:
|
A2
|
$10,000,000
|
|
A1
|
$25,000,000
|
|
A1+
|
$50,000,000
|
|
Long Term:
|
A- to A+
|
$ 5,000,000
|
|
AA- to AA+
|
$15,000,000
|
|
AAA
|
$35,000,000
|
- The combined value of investments in Investment Grade A2 (short term) and A1 to A+ (long term) is restricted to no more than 50% of the total value of portfolio investments.
- The maximum term to maturity of any investment shall be 10 years.
Responsibility
Treasurer
Types of Investment Permitted
Given the credit risk management guidelines detailed above, the following types of investment will be acceptable.
- Deposits with the Monash University Corporate Treasury Portfolio managed by an external fund manager.
- Deposits with a licensed Australian Trading Bank.
- Bills of Exchange and/or Negotiable Certificates of Deposit accepted or endorsed by a licensed Australian Trading Bank.
- Deposits with, and/or the purchase of securities issued by corporations within the abovementioned credit rating guidelines. Such securities would include, but not be limited to, promissory notes and debenture stock.
- Deposits with or the purchase of securities issued by Commonwealth or State Government, statutory authority, or entity guaranteed by them.
- In accordance with Division 2.11 of the Borrowing and Investment Powers Act 1987 the portfolio/s may enter into a financial arrangement for the purpose of managing, lessening, hedging or protecting against movements in currency exchange, interest or discount rates in order to protect or enhance the investments provided that at all times there are sufficient assets within the portfolio/s to support the financial arrangement undertaken. These financial arrangements may include futures contracts, swap agreements, options or other approved derivative product.
Responsibility
Treasurer
Content Enquiries: Finance Policy
|
