Ohio Administrative Code
Title 3344 - Cleveland State University
Chapter 3344-64 - Investment Fund
Section 3344-64-02 - Liquidity fund
Universal Citation: OH Admin Code 3344-64-02
Current through all regulations passed and filed through March 18, 2024
(A) Investment objectives. The primary objectives for the university's liquidity fund activities shall be:
(1) Safety. Investments of the university
shall be undertaken in a manner that ensures, over time, the preservation of
capital in the overall portfolio. The prospect of credit risk or risk of
permanent loss shall be minimized.
(2) Liquidity. The university's liquidity
fund portfolio will remain sufficiently liquid to enable the university to meet
all operating requirements. Portfolio liquidity is defined as the maturity or
ability to sell an investment on short notice near the purchase price of the
investment. To help retain the desired liquidity, no investment shall be
purchased that is likely to have few market makers or poor market bids.
Additionally, liquidity shall be assured by keeping an adequate amount of
short-term investments to accommodate the cash needs of the
university.
(3) Return on
investments. The university's liquidity fund portfolio shall be structured with
the objective of attaining the highest possible total return for the portfolio
while avoiding risk.
(4) Compliance
with state of Ohio guidelines. Investments shall be made only in publicly
traded securities or bank certificates of deposit. In addition, an amount equal
to twenty-five per cent of the average of the university's total investment
portfolio, which includes the university's liquidity fund and the university's
investment fund over the course of the previous fiscal year, shall be invested
in short term, liquid securities.
(B) Asset allocation
(1) The liquidity fund may be managed
internally or by one or more fixed income investment managers provided that
sufficient liquidity is maintained to meet the objectives of the
pool.
(2) Assets in the liquidity
fund may be invested in securities of the United States (U.S.) government or of
its agencies or instrumentalities, the treasurer of the state of Ohio's pooled
investment program, obligation of the state of Ohio or any political
subdivision of the state of Ohio, certificates of deposit of any national bank
located in the state of Ohio, written repurchase agreements with any eligible
Ohio financial institution that is a member of the federal reserve system or
federal home loan bank, money market funds, bankers acceptances maturing in two
hundred seventy days or less which are eligible for purchase by the federal
reserve system, commercial paper issued by a for-profit corporation rated in
the highest classification established by at least two rating services, and
mutual funds that invest exclusively in obligations described in this
paragraph.
(3) The liquidity fund
is expected to normally represent approximately thirty per cent of the
non-endowment funds, which would include both the liquidity fund and the
investment fund of the university. The university's chief investment officer
will monitor the liquidity fund and will attempt to stay at or near the thirty
per cent of the total combined assets of the liquidity fund and the investment
fund. If the portfolio exceeds the maximum or goes below the minimum guidelines
set forth in this policy, the chief investment officer will develop a plan of
action, either for immediate rebalancing of the portfolio or a rebalancing that
will occur over a reasonable time period.
(4) Fixed income and cash
(a) Minimum; twenty-five per cent
(b) Preferred; thirty per cent
(c) Maximum; thirty-five per cent
(C) Monitoring of objectives and results. The university's manager, cash management and banking will monitor the total return of the liquidity fund, which will be measured against six-month U.S. treasury bills.
(D) Equity investment managers review process.
(1) Failure to follow the Cleveland
state university's investment policy statement may be grounds for removal.
Written notification from the finance affairs committee may be sent to the
investment manager establishing the violation with a specific time frame to
comply with the policy; non-conformance may result in termination.
(2) Failure to consistently meet investment
benchmarks, as established within a reconciled performance monitor, over an
extended period of time may result in a manager being placed on "watch" and may
eventually lead to termination. Specifically, if a manager trails their
respective index or bogey by two hundred basis points over three years and the
manager is in the fifty percentile ranking or below of a comparable manager
universe then the manager is immediately placed on "watch."
(3) Failure to comply with investment
restrictions as provided by the finance affairs committee may be grounds for
removal.
(4) Substantive changes in
an investment manager's philosophy, process, people or fees may result in that
manager being placed on "watch" and may result in termination.
Disclaimer: These regulations may not be the most recent version. Ohio may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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