Current through all regulations passed and filed through September 16, 2024
(A) The purpose of this rule is to provide a
framework for the prudent management of all public funds that will adhere to
Chapter 135. of the Revised Code and to all other applicable laws and
regulations at all times.
Owens community college shall invest public funds in a manner,
which will provide maximum security with the highest investment return, safety
and preservation of principal, while meeting the daily cash flow demand and
conforming to all applicable statutes governing the investment of public
funds.
(B) Authority. The
treasurer/chief financial officer is the investment officer of the college and
is responsible for the purchase and sale of invested funds and the
implementation of the investment rule. The treasurer/chief financial officer
will adhere to the investment rule, section
3358.06 of the Revised Code,
section 3345.05 of the Revised Code, and
all other applicable laws and regulations.
(C) Scope. The investment rule applies to all
financial assets of the college, including state and federal funds held by the
college. The treasurer/chief financial officer or designated staff shall
routinely monitor the composition of the college's investment portfolio, the
available markets and relative value of competing investments and will adjust
the portfolio accordingly.
(D)
Standard of prudence. The standard of prudence to be applied by the treasurer
shall be the industry prudent-person standard, which states, "investments shall
be made with judgment and care, under circumstances then prevailing, which
persons of prudence, discretion and intelligence exercise in the management of
their own affairs, not for speculation, but for investment, considering the
probable safety of their capital as well as the probable income to be derived."
Acting in accordance with the investment rule or any other
appropriate written procedures pertaining to the administration and management
of the college investment portfolio while exercising due diligence, shall
relieve the treasurer of personal responsibility for an individual security's
credit risk or market price changes, provided deviations from expectations are
reported to the board of trustees in a timely fashion and appropriate action is
taken to respond to adverse developments.
(E) Objectives. The primary objectives of the
college's investment activities are in priority order, as follows:
(1) Safety. The safety of principal is the
foremost objective of the investment program. College investments shall be
undertaken in a manner that seeks to ensure the preservation of capital in the
overall portfolio. Diversification is required in order that potential losses
on individual securities are not excessive relative to the income generated
from the remainder of the portfolio.
(2) Liquidity. The college investment
portfolio will remain sufficiently liquid to enable it to meet all operating
requirements, which might be reasonably anticipated.
(3) Return on investment. The college's
investment portfolio shall be designed with the objective of attaining a market
rate of return throughout budgetary and economic cycles, taking into account
this investment rule and the cash flow characteristics of the
portfolio.
(4) Minimization of cost
of services. The fourth objective is to minimize transaction costs.
Relationships with securities dealers, investment bankers, and other entities
providing investment services will be carefully managed to secure high quality
services while simultaneously minimizing costs.
(F) Ethics and conflict of interest.
Designated college employees involved in the investment process shall refrain
from personal business activities that could conflict with proper execution of
the investment program, including having any material financial interest
involved in financial institutions or any substantial personal financial or
investment positions that could be related to, or affected by, the performance
of the college's portfolio. All employees, officers and investment consultants
to the college shall subordinate their personal investment interests to those
of the college, particularly with regard to the timing of purchases and
sales.
(G) Authorized financial
dealers and institutions. The treasurer/chief financial officer shall maintain
a list of financial institutions and approved security broker/dealers selected
by creditworthiness who are authorized to provide investment services and who
qualify under division (M)(1) of section
135.14 of the Revised Code.
(1) All financial institutions and
broker/dealers, which desire to become qualified to handle investment
transactions for the college should provide the treasurer/chief financial
officer with: audited annual financial statements; proof of good standing with
the office of the comptroller of the currency and state banking
regulators; national association of
security dealers certifications; proof of Ohio registration; and biographical
and regulatory information regarding the employees who would be the primary
contact.
(2) All financial
institutions, broker/dealers and consultants, which desire to conduct
investment business must certify that they have read, understood, and agree to
abide by this rule.
(H)
Authorized investments. The authorized investments below constitute a
nonexclusive list of appropriate investments, as follows:
(1) The Ohio subdivision's fund, also known
as the state treasury asset reserve of Ohio fund, set forth in section
135.45
of the Revised Code.
(2) Certificates of deposit of any national
bank located in the state of Ohio.
(3) No-load money market mutual funds, rated
in the highest category by at least one nationally recognized rating agency,
investing exclusively in the types of eligible securities as defined under
sections 3345.05 and
3358.06 of the Revised Code.
Eligible money market funds shall comply with section
135.01 of the Revised Code,
regarding limitations and restrictions.
(4) Bankers' acceptances, maturing in two
hundred seventy days or less, rated in the highest category by one of two
nationally recognized rating agencies.
(5) United States of America treasury bills,
notes, and bonds; various federal agency securities including issues of federal
national mortgage association, federal home loan mortgage corporation, federal
home loan bank, federal farm credit bank, student loan marketing association,
government national mortgage association, and other agencies or
instrumentalities of the United States of America. Eligible investments include
securities that may be "called" prior to the final maturity date. Any eligible
investment may be purchased at a premium or a discount. All federal agency
securities shall be direct issuances of federal government agencies or
instrumentalities.
(6) Bonds and
other obligations of the state of Ohio.
(I) Prohibited investment practices. In
addition to any other prohibitions in the Revised Code, the college shall not:
(1) Contract to sell securities that have not
yet been acquired on the speculation that prices will decline.
(2) Make any investment in "derivations' as
defined in division (C) of section
135.14 of the Revised
Code.
(3) Invest in a fund
established by another public body for the purpose of investing public money of
other subdivisions unless the fund is the Ohio subdivision's fund (state
treasury asset reserve of Ohio fund).
(4) Enter into reverse repurchase
agreements.
(5) Leverage current
investments as collateral to purchase other assets.
(6) Invest in stripped principal or interest
obligation of otherwise eligible obligations.
(J) Diversification. The college will
diversify its investments by security, type and institution. With the exception
of direct obligations of the Ohio subdivision's fund (state treasury asset
reserve of Ohio fund), no more than seventy-five per cent of the college's
total investment portfolio will be invested in a single security type or with a
single financial institution.
(K)
Maximum maturities. To the extent possible, the college will attempt to match
its investments with anticipated cash flow requirements. No investment shall be
made unless it can be reasonably held to its maturity. Unless there is no loss
to be suffered due to possible early liquidation, the college will not directly
invest more than five years from the date of settlement.
(L) Safekeeping and custody. All security
transactions, including collateral for repurchase agreements, entered into by
the college shall be conducted on a delivery-versus-payment basis. Securities
will be held by a third party custodian designated by the treasurer/chief
financial officer and evidenced by safekeeping receipts. Pledge collateral will
only be released by the college after verifications that the principal and
interest have been credited to the college's account.
The treasurer/chief financial officer may require any
depository holding a significant portion of the portfolio to identify specific
collateral and to deliver that collateral to the federal reserve bank as
security for the deposit.
(M) Internal controls. The treasurer/chief
financial officer is responsible for internal controls, which include but are
not limited to:
(1) The treasurer/chief
financial officer shall maintain a current inventory of all investments,
including:
(a) Description of each
security
(b) Cost
(c) Par value
(d) Dates (beginning, settlement,
maturity)
(e) Rates
(f) Seller
(g)
Rating
(2) The establishment of an investment
committee consisting of the treasurer/chief financial officer, controller and
budget officer. The investment committee shall generally meet monthly. Prior to
making an adjustment to the portfolio, the members of the committee review
investment options. An investment may be decided upon at the time of purchase
or sale via a communication method deemed appropriate among the members of the
committee. In the absence of the treasurer/chief financial officer, the
president will serve as the third member of the committee.
(a) With the approval of the board of
trustees, the investment committee may authorize the services of an investment
advisor who meets both of the following qualifications:
(i) Licensed by the division of securities
under section 1707.141 of the Revised Code;
or, registered with the securities and exchange commission.
(ii) Demonstrated experience in the
management of investments of public funds, particularly in the investment of
state-government investment portfolios; or, is an eligible institution as a
public depository in accordance with section
135.03 of the Revised
Code.
(b) The investment
advisor may assist in the management of the college's portfolio and will share
the responsibility for the investment and reinvestment of such investment
assets, including the execution of investment transactions. Upon the request of
the board of trustees finance committee or the treasurer/chief financial
officer, the investment advisor will report on all aspects of the college's
portfolio, including bond market conditions affecting the value of the
college's investments. The investment advisor may transact business (execute
the purchase and/or sale of securities) with eligible financial institutions,
in accordance with this investment rule. The investment advisor will be
required to issue monthly and quarterly portfolio reports to the
treasurer/chief financial officer, as defined in this investment
rule.
(3) The
treasurer/chief financial officer shall provide an investment report at
regularly scheduled meetings of the board of trustees finance committee.
The investment report will include a list of all investments
and a report on investment activity and returns.
(N) Education. The treasurer/chief financial
officer shall participate in education training programs sponsored by the state
treasurer or the state auditor, in which the treasurer/chief financial officer
is required to participate pursuant to section
135.22 of the Revised Code. In
such programs, the treasurer/chief financial officer will develop and enhance
background and working knowledge in investment, case management and
ethics.
(O) Adoption and amendment.
The board of trustees shall adopt the investment rule and it shall be annually
reviewed for recommended amendment. The treasurer shall file the adopted or
amended investment rule with the office of the auditor of state.
(P) Certification of reading, understanding
and acceptance of the investment rule by those who desire to conduct investment
business with the college.
The undersigned, hereby certifies that it
has read, understands and will accept and abide by this investment rule and the
relevant provisions of section
135.14 of the Revised Code in
conducting investment business on behalf of Owens community college; that it
understands that binding arbitration provisions are not permitted and that any
non-binding arbitration provisions governing its relationship with the college
must be expressly approved by the Owens community college board of trustees,
and that the officer executing this certification is authorized to do so on
behalf of the undersigned.
Undersigned:
________________________________
Signature:
________________________________
Title:
________________________________
Date:
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