A. Types Of Investments:
1. The village may invest in any type of security allowed by law as set out in the public funds investment act of the state of Illinois (the "investment act") 1 . A summary of allowable securities is as follows:
a. Bonds, notes, certificates of indebtedness, treasury bills, or other securities, which are guaranteed by the full faith and credit of the United States Of America.
b. Interest bearing savings accounts, interest bearing certificates of deposit or interest bearing time deposits or any other investments constituting direct obligations of any bank as defined by the Illinois banking act and only those banks with insurance managed and regulated by the federal deposit insurance corporation (FDIC).
c. Shares or other forms of securities legally issued by savings and loan associations incorporated under laws of the state of Illinois or any other state or under laws of the United States and only in those savings and loan associations insured by SAIF.
d. Short term obligations of corporations (commercial paper) organized in the United States with assets exceeding five hundred thousand dollars ($500,000.00) if:
(1) Such obligations are rated at the time of purchase at the highest classification established by at least two (2) standard rating services and which mature not later than one hundred eighty (180) days from the date of purchase; and
(2) No more than ten percent (10%) of village funds are invested in such obligations at any time; and
(3) Such purchases do not exceed ten percent (10%) of the corporation's outstanding obligations.
e. Short term discount obligations of federal agencies.
f. Illinois public treasurer's investment pool or other similar investments that are made within the parameters set by the Illinois investment of public funds act.
2. Investment in derivatives of the above instruments is prohibited.
B. Collateralization:
1. It is the policy of the village to require that funds on deposit with banks and savings and loans in excess of FDIC or SAIF insurance limits be secured by some form of collateral. The village will accept any of the following assets as collateral:
a. U.S. government securities.
b. Obligations of federal agencies.
c. Obligations of federal instrumentalities.
d. Obligations of the state of Illinois.
e. Obligations of the village.
2. The amount of collateral provided will be not less than one hundred ten percent (110%) of the fair market value of the net amount of public funds secured. The ratio of fair market value of collateral to the amount of funds secured will be reviewed quarterly, and additional collateral will be held by the village or in safekeeping and evidenced by a safekeeping agreement. If collateral is held in safekeeping, it may be held by a third party or by an escrow agent of the pledging institution. Collateral agreements will preclude the release of the pledged assets without an authorized signature from the village. Substitution or exchange of securities held in safekeeping cannot be done without prior approval of the village. (Ord. 1166, 3-15-1999)
Notes
| 1 | 1. 30 ILCS 235/1 et seq. |