2024 Review of QPRC Investment Policy

Consultation has concluded

The Investment policy provides a framework for the optimum investment of Queanbeyan-Palerang Regional Council’s funds at the most favourable rate of interest available to it at the time, maximising returns, while having due consideration of risk, liquidity and security for its investments.

The Investment Policy was last adopted on 9 September 2022 and is now due for review.

Recommended changes

The policy review recommends changes to the Credit Quality Limits to allow some limited exposure to unrated and lower credit rated Authorised Deposit taking Institutions (ADIs). ADIs are banks, building societies and credit unions authorised to conduct banking business in Australia.

Whilst this change will allow a small portion of Council’s portfolio to exposed to unrated deposits, these investments remain limited to short term (less than 12 months) cash deposits (such as term deposits) with ADIs and are protected by the regulatory provisions of the Banking Act 1959 and regulated by APRA.

The revision will allow for more portfolio diversification (within the limits set by the Minister for Local Government), have the potential for higher interest returns, deliver Council’s investment strategy and support QPRC’s commitment to achieving a sustainable local region.

Summary of proposed changes

Current policy	Proposed changes
1 – Outcomes	Additional words as per council resolution: “having regard to council’s preference for environmental and socially responsible investments”
4 – Definitions	Format changed to table
6.1 – Authority for delegation	Changed reference from CEO to GM
6.6 – Sustainable investing	Renumbered to 6.7 Additional points 6.7.3 and 6.7.4 added
6.7 – Risk management guidelines	Renumbered to 6.6
	6.7.8 new clause as per council resolution: Give consideration to local economic benefit when making investment decisions
6.8 - Investment advisor	6.8.3 reworded to reference the appropriate procurement process is followed when securing independent financial advisory services
6.10 - Credit Quantity limits	See table below. Additional point 7.10.4 added to allow for grandfathering of current investments
6.11 – Investments held under a previous investment policy	Removed. Too restrictive by referencing specific investment. Replaced with 6.10.4.
6.13 – Reporting	Renumbered to 6.11
	Attachment – copy of Ministerial Investment Order

Credit Quality Limits - Current Policy

Long term debt rating (Column A)		Portfolio Limit (Column B)	Counterparty Limit (Column C)	Maximum tenor (Column D)
S & P	Moody’s
AAA	Aaa1	100%	100%	Not applicable
AA+ to AA-	Aa1 to Aa3	100%	40%	5 years
A+ to A	A1 to A2	100%	100%	5 years (eligible FRNs) 3 years (other investments
A-	A3	40%	20%	3 years
BBB+	Baa1	35%	10%	3 years
BBB	Baa2	35%	5%	12 months
BBB- and below	Baa3 and below	0%	0%	-
TCorp		20%	20%	Not applicable

Credit Quality Limits - Proposed Changes

Long term debt rating (Column A)		Portfolio Limit (Column B)	Counterparty Limit (Column C)	Maximum tenor (Column D)
S & P	Moody’s
AAA	Aaa1	100%	100%	Not applicable
AA+ to AA-	Aa1 to Aa3	100%	40%	5 years
A+ to A-	A1 to A3	60%	35%	5 years
BBB+ to BBB-	Baa1 to Baa3	35%	15%	5 years
Unrated		10%	5%	12 months
TCorp		20%	20%	Not applicable

Have your say

By completing the survey below by Thursday 14 March
By email to council@qprc.nsw.gov.au referencing "2024 Review Investment Policy " in the subject line
By mail to PO Box 90, Queanbeyan NSW 2620