Investment Policy

Scope of Policy – This Investment Policy applies to the investment activities of any funds which are or may come under the jurisdiction of State Technical College of Missouri (College). Anything in this notwithstanding, the mandates of Revised Statutes of Missouri shall take precedence over this policy except where this policy is more restrictive.

1. Objectives – The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield:

1. Safety: Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk.
2. Liquidity: The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.
3. Yield: The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, considering the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low-risk securities in anticipation of earning a fair return relative to the risk being assumed.

2. Standard of Care:

1. Prudence: All participants in the investment process shall act responsibly as custodians of the public trust. The standard of prudence to be applied by the personnel involved in the investment process is the “prudent investor” rule, 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.”
2. Ethics and Conflicts of Interest: Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with which business is conducted on behalf of the College.
3. Delegation of Authority: Authority to manage the investment program is granted to the College’s Vice President of Finance. The Vice President of Finance shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate personnel.

3. Broker/Dealer Requirements:

Investments will be made through banks or securities dealers which offer investments that meet the criteria of this policy.

4. Suitable and Authorized Investment

1. Investment Type: In accordance with and subject to restrictions imposed by current statutes, the following list represents the entire range of investments the College will consider, and which shall be authorized for the investments of funds by the College:

• Governmental and Agency Debt – those securities issued by and or guaranteed by the Federal Government or an Agency or Instrumentality of the Federal Government: (i) United States Treasury Securities; and (ii) United States Agency Securities.
• Fixed Income Investments secured by the FDIC insurance and/or Collateral: (i) Repurchase Agreements; and (ii) Collateralized Public Deposits

1. Investment Restrictions and Prohibited Transactions: To provide for the safety and liquidity of the College’s funds, the investment activities will be subject to the following restriction:

• Borrowing for investment purposes is prohibited
• Instruments known as variable rate demand notes, floaters, inverse floaters, leveraged floaters, and equity-linked securities are not permitted. Investment in any instrument, which is commonly considered a “derivative” instrument (e.g., options, futures, swaps, caps, floors, and collars), is prohibited.
• Contracting to sell securities not yet acquired in order to purchase other securities for the purpose of speculating on developments or trends in the market is prohibited.

1. Collateralization: Collateralization will be required on two types of investments: certificates of deposit and repurchase agreements. The market value (including accrued interest) of the collateral should be at least 100%.

5. Investment Parameter
6. Diversification: Diversification of the investment portfolio shall be consistent with the Objectives described above.
7. Maximum Maturities: To the extent possible, the College shall attempt to match its investment with anticipated cash flow requirements. Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the College’s fund should be continuously invested in readily available funds, such as in bank deposits or overnight repurchase agreements, to ensure that appropriate liquidity is maintained to meet ongoing obligations.

6. Reporting
7. Method: The Vice President shall report on investment activity at the College’s Board of Regents upon request. The market value of the College’s fund shall be calculated regularly and reflected on the College’s annual audited financial statements.
8. Performance Standards: The College’s fund will be managed in accordance with the parameters specified within this policy. The use of U.S. Treasury bills, average Fed Fund rate, or other stable markets can be used to determine whether market yields are being achieved.

LINE OF AUTHORITY

Responsible Office: President’s Office

Contact person in that office: Executive Assistant to the President

EFFECTIVE DATE: August 16, 2023

Presidential approval: August 16, 2023