Minutes of a Regular Meeting, June 22-23, 2004 - Digital Collections

REGENTS’ POLICY MANUALSECTION 4—FINANCE AND MANAGEMENT4.4—INTERMEDIATE TERM CASHMANAGEMENT POLICYIn recognition of multiple cash management responsibilities, the Board of Regents has adopted thefollowing statement of investment policy to deal with intermediate term funds (ITFs). This policyestablishes the investment strategies and guidelines to be used in the management of ITFs that are definedas excess funds above the funds required for the normal operations of the University and are otherwiseavailable for investment with a two- to five-year time horizon. Operating funds and the reserves neededfor short term (less than two year needs) shall be invested in accordance with the University’s and StateTreasurer’s short-term investment policy.The investment of these ITF assets will be limited to those securities, strategies, and advisory firmsthat adhere to the standards of this ITF investment policy and which meet all other relevant legal, ethical,and fiduciary standards.4.4.1 PURPOSE OF STATEMENTThe purpose of the account in which these ITF assets are invested (hereafter referred to as the“Intermediate Term Funds Account” or “ITF Account”) is to enhance the yield (return) on cashinvestments of the University. Accordingly, the purpose of this statement is to establish a written policyfor the investment of the ITF Account assets, in order to achieve a greater return than would otherwise beobtained in the short-term cash fund.4.4.2 OBJECTIVES OF INTERMEDIATE TERM FUNDS ACCOUNTThe objectives of the ITF Account are to generate a greater return on assets than that of the short-termfund while maintaining similar quality and liquidity. The significant difference is to extend maturities ofthe investments to between two and five years. Interest, dividends, and other monies earned shall bereinvested in the ITF Account until such time the University’s Chief Financial Officer or Controllerrequests transfer to another University account. Such transfer will be made within three business days ofthe request.As more fully defined below, the ITF Account shall pursue a strategy of broad diversification.Investments will be made in investment-grade securities only within the three highest rating categories. Adollar weighted average maturity of three years or less will be maintained.4.4.3 SECURITY TYPESSpecific securities will be selected from the following Security Types with weighting adjusted to takeadvantage of market opportunities:• U.S. Treasury Securities• U.S. Government Agency Securities• Corporate bonds and notes- Investment-grade corporate securities are traditionally defined as 3A/3B- Rated 3A/A- = Permitted- Rated BBB = ExcludedTHE UNIVERSITY OF OKLAHOMA 227