Hamlet Investment Regulations
Regulation- Registration
- R-079-2005
- Source
- Unofficial consolidation PDF (justice.gov.nt.ca)
- Under
- Hamlets Act
This is an unofficial reading copy parsed from the Department of Justice consolidation PDF above — itself an office consolidation, not an official statement of the law. The authoritative text is in the Revised Statutes of the Northwest Territories, 1988 and the annual Statutes volumes.
- None.
The Commissioner, on the recommendation of the Minister, under subsection 130(4), section 169 of the Hamlets Act and every enabling power, makes the Hamlet Investment Regulations.
Interpretation
In these regulations,
"investment manager" means the officer identified in the investment plan who is responsible for all investments made on behalf of the hamlet; (gestionnaire des investissements)
"rating agency" means
(a) Canadian Bond Rating Service, Inc.,
(b) Dominion Bond Rating Service Limited,
(c) Moody's Investors Service, Inc., or
(d) Standard & Poor's Corporation. (agence d’évaluation)
Investment Plans
A hamlet’s investment plan must
(a) describe the measures to be taken to ensure that
(i) each investment decision made by or on behalf of the hamlet complies with the Conflict of Interest Act, and
(ii) no council member or officer benefits from, or is reasonably perceived to benefit from, investment decisions made by or on behalf of the hamlet;
(b) identify the officer who is to be responsible for all investments made on behalf of the hamlet and describe this officer’s duties;
(c) establish the signing authority procedures for making an individual investment decision;
(d) specify the type of investments, referred to in paragraphs 128(1)(a) through (h) of the Act, in which the hamlet intends to make investments;
(e) specify the types of securities, if any, in which the hamlet is authorized to make investments under paragraph 129(1)(b) of the Act;
(f) outline the diversification strategy to be followed and specify the proportion of the investments allowed for each type of investment specified under paragraphs (d) and (e);
(g) describe the different investment approaches the hamlet will follow and outline the investment objectives to be followed for short-term investments, for long-term investments of one year to five years, and for long-term investments of greater than five years;
(h) describe how regular cash flow estimates will be used when making investment decisions;
(i) describe the factors to be relied on when making investments for each of the three periods referred to in paragraph (g);
(j) describe how, with respect to short-term investments,
(i) the principal amount of the investments will be preserved,
(ii) the liquidity of the investments will be maintained, and
(iii) the rate of return will be maximized;
(k) describe how, with respect to long-term investments,
(i) the principal amount of the investments will be preserved,
(ii) the maturity dates of the investments will be matched with the dates when the funds will be needed as set out in the cash flow estimate, and
(iii) the rate of return will be maximized;
(l) set out the procedure the investment manager will follow in reporting to council on the hamlet’s investment activities, including
(i) the performance of the investment portfolio during the period covered by the report,
(ii) whether or not the investment manager is of the opinion that all investments were made in accordance with the investment plan, and
(iii) the date each investment transaction is made;
(m) set out the term of the plan, not exceeding five years, and a procedure for a regular annual review of the investment plan during the term of the plan by council; and
(n) identify the particular securities held by or on behalf of the hamlet at the time the plan is approved by council.
The investment manager shall ensure that a copy of the investment plan is provided to all financial institutions from which the hamlet acquires securities, either directly or through a broker.
Additional Authorized Investments
(1) Subject to this section, the investments authorized under paragraph 128(1)(g) of the Act for a hamlet are:
(a) securities issued by a corporation incorporated or continued under the laws of Canada or a province or territory, if the securities are rated by at least one rating agency with
(i) a rating of not less than R-1 or A or an equivalent, in the case of short-term securities, and
(ii) a rating of not less than A- or an equivalent, in the case of long-term securities;
(b) exchange agreements, futures agreements, option agreements or rate agreements in respect of interest, dividends, rates, currencies, indices or mediums of exchange, if
(i) the agreement is used in connection with and for the purpose of reducing the risk of another investment referred to in paragraph (a) or in paragraphs 128(1)(a) to (f) of the Act, or
(ii) the agreement is used to protect the hamlet from exposure to a loss resulting from a fluctuation in interest, currency or rate in connection with a debt owing to the hamlet or a debt owed by the hamlet.
(2) If an investment made under paragraph (1)(a) falls below the rating standard required by that paragraph, the hamlet is no longer authorized to hold the security and shall sell it within 90 days after the day the security first falls below the standard.
(3) No hamlet may invest more than
(a) 5% of the total amount of its investments in the types of investments authorized in subsection (1); or
(b) 1% of the total amount of its investments in a single investment authorized in subsection (1).
(4) No hamlet may invest in an investment authorized in subsection (1) that is not rated by a rating agency.
Investment Standards and Guidelines
The investment manager or person making investments on behalf of the hamlet shall
(a) follow the prudent person rule as understood generally by the investment community in Canada and the Northwest Territories;
(b) ensure that the investment is clearly made in the name of the hamlet;
(c) ensure that any investment in a registered security is properly registered in the name of the hamlet;
(d) ensure that the investment is documented in the form of a certificate received from the issuer of the security; and
(e) ensure that the documentation referred to in paragraph (d) is kept in a safe place.
No hamlet may make an investment in a particular security unless at least two different people authorize it, in accordance with the hamlet’s signing authority procedures for investments.
If a hamlet intends to keep the actual certificate or instrument evidencing a security in its possession, council must adopt procedures for the proper safekeeping of those documents. Territorial Printer, Northwest Territories Yellowknife, N.W.T./2005©