§ 401-54. Investment instruments.

A. 

Many public investments in Massachusetts are not protected by federal or state law and many investments are uncollateralized. It is the policy of the Town to retain the option to require full collateralization of all Town investments other than obligations of the United States government and its agencies. Certificates of deposit plus accrued interest up to the amount covered by FDIC insurance do not need to be collateralized pursuant to this policy. Collateralization should be held by a third party where possible.

B. 

The Treasurer may invest in the following instruments:

(1) 

The Massachusetts Municipal Depository Trust (MMDT), an investment pool for state, local and other independent governmental authorities, is under the auspices of the State Treasurer and currently managed by Fidelity Investments. It invests in bankers acceptances, commercial paper of high quality, bank certificates of deposit, repurchase agreements and United States Treasury Obligations.

(2) 

United States Treasury notes and bonds: obligations of the United States government issued with a fixed coupon rate and original maturities.

(3) 

United States agency obligations, provided that such United States agency obligations are backed by the full faith and credit of the federal government.

(4) 

Bank accounts or certificates of deposit which are fully collateralized through a third party agreement.

(5) 

Bank accounts and certificates of deposit (CDs) insured by FDIC up to the coverage limit, including CDAR eligible CDs. All bank accounts and CDs in one institution are considered in the aggregate for the insurance coverage limit. In some cases banking institutions carry additional insurance, Depository Insurance Fund (DIF).

(6) 

Unsecured bank deposits of any kind such as other checking, savings, money market or certificates of deposit accounts at banks that do not fit the above categories. These investments are subject to the following limitations: No more than 5% of an institution's assets and no more than 25% of a municipality's cash may be comprised of unsecured bank deposits. This percentage may be increased for not more than 30 days during times of heavy collection or in anticipation of large payments that will be made by the Town in the near future. These payments may be for items such as debt service payments, assessments or other large authorized expenditures. The institution's creditworthiness will be tracked by Veribanc, or other bank creditworthiness reporting systems. They will be diversified as much as possible and consistent with this policy.

(7) 

Money market mutual funds that are registered with the Securities and Exchange Commission and referenced in MGL c. 44, § 55.

(8) 

Common and preferred stock that are listed in the List of Legal Investments pursuant to MGL c. 167, § 15A, and MGL c. 167F, § 3.

(9) 

Investment grade corporate bonds, with a minimum investment risk rating of A/A2 Standard & Poor's/Moody's at the time of purchase.

(10) 

Investment funds that are listed in the List of Legal Investments.

(11) 

Mutual funds that are registered under the Investment Company Act of 1940.

(12) 

All other items not separately identified here that are listed in the List of Legal Investments.