North Mundham Parish Council Banking Arrangements and ...



North Mundham Parish Council Banking Arrangements and Investment StrategyIntroduction The Parish Council currently has two bank accounts the current account is held with Unity Trust Bank and provides internet banking facilities and the reserves account is held with Handelsbanken is in North Street Chichester, both banks provide a very good service. Neither account pay interest and the reserve account has now exceeded the FSCS compensation limit of ?85,000 Reserves The Parish Council has a number of ear marked reserves and one capital receipt reserve. The capital receipt reserve is from the sale of land and can only be used for the acquisition, construction, and enhancement of land, buildings, vehicles, plant and equipment.Earmarked Reserves are reserves that are being built up over a period of time for specific projects or liabilities. The Parish Councils reserves policy does not currently contain any guidance on investment and the council needs to determine an investment strategy in line with the Local Government Act 2003 Section 15(1) . Investment Solutions CCLAChurches, Charities & Local Authorities Investment Management Ltd (CCLA) which is an investment fund manager and is independently owned by the clients, which was founded in 1958 and currently manages ?11.3 billion for their clients. CCLA is regulated by the Financial Conduct Authority but does not come within the scope of compensation scheme.The Public Sector Deposit Fund (Rated AAA)Minimum investment ?25,000Minimum subsequent investment ?5,000Fund management Fee 0.08% Providing instructions are received prior to 11.30am then withdrawals will be paid to a nominated bank the same day. Dividend Payments can be reinvested and additional shares created or paid to nominated bank account. The funds investment policy invests in high quality sterling denominated deposits and securities and therefore is not the same as making a deposit with a bank or other deposit taking body and is not a guaranteed investment.This account is more risk adverse than the companies Local Authorities Property Fund, the yield rate is currently 0.52% (net of fees), Local Authorities Property Fund (property funds are not rated)Minimum investment ?25,000Minimum subsequent investment ?10,000Fund management Fee 0.71% Investment needs time to grow to cover capital Minimum investment period 5 years and redemption is subject to a minimum of 90 days. The fund is an actively managed, diversified portfolio of UK commercial property. It will principally invest in UK commercial properties but may invest in other assets.This is a higher risk option which aims to provide a higher yield this quarter they are currently predicting a yield of 4.36% (net of fees)Nationwide Commercial (Moody rating A1)The follwing accounts are operated by post, fax or email. Deposits can be made by electronic transfer. Business 1 Year Saver Single opening deposit of between ?5,000 and ?10 million No withdrawals can be made for one year, at the end of the year the funds can be transferred to a nominated account or open a new business saver account.No fees Interest 0.30% gross interest (fixed) Business 35 Day Saver Opening Deposit minimum of ?5,000 up to ?10 million, further deposits can be made throughout the year.Minimum withdrawal ?500 with 35 days’ notice, funds will be sent to a nominated account.Interest 0.20% gross p.a. (variable) can be paid monthly or annually.Business Instant Access Saver This is not a current account and can not be used for everyday transactions Opening Deposit minimum of ?5,000 up to ?10 million, further deposits can be made throughout the year. Minimum withdrawal ?500, funds will be sent to a nominated account.No fees Interest 0.05% gross p.a. (variable) can be paid monthly or annually Santander Business Banking (Moody rating Aa3)Business Everyday Saver Opening deposit ?1.00 Online banking available, however, please note I have not been able to contact Santander to establish if they are able to provide multi factor authorisationInterest 0.01% gross (Variable)The Council is asked to:Set the indicator levels: Security – protecting the capital sum invested from loss Liquidity – ensuring the funds invested are available for expenditure when needed Yield - Agree the level of risk to be associated with the yield Agree the formation of a working party, consisting of a minimum two councillors and the Clerk, to write an investment strategy (including property) considering the above guidance Call an extra ordinary meeting of the council on 2nd February 2021 to adopt the Investment Strategy and to commence the process to transfer sufficient funds to ensure that bank accounts are within the FSCS compensation allowance. ................
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