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Board Policy No. 9 — Investment Policy <br /> Prudence <br /> The standard of prudence to be used by investment officials shall be the "prudent investor" <br /> standard and shall be applied in the context of managing an overall portfolio. Investment officials <br /> shall act with care, skill, prudence, and diligence under circumstances then prevailing, including, <br /> but not limited to, the general economic conditions and the anticipated needs of NCTD, that a <br /> prudent person acting in a like capacity and familiarity with those matters would use in the conduct <br /> of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity <br /> needs of the NCTD. <br /> Objectives <br /> The goals of this policy are prioritized as: <br /> 1. Safety. Safety of principal is the foremost objective of the investment program. <br /> Investments of NCTD shall be undertaken in a manner that seeks to ensure preservation <br /> of capital in the portfolio. <br /> 2. Compliance: To ensure compliance with federal, state, and local laws governing the <br /> investment of funds. <br /> 3. Liquidity. The investment portfolio of NCTD will remain sufficiently liquid to enable NCTD <br /> to meet its cash flow requirements. <br /> 4. Return on Investment. The investment portfolio of NCTD shall be designed with the <br /> objective of attaining a market rate of return on its investments consistent with the <br /> constraints imposed by its safety objective and cash flow considerations. <br /> Ethics (Conflict of Interest) <br /> Officers and employees involved in the investment process shall comply with state law and refrain <br /> from personal business activities that could conflict with proper execution of the investment <br /> program, or which could impair their ability to make impartial decisions. <br /> Selection of Financial Institutions and Brokers/Dealers <br /> NCTD shall transact business only with banks and registered investment securities dealers. The <br /> purchase by NCTD of any investment other than those purchased directly from the issuer shall <br /> be either from an institution licensed by the state as a broker/dealer, as defined in §25004 of the <br /> Corporation Code, who is a member of the National Association of Securities Dealers (NASD), or <br /> a member of a federally-regulated securities exchange, a national or state-chartered bank, a <br /> federal or state association (as defined by Section 5102 of the Financial Code), or a brokerage <br /> firm designated as a Primary Government Dealer by the Federal Reserve Bank. <br /> All financial institutions and brokers who desire to become qualified bidders for investment <br /> transactions will be given a copy of the NCTD Investment Policy, and a return cover letter which <br /> must be signed indicating that the investment policy has been read and understood. Qualified <br /> financial institutions and brokers must supply the Treasurer with the following: <br /> Page 2 of 8 <br />