Investor Presentaiton
5 THE PRUDENT INVESTOR STANDARD
Section 418.1 of the Municipal
Act was proclaimed in force as of
March 1, 2018.
Permits a municipality that meets certain requirements to invest money that it
does not require immediately in any security in accordance with the prudent
investor standard and the regulation.
Requires a municipality investing money under this standard to exercise the care,
skill, diligence and judgement that a prudent investor would exercise in making an
investment.
Enables an eligible municipality to pass a by-law to opt into prudent investing as of
January 1, 2019.
Provides that a by-law opting into prudent investing cannot be revoked.
The municipality must consider the following criteria in planning investments:
1. General economic conditions.
2. The possible effect of inflation or deflation.
3. The role that each investment or course of action plays within the
municipality's portfolio of investments.
4. The expected total return from income and the appreciation of capital.
5. Needs for liquidity, regularity of income and preservation or appreciation
of capital
The municipality must diversify its investments to an extent that is appropriate to
general economic and investment market conditionsView entire presentation