Wednesday, June 19, 2019

Puerto Rico’s fiscal agency publishes government investment guidelines

By on March 21, 2019

(Screen capture of www.gdb.pr.gov)

Apply to entities that engage in treasury operations, investment programs or market investments through a broker-dealer

SAN JUAN – The Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym) issued the new “Investment Policy Guidelines of 2019” for investments made by all government entities.

The planning document describes investment objectives and risk tolerance over a “relevant time horizon, along with constraints that apply to each Investment Program,” the document explains, adding that

Aafaf Executive Director Christian Sobrino Vega said the policies were issued by virtue of the powers delegated to the his agency by Gov. Ricardo Rosselló under Executive Order 2019-13, which was issued pursuant to Act 113-1995.

The guidelines apply to entities that engage in treasury operations, investment programs or any purchase of capital market investments through any broker-dealer, the document says.

“These measures will allow all investments of public funds to be made in a prudent and transparent manner in accordance with the best practices in the field. This way, AAFAF will continue strengthening its role and services as financial advisor for all the entities of the Government of Puerto Rico,” Sobrino said.

The guidelines address topics such as: “the governance of investment programs (ethics and conflicts of interest), criteria for delegating management to the government entity, planning for appropriate asset allocation, risk management, monitoring results, appropriate reporting, as well as the implementation of investment programs with internal and/or external managers,” according to the announcing release.

The new policies do not apply to debt service reserve funds or to entities that “merely hold depositary bank accounts, certificates of deposits or money market funds.”

The guidelines replace ones approved by the Government Development Bank in 2007 and amended in 2013.

See the new guidelines here.

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