O. Reg. 147/04: Eligible Investments

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ontario regulation 147/04

made under the

education act

Made: May 26, 2004
Filed: May 26, 2004
Printed in The Ontario Gazette: June 12, 2004

Amending O. Reg. 471/97

(Eligible Investments)

1. (1) Section 2 of Ontario Regulation 471/97 is amended by striking out the portion before paragraph 1 and substituting the following:

2. The following are prescribed, for the purposes of clause 241 (1) (a) of the Act, as securities that a board may invest in:

. . . . .

(2) Paragraph 1 of section 2 of the Regulation is revoked and the following substituted:

1. Bonds, debentures, promissory notes or other evidence of indebtedness issued or guaranteed by,

i. Canada or a province or territory of Canada,

ii. an agency of Canada or of a province or territory of Canada,

iii. a country other than Canada,

iv. a municipality in Canada,

v. the Municipal Finance Authority of British Columbia,

vi. a board or similar entity in Canada, including the board making the investment, or

vii. a local board as defined in the Municipal Affairs Act or a conservation authority established under the Conservation Authorities Act.

(3) Subparagraphs 5 i and ii of section 2 of the Regulation are revoked and the following substituted:

i. the board of governors of a college of applied arts and technology established under the Ontario Colleges of Applied Arts and Technology Act, 2002,

ii. an institution authorized to grant a degree under the Post-secondary Education Choice and Excellence Act, 2000, or

(4) Section 2 of the Regulation is amended by adding the following paragraphs:

6. Bonds, debentures or other securities issued or guaranteed by the International Bank for Reconstruction and Development.

7. Asset-backed securities, as defined in subsection 50 (1) of Regulation 733 of the Revised Regulations of Ontario, 1990 made under the Loan and Trust Corporations Act.

8. Negotiable promissory notes or commercial paper, other than asset-backed securities, maturing one year or less from the date of issue, if that note or commercial paper has been issued by a corporation that is incorporated under the laws of Canada or a province of Canada.

2. (1) Subsection 3 (1) of the Regulation is amended by striking out the portion before clause (a) and substituting the following:

(1) A board shall not invest in a security under subparagraph 1 iii of section 2 or paragraph 4 of section 2 unless the bond, debenture, promissory note or evidence of indebtedness is rated,

. . . . .

(2) Clause 3 (1) (a) of the Regulation is revoked.

(3) Clause 3 (1) (d) of the Regulation is revoked and the following substituted:

(d) by Standard and Poor’s as “AA–” or higher.

(4) Subsection 3 (2) of the Regulation is amended by striking out “made under paragraph 4 of section 2” and substituting “made under subparagraph 1 iii of section 2 or paragraph 4 of section 2”.

(5) Section 3 of the Regulation is amended by adding the following subsections:

(3) A board shall not invest in an asset-backed security under paragraph 7 of section 2 that matures more than one year from the date of issue unless the security is rated,

(a) by Dominion Bond Rating Service Limited as “AAA”;

(b) by Moody’s Investors Services Inc. as “Aaa”; or

(c) by Standard and Poor’s as “AAA”.

(4) A board shall not invest in an asset-backed security under paragraph 7 of section 2 that matures one year or less from the date of issue unless the security is rated,

(a) by Dominion Bond Rating Service Limited as “R-1(high)”;

(b) by Moody’s Investors Services Inc. as “Prime-1”; or

(c) by Standard and Poor’s as “A-1+”.

(5) A board shall not invest in a security under paragraph 8 of section 2 unless the promissory note or commercial paper is rated,

(a) by Dominion Bond Rating Service Limited as “R-1(mid)” or higher;

(b) by Moody’s Investors Services Inc. as “Prime-1”; or

(c) by Standard and Poor’s as “A-1+”.

(6) If an investment made under paragraph 7 or 8 of section 2 falls below the standard required under subsection (3), (4) or (5), as the case may be, the board shall sell the investment within 30 days after the day the investment falls below the standard.

3. The Regulation is amended by adding  the following section:

3.1 A board shall not invest in a security under paragraph 7 of section 2 or in a promissory note or commercial paper under paragraph 8 of section 2 unless, on the date that the investment is made, all of the board’s long-term debt obligations are rated,

(a) by Dominion Bond Rating Service Limited as “AA(low)” or higher;

(b) by Moody’s Investors Services Inc. as “Aa3” or higher; or

(c) by Standard and Poor’s as “AA–” or higher.

4. Section 4 of the Regulation is revoked and the following substituted:

4. A board shall not invest in a security issued or guaranteed by a board or similar entity unless the money raised by issuing the security is to be used for school purposes.

5. Section 6 of the Regulation is amended by adding the following subsection:

(2) In preparing the statement of the board’s investment policies and goals under subsection (1), the board shall consider,

(a) the board’s risk tolerance and the preservation of its capital;

(b) the board’s need for a diversified portfolio of investments; and

(c) obtaining legal advice and financial advice with respect to the proposed investments.

6. (1) Clause 8 (1) (a) of the Regulation is revoked.

(2) Clause 8 (1) (d) of the Regulation is revoked and the following substituted:

(d) by Standard and Poor’s as “AA–” or higher.

 

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