Decision ID: 002380

In October 1992 the 1971 Fund Assembly decided that: a) the Fund should not, at least for the time being, broaden its investment policy beyond bank deposits and bank bills; b) the Fund should maintain, at least for the time being, its policy of investing only with banks, building societies and discount houses; c) the Director should retain the possibility of keeping assets in any currency required to meet payments of claims arising out of a particular incident which had been settled or were likely to be settled in that currency in the near future and should retain the possibility of buying currencies other than pounds sterling through forward contracts or through options to cover payments of such claims; d) as regards incidents which gave rise to substantial claims against the Fund, significant investments in the relevant currency at an early stage to meet such claims should require prior approval by the Assembly; e) the normal limit for investment in any one institution should be 25% of the 1971 Fund’s total assets provided, however, that investments with any one institution should not normally exceed £4 million; and f) the maximum period for investments should be maintained at one year. The Assembly adopted amendments to Financial Regulation 7.1 to reflect the above decisions. The Assembly instructed the Director a) to study further the question of the investment of the 1971 Fund’s assets in currencies other than pounds sterling (including the European Currency Unit): b) to examine whether it would be appropriate for the Fund to set up a special body to advise the Director on investment matters; and c) to consider whether to increase the resources of the Secretariat to deal with matters relating to the Fund’s finances in general and investment matters in particular. The Director was also instructed to report any developments in respect of internal procedures for investment purposes.