August 30, 2016
On April 25th, NAST and NASACT approved a formal document that offers voluntary guidelines for the management of stable net asset value (NAV) local government investment pools (LGIPs). For over a year, NAST and NASACT worked together to establish these guidelines which are divided into two main sections.
Section A provides risk management standards designed to maintain a stable NAV, including standards for managing portfolio credit, diversification, maturity, liquidity and shadow pricing of the portfolio. These standards are closely aligned with the standards set by the Governmental Accounting Standards Board (GASB) Statement No. 79 for LGIPs electing to measure all of its assets at amortized cost for financial reporting purposes.
Section B offers best practices for stable NAV LGIPs with respect to governance, including managing participant relationships, portfolio stress testing, accounting and record keeping, internal controls, compliance, transparency, reporting and disclosure, information on the LGIP sponsor, custody, oversight, approval of broker dealers and currency risk.
Huge thank you and congratulations to our ABLE Committee Chairs @MOTreasurer @Eric_Schmitt and @ILTreasurer Mike Frerichs for their great job..