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Treasury and Investments Policy

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Purpose | Scope | Principles | Policy statements | Roles and responsibilities | Definitions | Approval information | Version history | References | Appendix 1: Reporting requirements | Appendix 2: Student Managed Fund  

1. Purpose

1.1 The Treasury and Investments Policy (the policy) outlines requirements for the management of treasury and investment activities at UTS.

1.2 This policy is supported by the Treasury and Investments Procedure (the procedure) (SharePoint) and supplements the provisions outlined in the University of Technology Sydney Act 1989 (NSW) (the UTS Act).

2. Scope

2.1 This policy applies to all staff, affiliates and any individual with responsibilities for the management, coordination or execution of treasury or investment activities and transactions for, or on behalf of, UTS, its faculties, schools, divisions, units or other.

2.2 This policy applies to the Student Managed Fund in line with the requirements and authorities outlined in Appendix 2.

3. Principles

3.1 UTS’s treasury and investment activities are guided by a prudent, clear and consistent decision-making process to:

  1. ensure transparency
  2. manage risks and protect UTS assets
  3. ensure timeliness and cost-effectiveness
  4. maintain sufficient liquidity to meet future requirements, and
  5. at minimum, derive an acceptable rate of return.

3.2 UTS aims to manage its financial risks to ensure continued success in line with the UTS 2027 strategy. Effective risk management is recognised as an essential governance tool (refer also Risk Management Policy).

3.3 Speculative transactions which increase the university’s underlying risk profile are prohibited. Investment transactions, instructions and treasury decisions must be evidenced and substantiated by properly authorised supporting documentation. High risk investments are permitted for the Student Managed Fund and its educational objectives, however these must remain strictly within the parameters outlined in Appendix 2 and the UTS Delegations.

3.4 Investment of endowment funds is managed in line with the Philanthropic Fundraising Policy and must comply with the criteria in the trust deed and the Trustee Act 1925 (NSW) (the Trustee Act). These investments are required to comply with this policy to support long-term sustainable investment returns.

3.5 UTS recognises the definition of responsible investment outlined in the United Nations Principles for Responsible Investment (UNPRI) as: ‘an approach to investing that aims to incorporate environmental, social and governance (ESG) factors into investment decisions, to better manage risk and generate sustainable, long-term returns.’ ESG considerations will be factored into the valuation of investments and the investment management process to ensure consistency with the university’s values.

3.6 UTS has adopted sustainability priorities and principles which are of noted importance to UTS as an underlying strategic value (refer Sustainability Policy). These priorities must be considered as part of the university’s overall financial management.

3.7 Authorised delegates exercising investment functions must have strict regard to the precise responsibilities entrusted to them under the delegations principles (refer Schedule G1, General Rules) and to the monetary limits outlined in the Delegations.

4. Policy statements

Treasury and investment framework

4.1 Treasury and investment activities at UTS are managed according to the treasury and investment framework that requires the UTS Council, the Finance Committee and university management to work collaboratively and openly to meet the principles and requirements of the UTS Act, the Delegations, this policy and the procedure.

4.2 To avoid dilution of governance responsibilities, a maximum of 3 endorsement to approval points must be maintained for all actions and activities.

4.3 The Finance Committee, in line with its terms of reference (refer Finance Committee: Charter), provides advice to Council on financial matters, including the review and implementation of this policy and its procedure.

4.4 Investments are managed and established in line with Schedule 2, the UTS Act, this policy and the Delegations (noting that the general principle that a delegate’s supervisor has authority to exercise their subordinate’s delegation as outlined in Schedule G1, General Rules does not apply for these actions).

4.5 Investment products, fund managers, financial instruments and counterparties and their limits are approved by the Chief Operating Officer (COO) in line with the Delegations. These actions must then be reported to the Finance Committee for information and referred to the Governance Support Unit for inclusion in the procedure.

4.6 Any borrowing facility must be endorsed by the Finance Committee and submitted to Council for approval in line with the UTS Act.

Managing operational treasury risks

4.7 All financial management and decision-making will have associated risks that must be assessed through rigorous due diligence and risk assessment processes to ensure compliance with UTS values, policies and legislation (refer the procedure (SharePoint)).

4.8 To minimise operational treasury risks, the Chief Financial Officer (CFO) and the Finance Unit must ensure appropriate internal controls are available to relevant staff and are up to date and aligned with governance requirements. These controls include:

  1. position descriptions and accountabilities for staff with treasury functions including roles and responsibilities
  2. a formal segregation of duties matrix (taking into consideration the size of the treasury functions)
  3. this policy and the procedure (and any supplementary manuals for the Finance Unit), which must be kept current, fit for purpose and available for use
  4. clear guidance for the management of various financial risks (refer the procedure (SharePoint))
  5. business continuity planning and disaster recovery measures, which must be current, fit for purpose and available for use, and
  6. clear and well understood responsibilities for treasury transactions.

4.9 The Finance Unit, in line with the procedure, will:

  1. ensure that UTS maintains adequate liquidity in order to meet the university’s financial obligations
  2. manage the overall level of credit exposure to individual institutions to ensure that credit risk is kept to an acceptable level consistent with the university’s risk appetite.

Reporting requirements and records management

4.10 The COO must report to the Finance Committee in line with this policy (refer Appendix 1).

4.11 All information relating to treasury and investment decisions and transactions is a form of corporate data. The loss or unauthorised disclosure of such is considered a data breach and will be managed in line with the Data Breach Policy.

4.12 All treasury decisions, transactions and reports must be appropriately classified, managed and recorded in line with the Records Management Policy.

Policy breaches

4.13 Breaches of this policy are considered a breach of the Code of Conduct and will be managed in line with the code. This includes UTS’s right to notify a relevant statutory authority and/or agency where there is a breach of legislation.

4.14 Breaches that represent serious wrongdoing (including corrupt conduct, maladministration or serious and substantial waste) must be reported in line with the Whistleblowing and Public Interest Disclosures Policy.

5. Roles and responsibilities

5.1 Policy owner: The Chief Operating Officer (COO) is responsible for policy enforcement and compliance, ensuring that its principles and statements are observed. The COO is responsible for the approval of the Treasury and Investments Procedure (SharePoint). The COO is also responsible for the development, management and publication of all approval forms associated with this policy and its procedure.

5.2 Policy contact: The Head of Corporate and Divisional Finance is responsible for providing advice on the implementation of this policy.

5.3 Implementation and governance roles: 

Table 5.3 identifies the UTS treasury and investment responsibilities in addition to and aligned with the UTS Act, the Delegations, Council and Finance Committee terms of reference, this policy and the procedure. Further detailed responsibilities are outlined in the procedure.

Table 5.3: UTS treasury and investment responsibilities

Authority/responsibilityActivity
CouncilDelegates the detailed limits and review of compliance to the Finance Committee and university management as outlined in this policy.
Finance CommitteeProvides input and guidance on the content and implementation of this policy and the Treasury and Investment Procedure.  
Receives annual reports and reviews, provides advice and notes relevant changes in line with the Delegations, this policy and its terms of reference.
Chief Operating Officer (COO)Authority to approve investment products, fund managers and financial instruments in line with the Delegations for inclusion in the procedure.   
Approves the Treasury and Investment Procedure to ensure it aligns with the policy, and for publication alongside the policy.  
Reports changes to the procedure to the Finance Committee.   
Reports to the Finance Committee in line with the requirements of Appendix 1 of this policy.   
Ensures that the university’s systems, processes and controls are reliable and fit for purpose.
Finance UnitMonitors, manages and takes or recommends action to manage the university’s treasury and investment risks.

6. Definitions

The following definitions apply for this policy and associated procedure. Definitions in the singular also include the plural meaning of the word.

Affiliate is defined in the Code of Conduct.

Corporate data is defined in the Data Governance Policy.

Counterparty means the other party in a contract or financial transaction with UTS as approved by the appropriate delegate.

Credit risk means the risk of a loss resulting from a university investment. The university’s investments and hedges are subject to the risk that the counterparty may not be able to meet their financial obligations resulting in a loss to the university.

Data breach is defined in the Data Breach Policy.

Foreign exchange risk means the risk that university’s cash flows are adversely impacted by movements in exchange rates.

Funding risk means the risk that the Finance Unit has not arranged or is unable to arrange adequate debt finance at a reasonable price to fund Council approved projects.

Hedging means acting to mitigate against the risk of an investment or transaction being subject to any adverse price movements.

Interest rate risk means the risk that the university’s cash flows may be adversely impacted, from borrowing and investing activities, due to movements in interest rates.

Investment, for the purposes of this policy, relates specifically to the investment of endowment funds.

Liquidity risk means the risk that the university does not have sufficient available funds to enable it to make all payments as they become due.

Operational treasury risk means the risk of financial loss arising from UTS treasury function, governance, systems, personnel and process failure.

Serious wrongdoing is defined in the Whistleblowing and Public Interest Disclosures Policy.

Student Managed Fund means the elective subject managed in line with this policy that aims to provide undergraduate students with hands-on experience in managing real investment portfolios (refer Appendix 2).

Underlying risk profile means the risk profile before hedging transactions.