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<br />RISK AND DIVERSIFICATION <br /> <br />It is the policy of the City of Sunny Isles Beach to diversify its investment <br />portfolio. Assets held shall be diversified to control the risk of loss resulting <br />from over concentration of assets in a specific maturity, specific issuer, <br />specific instrument, class of instruments, and a dealer or bank through whom <br />these investments are bought and sold. Diversification strategies shall be <br />reviewed and revised periodically as deemed necessary by the appropriate <br />management staff. <br /> <br />AUTHORIZED INVESTMENT INSTITUTIONS AND DEALERS <br /> <br />Certificates of Deposit shall be placed only with financial institutions, which <br />qualify under Chapter 280 of the Florida Statues or financial institutions that <br />are selected by the City Commission. Other securities shall be purchased <br />only 1) through the "primary government securities dealer" as designated by <br />the Federal Reserve Bank, 2) regional dealers that qualify under Securities <br />and Exchange Commission Rule 15C3-1 (Uniform Net Capital Rule) 3) <br />through the Florida State Board of Administration (SBA), 4) through a <br />money manager appointed by the City. These institutions, dealers and <br />issuers must meet capital adequacy guidelines as determined by their <br />respective regulatory agencies and certify that no material adverse events <br />have occurred since the issue of their most recent financial statements. They <br />must also agree to notify the City in the event of material adverse events <br />affecting their capital adequacy. All securities purchased shall be only those <br />securities of authorized issuers of the various security types. <br /> <br />SELECTION OF INVESTMENT MANAGERS <br /> <br />I) Request for Proposal (RFP) or Letters of Interest <br />2) Interview the respondents <br />3) The City Commission approves the selection and authorized a <br />contract to be signed. <br /> <br />SALE OF SECURITIES <br /> <br />When the invested funds are needed in whole or in part for the purposes <br />originally intended or for more optimal investments, investments may be <br />sold at the then-prevai ling market price with the proceeds placed into the <br />proper account or fund. <br /> <br />Page 9 of 12 <br />