Item - 2016.EX13.10

The Executive Committee recommends that: 

1.  City Council request the Deputy City Manager and Chief Financial Officer to report to the Executive Committee on:

a.  the overall objectives for the City's investment policy (Section 47, City of Toronto Act, 2006),

b.  the qualifications for members of the investment board, and

c.  a plan for how the City will prepare to have the investment board and reporting structure in place for January 1, 2018.

The purpose of this report is to inform Council that the Province of Ontario has approved amendments to Ontario Regulation 610/06, Financial Activities, under the  City of Toronto Act, 2006 (the "Act"), to provide a framework for the City to invest according to the prudent investor standard.

This standard is similar to which that governs trustees and pension fund administrators and creates a fiduciary responsibility.  These reforms are expected to enable the City to earn improved risk-adjusted rates of returns on its investments as it will no longer be restricted to a prescribed list of eligible investments (i.e. basically bonds and money market securities).

This authority will come into effect on January 1, 2018.  Prior to the effective date, the City is required to establish an independent Investment Board and develop a new investment policy and strategy, both of which are required by the amended Regulation.