The purpose of devising a set of defined rules or policy in respect of investment of surplus funds is to establish specific guidelines that the management should use while making investments. The existence of such a policy is thought to be very crucial in order to get the maximum of the market rates of return while preserving and protecting the overall capital portfolio of the organizations. Organizations always look and desire to invest surplus funds in a way producing low risk and maximum returns for which there should be well drafted guidelines available for management's guidance.
My package (investment policy) will contain:
(i) Rationale & scope of investments
(iii) Objectivity Principles
(iv) Delegation of authority
(v) Conflict of interest
(vi) Investment of Committee