The Local Authorities (Capital Finance and Approved Investments) (Amendment) (Wales) Regulations 2002

Welsh Statutory Instruments

2002 No. 885 (W.100)

LOCAL GOVERNMENT, WALES

The Local Authorities (Capital Finance and Approved Investments) (Amendment) (Wales) Regulations 2002

Made

26th March 2002

Coming into force

1st April 2002

The National Assembly for Wales makes the following Regulations in exercise of the power given to the Secretary of State by sections 58(9) and 66(1)(a) of the Local Government and Housing Act 1989(1) which is now vested in the National Assembly for Wales so far as exercisable in Wales(2):

Name, commencement and application

1.—(1) The name of these Regulations is the Local Authorities (Capital Finance and Approved Investments) (Amendment) (Wales) Regulations 2002 and they shall come into force on 1st April 2002.

(2) These Regulations apply to Wales only.

Amendment of the Local Authorities (Capital Finance) (Approved Investments) Regulations 1990

2.—(1) The Local Authorities (Capital Finance) (Approved Investments) Regulations 1990(3) are amended as follows.

(2) In regulation 1(2) (interpretation), after the definition of “gilt-edged securities”, insert the following definitions—

• ““highest possible credit rating” means, in relation to a money market fund, that it has the highest possible rating—

  (a)

  in respect of creditworthiness assigned by Standard and Poor's, a division of The McGraw-Hill Companies Ltd(4); or

  (b)

  in respect of both creditworthiness and volatility assigned by either Moody’s Investors Service Ltd(5) or Fitch Ratings Ltd(6);

• “money market fund” means a collective investment scheme which—

  (a)

  in accordance with the Council Directive of 20th December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities as amended(7), is an undertaking for collective investment in transferable securities subject to that Directive;

  (b)

  has been given the highest possible credit rating; and

  (c)

  is either a unit trust scheme authorised under section 243 of the Financial Services and Markets Act 2000(8) or a collective investment scheme recognised under section 264 of that Act;”.

(3) In regulation 2(1) (approved investments)—

(a) in sub-paragraph (b), after “deposit-taker”, add “, the Treasury”; and

(b) after sub-paragraph (b), insert the following sub-paragraph—

“(bb) any investment in a money market fund;”;

(4) In regulation 3 (conditions for approval of investments), in paragraphs (1)(c) and (4)(a), after “regulation 2” insert “(1)”.

Amendment of the Local Authorities (Capital Finance) Regulations 1997

3.—(1) The Local Authorities (Capital Finance) Regulations 1997(9) are amended as follows.

(2) In regulation 62(b) (disposal of investments),—

(a) for “2(b) or (c)”, substitute “2(1)(b), (bb) or (c)”;

(b) in sub-paragraph (i), for “institution” wherever it appears, substitute “deposit-taker”;

(c) in sub-paragraph (ii),—

(i) after “2”, insert “(1)”; and

(ii) at the end, add “; or”; and

(d) after sub-paragraph (ii), add—

“(iii) where the investment was made with a money market fund, that fund has ceased to be a money market fund within the meaning given to that expression in regulation 1(2) of the 1990 Regulations.”.

Signed on behalf of the National Assembly for Wales under section 66(1) of the Government of Wales Act 1998(10)

Rhodri Morgan

The First Minister of the National Assembly

26th March 2002

Explanatory Note

(This note is not part of the Regulations)

The Local Authorities (Capital Finance) (Approved Investments) Regulations 1990 contain a list of investments which are approved for the purposes of Part IV of the Local Government and Housing Act 1989.

These Regulations amend the 1990 Regulations by adding investments in money market funds and deposits with the Treasury to the list of approved investments.

The Regulations also make consequential amendments to the Local Authorities (Capital Finance) Regulations 1997.

(1)

1989 c. 42.

(2)

See the National Assembly for Wales (Transfer of Functions) Order 1999 (S.I. 1999/672).

(3)

S.I. 1990/426; relevant amending instruments are S.I. 1991/501 and 2001/3731 (W.308).

(4)

Registered in England and Wales no. 01916239.

(5)

Registered in England and Wales no. 01950192.

(6)

Registered in England and Wales no. 01316230.

(7)

85/611/EEC (OJNL375, 31.12.1985) amended by 88/220/EEC (OJNL100, 19.4.1988) and 95/26/EC (OJNL168, 18.7.1995).

(8)

2000 c. 8.

(9)

S.I. 1997/319 to which there are amendments which are not relevant to these Regulations.

(10)

1998 c. 38.