The FNFA has by contract arranged to participate in the MFABC short to intermediate investment pools. These funds are a Money Market Fund and an Intermediate Fund, both of which offer high levels of protection of investor capital, combined with flexibility of subscription and redemption. The MFABC funds total $1.2 billion at the annual crest of local government cash flows each year. Members of the FNFA may invest their money in one of the two funds, which are managed by professional money managers (currently Phillips, Hager & North).
The FNFA investment funds provide solid investment opportunities for First Nations. The investment activities of the funds are governed by the Fiscal and Statistical Management Act and a Charter of investment policies, objectives and guidelines.
There is no financial interdependence between the pooled investments and the capital financing activities of the FNFA. They are separate activities.
Money Market Fund: Typically used for short term investments the principal objective is to provide the participants with a high level of current interest income earned by investing in the highest quality money market instruments with maturity of 366 days or less. Money Market Fund redemption period is just 24 hours.
Intermediate Fund: Typically used for longer term investments the principal objective is to obtain interest income and attempt, through prudent but active professional management of its assets, to achieve moderate capital appreciation by investing primarily in the highest quality fixed income and money market securities with maturities of up to 2 years. Intermediate Fund redemption period is 4 business days.
Investment Guidelines: The FNFA may invest monies in
- Securities issued or guaranteed by Canada, a province or the United States;
- Fixed-term deposits, notes, certificates or other short-term paper of, or guaranteed by, a bank, trust company or credit union, including swaps in United States currency;
- Commercial paper issued by a Canadian company that is rated in the highest category by at least two recognized security-rating institutions;
- Any class of investments permitted under an Act of a province relating to trustees; or
- Any other investments or class of investments prescribed by regulation.
Short-Term Pooled Investment Fund Regulations - Prescribed Investments
For the purposes of paragraph 87(2)(f) of the First Nations Fiscal and Statistical Management Act, funds in a short-term pooled investment fund may be invested in pooled investment funds established by the Municipal Finance Authority of British Columbia under section 16 of the British Columbia Municipal Finance Authority Act, R.S.B.C. 1996,c.325.
Enrollment: Before subscribing for units in the funds, a First Nation must enroll and become a subscriber by completing an Application for Enrollment form, an Electronic Withdrawal and Deposit Authorization form and a Specimen Signature form.
