Deposit and investment arrangements
(1) At the 56th session (March 1982), in the framework of a discussion of means of improving the organizations' cash position, it was agreed that problems of cash management should be discussed by CCAQ on a regular basis (ACC/1982/6, para. 41).
(2) At the 57th session (September 1982) it was agreed that the Committee should hold private oral exchanges of information at each of its future sessions on matters related to the security of cash assets, under the standing agenda item on cash management (ACC/1982/25, paras. 61 and 62). Such exchanges were provided for at each of the subsequent sessions of CCAQ(FB), but in view of their private nature were as a rule not recorded in the Committee's reports.
(3) In the context of the same discussions at the 57th session, it was agreed that it would be useful for informal contacts on cash management questions to take place between contact points in different organizations. A list of contact points was subsequently circulated by the CCAQ secretariat and updated from time to time.
(4) During the discussion on cash management questions at the 60th session (March 1984), it was noted that a facility was available at the Federal Reserve Bank of New York which permitted, under arrangements made in advance, the immediate investment of assessed contributions received. This facility made it possible to avoid losses of interest in various circumstances (ACC/1984/10, para. 39).
(5) At the 65th session (September 1986) the Committee drew up collective comments on a JIU report entitled "Cash management in the United Nations and four specialized agencies (FAO, ILO, UNESCO, WHO)" (JIU/REP/86/6). It was understood that individual organizations would be free to submit these comments to their governing bodies as they saw fit, with or without supplementary observations (ACC/1986/12, para. 50).
(6) In response to a request of ACC, the Committee reviewed at its 66th session (March-April 1987) the progress made by the organizations in implementing General Assembly resolutions on policies of apartheid: as far as the organizations were concerned, the matter was essentially one of relations with banks and financial institutions appearing in lists established by the UN Centre on Transnational Corporations. It was noted that such relations were being discontinued, but that the situation was also affected by changes of policy in the enterprises listed. It was noted that UN had introduced a standard clause concerning collaboration with South Africa in all of its purchase orders, general conditions of contracts and instructions to bidders, providing that no South African products were to be purchased directly or indirectly under the contract and that the same conditions were to be incorporated in contracts with subcontractors. The Committee recommended that similar clauses should be included by all organizations in their contracting documents (ACC/1987/6, para. 25).
(7) Also at the 66th session, CCAQ considered the possibility of establishing a standard method of calculating investment returns, as recommended in the JIU report mentioned in para. 5 above. The discussion was based on the conclusions reached at an informal meeting of treasurers of organizations in Geneva, who had agreed that if steps were taken to ensure that comparisons were made on the basis of comparable investment instruments, currencies, locations, risks and other factors, an affirmative response could be made to the JIU recommendation. As to the practical value of such comparisons, the Committee recalled that the financial reports submitted to organizations' governing bodies included information on investment returns. It did not appear that further investment comparisons needed to be provided; any such comparisons should, however, be the subject of consultations among the organizations' treasurers (ibid., paras. 26 and 27).
(8) During its discussion of deposit and investment arrangements at the 67th session (September 1987) the Committee requested its secretariat to investigate possible arrangements for the central provision of bank ratings to the organizations' financial services (ACC/1987/12, para. 36). At the 68th session (March 1988) the Chairman undertook to pursue that issue (ACC/1988/5, para. 34). (It was subsequently arranged that information on bank ratings available for investment purposes to UNJSPF could be made available to member organizations of CCAQ(FB) by UN.)
(9) At its 89th session (February 1999: ACC/1999/6, para. 41) participants held a private exchange of information on matters of current interest in relation to the safety of organizations' cash assets. The United Nations provided information on an insurance policy covering insurance of cash in transit. Interested organizations were requested to contact the United Nations Treasurer for further information.
(10) At its 91st session (August-September 2000: ACC/2000/6, para. 30) the Committee welcomed the Treasurer of the United Nations, who introduced a paper provided by the Financial Services Working Group covering a draft common framework for investment policies among the United Nations, UNDP, UNICEF and WFP. Participants from other organizations discussed the relevance of this framework to their own organizations and considered whether it was appropriate to develop system-wide "best practices" in this area. The Committee thanked the Working Group for the excellent work done in preparing the paper and decided that it would revert to this subject at the next session, when the United Nations would present a final paper taking into account any comments received from other organizations.
(11) At its February 2004 meeting (CEB/2004/HLCM/12/Rev.1, paras. 18-19) the FB Network considered a draft document from the Financial Services Working Group, led by the UN Secretariat, on the need for guiding principles and policies for investments. An accompanying presentation covered inter alia: delegation of authority, investment objectives, the role of investment committees, risk management, investment horizon and currency, credit limits and the use and selection of outside fund managers. The Network (a) welcomed the progress of the Working Group and supported the view that there was a need for a common framework to guide organizations in a dynamic and complex financial environment; (b) considered that the mandate of the Working Group to produce a unified model of common principles, which could be applied to the circumstances in each organisation, for investment guidance should continue; and (c) agreed that the finalised text, once approved by the FB Network, should be submitted to HLCM for endorsement as a common framework and guidance for the management of investments.
(12) At its March 2005 video-conference (CEB/2005/HLCM/8, paras. 28-29) the FB Network reviewed the current status of the discussion on common principles and policies for investments. The main issues were identified. The non-controversial issues were: (a) use of outside credit ratings, (b) definition of appropriate time horizons, (c) listing of investment instruments and corresponding most appropriate investment scenarios. The controversial issues were: (d) use of financial instruments for risk management of exchange rates; (e) accounting impact of any use of such financial instruments for risk management of exchange rates; (f) appropriate staffing and organization of investment units.