CREDS 3.2 Investment

Subject to the general limitations on its powers contained in the Credit Unions Act 1979 or the Credit Unions (Northern Ireland) Order 1985 (as appropriate)1 and to the limitations contained in CREDS 3.2.2 R and CREDS 3.2.3 R, a credit union may invest its surplus funds and funds serving liquidity purposes only in the following types of investment:

1. (1)

   deposits or loans to a UK domestic firm with Part 4A permission to accept deposits;

2. (2)

   deposits or loans to an institution which is authorised in any other EEA State to accept deposits;

3. (3)

   sterling-denominated securities issued by the government of any EEA State;

4. (4)

   fixed-interest sterling-denominated securities guaranteed by the government of any EEA State, provided that any guarantee is unconditional in respect of the payment of both principal and interest on those securities.

Any securities invested in, or loans made, in accordance with CREDS 3.2.1 R by a version 1 credit union must have a maturity date of not more than 12 months from the date on which the investment is made.

Any securities invested in, or loans made, in accordance with CREDS 3.2.1 R by a version 2 credit union must have a maturity date of not more than five years from the date on which the investment is made.

Surplus funds not invested by a credit union in accordance with CREDS 3.2.1 R to CREDS 3.2.3 R must be held as cash in the custody of officers of the credit union.

Where under CREDS 3.2.1 R to CREDS 3.2.3 R above, a firm or another institution ceases to satisfy the conditions necessary for a credit union to invest with it or lend to it, and any funds of a credit union are with that firm or other institution, the credit union must take all practicable steps to call in and realise that investment or loan within three months of that cessation, or, if that is not possible, as soon after the end of that period as possible.