statutory investment

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Statutory investment

An investment that a trustee is authorized to make under state law.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Statutory Investment

Investments allowed for institutional investors under the legal and regulatory rules of the country in which they are made. Institutional investors, notably banks, handle funds on behalf of clients, who may or may not be interested in investing themselves. As a result, many institutional investors are restricted from making certain high-risk investments. In the case of bonds, statutory investments are called investment-grade. One may also refer to statutory investments as legal investments.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

statutory investment

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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life insurers reported pre-tax realized statutory investments (including the decline in valuation reserve) in 2012 of $136 million on CML portfolios compared to pre-tax realized losses of $26 million (one bp of CML book value outstanding) in 2011.
Policy rate hikes induce rate rise in money markets, including in government securities, resulting in lower asset values for banks' statutory investments, leading to lower profitability.

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