Public Sector Insured Deposit Portal is a government guaranteed liquidity vehicle exclusively for public sector investors. It is critically important to understand why this exclusivity is so valuable. There is a current and serious issue being debated among the Government Accounting Standards Board (GASB), State Treasurers and Local Government Investment Pools (LGIPs). The focus is over the delineation between SEC registered money funds and LGIPs regarding SEC 2a-7 reform application. The premise is that the composition of deposits and complexion of the investors are completely different. Public sector investment deposits are highly stable, predictable and generally based on cash flows. There is little volatility of deposits. Corporate, bank and institutional deposits can be fleeting or influenced by global financial markets. This uncertainty could create disruptions and instability within a deposit program. It is for this reason that PSIDP was created.
