Resolution 2007-05 - Laserfiche WebLink

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Approved by Finance Committee-December 18, 2006 . Authorized Financial Institutions. Depositories. and Broker-Dealers The Finance Department shall maintain a list of financial institutions and depositories authorized by the City to provide investment services for the City from those eligible public depositories, as designated by the Banking Board. In addition, The Finance Department shall maintain a list of approvee! security bro- ker/dealers that may include "primary" dealers or regional dealers qualifying under Securities and Ex- change Commission Rule 15C3-1 (uniform net capital rule). To qualify for consideration for investment transactions with the City, all financial institutions and broker-dealers must supply the following, as ap- propriate: . Proof of state registration (except for those firms providing safekeeping and custodial services only) . Audited financial statements demonstrating compliance with state and federal capital adequacy guidelines . Proof of National Association of Securities Dealers (NASD) certification . Evidence of adequate insurance coverage . Certification of having read and understood and agreeing to comply with the City's investment pol- icy An annual review of the financial condition and registration of all qualified financial institutions and broker/dealers will be conducted by the investment officer. Safekeepin2 and Custody All trades of marketable securities will: be executed "delivery versus payment" (where applicable) to ensure that securities are deposited in an eligible financial institution prior to the release of funds. Securities will be held by an indepene!l~nt third-party custodian selected by the City as evidenced by safekeeping receipts. The safekeeping institution shall provide on an annual basis a copy of its most recent report on internal controls (Statl~ment of Standards 70). Moreover, the investment officer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft, or misuse. The in- ternal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance n~cognizes that (I) the cost of a control should not exceed the bene- fits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management. The internal controls structure should address the following points: . Control of collusion . Separation of transaction authority from accounting and recordkeeping . Custodial safekeeping . A voidance of physical delivery securities . Written confirmation of transactions for investments and wire transfers . Dual authorization of wire transfers Compliance with these controls shall be reviewed and confirmed through the City's annual independent audit. 4