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The Investment Committee shall, at least annually, review, revise and adopt a list of
authorized broker/dealers authorized to engage in securities transactions with the City. Those
firms that become qualified may be required to provide a completed broker/dealer
questionnaire that provides information regarding creditworthiness, experience and
reputation. Authorized firms may include primary dealers or regional dealers that qualify
under Securities & Exchange Commission Rule 15C3-1 (Uniform Net Capital Rule), and
qualified depositories.

Investment Policy Certification

All local government investment pools and discretionary investment management firms must
sign a certification acknowledging that the organization has received and reviewed the City’s
Investment Policy and that reasonable procedures and controls have been implemented to
preclude investment transactions that are not authorized by the City’s Policy and in
accordance with the PFIA.

IX. SAFEKEEPING AND CUSTODY

Safekeeping and Custodial Agreements

The City shall contract with a bank or banks for the safekeeping of securities either owned by
the City as part of its investment portfolio or held as collateral to secure demand or time
deposits. Securities owned by the City shall be held in the City’s account as evidenced by
safekeeping receipts of the institution holding the securities. The City shall approve all third-
party custodians for the holding of securities pledged to the City as collateral to secure financial
institution deposits.

Collateral Policy

The City has established a collateral policy in compliance with Government Code Chapter
2257, Public Funds Collateral Act. Deposits secured with irrevocable letters of credit shall
have 100% of principal plus anticipated interest of the deposit, less any amount insured by
the FDIC or NCUSIF. Deposits secured with pledged marketable securities shall have a market
value equal to or greater than 102% of the principal plus accrued interest of the deposit, less
any amount insured by the FDIC of NCUSIF. All deposits shall be insured or collateralized in
compliance with applicable State law. The City reserves the right, in its sole discretion, to
accept or reject any form of insurance or collateralization pledged towards financial institution
deposits. Financial institutions serving as City Depositories will be required to sign a
depository agreement with the City. The collateralized deposit portion of the agreement shall
define the City’s rights to the collateral in case of default, bankruptcy, or closing, and shall
establish a perfected security interest in compliance with Federal and State regulations,
including:

 The agreement must be in writing;
 The agreement must be executed by the Depository and City contemporaneously
with the acquisition of the asset;

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