§ 2-511. Third-party custodial agreements.

(a) All securities purchased by the city under this investment policy shall be properly designated as an asset of the city and held in safekeeping by a third party custodial bank or other third party custodial institution, chartered by the United States government or the State of Florida and no withdrawal of such securities, in whole or in part, shall be made from safekeeping except by the city manager or his designee.

(b) The strongest assurance and control that the securities have been properly segregated on behalf of the city is provided by an independent third-party custodian. In addition, it may be appropriate to accept confirmation from the trust company affiliated with the other party of the transaction. Assurances shall be obtained that the structure of this affiliation is such that the two (2) entities are fully independent of each other, that controls are adequate and that the city's security interest in the assets is not lost.

(c) The city will execute third-party custodial agreements with its bank(s) and depository institution(s). Such agreements shall include letters of authority from the city that details the responsibilities of each party, notification of security purchases, sales, delivery, repurchase agreements, wire transfers, safekeeping and transactions costs, procedures in case of wire failure or other unforeseen mishaps including liability of each party.

(d) An exception to this method of control will be the safekeeping of nonnegotiable bank certificates of deposit which would require physical delivery without systematic handling found commonly with book entry securities.

(Ord. No. 95-44, § 1, 12-19-95)