04. Attachment 2 - Statement of Work.pdf

Attachment 2

Rev. 06/15/18

DEPARTMENT OF FINANCIAL SERVICES

Statement of Work

ATTACHMENT 2

1. Scope of Work.

a. Background Section 717.138, Florida Statutes (F.S.), requires the Florida Department of Financial Services (Department), to administer and enforce the Florida Disposition of Unclaimed Property Act (FDUPA).

Pursuant to its responsibilities, the Department is required to take custody of, manage, and distribute to rightful owners, property that is presumed unclaimed, including Securities.

Securities that are presumed unclaimed by Holders are remitted to the Division by certificate or electronic transfer and are deposited into a brokerage account maintained by the Department’s Securities custodian.

Unclaimed Securities are remitted to the Department primarily from the following five (5) categories of Holders: transfer agents, mutual fund companies, brokerage firms, dividend reinvestment plans (DRPs), and limited partnership sponsors.

b. Scope of Work The Contractor shall assist the Department, through its Division of Unclaimed Property (Division), in carrying out its statutory responsibilities by serving as the custodian for unclaimed Securities remitted by Holders to the Department. Specifically, the Contractor shall maintain a brokerage account for the Division in order to receive, manage, redistribute, and liquidate unclaimed Securities remitted to the Department, and shall provide the following Deliverables, and perform the related Tasks, described in detail in this Statement of Work (SOW):

i. Establish a brokerage account for the Department and assist with the transfer of the Department’s unclaimed Securities from the current custodian to the Contractor;

ii. Process the Department’s unclaimed Securities transactions, and provide ongoing brokerage account maintenance; and

iii. Provide the specified reports to the Department regarding the Department’s unclaimed Securities transactions and positions.

2. Definitions.

In this Contract, the following terms will be defined as set forth below:

a. American Depositary Receipt (ADR) – A negotiable certificate issued by a U.S. bank representing a specific number of shares of a foreign stock traded on a U.S. stock exchange.

b. Business Days – Includes only Monday through Friday, except holidays declared and observed by the state government of Florida.

c. Business Hours – 8:00 AM to 5:00 PM, Eastern time, on all Business Days.

d. Calendar Days – All days, including weekends and holidays.

e. Claimant – A person on whose behalf a claim is filed with the Division.

f. Contract – The agreement between the Department and the Contractor for the services described in this

SOW.

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g. CUSIP – Represents the Committee on Uniform Securities Identification Procedure.

h. CUSIP Number – A nine-character number that uniquely identifies a particular security that is assigned by CUSIP.

i. Dividend Reinvestment Plan (DRP) – A program that allows the stockholders of a corporation to reinvest cash dividends into additional shares or fractional shares of the corporation.

j. DTC – The Depository Trust Company.

k. EFT – Electronic Funds Transfer.

l. Holder – Pursuant to section 717.101(12), F.S., a person, wherever organized or domiciled, who is: (a) in possession of unclaimed property belonging to another; (b) a trustee in case of a trust; or (c) indebted to another on an obligation.

m. Medallion Signature Guarantee – A certification stamp that guarantees that a signature that authorizes a transfer of securities is authentic and that the guarantor accepts liability for any forgery.

n. NASDAQ – The National Association of Securities Dealers Automated Quotations.

o. NYSE – The New York Stock Exchange.

p. SEC – The U. S. Securities Exchange Commission.

q. Security – Defined as stated in section 517.021(22), F.S.

r. Settlement Date – The date on which the Contractor receives the funds related to the sale of the

Department’s Securities.

s. SIPC – The Security Investor Protection Corporation.

t. Unclaimed Property Management Information System (UPMIS) – The Division’s internal information system for managing unclaimed property in its custody.

u. Unclaimed Property Identification Number (UPID) – A unique identifying number assigned by the Division to each Holder remitting unclaimed property to the Department.

3. Payment Provisions.

a. Compensation.

i. This is a fixed rate contract. The Contractor’s compensation for this Contract is stated in Attachment 3, Price Response and shall not exceed the amount determined by multiplying the agreed-upon rate by the total dollar value of the proceeds realized by the Department from the sale or liquidation of its unclaimed Securities in the custody of the Contractor (Maximum Allowed Commissions and Transaction Costs).

ii. Pursuant to Section 8.d., Delayed Liquidation Model, below, the Department may rescind any standing order to sell upon receipt and require the Contractor to hold the Department’s unclaimed Securities until the Contractor is notified, in writing, by the Department to liquidate its positions (Delayed Liquidation Period). During the Delayed Liquidation Period, in addition to commissions on any Securities that are sold, the Contractor may charge a Transaction Fee, on a per transaction

Rev. 06/15/18 basis, for Securities that it reissues or transfers back to Claimants as directed by the Department.

If a held Security is returned to a Claimant, only the Transaction Fee shall be charged.

b. Payment. Pursuant to section 717.122(2)(a), F.S., the Contractor shall be paid by deducting the fees it charges from the proceeds realized by the Department from the sale or liquidation of its unclaimed Securities in the custody of the Contractor.

c. True-Up. For each calendar year, or partial calendar year, within the term of the Contract, the Contractor shall perform a reconciliation of the amounts deducted as payment during the year, pursuant to Section 3.b., above, to the Maximum Allowed Commissions and Transaction Costs amount for the year. If the amounts deducted as payment during the year exceed the Maximum Allowed Commissions and Transaction Costs, the Contractor shall reimburse the Department by EFT within thirty (30) Calendar Days of the end of a calendar year. The Contractor shall also provide a copy of the reconciliation to the Department within thirty (30) Calendar Days of the end of a calendar year, which is subject to review, audit, and verification by the Department. Transaction Fees charged pursuant to Section 3.a.

ii., above, shall not be included in the reconciliation. If the amounts deducted are lower than the Maximum Allowed Commissions and Transaction Costs, the Department is not required to remit the difference to the Contractor.

d. Expenses. The Department will not compensate the Contractor for any of its expenses, including travel-related expenses.

4. General Contractor Responsibilities.

The Contractor shall perform the following services and comply with the following requirements:

a. General. The Contractor shall accept and process all unclaimed Securities remitted to the Department by Holders for the entire term of the Contract, including any renewal and extensions.

b. Physical Office. The Contractor shall maintain, as the official point of contact, a physical office located within the United States of America for the entire term of the Contract, including any renewals and extensions.

c. Records. The Contractor shall maintain a record of the receipt of all Securities remitted to the Department which must be accessible to the Department electronically.

d. Non-Transferable Securities. The Contractor shall notify the Department of any Securities reported to the Contractor by Holders that are non-transferable or that have no readily ascertainable market value within thirty days of the date reported. The Contractor shall not accept any non-transferable Securities or Securities with no readily ascertainable market value.

e. Physical Certificates. The Contractor shall make reasonable efforts to encourage Holders to convert any unclaimed Securities, including mutual fund shares, held in physical certificate form to electronic certificates.

f. Medallion Signature Guarantee. The Contractor shall obtain Medallion Signature Guarantees for the sale and transfer of the Department’s unclaimed securities when required.

g. Missing Property. The Contractor shall be liable to the Department for any property in the Contractor’s custody that becomes missing as a result of having been lost, stolen, misplaced, or not accounted-for properly. At the Department’s sole discretion, the Department may recover the value of any missing property, as such value is determined by the Department. Missing Securities shall be valued as of the date the property was first determined to be missing, unless such date cannot be readily ascertained. If this date cannot be ascertained, the property shall be valued as of the date the property was received by the Department or the Contractor, whichever value is greater. The Contractor shall reimburse the Department for the value of any missing property by EFT funds transfer within three (3) Business Days of a request by the Department.

h. Customer Service. The Contractor shall respond to a written request for assistance or an inquiry from the Department related to the work described in this SOW within six (6) Business Hours that the Contractor received the written request.

i. Credentials. Prior to commencing the work described in this SOW the Contractor shall:

i. be registered as a member in good standing of the NYSE and the NASDAQ;

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ii. be a participating member of the DTC;

iii. be licensed as a broker-dealer in Florida, unless exempt; and

iv. ensure that its accounts are insured by the SIPC.

j. Notice of Adverse Events. The Contractor shall notify the Department within one (1) Business Day of the Contractor receiving notice of any of the following adverse events:

i. the Contractor’s membership in the NYSE, NASDAQ, or the DTC is, or will be, suspended or terminated;

ii. the Contractor’s Florida broker-dealer license is, or will be, suspended or terminated;

iii. the Contractor has lost, or will lose, SIPC insurance for its accounts;

iv. the Contractor is insolvent;

v. the Contractor intends to file for bankruptcy protection or enter into an agreement for an assignment for the benefit of creditors;

vi. the Contractor receives, or will receive, a modified independent auditor’s opinion in connection with its financial statements;

vii. a credit rating of the Contractor is, or will be, downgraded; or

viii. any other events that would materially impair the Contractor’s ability to safeguard the

Department’s unclaimed Securities; execute transactions, including the transfer of cash or Securities; or perform the work described in this SOW.

5. Deliverables.

The Contractor shall provide the following Deliverables which are comprised of the Tasks described in the table below. All Deliverables must be provided, and Tasks performed, to the satisfaction of the Department or its authorized representative prior to acceptance.

Deliverable No. 1 – Establish Brokerage Account and Transfer Unclaimed Securities Portfolio Tasks Performance Measure/

Due Date(s) Financial Consequences

1. The Contractor shall establish a brokerage account in the name of the Department. The brokerage account shall include, on a continuing basis, the following;

a. the Department’s unclaimed

Securities’ positions,

b. transactions related to the

Department’s unclaimed Securities, and

c. the Department’s interest-bearing cash account that shall earn interest at the current market rate for such accounts for the term of the Contract.

The brokerage account shall be established in the name of the Department by the Contractor within twenty (20) Calendar Days of the effective date of the Contract.

Failure to establish a brokerage account, including an interest-bearing cash account, in the name of the Department shall result in financial consequences of $100 for each Calendar Day beyond the established due date that the Contractor fails to establish the account.

2. The Contractor shall assist with, and accept, the transfer of all the Department’s unclaimed Securities held by the Department’s current custodian firm to the custody of the Contractor.

The Contractor must complete the transfer of all the Department’s unclaimed Securities held by the Department’s current custodian firm to the custody of the Contractor within thirty

Failure to transfer all the Department’s unclaimed Securities to the custody of the Contractor shall result in financial consequences of $100 for each Calendar Day beyond the established due date that the

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(30) Calendar Days of the effective date of the Contract.

Contractor fails to complete the transfer.

3. The Contractor shall provide, at no additional charge to the Department, access to its computer system for the Department’s authorized staff via a direct link or web-based solution for the purpose of allowing the Department to view transactions, positions, and same day transaction records related to the brokerage account established pursuant to this Deliverable No. 1. This access shall continue throughout the Contract term.

The access shall be secured, and all messages shall be encrypted. The access shall provide for the following:

a. The Contractor’s acceptance of (1) electronically transmitted instructions by the Department, if allowed by SEC regulations, to liquidate, transfer, or reissue Securities as a result of an approved claim; (2) requests made by the Department for research information, including, but not limited to, market price, activity or reorganization, claim status, and transactions in the account; and (3) requests made by the Department for the return or re-registration of shares.

If the Contractor’s system does not provide for this capability, the Contractor shall provide these services via an alternative electronic format that is determined by the Department to be acceptable.

b. The Department’s capability to view its account on-line. The access provided for this purpose shall be read-only and shall grant access only to the Contractor’s authorized staff and the Department’s authorized users.

c. The Department’s access to on-line stock and mutual fund pricing systems. If the Contractor’s system does not have this capability, the Contractor shall provide access to an

The Contractor shall provide electronic access to its computer system to the Department for the purpose of allowing the Department to view its relevant records within thirty (30) Calendar Days of the effective date of the Contract.

Failure to provide electronic access to the Department’s records shall result in financial consequences of $100 for each Calendar Day beyond the established due date that the Contractor fails to provide access.

Rev. 06/15/18 electronic system capable of quoting any Security prices required by the Department.

d. Adequate safeguards to prevent unauthorized access to the Department’s account.

4. The Contractor shall provide pathways, data file name(s), data file format(s), and sample data files sufficient for the Department to test the accessibility of the data files, and to ensure the information is sufficient for the Department to update the UPMIS database with transactions; reconcile the issues and positions held in the Department’s account to the UPMIS database; and verify the accuracy of the Securities pricing information provided in the data files.

The Contractor shall provide the pathways, data file name(s), data file format(s), and sample data files within thirty

(30) Calendar Days of the Contract’s effective date.

Failure by the Contractor to provide this information by the established due date shall result in financial consequence of $100 for each day beyond the due date that the information is not provided.

Deliverable No. 2 – Process Securities Transactions and Provide for Account Maintenance

Tasks Performance Measure/Due Date(s)

Financial Consequences

1. The Contractor shall be a participating member of the DTC for the entire Contract term and shall accept, and record receipt of, Securities received electronically from Holders or from authorized Department agents. The Contractor shall have the ability to receive, manage, liquidate, reissue, transfer, and process the following categories of Securities:

a. stocks, including, but not limited to common shares, preferred shares, ADRs, and closed-end mutual fund shares, that are remitted from transfer agents, brokerage firms, and DRPs;

b. open-end mutual funds shares remitted from mutual fund companies and brokerage firms;

c. bonds and debentures remitted from transfer agents and brokerage firms;

d. time-based instruments, including but not limited to rights and warrants, remitted from transfer agents and brokerage firms;

e. limited partnership interests;

The Contractor shall accept and deposit the Securities it receives from Holders into the Department’s brokerage account within three (3) Business Days following receipt.

Failure to accept and deposit the Securities received within three

(3) Business Days shall result in financial consequences of $100 for each Business Day beyond the established due date that the Contractor fails to accept and deposit Securities as required.

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f. investment trust units remitted from sponsors and brokerage firms; and

g. any other category of Security, including any new products that come on to the market.

2. Pursuant to section 717.122(2)(a), F.S., Securities listed on an established stock exchange shall be sold by the Contractor at prices prevailing at the time of sale on the exchange. The Contractor shall sell all Securities within (3) Business Days of receipt unless permitted otherwise by the Department. Unlisted securities shall not be sold by the Contractor without the express authorization of the Department.

The Contractor shall not sell any Securities in which the fee will exceed the net proceeds.

The Contractor shall sell at prevailing prices the Department’s Securities within three (3) Business Days of receiving any Securities unless:

a. the Securities are unlisted;

b. the Contractor is directed otherwise by the Department;

or

c. the fee will exceed the net proceed realized from the sale.

The due date prescribed herein may be waived by the Department’s Contract Manager where a Security cannot reasonably be sold.

Failure by the Contractor to sell a Security as required under this Task and Performance Measure/Due Date shall result in a financial consequence of $100 for each occurrence.

3. The Contractor shall provide for the redemption of bonds at maturity including any coupons.

collect and remit the proceeds of bond redemptions to the Department no later than five (5) Business Days following the receipt of funds from redemption.

Failure by the Contractor to provide for the redemption of bonds at maturity, including any coupons, shall result in financial consequences of $100 for each occurrence. Failure by the Contractor to collect and remit the proceeds of bond redemptions to the Department by the established due date shall result in financial consequences of $100 for each day beyond the due date that the redemption proceeds are not remitted to the Department.

4. All Department funds received by the Contractor must be deposited into the Department’s interest-bearing cash account. The Contractor shall remit by EFT to the Department any interest, including any interest earned on the Department’s interest-bearing cash

The Contractor must deposit Department funds into the Department’s interest-bearing cash account within two (2) Business Days of receipt by the Contractor. The

Failure by the Contractor to deposit Department funds into the Department’s interest-bearing cash account by the established due date shall result in financial consequences of $100 for each day beyond the

Rev. 06/15/18 account, dividends, or any other Department funds received by the Contractor.

Contractor must remit via EFT interest, dividends, or other Department funds to the Department within five (5) Business Days following the end of the month unless otherwise agreed upon by the Contractor and the Department.

due date that the funds are not deposited. Failure by the Contractor to remit interest, dividend, or other Department funds by EFT to the Department by the established due date, unless otherwise agreed upon, shall result in financial consequences of $100 for each day beyond the due date that the funds are not remitted.

5. The Contractor shall deposit into the Department’s interest-bearing account, funds received from the sale of any Securities. All funds received by the Contractor from the sale of Securities shall be remitted by EFT to the Department on a weekly basis.

The Contractor shall deposit into the Department’s interest-bearing account funds received from the sale of any Securities within two

(2) Business Days from the Settlement Date. The total funds received by the Contractor from the sale of Securities during a week shall be transferred by EFT to the Department within two

(2) Business Days from the last business day of the week.

Failure by the Contractor to deposit funds received from the sale of the Department’s Securities or transfer the total funds received by the Contractor from the sale of Securities during a week by the established due date shall result in financial consequences in the amount of $100 for each day beyond the due date that the funds are not deposited or transferred.

6. The Contractor shall reissue or transfer a Security back to the original owner or other person (transferee(s)) when it is directed to do so in writing by the Department. The Contractor shall register any reissued or transferred Securities certificates in the name of the transferee as directed by the Department.

The Contractor shall complete the reissue or transfer of Securities to transferees within ten

(10) Business Days of any request made by the Department. The Contractor shall notify the Department that the transaction has been completed within five (5) Business Days of the transfer.

Failure by the Contractor to reissue or transfer Securities to transferees by the established due date shall result in financial consequences of $100 for each day beyond the due date that the funds are not transferred.

Failure by the Contractor to notify the Department that the transaction has been completed by the established due date shall result in financial consequences of $100 for each occurrence.

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Deliverable No. 3 – Provide Account Activity Reports

Tasks Due Date(s) Financial Consequences

1. The Contractor shall provide weekly statements to the Department that show the Department’s Securities positions as of the last business day of the week, its Securities transactions during the week, and the cash balance in its interest-bearing cash account as of the last business day of the week (Weekly Positions and Activities Report or WPAR). The WPAR provided by the Contractor shall be in standard comma separated value format (CSV) and shall be submitted using a secured file transfer mechanism approved by the Department (i.e., Secure File Transfer Protocol or SFTP). At the request of the Department, the Contractor shall modify the data file format with additions, deletions, or formatting provided by the Department within a time frame that shall be agreed upon by the Department and the Contractor. The WPARs provided by the Contractor shall include at a minimum:

a. the number of shares, type of Security

(e.g., common or preferred), ticker symbol, CUSIP Number, and the total market value of the Security including the price per share, for each Security issue received by the Contractor;

b. all sales, or any other type of transaction that occurred during the time period, including the transfer or reissue of certificates related to claims made by owners that have been approved by the Department;

c. all cash received and the corresponding Security issue’s name, number of shares, dividend payment date, record date, dividend dollar value per share, and total dividend value; and

d. all deductions made to the Department’s balances and any fees charged including, but not limited to, The Contractor shall provide WPARs to the Department within two

(2) Business Days of the last business day of a week.

Failure by the Contractor to provide a WPAR to the Department by the established due date shall result in a financial consequence of $100 for each day beyond the due date that the WPAR is not provided.

Rev. 06/15/18 commissions, SEC fees and any other transaction costs.

2. The Contractor shall provide monthly statements to the Department that show the Department’s Securities positions as of the last business day of the month, its Securities transactions during the month, and the cash balance in its interest-bearing cash account as of the last business day of the month (Monthly Positions and Activities Report or MPAR). The MPAR provided by the Contractor shall be in standard comma separated value format (CSV) and shall be submitted using a secured file transfer mechanism approved by the Department (i.e., Secure File Transfer Protocol or SFTP). At the request of the Department, the Contractor shall modify the data file format with additions, deletions, or formatting provided by the Department within a time frame that shall be agreed upon by the Department and the Contractor. The MPARs provided by the Contractor shall include at a minimum:

a. the number of shares, type of Security

(e.g., common or preferred), ticker symbol, CUSIP Number, and the total market value of the Security including the price per share, for each Security issue received by the Contractor;

b. all sales, or any other type of transaction that occurred during the time period, including the transfer or reissue of certificates related to claims made by owners that have been approved by the Department;

c. all cash received and the corresponding Security issue’s name, number of shares, dividend payment date, record date, dividend dollar value per share, and total dividend value; and

d. all deductions made to the Department’s balances and any fees charged including, but not limited to, The Contractor shall provide MPARs to the Department within fifteen

(15) Business Days of the end of a week.

Failure by the Contractor to provide a MPAR by the established due date shall result in financial consequences of $100 for each day beyond the due date that the MPAR is not provided.

Rev. 06/15/18 commissions, SEC fees and any other transaction costs.

3. For each calendar year of the Contract, the Contractor shall provide a year-end statement to the Department that shows the Department’s Securities positions as of the last business day of the year, its Securities transactions during the year, and its cash balance in its interest-bearing cash account as of the last business day of the year (Year-End Positions and Activities Report or YPAR). The YPAR provided by the Contractor shall be in standard comma separated value format (CSV) and shall be submitted using a secured file transfer mechanism approved by the Department (i.e., Secure File Transfer Protocol or SFTP). At the request of the Department, the Contractor shall modify the data file format with additions, deletions, or formatting provided by the Department within a time frame that shall be agreed upon by the Department and the Contractor. The YPARs provided by the Contractor shall include at a minimum:

a. the number of shares, type of Security

(e.g., common or preferred), ticker symbol, CUSIP Number, and the total market value of the Security including the price per share, for each Security issue received by the Contractor;

b. all sales, or any other type of transaction that occurred during the time period including the transfer or reissue of certificates related to claims made by owners that have been approved by the Department;

c. all cash received and the corresponding Security issue’s name, number of shares, dividend payment date, record date, dividend dollar value per share, and total dividend value; and

d. a summary of the previous year’s activities that occurred in the account.

provide YPARs to the Department within thirty

(30) Calendar Days of December 31 of the relevant year.

Failure by the Contractor to provide a YPAR to the Department by the established due date shall result in a financial consequence of $100 for each day beyond the due date that the MPAR is not provided.

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4. The Contractor shall provide weekly Sales Reports to the Department that shows the following information related to each sale of Securities that the Contractor has made pursuant to Deliverable 2, Task 2., above:

a. the UPID;

b. the corporate issue name including

Security type;

c. the CUSIP Number;

d. the number of shares or units sold;

e. the trade and settlement date;

f. the share or unit price and the gross sale amount;

g. the net proceeds to be received by the Department;

h. the commission rate per stock transaction; and

i. any other fees associated with the sale will also be identified.

The Contractor, to the extent directed by the Department, shall modify the data file formats related to the Sales Report to accommodate additions, deletions, and modifications the Division requires for the processing of the Securities.

The Contractor shall provide Weekly Sales Reports to the Department within two

(2) Business Days from the last business day of the week. The Contractor will make all modifications to data file formats related to the Sales Reports within thirty (30) Calendar Days of the Department request.

Failure by the Contractor to provide a Sales Report by the established due date shall result in financial consequences in the amount of $100 for each day beyond the due date that the Sales Report is not provided.

5. The Contractor shall submit monthly Commissions Reports to the Department showing all amounts deducted from the proceeds of the sale of Securities during the month including, but not limited to commissions, SEC fees, and other transaction costs. Commission Reports shall be submitted to the Department in a standard comma separated value format (CSV) monthly via SFTP and shall include the following information:

a. the issue charged including the number of shares,

b. the type of security (e.g., common or preferred),

c. the ticker symbol,

d. the CUSIP number,

e. the total market value of the security including the per share price,

f. the commission amount, and

g. any other fees or costs deducted.

The Contractor shall provide Commissions Reports to the Department within fifteen

(15) Calendar Days of the last day of a month.

Failure by the Contractor to provide a Commissions Report to the Department by the established due date shall result in financial consequences in the amount of $100 for each day beyond the due date that the Sales Report is not provided.

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6. The Contractor shall notify the Department of any capital transactions related to its Securities positions, including but not limited to tender offers, purchase offers, exchange offers, mergers, called bonds, rights exercises, or warrant exercises. The Contractor shall follow the instructions of the Department with respect to these activities, and include the following information in the WPARs and MPARs it provides to the Department:

a. stock dividends;

b. cash dividends and cash-in-lieu of fractional shares;

c. capital gains in mutual fund accounts;

d. dividend reinvestments in mutual fund accounts;

e. dividend reinvestments in DRP accounts;

f. splits;

g. mergers;

h. name changes;

i. reverse splits;

j. spin-offs;

k. securities calls;

l. tender offers; and

m. security exchanges.

notify the Department of any capital transactions related to its Securities positions within thirty

(30) Calendar Days of having been notified of such transactions.

Failure by the Contractor to notify the Department of any capital transaction related to its Securities positions shall result in financial consequences in the amount of $100 for each occurrence.

6. Department’s Responsibilities.

a. Contract Manager. The Department shall assign a Contract Manager who shall be responsible for the review and management of the Contract for the Department and who shall serve as a liaison between the Division and the Contractor. The Contract Manager assigned shall be fully knowledgeable of the objectives of the Contract and shall be able to make the necessary decisions regarding the Contract. The Contract Manager shall maintain a record of each occurrence that the Contractor has failed to meet any of the requirements of this SOW.

b. UPMIS. The Department will provide technical staff with knowledge of the Department’s UPMIS.

The technical staff assigned shall have the ability to make system modifications that are required and requested by the Contract Manager.

c. Securities Transfers. For Securities certificates to be transferred back to the original owner or other person (transferee), the Department shall provide to the Contractor the transferees name; social security number; mailing address and/or DTC number; corporate issue name (including Security type); CUSIP Number; and the number of shares to be transferred.

d. Testing. The Department will cooperate with the Contractor’s testing of the electronic process for brokerage services at implementation.

7. Enforcement.

a. Inspection. In addition to the requirements of Attachment 1, Standard Terms and Conditions, within twenty four (24) hours of receiving the Department’s written request, the Contractor shall permit persons duly authorized by the Department to inspect any records, papers, documents, facilities, Rev. 06/15/18 goods, and services of the Contractor, which are relevant to the Contract, and interview any clients and employees of the Contractor to be assured of satisfactory performance of the terms and conditions of the Contract. The Department shall be permitted access to such records only as authorized or permitted by federal law and the laws of the state of Florida. The Department will notify the Contractor if it determines that there are deficiencies in the manner in which any of the work of this SOW is performed.

b. Contractor Audit.

i. Upon request by the Department and prior to renewal of the Contract, the Department may direct the Contractor to pay for and provide an Independent Auditor’s Report of the Contractor’s activities during the initial 2 years of the Contract period that were conducted on behalf of the Department. The audit shall be performed by an independent, licensed Certified Public Accountant (Independent Auditor) in accordance with generally accepted auditing standards. The Independent Audit Report shall include the Independent Auditor’s opinion as to whether transactions were executed by the Contractor in accordance with the terms of the Contract, and whether the controls, records and procedures were sufficient to safeguard the Department’s assets in the custody of the Contractor. The audit shall be completed, and a copy of the Independent Auditor’s report shall be provided to the Department, at no cost to the Department, within six (6) months of the Department’s request.

ii. Upon request by the Department, the Department may direct the Contractor to pay for and provide an Independent Auditor’s Report of the Contractor’s activities during the entire initial Contract period and/or the Contract renewal period that were conducted on behalf of the Department. The audit shall be performed by an independent, licensed Certified Public Accountant (Independent Auditor) in accordance with generally accepted auditing standards.

The Independent Auditor’s Report shall include the Independent Auditor’s opinion as to whether transactions were executed by the Contractor in accordance with the terms of the Contract, and whether the controls, records, and procedures were sufficient to safeguard the Department’s assets in the custody of the Contractor. The audit shall be completed, and a copy of the Independent Auditor’s report shall be provided to the Department, at no cost to the Department, within six (6) months of the Department’s request.

8. Miscellaneous Contract Terms.

a. Staffing Expectations and Removal. The Department expects the Contractor to employ and assign competent, courteous, and responsive individuals to perform the services described in this SOW. The Department shall have the right to require the removal and replacement of any personnel assigned by the Contractor to perform the work described in this SOW. The Department is not required to show cause for, and the Contractor shall comply with, any such request. If removal and replacement is required by the Department, the Contractor’s proposed replacement must have experience and qualifications that are equal or superior to those of the incumbent staff member being replaced.

b. PUR 1000. The following provisions found in Attachment 4, PUR 1000, are not applicable to this Contract:

Section 2. Purchase Orders;

Section 3. Product Version;

Section 4. Price Changes Applicable only to Term Contracts subsections (b), Best Pricing Offer and (e), Equitable Adjustment;

Section 5. Additional Quantities;

Section 6. Packaging;

Section 8. Safety Standards;

Section 11. Transportation and Delivery;

Section 12. Installation;

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Section 20. Limitation of Liability;

Section 27. Purchase Order Duration;

Section 29. Assignment;

Section 31. Dispute Resolution;

Section 32. Employees, Subcontractors, and Agents;

Section 39. Leases and Installment Purchases; and Section 43. Cooperative Purchasing.

c. Data Transmission and Alternative Information Technology Solutions.

i. The Contractor shall provide the interfaces, data file formats, and the method of data receipt or transmittal as directed by the Department. The Contractor shall have the ability to send data to the Department that is in flat file format, using SFTP, or via direct webservice interface.

ii. The Contractor may request to use an alternative to flat files and direct webservice interface for the transmission of data to the Department. Any such alternative technology use requested by the Contractor must allow for the Department’s ability to submit requests to sell, reissue, and transfer Securities, as well as the ability to query transaction history and current positions. An implementation plan shall be submitted by the Contractor for approval by the Department’s Project Management Office. Development and user acceptance testing shall be successfully completed, as determined by the Department, before the implementation of any alternative technology. Once fully approved, developed, and tested, implementation shall be completed within a time frame agreed-upon by both the Contractor and the Department.

a.) For the Department’s Securities positions any electronic data transferred shall contain, at a minimum, the following data fields: (1) name/UPID of remitting entity; (2) issue name; (3) CUSIP Number; (4) ticker symbol; (5) price per share; (6) date of price per share; and (7) value of issue.

b.) For the Department’s Securities transactions any electronic data transferred shall contain, at a minimum, the following data fields: (1) name/UPID of remitting entity;

(2) issue name; (3) CUSIP Number; (4) ticker symbol; (5) transaction type; (6) record date; (7) payment date; (8) number of originating issue shares; (9) number of new shares; and (10) dollar amount of new shares.

d. Delayed Liquidation Model. Subject to market conditions, the Department may, during the Contract term, rescind any standing order to sell upon receipt and require the Contractor to hold the Department’s unclaimed Securities until the Contractor is notified, in writing, by the Department to liquidate its positions (Delayed Liquidation Period). During the Delayed Liquidation Period, the Contractor shall not liquidate any Securities unless directed by the Department, and shall reissue or transfer a Security back to the original owner or other person (transferee(s)) when it is directed to do so in writing by the Department. The duration of any Delayed Liquidation Period is subject to the sole discretion of the Department.

e. Exit Transition Services. In addition to the requirements set forth in Section 31, Exit Transition Services, of Attachment 1, Standard Term and Conditions (Applicable to Competitively Procured Contracts), upon termination or expiration of the Contract, the Contractor shall:

i. facilitate and ensure the transfer of all Securities in the Contractor’s custody to the custody of the Department’s new custodian;

ii. ensure that all Department’s funds are transferred to the Department within thirty (30)

Calendar Days of Contract termination or expiration;

iii. provide a year-to-date accounting of all transactions;

iv. transfer any securities received by the Contractor after the Contract’s termination or expiration to the Department’s new custodian within five (5) Business Days of receipt at no cost to the Department; and

v. facilitate the transfer of any necessary knowledge to the Department’s new custodian.

Rev. 06/15/18

f. Corrective Action Plan. In addition to the remedies listed in Section 16, Remedies, of Attachment 1, Standard Terms and Conditions, the Contractor’s failure to timely and satisfactorily perform the requirements of the Contract may result in the Department requiring the Contractor to provide a corrective action plan, at the Contractor’s expense, the terms of which must be mutually agreed to by the parties in writing. The plan must specify the financial consequences to be applied after the effective date of the corrective action plan, which may modify the financial consequences established in this Attachment 2, Statement of Work. The Contractor shall comply with all requirements of the approved corrective action plan at no additional cost to the Department.