BNY_Mellon_Contract-CustodyBankServices_-_fully_executed.pdf

SCOPE OF WORK

Contract No.: CTR054503 Description: Custodian and Investment Services

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Contractor, unless otherwise or specifically indicated, shall be responsible to provide the Services listed below:

1. General Requirements

1.1. Services relating to all assets managed by ASRS and its investment managers, including both domestic and international securities, in accordance with the provisions and requirements set forth herein.

1.2. ASRS has provided Contractor with ASRS Board Governance Policy Handbook and the Investment Policy Statement, each of which may be updated from time to time.

1.3. A mutually agreed upon relationship governance model that will focus on the long-term strategy for the relationship and provide ASRS with an organized approach to assess and foster continuous improvement of the business model.

1.4. Upon request by ASRS, Contractor will enter into a Service Level Agreement for some or all Services, as agreed upon between Contractor and ASRS.

1.5. On an annual basis, provide a report on the audit on the design and effectiveness of internal controls (e.g. SOC Type II, SSAE 18), conducted by an independent certified firm, which, for the avoidance of doubt, shall be treated as confidential information of Contractor by ASRS to the maximum extent permitted by applicable law. Contractor shall be responsible for any expenses related to such audits.

2. Transition and Conversion

Provide a formal transition and conversion plan that includes:

2.1. Names and résumés in accordance with Section 3.6 (Key Personnel) of the Special Terms and Conditions, and a brief description of each individual’s role and responsibilities with respect to the Services.

2.2. A timeline of events to meet the proposed July 1, 2021 inception date for Services.

2.3. A schedule of planning and training available or required for both ASRS staff and ASRS's current custody and depository banks.

2.4. The requirements for all ASRS operational, technology, and accounting staff and resources expected to be engaged for the transition and conversion process.

3. Authorized Signers

3.1. Contractor shall maintain a list of activity categories between Contractor and ASRS that require an authorized signatory.

3.2. Contractor will provide a contact person (or persons) to administer its client service team with ASRS. Changes to Contractor’s ASRS client service team will be authorized by this person or suitable persons.

3.3. Contractor will advise ASRS promptly as practicable under the circumstances in the event of any changes to the list of activity categories within the client service team through the contact person provided pursuant to Section

3.2 above.

3.4. Upon receipt of notification from ASRS, Contractor without undue delay will notify all necessary internal teams of any changes to ASRS authorized signatories.

3.5. Contractor will review jointly with ASRS the authorized signers no less than quarterly.

4. Relationship Management

4.1. Provide to ASRS semi-annually on or before March 31 and September 30 of each year a standard contact list for all services provided, including normal contacts, escalation contacts and emergency/after-hours contacts, to include work and mobile phone numbers.

4.2. Develop solutions to increase efficiency for both Contractor and ASRS, implement new services, and assist ASRS in leveraging global solutions.

A. ALL SERVICES

Description: Custodian and Investment Services

4.3. Provide a communications tracking process to jointly monitor and discuss all service delivery topics, formal requests, and open issues on a monthly basis or more frequently as deemed necessary by ASRS.

4.4. Provide a service evaluation survey on an annual basis to ASRS senior managers, as identified by ASRS.

4.4.1. Build recommendations and action plans around the survey results

4.4.2. Provide action plans to ASRS within ninety (90) days following the survey

4.5. For routine service and support issues and inquiries from ASRS:

4.5.1. Provide a timeframe in which ASRS can expect a resolution and response

4.5.2. Have a tracking mechanism in place, which Contractor and ASRS monitor through periodic service calls between the relevant business unit(s) of Contractor and ASRS.

4.5.3. Provide ASRS with a resolution or project plan, as requested, for issues that will take longer than ten (10) business days to resolve. The project plan must identify:

4.5.3.1. The specific action items that will be taken

4.5.3.2. The responsible Contractor representative or ASRS staff for each action item

4.5.3.3. The required deliverable dates for each action item

5. Issue and Operation Error Escalation and Resolution

In the event of a Contractor operating error, event, or issue that has the potential to disrupt regular, ongoing operations, Contractor will:

5.1. Make every attempt to minimize any disruptive impact or exposure to ASRS.

5.2. Establish a methodology to address problems or issues that require escalation, which includes, at minimum, the following requirements. Contractor will:

5.2.1. Communicate to ASRS and/or its designee all discovered operating errors/events without undue delay

5.2.2. Escalate all discovered operating errors/events to the Account Executive and Contractor’s equivalent senior management.

5.2.3. Prior to the execution of any corrective action,

5.2.3.1. Convene with ASRS and provide detailed explanation of proposed resolution

5.2.3.2. Achieve joint agreement from Contractor’s senior management and ASRS on the resolution, corrective actions, and any operating loss payment(s)

5.3. Provide to ASRS semi-annually on March 31 and September 30 of each year, a list of contact information detailing:

5.3.1. Contractor senior and risk management personnel

5.3.2. Contractor personnel who may be contacted during and outside of normal business hours.

5.4. If ASRS discovers an operating error/event by Contractor, ASRS agrees to communicate to Contractor without undue delay.

5.5. If ASRS causes an error/event that may impact Contractor, ASRS agrees to communicate to Contractor without undue delay.

6. Technology

6.1. Ensure that Contractor-sourced interfaces and applications integrate successfully with the ASRS environment.

6.2. Provide backup and maintain a comprehensive database that includes a comprehensive accounting system, securities, alternative assets, pricing, and performance for the entire ASRS investment portfolio.

6.3. Maintain or have the ability to maintain the following computer resources:

Description: Custodian and Investment Services

6.3.1. Implement a disaster recovery plan to secure an off-site backup system for all ASRS transactions.

Provide documentation of that system is in place and operating.

6.3.2. The ability to send/receive files (ANSI fixed length, ASCII comma delimited, XML, XLS, XLSM, etc.).

6.4. Establish a systematic process to receive, review and implement requests for new or changes to existing data feeds, transmissions or files to ASRS or designated third parties that includes, at minimum, the requirement that Contractor shall:

6.4.1. Acknowledge the request and provide an assessment of impact, effect, cost, and the proposed timeframe for implementation, if agreed to by ASRS.

6.4.2. Provide a status report of all change requests (open and completed during the reporting period) for ASRS review

6.4.3. Provide or revoke data feeds and transmissions by the agreed upon time, frequency and recipient.

6.4.4. Provide notification to ASRS for additions or changes to Contractor-sourced data feeds as promptly as practicable under the circumstances upon Contractor becoming aware of such additions or changes.

6.5. Set up new data feeds with third parties as requested and approved by ASRS.

6.5.1. Upon receipt of an approved request, Contractor will request the third party to sign and required compliance documents and access agreements.

6.5.2. Upon receipt of signed documentation, Contractor will

6.5.2.1. Forward copies to ASRS staff that initiated the request. Any delays in receiving signed documentation from third parties will be escalated to ASRS for resolution.

6.5.2.2. Implement the specified data feed. Contractor will confirm initial delivery to the receiving party and monitor on an ongoing basis.

6.6. Maintain and make available upon request a listing of known decommissioned data feeds or transmissions that includes the date the feed was retired.

6.7. Maintain an inventory of the investment managers and third-party organizations approved by ASRS to consume ASRS data, the type of data consumed, and make such information available to ASRS.

6.8. Resolve data feed issues as promptly as practicable under the circumstances and within the same business day to the extent practicable based on the criticality, as agreed to by ASRS and Contractor.

6.9. Maintain detailed plans for the prevention of, and response and mitigation in the event of, data breaches.

7. Business Continuity Planning

7.1. Maintain current and test a Business Continuity/Disaster Recovery Plan(s).

7.1.1. Based on the plans, inform ASRS of the business priority categorization for Contractor applications that ASRS deems critical to ASRS operations.

7.2. Incorporate applicable recovery procedures to fully support ASRS continuity of business operations.

7.3. Notify ASRS and engage in escalation support on incidents affecting Contractor Services to ASRS.

7.4. Participate in joint business continuity test exercises with ASRS with 30 days advance notice.

1. Custody Services

1.1. Provide ASRS with a relationship management team and support to meet complex and expanding needs with expertise in domestic and global custody and accounting, performance measurement and analytics, conversion/implementation, cash management, information deliver/technical support, accounting services (GAAP, Tax), securities lending, trade management and middle office.

B. ASSET SERVICES

Description: Custodian and Investment Services

1.2. Provide online access to ASRS and authorized, approved ASRS third parties for in-scope products and services.

Contractor will provide a new user with online access within the timeframe agreed upon between ASRS and Contractor during the transition process. The primary online systems in scope are:

1.2.1. Online information delivery platform via a single tool that services as a single point of sign on to multiple Contractor products and services including custody, accounting, investment analytics and other services in scope.

1.2.2. Secure downloading – using the online delivery platform the ability to download reports into spreadsheets or other common reporting formats (ANSI fixed length, ASCII comma delimited, XML, XLS, XLSM, etc.).

1.2.3. Corporate action online platform for corporate action notifications and responses.

1.2.4. Cash flow management system as a secure module providing clients reporting, transferring of funds and monitoring.

1.2.5. Document management with the ability to maintain, store and retrieve all electronic correspondence, reports, and spreadsheets received by third parties and that are provided or made available to Contractor (ex. ILPA statements, partnership capital account statements, partnership agreements, financial statements).

1.2.6. Performance Analytics as an integrated component of an online system which allows for holistic analysis of portfolios with configurable dashboards, the ability to analyze data by choice of attributes for risk and performance.

1.3. Maintain or have the ability to maintain the following computer resources:

1.3.1. The ability to communicate with another custody bank or banks in the event that one or more custodian is used.

1.3.2. An ability to share information with ASRS Consultants providing data and reporting on alternative investment accounting or performance.

1.3.3. A backup system up 24/7 to ensure downtime in ASRS operations is limited based on criticality of the relevant Service, and the ability to continue system operations.

1.3.4. An electronic link with ASRS and other financial institutions including the ability to transfer funds electronically.

1.3.5. The ability to provide encrypted data daily to third party data reconciliation data collection services for purposes of trade settlements and portfolio reconciliation on behalf of investment managers.

1.4. Safeguard ASRS assets and provide a range of capabilities to facilitate ASRS’s ability to access and invest in a global, multi-currency environment, and facilitate trade settlement and information processing in timely and accurately.

1.5. Provide the following custody services:

1.5.1. For account openings, follow a standard process to open new accounts in ten (10) business days or as promptly as practicable under the circumstances upon receipt of account information from ASRS.

1.5.2. For sub-custody account openings, follow a standard process to open new sub-custody accounts within thirty (30) business days or as promptly as practicable under the circumstances upon receipt of completed account information from ASRS.

1.6. Assist ASRS with documentation requirements for sub-custodian, as needed, to ensure complete documentation required for market entry, including the providing pre-filled forms to assist with opening process.

1.6.1. If market openings are requested by external manager, Contractor will confirm approval with ASRS before proceeding.

1.7. Implement account modifications upon receipt of instructions from ASRS by such methods as agreed upon by the parties in the Contract. Contractor will:

Description: Custodian and Investment Services

1.7.1. Implement general account changes in a reasonable, agreed upon, timeframe.

1.7.2. Update account name changes within three (3) business days or as promptly as practicable under the circumstances.

1.7.3. Update and confirm changes have been implemented in internal systems within ten (10) business days or as promptly as practicable under the circumstances following notification that additional security types are to be traded in a portfolio (such as futures, swaps, options).

1.7.3.1. Contractor should request additional information be provided by ASRS to correctly implement.

1.8. Close accounts and related sub-accounts upon direction of ASRS.

1.8.1. Identify and notify ASRS, by email, at least annually, and propose closures of stale accounts.

1.8.2. Upon receipt of written instructions via email from ASRS, close accounts on internal systems within ten

(10) business days.

1.8.3. Subject to record retention requirements, make available online historical data on closed accounts.

1.9. Adhere to applicable laws and regulations to keep secure all securities that are maintained in a paper form.

2. Trade Processing and Settlement

Contractor shall:

2.1. Provide transaction management services for trade capture via an automated trade interface and provide acknowledgment (validation or negative) in real-time as received, cancel and correction, and ability to capture and manually confirm trade instructions with both ASRS for authorization and broker for confirmation and send notification to custody for settlement.

2.2. Provide trade validation; systematically confirm/affirm trades to the broker/counterparty confirmation.

2.2.1. Adhere to market standard matching rule and pre-agreed ASRS tolerance levels.

2.2.2. Notify ASRS of trade confirmation discrepancies, as identified throughout the day.

2.2.3. Use all commercially reasonable efforts to resolve unmatched transactions within tolerance levels and custodian deadlines. Where all commercially reasonable efforts have been exhausted, Contractor will escalate to ASRS.

2.2.4. Deliver trade settlement instructions to other custodian in a secure and appropriately authorized manner.

2.2.5. Escalate settlement issues to ASRS as appropriate.

2.2.6. Resolve any unsettled transactions (i.e. Buy-ins, Corporate Actions, etc.) within custodian, depository, or market deadlines.

2.3. Provide broker setup and maintenance as requested by ASRS.

2.3.1. Contact ASRS within the same business day when additional information is needed to complete broker/counterparty setup.

2.3.2. In the event a trade is received by Contractor, and the broker/counterparty on the transaction has not been established on Contractor systems, Contractor should still be able to consume the transaction and hold in queue until such time the setup and such trade can be processed.

2.4. Provide failed trade management, which includes monitoring, tracking and reporting failed trades as identified by

Description: Custodian and Investment Services broker or custodian and coordinate resolution of failed trades.

2.4.1. Deliver daily reporting detailing the failed trades, further identifying the reasons for the failure to appropriate asset class managers.

2.4.2. Use all commercially reasonable efforts to resolve any unsettled transaction with the trade executing broker directly and within custodian deadlines. Where all commercially reasonable efforts have been exhausted, Contractor will escalate to ASRS.

3. Income Processing

3.1. Maintain an automated system for capturing, tracking and recording income events, which includes the ability to report on aging actions, determine and calculate entitlements based on custody holdings and reconcile the holding against depositories, automatic information feeds and other sources.

3.2. Collect and credit income with a pre-determined income program, including but not limited to: principal, interest, dividends, refunds, and other proceeds accruing to accounts; credit such income on pay date.

3.3. Notify ASRS of an event for internally managed funds if there is a need to reverse or adjust any conditional income and redemption credit when the paying agent fails to pay.

3.4. Notify ASRS if the pre-determined income program needs to change as a result of market conditions and ongoing global custody analysis. Income not set in a pre-determined schedule, which is not received on payable date must be monitored and tracked until income due is credited to funds.

3.5. Prepare and maintain receivable aging report available to ASRS through an online platform.

4. Tax Reclaim Support

4.1. Provide tax relief services in all markets where such services are offered.

4.2. Support tax exemption opportunities and relief at source, across relevant markets.

4.3. Provide foreign tax relief services in all markets where such services are offered, including processing tax reclaims and collections to the extent provided by tax treaties.

4.4. Provide ASRS with IRS form 8802 for submission to the IRS, and Contractor will mail and remit applicable payment to the IRS.

4.4.1. Request 150 copies of IRS Form 6166 annually for use in both public and private markets.

4.4.2. Provide ASRS with 25 copies of IRS Form 6166 for use in private markets.

4.5. Inform ASRS of relevant changes to tax information, new or changed documentation requirements, tax rates or market rule changes and statute of limitations, via email notification and online platform.

5. Corporate Actions

5.1. Offer a web-based corporate action platform or SWIFT, available via any intranet connection, which addresses daily corporate action needs. The application will allow ASRS to:

5.1.1. View both voluntary and non-voluntary corporate action notices.

5.1.2. Electronically deliver voluntary corporate action responses to Contractor.

5.1.3. Electronically deliver unsolicited instructions to Contractor.

5.1.4. Export corporate action data.

5.2. Use reasonable efforts to collect entitlements that are the result of a non-voluntary corporate action on ASRS behalf.

Description: Custodian and Investment Services

5.3. Accept standing instructions for corporate actions elections.

5.4. Notify ASRS of all new and amended corporate actions in respect of holdings within twenty-four (24) to forty-eight (48) hours of receipt, unless Contractor needs to validate or clarify additional information prior to distribution.

5.5. Deliver notifications forty-eight (48) hours prior to the ex-effective date for ex-date driven events (e.g., stock dividend) and at least ten (10) days prior to the expiration for expiration date driven events (e.g., tender offer).

5.6. Process authorized instructions accurately and timely to the market, provided ASRS provides proper corporate action instructions by Contractor deadline.

5.7. Report open or missing events that are at or approaching the response deadline that require time sensitive responses and require ASRS to submit responses prior to the deadline via the corporate action online platform.

5.8. Make all reasonable efforts to process corporate action instructions received after Contractor deadlines.

5.9. Coordinate with the Proxy Voting Services contractor, if the services are provided by another supplier.

5.10. For unsolicited events:

5.10.1. Accept written instructions to process securities conversion privileges that may be inherent in certain types of securities and allow the holder to convert shares into some other class or form of related securities (e.g., exercising warrants, converting ordinary shares into American Depository Receipts (ADRs), converting ADRs into ordinary shares).

5.10.2. Take the appropriate due diligence steps prior to responding to an ASRS inquiry, including clarification of fees and market taxes on financial transactions, pending corporate actions, on-loan positions, pending trades, and reconciliation items.

5.10.3. Reach out to sub-custodians, depositories, and conversion agents to receive information regarding the initial request and report this information to ASRS.

5.10.4. Transfer securities only when a signed instruction is received from an ASRS authorized signer.

5.10.5. Process the instruction within agreed upon timeframe; settlement will depend on market conditions.

1. Accounting System and Reconciliation

1.1. Utilize a trade date, full accrual, multicurrency accounting and reporting system that:

1.1.1. Performs accounting and valuation daily

1.1.2. Supports real-time or batch processing and all types of assets, including equity, debt, short-term, mortgage-backed, currency, foreign exchanges, options, futures, and all derivative securities in either base or local currency

1.1.3. Provide Net Asset Values (NAV) and processes market trades at cost; accounts for unrealized gains and losses on securities sold on an average cost basis unless otherwise specified by ASRS.

1.1.4. Reflects corporate actions by event type and on event date.

1.2. Calculate the NAV based upon best available information.

1.3. Account for and report on assets in a manner consistent with generally accepted accounting principles.

C. PORTFOLIO ACCOUNTING

Description: Custodian and Investment Services

1.4. Account for all assets monthly on a full accrual fiscal year basis, using the ASRS fiscal year that begins July 1 and ends June 30.

1.5. Account for all security transactions, including dividend, interest and principal payments and capital changes, consisting of mergers, acquisitions, spin-offs, tenders, stock splits, dividends, warrants and bond calls, within three (3) business days of the transaction date.

1.6. Account for specified assets, as needed and directed by ASRS, separately from the trust assets.

1.7. Account for fixed income at the amortized cost with discounts or premiums amortized using the effective interest rate method, and zero coupon bond accreted using the scientific method. Gains and losses on securities sold must be recognized on the basis of the average cost of the securities.

1.8. Perform reconciliation and closing:

1.8.1. For month-end, within seven (7) business days of the last day of each month

1.8.2. For fiscal year end, within seven (7) days of June 30

1.8.3. Develop a decision criterion, a process for correction, and communication with ASRS for re-opening the books in the event of a material error identified by ASRS, Contractor, auditors, actuaries or other ASRS Contractors.

1.9. Provide ongoing updates, information and training concerning new investment instrument and accounting issues surrounding various investment types.

1.10. Provide technical assistance in implementing released pronouncements issued by the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB).

1.11. Provide an accounting system administrator to be available to ASRS by telephone between the hours of 7:00 AM and 5:00 PM Mountain Standard Time.

1.12. Provide access to the custody platform to ASRS external managers to reconcile valuations to the ASRS accounting book of record and to send the reconciliation to Contractor by the agreed upon timeframe

1.12.1. Notify ASRS as soon as is practicable if an external manager fails to deliver completed reconciliation.

2. Unitization

ASRS maintains four different plans under one asset allocation and is using a Total Trust composite wrapper to track the fund level ownership. Therefore, Contractor must:

2.1. Have the ability to use plan level allocation to adjust amounts for each fund maintained by ASRS and process the transactions on a daily basis.

2.2. Perform a daily validation that the shares outstanding of the composited portfolio equals the sum of all the shares held by the participating plan.

2.3. Ensure that NAV/share of the composite portfolio matches the price applied to the position for all plans that hold the composite to ensure consistency between plan and accuracy.

2.4. Assist ASRS with impact and handling from a fund perspective of the total fund wrapper and associated share

Description: Custodian and Investment Services price, if ASRS applies “operational leverage”, up to 5% of Assets Under Management (AUM).

3. Pricing and Market Data

3.1. Obtain pricing feeds from multiple suppliers on a daily basis.

3.2. Establish a pricing matrix with ASRS, determining primary, secondary and tertiary pricing sources.

3.2.1. Follow procedures to use approved backup pricing sources when primary sources are unavailable according to the pricing matrix.

3.2.2. For non-supplier pricing sources, Contractor will price line item, non-custody funds (such as hedge funds, and limited partnerships, commingled funds, real estate funds or similar investment vehicles that do not actively trade through established exchanges) using general or managing partner, or investment manager as per the pricing matrix and will make reasonable efforts to validate market value statements received from third parties.

3.3. Price all ASRS securities of the same type on a consistent basis so those with the same identification number have the same price across all accounts and all NAVs are calculated using the same pricing inputs.

3.4. Accept and resolve, in good faith, price challenges from or on behalf of ASRS on a periodic basis. The price challenge will include:

3.4.1. The date, security, Contractor price, proposed price and proposed price source

3.4.2. A status update to ASRS within three (3) business days of receipt, and notification of final resolution when achieved, which shall be within ten (10) business days, if feasible.

3.5. Provide stale price reporting to ASRS, which will consist of holdings that have not been priced within five (5) business days.

3.5.1. Evaluate why a stale price is being used to determine market value

3.5.2. If a stale price is being used in error, correct the issue prior to the month end closing deadline

3.5.3. Provide ASRS with an explanation of why any holdings remain stale priced by the month-end closing deadline

4. Derivatives

4.1. Provide custody trade capture services and accounting and reporting for:

4.1.1. Futures (including currency, equity index, commodity, fixed income)

4.1.2. Options (including currency, fixed income, options on futures, and equity index)

4.1.3. Currency hedging (net or gross settlement capabilities)

4.1.4. Swaps (including total return, interest rate, credit default, currency and custom baskets)

4.2. Provide the ability to process collateral on ASRS or fund manager instruction and provide timely settlement and reporting.

Description: Custodian and Investment Services

4.3. Track collateral delivered, report in the accounting system, and collect principal and income on securities held as collateral at a third party.

4.4. Provide tri-party collateral management and negotiate the applicable agreements with ASRS and the counterparty.

4.5. Support accounting and reporting for swaps, which includes both the leg- and contract- level for reporting.

5. Financial Reporting

5.1. Provide financial reporting that is in compliance and meets Governmental Accounting Standards Board (GASB), Financial Accounting Standards Board (FASB), through predefined reports, downloads, and graphics.

5.2. Provide reports that can be filtered for accounts, portfolios, date periods and other fields to provide for flexibility for

ASRS.

5.3. Monthly and quarterly reports:

5.3.1. The following reports shall be available online no later than seven (7) working days after the end of each month and the end of each quarter.

5.3.1.1. A balance sheet and income statement.

5.3.1.2. A security inventory report for book and market value.

5.3.1.3. A detail and summary Holdings Report based on ASRS specified asset allocations.

5.3.1.4. A transaction listing

5.3.1.5. Dividend income, interest receivable and amortization/accretion reports.

5.3.1.6. An aging of dividends and interest receivables.

5.4. At a minimum, make available to ASRS for download and further consumption the following reports:

5.4.1. Detail general ledger

5.4.2. Trial balance

5.4.3. Holdings, transactions and other pertinent investment data.

5.4.4. Detail transaction reports that include security purchases and settlement costs, sales, and income.

5.4.5. Reporting for GASB 40, 53 and 72 disclosure requirements at fiscal year end

5.4.6. Reporting for money weighted rate of return net of expense

5.4.7. Other reports as requested as GASB standards are updated or accounting needs change.

Contractor and ASRS will agree to an on-boarding timeline. Once both parties agree on-boarding processes are complete, Contractor will:

D. INVESTMENT MANAGEMENT SUPPORT

Description: Custodian and Investment Services

1. Provide lifecycle management for setting up external investment managers, including

1.1. Standard opening process

1.2. Obtaining compliance documentation

1.3. Granting system access for a specified portfolio

1.4. Reconciling manager portfolio with manager’s monthly reconciliation

1.5. Processing manager termination as requested by ASRS

2. Provide claims support, processes to capture in-bound claims, tracking, claim investigation and issue claims as indicated below.

2.1. In the event of a claim, if the fault is with the:

2.1.1. Third party (broker/custodian) - the third party will be responsible for paying the claim.

2.1.2. ASRS broker - Contractor will escalate to the broker for payment and resolution.

2.1.3. ASRS - Contractor will escalate to ASRS for payment and resolution.

2.1.4. Contractor - Contractor will pay the claim and determine a resolution, which will be communicated to ASRS as soon as is practicable.

2.2. Collect and remit claim funds irrespective of at-fault party.

2.3. Perform a claims investigation and issue the claim to the at-fault party

2.4. Provide a claims report on a monthly basis to ASRS.

1. Interface directly with general partners and/or third party administrators and, to the extent Contractor is able to obtain information from such parties, obtain financial statements, valuations, fee information, capital calls, distributions, records of unfunded commitments (including amounts attributable to distributions that are subject to recall), and other relevant documents and communication.

2. Capture and upload information to an accounting system, searchable database, and cash management system in a timely manner.

3. Provide a standard process for setting up alternative investments, with the ability to set custom groupings for ASRS reporting and analytic purposes.

4. Process capital calls and distributions and record the activity in the accounting information system so that attributes

(investment, expense, manager fees, return on capital, realized gain, etc.) are able to be reported and reconciled to the partnership capital account statements and Institutional Limited Partners Association (ILPA) reporting .

5. Process cash flow processing for capital call management, matching the capital call instructions to a set of standing instructions before releasing payment.

5.1. Work with ASRS and/or its designee and the general partner/third party administrator to resolve any differences.

6. Provide audit and reconciliation services:

E. ALTERNATIVE ASSETS

Description: Custodian and Investment Services

6.1. Adjust valuations of partnerships and similar vehicle as they occur and as valuation statements are processed

6.2. Reconcile cash flows to those reported by the general partner upon receipt of capital call statements

6.3. Reconcile unfunded commitments on a quarterly basis

6.4. Perform a detailed reconciliation of manager fees, performance fees and expenses, incentive fees or carried interest, and placement fees for limited partnership investments based on the ILPA reporting template or other agreed upon document.

7. Provide fee transparency data through customizable and standard reporting.

8. Provide holding-level analysis of limited partnerships, including investment level transparency into exposures and investments contained within the limited partnerships.

9. Process and account for in-kind distributions received from an alternative asset consistent with ASRS accounting procedures; receive securities into a segregated stock account in custody.

10. Provide alternate investment performance metrics:

10.1. On a quarter-lagged and on a non-lagged basis

10.2. Using Internal Rates of Return measuring on a quarter, one-year, fiscal year, three-year, five-year, ten-year and inception to date

11. Prove through an online platform the ability to search, query, and download documents, calculations and data.

1. Performance and Reporting

1.1. Have a multi-asset class performance and analytics system (“performance system”), with flexible classification, reporting, and analysis options, for providing performance measurement for daily and monthly time periods. The performance system must:

1.1.1. Calculate returns on gross of fees, net of all manager fees or net of all fees, and security level returns.

1.1.2. Calculate returns on the Modified Dietz methodology and daily returns linked to generate extended time-weighted rates of return.

1.1.3. Be fully integrated with Contractor’s IBOR and accounting and reporting system, including account and security reference files.

1.1.4. Load all available history on new benchmarks from suppliers.

1.1.5. Build custom benchmarks, including lagged-return benchmarks for alternative investments.

1.1.6. Provide capabilities to calculate returns on ad-hoc portfolios and composites, with an asset weighted benchmark using custom dates and drill down capabilities to the security level.

1.2. Will not restate performance unless approval is provided by ASRS; if approved, the revision will occur without undue delay and by agreed upon timelines.

F. PERFORMANCE ANALYTICS

Description: Custodian and Investment Services

1.3. Close monthly performance three (3) business days after accounting has completed a hard close on all accounts.

1.4. Provide ASRS the ability to download files, reports, graphics and analysis through Contractor’s online platform or as a data feed.

2. Attribution Analytics

2.1. Provide performance attribution analytics for ASRS internal investment managers to assess investment strategies and that.

2.1.1. Measure investment allocation and security selection effects, interaction effect, currency and total effect

2.1.2. Allow for multi-period attribution and have the ability to be applied to one or multiple accounts, portfolio or fund

3. Risk Analytics

3.1. Provide and assist ASRS with risk analytics, if requested.

4. Investment Compliance Monitoring

4.1. Provide compliance monitoring services on the fund, portfolios and accounts of ASRS.

4.2. Work with ASRS investment staff to establish and maintain compliance guidelines for new and existing funds, portfolios and accounts.

4.3. Inform ASRS, in writing, of any applicable licensing fees or contractual obligations prior to implementation of fund, portfolio or account.

4.4. For post-trade compliance:

4.4.1. Work closely with ASRS to interpret portfolio and manager specific investment guidelines applicable to

ASRS’s externally and internally managed portfolios and advise on different compliance monitoring approaches.

4.4.2. Implement the agreed upon monitoring approach.

4.4.3. Maintain existing investment guidelines and tests and make applicable changes requested by ASRS.

4.4.4. Monitor prohibited Transactions.

4.5. For statutory compliance:

4.5.1. Provide clarification of portfolio and manager-specific investment guidelines and other guidelines provided by ASRS, including those that may be based on applicable state and federal mandated investment rules (such as CFTC, SEC, US Treasury Department) and any other applicable rules and regulations.

4.5.2. Establish and modify, as necessary, applicable guidelines, rules and regulations.

4.5.3. Provide alert validation with investment managers.

4.5.4. Provide validation and exception research.

Description: Custodian and Investment Services

4.6. Provide comments and research online via Contractor’s Compliance Monitoring service accessible by ASRS.

4.7. Provide a summarized compliance report to ASRS each month with warnings, violations and state statutory compliance to ASRS.

1. Provide an automated cash processing system to process capital calls, distributions, fund transfers, check requests, wires, foreign exchange or other cash related activity.

1.1. Provide reports on cash which include transaction reporting, ending balances, sweep security and positions, unsettled transactions, cash balances at the fund and composite level accessible by online reporting platform.

1.2. Provide system controls to ensure that only authorized ASRS personnel are able to initiate, review, or approve transactions.

1.3. Provide a list of authorized personnel to be reviewed by the ASRS Controller and CFO, not less than semi-annually on March 31 and September 30.

1.4. The automated cash processing system will have the ability to customize various approval workflows for wires, with up to four approval steps.

1.5. In conjunction with ASRS, the Contractor will conduct an annual review of stale wire instructions.

2. Maintain daily sweep activity for the purpose of transferring uncommitted funds between individual external manager and the ASRS’s internal custody accounts and the ASRS’s cash management account.

3. Remit cash receipts by wire of electronic fund transfer (EFT) on the payable date for dividends, bond interest, and principal and mortgage/asset backed principal and interest payments.

4. Work with ASRS to complete a manual wire transfer should Contractor’s cash flow management system platform be unavailable.

5. Assist ASRS with capital calls and distributions, and other transactions denominated in currency other than USD.

6. Provide an overnight investment vehicle to zero balance the ASRS’s Demand Deposit Accounts (DDA) daily.

7. Credit ASRS with the benefit of all floats on transactions, including failed trades.

8. Collateralize all ASRS funds on deposit with the custody bank.

9. Provide time and date stamps on all wire activity and Federal Reserve reference numbers for wires as needed and upon ASRS request.

10. Provide an audit trail, which can be accessed at any time by authorized users, of each user profile and workstation for all cash movement transactions.

11. Maintain complete legal or service authorizations on file resulting from additions or changes to: services, authorized persons, third-party supplier relationships, legal status or other changes as they occur.

12. Accept and maintain a schedule of standing instructions from ASRS that includes effective and termination dates of instructions; provide ASRS with this schedule and copies of instructions for review semi-annually to ensure ongoing

G. CASH MANAGEMENT

Description: Custodian and Investment Services and mutual understanding of all standing instructions being used.

CUSTODY AGREEMENT

Description: Custodian and Investment Services

This Agreement (this “Agreement”), between Arizona State Retirement System, hereinafter called the "ASRS," and The Bank of New York Mellon, a bank organized under the laws of the state of New York, hereinafter called the "Custodian," is a part of Contract # CTR054503 effective as of July 1, 2021 (the “Effective Date”), hereafter referred to as “the Contract”. Terms used but not defined in the Agreement have the meanings specified in Exhibit A.

WITNESSETH:

For good and valuable consideration, including without limitation the mutual covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the ASRS and the Custodian agree as follows:

1. Agreement. The documents comprising this Agreement shall be as follows:

a. Contract Documents. To the extent not otherwise specified herein, the parties agree that the services to be provided by Custodian pursuant to this Agreement shall be provided in the manner specified in the Contract. To the extent of any conflict amongst this Agreement, Contract Order of Precedence as indicated in Section 2.3 (Contract Interpretation) of the Uniform Terms and Conditions shall apply.

b. Amendments. Amendments made to this Agreement shall be in accordance with Section 5.1 (Amendments) of the Uniform Terms and Conditions and shall be considered part of the Agreement.

2. Standard of Care. Custodian shall perform all services that it has agreed to hereunder and in accordance with the

Contract (including but not limited to the safe keeping and custody of all Assets received by it pursuant to this Agreement) with the care, skill, diligence, and responsibility of a professional custodian familiar with such matters and acting in a like capacity in the conduct of an enterprise of like character and with like aims (herein, Custodian's "Standard of Care"). Custodian does not exercise any discretionary authority or discretionary control with respect to the management or disposition of assets of the Accounts. Custodian's Standard of Care shall apply to all services that it performs hereunder and shall be adhered to by Custodian at all times. Notwithstanding any other provision in this Agreement, Custodian's Standard of Care is incorporated in and applies to each and every provision of this Agreement and the Contract, setting forth the services to be performed by Custodian and each and every such provision is subject to the Standard of Care unless such other provision (if any) specifically and unequivocally states that Custodian's Standard of Care does not apply to a specifically identified service, in which case the specified standard of care shall apply or, if no standard of care is specified, then the Custodian shall use reasonable care.

The provisions of this paragraph shall survive termination of this Agreement during any period in which Custodian is providing transition services.

3. Tax-exempt. ASRS represents that the Fund is a tax-exempt organization described in Section 40l(a) of the Internal Revenue Code ("Code") and that all gains and income associated with the assets of the Accounts are exempt from federal income tax under Section 50l(a) of the Code; ASRS agrees to promptly inform Custodian of any change in the tax exempt status of the Fund; Custodian shall have no obligation to provide tax information or tax-related reports, except as agreed upon by Custodian in writing.

4. Holding.

a. ASRS hereby appoints Custodian as custodian of all cash and securities to be held under this Agreement (collectively, “Assets” or “assets”), and Custodian hereby accepts such appointment.

b. Custodian shall hold and safeguard the cash, securities, and other property in the Accounts and shall collect the income and principal thereof when due.

5. Name. Custodian will establish and maintain one or more accounts in which Custodian will hold the Assets (each an

“Account” or a “Separate Account”, and collectively the “Accounts”). Custodian may hold cash, securities or other property of each Separate Account through an agent or in the name of its nominee or in a Depository or federal book entry account system or other form as it deems best and consistent with this Agreement. Custodian, or its designee, shall forward any proxies relating to securities or other property held in the Account to the appropriate investment manager, or, in accounts where no investment manager has been appointed, to ASRS or ASRS's designee, and Custodian, or its designee, shall process such proxies as directed by the investment manager, ASRS or ASRS's designee.

6. Transactions.

Description: Custodian and Investment Services

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a. With respect to a Separate Account managed by ASRS, all security transactions shall be placed through brokers of ASRS's choice. Each investment manager appointed by ASRS is authorized to execute security trades directly with respect to its respective Separate Account. Custodian is hereby directed to receive and pay for securities purchased, and to deliver securities sold, by ASRS or by an investment manager. Unless ASRS directs otherwise in writing, ASRS agrees not to receive separate notifications of securities transactions and that all securities transactions will be reported on ASRS's periodic statements of account. Under no circumstance shall Custodian pay any money to an investment manager except pursuant to written instructions by ASRS. Custodian shall issue its operating instructions to ASRS and to an investment manager as it deems appropriate.

b. Settlement of Securities Transactions. Promptly after the execution of each securities transaction, ASRS’s Authorized Persons will issue to Custodian Instructions to settle such securities transaction. Unless otherwise agreed by Custodian, Assets will be credited to the relevant Account only when actually received by Custodian.

For the purpose of settling a securities transaction, ASRS will provide Custodian with sufficient immediately available funds or securities, as applicable, by such time and date as is required to enable Custodian to settle such transaction in the country of settlement and in the currency to be used to settle such transaction.

Securities transactions will be settled using practices customary in the jurisdiction or market where the transaction occurs, which may include the delivery of Securities or Cash to a counterparty or its agents against, as applicable, the receipt of securities or cash in the future. Customer assumes full responsibility for all risks involved in connection with Custodian’s delivery of Securities or Cash in accordance with such practices.

7. Provisional Credits. Custodian is authorized, but shall not be obligated, to credit the Account provisionally on payable date with the proceeds resulting from the purchase, sale, redemption or other delivery or receipt of securities or interest, dividends, distributions, margin, collateral or other amounts due, prior to its actual receipt thereof. Otherwise, such amounts will be credited to the Account on the date such amounts are actually received by Custodian and reconciled to the Account. In cases where Custodian has credited the Account with such amounts prior to actual collection and reconciliation, ASRS agrees that Custodian may reverse such credit as of payable date if and to the extent that it does not receive such amounts. ASRS acknowledges that Custodian shall be entitled to recover on demand such provisional credit plus accrued interest at a rate then charged by Custodian to its institutional custody clients in the relevant currency and its overdraft fee, as set forth in the Pricing Schedule (as hereinafter defined), in connection with such provisional credit. The Parties acknowledge that any additional fees will be assessed only by mutual agreement.

8. Advances. Custodian is authorized, but shall not be obligated, to advance its own funds to complete transactions in cases where adequate funds may not otherwise be available to the Account. ASRS acknowledges that Custodian shall be entitled to repayment of any amounts advanced plus accrued interest at a rate then charged by Custodian to its institutional custody clients in the relevant currency and its overdraft fee, as set forth in the Pricing Schedule, in connection with advancing such funds. The Parties acknowledge that any additional fees will be assessed only by mutual agreement.

9. Accommodation. ASRS recognizes that any decision to effect a provisional credit or an advancement of Custodian's own funds to the Account pursuant to this Agreement will be an accommodation granted entirely at Custodian's option and in light of the particular circumstances, which circumstances may involve conditions in different countries, markets and classes of assets at different times. All amounts thus due to Custodian under this Agreement with respect to a provisional credit or advancement of Custodian's funds to the Account shall be paid by Custodian from the Account unless otherwise paid by ASRS on a timely basis and in that connection ASRS grants to Custodian a continuing security interest in and lien on all Account assets to secure such payments and agrees that Custodian will be entitled to set off against and collect from the Accounts sufficient Cash for reimbursement after providing ASRS with written notification of insufficient funds and allowing reasonable time for ASRS to act to replenish Cash for Custodian’s reimbursement. If funds in the Account are insufficient to make any such payment, ASRS shall promptly deliver to Custodian the amount of such deficiency in immediately available funds when and as specified by Custodian's written or oral notification. Custodian shall be entitled to sell Securities to the extent necessary to obtain reimbursement.