RFI_30901-64426_Collateral_Pool_Solution.pdf

STATE OF TENNESSEE

DEPARTMENT OF TREASURY

REQUEST FOR INFORMATION

FOR

COLLATERAL POOL SOLUTION

RFI # 30901-64426

OCTOBER 1, 2025

1. STATEMENT OF PURPOSE:

The State of Tennessee, Department of Treasury (“Treasury”) issues this Request for Information (“RFI”) for the purpose of soliciting information from the vendor community to assist Treasury in performing analysis of software solutions available to meet Treasury’s need for enhancing or replacing Treasury’s electronic collateral management system used to administer the Tennessee Collateral Pool Program and the State Depository Program. Both of these Programs require collateral to secure public deposits covered by the Programs. Ideally, this would be one system that can maintain a database of over 100 Collateral Pool bank participants, approximately 50 state depository banks, 15 separate collateral safekeeping agents/trustee custodians, and over $12 billion in collateral with approximately 5,000 separate collateral positions. The new system must be able to migrate the data from Treasury’s current collateral management system into the new system in a harmonious, unified and coherent format. This system must also provide (i) web portal access for both Treasury and bank participants; (ii) daily pricing of collateral holdings with accurate PAR values and accurate Market Values; (iii) method of daily collateral sufficiency monitoring based off accurate Market Values; (iv) electronic collateral pledge and release requests processing; (v) resetting individual monthly collateral targets for each bank participant;

(vi) updates quarterly pledge level changes; (vii) method of monthly reconciliation with safekeeping agents, and (viii) efficient reporting with excel and pdf output options. Treasury has provided the questions below in an attempt to understand the services available. The information gathered during this process will be utilized by Treasury to determine the next steps required for a potential procurement. This request is strictly a mechanism for gathering information and will not constitute a procurement process. All vendors with appropriate product offerings and knowledge relating to the requirements described herein are invited to submit a response to this RFI. The response should discuss the vendor’s capabilities to provide products and assist Treasury in understanding product offering capacities. Responses should also address the functional, technical, and other questions specified in this RFP. We appreciate your input and participation in this process. agents/trustee custodians, and over $12 billion in collateral with approximately 5,000 separate collateral positions.

2. BACKGROUND:

Collateral is required to secure public deposits held in authorized depository institutions (both Tennessee state deposits and the deposits of Tennessee local governments). In general, State law sets the required collateral level at a market value of 105% of the value of the deposit secured, less the amount secured by the Federal Deposit Insurance Corporation. State law also sets forth the types of investment instruments that are eligible to be pledged as collateral. To hold Tennessee state deposits, a bank must be approved to be a State Depository (be a participant in the State’s Depository Program which is administered by Treasury). Alternatively, a State Depository may pledge collateral via the Collateral Pool Program if approved by the Collateral Pool Program Board. The Collateral Pool Program is also administered by Treasury and provides banks an alternative way to collateralize public deposits that is designed to provide greater efficiency and lower risk. The Collateral Pool Board has established minimum financial performance levels for applicants which must be met to ensure that Program risk is minimized.

All public funds (both Tennessee State and local government funds) held by a bank Pool participant are collateralized based on a collateral target calculated each month by the participant. The collateral target is based on the aggregate average balance of all public funds for the month multiplied by the pledge percentage level assigned to the participant by the Board.

The Board has established three different collateral pledge levels, which are currently 115 percent, 100 percent and 90 percent. The pledge level is based on financial criteria set by the Collateral Pool Board with the financially strongest institutions being eligible for the lowest pledge level.

Under the Collateral Pool, should a financial institution default with insufficient collateral to cover public deposits, then the other financial institutions participating in the Pool must make up the difference on a pro rata basis. Accordingly, public funds are not at risk in the Collateral Pool.

The Collateral Pool serves as a significant administrative advantage for local governments.

Under the Collateral Pool, Treasury, rather than the local government, is responsible for monitoring the pledge level; pricing collateral; reconciling collateral monthly with the trustee custodian; monitoring collateral; pledging, releasing and substituting collateral and maintaining a trustee custodian relationship.

Treasury currently utilizes a 3rd party vendor supported software application to support the Collateral Pool Program and State Depository Program which includes a Treasury database that connects real time to the Collateral Management System web portal. System functionality includes bank participant and account set-up and maintenance; initiating; processing and recording collateral pledge and release requests; checking and monitoring the sufficiency/deficiency of each bank in real time; communicating with, and posting messages for participant banks; allowing participants to view the securities pledged as collateral, the collateral target, market value of collateral pledged, surplus/deficiency of collateral pledged; participant ability to pledge and release securities; pre-population of pledge and release forms based on bank identification information; electronic submission of pledge and release forms; printing listing of securities pledged; participant editing of select information; Treasury staff ability to accept or deny pledges; notification when a bank participant fails to maintain minimum pledged collateral and ability to modify minimum threshold; alert treasury staff and the participant when the participant becomes deficient; system generation of a notification informing participants if security being pledged was not acceptable; and system generation of a confirmation notifying the participant bank and custodian bank that a security has been pledged to the state of Tennessee once approved by Treasury staff.

The new solution should be able to provide and service general State Depository and Collateral Pool activities via an all-in-one system or a database available to Treasury that has a web interface that is available to both Treasury and the participating banks with the following primary capabilities:

1) The ability to add and remove new bank participants and new safekeeping banks / trustee custodians. Once a new bank participant is set up by Treasury, the bank participant manages its user access going forward adding and deleting users as needed.

2) Login Process

3) Home Screen

a. Banner Section

b. Change Password

c. Bank Section

d. Notices Section

e. Participant Collateral Section

f. Securities Section

g. Administration Section

4) Pledge / Release Screen

a. Pledge / Release Screen

b. Release Collateral

c. Export Options – ability to export inventory of collateral holdings in excel or pdf

5) Transaction History Screen

a. View / Sort Transactions

b. Transaction History Headers

c. Transaction History Dates

d. Display Reject Reason

6) My Profile Screen – to edit user profile information

7) User Accounts Screen

a. Sort / retrieve users by using filters

b. Add new users

c. Reset passwords for users

d. Unlock / Inactivate Accounts

3. COMMUNICATIONS:

3.1. Please submit your response to this RFI via email to Dawn Rochelle at dawn.rochelle@tn.gov by no later than the Response Deadline date specified in Section 4, Schedule of Events, below. In the event your response with all attachments and supporting documentation will exceed fifteen (15) megabytes in total, please place the documents in a zip file or make two (2) or more submissions such that the documents, per email submission, do not exceed fifteen (15) megabytes.

3.2. Please feel free to contact Treasury with any questions regarding this RFI. The main point of contact will be:

Dawn Rochelle, Solicitation Coordinator Tennessee Department of Treasury Telephone: (615)253-8770 Email: dawn.rochelle@tn.gov

Note: If you have any questions or comments concerning this RFI, it is important you e-mail them to Dawn Rochelle (Treasury’s main point of contact) by no later than the Written Questions & Comments Deadline detailed in RFI Section 4, Schedule of Events.

Treasury will e-mail its responses to written questions and comments to prospective Respondents on the date detailed in RFI Section 4, Schedule of Events. Treasury will also post a copy of the amendment to the following website:

https://www.tn.gov/generalservices/procurement/central-procurement-office--cpo- /supplier-information/request-for-proposals--rfp--opportunities1.html

3.3. Please reference RFI # 30901-64426 with all communications to this RFI.

https://www.tn.gov/generalservices/procurement/central-procurement-office--cpo-/supplier-information/request-for-proposals--rfp--opportunities1.html https://www.tn.gov/generalservices/procurement/central-procurement-office--cpo-/supplier-information/request-for-proposals--rfp--opportunities1.html

4. RFI SCHEDULE OF EVENTS:

EVENT

TIME

(Central Time Zone)

DATE

(all dates are State business days)

1. RFI Issued October 1, 2025

2. Written “Questions & Comments” Deadline 2:00 p.m. October 15, 2025

3.

Treasury Response to Written “Questions and Comments”

October 29, 2025

4. RFI Response Deadline 2:00 p.m. November 19, 2025

5. GENERAL INFORMATION:

5.1. Please note that responding to this RFI is not a prerequisite for responding to any future solicitations related to this project and a response to this RFI will not create any contract rights. Responses to this RFI will become property of Treasury.

5.2. The information gathered during this RFI is part of an ongoing procurement. In order to prevent an unfair advantage among potential respondents, the RFI responses will not be available until after the completion of evaluation of any responses, proposals, or bids resulting from a Request for Qualifications, Request for Proposals, Invitation to Bid or other procurement method. In the event that Treasury chooses not to go further in the procurement process and responses are never evaluated, the responses to the procurement including the responses to the RFI, will be considered confidential by Treasury.

5.3. Treasury will not pay for any costs associated with responding to this RFI.

6. INFORMATIONAL FORMS:

Treasury is requesting the following information from all interested parties. Please fill out the following forms:

RFI #30901-64426

TECHNICAL INFORMATIONAL FORM

1. RESPONDENT LEGAL ENTITY NAME:

2. RESPONDENT CONTACT PERSON:

Name, Title:

Address:

Phone Number:

Email:

3. Please provide a brief description of Respondent’s experience providing similar scope of services/products.

4. Describe the solution’s ability to provide book-of-record services for a state Bank Collateral Pool Program with over $12 billion in pledged collateral, over 100 bank participants, and at least 14 different safekeepers/trustee custodians.

5. Does your solution provide a web portal that allows the participant banks to initiate collateral pledge and release requests electronically that also syncs to the book of record system real time?

If not, could you develop such a portal or provide an alternative solution? Please describe general information on the development process or alternative solution (level of effort, timeline, cost, etc.)

6. Describe how your system prices the collateral holdings to ensure accurate collateral market values are reflected. Include within your description the frequency of the collateral holdings pricing.

7. How does your system reconcile the collateral holdings of each participant with their custodian or custodians, and at what frequency does the reconciliation occur?

8. Describe your system’s reporting capabilities for monitoring collateral sufficiency for each bank participant on a daily basis and what output options exist (e.g. excel and pdf, etc.).

9. Describe how your solution allows the participant banks to initiate collateral pledge and release requests electronically and how those activities sync to the book of record system, including information on the time delay between transaction execution and syncing.

10. Does your organization currently provide services for any other state’s Bank Collateral Pool Program? If so, please disclose the names? If you cannot disclose the names, please provide general levels of service that would be helpful in understanding what additional functionality your system can provide.

11. Describe how the solution can implement appropriate RBAC (Role Based Access Control) covering items such as segregations of duties and the capability to manage the functionality to create/modify user groups, roles, permission, users, and access privileges.

12. Describe how the solution’s security aligns with the NIST Cybersecurity Framework (CSF) to include the implementation of key NIST 800.53 Security Controls. How would you work with Treasury in completing a System Security Plan based on your proposed solution and meeting state cybersecurity requirements?

COST INFORMATIONAL FORM

1. Describe what pricing units you typically utilize for similar services or goods (e.g., per hour, each, etc.:

2. Describe the typical price range for similar services or goods:

ADDITIONAL CONSIDERATIONS

1. Please provide input on alternative approaches or additional things to consider that might benefit Treasury:

2. If your company has recently responded to a public solicitation for similar services described in this RFI, please describe how Treasury can access the solicitation and your response.