S000000143 Global Custody Services Q and A~2.pdf

# Question Reference Question Answer

General Questions- Technical

Proposal Packet-S000000143 What is the funds fiscal year-end? 30-Jun

General Questions- Technical

Proposal Packet-S000000143

In addition to the information in the RFP, are there any areas of focus that may be of particular concern for your Client, or that have prompted the request for information, that would assist us in customizing our RFP response?

The ability to implement on the Arkansas Treasury's requisite timeline.

General Questions- Technical

Proposal Packet-S000000143

Technical Proposal Packet-S000000143, Information For

Evaluation-Solution section notes:

?Using this template, Prospective Contractors should include a narrative to address and provide a high-level overview of the solution and/or approach proposed using the requirements outlined in the Solicitation.?

Is there a template you would like us to use as one was not provided?

Prospective Contractors may use the blank page provided as a template to submit their response to the Solution portion.

Accounts and Market Value-

S000000143

Please provide a holdings reporting in excel with the following information:

Date (holdings as of)

Account/Fund Name

Number of Shares

Valid Security Identifiers (CUSIP, Sedol)

Security Name

Market Values

See , "Attachment A State of Arkansas Investment

Holdings Report 6-30-22 "

Accounts and Market Value-

S000000143

Market Value of any bank loan assets and annual transactions

Total number of individual positions held by country.

The Arkansas Treasury neither holds nor transacts bank loan assets. Please see "Attachment B Permitted

Investments and Restrictions 7-15-22. " All assets are dollar denominated. All Commercial Paper is held in DTC.

Accounts and Market Value-

S000000143

Please supply a breakdown, by type, of the funds (mutual funds, commingled funds, limited partnerships, hedge funds, etc.)

Please note that we are primarily interested in the total number of fund investments and not in the number of accounts the fund investments are held (if the totals vary).

See , "Attachment A State of Arkansas Investment

Holdings Report 6-30-22 "

7 Transactions-S000000143

Please provide the following information:

Number of buy/sell trades per annum, by country held

Number of wires

Number of Derivative transactions (Swaps, Options, Futures)

See RFP for trade and wire numbers. See " Attachment B

Permitted Investments and Restrictions 7-15-22. "

8 Cash Management-S000000143

What is the estimated average daily cash balance held in the current custodians sweep vehicle?

What type of constant net asset value (CNAV) Money Market

Funds (MMF) are you permitted to invest in?

Ideally, the daily cash balance should be zero--though there are infrequent exceptions. See , "Attachment B

Permitted Investments and Restrictions 7-15-22."

9 Cash Management-S000000143 Are you allowed to invest in Prime fluctuation net asset value

(FNAV) MMF?s? If yes, is this under consideration?

See, " Attachment B Permitted Investments and

Restrictions 7-15-22. "

10 Cash Management-S000000143 Are you comfortable with Bank balance sheet deposits? If yes, what range of rates are you currently receiving?

No.

11 Cash Management-S000000143

For cash that is kept at your Demand Deposit Account (DDA)

Banks, does excess amounts get swept out nightly and invested in MMF?s? If yes, which funds (cusip and/or ticker)?

No. Our DDA does not have a sweep attached to it.

Excess funds are manually moved to a MMF.

12 Cash Management-S000000143

Do you have MMF investment concentration limits? If yes, is it a set dollar amount or a % of the Asset Under Management of a specific fund?

Can you provide a list of MMF?s that you currently invest excess overnight cash in? And can you share your reasoning behind choosing these funds?

See "Attachment B Permitted Investments and

Restrictions 7-15-22. " Also see, "Attachment C State of

Arkansas Money Market Report 6-30-22"

13 Cash Management-S000000143

For commercial paper (CP), do you transact directly with a CP trading desk at a specific institution? If yes, who and how many?

Do you use Bloombergs? BOOM for your CP trading activity?

What type of CP are you authorized to buy? Is it rating based or do you underwrite specific names?

The Arkansas Treasury utilizes multiple dealers through

Bloomberg BOOM. See, "Attachment B Permitted

Investments and Restrictions 7-15-22. "

14 Cash Management-S000000143 Are you familiar with the FDIC Insured Cash Sweep product?

Would you consider investing in this category?

Yes, the Arkansas Treasury is familiar with the FDIC

Insured Cash Sweep product. That product is not under consideration at this time.

15 Cash Management-S000000143 Are you familiar with Short Duration Exchange Traded Funds

(ETF)?s? Would you consider investing in this category?

See, "Attachment B Permitted Investments and

Restrictions 7-15-22 ."

S000000143

Written Questions

State of Arkansas-Arkansas Treasurer of State’s Office

Global Custody Services

REPO Trading and Related Services-

S000000143

Does Arkansas trade repo today?

If yes, does Arkansas invest cash, or raise cash? What collateral types, tenor ? overnight or term, haircuts? How many dealer relationships?

We are not currently trading repurchase agreements at this time.

REPO Trading and Related Services-

S000000143

Is Arkansas looking to invest cash and buy repo as an investment or is repo a way to raise cash (example: Arkansas raising cash, repo out agency mortgage bond collateral)?

Does Arkansas require the custodian to be a bilateral repo counterparty?

See, "Attachment B Permitted Investments and

Restrictions 7-15-22 ."

REPO Trading and Related Services-

S000000143

Is Arkansas familiar with and trade FICC Sponsored Cleared

Repo ?

If so, is this as a cash or collateral provider?

If not, please note that FICC requires representation that

Arkansas entity is a Qualified Institutional Buyer (QIB) and transacts under NY Law.

If interested in pursuing FICC Repo, is Arkansas a QIB and able to transact under NY Law?

See, "Attachment B Permitted Investments and

Restrictions 7-15-22 ."

REPO Trading and Related Services-

S000000143

What investment options would Arkansas consider for late night investment?

When does Arkansas know their final cash number to be invested?

How stable is that end of day balance ?

Not applicable.

Performance Measurement and related services-S000000143

Please indicate if the following services are utilized today or if there is an interest in the following:

Monthly returns

Analytics or look-thru analytics

Custom benchmarks

Monthly Attribution

Universe Comparison (Peer and Manager Universes)

Compliance Monitoring

If yes, daily or monthly?

The Arkansas Treasury was not using these products with or through its previous custodian. The Arkansas Treasury is always interested in products that could maximize the services it provides to the citizens of Arkansas. However, those items are not within the scope of this RFP.

Prospective Contractors should utilize the Recommended

Options form to propose services related to the scope of this RFP.

21 Providing a Price Quote Could you provide the average monthly transaction volumes for this portfolio?

Please see Section 2.1 of the RFP.

22 Providing a Price Quote

What is the portfolio's target allocation of the Money Market

Funds? Would you consider using a providers proprietary

Money Market Fund?

The Arkansas Treasury does not have a target allocation for MMFs. The Arkansas Treasury is always interested in products that could maximize the services it provides to the citizens of Arkansas. However, those items are not within the scope of this RFP. Prospective Contractors should utilize the Recommended Options form to propose services related to the scope of this RFP.

Section 1.2 Global Custody Provider

RFP document

Could you explain what the live proposal opening? Did this event already occur?

The live proposal opening will take place at the Proposal

Opening Date/Time specified on page one of the RFP.

24 Plan volumes and service needs

Please provide an account schematic showing the number of accounts with your current custodian and an indication as to whether they are actively managed (discrete securities) or line items (mutual funds/hedge etc.)

See, "Attachment F Account Schematic "

25 Plan volumes and service needs

Please provide an Excel based asset list for each account

(separately managed and single line asset) that includes the asset description, market value in USD and country of settlement (where the asset is held by the current custodian).

See, "Attachment A State of Arkansas Investment

Holdings Report 6-30-22 "

26 Plan volumes and service needs

Please provide annualized trade volumes for the following if applicable for your portfolio:

? # of US equity trades

? # of US corporate bond trades

? # of US Government bond trades

? # of US Agency trades

? # of Non-U.S. trades by country and currency

? # of US single line asset trades by each asset type - MF trades, LP transactions, Hedge Funds, Capital Calls etc

? # Bank loan transactions

? # of third party FX transactions

? # futures/option buy/sells

? # of margin movements

? # of OTC and Exchange traded derivatives buy/sell transactions (separate buy and sell listing)

? # of outgoing wire transfers

See, "Attachment A State of Arkansas Investment

Holdings Report 6-30-222 "

27 Plan volumes and service needs Are performance measurement services required and, if so, which services?

Performance measurement services are not required.

The Arkansas Treasury is always interested in products that could maximize the services it provides to the citizens of Arkansas. However, those items are not within the scope of this RFP. Prospective Contractors should utilize the Recommended Options form to propose services related to the scope of this RFP.

28 Plan volumes and service needs Please provide the average balance invested in the STIF offered by the current custodian.

Sweep accounts are used infrequently and only when necessary.

29 RFP, page 9, Section 2.7c.:

Under required services Contractual Settlement is specified.

Given the low rate of fails in U.S. markets will you accept Actual settlement?

Contractual Settlement is preferred at this time.

30 RFP, page 8, Section 2.5j.:

In regard to your requirement that the Contractor shall have an overnight investment vehicle for all funds remaining in or received by the Office account(s) after 3 p.m. central time each day. Can you advise if a 2 p.m. CT cutoff is acceptable if the 2 p.m. sweeps projected cash (settlements and pending cash disbursements/receipts)?

No. 2 p.m. is not acceptable.

31 RFP, page 4, Section 4.b.:

Is the Voluntary Product Accessibility Template (VPAT) applicable? If yes, can the Department provide a copy?

If required, the VPAT template can be found at https://www.section508.gov/sell/vpat/ .

RFP, page 11, Section 2.16-

Performance Standards:

Subsection A indicates that State law requires qualifying contracts for services include Performance Standards. Is it required that the contract for these custody services include

Performance Standards? If yes, would custodian be subject to monetary or other penalties if it does not satisfy such standards?

Performance standards can be negotiated during the

Discussions Phase.

MASTER-Solicitation Terms and

Conditions, page 6, Section 21:

Which of the specific standards within the State?s shared

Technical Architecture Program shall apply to global custody services?

Prospective Contractors should review the policies to determine if their proposal complies with the policies and standards set forth in the Technical Architecture Program.

34 Services-Contract, page 4, Item 11:

a. Can the Department provide copies of Executive Order 98-

04 and the Regulations pursuant thereto?

b. Is the ?Contract and Grant Disclosure and Certification

Form? (?Form?) the same as the ?Attachment #1-Certification of Contractor?? If not, can the Department provide a copy of the Form?

A copy of the Contract and Grant Disclosure form is posted with the solicitation.

Services-Contract, page 8, Attachment #1-Certification of

Contractor:

Subsection B. requires a ?List of any other contracts or subcontracts Contractor has with any other state government entities?, and other text in that Attachment #1 use lower-case

?state?. Is lower-case ?state? making reference to Arkansas?

Attachment #1 references lower-case 'state'. Prospective

Contractors can discuss with the State how extensive this response should be during the Discussions Phase.

36 2.13 Disaster Recovery Plan (E)

We conduct tests for Disaster Recovery at pre-determined schedules during the year. We usually do not perform testing on a one off basis. Please clarify or provide additional color for this request.

Please see Section 2.13 of S000000143 Global Custody

Provider RFP Revised.

37 2.13 Disaster Recovery Plan

Disaster Recovery is proprietary to most financial organizations.

Since Public Fund bids can be subject to FOIA requests and/or

Sunshine Laws, we may offer an alternative such as an information sharing session

Please see Section 2.13 of S000000143 Global Custody

Provider RFP Revised.

38 1.8 Response Documents 3(g)

Internal Policies such as EEOC are proprietary Since Public

Fund bids can be subject to FOIA requests and/or Sunshine

Laws, we may offer an alternative such as an information sharing session or a comfort letter

Please see Section 2.13 of S000000143 Global Custody

Provider RFP Revised.

39 2.11 Audit & Control

Internal Audit Reports and SOC Reports are proprietary. Since

Public Fund bids can be subject to FOIA requests and/or

Sunshine Laws, we may offer an alternative such as an information sharing session where you can view the documents and confirm that the controls are sufficient to satisfy your requirements.

Please see Section 2.13 of S000000143 Global Custody

Provider RFP Revised.

2.13 DISASTER REOVERY &

BUSINESS CONTINUITY 3 (C)

Could you provide an example of what you are currently receiving for this requirement. "The Contractor shall furnish to the Contract Administrator or their designee an electronic daily report delineating the completion of that day?s backup, the status, and catalog of items backed up" We back up our systems but I don't believe I have ever seen a report like this for distribution to a client.

Please see Section 2.13 of S000000143 Global Custody

Provider RFP Revised .

41 Section 2.14 ? Pricing Structure

- Can a Prospective Contractor provide a separate pricing model in addition to the one requested in the MAP Price Sheet document?

It is allowable for a Prospective Contractor to submit a separate pricing model. However, only the MAP Price

Sheet will be evaluated for Cost Score.

Services Contract (SRV-1) Fillable

Form

To what extent the terms included within the SRV-1 form negotiable?

Per Section 1.10 of the RFP, please include any exceptions to the SRV-1 form on the Exceptions Form.

Services Contract (SRV-1) Fillable

Form

Would the Office be willing to accept a Prospective Contractor?s standard custody contract?

Per Section 1.10 of the RFP, please include any exceptions to the SRV-1 form on the Exceptions Form.

This should include proposing additional language.

Section 2.13 ? Disaster Recovery &

Business Continuity

Would a Prospective Contractor risk disqualification if it did not meet all the stated requirements related to disaster recovery / business continuity?

Please see Section 2.13 of S000000143 Global Custody

Provider RFP Revised.

Section 2.13: Disaster Recovery &

Business Continuity

To what extent would the Office be willing to consider alternative procedures around business recovery?

Please see Section 2.13 of S000000143 Global Custody

Provider RFP Revised .

46 Section 2.5: General Requirements Can the Office please share an updated account schematic? See, "Attachment F Account Schematic "

47 Section 2.5: General Requirements Can the Office please confirm whether accounting services are in scope for this RFP?

The Arkansas Treasury is always interested in products that could maximize the services it provides to the citizens of Arkansas. However, Accounting Services are not within the scope of this RFP. Prospective Contractors should utilize the Recommended Options form to propose services related to the scope of this RFP.

48 Section 2.5: General Requirements

Can the Office please provide the following: 1) Expected number of individual accounts, total number of CUSIPs and average CUSIP per account; 2) A sample settled positions report and account statement report; 3) Average monthly transaction count in 2021 and YTD2022

The Arkansas Treasury currently has 7 subaccounts. See, Attachment D Positions Report , Attachment E Daily

Transactions, and Section 2.1 of the RFP for average transactions.

49 Section 2.5: General Requirements

Does the Office utilize its current custodian?s sweep platform ?

is it active or passive? Can the Office provide average cash balance, currency, investment cutoff time and ticker for current fund(s) it sweeps to?

Yes. However, sweep accounts are only used when necessary. Ideally, the Arkansas Treasury carries zero cash balance. The current custodian's sweep platform is used infrequently.

50 Section 2.5: General Requirements

Does the Office participate in a deposit program with your current custodian? If so, can the Office provide average cash balance and currency? If not, would the Office be open to leaving participating in a deposit program with the new

Contractor?

No. The Arkansas Treasury is always interested in products that could maximize the services it provides to the citizens of Arkansas. However, those services are not within the scope of this RFP. Prospective Contractors should utilize the Recommended Options form to propose services related to the scope of this RFP.

51 Section 2.5: General Requirements For cash movements, what is the Office?s method of instruction

(e.g. SWIFT, Fax)

The Arkansas Treasury currently uses wire transactions within the current custodian's proprietary system.