RFP Custodies and Securities Lending Services

Background
The City of Los Angeles, California, is the second most populous city in the United States, with an estimated population of approximately 3.8 million residents as of 2025. The City expends several billion dollars annually for goods and services. The Office of Finance plays a critical role in managing the City's financial operations, including the custody and investment of over $18 billion in assets. This RFP seeks proposals from qualified financial institutions to provide Custodial Services for the City's securities and cash assets, along with associated Securities Lending Services.

Work Details
The selected service provider will be responsible for:

1. **Custody Services**:
- Maintaining records for securities held in custody per GAAP standards.
- Ensuring compliance with applicable laws regarding investment transactions.
- Monitoring and recording fund collections on behalf of the City.
- Providing monthly activity statements and reports, including market valuations.
- Daily market valuations for all custodied securities.
- Auto-sending daily portfolio holdings reports to third-party vendors.
- Offering real-time queries and reports via web portal access.

2. **Securities Lending Services**:
- Entering agreements with borrowers and negotiating fees.
- Delivering securities held in the City’s custodian clearing account to eligible borrowers.
- Receiving collateral at a minimum value of 102% of loaned securities' market value.
- Holding collateral to maintain a perfected interest at all times.
- Investing cash collateral according to the City's Investment Policy.
- Remitting interest payments on loaned securities to the City and performing ongoing credit monitoring of borrowers.

Period of Performance
The contract is anticipated to have an initial term of five (5) years, with a potential extension for an additional five (5) years upon mutual agreement.

Place of Performance
Services will be performed within the jurisdiction of the City of Los Angeles.

Bidder Requirements
Proposers must meet specific criteria:

1. Be a state or national bank or federally insured institution.
2. Have at least ten (10) years in investment custody business with five (5) years providing services for clients with assets exceeding $5 billion.
3. Maintain relevant insurance coverage and bond limits.
4. Ensure primary contacts have at least five (5) years’ experience in relevant services.
5. Be financially solvent and in good standing with California Secretary of State.