request for proposal master custodian, related services
TRANSCRIPT
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REQUEST FOR PROPOSAL
Master Custodian, Related Services & Securities Lending
ID: RFP-20-21-01
Issued June 3, 2021
Responses due via email
by 4:30 pm CT on July 19, 2021
Please include RFP ID on all correspondence
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Table of Contents I. Introduction ................................................................................................................................................................. 4
II. Description of SURS ................................................................................................................................................... 4
III. Scope of Work.............................................................................................................................................................. 5
IV. Minimum Qualifications .......................................................................................................................................... 8
V. Proposal Content ........................................................................................................................................................ 8
Indexed Table of Contents ..................................................................................................................................... 9
Cover Letter ............................................................................................................................................................ 9
Statement of Minimum Qualifications .................................................................................................................. 9
Reference Checks ................................................................................................................................................... 9
Company Organization and Diversity Disclosure ................................................................................................... 9
Fee Proposal ........................................................................................................................................................... 9
Contract .................................................................................................................................................................. 9
VI. Submission of Proposals ....................................................................................................................................... 10
VII. Evaluation Process .................................................................................................................................................. 10
Pre-Evaluation Review ......................................................................................................................................... 10
Proposal Evaluation.............................................................................................................................................. 10
VIII. Anticipated Timeline and Contact Information ........................................................................................... 12
IX. Submission Process ................................................................................................................................................. 12
Deadline ............................................................................................................................................................... 12
Withdrawal ........................................................................................................................................................... 12
Questions ............................................................................................................................................................. 13
X. General Conditions .................................................................................................................................................. 13
Freedom of Information Act Disclosure and Redacted RFP Response Requirement .......................................... 13
Redacted Version of RFP Response ..................................................................................................................... 13
Ordinary Course of Business Communications Allowed ...................................................................................... 14
SURS Quiet Period Policy ..................................................................................................................................... 14
Rights Reserved .................................................................................................................................................... 14
Equal Opportunity ................................................................................................................................................ 15
Terms and Conditions .......................................................................................................................................... 15
Appendix A: Statement of Minimum Qualifications ............................................................................................. 16
Appendix B: Questionnaire ........................................................................................................................................... 18
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Contact and Company Information: ...................................................................................................................... 18
Organization Background (All Proposals) .............................................................................................................. 18
Diversity, Equity and Inclusion (All Proposals) ..................................................................................................... 20
References (All Proposals).................................................................................................................................... 22
Client Servicing Capabilities (All Proposals) ......................................................................................................... 22
Technology (All Proposals) ................................................................................................................................... 23
Custody Services (Custody) ................................................................................................................................... 24
Accounting and Reporting (Custody) ................................................................................................................... 27
Asset Safekeeping (Custody) ................................................................................................................................ 28
Foreign Exchange Transactions (Custody) ........................................................................................................... 31
Transition Plan (Custody) ..................................................................................................................................... 32
Cash Management (Custody) ............................................................................................................................... 32
Investment Guideline Compliance (Custody) ...................................................................................................... 33
Performance Measurement and Analytical Services (Custody) .......................................................................... 34
Asset Transitions/Management (Custody) .......................................................................................................... 35
Class Action Claims Filing (Custody) ..................................................................................................................... 35
Proxy Voting (Custody) ......................................................................................................................................... 36
Corporate Action (Custody) ................................................................................................................................. 36
Banking Services (Custody) .................................................................................................................................. 36
Securities Lending (Securities Lending)................................................................................................................ 36
Transition (Securities Lending) ............................................................................................................................. 39
Appendix C: Fee Proposal ............................................................................................................................................... 40
Appendix C-1: Fee Proposal – Custody with Securities Lending ..................................................................... 41
Appendix C-2: Fee Proposal – Custody without Securities Lending .............................................................. 44
Appendix C-3: Fee Proposal – Stand-Alone Securities Lending ....................................................................... 46
Appendix D: Addendum to Contract .......................................................................................................................... 48
Appendix E: Diversity Disclosure ............................................................................................................................... 50
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I. Introduction
The State Universities Retirement System (SURS, or the “System”) is soliciting proposals from firms to provide master trust/custodial and securities lending services. SURS will be considering proposals for: 1) custody with securities lending; 2) custody with no securities lending; and/or 3) stand-alone securities lending.
All forms/required documents needed for submitting a request for proposal (“RFP”) are available on the SURS website at www.surs.org.
A proposer’s preparation and submittal of a proposal or subsequent participation in presentations or contract negotiations creates no obligation on the System to award a contract or to pay any associated costs. All proposals and related materials will be retained by the System and will be subject to disclosure as required in accordance with the Illinois Freedom of Information Act.
II. Description of SURS
SURS is the administrator of a cost-sharing, multiple-employer, public employee retirement system that provides retirement, survivor, disability and death benefits to employees of Illinois state universities, community colleges, and certain other affiliated organizations and agencies. SURS was created in 1941, by an act of the Illinois General Assembly, and is governed by the Illinois Pension Code (40 ILCS 5/15-101 et seq.). SURS provides benefit services to over 240,000 members who work for 61 employers. SURS is responsible for investing assets of more than $22 billion in a diversified portfolio of U.S. and foreign stocks, bonds, real estate and alternative investments. SURS also administers a defined contribution plan, the Retirement Savings Plan, which currently has assets of approximately $3 billion.
An elected and appointed, eleven-person, board of trustees, governs SURS. Five members of the board are appointed by the governor of the state of Illinois (one of whom is the chairperson of the Illinois Board of Higher Education). The remaining six members of the board are elected by participating members (four individuals) and annuitants (two individuals). The governor designates the chairperson of SURS from among the eleven trustees. Trustees serve six-year terms. SURS is funded by participant payroll deductions and annual employer contributions provided by the state of Illinois. By statute, SURS is defined as a “body politic and corporate” created by Article 15 of the Illinois Pension Code.
SURS currently employs approximately 161 staff, located in offices in Champaign and Naperville, Illinois. Three SURS employees are in the Naperville office. The remaining SURS employees are currently situated in the Champaign offices at 1901 Fox Drive and 1801 Fox Drive.
A copy of SURS’ most recent comprehensive annual financial report is available for review, or to download, at www.surs.org.
The Illinois Governmental Ethics Act, 40 ILCS 420, provides guidelines for ethical practices concerning state and local pension plans. Proposer providers should be familiar with the provisions of this Act.
Section 1-109.1(6) of the Illinois Pension Code (40 ILCS 5/1-109.1(6)) encourages Illinois public pension systems like SURS to utilize businesses owned by “minorities,” “women,” and “persons with disabilities” for all contracts and services, as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act (“BEMWPD”,30 ILCS 575). Additionally, Section 1-109.1(10) of the Illinois Pension Code (40 ILCS 5/1-109.1(10)) sets an aspirational goal of not less
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than 20 percent of contracts awarded to such businesses for "information technology services,” "accounting services,” "insurance brokers,” "architectural and engineering services,” and "legal services" as defined by the BEMWPD. Accordingly, businesses that meet these definitions are strongly encouraged to submit responses to this RFP.
A section of the Illinois Procurement Code concerning prohibitions of political contributions for vendors, 30 ILCS 500/50-37, may or may not apply to SURS service providers. However, each service provider should be familiar with the provisions of this section and comply with this section if the service provider deems it appropriate.
SURS is subject to its own procurement statutes and rules, which include, without limitation, rules and regulations set forth in the Illinois Administrative Code adopted by the Joint Committee on Administrative Rules, Ill. Adm. Code Title 80. Part 1600.130, the SURS General Procurement Policy and the SURS Investment Procurement Policy. Responders should be familiar with those procurement requirements as well. The selected responder will be paid by SURS directly.
Additional legal requirements that vendors should be familiar with are contained in the Addendum to Contract under Appendix D.
Background specific to this RFP:
The State Universities Retirement System (SURS, or the “System”) is soliciting proposals to provide comprehensive domestic and international master trust/custodial services (acting in the capacity of a plan fiduciary, which status will extend to all custodial services and will not be limited or diluted by exculpation clauses or other contractual language) and securities lending. This includes, but not limited to securities safekeeping, settlement, valuation and lending; performance measurement; foreign exchange; collection of income; and providing a management/accounting and information retrieval system. This search was authorized by the SURS Board of Trustees. The provider(s) will work with and provide assistance to the SURS investment staff. It is anticipated that SURS will enter into a five (5) year contract with the provider, in accordance with the provisions of section 113.14 of the Illinois Pension Code (40 ILCS 5/1-113.14). SURS currently utilizes Northern Trust as master custodian and Deutsche Bank as securities lending provider.
III. Scope of Work
The State Universities Retirement System is looking for a vendor(s) to provide master trust/custodial and/or securities lending services in compliance with generally accepted accounting principles, government accounting standards board principals, and the laws under which SURS operates within the state of Illinois. The proposer must be able to provide all of the services listed below unless otherwise indicated:
ACCOUNTING 1. Trade date multi-currency (local and US dollars) accounting for all securities and full accrual
accounting for all assets. 2. Accounting for the following:
a. Dividends and interest, corporate actions (including mergers, acquisitions, tenders, stock splits and dividends, warrants and spin-offs)
b. Securities lending c. Domestic and international fixed income and equity portfolios d. Equity real estate and REIT portfolios e. Futures and multi-currency derivatives
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f. Alternative investments, including domestic and non-US limited partnerships for LBO’s, venture capital, infrastructure, etc.
3. Payable date posting for dividends, bond interest and principal, and interest and paydown on mortgage pass-through certificates.
4. Accounting must be on a fiscal year basis (July 1 - June 30). 5. A secondary pricing source for comparison to the primary source for pricing securities. 6. Investments must be reported at cost and market value. 7. The proposer confirms that all information concerning holdings and transactions will be
available for inquiry, download or print capabilities. SECURITIES SAFEKEEPING / SETTLEMENT 1. The ability to provide safekeeping of assets, derivative processing, collection of income, and
tax reclamation and relief. 2. Participating member and access to securities settlement through DTC, Federal Reserve wire
system, PTC, and at other depositories (both domestic and international). 3. The ability to settle physically held securities. 4. The ability to execute foreign exchange transactions. 5. Provision of buy-fail float and contractual settlement date posting of sales. 6. Trade data must be electronically accessible by SURS, its investment managers and
consultants. CASH MANAGEMENT 1. Provide a Short-Term Investment Fund (STIF) for daily cash sweeps and a master account. 2. Provide for same day settlement of cash trades, such as physical, DTC, and Fed wireable
repo and term purchases. 3. Transfer cash between accounts, make and accept wire transfers of funds (including provision
of Fed reference numbers upon request), and make and accept ACH transfers of funds. SECURITIES LENDING (Proposer can choose to provide along with custody or not, or as stand-alone service) 1. Provide securities lending services for eligible domestic and international securities. 2. Establish a list of eligible borrowers and a maximum amount that may be borrowed by each
borrower. Conduct ongoing reviews of borrowers' qualifications. 3. Require that all loans of securities be collateralized by either cash, securities or letters of credit
of mutually acceptable counterparties. 4. Require competitive market levels of collateralization for domestic and international securities,
including accrued income. 5. Monitor collateral levels daily. Obtain additional collateral if mark-to-market values fall below
acceptable levels. 6. Collect all interest or other distributions with respect to all loaned securities. 7. Make available a daily report of collateral, identifying daily collateral required and pledged,
and a monthly report on securities lending activity and outstanding loans, including amounts by borrowers.
8. Provide indemnification against borrower default. 9. Allow for and cooperate with a third-party securities lending custodian (if requested) and
associated vendors. CORPORATE ACTIONS, CLASS ACTIONS AND PROXY PROCESSING 1. In a timely manner, provide company annual reports, proxy voting cards, and proxy
statements to SURS’ designated proxy voting agent.
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2. Timely notification to SURS’ investment managers of corporate actions regarding conversion privileges, issuance of rights, mergers, tender offers, reorganizations, and other actions requiring decisions by SURS’ investment managers.
3. Timely notification of class action litigation and provision of the necessary securities information to SURS.
4. File claims for securities class action awards and monitor collection of the amounts to which the System is entitled.
TECHNOLOGY 1. Provide a web enabled or internet-based system with access to management information and
accounting systems with the capability of providing the following information: a. Current and historical prices, market values, and exchange rates in effect at times of
pricing international securities b. Composite portfolios c. Current and historical transactions by security; by account; by asset class d. On-line access to current and historical holdings in any aggregate e. Customized reports as required f. Ad hoc query and reporting
2. Provide state-of-the-art back-up systems to minimize loss of data and provide instant availability.
3. Provide staff with the ability to review all externally managed portfolios. REPORT REQUIREMENTS 1. Provide audited monthly holding reports to be received no later than 10 working days after
month-end for on-line reports. 2. Provide accurate monthly, quarterly, and year-to- date reports on all transactions, income,
and other pertinent investment data, in a format acceptable to SURS, no later than eight working days after the end of each month.
3. Provide monthly reports in a format acceptable to SURS. 4. Provide valuation support services for marketable securities, including leveling review
using enhanced vendor pricing information, preparation of Level 3 unobservable inputs table and review with auditor as requested.
5. Provide annual GASB 40 and 53 reporting details and support. 6. Provide other reports as may be requested by SURS. 7. Provide annually the Statement on Standards for Attestation Engagements (SSAE) No.
16, Reporting on Controls at a Service Organization (SSAE 16) and/or International Standard on Assurance Engagements 3402, Assurance Reports on Controls at a Service Organization (ISAE 3402).
8. Provide certification from the trustee that the reported information is complete and accurate.
9. Reports of daily transactions including domestic trades affirmed, unaffirmed, failing, pending, etc.
10. Monthly performance measurement reports to be received no later than 10 working days after month-end.
11. Quarterly performance measurement, attribution, and other analytic reports. 12. Quarterly Analysis and IRR Calculations for Private Markets (Private Equity, Real Estate,
Infrastructure). PERSONNEL 1. Proposer must make presentations as required to the board to discuss services related to
SURS.
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2. Proposer should provide the personnel to facilitate audit access to SURS’ staff or its designated agents for the purpose of verifying the integrity of proposer’s operations for the SURS account and all data input and output in case such an audit is deemed necessary.
3. Proposer would be required to conduct annual account review sessions with SURS’ staff in Champaign or Chicago.
IV. Minimum Qualifications
The proposer’s key professionals and/or organization must not have material conflicts with SURS or the SURS board.
Failure to satisfy each of the minimum qualifications will result in the immediate rejection of the proposal. The proposal must address each of the qualifications substantiating how the proposer satisfies each of the minimum qualifications. The responses must contain sufficient information as prescribed to assure SURS of its accuracy. Failure to provide complete information will result in rejection of the proposal. The proposer must certify in writing on the Statement of Minimum Qualifications (Appendix A) that it meets all of the minimum qualifications, and such Statement of Minimum Qualifications must be signed by an individual who is authorized to bind the proposer contractually.
Custody 1. If submitting a proposal, the candidate must have at least $1 trillion in tax-exempt master
trust/master custody assets as of December 31, 2020. This amount must include at least $25 billion in international equity and fixed income.
2. As of December 31, 2020, the candidate must have provided custody services for a minimum of twenty-five (25) years.
3. The account manager assigned must have had a minimum of ten (10) years’ experience in the master trust/custody field with at least three (3) years’ experience at the responding firm. The transition team leader and his/her assistant must have worked together on at least three (3) prior major conversions of an account with market value in excess of $5 billion consisting of multiple asset classes.
4. The candidate must be authorized to conduct a trust business in the state of Illinois. Securities Lending 1. The candidate must have at least $100 billion in securities lending lendable base on an agency
basis as of December 31, 2020. 2. As of December 31, 2020, the candidate must have provided securities lending services for a
minimum of ten (10) years. 3. The account manager assigned must have had a minimum of ten (10) years’ experience in
the securities lending field with at least three (3) years’ experience at the responding firm. SURS retains the sole right to decide whether any proposer is qualified to bid, including determining whether any proposer’s qualifications are sufficiently comparable to satisfy the above minimum qualifications.
V. Proposal Content
At a minimum, the proposal must include the following information to be considered for the engagement. For ease of review, each requirement should be addressed separately. All
communications regarding this RFP must include the RFP ID shown on the title page.
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Indexed Table of Contents The proposal package must include an indexed table of contents to facilitate the review process.
Cover Letter A cover letter, which will be considered an integral part of the proposal package, in the form of a standard business letter, must be signed by an individual authorized to bind the proposer contractually. This cover letter must indicate the signer is so authorized and must indicate the signer’s title or position. An unsigned proposal will be rejected. The cover letter must also include:
a. A statement that the proposal meets all requirements of this RFP, and that the offer tendered by the proposal will remain in full force and effect until and may be accepted by SURS at any time prior to 180 days beyond the deadline for submittal.
b. A disclosure of any current business relationship or any current negotiations for prospective business with SURS, or with any member of the SURS Board of Trustees or SURS staff, or any party currently rendering services to SURS.
c. A statement that the proposer acknowledges that all documents submitted in response to this RFP may be subject to disclosure under the Illinois Freedom of Information Act and/or the Illinois Open Meetings Act.
Statement of Minimum Qualifications Proposers must complete and return the Statement of Minimum Qualifications certification in the form contained in Appendix A.
Reference Checks Reference checks will be conducted for each finalist.
Company Organization and Diversity Disclosure The Questionnaire (Appendix B) and Diversity Disclosure (Appendix E) to this RFP must be completed and returned as part of the proposal.
Fee Proposal Proposers must submit a fixed-cost proposal in the format prescribed in the Fee Proposal (Appendix C). Any deviation from the prescribed format which in the opinion of SURS is material may result in the rejection of the proposal. The proposed fee shall include all costs and expenses for providing the services as described in this RFP. Once finalists are selected, fees may be subject to a “best and final” offer process to be determined at the discretion of the System.
The Fee Proposal must expressly state that the proposed fees are guaranteed for the term of any resulting contract.
Contract This request for proposal is neither a contract nor meant to serve as a contract. It is anticipated that one or two of the proposals submitted in response to this RFP may be selected as the basis for negotiation of a contract with the proposer. Such a contract is presently contemplated to contain, at a minimum, the terms of the proposal submitted, as finally negotiated and approved by the System. SURS reserves the right to negotiate additions, deletions or modifications to the terms of proposals submitted. The terms contained in Appendix D, Addendum to Contract, must be agreed to and accepted by the candidate or organization selected to perform the work contemplated by this RFP, unless exceptions are noted as part of the proposer’s response. Any questions or exceptions to the terms and conditions must be outlined as part of the proposer’s response. However, SURS is not required to accept the proposer’s exceptions. Any exceptions noted in the proposer’s response will be addressed and discussed during the review process, but no changes will be made to the terms and
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conditions stated herein, unless the proposer and SURS both agree to include said changes in the final contract awarded under this RFP.
As part of this RFP process, including but not necessarily as a precursor to its acceptance of any best and final offer, SURS may require any proposers deemed reasonably susceptible to award to engage in discussions of specific contract language. Such discussions may be extensive, and may require the proposer to be represented by personnel with authority to agree to contractual language. SURS may request or require that proposers who engage in such discussions include the contract language that results from such discussions as part of a best and final offer, such that SURS’ award to such a proposer will lead directly to contract execution on the agreed terms, without further discussion or negotiation. The specifics of the terms and conditions agreed to as a result of such discussions may be a factor in SURS’ award decision.
VI. Submission of Proposals
All proposals must be received no later than the deadline stated in the Anticipated Timeline and Contact Information section. Submissions must be made via email to the identified contact person by the stated deadline. Only email submissions will be accepted.
The proposals become the property of SURS upon submission. All costs for developing proposals and attending presentations and/or interviews are entirely the responsibility of the proposer and shall not be chargeable to SURS.
Only one proposal from an individual, firm, partnership, corporation, or combination thereof, will be considered for this assignment.
VII. Evaluation Process
Pre-Evaluation Review All proposals will be reviewed to determine if they contain all the required submittals specified in this RFP. Those not submitting all required information in the prescribed format may be rejected.
Proposal Evaluation All proposals received by the SURS representative on or before the deadline listed above will be reviewed to determine whether they meet the minimum requirements of this RFP.
All proposals received by deadline and that pass the pre-evaluation review will undergo an evaluation process conducted by SURS staff and SURS general consultant, Meketa. They will be reviewed to determine whether they meet the requirements of this RFP. SURS will consider the following factors in the evaluation process, ranked in no specific order, and will render a decision based on the perceived best fit and best value for the engagement. Fees will be one of the determining factors in this decision but will not be the primary determinative. Proposals will be evaluated based on criteria including:
• Corporate organization, general experience, and stability • Professional staff / client relations • Custody services expertise and experience (U.S. and Non-U.S. capabilities) • Risk management – internal control structure • Cash management capabilities and experience • Accounting and reconciliation capabilities • Minority brokerage reporting capabilities • Performance measurement and analytics capabilities and experience
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• Technology • Contractual terms and conditions • Exceptions • Timeliness and accuracy of reporting • Tracking litigation and filing litigation claims • Securities lending experience • Year-end reporting capabilities • Assistance with GASB issues and reporting • Experience in managing transition and conversion • Willingness to execute the Predatory Lending Certificate • Cost of services
Proposals that contain false or misleading statements or that provide references which do not support an attribute or condition claimed by the proposer will be rejected. Issuance of the request for proposal creates no obligation to award a contract or to pay any costs incurred in the preparation of a proposal. Nothing in this RFP or any resulting contract shall preclude SURS from procuring services similar to those described herein from other sources.
During the evaluation process, proposers may be requested to provide additional information and/or clarify contents of their proposal. Other than information requested by SURS, no proposer will be allowed to alter the proposal or add new information after the filing date.
Once finalists are selected, proposals may be subject to a “best and final” offer process to be determined at the discretion of the System.
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VIII. Anticipated Timeline and Contact Information
Schedule Dates
Quiet Period Begins June 3, 2021 RFP Issued June 3, 2021 Responder Questions Due June 21, 2021, 4:30 p.m. CT Responses to Questions June 28, 2021, 4:30 p.m. CT RFP Responses Due On or Before July 19, 2021, 4:30 p.m. CT Evaluations July 2021 Interviews September 2021 Selection by SURS October 21, 2021
SURS may extend these deadlines at its discretion. Any such extensions will be posted to the SURS website.
SURS RFP Contact Information Procurement Officer [email protected] SURS 1901 Fox Drive Champaign, IL 61820-7333
IX. Submission Process
Deadline To be considered for selection, proposals must be received via email in Adobe Acrobat format at [email protected] no later than 4:30 p.m. CT, July 19, 2021. Please reference “RFP-20-21-01 + Master Custodian, Related Services & Securities Lending RFP Response” with name of proposer in the subject line of your communications. An email confirmation will be sent confirming receipt of the proposal.
In addition, please email a copy of your proposal to John Harris ([email protected]) at Meketa Investment Group.
Withdrawal A proposal may be withdrawn by written notification signed by the individual applicant or authorized agent of the firm, and received at [email protected] no later than the submission deadline, currently designated as 4:30 p.m. CT, July 19, 2021. Please reference “RFP-20-21-01 + Master Custodian, Related Services & Securities Lending RFP Response” with name of proposer in the subject line of your communications. An email confirmation will be sent confirming withdrawal of the proposal. The proposal may be resubmitted with any modifications no later than the deadline. Modifications offered in any other manner will not be considered.
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Questions To clarify any issues in this RFP, SURS will respond only to questions that are presented in writing via email to [email protected]. All questions should be submitted to SURS by 4:30 p.m. CT, June 21, 2021. Please reference “RFP-20-21-01 + Master Custodian, Related Services & Securities Lending RFP Response” with name of proposer in the subject line of your communications. These questions will be consolidated into a single Q&A document and responded to by SURS on or about June 28, 2021. The Q&A document will be posted on the SURS website at www.surs.org/rfp- investment. This document will include all questions received and SURS’ answers to the same without indicating the source of the query.
X. General Conditions
Freedom of Information Act Disclosure and Redacted RFP Response Requirement All materials submitted in response to the RFP become property of SURS. Proposals remain confidential during the selection process. However, upon completion of the selection process, all responses, including that of the individual, vendor or firm selected, will be a matter of public information and will be open to public inspection in accordance with the state of Illinois Freedom of Information Act (FOIA).
If, in response to this RFP, trade secrets or commercial or financial information are furnished under a claim that they are proprietary, privileged or confidential and that disclosure of the trade secrets or commercial or financial information would cause competitive harm to the person or business responding to this RFP, such claim must be clearly made, and such information must be clearly identified. (5 ILCS 140/7 and 7.5) Responses to this RFP with every page marked as proprietary, privileged or confidential will not satisfy this requirement, and such markings will result in the entire proposal being deemed to be disclosable public information, without further discussion. Proposers are required to make a good faith attempt to properly identify only those portions of the response that are truly furnished under a claim that they are proprietary, privileged or confidential and that disclosure of the trade secrets or commercial or financial information would cause competitive harm to the person or business responding to this RFP.
Redacted Version of RFP Response In the event the proposer believes and claims that certain materials or information contained in the submitted response are exempt from public disclosure under the Illinois FOIA, the proposer is required to provide a redacted version of the response it believes will be suitable for release under the Illinois Freedom of Information Act. (5 ILCS 140/7 and 7.5) Proposers should assume that information suitable for release will include, but not be limited to, proposer’s questions, proposals, appendices attached, proof of concepts, best and final offers, and any related communication with SURS staff in regard to the RFP.
Note: Pricing and fee structures are generally disclosable under FOIA.
A PROPOSER’S FAILURE TO PROVIDE A REDACTED VERSION OF THE RFP RESPONSE WILL RESULT IN SURS DISCLOSING THE PROPOSER’S ENTIRE RFP RESPONSE IF THE SAME IS REQUESTED UNDER THE ILLINOIS FREEDOM OF INFORMATION ACT AND NEITHER THE PROPOSER NOR ANY THIRD PARTIES SHALL HAVE ANY RECOURSE AGAINST SURS FOR ITS DISCLOSURE OF THE NON-REDACTED RFP RESPONSE.
However, any claim of privilege from disclosure is not definitive. SURS has the right and legal obligation to determine whether such information is exempt from disclosure under the Illinois Freedom
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of Information Act and no information will be considered or determined by SURS to be proprietary, privileged or confidential unless it is identified and separated as indicated herein. (5 ILCS 140/7 and 7.5)
Ordinary Course of Business Communications Allowed Other than existing normal business matters unrelated to this RFP, proposers, potential proposers, or their representatives should not contact anyone at SURS (including SURS staff, members of the SURS advisory committees and members of the SURS board) other than the listed RFP contact, and in compliance with the Quiet Period Policy described below. In addition, proposers must not discuss this RFP with any employee of SURS, trustee of SURS, employee of SURS’ custodian, managers, legal counsel, or other advisors or persons/entities having contracts or other affiliations with SURS, except in compliance with the Quiet Period Policy.
SURS Quiet Period Policy Please note the following Quiet Period Policy establishing guidelines by which the SURS Board of Trustees and SURS staff will communicate with prospective vendors or service providers during a search process. The quiet period for this RFP began on the date the RFP was issued: June 3, 2021.
1. A Quiet Period will commence upon issuance of an RFP and end once a selection has been
made by the Board and the completion of successful contract negotiations with a respondent; 2. Initiation, continuation and conclusion of the Quiet Period shall be publicly communicated to
prevent inadvertent violations; 3. All Board members, and Staff other than those directly involved in the search or the Chief
Procurement Officer or their designee, shall refrain from communicating with respondents regarding any product or service related to the search in process. All Board members and Staff shall refrain from accepting meals, travel, hotel, or other value from such respondents;
4. Throughout the Quiet Period, if any Board member is contacted by a respondent, the Board member shall refer such party to the Chief Procurement Officer;
5. All authority related to the search process shall be exercised solely by the Investment Committee or Board as a whole or its designee(s), and not by individual Board members;
6. The Quiet Period does not prevent Board approved due diligence, client conference attendance or communications with an existing vendor; provided, however, that discussions related to the procurement and pending selection shall be avoided during those activities;
7. The provisions of this Policy shall apply throughout the Quiet Period and shall be communicated to respondents in conjunction with any search; and
8. A respondent may be disqualified from a search process for a violation of the Quiet Period or any portion of this Policy.
Rights Reserved SURS reserves the right to amend any segment of the RFP prior to the announcement of a selected vendor/contractor. In such an event, all proposers will be afforded the opportunity to revise their proposals to accommodate the RFP amendment.
SURS reserves the right to remove any or all services from consideration for this contract. At its discretion, SURS may issue a separate contract for any service or groups of services included in this RFP. SURS may negotiate additional provisions to the contract awarded pursuant to this RFP.
SURS may request additional information from any or all proposers to assist in the evaluation of proposals, and SURS reserves the right to conduct background investigations of selected individuals or firms prior to awarding a contract under this RFP.
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SURS does not bear any obligation to complete the RFP process or to select any individual(s) or firm(s). SURS also reserves the right without prejudice to reject any or all proposals submitted.
SURS will NOT reimburse any expenses incurred in responding to this RFP.
Equal Opportunity SURS does not discriminate because of race, color, religion, creed, sex, sexual orientation, age, marital status, military status, certain unfavorable discharges from military service, political affiliation, citizenship, ancestry, national origin, physical or mental handicap or disability or any other characteristic protected by law. It is the System’s intent to comply with all state, federal and local equal employment and opportunity laws and public policies.
Terms and Conditions Following a review of submitted materials, if requested, selected individuals or organizations must be prepared to make a presentation or otherwise participate in an in-person interview in Champaign, IL or in Chicago, IL with SURS staff members and/or members of the SURS Board of Trustees at a date and location to be determined by SURS. SURS will not provide reimbursement for any costs incurred by the individuals or organizations associated with this presentation. Prior to the award of a contract pursuant to this RFP, selected individuals or firms must provide all requested documentation.
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Appendix A: Statement of Minimum Qualifications
(Firm Name) certifies that it meets the following minimum qualifications.
Please initial each as applicable.
1. _________ The proposer’s key professionals and/or organization has no material conflicts with SURS or the SURS board.
2. _________ The firm is either (i) a U.S.-domiciled national bank or trust company and member of the Federal Reserve, or (ii) a U.S. subsidiary of a foreign bank subject to the jurisdiction of U.S. courts, and has substantial unimpaired equity capital. (proposing custody)
3. _________ The firm is authorized to conduct a trust business in the State of Illinois. (proposing custody)
4. _________ The firm has total assets under trust/custody for institutional clients in excess of U.S. $1.0 trillion as of December 31, 2020. (proposing custody)
5. _________ The firm must have at least $100 billion in securities lending lendable base on an agency basis as of December 31, 2020. (proposing securities lending)
6. _________ The firm will provide global custodial services, acting as a fiduciary under the Illinois Pension Code. (proposing custody)
7. _________ The firm has provided global custody services for a minimum of twenty-five years, as of December 31, 2020. (proposing custody)
8. _________ The firm has provided securities lending services for a minimum of ten (10) years as of December 31, 2020. (proposing securities lending)
9. _________ The proposed account manager has a minimum of ten (10) years’ experience in the master trust/custody field and/or the securities lending field as of December 31, 2020.
10. _________ The proposed custody transition team leader and his/her assistant have worked together on at least three prior major conversions ($1.0B or greater) of an account with a market value in excess of $5.0 billion consisting of multiple asset classes in the last five years as of December 31, 2020. (proposing custody)
11. _________ The firm and its proposed team have all authorizations, permits, licenses and certifications required by federal and state laws and regulations to perform the services specified in this RFP at the time proposer submits a response to the RFP. Proposer’s audited financial statements must be made available for review.
12. _________ The firm will comply with all legislation, applicable state fiduciary, ethics, and diversity laws, including any additional disclosure requirements.
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13. _________ The firm has provided evidence as to applicable Scope of Work in Section III of this RFP.
Signed: Date:
Title:
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Appendix B: Questionnaire
The following questionnaire must be completed and included with your response to this RFP. Type your responses in the same order as the questionnaire, listing the question first followed by your answer.
Contact and Company Information:
Name of Individual / Organization:
Mailing Address:
City: State: Zip Code: Phone:
Fax:
Federal Employer Identification Number:
Contact Person(s):
Name: Phone:
Title:
Fax: Email:
Website:
Please indicate which proposal you are participating in (check all that apply) and complete sections as indicated:
☐ Custody with Securities Lending Complete sections: All Proposals, Custody and Securities Lending
☐ Custody with No Securities Lending Complete sections: All Proposals and Custody
☐ Stand-Alone Securities Lending Complete sections: All Proposals and Securities Lending
Organization Background (All Proposals)
1. Provide a brief summary of your organization. This should include the primary function of your organization and the number of years your organization has provided the services being offered.
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2. Has your organization had any contracts that were terminated within the last five (5) years in connection with any actual or alleged breach or similar failure to comply with the terms of the Contract, or for any other reason prior to their scheduled termination date(s)? If so, please explain.
3. Has your organization had a record of performance that includes factual evidence of failure to satisfy the terms of agreements with any party to a contract? If so, please explain.
4. Is your organization legally qualified to contract with SURS, including the ability to serve as a fiduciary within the meaning of Illinois legislation and to act in accordance with all requirements and standards of conduct applicable to fiduciaries?
5. Has your organization been subject to any regulatory investigation or action in the past five (5) years? Describe any occurrences and the resulting resolution.
6. Has your organization been sued in the last five (5) years by a client or third party in relation to the Services provided to any client that were similar to those services solicited here? Describe any occurrences and the resulting resolution.
7. Describe the financial stability of your organization, including your organization’s total assets and capital base. Provide such information as a reasonable client would find relevant in assessing your organization’s financial ability to perform.
8. Please disclose the ownership structure of the firm, providing details on the number of owners and distribution of ownership among them if applicable (i.e., not publicly traded). Do you anticipate any changes to the ownership structure?
9. Describe in detail any potential conflicts of interest your firm may have in the management of the SURS account, or in the alternative, state that no potential conflicts exist.
10. Does your firm accept the duties of a fiduciary with respect to all of the services provided? Please provide sample contractual language describing your firm’s status as a fiduciary with respect to the services being offered, including any limitations on such duty or the client’s remedies for breaches thereof.
11. Do you provide reporting for ASC 820 (previously FAS 157) disclosure requirements?
12. Describe what limitation of liability, if any, your company would propose as part of any resulting contract. Please include specific contractual language.
13. Are there any potential conflicts of interest that may be created by awarding the contract to your firm? If yes, please explain.
14. Please describe any relationships your organization has with other business organizations, including major subsidiaries belonging to the same parent company or joint ventures with other firms. Is your
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firm related by ownership or formal business agreement to any provider of brokerage, consulting and/or research services? If yes, please explain.
15. Please address any substantive issues raised by independent auditors in your SSAE 16 and/or SAS 70 and issues published in your most recent annual report, Form 10-K and subsequent Form 10-Qs. Provide a copy of the most recent annual report, Form 10-Q and SSAE 16 or SAS 70. Please label appropriately.
16. What is the nature and size of any “off balance sheet items” in your annual report and what are the three critical areas that pose the most at risk exposure to the bank?
17. Please state the face amount and provide copies of all insurance policies (E&O, Fiduciary Insurance, Fidelity Bonding and other insurance policies).
18. Describe the various types of insurance coverage and indemnification provided to protect clients of service(s) proposed, including risk coverage, carriers, levels, limits, deductibles and expiration.
19. Describe your business continuity and disaster recovery plans, including pandemic planning. When was the most recent test done? Indicate the date, scope, and results of the last testing of such emergency plan(s).
20. Please provide a copy of your firm’s most recent SOC1 report.
Diversity, Equity and Inclusion (All Proposals)
21. Does your firm have a Diversity, Equity and Inclusion (DEI) policy or initiative? If ‘yes,’ provide a copy of the policy. If ‘no,’ are you considering the development of such a policy or initiative?
22. Does your firm have a DEI Committee within the organization empowered to effect best DEI practices? If ‘yes,’ provide details of the committee and their accomplishments over the past three years.
23. Does your firm have policies or practices in place to ensure that equal pay is provided for equal performance in equivalent roles regardless of gender and minority categorization? If ‘yes,’ provide details of the policies/practices.
24. Does your firm have formal mentorship, sponsorship and/or employer affinity programs for minorities, women, and/or persons with a disability? If ‘yes,’ provide details of the program(s).
25. Does your firm define goals and measure diversity outcomes at all levels of the organization, across all departments, and is compensation tied to the achievement of these goals? If ‘yes,’ provide details.
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26. Does your firm have procedures in place for the anonymous reporting and investigation of harassment, discrimination and/or workplace violence? If ‘yes,’ please provide details of the procedures and how they are communicated to employees. If not, are you considering the establishment and communication of such procedures?
27. What improvements has the firm made in the hiring of minority-, women -, or person with a disability-owned business (MWDB) in the past year?
28. If your firm is certified as a minority-, woman-, or person with a disability-owned business, please provide a copy of the MWDB certification.
29. When selecting service providers, does the firm consider DEI policies or practices in the review process?
30. Does your firm require a Code of Conduct from service providers? If ‘no,’ are you considering making this a requirement?
31. Does the firm utilize MWDBE investment banks for capital markets services, mergers and acquisitions services and/or other advisory services?
32. Does your firm have a Code of Conduct that covers harassment, discrimination and/or workplace violence? If ‘yes,’ provide a copy of the Code. If ‘no,’ are you considering the development and implementation of such a code?
33. Does your firm provide mandatory anti-harassment and non-discrimination training to all employees? If ‘yes,’ please provide details and timing of the training. If ‘no,’ are you considering implementing a training program?
34. Have there been any claims of sexual or general harassment, misconduct, or discrimination against any current or former firm employees (while employed by your firm) within the last five years? If applicable, how did the firm respond to any claims of sexual or general harassment, misconduct, or discriminations against any current or former employees (while employed by the firm) within the last five (5) years?
35. Does your firm work with organizations that promote the attraction and retention of women, minorities, and persons with a disability within the investment industry? If “yes,’ provide a list of these organizations, as well as any additional programs you have embraced.
36. Has your firm undertaken any actions to combat racism and sexism in the investment management industry in the last year? If ‘yes,’ provide details.
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References (All Proposals)
37. Please provide a list of clients that have converted to your organization in the past twelve months, including the dates of conversion.
38. Please list clients that have departed your organization in the past twelve months, including dates of leaving.
39. Please list five references for clients with similar structure and size to SURS, and that utilize the services being requested in this RFP. At least three of these references should be serviced by the same client service team you are proposing for this mandate. For how long has each been a client of your organization?
Client Servicing Capabilities (All Proposals)
40. List and describe the functional business units that will support the assigned account manager in providing services to SURS. Business Unit # of People Location Description
(Include whether integrated with or segregated from other units)
Relationship Management
Operations/Management
IT/Systems Support
Information Security
Audit and Compliance
Risk Management
Legal
Other
41. Describe the roles and number of people who would be assigned to this account, their total years in the industry, their total years with your organization and their total number of years in custody if different from organization. Where would they be located? To how many client accounts would this team be assigned? Does the proposed team have experience with Illinois public retirement systems?
42. How often will the client service officer meet with the client at the board’s offices or meetings?
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43. Describe your approach to client service. Include a discussion of the procedures relative to client interaction. Does each client have a primary contact to whom all inquiries are directed? What coverage is provided if those responsible for an account are unavailable?
44. What would be the most distinct element of your client servicing approach that SURS would benefit from and consider exceptional relative to others in the industry?
45. How will you oversee quality control and client satisfaction for SURS? How does your firm ensure expert response in a timely manner?
46. On average, how many accounts are assigned to each of the account executives and account managers?
47. Do you have programs in place designed to retain key personnel? If so, describe.
48. Does the client servicing staff (i.e., relationship manager and accountants) maintain a “procedures manual” for each client? What is the typical content of such a manual?
49. Please provide tangible examples of how you work with clients to develop best in class service and best practice initiatives for clients.
50. What is your procedure for handling complaints about accuracy of reports and analysis?
Technology (All Proposals)
51. How will your organization provide dedicated support and comprehensive data access to SURS (e.g., via your organization’s web portal or proprietary database)?
52. Does your organization have adequate data storage, security and back-up capabilities? Please describe your functionality and processes.
53. How long has the current software been in place? When was the most recent major change/enhancement to the systems that support your master trust/custody capabilities? Are the systems batch-oriented or real-time?
54. Was the software developed in-house? Do you have a data-processing staff in-house? How many persons actually support your system?
55. What major enhancements are planned at this time?
56. What are your annual budgets for the last three years for systems enhancements/upgrades?
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57. Is your data-processing equipment shared with other departments? If so, what is the priority level for the services being offered?
58. What downtime have you experienced in the last year for any systems that would be used in providing the services hereunder?
59. Is data available real-time (access information as it changes throughout the day) or batch processed (data is updated each night)?
60. How long is data available on the system? How long is your data retention period? How long is data available online versus archived?
61. Describe the data-processing cycle for creating monthly and annual reports and provide sample copies of these reports. Indicate the frequency with which each report is generated and the number of business days following the end of a reporting period upon which it is distributed.
62. How do you handle reporting or software programming needs specific to one client? Include a discussion of any cost implications. What is the approximate time frame within which client-specific needs are met?
63. Can nonstandard reports be created by users with your online software? Does your system have a user-friendly report writer?
64. What client training do you provide for utilizing your online system?
65. Does your system provide online help?
66. What system security measures do you have in place? How is online access authentication and authorization provided?
67. Has your organization experienced any data breach or loss of personal, financial or other data considered private or confidential in the past three (3) years? If so, provide details and what steps were taken to address the issue both in the short term related to the specific breach/loss and also in the longer term to prevent such a breach/loss from happening again. Please describe what contractual commitments you are willing to make to SURS with respect to data breaches.
Custody Services (Custody)
68. Where does custody of retirement plans fit within the organization as a service or product offering?
69. Provide a brief history of your master trust/custody organization including the year the firm was founded and how it has evolved over time.
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70. Please summarize your Master Trust/Custody Department's long-term strategy for business development.
71. Please describe any organizational changes (mergers, acquisitions, alliances) of the past two years that have affected your master trust/custody operations. Specifically, what adjustments have or are occurring because of these organizational changes?
72. Briefly summarize your firm's competitive advantages within the master trust/custody industry.
73. Does any foreign entity have any control or financial interest in your organization? If so, please identify and describe the relationship.
74. Describe the organizational structure of your Master Trust/Custody Department, including an organizational chart and the total number of employees in each area. Discuss how different teams/departments within the Master Trust/Custody Department work with each other. If your organization uses multiple office locations, please include a description of how the different locations interact with each other.
75. Are the domestic and international custody operations integrated or separate units?
76. List all depositories, agents, and sub-custodian banks that may be used in each country on behalf of SURS, and identify those affiliated with your organization. For each country, please indicate whether you use a central depository or physical delivery.
77. How are domestic and international sub-custodians selected and subsequently monitored?
78. Discuss the distinctions in the level of control over the work accomplished on your behalf by sub-custodians who are affiliated with your organization and those unaffiliated.
79. Describe how you and your sub-custodians segregate assets so that they are not subject to the claims of creditors against your organization and the sub-custodians’ organizations. Provide a list of all of your sub-custodians.
80. Are there any restrictions as to the type of securities that may be held in safekeeping? If so, what are they?
81. Discuss the minimum level of education or experience required of employees in your Master Trust/Custody Department. Describe on-going and new-employee training program(s). What has the level of turnover in the Master Trust/Custody Department been over the last five (5) years?
82. Will you be subcontracting any of the work described in these specifications? If so, explain.
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83. Describe quality control/internal audit programs you have within your Master Trust/Custody Department. How are client reports audited and how often prior to finalization/dissemination? How often is the department audited by outside organizations?
84. Do you have a department dedicated Master Trust/Custody legal staff?
85. Are you able to provide different levels of training and education, including on-site at a minimum of eight (8) hours per year in Champaign and/or Chicago?
86. What percentage of total corporate earnings did your Master Trust/Custody Department contribute to your organization each year over the last five (5) years? Year Percentage of Total
Corporate Earnings 2016 2017 2018 2019 2020
87. Provide the number of your organization’s Total Tax-Exempt Trust and Custody Clients in the following matrix. Report aggregate values of their total assets under custody in US $ millions for periods specified. Year Total Number of Clients Asset Value
(US $ Millions) 2016 2017 2018 2019 2020
88. Provide the number of your organization’s Public Fund Custody Clients in the following matrix. Report aggregate values of their total assets under custody in US $ millions for periods specified. Year Total Number of Clients Asset Value
(US $ Millions) 2016 2017 2018 2019 2020
89. Provide the number of tax-exempt trust and custody accounts, including global custody clients, gained and/or lost for the periods listed in the following matrix. Report corresponding market values in US $ millions as of initiation date for clients gained and termination date for clients lost. Year Clients Gained
(Number) Clients Gained (US $ Millions)
Clients Lost (Number)
Clients Lost (US $ Millions)
2016 2017 2018 2019 2020
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90. Provide your organization’s client distribution as specified in the following table. Report aggregate market values of total assets under custody in US $ millions as of December 31, 2020. Distribution Number of
Clients Number of
Plans Aggregate Market
Value (US $ Millions)
Taft Hartley-Union Below $500 million $500+ million to $1 billion $1+ billion to $5 billion $5+ billion and Up Corporate Below $500 million $500+ million to $1 billion $1+ billion to $5 billion $5+ billion and Up Public Fund Below $500 million $500+ million to $1 billion $1+ billion to $5 billion $5+ billion and Up Endowments & Foundations, etc Below $500 million $500+ million to $1 billion $1+ billion to $5 billion $5+ billion and Up
Accounting and Reporting (Custody)
91. Provide a complete description of your accounting system, including the level of automation.
92. Are your reports on a trade date, settlement date or cash basis? Are all versions available?
93. Does your system report or accommodate trade date, contractual settlement date, cash basis accounting or a combination? What, if any, transactions are not accrued? Please explain.
94. How do you report interest and dividend income? How are interest and paydowns for pass-through securities reflected?
95. Describe your procedures and basis (i.e. average cost) for computing and reporting realized and unrealized gains and losses for domestic and international securities, including total, from currency, and from market.
96. What are your international income collection and income crediting policies, by country? Can you provide standing instructions to convert income to U.S. dollars or another currency?
97. Do you provide payable date posting for dividends, bond interest and principal and interest on mortgage pass-through certificates?
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98. What is your organization’s ability to record individual portfolios and/or consolidation of individual portfolios? Can you consolidate international and domestic portfolios?
99. Can you capture and report brokerage commissions generated by a money manager?
100. How do you report on illiquid investments (i.e. real estate, private equity)?
101. How long is your data retention period?
102. Describe the daily, weekly, monthly, quarterly and annual reporting timetables to which your organization would commit.
103. Do you provide book and market value reconciliations? How often?
104. Describe your procedures for notifying investment managers of transactions and cash balances available for investment.
105. What procedures are used to verify the accuracy and completeness of dividend and income receipts?
106. What reporting is provided to assist in satisfying GASB Statements? What provisions are in place for future GASB requirements and how do you prepare for new GASB requirements?
107. Where is your accounting group located?
Asset Safekeeping (Custody)
108. Describe your system for registration and custody of assets, including depositories used.
109. What is distinct about your safekeeping capabilities in the areas of derivatives, structured instruments and non-traditional asset classes?
110. Describe your procedures for securities settlement and clearance. How and where are physical settlements transacted?
111. How do you track the accuracy in your custody and clearing area?
112. Describe your safekeeping facilities.
113. Briefly describe the method and frequency of reconciling the custodian’s positions with its depositories, sub-custodians and managers.
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114. If securities are lost or damaged, do you obtain replacement securities?
115. Briefly describe the procedures used to ensure that physical securities are properly registered, transferred and in general, held, delivered and/or received in good deliverable form. Include any second party banks in the clearing of such securities.
116. Please provide the following information concerning pricing:
a. What is the source of your pricing data for equity and fixed income securities? Include pricing sources for foreign assets and currencies.
b. What procedures do you have in effect, if any, to identify and investigate unusual or significant pricing changes?
117. How do you handle information on corporate activities (i.e., tender offers, exchange offers, splits, etc.)?
118. Describe how you monitor and distribute proxy information.
119. Briefly describe your global custody capabilities, highlighting those items that set you apart from your competition.
120. For each country where you provide custody services, list your custodial agent bank and the year the current relationship began.
121. What selection criteria do you use to select your global sub-custodians? Please describe how you ensure that sub custodians provide the highest level of reporting and service to your clients. Also, discuss whether clients have transparency into the sub custodian relationships and underlying reporting.
122. Please discuss whether, and on what terms, your firm is willing to take on the responsibility for filing on behalf of clients for either sub-custodial documentation or foreign taxes. If not, please describe the process for ensuring this documentation takes place.
123. Outside of the United States, do you use any central depository facilities? Are they used for international clearing?
124. How are trade settlements communicated?
125. Do you have an accrual accounting system for global custody?
126. Describe the processing of tax claims on foreign income, including:
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Sources of information Procedures for maintaining information on current treaty provisions Filing to establish status for exemptions and reclamation Filing reclamations for tax refunds Identification of party responsible for each processing step Procedures for accruing, reporting, aging and posting of reclaimable tax Detail reporting provided to SURS
127. Describe your procedures for establishing domestic and international entitlements and accruals for capital changes (stock splits, stock dividends, spin-offs, mergers/acquisitions, tenders, calls, warrants, maturities, etc.). Indicate whether the process is automated or manual and the primary source of data.
128. What percentage of tax reclaims for the last three years ending December 31, 2020, was your organization able to reclaim?
129. Are accounting and reporting capabilities available in both local currency and in U.S. dollars? Please describe.
130. Do your standard reports include a report of trades pending settlement? Is there a standard report of all pending transactions? Is there a standard report of pending tax reclaims?
131. How long have you used your current global accounting software? What major enhancements have you made in the last three (3) years?
132. Describe your global cash management services.
133. State the value of assets held (as of December 31, 2020) at Depository Trust Company and Federal Reserve and the length of the direct participant relationship with the custodians.
134. State the value of assets for basic international depositories, such as Euroclear, EuroNext and Clearstream, as of December 31, 2020.
135. What was the trade volume (number and market value size) that you processed for the year ending December 31, 2020, and failed trades for US securities? Trades Volume (Number) Total Market Value in
($ Millions) Fail Rate (%)
Purchase Sales
136. There is growing concern regarding the requirement for an Independent Tax Agent in certain countries in which SURS is invested. Please describe how you support the registration process, designation of an Independent Tax Agent and preparation of the Global Power of Attorney for SURS. How do you ensure that this is not a burden to SURS?
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137. Related to the previous question, identify the countries with whom you have formulated a solution for Independent Tax Agent requirements, including distinct policies. Who is the normal contracted Independent Tax Agent assisting clients like SURS?
Foreign Exchange Transactions (Custody)
138. Describe your ability to handle foreign exchange transactions. Please discuss transparency with respect to FX and trade data.
139. Do you execute foreign exchange transactions pursuant to best execution standards for the client’s benefit or do you derive profit from foreign exchange transactions you execute above your stated fixed fee for consummating the transactions and, if so, in what amount or percentage per transactions?
140. Do you provide real time reporting on FX trades, with spreads and costs clearly articulated? Do you provide “time-stamped” data?
141. Within international separate account portfolios, what is your pricing policy and procedures for competitive and auto-repatriated foreign-exchange trades (i.e. dividends, interest, etc.)?
142. How does your firm monitor and evaluate the execution of the local "sub-custodian" foreign-exchange executions? Please elaborate on how these sub-custodians are held to the same standards as your firm with respect to execution. Do you assume the liability, and indemnify the client, for sub-custodians?
143. What area handles foreign exchange contracts within your organization? Have there been any recent personnel changes with regards to senior management?
144. Are investment managers given a choice to as to whether or not they want to use the custodian for foreign contracts?
145. Are any penalties in place for executing trades outside of the custodian bank?
146. When a foreign contract request is initiated by the manager do you execute the contract right away or will the request become part of a batch process to be executed at a later time?
147. How are the rates which foreign contracts are executed, arrived at?
148. Do you track your execution relative to the daily average for each currency? Is this information available to clients and consultants?
149. What is the cost associated with a foreign exchange contract? Is there a flat fee or is the cost embedded in the spread?
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150. Are there any countries with which you will not process a foreign currency exchange contract with?
151. Can you confirm compliance with the foreign laws, including the Foreign Corrupt Practices Act?
Transition Plan (Custody)
152. Describe a proposed custodian transition process and timetable.
153. Describe the factors that could change the proposed transition process and timetable.
154. What specific technical and human resources would you provide during the conversion?
155. How do you conduct the transfer of securities and cash from a prior custodian and its sub-custodians to control the risk of loss of assets and assure that all are received and accounted for properly?
156. What is your policy to make a client whole if an asset was not transitioned or failed to be accounted for after the conversion date? Who pays the client?
157. What is the relationship between the transition team and the permanent relationship management key personnel?
158. Please discuss the transition notification period required for terminating a current securities lending program, and implementing a new program.
159. How will you handle open tax reclaims filed by a prior custodian?
Cash Management (Custody)
160. Describe the custodian’s standard policies on cash crediting and debiting, including cut-off deadlines for all securities, both domestic and international.
161. Describe your procedures for ensuring that interest and dividends (domestic and international) are paid.
162. Will payments be credited in same day funds or clearinghouse funds for domestic and international securities?
163. When and in what instances do you rescind contractual income collections? What is/are your policy(s) for both domestic and international markets?
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164. Do you track late collections of income? Can you produce a tracking report detailing outstanding claims? Do you notify clients of failures to collect or late collections of income?
165. What short-term investment vehicles do you offer for tax-exempt use? What are the respective fees?
166. For each of the short-term investment vehicles, provide the net return and market value for the past five (5) years, as of December 31, 2020.
167. Describe, in detail, your buy/sell fail procedures. Are dollar amounts “netted” together?
168. If your client is in a net buy fail position, how are the related cash monies handled?
169. How are overdrafts handled? Do client-level “daylight” overdrafts occur? What are the charges if any for an overdrawn position?
170. Do you have the ability to forecast available cash? If yes, how far out into the future?
171. Did any of your organization’s short-term investment vehicles “break the buck” in the past five (5) years? If so, what was your firm’s response to clients who may have suffered losses (realized or unrealized) and were any capital support programs offered by your organizations?
Investment Guideline Compliance (Custody)
172. Please provide a complete description of your capabilities for monitoring required compliance with the Patriot Act, Anti-Money Laundering, and OFAC SDN List. Are you able to identify companies that have been invested in that are fined by OFAC.
173. Please describe your organization’s offering with respect to corporate governance tools and support to clients. What services are available?
174. Does the system integrate guideline compliance into the automated trading process and actively monitor transactions and portfolio composition?
175. Provide a description of the different levels of compliance monitoring (i.e., basic, intermediate or advanced) you provide and advise which services are included in your fee proposal and which are available for an additional fee.
176. Is compliance monitoring performed for all asset classes? Is it performed daily? Is it on a post-trade, p-settlement basis? Is it available on-line?
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177. How are clients and investment managers notified of a violation or breach in the investment policy and guidelines?
178. Does the compliance monitoring system allow for tracking of potential violations and generation of periodic reports?
Performance Measurement and Analytical Services (Custody)
179. Describe the performance evaluation services you presently offer, including attribution analysis reports.
180. Describe the internal infrastructure used to provide these services (i.e., organizational hierarchy, resources, etc.).
181. Describe the methodology used to calculate performance measurement.
182. Can you compare managers' rates of return to a substantial universe of similar portfolios?
183. Do you adjust market values used in performance calculations for accruals?
184. Describe any reports you have which analyze equity or fixed income portfolio holdings. Are these reports available for aggregates of portfolios?
185. What are the sources of your performance measurement and manager analytic information?
186. List all market indices available.
187. How often and how soon are performance measurement reports available?
188. Do you provide broker trade analysis? Can you provide information identifying commission and implicit execution costs by broker, and by portfolio? Please describe your capability in this area in detail.
189. Provide a sample of the performance measurement information that you normally send to your clients.
190. Can you backload prior years' monthly performance data? If yes, please describe and give the number of years of data that can be backloaded.
191. Describe your procedures for auditing rates of return calculated.
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192. What is your procedure for calculating performance for periods that contain large cash flows? (>10% of market value)
193. How do you process private market investments (i.e. private equity, private real estate and infrastructure) that are reported on a lagged basis?
194. Do you have any other significant performance measurement or analytic services not addressed in the above questions?
Asset Transitions/Management (Custody)
195. Describe your capabilities with respect to assisting clients in implementing significant asset transitions/restructurings.
196. Do you offer internal trade crossing/swapping opportunities to help clients achieve low-cost transitions between managers? If so, what was the volume of internal crosses/swaps executed during 2020, 2019, 2018, 2017, and 2016?
197. Please provide an overview of investment products offered by your organization to qualified plans. What advantages, if any, are associated with client utilization of these products relative to other vehicles?
Class Action Claims Filing (Custody)
198. Describe the structure of your dedicated unit for class action claims filing.
199. Describe your capabilities with respect to assisting clients in filing class action claims on their behalf.
200. Does your organization have a quality assurance process to audit claims filed to ensure holdings reconcile with the corresponding transactions? Is this an automated or manual process?
201. Has your organization invested in the development and modernization of its securities litigation claim filing services process, technology, and staffing over the past three (3) years?
202. Does your organization file for open and closed accounts?
203. How long does your organization maintain securities litigation data?
204. Please explain how fees are charged with regards to filing claims on the client’s behalf as well as an estimated fee range.
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205. Please outline any third- party audit services used for class action filings. Are these costs borne by the custodian bank, or the client? If there is a choice, please detail how many clients utilize each option currently.
Proxy Voting (Custody)
206. Describe the structure of your dedicated unit for proxy voting support.
207. Can you support proxy voting by third party? If yes, briefly describe how the process would work.
Corporate Action (Custody)
208. Describe the structure of your dedicated unit for corporate actions.
209. How do you handle bankruptcy filings and the subsequent monitoring of the filings?
Banking Services (Custody)
210. ACH Processing: SURS transmits (via FTP) approximately 50,000 transactions on a monthly basis, using pre-note procedures to enhance the accuracy of transactions. This includes the ability to send ACH payments to foreign banks, a high level of support for return and reversal items, and on-line review of daily activity. Describe your firm’s capability as it pertains to ACH processing, file transmission and on-line access.
211. Lock box processing: SURS receives between 5-40 lockbox items per day that needs to be processed and data transmitted on a daily basis via FTP. Copies of supporting documents need to be available online. Describe your firm’s capability to meet SURS requirements as it pertains to lock box requirements.
212. Checking account services: SURS utilizes positive pay, zero balance checking account vis-à-vis a trust account, ACH debit blocking services, online account inquiry, stop-payment processing, online access to copies of cancelled checks, and online ACH/wire credit/debit reporting. Describe your firm’s capability to meet SURS requirements as it pertains to checking account services.
213. Remittance of federal and state withholding taxes: Describe your firm’s process and capability in remitting federal and state withholding taxes.
Securities Lending (Securities Lending)
214. Where does securities lending fit within the organization as a service or product offering?
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215. In what year did you first offer securities lending?
216. How many clients currently participate in securities lending? What is the dollar size of your securities lending pool?
217. Provide the number of securities lending clients gained and/or lost for the periods listed in the following matrix. Report corresponding market values in US $ millions as of initiation date for clients gained and termination date for clients lost. Year Clients Gained
(Number) Clients Gained (US $ Millions)
Clients Lost (Number)
Clients Lost (US $ Millions)
2016 2017 2018 2019 2020
218. What is the approximate revenue and profit contribution of your Institutional securities lending business to overall company (as defined by the top of the organizational chart) revenue and profit in percentage terms?
219. Are there any current organizational issues (i.e., mergers, acquisitions, personnel changes, business concerns, etc.) about your institution that we should know about? Describe.
220. Furnish a copy of your firm’s Ethics Statement and Code of Conduct, specifically developed for securities lending services.
221. SURS requires a SSAE 16 or SAS 70 report covering your organizations securities lending function. Please verify that your firm can fulfill this requirement. List substantive issues raised by independent auditors in your SSAE 16 or SAS 70 and issues published in your Form 10-K if filed. Provide a copy of the most recent annual report, Form 10-Q and SSAE 16 or SAS 70 and label appropriately. Please indicate whether there have been any substantive changes in internal controls since the date of your SSAE 16 or SAS 70 report.
222. Describe the various types of insurance coverage and indemnification provided to protect your securities lending clients.
223. What additional safeguards are offered by your firm to its lending participants?
224. If a client wished to withdraw from your firm's securities lending program, what notice period is required to ensure 100% on the dollar payoff?
225. Does your organization have any capacity limitations? What determines the limit on the deals, transactions and lending activities in which your firm engages?
226. Disclose how many clients or aggregate asset size your organization can effectively handle and discuss why.
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227. Does the securities lending group have a dedicated credit analysis team or part of a larger pool within your organization?
228. Has your organization experienced any losses due to operational negligence, collateral reinvestment and/or security specific reinvestments, and/or broker default since the inception of your securities lending program? Describe. What was the recourse provided to clients and the level of dialogue to explain (resolve) the issues?
229. How does your organization conduct asset/liability (gap) analysis, specifically the duration of the loan and cash investments?
230. Does your firm stress test your securities lending program? Describe the methodology and procedures utilized for stress testing, including the frequency of testing.
231. How do you protect against excess risk and loss? Describe with specific details any indemnification provisions related to borrower default and/or collateral impairment.
232. Describe your policy for screening borrowing counterparties.
233. Please provide a current list of the borrowing counterparties approved for lending.
234. How many borrowing counterparties on your approved list are used (i.e., does 75% of your lending actually go to a small number of counterparties)?
235. What is the maximum loan made to a single borrowing counterparty?
236. What percentage of collateral do you require? Please list requirements for various types of securities if applicable. Do you require collateral to cover both market value and accrued income?
237. What forms of collateral do you accept? If you accept non-cash collateral, please describe how it is managed.
238. What is the credit quality of your collateralized pool? Please provide liquidity (e.g., WAM/WAL) and yield characteristics as well.
239. Describe the procedures and the frequency of marking collateral to market.
240. How is the collateral invested? Please describe general investment approach as well as risk mitigation strategies.
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241. For direct lending services, do clients have a choice of collateral pools? If yes, please provide a factsheet or prospectus for each pool.
242. Have you ever experienced any impairments to your collateral pools? If so, how was this handled?
243. Describe the allocation system used in determining which clients’ securities are loaned.
244. Describe your recall procedures and how substitution is utilized.
245. How does your securities lending staff avoid infringing on an investment manager’s responsibilities, specifically recall of securities?
246. What lending reports are made available to clients?
247. Do you offer international lending? If yes, please describe.
248. What percentage of the income generated from securities lending is shared with your clients?
249. How does your firm manage the coordination of trade settlements, corporate actions, dividend collection, etc. with the custodian bank? Does your firm provide guarantees?
Transition (Securities Lending)
250. How long will the transition/conversion process take? What remedy will you offer if the plan takes longer than you expected?
251. Provide a summary of the problems that you reasonably expect to occur during a transition/conversion and your approach to resolving these anticipated problems.
252. What is the relationship between the transition team and the permanent relationship management key personnel?
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Appendix C: Fee Proposal
SURS will be considering separate proposals for 1) custody with securities lending; 2) custody with no securities lending; 3) stand-alone securities lending. In submitting proposals, please complete Appendix C-1 for custody with securities lending, Appendix C-2 for custody with no securities lending and/or Appendix C-3 for stand-alone securities lending. Firms can submit proposals for more than one option.
FIRM NAME: _______________________________________________________
ADDRESS: _______________________________________________________
____________________________________________________________________
TELEPHONE: _______________________________________________________
REPRESENTATIVE: __________________________________________________
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Appendix C-1: Fee Proposal – Custody with Securities Lending
Fees Proposal must provide fees on a firm fixed price (flat fee) basis that will be deemed to have allowed correct and sufficient amounts to cover all its obligations under or arising from the contract, law, or otherwise, and to have allowed the necessary resources to enable it to carry out the relevant Scope of Work. Pricing must include any additional costs outside of the services indicated, such as transition or conversion fees. Provide fees, in United States dollars (USD), below for the Services described in the Scope of Work and for which proposer is submitting an offer. Fees should be provided in the manner that the services are typically structured for this service (hourly, quarterly, annually, project basis, number of funds, basis points, etc.). All pricing must be inclusive of travel. If fees include all Services within each category, offeror may complete only the main category row (highlighted in gray). If there are separate fees for any Service in a sub-category row, proposer must complete all sub-category rows. Do not complete both the category and sub-category rows for each service being offered. Proposer must complete this table as requested. Any changes to the table will not be accepted. Additional clarifications can be made in the Fees Clarification section below.
SOW Section Description
Services Included
Unit Measure
5-year Price
Guarantee A. Core Custody Services
1. Custody Services ☐ 2. Trade Processing and Settlement ☐ 3. Income Processing ☐ 4. Tax Reclaim Support ☐ 5. Corporate Actions ☐ 6. Transition and Conversion ☐ 7. Accounting and Reconciliation ☐ 8. Unitization ☐ 9. Pricing and Market Data ☐
10. Derivatives ☐ 11. Reporting ☐ 12. Investment Management Support ☐ 13. Cash Management System ☐ 14. Foreign Exchange Transactions ☐
B. Investment Book of Record (IBOR) C. Middle Office Trade Support Services D. Alternative Assets
1. Capital Call and Distributions Processing ☐ 2. Audit and Reconciliation Services ☐ 3. Fee Transparency Reporting ☐ 4. Performance and Reporting ☐
E. Performance Analytics (Without Risk Analytics)
1. Performance and Reporting ☐
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SOW Section Description
Services Included
Unit Measure
5-year Price
Guarantee 2. Attribution Analytics ☐ 3. Investment Compliance Monitoring ☐
F. Overnight Investment Vehicles 6. Alternative Service: ☐ 8. Alternative Service: ☐
G. Class actions and Proxy Processing 1. Research, Filing, and Monitoring services ☐ 2. Audit & Gap Analysis ☐ 3. Notifications ☐
H. Technology 1. Interface with third- party providers ☐ 2. Storage and Maintenance Fees ☐ 3. Technology, Reporting, and Query Services ☐
J. Banking Services 1. Wire Transfers ☐ 2. ACH Processing ☐ 3. Checking Account Services ☐ 4. Overdraft Charges ☐ 5. Lock box processing ☐
K. Securities Lending 1. Revenue Sharing Split ☐ 2. Third-Party Collateral Custody Fees ☐ 3. Third-Party Purchases/Sales Transactions ☐ 4. Third-Party Loans/Loan Returns ☐ 5. Third-Party Wire Charges ☐ 6. Other Third-Party Charges ☐
L. Other Services not listed (provide description):________________________
Fees Clarification Provide additional comments/explanations related to standard services that will assist SURS in evaluating the fees table above. Do not include proprietary formulas or applied discounts used to derive the fees. Most Favored Nation Clause (MFN) Would your firm be willing to enter into a most favored nation clause certifying that the fees, costs, or pricing charged to SURS do not exceed the fees, costs, or pricing charged by the proposer to any of its clients for the same or similar level of services? Other Fees The proposer should disclose any additional fees associated with subcontractor arrangements that involved the services to be provided to SURS and are not included in the Fees section approve.
Discount Option
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Include any discounts that could be applied to the fee schedule. Provide a reason and explanation of how/when the discount would be applied.
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Appendix C-2: Fee Proposal – Custody without Securities Lending
Fees Proposal must provide fees on a firm fixed price (flat fee) basis that will be deemed to have allowed correct and sufficient amounts to cover all its obligations under or arising from the Contract, law, or otherwise, and to have allowed the necessary resources to enable it to carry out the relevant Scope of Work. Pricing must include any additional costs outside of the services indicated, such as transition or conversion fees. Provide fees, in United States dollars (USD), below for the Services described in the Scope of Work and for which proposer is submitting an Offer. Fees should be provided in the manner that the services are typically structured for this service (hourly, quarterly, annually, project basis, number of funds, basis points, etc.). All pricing must be inclusive of travel. If fees include all Services within each category, Offeror may complete only the main category row (highlighted in gray). If there are separate fees for any Service in a sub-category row, proposer must complete all sub-category rows. Do not complete both the category and sub-category rows for each service being offered. Proposer must complete this table as requested. Any changes to the table will not be accepted. Additional clarifications can be made in the Fees Clarification section below.
SOW Section Description
Services Included
Unit Measure
5-year Price
Guarantee A. Core Custody Services
1. Custody Services ☐ 2. Trade Processing and Settlement ☐ 3. Income Processing ☐ 4. Tax Reclaim Support ☐ 5. Corporate Actions ☐ 6. Transition and Conversion ☐ 7. Accounting and Reconciliation ☐ 8. Unitization ☐ 9. Pricing and Market Data ☐
10. Derivatives ☐ 11. Reporting ☐ 12. Investment Management Support ☐ 13. Cash Management System ☐ 14. Foreign Exchange Transactions ☐
B. Investment Book of Record (IBOR) C. Middle Office Trade Support Services D. Alternative Assets
1. Capital Call and Distributions Processing ☐ 2. Audit and Reconciliation Services ☐ 3. Fee Transparency Reporting ☐ 4. Performance and Reporting ☐
E. Performance Analytics (Without Risk Analytics)
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SOW Section Description
Services Included
Unit Measure
5-year Price
Guarantee 1. Performance and Reporting ☐ 2. Attribution Analytics ☐ 3. Investment Compliance Monitoring ☐
F. Overnight Investment Vehicles 6. Alternative Service: ☐ 8. Alternative Service: ☐
G. Class Actions and Proxy Processing 1. Research, Filing, and Monitoring services ☐ 2. Audit and Gap Analysis ☐ 3. Notifications ☐
H. Technology 1. Interface with third- party providers ☐ 2. Storage and Maintenance Fees ☐ 3. Technology, Reporting and Query Services ☐
J. Banking Services 1. Wire Transfers ☐ 2. ACH Processing ☐ 3. Checking Account Services ☐ 4. Overdraft Charges ☐ 5. Lock box processing ☐
K. Other Services not listed (provide description):________________________
Fees Clarification Provide additional comments/explanations related to standard services that will assist SURS in evaluating the fees table above. Do not include proprietary formulas or applied discounts used to derive the fees. Most Favored Nation Clause (MFN) Would your firm be willing to enter into a most favored nation clause certifying that the fees, costs, or pricing charged to SURS do not exceed the fees, costs, or pricing charged by the proposer to any of its clients for the same or similar level of services? Other Fees The proposer should disclose any additional fees associated with subcontractor arrangements that involved the services to be provided to SURS and are not included in the Fees section approve.
Discount Option Include any discounts that could be applied to the fee schedule. Provide a reason and explanation of how/when the discount would be applied.
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Appendix C-3: Fee Proposal – Stand-Alone Securities Lending
Fees Proposal must provide fees on a firm fixed price (flat fee) basis that will be deemed to have allowed correct and sufficient amounts to cover all its obligations under or arising from the Contract, law, or otherwise, and to have allowed the necessary resources to enable it to carry out the relevant Scope of Work. Pricing must include any additional costs outside of the services indicated, such as transition or conversion fees. Provide fees, in United States dollars (USD), below for the Services described in the Scope of Work and for which Proposer is submitting an Offer. Fees should be provided in the manner that the services are typically structured for this service (hourly, quarterly, annually, project basis, number of funds, basis points, etc.). All pricing must be inclusive of travel. If fees include all Services within each category, Offeror may complete only the main category row (highlighted in gray). If there are separate fees for any Service in a sub-category row, Proposer must complete all sub-category rows. Do not complete both the category and sub-category rows for each service being offered. Proposer must complete this table as requested. Any changes to the table will not be accepted. Additional clarifications can be made in the Fees Clarification section below.
SOW Section Description
Services Included
Unit Measure
5-year Price
Guarantee A. Securities Lending
1. Revenue Sharing Split ☐ 2. Third-Party Collateral Custody Fees ☐ 3. Third-Party Purchases/Sales Transactions ☐ 4. Third-Party Loans/Loan Returns ☐ 5. Third-Party Wire Charges ☐ 6. Other Third-Party Charges ☐
B. Other Services not listed (provide description):________________________
Fees Clarification Provide additional comments/explanations related to standard services that will assist SURS in evaluating the fees table above. Do not include proprietary formulas or applied discounts used to derive the fees. Most Favored Nation Clause (MFN) Would your firm be willing to enter into a most favored nation clause certifying that the fees, costs, or pricing charged to SURS do not exceed the fees, costs, or pricing charged by the proposer to any of its clients for the same or similar level of services? Other Fees The proposer should disclose any additional fees associated with subcontractor arrangements that involved the services to be provided to SURS and are not included in the Fees section approve.
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Discount Option Include any discounts that could be applied to the fee schedule. Provide a reason and explanation of how/when the discount would be applied.
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Appendix D: Addendum to Contract
ADDENDUM TO CONTRACT
In consideration of SURS entering into such contract, the vendor/contractor also agrees to the
following:
1) If the contractor is an individual, he or she certifies that he or she is not in default on an educational loan as provided in Section 3 of the Educational Loan Default Act, 5 ILCS 385/3.
2) The contractor certifies that it is not barred from being awarded a contract or subcontract because of a conviction or admission of guilt for bribery or for bribing an officer or employee of the state of Illinois or any other state in that officer or employee’s official capacity as provided in Section 50-5 of the Illinois Procurement Code, 30 ILCS 500/50-5 and further certifies that it is in compliance with Section 50-37 of the Illinois Procurement Code, 30 ILCS 500/50-37.
3) The contractor certifies that it will provide a drug free workplace by engaging in the conduct prescribed in Section 3 of the Drug Free Workplace Act, 30 ILCS 580/3.
4) The contractor certifies that it is not barred from contracting with SURS because of a violation of either Section 33E-3 (bid-rigging) or 33E-4 (bid rotating) of Article 33E of the Criminal Code of 1961, 720 ILCS 5/33E.
5) The contractor certifies that neither it nor any substantially owned affiliated company is participating or shall participate in an international boycott in violation of the provisions of the
U.S. Export Administration Act of 1979 or the regulations of the U.S. Department of Commerce promulgated under that Act.
6) The contractor certifies that no fees, commissions, or payments of any type have been or will be paid to any third party in connection with the contract to which this is an addendum, except as disclosed in the contract or an exhibit thereto as provided in 30 ILCS 500/50-25 and in 40 ILCS 5/1-
145. The contractor shall promptly notify SURS if it ever has reason to believe that this certification is no longer accurate.
7) To the extent Illinois law is applicable to contractor, pursuant to 775 ILCS 5/2-105, contractor agrees to:
a) Refrain from unlawful discrimination and discrimination based on citizenship status in employment and undertake affirmative action to assure equality of employment opportunity and eliminate the effects of past discrimination;
b) Comply with the procedures and requirements of the Illinois Department of Human Rights’ regulations concerning equal employment opportunities and affirmative action;
c) Provide such information, with respect to its employees and applications for employment, and assistance as the Illinois Department of Human Rights may reasonably request; and
d) Have written sexual harassment policies that shall include, at a minimum, the following information:
i) The illegality of sexual harassment;
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ii) The definition of sexual harassment under state law;
iii) A description of sexual harassment, utilizing examples;
iv) Contractor’s internal complaint process including penalties;
v) The legal recourse, investigative and complaint process available through the Illinois Department of Human Rights and the Illinois Human Rights Commission;
vi) Directions on how to contact the Illinois Department of Human Rights and the Illinois Human Rights Commission; and
vii) Protection against retaliation as provided by Section 6-101 of the Illinois Human Rights Act. A copy of the policies shall be provided to the Illinois Department of Human Rights upon request.
8) To the extent it applies to the contractor and this contract, the contractor agrees to comply with the Illinois Prevailing Wage Act, 820 ILCS 130/1, et seq.
9) Contractor shall maintain, for a minimum of five (5) years after the completion of the contract, adequate books, records, and supporting documents to verify the amounts, recipients, and uses of all disbursements of funds passing in conjunction with the contract. Contractor shall further make all such books, records, and supporting documents related to the contract available for review and audit by the internal auditor of SURS and by the Illinois Auditor General and shall cooperate fully with any audit conducted by the internal auditor of SURS and the Illinois Auditor General and will further provide the internal auditor of SURS and the Illinois Auditor General full access to all relevant materials.
10) Contractor agrees to notify the SURS Ethics Officer if it solicits or intends to solicit for employment any of the employees of SURS during the term of the contract.
11) Contractor understands that SURS and this contract are subject to the provisions of the Illinois Open Meetings Act (5 ILCS 120/1, et seq) and the Illinois Freedom of Information Act (5 ILCS 140/1, et seq).
12) Counterparts. This Agreement and Addendum may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement. The counterparts of this Agreement and Addendum may be executed and delivered by facsimile or other electronic signature by any of the parties to any other party and the receiving party may rely on the receipt of such document so executed and delivered by facsimile or other electronic means as if the original had been received.
Under penalties of perjury, the contractor certifies that is its correct Federal Taxpayer Identification Number.
Contractor is doing business as a(n) (please circle applicable entity):
● Individual ● Sole Proprietorship ● Partnership
● Corporation ● Not-for-Profit Corporation ● Medical and Health Care Services Provider Corporation
● Real Estate Agent ● Governmental Entity ● Tax Exempt Organization (IRC 501(a) only)
● Trust or Estate ● Other: ___________________
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Appendix E: Diversity Disclosure