Specifications include, but are not limited to: A. The Contractor shall be able to settle 10,000 security transactions annually, safe keep a total portfolio of at least $10 billion, and complete up to $1.5 billion in cash settlement trades/day. B. The Contractor shall settle all State of Arkansas transactions on a delivery versus payment basis facilitated through the Federal Reserve or the Depository Trust Company. C. The Contractor shall provide a system for all State securities that: 1. Collects interest and principal payments on securities and either credits the Office custody account or remits as directed by the Office on the payable date; 2. Accepts wirable securities at the Federal Reserve in the Contractor’s account; 3. Accept wired cash payments and credits properly to account for coupon payments on physical bonds and SPOs; 4. Collects interest and principal payments for collateral securities (mostly mortgage backed) and remits to brokers entitled to such payments under repurchase agreements, on the payable date; 5. Accepts repurchase agreement collateral information from the broker/bank after the Office notifies the custodian of the terms of the investment; 6. Returns repurchase agreement collateral on the closing date without additional Office instruction. D. The Contractor shall maintain a daily market value of the collateral for repurchase agreements according to margin requirements established by the State. E. The Contractor shall verify and maintain Repo collateral valued at an agreed amount, value the collateral daily, and make margin calls on behalf of the State when the collateral is under value. F. The Contractor shall coordinate collateral substitutions and margin calls as requested by brokers/banks and ensure that the market value of the collateral is sufficient. G. The Contractor shall provide daily online reports that compare the market value of the collateral to the related investment, aggregated on a broker by broker basis. In addition, the custodian shall provide a daily online report detailing all substitution and margin calls. H. The Contractor shall provide a daily online securities pricing system. I. The Contractor shall accept physical deliveries and hold in a vault (at the Office’s discretion). Physical bonds must be accessible within a 24-hour period for overnight delivery. J. The Contractor shall have an overnight investment vehicle for all funds remaining in or received by the Office account(s) after 3 p.m. central time each day. Also, any investment program utilizing repurchase agreements must provide that collateral is held at the Federal Reserve in the Offeror's account or, at the option of the Office, by a third party.
