Bank Safekeeping Agreement

GFOA recommends that governments use an independent third-party child care service for investment conservation. Governments need to assess the risks against the cost of services and understand exactly the impact of a deposit provider`s failure on the government`s ability to access its fixed assets. The security of public funds should be the priority investment objective of all governments. One of the main measures to protect and combat fraud is the separation of the custody function from the investment function. The investment policy should contain a section on custody and custody, which sets out how the government should have its securities held by an independent third party in order to minimize the risk of a fraudulent transaction. An independent third party in a conservation agreement may be a financial institution completely separate from the place where the cash holdings are held, or it may be a separate division of the institution of the same name. Governments should ensure that when using the same institution both for trading their assets and for participation in custodial services, there are appropriate firewalls and safeguards in place to protect your company`s money. Governments should also be aware of and integrate national and local conservation and conservation laws. A deposit depository has a fiduciary responsibility to its clients and usually charges a set fee based on the volume of assets. Deposit agreements with these providers are often seen as a special type of custody service held within a trustee department of the custodian bank, thus creating independence from the commercial or retail bank. The elements of a deposit banking agreement are as follows: a custody agreement approved by the city is concluded with each custodian bank before the use of that bank`s custody services. Investors who purchase fixed income through their Wells Fargo Securities account can have the securities held by Wells Fargo Bank for a fee.

The securities are held in a wells Fargo bank deposit, also calculated with an interest rate. It is also important to know that banks and financial institutions can use the conditions of custody and custody interchangeably. The COB shall keep a written custody agreement with each bank before using the custody services of the custodians. Under this agreement, fees are often nominal or the service is provided without direct charges as part of a broader relationship. Governments need to understand what services are provided and how capital assets are maintained. The general elements of a basic custody agreement are as follows: There are generally two types of custody services (agreements) that a government will encounter: depositaries may delegate deposit assignments (sale, redemption, issuance) to third parties, provide additional financial services, and facilitate the key function of transferring ownership of shares from one investor`s account to another when a trade is made. . .