(A) Delivery vs. payment. All trades of marketable securities will be executed (cleared and settled) on a delivery vs. payment (DVP) basis to ensure that securities are deposited in the entity's safekeeping institution prior to the release of funds.
(B) Third-party safekeeping. Securities will be held by an independent third-party safekeeping institution selected by the City of Middletown. All securities will be evidenced by safekeeping receipts in the name of the City of Middletown. The safekeeping
institution shall annually provide a copy of its most recent report on internal controls, Service Organization Control Reports (formerly 70, or SAS 70) prepared in accordance with the Statement on Standards for Attestation Engagements (SSAE) No. 16 (effective June 15, 2011).
(C) Internal controls. Management shall establish a system of internal controls, which shall be documented in writing. The internal controls shall be reviewed by the investment committee, where present, and with the independent auditor. The controls shall be designed to prevent the loss of public funds arising from fraud, employee error, and misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the city.
(Ord. 08-08-19-B, passed 9-12-2019)