An act relating to the state treasurer negotiating state-wide custody contracts.
Local governments enter into contracts with financial institutions for custody services.
The custodian financial institution assures delivery of newly purchased securities before releasing monies for those securities. In addition, the custodian holds the securities and provides other valuation and reporting services during the period when the local government owns the securities. Currently, each local government negotiates its own custody contract. Concerns exist that larger local governments receive better rates and terms for custody services than smaller local governments who do not have the same volume of business. The State Treasurer is authorized to negotiate a statewide custody contract for local government custody services.