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Board Policy No. 9 — Investment Policy <br /> 1. Financial Institutions. <br /> • Current audited financial statements. <br /> • Depository contracts, as appropriate. <br /> • Proof that commercial banks and savings banks are state or federally chartered. <br /> In addition to the above, commercial banks and savings banks must maintain a minimum <br /> net worth to asset ratio of three (3) percent (total regulatory net worth divided by total <br /> assets), and must have had positive net earnings for the last reporting period. <br /> 2. Brokers. <br /> • Current audited financial statements. <br /> • Proof that brokerage firms are members in good standing of a national securities <br /> exchange. <br /> In addition, to be eligible for consideration to become an authorized provider, each <br /> broker/firm shall meet the following minimum requirements: <br /> 1. Have a net capital position in excess of$10 million; <br /> 2. Have been in business for at least five (5) years; <br /> 3. Are currently licensed as a broker-dealer or investment adviser in California; and <br /> 4. Must carry adequate insurance coverage including liability, errors and omissions, <br /> and workers' compensation (if applicable). <br /> Firms providing only representation of money market funds are exempt from requirement <br /> #1, but must still comply with all other requirements, including those listed below. <br /> The Evaluation Committee shall evaluate the qualifications of all qualified firms, and <br /> choose (at least) the three most qualified firms based on evaluation criteria. The NCTD <br /> Board shall approve the initial authorization of any qualified firm. Renewal of authorization <br /> is at the discretion of the Treasurer, provided the minimum requirements stated above <br /> continue to be met. <br /> All firms authorized to do business with NCTD must also comply with the following <br /> requirements: <br /> a. Firms must submit audited financial statements annually, within six (6) months of <br /> their fiscal year-end; <br /> b. Firms must provide proof of their National Association of Securities Dealers <br /> (NASD) certification, and must disclose to NCTD any regulatory actions or <br /> complaints against the broker assigned to the NCTD account; <br /> c. Firms must provide proof of their registration/license to do business in the State of <br /> California, and shall immediately disclose to NCTD any change in that status; and <br /> Page 3 of 8 <br />