Financial markets administration services

Tender description

The Greater London Authority (GLA) provides a shared service function for Treasury Management to a number of related public sector organisations, through the Group Investment Syndicate (GIS). As at 31.3.16 the fund balance was 2 300 000 000 GBP, and this is expected to grow, as more participants join the shared service arrangement. As the fund is primarily a cash-based fund, intended to facilitate good liquidity whilst making as good a return as possible, investments tend to be relatively short term in nature. Much of the fund is placed on fixed term deposit and a relatively small proportion is currently invested in corporate bonds. However, as the fund is expanding, and in order to diversify perceived risk and improve returns, the GLA is now anticipating a more targeted approach to investing in corporate bonds and other securities such as Residential Mortgage Backed Securities. There is therefore now a need to engage a custodian to provide safekeeping and related services on behalf of both the GLA and the GIS. The targeted sum in the medium term would be approximately 150 000 000 GBP held in these asset classes (bonds/RMBS), with specified sums potentially being held for named participants in the syndicate or on behalf of the group as a whole. Separate sub-funds are likely to be required to designate group and individually owned assets, and for those under external fund managers. It is likely that the GIS will continue to expand as various new parties consider the benefits of investing on a group basis. For this reason, alternative legal structures for the provision of the service are being considered, with the potential for establishing an Authorised Contractual Scheme (ACS) being 1. It is essential that the appointed custodian is able to transfer the contract to a future entity on the agreed terms and that they are capable of providing the service to a much larger fund, working in collaboration with other asset servicing entities, such as trustee/depositary and transfer agent. The successful organisation will be expected to provide the following services: — Custody — Investment Accounting — Performance Measurement — Compliance Reporting Further details regarding the requirements can be found in the specification document as part of the invitation to Tender. Please be aware that the GLA may convert the GIS into an Authorised Contractual Scheme (ACS).