HomeMy Public PortalAboutR2177 R E S O L U T I O N NO. 2177
WHEREAS, the Board of Trustees of The Metropolitan St.
Louis Sewer District acts as fiduciary to the members and
beneficiaries of the District's Pension Plan, and
WHEREAS, as fiduciary, said Board has the responsibility
for the evaluation and management of Pension Plan transaction costs
for the exclusive benefit of members and beneficiaries, and
WHEREAS, it is the intent of said Board that all Pension
Plan transactions of publicly traded securities be effected through
brokerage firms, regardless of location, in order to obtain the
best execution and lowest cost of the transaction, and
WHEREAS, it is the intent of said Board to establish
guidelines for the selection of broker/dealer firms to be used by
the District Pension Plan Investment Managers,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT, that the Trading and
Brokerage Policy as attached hereto and made a part hereof is and
hereafter shall be the policy of the District for the selection of
broker/dealer firms to be used by the District Pension Plan
Investment Managers for all Pension Plan transactions of publicly
traded securities.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEE PENSION PLAN INVESTMENT POLICY STATEMENT
TRADING AND BROKERAGE POLICY
A. Security Transaction Policy
1. Introduction
The Board of Trustees of The Metropolitan St. Louis Sewer District (District)
intends to fulfill its responsibility for the evaluation and management of
transaction costs for the exclusive benefit of participants and beneficiaries. To
assist in accomplishing these duties, this Security Transactions Policy and these
Guidelines for the Selection of Brokerage Firms have been approved by the
Board.
2. Basic Principles
The Board of Trustees requires that these principles guide all transactions for
the Plan:
! Best execution and lowest cost (including commission costs and market
impact) and providing benefits exclusively for participants and
beneficiaries of the District must apply to each trade.
! Efforts to reduce trading costs, in terms of both commissions and market
impact, provided the investment returns of the Pension Plan are not
jeopardized, will be ongoing.
! Only brokerage firms who meet the District's Guidelines for Selection
with appropriate trading capabilities and market expertise should be
utilized.
! The Board will retain the ability to enter into brokerage commission
recapture agreement(s).
! The Board may evaluate transaction activity annually through a Trading
Cost Analysis.
Provided that the total return of a manager's portfolio is not adversely affected
or that the investment process is not affected so as to place the Plan in a
disadvantageous position relative to the investment manager's other accounts,
and provided that best execution and lowest cost are obtained, each manager is
to direct a percentage of its trading to specified firms for the purpose of
brokerage commission recapture programs. The Board will select the brokerage
firms and establish the expected level of trading to be directed.
B. Guidelines for Selection of Brokerage Firm
1. Introduction and Basic Principles
The primary responsibility of the Board of Trustees is to act as a
fiduciary to the members and beneficiaries of the District's Pension Plan.
It is the intent of the Board of Trustees that all transactions of publicly
traded securities be effected through brokerage firms, regardless of
location, in order to obtain the best execution and lowest cost of the
transaction.
Brokerage firms are an integral part of the investment process. Their
services can significantly affect the investment performance of the fund.
Hence, the Board of Trustees, in fulfilling their fiduciary responsibilities,
is establishing guidelines for the selection of broker/dealer firms to be
used by the Plan's investment managers.
Each investment manager will be responsible for the selection of
brokerage firms, or automated trading systems, through which trading will
be completed for the Pension Plan. Their selection must in all cases be
for the exclusive benefit of the Plan's participants and beneficiaries and
should strive for best execution with lowest cost for each trade.
2. Guidelines for Selection
The broker/dealer firm must:
! Be in compliance with applicable Federal and State of Missouri laws
relevant to the conduct of business as a broker/dealer.
! Be a member in good standing of the major financial exchanges
worldwide.
! Have on-site, in-house trading capability and direct access to major
markets.
! Have in-house access to trading support equipment.
! Be able to trade for competitive rates.
! Have the financial capability to accommodate a capital commitment trade
over a five day settlement period.
! Have the ability to clear and settle trades without unnecessary delays or
fails, and a record of doing so.
! Have been in business as a broker/dealer for a reasonable period of
time to ensure financial and operational stability.
3. Review/Evaluation
At least annually, the Board of Trustees may review the brokerage firms utilized
by the Plan's investment managers and all transactions for compliance with
these policies and procedures through an annual trading Cost Analysis. With
the assistance of the District's custodian, the Board may monitor manager
commission costs on a routine basis.
The foregoing Resolution was adopted April 20, 1995.