request for proposals


Dec 22, 2014 - The Systems invest in a variety of asset classes, including US and Non-US Equity (Emerging ..... asset class exposure (benchmark) and v...

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CITY OF NEW YORK OFFICE OF THE COMPTROLLER

REQUEST FOR PROPOSALS FOR A MANAGEMENT AND OPERATIONS STUDY AND BEST PRACTICE REVIEW FOR THE NEW YORK CITY OFFICE OF THE COMPTROLLER’S ASSET MANAGEMENT FUNCTION

PIN:

015-15816200ZC

RFP ISSUED:

11/18/2014

PROPOSALS DUE: 12/22/2014 BY 2:00 P.M. (ET) SCOTT M. STRINGER Comptroller

Prepared by: New York City Office of the Comptroller Bureau of Asset Management

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REQUEST FOR PROPOSALS FOR A MANAGEMENT AND OPERATIONS STUDY AND BEST PRACTICE REVIEW FOR THE NEW YORK CITY OFFICE OF THE COMPTROLLER’S ASSET MANAGEMENT FUNCTION PIN: 015-15816200ZC TABLE OF CONTENTS

SECTION I. A. B.

INTRODUCTION AND BACKGROUND ................................................................. 1

INTRODUCTION................................................................................................................................. 1 BACKGROUND .................................................................................................................................. 2

SECTION II.

MINIMUM REQUIREMENTS AND PREFERRED REQUIREMENTS .............. 6

A. MINIMUM REQUIREMENTS ................................................................................................................... 6 B. PREFERRED REQUIREMENTS ................................................................................................................ 7 SECTION III. A. B. C.

DELIVERABLES, PROJECT APPROACH, SCOPE OF WORK .......................... 7

DELIVERABLES................................................................................................................................. 7 PROJECT APPROACH ........................................................................................................................ 9 SCOPE OF SERVICE ........................................................................................................................... 9

SECTION IV.

EVALUATION CRITERIA ....................................................................................... 15

A. PROPOSER'S WORK PLAN AND APPROACH (MAXIMUM 70 POINTS) .............................................. 15 B. PROPOSER’S CHARACTERISTICS, QUALITY OF STAFF ASSIGNED AND EXPERIENCE PROVIDING SIMILAR SERVICES (MAXIMUM 30 POINTS) ........................................................................................... 15 C. FEE PROPOSAL ............................................................................................................................... 16 SECTION V.

EVALUATION PROCESS ......................................................................................... 16

SECTION VI.

PROJECTED RFP TIMETABLE ............................................................................. 17

SECTION VII. TECHNICAL PROPOSAL QUESTIONNAIRE ..................................................... 17 A. B. C. D. E.

SUMMARY ...................................................................................................................................... 18 DESCRIPTION OF WORK PLAN AND DELIVERABLES ...................................................................... 18 ORGANIZATIONAL SUPPORT AND EXPERIENCE ............................................................................. 19 PROFESSIONAL STAFF .................................................................................................................... 20 ESG ................................................................................................................................................ 21

SECTION VIII. FEE PROPOSAL......................................................................................................... 22 SECTION IX. A. B. C. D. E.

PROPOSAL SUBMISSION PROCEDURES ........................................................... 24

COMMUNICATION WITH AGENCY .................................................................................................. 24 PROPOSAL DUE DATE, TIME AND LOCATION ................................................................................. 24 PROPOSAL PACKAGE SIZE.............................................................................................................. 25 PROPOSAL PACKAGE CONTENTS ................................................................................................... 25 TRANSMISSION OF DOING BUSINESS DATA FORM ........................................................................ 26

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SECTION X. A. B. C. D.

TIME OF PAYMENTS ....................................................................................................................... 27 AMENDMENTS TO REQUEST FOR PROPOSALS ................................................................................ 27 DISCLOSURE ................................................................................................................................... 27 WORK PRODUCTS .......................................................................................................................... 27

SECTION XI. A. B. C. D. E. F. G. H. I. J. K. L. M. N. O.

GENERAL INFORMATION TO PROPOSERS ..................................................... 27

ADDITIONAL GENERAL INFORMATION TO PROPOSERS .......................... 27

COMPLAINTS .................................................................................................................................. 27 APPLICABLE LAWS ......................................................................................................................... 27 GENERAL CONTRACT PROVISIONS ................................................................................................ 27 CONTRACT AWARD ........................................................................................................................ 28 PROPOSER’S APPEAL RIGHTS ......................................................................................................... 28 MULTI-YEAR CONTRACTS ............................................................................................................. 28 PROMPT PAYMENT POLICY ............................................................................................................ 28 PRICES IRREVOCABLE .................................................................................................................... 28 CONFIDENTIAL, PROPRIETARY INFORMATION OR TRADE SECRETS .............................................. 29 RFP POSTPONEMENT/CANCELLATION........................................................................................... 29 PROPOSER COSTS ........................................................................................................................... 29 SOLICITATION MAY NOT RESULT IN AWARD ................................................................................ 29 CHARTER §312(A) CERTIFICATION (I.E., LOCAL LAW 35) ............................................................. 29 COMPLIANCE WITH LOCAL LAW 34 OF 2007 ................................................................................. 29 VENDEX FEES................................................................................................................................. 30

NEW YORK CITY RETIREMENT SYSTEMS: ETHICS AND COMPLIANCE POLICY .......... 35 ATTACHMENT ATTACHMENT 1 BUREAU OF ASSET MANAGEMENT’S ORGANIZATIONAL CHART ………31 EXHIBITS EXHIBIT 1 EXHIBIT 2 EXHIBIT 3 EXHIBIT 3-A EXHIBIT 4

PROPOSER'S COVER SHEET .................................................................................... 32 ACKNOWLEDGMENT OF ADDENDA .................................................................... 34 NYCRS ETHICS AND COMPLIANCE POLICY ....................................................... 35 NYCRS INVESTMENT CONSULTANT RFP CERTIFICATION ............................. 43 SUPPLEMENTAL DILIGENCE QUESTIONNAIRE ................................................ 44

ENCLOSURES ENCLOSURE 1 ENCLOSURE 2 ENCLOSURE 3 ENCLOSURE 4 ENCLOSURE 5

ELECTRONIC FUNDS TRANSFER AND LINK TO ENROLLMENT FORM ........ 50 LOCAL LAW 34: DOING BUSINESS DATA FORM AND LINK TO FORM ......... 51 WHISTLE BLOWER PROTECTION EXPANSION ACT RIDER ………………….54 BIDDERS CERTIFICATE OF COMPLIANCE WITH IRAN DIVESTMENT ACT . 56 SUBCONTRACTOR TRACKING NOTICE ……………………………………..….58

APPENDIX A

GENERAL PROVISIONS GOVERNING CONTRACTS FOR CONSULTANTS, PROFESSIONAL AND TECHNICAL SERVICES AND RIDER

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REQUEST FOR PROPOSALS FOR A MANAGEMENT AND OPERATIONS STUDY AND BEST PRACTICE REVIEW FOR THE NEW YORK CITY OFFICE OF THE COMPTROLLER’S ASSET MANAGEMENT FUNCTION PIN: 015-15816200ZC

SECTION I. INTRODUCTION AND BACKGROUND A. Introduction The Comptroller of the City of New York (the “Comptroller”), is custodian of and responsible for the safekeeping of the assets of the five (5) New York City retirement systems 1 (each, a “System”) and collectively, the “Systems” or “NYCRS”) and 11 related variable and miscellaneous supplemental funds (“Related Funds”). The Comptroller, acting on behalf of the Systems and Related Funds, is distributing this Request for Proposals (“RFP”) to identify a firm to provide services in connection with a study and analysis of the management, operations, processes, and performance of the Bureau of Asset Management (“BAM”) and review and recommendations on best practices for BAM (together, the “Management and Operations Study and Best Practice Review” or “Review”). BAM serves the Comptroller’s asset management functions under the direction of the Deputy Comptroller for Asset Management / Chief Investment Officer (please see the BAM Organizational Chart, Attachment 1 to this RFP). The selected firm must have expertise in conducting a Management and Operations Study and Best Practice Review of asset management operations process flow in a public pension environment, and must demonstrate a thorough knowledge of large public pension plan investment policies and procedures. Such expertise and qualifications are necessary since the firm will be required to show a track record of successful reviews and support for implementations of services, including, but not limited to, the following areas: investment strategy and investment control; cash management; short-term trading; financial reporting; compliance and risk management; corporate governance; pensions administration; contracts; and accountancy. A detailed scope of the Review is listed under Section III herein. It is envisioned that the Review will be a comprehensive examination and independent evaluation of the Comptroller’s current asset management policies, processes, procedures and internal controls. The Review must gauge the cost effectiveness and efficiency of BAM’s asset management operations, identify operational weaknesses and opportunities for improvement based on industry and market trends, and identify industry best practices and the needs of BAM. Section III of this RFP details the work and deliverables to be performed by the successful proposer under this engagement. 1

Each of the five Systems include: (1) Teachers’ Retirement System of The City of New York, (2) New York City Employees’ Retirement System, (3) New York City Police Pension Fund, (4) New York City Fire Department Pension Fund, and (5) Board of Education Retirement System of The City of New York.

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It is the expectation of the Comptroller that a final report (“Best Practice Protocol”) required by this RFP will be completed within four (4) months of the commencement of the contract. This Best Practice Protocol (as described further in Section III herein) shall include without limitation a summary of the findings and a gap analysis. Proposals will be evaluated based on the criteria set forth in this RFP. A contract award will be made to the responsible proposer whose proposal represents the best value to the City by optimizing quality, cost and efficiency, and is therefore determined to be the most advantageous to the City, taking into consideration the price and such other factors or criteria that are set forth in this RFP. The Comptroller reserves the right to select multiple firms to provide the requested services pursuant to this RFP. Consistent with the laws and policies of the City, proposals from certified minority-owned and/or women-owned businesses or proposals that include partnering arrangements with certified minority-owned and/or women-owned firms are encouraged. Additionally, proposals from small and New York City based businesses are also encouraged. B. Background The Comptroller’s Bureau of Asset Management (BAM) assists the Systems and Related Funds in selecting investment advisors, consultants and related service providers in public and private markets totaling approximately 300 firms. State Street Bank and Trust Company, N.A., is the Systems’ current master custodian bank (the “Master Custodian Bank”). The Systems invest in a variety of asset classes, including US and Non-US Equity (Emerging Markets, EAFE), REIT, Private Equity and Real Assets (including Real Estate, Infrastructure and Commodities), Enhanced Yield, Bank Loans, Convertible Bonds, Opportunistic Fixed Income, and Hedge Funds. In addition, the Systems seek to achieve a target allocation of 2 % of assets to Economically Targeted Investments (“ETIs”) where practical and consistent with the standards and policies of each system. ETIs may cross a variety of asset classes. Currently, BAM also manages the Systems’ and Related Funds’ cash, directs allocations to the investment advisors and assures the investments recommended by the advisors meet legal requirements. BAM also analyzes the performance of individual advisors, based on their investments and transactions for compliance and fulfillment of investment guidelines. In addition, BAM executes short-term trading and, on behalf of the Systems’ and Related Funds’ Boards of Trustees (“Trustees”), votes the proxies for shares held by the Systems and Related Funds, and coordinates Corporate Governance and the shareholder initiatives programs. Additionally, BAM works with the Comptroller’s Bureau of Accountancy (“BOA”) to develop reports and execute other asset management functions. The Bureau of Accountancy is responsible for maintaining the official financial accounting records of the City. It prepares and issues the City’s Comprehensive Annual Financial Report (CAFR) and oversees the independent audits of the City, the Systems and Related Funds. In addition, BOA is primarily responsible for the design and management of the accounting aspects of the City’s centralized accounting and budgeting system, the Financial Management System, or “FMS Accounting.”

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On a monthly basis, the BOA’s Fiduciary Services Division - Pension Accounting Unit reviews and analyzes investment data received from BAM, prepares journal entries and processes them using the Q2 General Ledger System and produces reports which are sent to the Systems and Related Funds for use in preparing their financial statements. Two other units within the Fiduciary Services Division are responsible for processing the monthly pension payrolls, providing BAM with disbursement information for funding purposes, recording cash receipts and cash disbursements and reconciling the pension (cash) bank accounts. The Systems’ fund size as of August 31, 2014 totaled approximately $163.12 billion, consisting of the investments under management shown below: ($Millions)

Systems1 Total

U.S Equity

Non-U.S Equity

Fixed Income2

Private Equity

Real Assets3

Hedge Funds

Other4

$63.36

$28.84

$47.93

$9.72

$5.54

$3.41

$4.32

NYCRS Total Fund Size $163.12

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System includes: (1) Teachers’ Retirement System of The City of New York, (2) New York City Employees’ Retirement System, (3) New York City Police Pension Fund, (4) New York City Fire Department Pension Fund, and (5) Board of Education Retirement System of The City of New York. 2 Fixed Income includes TIPS, Enhanced Yield, Bank Loans, Convertible Bonds, and Opportunistic Fixed Income. 3

Real Assets includes Real Estate and Infrastructure

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Other includes, Securities Lending and BNY-Mellon CD accounts, Cash.

BAM’s asset management functions are executed by several divisions (please see the BAM Organizational Chart, Attachment 1 to this RFP). The work and responsibilities of key divisions are briefly described below: 1. Investment Strategy Division The Investment Strategy Division, in conjunction with outside investment consultants selected by each System, develops and recommends investment policy and strategy, asset allocation and investment manager selection for adoption by the Trustees and develops investment manager guidelines. The Investment Strategy Division staff oversees the following asset classes: Fixed Income; U.S Equity; Non-US Equity; Private Equity; Hedge Funds; and Real Assets (including Real Estate, Infrastructure and Commodities). This division also provides oversight of portfolio managers, prepares agendas for investment meetings, prepares quarterly investment performance reports and other assessments for each System, and prepares executive summaries for the Comptroller. 2. Investment Control Division The Investment Control Division maintains and confirms all transactions and records, manages account changes and reviews all fee payments. The Investment Control

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Division’s staff monitors the securities safekeeping, transaction processing and records of the investment activity of the Systems and Related Funds. The Division verifies the purchases and sales of securities and the transfer of cash and securities. The Division is responsible for reviewing all reported transactions and conducting monthly reconciliations of all internal and external transactions and transition reconciliations. The Division is also responsible for reviewing and updating all account structures along with updating all internal current work papers to include new custodian bank account numbers. 3. Cash Management Division The Cash Management Division manages the day-to-day cash flows of the Systems and Related Funds. Calculations are made by the Division to determine the amount of funds needed to cover controlled disbursements, private equity investments, targeted investments, fixed income investments, equity investments, real estate investments, hedge fund investments, opportunistic investments, etc. The Cash Management Division notifies the Short-Term Trading Division of the excess funds to invest overnight or longer. The Division performs all necessary wire transfers, prepares reports of cash flow analysis, and sends daily transmittal reports to the Comptroller’s Bureau of Accountancy The Division also processes advisor fees for payment to BAM’s various vendors, including investment managers, consultants, and custodian banks. 4. Short-Term Trading Division The Short-Term Trading Division actively manages the City’s short-term investments, including those of the City Treasury, the Systems’, and other City agencies. The ShortTerm Trading Division’s staff operates the trading desk, executes the trades, and inputs the trade data into QED, a short-term investment reporting system/mainframe application that tracks holdings of securities. Each month a holdings report, a list of securities that the City owns, is generated from QED which is reconciled with the holdings report from State Street Bank and Trust Company, N.A., the Systems’ short-term investment assets custodian bank. 5. Compliance and Risk Management Division The Compliance and Risk Management Division monitors investment activities in order to proactively evaluate investment and compliance risks in the portfolios overseen by BAM. This Division is responsible for identifying and implementing systems to assess and document protocols, to monitor regulatory compliance (both within and outside of BAM), and to monitor compliance as it relates to the ethical conduct of external managers, parent companies, affiliates, joint venture partners, as well as the investment managers’ delegates, on a range of issues relevant to the financial services industry. This Division also ensures that investments comply with State and Federal law, the Systems’ investment guidelines, and the asset allocation decisions made by the Systems’ and Related Funds’ Trustees. This Division is also responsible for analyzing and reporting on portfolio investment risk using complex quantitative models (i.e., VaR, Stress Testing, and Scenario Analysis),

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evaluating the implications of investment decisions on total portfolio risk, and monitoring the impact of market developments on asset allocations and other investment policies. The Division also reviews and recommends innovative risk management technology and modifications to risk-related controls and internal operating procedures and systems. 6. Corporate Governance Division The Corporate Governance Division is responsible for developing and implementing the proxy voting and shareholder initiatives programs of the Systems, including, but not limited to: voting the Systems’ and Related Funds’ proxies for US public equities; engaging with management and directors at portfolio companies; advocating for legal and regulatory reforms to protect investors and strengthen shareholder rights; advising investment staff and trustees on environmental, social and governance risks and disclosures; and representing the Comptroller’s Office, Systems and Related Funds in relevant investor organizations and other formal and informal collaborative investor groups and initiatives. Consistent with the fiduciary obligations of the Systems’ and Related Funds’ Trustees, the proxy voting and shareowner initiatives programs actively promote sound corporate governance, responsible executive compensation and sustainable business practices at portfolio companies in order to protect and enhance the long-term value of the Systems’ and Related Funds’ investments. Corporate Governance Division staff present the proposed programs to the Proxy Committee of each System for review and approval. Each Proxy Committee acts on behalf of its respective Board of Trustees. 7. Administration and Pensions The Administration and Pensions Division monitors the investments and management of the Systems. This Division is also responsible for developing and maintaining BAM’s relationships with Trustees. The Administration and Pensions Division staff attends Boards of Trustees meetings and actively represents the Comptroller as a Trustee at the Boards of Trustees meetings. 8. Financial Reporting Division The Financial Reporting Division assists the BOA, the Systems and Related Funds in gathering data for the Comprehensive Annual Financial Report issued by the Comptroller every October. This Division also helps produce reports such as GASB 28 (Securities Lending), Management Fees, Pie Charts of investment summary, GASB 40, Broker Commissions, and Quarterly and Monthly Reports. The Financial Reporting Division is responsible for developing timelines for the processing of the quarterly Trustee reports (June, September, December, and March), and acts as a liaison between BAM staff and the Master Custodian Bank to ensure that information is accurate and corrections are made when necessary. The Division is responsible for maintaining a spreadsheet with a running total of investment expenses under each contract.

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9. Contracts Division The Contracts Division develops and manages RFPs and Notices of Search, negotiates contracts and handles related registration, renewal and amendment activities for approximately 125 contractual relationships. The Contracts Division staff handles all procurement and contracting for external services used by BAM including, for example, investment advisory, consulting, information, and custodian services. Subsequently, the Division is responsible for drafting, producing, advertising, and distributing RFPs, creating and maintaining mailing lists, and responding to inquiries. In addition, the Division coordinates the receipt, distribution and evaluation of proposals. BAM Organizational Structure For the BAM organizational structure, please refer to the BAM Organizational Chart, Attachment 1 to this RFP. SECTION II.

MINIMUM REQUIREMENTS AND PREFERRED REQUIREMENTS

A. Minimum Requirements Proposals in response to the RFP must meet minimum requirements set forth below (the “Minimum Requirements”). Proposers who do not meet the Minimum Requirements, or who do not comply with the specifications or material terms and conditions of this RFP, shall be considered non-responsive and shall be rejected. Proposers must provide proof to demonstrate that their firms meet the Minimum Requirements. The Comptroller’s Office reserves the right to reject any firm that it determines to have a conflict of interest that would affect the proposer’s ability to perform the services specified in this RFP. The Comptroller will review proposals only from firms that meet the Minimum Requirements set forth in this Section II(A). 1. Firm must be experienced in reviewing the asset management function of public pension plans, and must have conducted such a review within the past five (5) years for at least one public pension plan. 2. Firm must not currently have a contract with the Systems, Related Funds or Comptroller in connection with the services, operations or functions within the scope of the Management and Operations Study and Best Practice Review, unless the firm can demonstrate adequate policies, systems, procedures, practices and means to prevent and mitigate any conflicts of interest with the Systems or Related Funds. 3. Firm must not be affiliated with any firm providing the services described in Paragraph A (2) immediately above. 4. Firm’s key professionals to be assigned to this engagement must have at least three (3)

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years of experience conducting substantially similar assessments and/or reviews and performing the activities listed in the Scope of Services described herein. The firm must provide evidence where the professionals assigned performed such services for large pension plan asset management functions. 5. Proposers should refer to the NYCRS Ethics and Compliance Policy (the “Policy”) at Exhibit 3 to this RFP and then indicate their ability and willingness to comply with the Policy by signing NYCRS Investment Consultant RFP Certification (the “Certification”) that appears as Exhibit 3-A to this RFP. Certification should be appended to the Proposer’s Cover Sheet which appears as Exhibit 1 to this RFP. All proposals will be screened initially to determine whether the Minimum Requirements are met. The successful proposer will be required to maintain these minimum qualification requirements during the term of any contract awarded pursuant to this RFP. B. Preferred Requirements In addition to meeting the Minimum Requirements set forth above, proposers are advised that the Comptroller will award the contract to a proposer that has the capacity to meet the needs of the Comptroller’s Office, as evidenced by a proposer’s high ratings in connection with preferred requirements (“Preferred Requirements”). Failure to meet the Preferred Requirements, however, will not necessarily result in the rejection of a proposal. Preferred Requirements include: 1. Ability to review the asset management function of public pension plans with a multiple participant structure, such as the five Systems of NYCRS, having over $25 billion in assets; 2. Provide two (2) references of the firm’s experience in conducting the services described in Preferred Requirements Section II (B)(1) immediately above.

SECTION III.

DELIVERABLES, PROJECT APPROACH, SCOPE OF WORK

A. Deliverables The successful proposer will work collaboratively with BAM to lead an analysis of BAM’s policies, procedures and practices and provide the required reports described in this section. Listed below are the primary areas of focus for the Management and Operations Study and Best Practice Review. Additional areas may be suggested by the successful proposer as it relates to the scope of work. Each area is outlined in more detail in Section III(C) Scope of Services to this RFP.

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1. Management and Operations Study of BAM’s Divisions Within 45 calendar days of contract commencement, the successful proposer shall provide to BAM a management and operations study of BAM’s divisions that will be in the form of evaluating the following areas (and as further described in Section III(C) Scope of Services herein): A. B. C. D. E. F. G. H. I. J.

Evaluation of Investment Strategy Evaluation of Investment Control Evaluation of Cash Management Evaluation of Short-Term Trading Evaluation of Compliance and Risk Management Evaluation of Corporate Governance Evaluation of Administration and Pensions Evaluation of Financial Reporting Evaluation of Contracts Evaluation of Bureau of Accountancy’s (interaction with BAM)

2. Performance Analysis Report Within three (3) months of contract commencement, the successful proposer shall provide to BAM a Performance Analysis Report providing a detailed performance analysis of BAM’s investments processes and operations that will cover the areas set forth below (and as further described in Section III(C) Scope of Services herein): A. B. C. D. E. F. G. H. I. J. 3.

Investment Performance Analysis Investment Team Performance Master Custodian Bank services provided to BAM Effectiveness of Third-Party Foreign Exchange services provided to BAM Effectiveness of Third-Party Securities Lending services provided to BAM Consulting Services provided to BAM Transition Management Performance Independent Evaluators of Transition Management Services BAM interaction with the Systems Information Systems Performance

Best Practice Protocol Within four (4) months of contract commencement, the successful proposer shall provide to BAM a Best Practice Protocol providing the following (and as further described in Section III(C) Scope of Services herein): A. Summary of the Results and Findings B. Gap Analysis of Best Practices, with Recommendations and Priorities

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In your proposal please describe the methodology and format the proposer will use to deliver the reports described above. B. Project Approach The successful proposer shall conduct a Management and Operations Study and Best Practice Review pursuant to the Scope of Service described in Section III(C) herein. The successful proposer will engage appropriate subject matter experts and personnel from within its team. The successful proposer must demonstrate a thorough knowledge of large public pension plan investment policies, procedures, and best practices in asset management. Such expertise and qualifications are necessary to meet the objectives of obtaining the reports described in detail in Section III (C). Proposers should note that the Evaluation Criteria for this RFP, described in Section IV herein, place significant emphasis on proposers' experience with large public pension plans. The Comptroller’s Office will provide the successful proposer with a BAM staff member to serve as a project coordinator and support to the BAM team members, in order to: coordinate the gathering of relevant BAM materials and data; schedule meetings; reserve conference rooms; schedule follow-up meetings; and provide related functions. The Comptroller’s Office will also provide the successful proposer with access to the appropriate subject matter experts within BAM who will be able to demonstrate and/or communicate an understanding of the current state environment, serve as a resource for any follow-up questions from the successful proposer as the analysis of the current state takes place, and provide input on any of the successful proposer’s work and deliverables. Interviews and observations will be conducted at BAM’s investment operations center in New York City. The successful proposer will conduct interviews with BAM staff, BOA staff and representatives of the Systems as BAM deems necessary in connection with the study. After the successful proposer’s on-site observations, BAM and the successful proposer will validate current state understanding, and the successful proposer will provide analysis, recommendations and deliverables pursuant to the Project Timeline set forth in Section VI of this RFP. A successful proposer may subcontract some of the services to a third-party firm with approval from the Comptroller and must disclose this in the Technical Proposal Questionnaire, Section VII to this RFP. C. Scope of Service The successful proposer shall perform a Management and Operations Study and Best Practice Review of BAM, which shall consist of a number of services, including without limitation: (1) performing a comprehensive review of asset management functions; (2) analyzing and reviewing the effectiveness of the current services being provided to BAM and quality of

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BAM’s staff performance (3) providing BAM with at least three reports that include written recommendations for improvement of BAM’s operations. The successful proposer’s findings and recommendations must be specific to the Comptroller’s Office, based on the successful proposer's careful study and evaluation of asset management operations. A generic, pre-written or non-specific study, report, and/or recommendations will not be considered acceptable work products. Part 1: Management and Operations Study of BAM’s Divisions The successful proposer must provide an evaluation of BAM’s Divisions. The successful proposer must provide an assessment of the asset management divisions to determine if the divisions are appropriately aligned with the policies, strategic plans and legal mandates of the Comptroller’s Office, and to determine the efficiency and effectiveness of the operations. The successful proposer’s evaluation must include but not be limited to the following areas: A. Investment Strategy a. Monitoring, Reviewing and Performance Analysis b. Manager Selection and Monitoring c. Asset Allocation and Rebalancing d. Transition Management e. Evaluation of BAM’s procedures used to measure manager’s performance f. Contract negotiations and interaction with General Counsel’s Office g. Board of Trustee Interaction h. Investment Process by Asset Class from Inception to Completion i. Fixed Income 1. Public 2. Private (Opportunistic Fixed Income) ii. Hedge Funds iii. U.S. Equity and Non-U.S. Equity 1. Private 2. Public iv. Real Assets 1. Real Estate 2. Infrastructure i. Review of any new asset classes which will exist at the time the successful proposer begins this engagement, e.g., commodities. B. Investment Control a. Management Reporting i. Annual Plan ii. Monthly Updates

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b. c. d. e. f. g.

iii. Reconciliations (bank accounts, asset balances, etc.) iv. Corporate Action analysis v. Advisor Fees analysis vi. Record-keeping Fixed Income – Daily, Weekly, Monthly Equity Procedures and Reports – daily, weekly, monthly International Procedures and Reports – daily, weekly, monthly Alternatives Procedures and Reports – daily, weekly, monthly Securities Lending Procedures and Reports – daily, weekly, monthly Post-reconciliation inventory holding audit with investment guidelines – e.g., IC ADR review

C. Cash Management a. Cash Forecasting b. Authorization of Wire Transfers – Pensions c. Authorization of Wire Transfers – Other d. Investment Guidelines and Procedures e. Financial Data Reporting f. Demand Deposit Services g. Cash Reconciliation and Monitoring h. Capital Calls i. FX Processing j. Division’s interaction with other Bureaus. D. Short-Term Trading a. Execution of daily trades for short-term funds b. Reporting – External (Accounting, Department of Finance, etc.), Internal (Bureau Chief) c. Recording and Analysis E. Compliance and Risk Management Division a. Implementation of Ethics and Compliance Policy b. Guideline Mapping to Custodian System c. Exception Reporting – Daily and Monthly d. Policy and Guideline Compliance Monitoring e. Manager Compliance Disclosures f. Risk Monitoring for the Systems g. Coordination of Quarterly Risk Reports h. Document Retention Procedures i. Procedure Manual Creation and Update j. Business Continuity and Disaster Recovery k. Board of Trustee Meetings Reporting l. Investment Policy Updates and Distribution – Core Investment Policy Statement (IPS) and Satellite IPS F. Corporate Governance Division

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a. U.S. Proxy-Voting Policies, Procedures and Process b. Global Proxy-Voting Policies and Oversight c. Shareholder Initiative Process G. Administration and Pensions a. Oversight of investment and management of the Systems b. Establishing and maintaining Trustee relationships c. Comptroller representation at Board of Trustee meetings d. Providing Trustees with materials needed to make investment decisions prior to the investment meeting date, including information on any special issues or private equity/real assets decisions e. Overseeing BAM operations f. Attending Meetings of Full Boards of Trustees g. Attending Disability Meetings of Boards of Trustees H. Financial Reporting Division a. Oversight of performance reports production (monthly, quarterly) b. Oversight of CAFR production for the Systems c. Data preparation for FOIL requests d. Fees and Corpus-funded contracts monitoring I. Contracts Division a. Management of all BAM procurements and contracting activity b. Management of Contract negotiations and interaction with General Counsel c. Procedures for drafting and producing RFPs and other solicitations d. Retention procedures for advertisements, mailing lists and responses to solicitations and contracts e. Management of contracts, renewals, extensions, and amendments f. Fee calculations maintenance J. Bureau of Accountancy (only the BOA units that interact with BAM) a. Interaction with BAM Staff b. Procedures for preparing market value schedules for all investments at fiscal year end c. Advisor Fee Schedules d. General Ledger Reports Part 2: Performance Analysis Report The successful proposer must analyze and assess the effectiveness of the current services being provided to BAM and quality of BAM’s staff performance. The performance analysis must incorporate, but not be limited to the following: A. Investment Performance Analysis a. Evaluation of the process used to determine and measure investment

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performance b. Assessment of the performance benchmarks used to evaluate its investment returns c. Review of process used to select benchmarks for each asset class under evaluation d. Benchmarking against other large public pension funds and against any other benchmarks the successful proposer deems appropriate B. Investment Team Performance a. Quality and Depth of Team b. Quality of BAM’S Investment Activities C. Master Custodian Services provided to BAM a. Oversight of Master Custodian Bank b. Security Pricing Discrepancies and Escalations c. Foreign Tax Withholding and Reclaim Process d. Failed Trades Process and Escalation e. Monitoring of the STIF Sweeping Mechanism f. Fail to Deliver and Fail to Receive Procedures g. Timeliness and Quality of Reporting D. Effectiveness of Third–Party Foreign Exchange Services provided to BAM a. Implementation of FX program objectives i. Transparency ii. Transaction costs reduction iii. Best execution procedures iv. Cost of the execution b. Evaluation of trading and settlement of Orders directed to Investment Managers c. Performance Reports provided to BAM upon the Comptroller’s Request d. Performance Measurement and risk management e. Assessment of the firm’s annual meetings with the Systems’ representatives. E. Effectiveness of Third Party- Securities Lending Services provided to BAM a. Monitoring, Reviewing and Performance of the Services i. Negotiation of rebates and/or lending fess with the Borrowers ii. Collection process of cash, securities or other financial instruments from Borrowers. iii. Relationship with the Master Custodian Bank iv. Performance measurement v. Interaction between the Securities Lending Provider and BAM Staff. F. Consulting Services provided to BAM a. Review and assess the level and quality of investment consulting services the Staff receives b. Assessment of BAM’s use being made of the consultant’s capabilities c. Comparison of the fee structure for each consultant versus industry standards

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for similar deliverables G. Transition Management Performance a. Selection Process of Transition Managers b. Transition Managers interaction with the Custodian and the Target and Legacy Portfolio managers c. Transition manager’s ability of minimizing tracking errors and maintaining asset class exposure (benchmark) and value d. Review of the Pre-trade, Post-Trade analysis/reports and daily reports provided to BAM by the Transition Manager e. Transition Plan and execution of the plan in a timely manner f. Transition Manager’s compliance with the discretionary, fiduciary requirements of the transition H. Independent Evaluators Analysis of Transition Management Services a. Post- trade report of the Transition executed by the Transition manager. b. Cost analysis reports c. Written transition report submitted to BAM d. Independent evaluator’s documents review procedures I. BAM Interaction with the Systems a. BAM interaction with the Systems’ representatives b. Evaluation of BAM’s interaction with each of the Systems’ accounting groups c. Establish and maintain Trustee relationships d. Comptroller representation at Board of Trustee meetings J. Information Systems Performance a. Evaluate the efficiency, effectiveness and the internal environment surrounding the existing technology and automated systems i. QED ii. My State Street iii. ProxyEdge iv. Investor Analytics b. Identify opportunities for using enhanced technologies to speed cycle times, reduce costs, and improve services for the benefit of the Comptroller’s Office. c. Provide an evaluation of current plans to enhance and expand systems. Part 3: Best Practice Protocol The Best Practice Protocol shall serve as a comprehensive gap analysis of all BAM divisions and functions and describe in detail recommended improvements to enable BAM to adopt appropriate recommendations in order to address and resolve any operations or compliance issues identified by the successful proposer or internally by BAM. The Best Practice Protocol, along with the Assessment and Evaluation of BAM Divisions and the Performance Analysis Report, is also intended to assist BAM’s writing of an “operations manual” describing all BAM functions and procedures. To achieve these purposes, the Best Practice Protocol shall at a

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minimum incorporate the following: A.

A summary of the successful proposer’s findings and analysis for all of the areas identified in the Management and Operations Assessment and Evaluation of BAM’s Divisions and the Performance Analysis Report.

B.

An assessment of all gaps that have been found and written recommendations of policy and procedure improvements for BAM, based on the industry’s best practices and the needs and interests of BAM, the Systems and the Related Funds. The recommendations shall include a ranking of the suggested priorities for their implementation, emphasizing those that are likely to yield the greatest improvement in critical areas relative to the additional time and resources likely to be required.

The successful proposer will be required to provide the reports as deliverables during the course of the study as stated in Section III (A) of this RFP. The successful proposer should be prepared to make presentations to the Comptroller of its reports and the recommendations of improvement for BAM. SECTION IV.

EVALUATION CRITERIA

A proposal not meeting the Minimum Requirements set forth in Section II (A) herein will not be evaluated further. For proposals meeting minimum requirements, the criteria for selection will include: A. Proposer's Work Plan and Approach (Maximum 70 points) 1. Overall technical approach to the Management and Operations Study and Best Practice Review, including strategies and the planned sequence to complete the work required by Scope of Service in this RFP; 2. Appropriateness, comprehensiveness, and general quality of the proposed work plan and methodology; 3. Ability of the proposer to successfully complete the work within the proposed schedule, based upon such factors as staff commitment, management plan and the sufficiency of staff to be assigned; 4. Previous assessments and/or reviews quality as shown by the sample reports submitted with the proposal; and 5. Compliance with the terms, conditions and other provisions of the RFP. B. Proposer’s Characteristics, Quality of Staff Assigned and Experience Providing Similar Services (Maximum 30 points) 1. Qualifications and experience of the senior personnel the proposer plans to assign to the review ; 2. Quality of the junior staff the proposer plans to assign to the engagement and the level of staffing;

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3. Strength of the proposer's references; 4. Financial stability of the proposer; 5. Prior performance of the proposer on Management and Operations Study and Best Practice Review of similar scope and size; 6. Depth and breadth of the proposer's public pension system investment management review and operations review experience; 7. Expressed level of commitment of executive and senior management and accessibility and availability of the senior staff of the project; 8. Whether the proposer is a New York City-certified minority or women-owned business enterprise (M/WBE); and 9. Qualifications and experience of any subcontractors proposed. C. Fee Proposal Proposed fees will have a material impact on evaluating the proposal SECTION V.

EVALUATION PROCESS

All proposals accepted by the Comptroller’s Office will be reviewed to determine whether they are responsive or non-responsive to the requisites of this RFP. Proposals that are determined by the Comptroller’s Office to be non-responsive will be rejected. The Evaluation Committee will evaluate and rate all remaining proposals based on the Evaluation Criteria prescribed above to determine whether a proposal represents the best value to the city and is therefore the most advantageous proposal. The Comptroller’s Office reserves the right to request clarifications or additional information regarding their proposals, conduct site visits and/or interviews and/or to request that proposers make presentations and/or demonstrations, as the Comptroller’s Office deems applicable and appropriate at any time during the evaluation process. Although discussions may be conducted with proposers submitting acceptable proposals, and the Comptroller’s Office may request submission of best and final offers (BAFOs), the Comptroller’s Office reserves the right to award contracts on the basis of initial proposals received, without discussions; therefore, the proposer’s initial proposal should contain its best technical proposal and price terms. The Comptroller’s Office may request BAFOs and will then consider price by negotiating a fair and reasonable price with the highest technically ranked proposer. In the event that such fee is not successfully negotiated, the Comptroller’s Office may conclude such negotiations, and enter into negotiations with the next ranked proposer, as necessary. A contract will be awarded to the responsible proposer(s) whose proposal(s) is/are determined to be the best value to the city and most advantageous to the Systems, taking into consideration the price and such other factors or criteria which are set forth in this RFP. The Comptroller will conduct contract negotiations with proposer(s) selected by the Trustees. Should negotiations fail to result in agreement within two (2) weeks of their commencement, the Comptroller shall have the right to terminate negotiations. The Systems may select another proposer who submitted a proposal in response to this RFP, or take other action consistent with the best interests of the System(s).

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Notwithstanding the above, by soliciting proposals, the Comptroller is not obligated to award any contract. The proposer must be the entity that, if selected, will be contracting with the Comptroller to provide the services described in this RFP (the “proposer” or the “proposing firm”). SECTION VI.

PROJECTED RFP TIMETABLE

The following is the estimated timetable for awarding the contract(s). EVENT

DATE

Release RFP

On or about November 18, 2014

Deadline to submit questions

December 3, 2014

Response to questions distributed

On or about December 12, 2014

Proposal due date

December 22, 2014 By 2 P.M. EST

Evaluations/Interview

January/February 2015

Projected contractor selection and award of contract

February/March 2015

Contract start

On or about April 1, 2015

The successful proposer shall dedicate sufficient resources to complete the Management and Operations Study and Best Practice Review within the Project Timeline indicated below. Start and completion dates are to be mutually agreed by BAM and the successful proposer. SECTION VII. TECHNICAL PROPOSAL QUESTIONNAIRE Name of Firm: Contact: Title: Street Address: City, State, Postal Code Country (if other than U.S.) Telephone: Fax: E-Mail: Date of Response:

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A. Summary This section must include a synopsis of the proposal including a brief overview of the proposed work and the services to be provided by the proposer. B. Description of Work Plan and Deliverables This section is the proposer's detailed plan for satisfying the requirements outlined in Section III Scope of Services, Work Plan and Deliverables of this RFP. The proposer's description of the work and services to be rendered must be clear and in sufficient detail to permit the selection committee to evaluate the proposal fairly. Further, the proposer must describe the effort it will make and skills it possesses that are necessary to complete the engagement. This section must contain at least the following information: 1. A brief introduction outlining the general approach to completing the Management and Operations Study and Best Practice Review and providing the related services. 2. A detailed work plan for each deliverable in the proper sequence. The work plan must include the following for each deliverable, task and requirement: •

Estimated work hours for completion.



An analysis of the work hours by category of proposer's staff to be assigned.



Detailed implementation schedule clearly indicating each deliverable and its completion date and the work product(s) to be provided at the completion of each task.

3. Detailed discussion of the proposer's plan for providing each deliverable required in Section III Scope of Services, Work Plan and Deliverables of this RFP, including a detailed project methodology for the conduct of the Management and Operations Study and Best Practice Review. The discussion should include sampling activities, the approach to gathering data, and any standards to be used, the model for comparative projections, the approach to analyzing data regarding benchmarking and best practices, interview protocols and any other significant analytical or methodological approaches. 4. A detailed discussion of proposer's approach to review of pension plan investment risk management. 5. A detailed discussion of proposer's approach to review of investment custody services.

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6. A detailed discussion of proposer's approach to analysis and evaluation of the operational management of BAM. 7. A detailed discussion of proposer's approach to evaluating technology and automated systems pertaining to asset management and custodial services in large retirement system environments. 8. A detailed discussion of the proposer's benchmarking and best practices methodology and of the proposer's existing practices and metrics database. 9.

A detailed discussion of the proposer’s approach to the preparation of the best practices and operations reports to be produced.

10. Sample checklist(s), questionnaires, guides, or other documents, if any, used to conduct similar assessments. C. Organizational Support and Experience This section must contain all pertinent information that substantiates the proposer's and any proposed subcontractor's qualifications and capabilities to perform the services required by this RFP on a timely basis. The proposal must: 1. Provide evidence that the proposer has conducted assessments and/or reviews and related consulting services for at least five (5) years. The proposer must explicitly disclose engagements where such work was performed for large public retirement systems or large private pension plans. 2. Provide evidence of expertise in the analysis and review of pension plan investment management. The proposer must include evidence of experience and knowledge in statistical sampling and computer modeling and reporting methods. 3.

Provide evidence that the firm has working knowledge of the experience, transparency and consideration requirements that regulatory and/or government agencies demand.

4. Discuss the commitment of the proposer's senior management to providing the services required under this RFP. 5. Discuss the size of the professional staff experienced in operations reviews and similar assessments, including, but not limited to, the size of professional staff experienced in such reviews involving large public retirement systems. 6. Include resumes, qualifications and relevant work experience of all members of the proposer's staff who will be assigned to the project. 7. Demonstrate the proposer's financial and organizational stability.

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8. Indicate whether the proposer or its subcontractor(s) is a New York City Certified Minority or Women Owned Business Enterprise (M/WBE). 9. Provide at least five (5) references, including their names, addresses and telephone numbers. For each reference, the proposer must indicate the number of staff members who worked on the project. The proposer must, in summary form, compare and contrast in terms of size, technical requirements and deliverables the work performed for these references, with the tasks, requirements and deliverables of this RFP. To the extent that recommendations from these assessments have been implemented, proposers should comment on the ensuing results. 10. Provide a synopsis of the firm's consulting engagements, management assessments and/or reviews, in matrix format, showing which of the proposed staff participated in the engagement assessment and/or review. 11. Provide a skills matrix which provides a synopsis of the talents, skills and experience of all proposed staff. 12. Provide a description of the proposer's professional relationships with any System, pension fund, variable supplements fund or the City or any of its agencies within the past three (3) years. 13. Sub-contracting The Comptroller's Office recognizes that in submitting a proposal, proposers may propose utilizing subcontractors to perform certain aspects of the work required in this RFP. In addition, to give certified M/WBEs with offices in New York City an opportunity to participate in the contract, the Comptroller's Office encourages proposals that include such entities. Regardless of the successful proposer's subcontracting arrangements, the Comptroller's Office will sign a contract only with the successful proposer, which must assume full responsibility for all aspects of the work to be performed, including the work of all subcontractors. There will be no privity of contract between the Comptroller’s Office and any subcontractors. Proposals submitted must clearly identify every subcontractor that will supply goods or services under the contract and disclose the relationship to the successful proposer. The successful proposer must provide resumes of all members of the subcontractor’s team, documentation demonstrating the subcontractor’s financial and organizational activity, at least three references that indicate prior experience in conducting similar reviews and indicate any relationships the subcontractor has with any System, Pension fund and/or City Agency. Subcontractors are subject to the prior approval of the evaluation committee. D. Professional Staff

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1. Identify the team that would be responsible for servicing the Comptroller and the Systems (the “Service Team”) and which members of the Service Team would be deemed key employees for the NYC engagement (“Key Professionals”). The proposer must provide resumes for each Service Team member and identify key clients they have served as well as a detailed description of the services, and indicate other clients for whom the Service Team or members of the Service Team currently provide services, including the nature of the services, and how they would divide their time between various clients. 2. Describe your affirmative action policies and practices as they pertain to employee hiring. 3. What percentage of all new managerial and non-managerial hires within the last three (3) years were women and/or minorities? Check one for each column. Managerial

Non-managerial

Greater than 75% Between 50 and 75% Between 25 and 50% Less than 25% 4. Describe how your firm demonstrates a commitment to diversity as it relates to community involvement, service providers, vendors, and the philosophy of the organization. 5. Is your firm an M/WBE and, if so, is it certified by any local, state or other authorized jurisdiction? 6. Does your firm have any current partnering arrangements with M/WBE firms to perform any of the services required pursuant to this RFP? 7. Will your firm consider partnering or subcontracting with any M/WBE firms to perform any of the services required pursuant to this RFP? If so, what arrangements would you proposer? 8. Over the last five (5) years, has your firm been the subject of any actions, complaints or adverse determinations concerning violations of Federal, State or City equal employment opportunity laws or regulations? If yes, provide information on all such actions, complaints or determinations including current status and/or outcome. E. ESG Proposals must contain the following information regarding Environmental, Social and Governance (“ESG”) policies and practices:

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1. Does your firm have a policy that incorporates ESG issues into the investment evaluation process? 2. How do you evaluate and monitor compliance with your policy? Does your firm have staff dedicated to integrating ESG issues in the investment evaluation process? Does your firm have staff dedicated to compliance? 3. Does your firm allocate resources, including an internal staff and/or external services, to review and evaluate sustainability reports of companies involved in potential investments? 4. If your firm has established an internal staff to review and evaluate company ESG/ sustainability reports, please describe how it is positioned and interacts within your firm’s organizational structure. 5. Does the internal structure/staff prepare periodic reports on its review and evaluation of ESG/sustainability issues related to investments, and if so, are such reports reviewed by senior management and the board/leadership? SECTION VIII. FEE PROPOSAL A. In a separate, sealed envelope the proposer must propose a fee that covers all consulting services described in Section III and that does not exceed total contract cost. The Fee Proposal must be an all-inclusive flat fee including all travel and service costs. Additional charges will not be permitted if they are not included in the fee proposal. Please describe how fees are determined. B. You must provide your Fee Proposal for this mandate using the table that appears on the next page. The Fee Proposal must be presented as a PDF file on a compact discs (CD’s) and as two (2) hard copies. See Section IX for proposal submission procedures. C. All firms should recognize that fees are a material element in the section process and that all selections will be made competitively. The Comptroller reserves the right to negotiate fees and request best and final offers. D. Proposers may offer an alternative fee schedule or structure, but must still respond to the items described in Paragraph A of this section. E. Proposers are advised that any contract resulting from this RFP will include a “most favored nation” clause, requiring the contractor to represent and warrant that no other client of comparable structure with a similar scope of work has a lower fee. All firms should recognize that fees are a material element in the selection process and that all selections will be made competitively. The Comptroller reserves the right to negotiate fees and to request best and final offers.

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REQUEST FOR PROPOSALS FOR A MANAGEMENT AND OPERATIONS STUDY AND BEST PRACTICE REVIEW FOR THE NEW YORK CITY OFFICE OF THE COMPTROLLER’S ASSET MANAGEMENT FUNCTION PIN: 015-15816200ZC FEE PROPOSAL Company Name: Date: Contact Information (name, e-mail and phone number): Hourly Rate for Services Please provide an hourly rate for additional services.

Company Name:

TOTAL COST PROPOSAL NUMBER OF STAFF

HOURLY RATE

TOTAL HOURS

COST

MANAGEMENT AND OPERATIONS STUDY OF BAM’S DIVISIONS Consultant team lead Senior Consultants Junior Consultants Others (e.g., Relationship Consultant) Subtotals

$

Subtotals

$

Subtotals ADDITIONAL COST ( e.g., Traveling)- PLEASE SPECIFY Subtotals

$

PERFORMANCE ANALYSIS REPORT Consultant team lead Senior Consultant Junior Consultant Others ( e.g., Relationship Consultant) BEST PRACTICE PROTOCOL Consultant team lead Senior Consultant Junior Consultant Others (e.g., Relationship Consultant)

TOTAL CONTRACT COST

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$ $

SECTION IX. A.

PROPOSAL SUBMISSION PROCEDURES

Communication with Agency

1.

Agency Contact The Comptroller's exclusive Agency Contact for purposes of receiving proposals and responding to inquiries regarding this RFP is: Evelyn Dresler Office of the Comptroller of the City of New York The Municipal Building 1 Centre Street, Room 650 New York, New York 10007-2341 Phone: (212) 669-8235 E-mail: [email protected] The Comptroller's Office shall not be bound by, and proposers may not rely on, information regarding RFP requirements obtained from any other person. From the issue date of this RFP until a proposal is selected, all contact with City employees concerning the RFP must be cleared through the agency contact.

2.

Questions Questions concerning the RFP should be submitted by e-mail to the Agency Contact by the due date for questions indicated on the projected RFP timetable in Section IV. Proposers should submit questions as soon as they arise after receipt of this RFP. Answers to proposers’ questions (unidentified as to source) will be responded to in writing in an Addendum to the RFP and distributed by e-mail to all prospective proposers who downloaded the RFP from the Comptroller's Web site. Only written responses from the Agency Contact should be considered official responses of the Comptroller. See Section IV, Projected RFP Timetable, for applicable dates.

B.

Proposal due Date, Time and Location

1.

Due Date for Proposals: December 22, 2014

2.

Time: 2:00 p.m. (EST) Proposals received after this date and time will not be accepted by the Comptroller’s Office, except as may be provided by the Procurement Policy Board Rules.

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3.

Location for Submission: Office of the Comptroller of the City of New York The Municipal Building 1 Centre Street, Room 650 New York, NY 10007-2341 Attn: Evelyn Dresler

C.

Proposal Package Size

Please submit a Technical Proposal of no more than (30) pages, exclusive of questions and requested exhibits D.

Proposal Package Contents

1.

The proposal package should contain a two compact disks (CDs), five bound hardcopies of Technical Proposal Questionnaire, five hard copies of Sample Reports and Plans, and one original hardcopy Exhibits 1, 2, 3A and 4, as described see below.

2.

Requirements for the compact disks: • Each CD should be in its own case and each CD must either numbered CD1 or CD2 •

Each CD must have a label that states:

CD1 or CD2 Name of Proposing Firm Management and Operations Study and Best Practice Review RFP PIN: 015-15816200ZC

3.



CD1 – should contain pdf files of all documents submitted as part of the Proposal except the Fee Proposal (see checklist below).



CD2 – should contain the Fee Proposal. Use the format provided in the RFP including contact information

Checklist for CD 1 – Exhibits, Technical Proposal & Miscellaneous Technical Proposal as a PDF file Exhibits 1 through 5 as a PDF File: Exhibit 1 - Proposer’s Cover Sheet

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Exhibit 2 - Acknowledgment of Addenda Exhibit 3-A, Management and Operations Study and Best Practice Review RFP Certification Exhibit 4 - Supplemental Due Diligence Questionnaire Exhibit 5 - Certificate of Compliance with Iran Divestment Act Firm’s Form ADV Parts I and II as a PDF file Firm’s Conflict of Interests Policy as a PDF file Firm’s Code of Ethics as a PDF file 4.

Please submit Five (5) Bound Hardcopies of the Technical Proposal Questionnaire. Please note the following: a. The Technical Proposal Questionnaire should be page numbered. b. The Technical Proposal Questionnaire should be no more than 30 pages, exclusive of all attachments and exhibits.

5.

Please submit five (5) Hardcopies of firm’s Sample Reports requested in the RFP: a. Management And Operations Study of BAM’s Divisions b. Performance Analysis Report c. Best Practice Protocol

as

E. Transmission of Doing Business Data Form See Enclosure 2, Local Law 34: Doing Business Data Form (Data Form) and Link to Enrollment Form, for further information. If you have any questions about the Data Form, contact Richard Friedman Agency Chief Contracting Officer, at (212) 669-2043 or [email protected] Do not mail the completed Data Form as a hard copy. Instead, your completed Data Form must be returned as an image attached to an e-mail that should be sent to the mailbox below. [email protected]

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SECTION X.

GENERAL INFORMATION TO PROPOSERS

A. Time of Payments Fee payments will be made quarterly in arrears upon submission and review of an invoice. B. Amendments to Request for Proposals Any substantial clarification or change to this RFP shall be by amendment to the RFP and shall be provided by e-mail to all firms that downloaded a copy from the Comptroller’s Website. It is the proposer’s responsibility to assure receipt of all addenda. All proposals must include an acknowledgment of amendments to the RFP. See Exhibit 2, Acknowledgment of Addenda. C. Disclosure The proposer shall disclose developments that may materially affect its ability to perform the services requested in this RFP or to fulfill its obligations under an agreement that results from this RFP. D. Work Products Materials and working papers developed during the engagement will become the property of the City or the System(s). All original information and all data files derived from the custody services provided to the Comptroller pursuant to this RFP and subsequent contract, if applicable, will be the property of the Comptroller. SECTION XI.

ADDITIONAL GENERAL INFORMATION TO PROPOSERS

A. Complaints The Comptroller is charged with the audit of contracts in the City. Any proposer who believes that there has been unfairness, favoritism or impropriety in the proposal process should inform the Comptroller, Office of Contract Administration, 1 Centre Street, Room 1005, New York, NY 10007; the telephone number is (212) 669-2323. B. Applicable Laws This RFP and the resulting contract award(s), if any, unless otherwise stated, are subject to all applicable provisions of New York State Law, the New York City Administrative Code, New York City Charter and New York City Procurement Policy Board (PPB) Rules. The PPB Rules are available from the Comptroller’s Web site: www.comptroller.nyc.gov. Select RFPs, then Bureaus, then Asset Management, then Procurement Process, then Procurement Process & Forms and then PPB Rules. C. General Contract Provisions

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Contracts shall be subject to New York City’s general contract provisions, including without limitation those provisions in substantially the form that they appear in Appendix A, General Provisions Governing Contracts for Consultants, Professional and Technical Services. D. Contract Award Contract award is subject to each of the following applicable conditions and any others that may apply: New York City MacBride Principles Law; submission by the proposer of the requisite New York City Department of Business Services/Division of Labor Services Employment Report and certification by that office; submission by the proposer of the requisite VENDEX Questionnaires/Certification of No Change and review of the information contained therein by the New York City Department of Investigation; all other required oversight approvals; and, applicable provisions of federal, state and local laws and executive orders requiring affirmative action and equal employment opportunity. Although not required at this time, VENDEX Questionnaires and Supply and Services Reports are available from the Comptroller’s Web site, www.comptroller.nyc.gov. Select RFPs, then Bureaus, then Asset Management, then Procurement Process, then Procurement Process & Forms and then VENDEX or Supply & Services Employment Report. E. Proposer’s Appeal Rights Pursuant to the PPB Rules, proposers have the right to appeal agency nonresponsiveness determinations and agency non-responsibility determinations and to protest an agency’s determination regarding the solicitation or award of a contract. F. Multi-Year Contracts Multi-year contracts are subject to modification or cancellation if adequate funds are not appropriated to support continuation of performance in any City fiscal year succeeding the first fiscal year and/or if the contractor’s performance is not satisfactory. The Comptroller’s Office will notify the contractor as soon as is practicable that the funds are, or are not, available for the continuation of the multi-year contract for each succeeding City fiscal year. In the event of cancellation, the contractor will be reimbursed for those costs, if any, which are so provided for in the contract. G. Prompt Payment Policy Pursuant to the PPB Rules, it is the policy of the City to process contract payments efficiently and expeditiously, upon receipt of a proper invoice. H. Prices Irrevocable Prices proposed by the proposer shall be irrevocable until contract award, unless the proposal is withdrawn. Proposals may only be withdrawn by submitting a written request to the Agency Contact prior to contract award but after the expiration of 180

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days after the opening of proposals. This shall not limit the discretion of the Comptroller’s Office to request proposers to revise proposed prices through the submission of best and final offers and/or the conduct of negotiations. I. Confidential, Proprietary Information or Trade Secrets Proposers should give specific attention to the identification of those portions of their proposals that they deem to be confidential, proprietary information or trade secrets and provide any justification of why such materials, upon request, should not be disclosed by the City. Such information must be easily separable from the nonconfidential, non-trade secret sections of the proposal. All information not so identified may be disclosed by the City. The Comptroller’s Office will attempt to keep such information confidential, but no assurances can be given. J. RFP Postponement/Cancellation The Comptroller’s Office reserves the right to postpone or cancel this RFP, in whole or in part, and to reject all proposals. K. Proposer Costs Proposer will not be reimbursed for any costs incurred to prepare proposals or for any work performed in connection therewith, or during any negotiations on proposed contracts. L. Solicitation May Not Result in Award This Solicitation does not commit the Comptroller’s Office or the System(s) to award a contract or to engage any proposer to perform services of any kind. M. Charter §312(a) Certification (i.e., Local Law 35) The Comptroller has determined that the contract(s) to be awarded through this RFP will not directly result in the displacement of any New York City employee. N. Compliance with Local Law 34 of 2007 Pursuant to Local Law 34 of 2007, amending the City's Campaign Finance Law, the City is required to establish a computerized database containing the names of any “person” that has “business dealings with the City” as such terms are defined in the Local Law. In order for the City to obtain necessary information to establish the required database, proposers responding to this solicitation should complete the Doing Business Data Form. See Enclosure 2, Local Law 34: Doing Business Data Form and Link to Form, for further information. The submission of a Doing Business Data Form that is not accurate and complete may result in appropriate sanctions.

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O. Vendex Fees Pursuant to Procurement Policy Board Rule 2-08(f)(2), the contractor will be charged a fee for the administration of the VENDEX system, including the Vendor Name Check process, if a Vendor Name Check review is required to be conducted by the Department of Investigation. The contractor shall also be required to pay the applicable required fees for any of its subcontractors for which Vendor Name Check reviews are required. The fee(s) will be deducted from payments made to the contractor under the contract. For contracts with an estimated value of less than or equal to $1,000,000, the fee will be $175. For contracts with an estimated value of greater than $1,000,000, the fee will be $350. The estimated value for each contract resulting from this RFP is estimated to be above $1 million.

30

ATTACHMENT 1 BAM Organizational Chart (see attached)

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EXHIBIT 1 REQUEST FOR PROPOSALS FOR A MANAGEMENT AND OPERATIONS STUDY AND BEST PRACTICE REVIEW FOR THE NEW YORK CITY OFFICE OF THE COMPTROLLER’S ASSET MANAGEMENT FUNCTION PIN: 015-15816200ZC PROPOSER’S COVER SHEET 1. Proposer’s Name (Company) __________________________________________________________________________ Note: The proposer must be the legal entity that will contract with us if selected. 2. Address ( Administrative Office) __________________________________________________________________________ 3. RFP Contact: Please provide the following information for two people at your firm that we may contact regarding your proposal. Name/Title:___________________________________________________________ Street: _________________________________ City/State/Zip: _________________ Phone: _________________________________ Fax: _________________________ E-mail: ______________________________________________________________ Name/Title:____________________________________________________________ Street: _________________________________ City/State/Zip: _________________ Phone: _________________________________ Fax: _________________________ E-mail: ______________________________________________________________ 4. Tax Identification #: 5. Does the firm have experience in reviewing the asset management function and has conducted such review within the past five (5) years for at least one public pension plan? Yes__ No__ 6. Does the firm have a contract with the Systems, Related Funds or Comptroller to conduct investment advising services or products, in connection with the selection and monitoring of investments or investment managers, or other services, operations or functions within the scope of the Management and Operations Study and Best Practice Review?

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Yes__ No__ 7. Does the firm have affiliations with any firm providing the services described in Section II Paragraph A(2)? Yes__ No__

8. Do the firm’s key professionals to be assigned to this engagement have at least three (3) years of experience conducting similar evaluations and/or reviews the asset management function of public pension fund and performing the activities listed in the scope of the Management and Operations Study and Best Practice Review, as of December 31, 2013?

Yes__ No__

9. Did proposer certify willingness to comply with NYCRS Ethics and Compliance Policy (Exhibit 3) by signing NYCRS Investment Consultant RFP Certification (Exhibit 3-A) and appending it to the Proposer’s Cover Sheet? Yes__ No__

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EXHIBIT 2 ACKNOWLEDGMENT OF ADDENDA

Request for Proposals for a Management and Operations Study and Best Practice Review of the New York City Office of the Comptroller’s Asset Management Function PIN: 015-15816200ZC Directions: Proposer Must Complete Part I Or Part II Part I: Listed Below Are The Issue Dates For Each Addendum Received In Connection With This RFP Addendum #1, Dated________________________, 2014 Addendum #2, Dated________________________, 2014 Addendum #3, Dated________________________, 2014

PART II:

No Addendum Was Received In Connection With This RFP.

Firm: Name of authorized officer: Signature of authorized officer: ___________________________________ Date:

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Exhibit 3 THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER 1 CENTRE STREET NEW YORK, N.Y. 10007-2341

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Scott M. Stringer COMPTROLLER

New York City Retirement Systems: Ethics and Compliance Policy I. Purpose of the Policy The New York City Retirement Systems (the “Systems”), in furtherance of the management and investment of the assets of the Systems, have determined to establish a comprehensive written Ethics and Compliance Policy (the “Policy”) for investment consultants (the “Consultants”) and for investment managers (the “Managers”) that do or seek to do business with the Systems. The Boards of Trustees of the Systems (the “Boards”) have requested that the Bureau of Asset Management (“BAM”) of the New York City Office of the Comptroller implement the Policy on behalf of the Systems. The purposes of the Policy are: -

to identify and ensure disclosure of any potential risk, conflicts of interest and/or other ethical issues both before and after entering into contracts or transactions with the Consultants’ and the Managers’ firms;

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to ensure that proper internal compliance controls are in effect at the Consultants’ and Managers’ firms, so as to reduce the risk to the Systems;

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to provide a protocol for ensuring that Consultants and Managers are in compliance with the federal securities laws and the rules of the U.S. Securities and Exchange Commission (“S.E.C.”), and other applicable law;

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to obtain timely disclosure from the Consultants and the Managers as to actual or alleged non-compliance with the Consultants’ and the Managers’ internal controls or with applicable law; and

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to assist BAM and the Systems in identifying and responding to non-compliance on the part of any Consultant and/or Manager.

BAM will not recommend continuation of or selection of any Consultant or Manager which does not meet the standards of compliance with this Policy. In addition, a Consultant or Manager which discloses a conflict of interest or other violation of this Policy to BAM must refrain from giving advice or making decisions about any matters affected by the conflict of interest or other violation of this Policy, until and unless authorized by the Board.

II. Annual Certification Obligation of Consultants and Managers 35

Annually, on or before June 15th of each year, Consultants and Managers shall submit an Annual Certification and Compliance Statement (the “Annual Statement”) to BAM, which Annual Statement shall, in addition to providing an update on conflicts of interest, include a certification in the form attached hereto, in which the Consultant or Manager makes the following representations: 1) that the Consultant or Manager is a fiduciary of the Systems; 2) that the Consultant or Manager has received and read this Policy; 3) that the Consultant or Manager is in full compliance with the Policy, except as disclosed in the Annual Statement; 4) that the Consultant or Manager is in full compliance with any other applicable policies and procedures of the Systems that apply to such Consultant or Manager, except as disclosed therein; and 5) that the Consultant or Manager is in full compliance with all applicable laws and regulations. In addition to the above certification, Consultants and Managers, in their Annual Statements, must disclose all information specified in sub-sections A and B below. Although the firm’s Form ADV or other S.E.C. filings may be provided as a supplement; the firm must make full and complete disclosure in the body of the Annual Statement itself. A. Conflicts A conflict of interest exists for a Consultant or Manager whenever the Consultant or Manager has a direct or indirect pecuniary interest or a relationship (without regard to whether the relationship is direct, indirect, personal, private, commercial, or business) with a third party, and the interest or relationship could diminish the Consultant’s or the Manager’s independence of judgment in the performance of the Consultant’s or the Manager’s responsibilities to the Systems. Consultants and Managers must promptly disclose conflicts of interest in writing to BAM, which shall promptly disclose such conflicts to the Systems for review. 1. Relational Conflicts, Generally a) Each Manager/Consultant is required to include a written statement to BAM specifying its affiliates and the lines of relationship between itself and said affiliates, their lines of business, and whether affiliates have any role in the investment process related to the Systems. b) Each Manager/Consultant must also disclose to the Systems at least annually any actual or potential conflicts of interests between the Manager/Consultant (including its affiliates) and the Systems, such as with respect to: i) investment of the Systems’ assets in investment vehicles marketed or managed by the Manager/Consultant or affiliates; ii) allocation of investment opportunities as between the Systems and either the Manager/Consultant, affiliates or other clients; or iii) use, on behalf of the Systems, of services provided by affiliates, such as brokerage or auditing services. Managers/Consultants must also immediately notify BAM of any additional such conflicts that have arisen since the last Annual Statement. c) Managers/Consultants must also report to the Systems the procedures in place to prevent such conflicts and/or mitigate their effects should they occur; and to the Manager’s/Consultant’s policy in relation to the allocation of investment opportunities among its affiliates, between itself and outside clients, and also among outside clients. 2. Compensation Conflicts

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a) Managers/Consultants must disclose to the Systems all matters, including beneficial ownership of securities or other investments that reasonably could be expected to interfere with their duty to the Systems or with their ability to make unbiased and objective decisions in the investment of the Systems’ assets. Managers/Consultants must also promptly notify the Systems of any additional such matters that have arisen since the last Annual Statement. b) Managers/Consultants must also disclose to the Systems: i) all monetary compensation or other benefits that are in addition to compensation or benefits conferred by the Systems, and that they, their affiliates or their personnel have received or may receive for any services performed or to be performed that relate in any way to assets of the Systems, including services for “portfolio companies” of the Systems (those companies whose securities the Manager holds on behalf of the Systems, other than in an index fund); ii) Any referral fees or other consideration or benefit received by the Manager/Consultant or delivered to others for the recommendation of any services to the Systems; and iii) The full details of any services for portfolio companies of the Systems that the Manager/Consultant has undertaken, performed, or agreed to perform. c) Managers/Consultants must also promptly notify the Systems of any additional such compensation or benefits or earned, received or agreed, or services undertaken, performed, or agreed to, to since the last Annual Statement. 3. Conflicts Relating to Systems’ Other Advisors a) Managers must disclose whether any Consultant is an affiliate of the Manager. Consultants must disclose whether any Manager is an affiliate of the Consultant. Affiliate for this purpose includes a parent, subsidiary, debtor, creditor, entity under common ownership, entity in which the Manager/Consultant has invested or which has an investment in the Manager/Consultant or entity with which the Manager/Consultant has a strategic alliance. If yes, the Annual Statement must include a detailed description of the nature of the affiliation. b) Managers must further disclose whether in the past five years, the Manager or any affiliate of the Manager has paid any compensation to any Consultant, or entered into any agreement with any Consultant, under which the Manager or any affiliate of the Manager may pay compensation in the future. Compensation for this purpose means any payment, product or service, and includes, but is not limited to, conference registration fees, research or consulting fees, and brokerage commissions, paid either directly or through soft-dollar arrangements. If so, the Annual Statement must, with respect to each and every such Consultant, describe in detail: i)

The full name of the Consultant;

ii) The amount(s) of the compensation; iii) The year(s) in which it was paid; iv) The purpose of the compensation; and v) The terms of the agreement.

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c) Consultants must further disclose whether in the past five years, the Consultant, or any affiliate of the Consultant, has paid to or received from any Manager any compensation, or has entered into any agreement with any Manager, under which the Consultant or any affiliate of the Consultant may pay or receive compensation in the future. Compensation for this purpose means any payment, product or service, and includes, but is not limited to, conference registration fees, research or consulting fees, and brokerage commissions, paid either directly or through soft-dollar arrangements. If so, the Annual Statement must, with respect to each and every such Manager, describe in detail: i)

The full name of the Manager;

ii) the amount(s) of the compensation; iii) the year(s) in which it was paid; iv) the purpose of the compensation; and (v) the terms of the agreement. d) Consultants must further disclose: i) whether they have any arrangements with broker-dealers under which they or an affiliate will benefit if any Managers place trades for the Systems with such brokerdealers, and if so, must disclose the full details of those arrangements; and ii) what percentage of their public pension plan or ERISA clients utilize investment managers, investment funds, brokerage services or other service providers from whom the Consultant or any affiliate receives fees. e) Managers that have “soft dollar” arrangements with broker-dealers must further disclose whether, in connection those arrangements, they have received any of the following three categories of compensation from any broker-dealer in the past twelve months, and if so, must disclose in detail what they received in those three categories, and from whom i) physical or tangible items, such as computer hardware and accessories, phone lines or office equipment; ii) payment of travel expenses or meals or entertainment associated with attending seminars; or iii) software or consultant services that relate primarily to a Manager’s internal management or internal operations. B. Compliance with Law Managers and Consultants, as applicable, shall further certify compliance with, and provide any disclosures required by, the following: 1. Managers/Consultants Must Have a Code of Ethics. Every Manager/Consultant must have a Code of Ethics that satisfies the requirements of Rule

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204A-1 under the Investment Advisers Act, regardless of whether the Manager/Consultant is required to register under that Act. 2. Managers/Consultants Must Have Third-Party Review of Controls. a) Each Manager/Consultant must certify that it has a periodic review of its Compliance Manual and compliance controls by an independent third-party at least once every three years. Internal review by the General Counsel, Chief Compliance Officer, or similar official of the firm or any of its affiliates does not qualify as an independent review. Managers/Consultants first entering into contract(s) with the Systems after June 2005 must complete their first such review no later than 3 years from the date of the initial contract with the Systems or by such other dated requested by the Comptroller’s office in writing. Should any third-party review identify any deficiencies in the compliance controls or Compliance Manual, the firm must provide to BAM a copy of the thirdparty’s report and an explanation of any remedial actions taken or planned. b) In addition to the third-party review of the Compliance Manual and compliance controls, the Systems encourage Managers managing assets aggregating over $3 billion for all clients to have conducted at least a Level I SAS 70 review, or the equivalent of a SAS 70 in the country of incorporation or formation. The third party review of the Compliance Manual and compliance controls may be conducted as an explicit add-on to a SAS 70 review. 3. Managers/Consultants Must Monitor Personal Trading. Each Manager/Consultant must certify that it has a written personal trading policy with an established method for monitoring same. For Managers/Consultants managing, or advising as to, assets aggregating over $3 billion for all clients, the Systems encourage the use of an automated system, such as STAR Compliance. The Manager/Consultant must report in detail any personal trading violations within the last 12 months and report the Manager/Consultant’s response to it. It is acceptable if the disclosure of these violations is grouped according to categories of violations and of employees in some reasonable manner. 4. Managers Must Have a Policy on Mutual Funds Trading. The Manager must certify that it has a written policy on disclosure of market timing and late trading of mutual funds, where applicable, which should comply with the requirements of the SEC RIN 3235-AI99. The Manager should notify BAM, i) annually; and ii) promptly upon occurrence, of any violations 1 any investigations by any government agency or any securities exchange involving or against the Manager or any of its personnel within the last three years with respect to such trading. 5. Managers Must Report Violations Relating to Restricted Securities. Managers are required to include a report to BAM on any inquiry or other action by any governmental agency relating to the improper sale within the last three years by the Manager to any person of any restricted securities (such as those covered by Rule 144a). 6. Managers/Consultants Must Provide Updates on Government Investigations and Enforcement Actions.

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a) Managers and Consultants must, unless prohibited by law, regularly and promptly notify BAM in detail with respect to the commencement of, status of, or significant developments in, any government investigation of the Manager or Consultant or its employees in connection with any potential violations of applicable laws, or any enforcement action in connection therewith. b) Managers and Consultants must promptly provide such updates, and must promptly provide all disclosure called for by this Policy, regardless of whether the Manager or Consultant is required to file an S.E.C. Form 8K or is yet due to file a Form ADV.

III. Non-Compliance with this Policy - Reporting Requirements BAM Will Report Non-Compliance to the Boards To the extent BAM receives or obtains information indicating that a Consultant or Manager is substantially out of compliance with the Policy and/or substantially in violation of applicable law, BAM will report such information to the Board for whatever action the Board deems appropriate, which may include termination of the Consultant or Manager.

IV. Dissemination of Policy to Consultants and Managers A. Current Consultants and Managers Upon amendment of this Policy by the Boards, BAM shall immediately forward copies of the amended Policy to all current Consultants and Managers. B. Prospective and New Consultants and Managers 1. Consultants and Managers seeking to do business with the Systems will be required to certify compliance with the Policy, and provide the disclosures required by the Policy, at the time they submit their response to a Request for Proposals (“RFP”) or, in the event that there is no RFP process, during the selection process. 2. If awarded a contract with the Systems, including any assignment of an existing contract, all new Consultants and Managers will be required to file with BAM, prior to signing the contract, their first Annual Certification and Compliance Statement, as described above (the “Initial Statement”). If the date of a new Manager/Consultant’s submitting its Initial Statement is after January 1 of a given year; then on June 15 of that year, the Manager/Consultant need only file a statement disclosing any updates to the information contained in its Initial Statement. Adopted: Effective May 2005 Amended: Effective March 2006

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CERTIFICATION: ETHICS AND COMPLIANCE POLICY I, [name of individual:] _____________________, in connection with the Ethics and Compliance Policy (the “Policy”) of the New York City Retirement Systems (the “Systems”), hereby certify: 1. That I am the duly authorized representative of [name of firm:] _________________________________________ (the “Undersigned”), and that I have been duly authorized to execute this Certification on behalf of the Undersigned; 2.

That the Undersigned acts as an investment advisor/consultant for (check as appropriate): NYCERS ______ TRS __________ Police ________ Fire __________ BERS ________

And advises on the following asset classes: _____________________________________________________________________ 3. That the Undersigned is a fiduciary to the System(s) and in investing or in consulting with respect to a System’s assets, shall exercise at all times the diligence and standard of care which is the highest to which any of the following is subject: (i) a professional fiduciary; (ii) a trustee of an express trust under the laws of the State of New York; (iii) a fiduciary under Section 404 of ERISA or (iv) an investment manager and analyst in the industry. 3. That the Undersigned: a) has received copies of and read the Policy; b) is currently in full compliance with all terms and conditions of the Policy, unless otherwise disclosed in the Annual Certification and Compliance Statement; c) has attached to this Certification all written disclosures that are required in the Annual Certification and Compliance Statement; d) for as long as it does business with any of the Systems, will continue to comply with the Policy, and will make all subsequent disclosures required by the Policy in a timely manner; and e) has completed the required third party review in accordance with sub-section II(B)(2) of the Policy on [enter date ] __________________. (In the event such review has not been completed, enter the anticipated review completion date.)

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Dated

Firm name:

By: (Please sign above this line)

Name of individual: Authorized Representative

Title:

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EXHIBIT 3-A REQUEST FOR PROPOSALS FOR MANAGEMENT AND OPERATIONS STUDY AND BEST PRACTICE REVIEW FOR THE NEW YORK CITY OFFICE OF THE COMPTROLLER’S ASSET MANAGEMENT FUNCTION

I, __________________, in connection with the Request for Proposals for Management and Operations Study and Best Practice Review for the New York City Office of the Comptroller’s Asset Management Function (the “RFP”) dated ___________, 2014, hereby certify that:

1. I am the duly authorized representative of __________________________ (the “Undersigned”) and that I have been duly authorized to execute this Certification on behalf of the Undersigned;

2. The Undersigned agrees to be a fiduciary to the System and that the Undersigned shall, in carrying out its duties as Consultant to the System, exercise at all times the diligence and standard of care of a fiduciary under Section 404 of the Employee Retirement Income Security Act of 1974 (“ERISA”) or, if such law is enacted, any other law affecting any of the New York City Retirement Funds and Systems which may impose a higher or comparable standard;

3. Basic fiduciary principles prohibit a Consultant from taking an interest that is or is potentially adverse to the System without the System’s informed consent and from using System assets for its own benefit;

4. The Undersigned has received copies of and read NYCRS Ethics and Compliance Policy and that the Undersigned agrees to abide strictly by the terms and conditions of that Policy throughout the term of this engagement if selected.

Firm’s Name: ___________________________

Signed _________________________________

Title ___________________________________

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Dated_________________

EXHIBIT 4 THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER 1 CENTRE STREET NEW YORK, N.Y. 10007-2341 ───────────── Scott M. Stringer COMPTROLLER

Supplemental Diligence Questionnaire for Investment Managers and Consultants NEW YORK CITY EMPLOYEES’ RETIREMENT SYSTEM (“NYCERS”) TEACHERS’ RETIREMENT SYSTEM OF THE CITY OF NEW YORK (“TRS”) NEW YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM (“BERS”) MANAGERS AND CONSULTANTS MUST SUBMIT A COMPLETED SUPPLEMENTAL DILIGENCE QUESTIONNAIRE BEFORE THE NEW YORK CITY COMPTROLLER’S OFFICE WILL CONSIDER A MANAGER OR CONSULTANT FOR RECOMMENDATION TO NYCERS, TRS OR BERS. ANSWER THIS QUESTIONNAIRE CAREFULLY AND COMPLETELY. FAILURE TO SUBMIT A FULLY COMPLETED QUESTIONNAIRE WILL RESULT IN REJECTION OF THE QUESTIONNAIRE AND SUSPENSION OF DUE DILIGENCE AND CONSIDERATION OF THE MANAGER FOR INVESTMENT, OR THE CONSULTANT FOR RETENTION BY NYCERS, TRS OR BERS. All questions must be answered. A response of “Not Applicable (N/A)”, or the equivalent, is not acceptable. For purposes of this Supplemental Diligence Questionnaire, NYCERS, TRS and BERS are sometimes collectively referred to as “the Systems.” Name of submitting Manager/Consultant (the “Manager”): _______________________ Type of submission: new/revised

Date: _______________________________

Name of person completing this questionnaire: _______________________________ Employer:

_________________________________________

Title:

_________________________________________

Phone:

_______________________________

E-mail:

_______________________________

(A) Contacts In order to protect and enhance the integrity of the investment decision-making process, 44

Managers must disclose all contacts with any employee of the New York City Comptroller’s Office or the Systems, a Trustee of NYCERS, TRS or BERS or his or her representative or delegate. Contact is defined as any form of communication or association made for the purpose of solicitation of the System(s) as a potential client or the retention of the System(s) as an existing client (“Contact”). 1. Provide a schedule of all Contacts the Manager or any of its affiliates or agents (including placement agent, counsel or consultant) has had with any employee of the New York City Comptroller’s Office or the Systems, a NYCERS, TRS or BERS Trustee or his or her representative or delegate on or after July 1, 2010. The schedule shall include the individual contacted, the individual’s employer or organization, the date, nature and form of the contact. (B)

Gifts

The New York City Charter, Chapter 68, Section 2604(b)(5), provides that “[n]o public servant shall accept any valuable gift, as defined by rule of the board, from any person or firm which such public servant knows is or intends to become engaged in business dealings with the city, except that nothing contained herein shall prohibit a public servant from accepting a gift which is customary on family or social occasions.” In addition, Comptroller Scott Stringer has adopted a “No Gift” policy for all employees of the NYC Comptroller’s Office. Attached are the Conflicts of Interest Board rules defining “gift” and “valuable gift”. Please be advised that pursuant to opinions from the New York City Conflicts of Interest Board, for purposes of Chapter 68 and the Conflicts of Interest Board Rules, all Trustees of the New York City Retirement Systems and their representatives or delegates are considered “public servants”. 2.

Has the Manager or any of its affiliates or agents given any gifts, regardless of value, whether in the form of money, service, loan, travel, entertainment, thing or promise, or in any other form, to any employee of the Comptroller’s Office in connection with this investment or otherwise on or after January 1, 2010?

3. Has the Manager or any of its affiliates or agents given any “valuable gift,” whether in the form of money, service, loan, travel, entertainment, thing or promise, or in any other form, to any employee of NYCERS, TRS or BERS or to any Trustee of NYCERS, TRS or BERS or his or her representative or delegate in connection with this investment or otherwise on or after July 1, 2010? 4. If the answer to questions #2 or #3 is “Yes”, please provide a detailed schedule of the gifts.

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CERTIFICATION A MATERIALLY FALSE STATEMENT WILLFULLY OR FRAUDULENTLY MADE IN CONNECTION WITH THIS QUESTIONNAIRE MAY RESULT IN RENDERING THE SUBMITTING MANAGER OR CONSULTANT INELIGIBLE FOR INVESTMENT OR RETENTION BY NYCERS, TRS OR BERS, AND IN ADDITION, MAY SUBJECT THE PERSON MAKING THE FALSE STATEMENT TO CRIMINAL CHARGES. Each of the undersigned hereby certifies that: • I have not altered the substance of this questionnaire in any manner; • I have read and understand all of the questions contained in the foregoing ___ pages of this questionnaire and the following _____________pages of attachments, including attachments relating to the prohibition on “gifts” as set forth in New York City Chapter 68 and Rules of the Conflicts of Interest Board; • I have supplied full, detailed and complete responses to each question therein to the best of my knowledge, information and belief; • I understand that the Comptroller’s Office and the Systems will rely on the information supplied in this questionnaire as an inducement to enter into an investment or other contract with the submitting Manager or Consultant; • I understand that at the time of execution of any investment or contract with the Comptroller’s Office acting on behalf of the Systems, the Manager or Consultant will be required to certify that the information I have supplied remains accurate, and I further understand that I must provide to the Comptroller’s Office, in writing, any change(s) in the information provided in this questionnaire as soon as practicable after I become aware of the change. • I have read and agree to the attached rider to the Systems’ side letter relating to this investment and agree to its terms as stated. All of the Manager/Consultant’s principals must print their names and sign below. Attach an additional sheet of paper if necessary.

Signed By:

________________________

Date: ___________________

________________________ Signed By:

________________________

Date: ___________________

________________________ Signed By:

________________________ _________________________

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Date: ___________________

SUPPLEMENTAL DILIGENCE QUESTIONNAIRE NOTARY PAGE STATE OF _________________) : ss. COUNTY __________________) On this __________day of , 2014, before me personally came ___________________________, known to me to be the person described in and who executed the foregoing instrument and acknowledged to me that (s)he executed the same as _______________________________________for the purpose therein mentioned. _________________________________ Notary Public or Commissioner of Deeds

STATE OF _________________) : ss. COUNTY __________________) On this __________day of , 2014, before me personally came ___________________________, known to me to be the person described in and who executed the foregoing instrument and acknowledged to me that (s)he executed the same as _______________________________________for the purpose therein mentioned. _________________________________ Notary Public or Commissioner of Deeds

STATE OF _________________) : ss. COUNTY __________________) On this __________day of , 2014, before me personally came ___________________________, known to me to be the person described in and who executed the foregoing instrument and acknowledged to me that (s)he executed the same as _______________________________________for the purpose therein mentioned. _________________________________ Notary Public or Commissioner of Deeds

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Side Letter or Contract Rider Every investment or management agreement entered into by the Comptroller’s Office on behalf of the NYC Systems will contain the following manager representation. As used below, the term Comptroller refers to the Comptroller’s Office on behalf of the NYC Retirement System(s). Investment management agreements awarded pursuant to an RFP or other solicitation method will include the same substantive provisions, with appropriate changes to reflect the different structure of the relationship (e.g. contract versus a limited partnership). “The Manager further represents and warrants that all information contained in its Supplemental Diligence Questionnaire and/or its Placement Agent Fee Disclosure Certificate is true, correct, and complete in all material respects. The Manager makes such representations and warranties to induce the Comptroller to enter into this Agreement and the Comptroller relies upon such representations and warranties in the execution thereof. If the Comptroller determines in its sole discretion that Manager’s Supplemental Diligence Questionnaire and/or its Placement Agent Fee Disclosure Certificate contains a material inaccuracy or omission, the Comptroller shall have the option, in its sole discretion and without liability to the Manager, or any third party controlled by the Manager, to cease making further payments to the Manager due under the Agreement and/or annul the Agreement without liability and to recover all monies paid thereunder, and the Manager shall not make claim for, or be entitled to recover, any sum or sums due under the Agreement, and/or pursue all remedies that may otherwise be available to the Comptroller without being deemed in default under the Agreement and without incurring any other penalty under any agreement to which it is a party. This remedy, if effected, shall not constitute the sole remedy afforded the Comptroller and the Systems for the breach or violation of this provision, nor shall it constitute a waiver of the Comptroller’s or the Systems’ right(s) to claim damages or refuse payment or take any other action provided for by law of pursuant to this Agreement.”

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Click the Link for the Conflict of Interest Board Rules

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ENCLOSURE 1 ELECTRONIC FUNDS TRANSFER AND LINK TO ENROLLMENT FORM A. In accordance with Section 6-107.1 of the New York City Administrative Code, the Contractor agrees to accept payments under this Agreement from the City by electronic funds transfer. An electronic funds transfer is any transfer of funds, other than a transaction originated by check, draft or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument or computer or magnetic tape so as to order, instruct or authorize a financial institution to debit or credit an account. Prior to the first payment made under this Agreement, Contractor shall designate one financial institution or other authorized payment agent and shall complete the “EFT Vendor Payment Enrollment Form” in order to provide the Commissioner of Finance with information necessary for Contractor to receive electronic funds transfer payments through the designated financial institution or authorized payment agent. Note: Click on the PDF icon below to retrieve and then print the ”EFT Vendor Payment Enrollment Form”.

Acrobat Document

The crediting of the amount of a payment to the appropriate account on the books of a financial institution or other authorized payment agent designated by the Contractor shall constitute full satisfaction by the City for the amount of the payment under this agreement. The account information supplied by the Contractor to facilitate the electronic funds transfer shall remain confidential to the fullest extent provided by law. B. The agency head may waive the application of the requirements herein to payments on contracts entered into pursuant to §315 of the City Charter. In addition, the Commissioner of the Department of Finance and the Comptroller may jointly issue standards pursuant to which the contracting agency may waive the requirements hereunder for payments in the following circumstances: (i) for individuals or classes of individuals for whom compliance imposes a hardship; (ii) for classifications or types of checks; or (iii) in other circumstances as may be necessary in the interest of the City. 01/01/08

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ENCLOSURE 2 LOCAL LAW 34: DOING BUSINESS DATA FORM AND LINK TO FORM PENSION INVESTMENTS

What is the purpose of this Data Form? To collect accurate, up-to-date identification information about entities that have business dealings with the City of New York in order to comply with Local Law 34 of 2007 (LL 34), the recently passed campaign finance reform law. LL 34 limits municipal campaign contributions from principal officers, owners and senior managers of entities doing business with the City and mandates the creation of a Doing Business Database to allow the City to enforce the law. The information requested in this Data Form must be provided, regardless of whether the entity or the people associated with it make or intend to make campaign contributions. No sensitive personal information collected will be disclosed to the public. Why have I received this Data Form? What entities are considered to have business dealings with the City? All contracts for, or related to, the investment of assets of the City’s pension systems, including contracts for public market investments, alternative investments, and real estate investments, are considered business dealings with the City and are covered by LL 34, as are investment consultant contracts. You have received this Data Form because your firm has such business dealings with the City. You may also receive similar Data Forms if your firm participates in other transactions that are or will be covered by LL 34, such as contracts for goods, services and construction; concessions; franchises; grants; economic development agreements; land use actions and real property transactions. What individuals are considered to be doing business with the City? The principal officers, owners and certain senior managers of entities listed in the Doing Business Database are themselves considered to be doing business with the City and will also be included in the Database. • Principal Officers are the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Chief Operating Officer (COO), or their functional equivalents. See the Data Form for examples of titles that apply. • Principal Owners are individuals who own or control 10% of more of the entity. This includes stockholders, partners and anyone else with an ownership or controlling interest in the entity. • Senior Managers include anyone who, either by job title or actual duties, has substantial discretion and high-level oversight regarding the solicitation, letting or administration of any covered transaction with the City. You must list at least one Senior Manager, or your Data Form will be considered incomplete. Will the information on this Data Form be available to the public? The names and titles of the officers, owners and senior managers reported on the Data Form will be made available to the public, as will information about the entity itself. However, personal identifying information, such as home address, home phone and date of birth, will not be disclosed to the public, and home address and phone number information will not be used for communication purposes.

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I have already completed a Doing Business Data Form; do I have to submit another one? Yes. An entity is required to submit a Doing Business Data Form each time it enters into a transaction considered a business dealing with the City. However, the Data Form has both a Change option, which requires only information that has changed since the last Data Form was filed, and a No Change option. No entity should have to fill out the entire Data Form more than once. If you have already submitted a Data Form for another transaction type covered by LL 34 (such as an economic development agreement) and this is the first time you are completing a Data Form for a pension-related contract, please select the Change option and complete Section 4 (Senior Pension Investment Contract Managers). I provided some of this information on the VENDEX Questionnaire. Do I have to provide it again? Although the Doing Business Data Form and the VENDEX Questionnaire request some of the same information, they serve entirely different purposes. In addition, the Data Form requests information concerning senior managers, which is not part of the VENDEX Questionnaire. No one in my organization plans to contribute to a candidate; do I have to fill out this Data Form? Yes. All entities are required to return this Data Form with complete and accurate information, regardless of the history or intention of the entity or its officers, owners or senior managers to make campaign contributions. The Doing Business Database must be complete so that the Campaign Finance Board can verify whether future contributions are in compliance with the law. How does a person remove him/herself from the Doing Business Database? Any person who believes that s/he should not be listed may apply for removal from the Database by submitting a Removal Request. Reasons that a person would be removed include his/her no longer being the principal officer, owner or senior manager of the entity, or the entity no longer doing business with the City. Entities may also update their database information by submitting an update form. These forms are available online at www.nyc.gov/mocs (once there, click MOCS Programs) or by calling 212-788-8104. How long will an entity and its officers, owners and senior managers remain listed on the Doing Business Database? Entities that hold contracts for, or related to, the investment of pension funds are considered to be doing business with the City from the time of presentation of an investment opportunity or the submission of a proposal, whichever is earlier, until one year after the end of the contract. What are the new campaign contribution limits for people doing business with the City? Contributions to City Council candidates are limited to $250 per election cycle; $320 to Borough President candidates; and $400 to candidates for citywide office. Please contact the NYC Campaign Finance Board for more information at www.nyccfb.info, or 212-306-7100. If you have any questions about the Data Form, please contact Richard Friedman at 212-669-2867 or [email protected]

Doing Business Data Form can be accessed by hitting the CTRL key and CLICK to

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follow the link below. http://comptroller.nyc.gov/wpcontent/uploads/2013/07/Doing_Business_Data_Form.pdf Your completed Data Form must be returned to the mailbox below. [email protected]

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Enclosure 3 WHISTLEBLOWER PROTECTION EXPANSION ACT RIDER 1. In accordance with Local Law Nos. 30-2012 and 33-2012, codified at sections 6-132 and 12-113 of the New York City Administrative Code, respectively, (a) Contractor shall not take an adverse personnel action with respect to an officer or employee in retaliation for such officer or employee making a report of information concerning conduct which such officer or employee knows or reasonably believes to involve corruption, criminal activity, conflict of interest, gross mismanagement or abuse of authority by any officer or employee relating to this Contract to (i) the Commissioner of the Department of Investigation, (ii) a member of the New York City Council, the Public Advocate, or the Comptroller, or (iii) the City Chief Procurement Officer, ACCO, Agency head, or Commissioner. (b) If any of Contractor’s officers or employees believes that he or she has been the subject of an adverse personnel action in violation of subparagraph (a) of paragraph 1 of this rider, he or she shall be entitled to bring a cause of action against Contractor to recover all relief necessary to make him or her whole. Such relief may include but is not limited to: (i) an injunction to restrain continued retaliation, (ii) reinstatement to the position such employee would have had but for the retaliation or to an equivalent position, (iii) reinstatement of full fringe benefits and seniority rights, (iv) payment of two times back pay, plus interest, and (v) compensation for any special damages sustained as a result of the retaliation, including litigation costs and reasonable attorney’s fees. (c) Contractor shall post a notice provided by the City in a prominent and accessible place on any site where work pursuant to the Contract is performed that contains information about: (i) how its employees can report to the New York City Department of Investigation allegations of fraud, false claims, criminality or corruption arising out of or in connection with the Contract; and (ii) the rights and remedies afforded to its employees under New York City Administrative Code sections 7-805 (the New York City False Claims Act) and 12-113 (the Whistleblower Protection Expansion Act) for lawful acts taken in connection with the reporting of allegations of fraud, false claims, criminality or corruption in connection with the Contract. (d) For the purposes of this rider, “adverse personnel action” includes dismissal, demotion, suspension, disciplinary action, negative

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performance evaluation, any action resulting in loss of staff, office space, equipment or other benefit, failure to appoint, failure to promote, or any transfer or assignment or failure to transfer or assign against the wishes of the affected officer or employee. (e) This rider is applicable to all of Contractor’s subcontractors having subcontracts with a value in excess of $100,000; accordingly, Contractor shall include this rider in all subcontracts with a value a value in excess of $100,000. 2. Paragraph 1 is not applicable to this Contract if it is valued at $100,000 or less. Subparagraphs (a), (b), (d), and (e) of paragraph 1 are not applicable to this Contract if it was solicited pursuant to a finding of an emergency. Subparagraph (c) of paragraph 1 is neither applicable to this Contract if it was solicited prior to October 18, 2012 nor if it is a renewal of a contract executed prior to October 18, 2012.

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Enclosure 4 Bidders Certificate of Compliance With Iran Divestment Act The Iran Divestment Act of 2012, effective as of April 12, 2012, is codified at State Finance Law (“SFL”) Section 165-a and General Municipal Law (“GML”) Section 103-g. The Iran Divestment Act, with certain exceptions, prohibits municipalities, including the City, from entering into contracts with persons engaged in investment activities in the energy sector of Iran. Pursuant to the terms set forth in SFL Section 165-a and GML Section 103-g, a person engages in investment activities in the energy sector of Iran if: (a) The person provides goods or services of twenty million dollars or more in the energy sector of Iran, including a person that provides oil or liquefied natural gas tankers, or products used to construct or maintain pipelines used to transport oil or liquefied natural gas, for the energy sector of Iran; or (b) The person is a financial institution that extends twenty million dollars or more in credit to another person, for forty-five days or more, if that person will use the credit to provide goods or services in the energy sector in Iran and is identified on a list created pursuant to paragraph (b) of subdivision three of Section 165-a of the State Finance Law and maintained by the Commissioner of the Office of General Services. A bid or proposal shall not be considered for award nor shall any award be made where the bidder or proposer fails to submit a signed and verified bidder’s certification. Each bidder or proposer must certify that it is not on the list of entities engaged in investment activities in Iran created pursuant to paragraph (b) of subdivision 3 of Section 165-a of the State Finance Law. In any case where the bidder of proposer cannot certify that they are not on such list, the bidder or proposer shall so state and shall furnish with the bid or proposal a signed statement which sets forth in detail the reasons why such statement cannot be made. The City of New York may award a bid to a bidder who cannot make the certification on a case by case basis if: (1) The investment activities in Iran were made before the effective date of this section (i.e., April 12, 2012), the investment activities in Iran have not been expanded or renewed after the effective date of this section and the person has adopted, publicized and is implementing a formal plan to cease the investment activities in Iran and to refrain from engaging in any new investments in Iran: or (2) The City makes a determination that the goods or services are necessary for the City to perform its functions and that, absent such an exemption, the City would be unable to obtain the goods or services for which the contract is offered. Such determination shall be made in writing and shall be a public document.

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BIDDER’S CERTIFICATION OF COMPLIANCE WITH IRAN DIVESTMENT ACT

Pursuant to General Municipal Law Section 103-g, which generally prohibits the City from entering into contracts with persons engaged in investment activities in the energy sector of Iran, the bidder/proposer submits the following certification: [Please Check One] BIDDER’S CERTIFICATION _____ By submission of this bid or proposal, each bidder/proposer and each person signing on behalf of any bidder/proposer certifies, and in the case of a joint bid each party thereto certifies as to its own organization, under penalty of perjury, that to the best of its knowledge and belief, that each bidder/proposer is not on the list created pursuant to paragraph (b) of subdivision 3 of Section 165-a of the State Finance Law. _____ I am unable to certify that my name and the name of the bidder/proposer does not appear on the list created pursuant to paragraph (b) of subdivision 3 of Section 165-a of the State Finance Law. I have attached a signed statement setting forth in detail why I cannot so certify. Dated: _____________, New York _____________, 2014

__________________________________________ FIRM SIGNATURE

PRINTED NAME

TITLE Sworn to before me this ________ day of __________, 2014

Notary Public Dated:

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ENCLOSURE 5 SUBCONTRACTOR TRACKING NOTICE As of March 2013 the City has implemented a new web based subcontractor reporting system through the City's Payee Information Portal (PIP), available at www.nyc.gov/pip. In order to use the new system, a PIP account will be required. Detailed instructions on creating a PIP account and using the new system are also available at that site. Additional assistance with PIP may be received by emailing the Financial Information Services Agency Help Desk at [email protected] In order to obtain subcontractor approval under section 3.02 of Appendix A or Article 17 of the Standard Construction Contract and PPB Rule § 4-13 Contractor is required to list the subcontractor in the system. For each subcontractor listed, Contractor is required to provide the following information: maximum contract value, description of subcontractor work, start and end date of the subcontract and identification of the subcontractor’s industry. Thereafter, Contractor will be required to report in the system the payments made to each subcontractor within 30 days of making the payment. If any of the required information changes throughout the term of the contract, Contractor will be required to revise the information in the system. Failure of the Contractor to list a subcontractor and/or to report subcontractor payments in a timely fashion may result in the Agency declaring the Contractor in default of the Contract and will subject Contractor to liquidated damages in the amount of $100 per day for each day that the Contractor fails to identify a subcontractor along with the required information about the subcontractor and/or fails to report payments to a subcontractor, beyond the time frames set forth herein or in the notice from the City. For construction contracts, the provisions of Article 15 of the Standard Construction Contract shall govern the issue of liquidated damages. Contractor hereby agrees to these provisions.

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APPENDIX A GENERAL PROVISIONS GOVERNING CONTRACTS FOR CONSULTANTS, PROFESSIONAL AND TECHNICAL SERVICES AND RIDER (see attached)

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