§ 42-9. Safekeeping and collateralization., Chapter 42. Investment Policy, Part I. Administrative Legislation, Code of Ordinances, New Rochelle

Eligible securities used for collateralizing deposits shall be held by separately incorporated banks or trust companies subject to security and custodial agreements.

The security agreement shall provide that eligible securities or a pro rata portion of a pool of eligible securities is being pledged to secure local government deposits, together with agreed-upon interest, if any, and any costs or expenses arising out of the collection of such deposits upon default. It shall also provide the conditions under which the securities may be sold, presented for payment, substituted or released and the events which will enable the local government to exercise its rights against the pledged securities. In the event that the securities are not registered or inscribed in the name of the local government, such securities shall be delivered in a form suitable for transfer or with an assignment in blank to the City of New Rochelle or its custodial bank.

The custodial agreement shall provide that securities or a pro rata portion of a pool of eligible securities held by the bank or trust company or agent of and custodian for the local government will be kept separate and apart from the general assets of the custodial bank or trust company and will not, in any circumstances, be commingled with or become part of the backing for any other deposits or other liabilities. The agreement should also describe that the custodian shall confirm the receipt, substitution or release of the securities. The agreement shall provide for the frequency of revaluation of eligible securities and for the substitution of securities when a change in the rating of a security may cause ineligibility. Such agreement shall include all provisions necessary to provide the local government a perfected interest in the securities.

The City Manager or chief financial officer of the City of New Rochelle is hereby authorized to enter into such security and custodial agreements with the designated depositories.