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SAFEKEEPING AND CUSTODY <br /> All security transactions entered into by the City shall be conducted on a delivery- <br /> versus-payment (DVP) basis. Securities purchased from brokers/dealers will be held by <br /> a third party custodian designated by the Director of Finance and evidenced by <br /> safekeeping receipts. Securities do not literally have to be held in the name of the City <br /> but ownership is evidenced through safekeeping or custodial receipts and/or <br /> statements. <br /> TRUST AGREEMENTS <br /> The City shall direct the investment activities of trustees. Such direction shall be in <br /> keeping with the terms and conditions of its bond agreements, applicable law and <br /> policies set forth in this document. <br /> DIVERSIFICATION <br /> The City will diversify its instruments by security type and institution, meeting at least <br /> the minimum requirements as outlined in Government Code Section 53601. With the <br /> exception of U.S. Treasury securities, Federal Agency securities. Medium-term notes <br /> and authorized pools, no more than 30% of the total portfolio, and less where stated, <br /> will be invested in a single security type with no more than 5 percent invested with a <br /> single issuer. <br /> 7 <br />