1. GUIDE TO RESPONSES (PAGE 3)
Tax clearance certificate – will this be required for a Global Custodian if they are a third party
to this response? Yes if the third party is part of a joint venture, No if the third party is a subconsultant in the proposal
1.
SCOPE OF WORK
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1. Please describe the GEPF's concept of "tax management". Understanding the different
tax legislation for withholding tax purposes on corporate events.
2. Kindly provide the Custody transactions volumes for the past twelve months (number of
transactions). Elaborate if any of these are off market trades. On average 1200
purchases and sales monthly. This includes unlisted trades for properties and
development capital.
3. Are the cash projection and management activities relating to settlements, corporate
actions or other? It is for settlements and corporate actions. Also the management of
offshore funds to ensure settlement happens.
4. Elaborate on GEPF's requirements for multi-currency securities and fund account
reporting. Consolidated reporting should be provided in the base currency Rands (ZAR).
Therefore the master custodian should have the ability to convert all currencies on
instrument level to ZAR and report the results in the detail set out in Annexure A.
5. Banking Facilities - Please describe your funding requirements and advise the quantum
for the next 5 years. Currently there are no overdraft facilities needed.
6. Are the bank accounts that are managed by the Investment Managers opened in the
name of GEPF? Yes
7. What other banking requirements/ facilities do you have? We plan to move from the
current facilities to the master custody arrangement where all custody and cash accounts
are held at the master custodian.
8. Assuming you have additional transactional banking requirements, please provide the
transactional banking volumes for the past twelve months (number of transactions). The
only additions will be to facilitate African investments. This won’t increase the volumes of
trading significantly.
9. What is the average value of the cash balances in the transactional/custodian accounts
throughout the month? It varies a lot due to the size of the portfolio’s and therefore the
size of the coupons and dividends.
2. VALUE ADDED SERVICES
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10. Performance measurement and attribution – What level of performance measurement is
required and in what detail is the attribution required? For purposes of reporting to
GEPF, this would be at asset class level. Attribution is at stock level.
11. Investment accounting – what is the level of interaction required between internal and
external audit. What are their requirements / timelines etc? ISAE3402 required for audit
purposes.
Liaison will depend on ISAE3402 report and on external / internal audit
findings
12. Risk analytics and measurement – what analytics due you currently use and how do you
manage risk? Various risk metrices are used including, duration, tracking error, relative
Var, credit ratings. Risk is managed in accordance with the organisations policies, which
stipulate our risk appetite and tolerance levels
13. Compliance – please elaborate on the level of compliance you would like. In respect of
mandate compliance, every aspect of the mandate is monitored.
14. “Executing borrowing and lending activities” – is this an additional / distinct requirement
from your recent Sec Lending Tender? Securities lending is not yet active on the
portfolio, but we will need the capability from the master custodian should this become
active.
3. ANNEXURE A PAGE 6 OF 44
15. Daily reporting - is there a preference for electronic or printed reporting? Electronic
16. If printed copies are required, what is the expected delivery mechanism for printed
copies? N/A
1. Please provide target dates for the due diligence assessment, should the bidder
meet the evaluation criteria in phase 1.1. Any date after the closing date for bid
submissions (11 March 2013) but the successful bidders from phase 1.1 will be
notified beforehand.
2. Would bidders be assessed on presentations, systems and process walkthrough on
the same day? This will be done in line with due diligence assessment processes but
communication will be made with the relevant bidders beforehand.
3. Who will form part of the delegation conducting the assessment? Experts who
manage investment administration and all relevant functional areas.
1. Size of the response. Is there an anticipated size of the document? No. Size
depends on the content of the response and there are no restrictions. Please note as
per clause 1.3.3 of the Special Conditions of Contract in the bid document, a
minimum of five (5) copies of the technical proposal are required as well as five (5)
copies of the pricing proposal in a separate envelope. The original tender document
must be resubmitted with an original Tax Clearance Certificate and BBBEE
certificate
2. Current Asset Size of the fund R1,036 trillion (audited as at 31 March 2012)
3. The asset composition and size per asset class:
Equities, bonds, money market instruments, cash, derivatives, private equity
investments, listed and unlisted property. The percentages for the asset classes
were: Capital Markets 36%, Equities 46%, Cash & Money Markets 8%, Private
Equity 1%, Property 4%, Offshore Assets 5%.
o The breakdown of these assets per location, i.e. local or international.
Everything local accept 5% offshore assets
 If International, which countries are currently invested in and whether
these are in underlying instruments or through a pooled investment
vehicle such as a unit trust. If the investment is in underlying
instruments please could you confirm the split between equities,
bonds, money market instruments, cash, derivatives, private equity
investments, listed and unlisted property. Pooled investment through
BlackRock equity indexes. Underlying instruments held in the bond
portfolio. Invested worldwide in many countries. Only equities and
bonds. Please note that in future there might be more participants and
more effort of administration on other international investments which
will not only be BlackRock
o Number of Asset Managers per asset class both locally and internationally
Locally there were 18 external managers of equity. Only BlackRock as
current foreign asset manager. Please note that in future there might be more
participants and more effort of administration on other international
investments which will not only be BlackRock
 The number of local accounts held at a custodian Every external
manager has a local account at custodian and GEPF has 2 accounts
 The number of international accounts held at a custodian Accounts
are held by BlackRock. Please note that in future there might be more
participants and more effort of administration on other international
investments which will not only be BlackRock
4. Number of transactions per month. Approximately 1200 purchases and sales per
month on average. (Excluding BlackRock)
5. Is Section 13B of the Pension Fund Act, relevant? Yes (GEPF strives to align to the
Pension Fund Act)
6. Securities Lending. Please provide a brief description of the securities lending
program available. The program is not yet in place.
o What are the lendable portfolios? This is not yet available.
o What is the collateral accepted,
 if cash collateral is accepted are there any guidelines? Collateral will
be specified in the separate agreement for lending. Guidelines will be
used and cash is accepted in the guidelines.
7. Foreign Exchange: what are the currency pairs traded, GEPF invested in an Equity
index and a short duration bond portfolio. Foreign currencies are not traded as a
specific asset class, but FEC’s are used to hedge exchange risk
o In what volumes. The volumes are not significant at this stage
8. On page 32 of the Bid Document, clause1.3.8. In the meeting on Fri, it was
mentioned that this clause may be invoked. What circumstances will lead to this
clause being invoked. This would be in instances where the strength of the technical
competence / functionality of the bids submitted (including verification thereof) is
more important and not purely on price and BBBEE level.
9. Funding, part of the scope of work refers to funding. Could you please clarify what
this will entail. Is this referring to pre-funding? Funding refers to the ability to fund
settlements in various currencies. Overdraft facilities not needed at present
10. I understand that the Bid Validity is 120 days, is it possible to comment on how long
post the 120 days and the decision being made on the Master Custodian will the
migration take place. The timelines will vary depending on the finalisation of the
GEPF’s governance processes but engagement with the successful bidder on
migration will be made at that time
11. System Interface, can you please provide us with more information as to the outputs
required and associated frequencies. We expect a daily file that has details of
transactions made. This information will be loaded onto our systems. The actual file
format and details of data in the file will be finalised with the shortlisted bidder.
- The exact content of the Schedule IA - I could not find it in the GEPF annual financial
statements (please find attached). Annexure IA reflects the notes to the Annual Financial
Statements – GEPF 2011/12 Annual Report pages 114 - 126
- The information required to update the notes to the annual financial statements – this
requirement could have an extremely broad scope and it would be fantastic to understand
GEPF exact expectations. Refer to notes to the Annual Financial Statements – GEPF
2011/12 Annual Report pages 114 - 126