Current through Register Vol. 46, No. 39, September 25, 2024
(a) Committees.
(1) The Comptroller shall appoint committees
required by statute, regulation, or executive order of the Comptroller,
including but not limited to, the Investment Advisory Committee and the Real
Estate Advisory Committee (also known as the Mortgage Advisory Committee)
required by section
423 of the Retirement and Social Security
Law. The Comptroller shall establish and administer written ethical standards
applicable to the members of such committees. The ethical standards shall
establish a financial disclosure and conflicts of interest process designed to
ensure that decisions are made for the benefit of the retirement system members
and beneficiaries. Such ethical standards shall be published on the OSC public
website.
(2) The Comptroller shall
authorize the investment advisory committee to review the investment policy
statement and offer advice regarding amendments to the investment policy
statement as needed.
(3) The
Comptroller shall develop a process to receive and investigate complaints from
any source, or upon his or her own initiative, concerning allegations of
corruption, fraud, criminal activity, conflicts of interest or abuse by a
committee member. The process shall be set forth in written guidelines and such
guidelines shall be published on the OSC public website.
(b) Employees.
(1) All employees of OSC who have
responsibility for matters related to the fund are subject to the applicable
provisions of the Public Officers Law.
(2) All employees of OSC who have
responsibility for matters related to the fund shall be provided training with
respect to discharge of their duties and responsibilities to the
fund.
(3) The Comptroller shall
develop a process to receive and investigate complaints from any source, or
upon his or her own initiative, concerning allegations of corruption, fraud,
criminal activity, conflicts of interest or abuse in OSC by a State officer or
employee relating to his or her office or employment. The process shall be set
forth in written guidelines and such guidelines shall be published on the OSC
public website.
(c)
Investment managers, and consultants or advisors.
(1) The Comptroller shall require that
investment managers, and consultants or advisors:
(i) promptly disclose to the fund in writing
any conflict of interest the investment manager or consultant or advisor may
have which could reasonably be expected to impair the investment manager's, or
consultant or advisor's ability to render unbiased and objective advice;
and
(ii) file annually with the
fund a statement acknowledging that they are aware of and that they are in
compliance with the above standard. Such statement shall contain the following
language:
"ALL INVESTMENT MANAGERS, AND CONSULTANTS OR ADVISORS OWE
THE COMPTROLLER A FIDUCIARY DUTY. THIS MEANS THAT INVESTMENT MANAGERS, OR
CONSULTANTS OR ADVISORS MUST DISCLOSE TO THE COMPTROLLER INFORMATION ABOUT
MATERIAL CONFLICTS OF INTEREST. FAILURE TO TRUTHFULLY COMPLETE THIS STATEMENT
MAY RESULT IN CRIMINAL OR CIVIL LIABILITIES".
(2) The Comptroller shall establish
transparent procurement guidelines and procedures with respect to procurement
of all investment managers, and consultants or advisors. Such guidelines and
procedures shall be published on the OSC public website. The method of
selection of investment managers, and consultants or advisors shall be
documented in writing, in a procurement record.
(3) The Comptroller shall develop a process
to receive and investigate complaints from any source, or upon his or her own
initiative, concerning allegations of corruption, fraud, criminal activity,
conflicts of interest or abuse by a person or entity having business dealings
with the fund relating to such dealings. The process shall be set forth in
written guidelines and such guidelines shall be published on the OSC public
website.
(d) Placement
agents or intermediaries: In order to preserve the independence and integrity
of the fund, to prevent potential conflicts of interest, and to assist the
Comptroller in fulfilling his or her duties as a fiduciary to the fund, the
fund shall not engage, hire, invest with, or commit to an investment manager
that is using the services of a placement agent or intermediary to assist such
investment manager in obtaining investments by the fund, nor shall the fund
engage, hire, invest with, or commit to an investment manager without obtaining
from such investment manager a certification in the form and manner prescribed
by the fund stating that such investment manager has not used the services of a
placement agent or other intermediary to assist such investment manager in
obtaining investments by the fund.
(e) Audit committee. Consistent with his or
her obligations as a fiduciary, the Comptroller shall establish an audit
committee for the retirement system and the fund comprised exclusively of
unaffiliated persons, one of whom shall reflect the interests of public
employees and one of whom shall reflect the interests of public employers. The
Comptroller shall:
(1) develop an audit
committee charter for the committee;
(2) establish written standards for the
selection of audit committee members;
(3) authorize the audit committee to review
and report to the Comptroller on the internal audit plans and the internal
audit and regulatory examination reports related to the retirement system and
the fund;
(4) authorize the audit
committee to review and report to the Comptroller on the procurement of
external auditor services by the retirement system and the fund;
(5) authorize the audit committee to review
and report to the Comptroller on the annual audit process related to the
retirement system and the fund and the Comprehensive Annual Financial Report,
which shall include meeting with external auditors to review the adequacy of
internal controls and significant findings and recommendations; and
(6) authorize the audit committee to develop
quarterly progress reports to the Comptroller that, at a minimum, discuss:
(i) the audits of the retirement system and
the fund scheduled to be conducted, along with the scope of the
audits;
(ii) the audits of the
retirement system and the fund completed; and
(iii) significant audit findings and
recommendations related to the retirement system and the fund.
