The State Treasurer’s Office, Securities Clearance Section is comprised of two units: Investment Clearance and Pledge Clearance.
Investment Clearance Unit
The Investment Clearance Unit clears and settles securities purchased or sold for investment by the State Treasurer for the Pooled Money Investment Account (PMIA), State Compensation Insurance Fund (SCIF), State Lottery Commission Fund, Public Works Board, Department of Water Resources, and other active investment funds. The Unit is responsible for accounting, reconciling and monitoring security transactions from initiation through settlement; calculating, collecting and authorizing each security’s principal and interest payment; and ensuring all transactions and payments are completed timely and accurately.
The Unit also completes the monthly PMIA Market Valuation, which is posted to the Treasurer’s website and utilized by Local Agency Investment Fund (LAIF) participants. Cash projection reports generated by the Unit are utilized by the Financial Services Section for determining the daily effect on the Treasurer’s Pooled Money Investment Portfolio.
Pledge Clearance Unit
The Pledge Clearance Unit clears and settles securities pledged to the State for agencies or departments, such as the Department of Insurance, Employment Development Department, Department of Financial Protection and Innovation, Contractor’s State License Board, and Department of Industrial Relations. The Treasurer acts as legal custodian for these securities, which are pledged by companies required by law to provide collateral in order to transact business within the State. The Unit is responsible for accounting, reconciling and monitoring security transactions from initiation through settlement; calculating, collecting and authorizing each security’s principal and interest payment; and ensuring all transactions and payments are completed timely and accurately.
In addition to the duties listed above, the Securities Clearance Section also manages the State’s Custodian Bank contract. The Custodian Bank holds securities owned by the State of California and held under the custody of the State Treasurer, ensuring proper settlement of each deposit and release transaction and the delivery of principal and interest payments to the State’s Centralized Treasury System or correspondent banks.