NEW YORK – The Federal Reserve Bank of New York today announced that it is launching a prequalification process for corporate bond and exchanged-traded funds (ETF) investment management services for the Secondary Market Corporate Credit Facility (SMCCF). This is part of a multiphase competitive procurement process commenced by the New York Fed in October 2020.
When the Federal Reserve launched a number of emergency liquidity facilities in 2020, some vendor roles were filled through direct negotiations with service providers to expedite program implementation and support the flow of credit to households and businesses in the face of the severe economic disruption caused by the COVID-19 pandemic. The New York Fed did so with a view that, once the immediate need to commence operations of the facilities had passed, those roles would be subject to a competitive procurement process.
The New York Fed is undertaking a prequalification process to identify and select firms to participate in the request for proposal(s) (RFP) for investment management services for the SMCCF. The SMCCF’s authorization to purchase new assets ceased on December 31, 2020, but the SMCCF has a continued need to manage its portfolio of investments, which as of that date consisted of $5.5 billion in corporate bonds at amortized cost and $8.8 billion in fixed-income ETFs at market value. The investment management services role could be performed either as two distinct roles, one for the corporate bond portfolio and another for the ETF portfolio, or as a single combined service. Of note, the Primary Market Corporate Credit Facility (PMCCF) closed on December 31, 2020 and holds no assets; as such, the existing investment management arrangements for the PMCCF will terminate on February 5, 2021.
Firms interested in participating in the potential RFP must submit the information detailed in the prequalification form. The New York Fed will evaluate the responses in conjunction with an updated assessment of its business needs. A firm’s participation in the prequalification process does not guarantee that the firm will be invited to submit a proposal in response to any RFP should one be issued. The prequalification form is due by 5:00 p.m. Eastern Time on February 22, 2021.
The New York Fed is using the prequalification process to facilitate broad awareness of this opportunity and encourage a wide range of firms to review the eligibility criteria and consider expressing their interest. Through these efforts, the New York Fed seeks to further its mandate to support equal opportunity and diversity in the implementation of these facilities. The New York Fed is committed to transparency and inclusive access as it undertakes this competitive procurement process.
The New York Fed plans to host an information session regarding this procurement process for investment management services. Details for this session are posted here.