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									          FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION
        SECURITIES LENDING COLLATERAL MONITORING PROCEDURES
                            (Accounting Unit)

PURPOSE: To monitor the collateral received from securities lent by FCERA through
the securities lending program. The maintenance margin per the securities lending
contract is set at 102% of the value of the security.

FREQUENCY OF MONITORING: Monthly

I. Exposure Report – The Exposure Report lists all securities on loan from the
                     FCERA portfolio and the collateral received for each
                     security.

      a.     On the tenth day of every month request an Exposure Report from the
             current securities lending manager for the prior month activity. For
             timeliness, it is reasonable to receive the report no later than the fifteenth
             of every month. The Exposure Report should be delivered in an excel
             spreadsheet format. Currently FCERA is contracted with Credit Suisse
             First Boston (CSFB) (See contact information below for CSFB).

      b.     Name the excel spreadsheet Securities Lending MM-DD-YY.xls. Save
             Securities Lending MM-DD-YY.xls in the appropriate financial period
             folder. All Securities Lending spreadsheets should be saved in
             G:\Shared\RETIRMNT\ACCT\FINSTMTS\”appropriate financial period
             folder”\Securities Lending MM-DD-YY.xls

      b.     Copy the Account Number tab from prior month Securities Lending MM-
             DD-YY.xls spreadsheet into the current worksheet. (Exhibit A)

      c.     Sort the excel spreadsheet Exposure Report by the exposure amount so
             that any negative amounts show at the top of the listing. This step
             identifies all negative exposure amounts. Negative amounts within the
             exposure amount column represent securities that have not collateralized
             a full 102% of security value. (Exhibit B)

      d.     Compare the column Fund X Ref to the Account Number tab within the
             Securities Lending spreadsheet. (Exhibit A and B)

      Contact Information Credit Suisse First Boston, Securities Lending Management

      Timothy Guinan                      Simon Luethi
      One Madison Ave, 2nd Floor          Eleven Madison Ave, 3rd Floor
      New York, NY 10010                  New York, NY 10010
      Tel: (212) 325-7699                 Tel: (212) 538-1496
      Fax: (212) 325-7679                 Fax: (212) 322-0336
      timothy.guinan@credit-suisse.com    simon.luethi@credit-suisse.com




C:\Documents and Settings\bvanwyk\Local Settings\Temporary Internet Files\OLK275\DRAFT
SECURITIES LENDING (2).doc
        FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION
  SECURITIES LENDING COLLATERAL MONITORING PROCEDURES (continued)
                           (Accounting Unit)


II. Notification of Findings

       a.     Report all under-collateralized securities to FCERA Management and
              Securities Lending Manager.

       b.     Request written response from Securities Lending Manager regarding the
              under-collateralized securities and any steps taken by the Securities
              Lending Manager to correct the issue. Maintain responses for Audit File.




C:\Documents and Settings\bvanwyk\Local Settings\Temporary Internet Files\OLK275\DRAFT
SECURITIES LENDING (2).doc
                                                                                EXHIBIT A

          FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION
    SECURITIES LENDING COLLATERAL MONITORING PROCEDURES (continued)
                             (Accounting Unit)


      CUSTODIED MANAGER ACCOUNT NUMBER TAB
      FOR SECURITIES ON LOAN




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SECURITIES LENDING (2).doc
                                                                                                                                   Exhibit B
                             FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION
                       SECURITIES LENDING COLLATERAL MONITORING PROCEDURES (continued)
                                                (Accounting Unit)

      Please note: the Exposure Report represented below has been altered for presentation purposes.

                                      Fund X                 Loan                             Market                    Margin   Margin
SecurityId       Description          Ref        Quantity    Price     Loan Value      Rate   Price     Market Value    Req      Act      Exposure
                 FNMA NOTE 4.5000                                                                                                                  -
US31359MZH95     15/10/08             13452844     947,000   $101.00    $956,470.00    4.85   $100.08    $947,800.22      102    100.91   $10,286.22
                 US TREASURY
                 NOTE 3.0000
US912828AN09     15/11/07             13452810   4,400,000   $100.50   $4,422,000.00   4.85    $98.66   $4,341,101.60     102    101.86   -$5,923.63
                 US TREASURY
                 NOTE 4.5000
US912810FT08     15/02/36             13452844   1,800,000    $98.50   $1,773,000.00    3.6    $96.80   $1,742,479.20     102    101.75   -$4,328.78
                 US TREASURY
                 NOTE 3.0000
US912828AN09     15/11/07             13452810   3,000,000   $100.50   $3,015,000.00    4.9    $98.66   $2,959,842.00     102    101.86   -$4,038.84
US1567821046     CERNER CORP          14235263       2,800    $48.00    $134,400.00     5.3    $46.73    $130,844.00      105    102.72   -$2,986.20
US9843321061     YAHOO INC            14235263      15,000    $25.69    $385,338.40     5.3    $25.36    $380,400.00      102     101.3   -$2,669.60
                 US TREASURY
                 NOTE 4.5000
US912810FT08     15/02/36             13452844     500,000    $98.50    $492,500.00     3.6    $96.80    $484,022.00      102    101.75   -$1,202.44
                 HCA INC BOND
                 FEB 6.5% 1 6.5000
US404119AR01     15/02/16             14257606      93,000    $87.28     $81,171.44    5.21    $86.65     $80,585.80      102    100.73   -$1,026.08
                 US TREASURY
                 NOTE 4.5000
US912810FT08     15/02/36             13452844     395,000    $98.50    $389,075.00     3.6    $96.80    $382,377.38      102    101.75     -$949.93
FR0000120529     SUEZ SA                135442         100    $52.80      $5,280.00    5.15    $50.29      $5,028.54      105    105.00        $0.03
                 FIRST
                 MARBLEHEAD
US3207711082     CORP                 13452851           2    $56.00        $112.00    5.16    $54.76        $109.52      102    102.26        $0.29




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