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8. The City will not purchase securities that are considered highly sensitive. A highly sensitive investment is a debt instrument with contract terms that make the investment's fair value highly sensitive to interest rate changes. Examples include range notes and index amortizing notes, step-up notes and bonds, variable-rate investments with coupon multipliers,and coupons that vary inversely with a benchmark index. 9. The City will not purchase securities that could expose the City to foreign currency risk. 10. The City will not purchase derivatives. 6. Safekeeping and Custody Investments may be held in safekeeping with: 1. Any Federal Reserve Bank, 2. Any bank authorized under the laws of the United States or any state to exercise corporate trust powers,including but not limited to the bank from which the investment is purchased, 3. A primary reporting dealer in the United States government securities to the Federal Reserve Bank of New York, or 411 4. A securities broker-dealer having its principal executive office in Minnesota, Licensed pursuant to Minnesota Statutes Chapter 80A, or an affiliate of it, regulated by the securities and exchange commission and maintaining a combined capital and surplus of$40,000,000 or more,exclusive of subordinated debt. The City's ownership of all securities in which the fund is invested should be evidenced by written acknowledgments identifying the securities by: A. The names of issuers, B. The maturity dates, C. The interest rates, D. Any serial numbers or other distinguishing marks. The City shall not invest in securities that are both uninsured and not registered in the name of the City and are held by either: A. The counterparty or B. The counterparty's trust department or agent,but not in the name of the City. The Finance Director shall establish a system of internal controls, which shall be reviewed with the independent auditor of the City. The controls shall be designed to prevent the 5