Gov. Code, § 6932

Any written contract entered into between a governmental investor and an investment manager on or after January 1, 1991, for the management of assets of a public fund or a public pension or retirement fund, which includes a soft dollar and directed brokerage arrangement, shall contain the following requirements:

(a) The investment manager shall maintain complete and detailed records of all billed services provided pursuant to soft dollar and directed brokerage arrangements.

(b) The services which may be provided by a broker-dealer pursuant to soft dollar and directed brokerage arrangements shall be clearly defined.

(c) The investment manager shall, in the customer agreement letters with governmental investors, disclose:

(1) A list of all billed services provided pursuant to soft dollar and directed brokerage arrangements with respect to investment transactions for the governmental investor.

(2) The justification for providing each of those services.

(3) The maximum percentage of the investment transactions of the governmental investor planned for use in soft dollar and directed brokerage arrangements.

(4) An annual statement of all billed services provided during the previous year under soft dollar and directed brokerage arrangements with respect to investment transactions for the governmental investor.

(5) A determination of whether each service provided under soft dollar and directed brokerage arrangements with respect to investment transactions for the governmental investor is proprietary or is being shared by other clients of the investment manager.