What technique should public sector investors use to mitigate risks with securities dealers?

Public sector investors should employ the technique of avoiding buying securities from "cold calls" to mitigate risks associated with securities dealers. This approach is sound for several reasons.

Firstly, "cold calls" typically involve unsolicited offers from brokers or dealers who may not have an established relationship with the investor. Such arrangements can expose investors to a higher risk of fraud or less favorable terms, as the identity and reliability of the dealer may not be fully vetted. Avoiding these unsolicited communications helps ensure that transactions are conducted with known and reputable dealers, thereby reducing the likelihood of encountering scams or untrustworthy practices.

Additionally, this technique encourages diligence in establishing relationships with well-known, credible brokers or securities firms that have a track record of reliability and integrity in the market. By focusing on established dealers or those with a proven history, public sector investors can better manage counterparty risk and ensure compliance with fiduciary responsibilities.

In summary, by steering clear of purchasing securities via unsolicited offers, public sector investors protect themselves from potential fraud and engage in more secure, reliable transaction practices.