EX-99.(p)(12)
▇▇▇▇▇▇ Associates L.P., ▇▇▇▇▇▇ Associates Securities L.P. and ▇▇▇▇▇▇
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Associates Investment Trust
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Code of Ethics and Statement on ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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(Effective April 18, 2000)
I. DEFINITIONS
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A. Firm or ▇▇▇▇▇▇. The term "Firm" or "▇▇▇▇▇▇" shall include ▇▇▇▇▇▇
Associates L.P. ("HALP") and ▇▇▇▇▇▇ Associates Securities L.P. ("HASLP").
B. Trust. The term "Trust" shall mean ▇▇▇▇▇▇ Associates Investment Trust,
including any series of shares of beneficial interest of the Trust (each, a
"Fund").
C. Employee. The term "Employee" shall include any person employed by the
Firm, whether on a full or part-time basis and all partners, officers,
shareholders and directors of the Firm.
D. Access Person. The term "Access Person" shall have the meaning set forth
in Section 17j-1(a)(1) of the Investment Company Act of 1940 and rules
thereunder (the "Act"). Accordingly, Access Person means any director, officer,
general partner, or Advisory Person (as defined below) of the Fund or HALP, but
shall not include any trustee of the Trust who is not an "interested person" of
the Trust.
E. Advisory Person. The term "Advisory Person" shall have the meaning set
forth in Section 17j-1(a)(2) of the Act. Accordingly, Advisory Person means any
Employee of the Firm, who, in connection with his or her regular functions or
duties, makes, participates in, or obtains information regarding the purchase or
sale of Covered Securities (as defined below) by a Client (as defined below), or
whose functions relate to the making of any recommendations with respect to
purchases and sales. For the purpose of this Code, each Employee of the Firm
with an office at the Firm's principal place of business shall be deemed to be
an Advisory Person.
F. Persons Subject to this Code. Each Employee is subject to this Code.
G. Covered Security. The term "Covered Security" shall have the meaning set
forth in Section 2(a)(36) of the Act,/1/ including any right to acquire such
security, except that it shall not include securities which are direct
obligations of the Government of the United States, bankers' acceptances, bank
certificates of deposit, commercial paper, high quality short-term debit
instruments (including
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/1/ Sec. 2(a)(36) "Security" means any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral-trust
certificate, preorganization certificate or subscription, transferable
share, investment contract, voting-trust certificate, certificate of
deposit for a security, fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or privilege on any
security (including a certificate of deposit) or on any group or index of
securities (including any interest therein or based on the value thereof),
or any put, call, straddle, option, or privilege entered into on a national
securities exchange relating to foreign currency, or, in general, any
interest or instrument commonly known as a "security," or any certificate
of interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
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repurchase agreements), and shares issued by open-end investment companies.
H. Beneficial Interest or Ownership. The term "beneficial interest or
ownership" shall be interpreted in the same manner as it would be under Rule
16a-1(a)(2) under the Securities Exchange Act of 1934 in determining whether a
person is subject to the provisions of Section 16 of the Securities Exchange Act
of 1934 and rules thereunder, which includes any interest in which a person,
directly or indirectly, has or shares a direct or indirect pecuniary interest.
A pecuniary interest is the opportunity, directly or indirectly, to profit or
share in any profit derived from any transaction. Each person will be assumed
to have a pecuniary interest, and therefore, beneficial interest or ownership,
in all securities held by that person, that person's spouse, all members of that
person's immediate family and adults sharing the same household with that person
(other than mere roommates) and all minor children of that person and in all
accounts subject to their direct or indirect influence or control and/or through
which they obtain the substantial equivalent of ownership, such as trusts in
which they are a trustee or beneficiary, partnerships in which they are the
general partner, corporations in which they are a controlling shareholder or any
other similar arrangement. Any questions an Employee may have about whether an
interest in a security or an account constitutes beneficial interest or
ownership should be directed to the Firm's General Counsel or Compliance
Department. Examples of beneficial interest or ownership are attached as
Appendix A.
I. Client. The term "Client" shall mean any client of HALP, including any
Fund.
II. CODE OF ETHICS
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A. GENERAL STATEMENT
▇▇▇▇▇▇ seeks to ▇▇▇▇▇▇ a reputation for integrity and professionalism.
That reputation is a vital business asset. The confidence and trust placed in
us by investors in mutual funds and clients with accounts advised by the Firm is
something that is highly valued and must be protected. As a result, any activity
which creates even the suspicion of misuse of material non-public information by
the Firm or any of its Employees, which gives rise to or appears to give rise to
any breach of fiduciary duty owed to any Client, or which creates any actual or
potential conflict of interest between any Client and the Firm or any of its
Employees or even the appearance of any conflict of interest must be avoided and
is prohibited.
The Investment Company Act and rules make it illegal for any person covered
by the Code, directly or indirectly, in connection with the purchase or sale of
a security held or to be acquired by the Trust to:
a. employ any device, scheme, or artifice to defraud the Trust;
b. make any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light
of circumstances under which they are made, not misleading or in any
way mislead the Trust regarding a material fact;
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c. engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon the Trust; or
d. engage in any manipulative practice with respect to the Trust.
The restrictions on personal securities transactions contained in this Code are
intended to help the Firm monitor for compliance with these prohibitions.
Additionally, the federal securities laws require that an investment
adviser maintain a record of every transaction in any Covered Security in which
an Access Person acquires any direct or indirect beneficial interest or
ownership, except any transaction in an account in which the Access Person has
no direct or indirect control or influence.
To attempt to ensure that each Person Subject to this Code satisfies this
Code and these record keeping obligations, the Firm has developed the following
rules relating to personal securities trading, outside employment, personal
investments with external investment managers and confidentiality. The General
Counsel, Chief Executive Officer, and Compliance Officer, acting in concert, has
the authority to grant written waivers of the provisions of this Code in
appropriate instances. However, the Firm expects that waivers will be granted
only in rare instances, and some provisions of the Code that are mandated by the
Act cannot be waived.
B. RESTRICTIONS ON EMPLOYEE TRADING
No trading activity by an Employee in any security in which an Employee has any
beneficial interest or ownership which is also the subject of a Client portfolio
purchase or sale shall disadvantage or appear to disadvantage such Client
transaction. Further, the following specific restrictions apply to all trading
activity for Advisory Persons:
i) Any transaction in a security in anticipation of client orders
("frontrunning") is prohibited,
ii) Any transaction in a security which is the subject of a Firm
recommendation is prohibited until the tenth business day following the
dissemination of the recommendation, or any longer period specified in this
Code,
iii) Any transaction in a security which the Advisory Person knows or
has reason to believe is being purchased or sold or considered for purchase
or sale/2/ by any investment company advised by the Firm is prohibited
until the transaction by such investment company has been
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/2/ A security is "being considered for purchase or sale", the
earlier of, when a recommendation to purchase or sell has been made and
communicated or the security is placed on the research project list and,
with respect to the person making the recommendation, when such person
seriously considers making such a recommendation.
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completed or consideration of such transaction has been abandoned,/3/
iv) Any same day transaction in a security in which any investment
company advised by the Firm has a pending or actual transaction is
prohibited. If an Advisory Person places a same day trade for such
security prior to the investment company placing an order the Employee's
order will be canceled,
v) Any transaction in a security within two business days after any
investment company advised by the Firm has traded in that security is
prohibited,
vi) Any transaction involving options relating to any security on the
Firm's approved list or which are held by any investment company advised by
the Firm is prohibited, and
vii) Any acquisition of an equity security in an initial public offering is
prohibited.
Additionally, no Employee of the Firm shall knowingly sell to or purchase
from the Funds or ▇▇▇▇ any security or other property except, in the case of the
Funds, securities issued by the Funds.
C. PERSONAL INVESTMENTS WITH EXTERNAL MONEY MANAGERS.
All investments in which an Advisory Person has any beneficial interest or
ownership placed with external investment managers (including interests in
limited partnerships or trust vehicles, managed accounts, variable annuities or
foreign entities) or in any account in which an Advisory Person has discretion
must be approved in writing by the Compliance Department and the Chief Executive
Officer prior to the commitment of initial capital.
Additionally, "Investment Personnel" must obtain approval prior to
investing or acquiring a beneficial ownership interest in a Limited Offering,
whether directly or indirectly. "Investment Personnel" is defined in Section
17j-1(a)(7) of the Act and shall be deemed to include any officer of HAI with an
office in the Firm's principal place of business; any officer of HAI who, in
connection with his or her regular functions or duties, makes or participates in
making recommendations regarding the purchase or sale of securities; any ▇▇▇▇▇▇
portfolio manager; any member of the ▇▇▇▇▇▇ stock selection group; any ▇▇▇▇▇▇
financial analyst; or any ▇▇▇▇▇▇ fund manager. A "Limited Offering" is generally
defined as a private placement and can include interests in real estate or oil
and gas limited partnership interests and other privately placed securities and
funds. The Investment Personnel must (i) provide notice in writing to the Chief
Executive Officer and the Compliance Department prior to acquiring ownership,
and (ii) obtain the written approval of the Chief Executive Officer and the
Compliance Department prior to acquiring ownership. The Compliance Department
shall maintain a copy of such approval and reasons supporting the approval as
provided under Section IV of this Code.
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/3/ Among the clients of the Firm are private investment partnerships
(partnerships) in which various Employees of the Firm have equity
interests. This trading prohibition shall not restrict purchases or sales
for the accounts of such partnerships provided that the Trust and such
accounts are treated fairly and equitably in connection with such purchases
and sales.
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The Compliance Department will maintain a list of investment managers used
by Partnerships managed internally and a list of investment managers used by
Advisory Persons.
If an Advisory Person has been notified that an investment manager is used
by the Partnerships' managed internally, an Advisory Person must notify the
Compliance Department and the Head of the Multi-Manager Area of any material
withdrawal of their investment with such investment manager at least two working
days prior to an Advisory Person submitting any notice of such withdrawal. To
avoid a conflict of interest or the appearance of any conflict, an Advisory
Person should also note the reason for the withdrawal if it relates to the
investment manager's performance, organization or perceived ability to execute
their trading strategy.
D. ADDITIONAL RESTRICTION ON FUND MANAGERS OF INVESTMENT COMPANY ACCOUNTS.
Any Access Person who is a fund manager of any investment company that is
advised by the Firm is prohibited from buying or selling a security within
fifteen calendar days before and after the investment company that he/she
manages trades in that security. Any profits realized on trades within the
proscribed periods shall be required to be disgorged./4/
E. PROCEDURES TO IMPLEMENT TRADING RESTRICTIONS AND REPORTING OBLIGATIONS.
1) Trading through ▇▇▇▇▇▇' Trading Desk.
All transactions in Covered Securities in which an Advisory Person has any
beneficial interest or ownership or in any accounts in which an Advisory Person
has discretion, other than fee paying accounts ("Advisory Person account"), must
be processed through the Firm's trading desk.
Transactions at other brokers or banks are not permitted except in unusual
circumstances and then only after the Advisory Person has: (i) provided notice
in writing to his/her Supervisor and the Compliance Department prior to opening
or placing an initial order in an account with such other broker or bank, (ii)
obtained the written approval of his/her Supervisor and the Compliance
Department prior to opening or placing an initial order in such account, (iii)
provided such other broker or bank with a written notice of the Advisory
Person's affiliation with ▇▇▇▇▇▇ and request that copies of confirmations and
statements be sent to the Firm's Compliance Department, and provide a report to
the Firm that includes the name of the broker or bank with whom the account was
established, the date the account was established, and the date the report is
submitted. A copy of such written notice and request should also be provided to
his/her Supervisor and the Compliance Department.
Even after an Advisory Person has obtained approval to execute transactions
through another broker or bank, the Advisory Person must still present the
Firm's trading desk with an order ticket for an
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/4/ Any profits disgorged shall be given to a tax exempt charitable
organization of ▇▇▇▇▇▇' choosing.
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order to be executed at the other broker or bank. In those exceptional
situations in which it is inappropriate for the Firm's trading desk to place the
order, the Advisory Person must promptly present the trading desk with a
completed order ticket reflecting the details of the transaction and clearly
indicating that the transaction has been completed.
2) Monitoring of Trades.
Transactions for an account of an Advisory Person that are executed through
the Firm's trading desk are to be monitored by the Trading Department and
reviewed and approved by the Chief Executive Officer (or such party to whom he
delegates). These transactions are unsolicited brokerage transactions, should be
so marked on the original order ticket and may not be executed if they are in
conflict with discretionary orders. Should a conflict arise, sharing of
executions may be approved by the Head of the Investment Advisory Department, or
in his/her absence, the Manager of the Trading Department. Employee accounts
must be opened in the 40000 office range.
The Firm will provide to the Compliance Department information (including
the title of each Covered Security involved, the date of the transaction, the
interest rate and maturity rate (if applicable), the number of shares and
principal amount of each Covered Security involved, the nature of the
transaction (i.e. buy/sell), the price at which the transaction was effected,
the name of the broker or bank through which the transaction was effected, and
the date on which the report is submitted) about transactions in the accounts of
Advisory Persons who have accounts with the Firm.
Transactions at other brokers or banks, in addition to being placed through
the trading desk, are to be monitored by the Compliance Department. To
accomplish this, an Access Person shall submit to the Compliance Department
within ten days after any transaction a report which includes the title of the
Covered Security, the date of the transaction, the interest rate and maturity
rate (if applicable), the number of shares and principal amount of each Covered
Security involved, the nature of the transaction (i.e. buy/sell), the price at
which the transaction was effected, the name of the broker or bank through which
the transaction was effected and the date on which the report is submitted. This
requirement may be satisfied by having the broker or bank send the Firm
duplicate copies of confirmations and statements, provided that such
confirmations and statements contain all of the information otherwise required
to be provided in the report. The Compliance Department will maintain copies of
all such transaction reports.
3) Cancellation of Trades.
Any transaction for an account of an Access Person is subject to
cancellation or reversal if it is determined by either the Chief Executive
Officer (or such party to whom he delegates), the Manager of the Trading
Department or the Compliance Department that the transaction is or was in
conflict with or appeared to be in conflict with any Client transaction or any
of the trading restrictions of this Code. Cancellations or reversals of
transactions may be required after an extended period past the settlement date.
The Manager of the Trading Department may also prevent the execution of orders
for an Advisory Person's account if it appears that the trade may have to be
canceled or reversed.
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Client transactions include transactions for any investment company managed
by the Firm, any other discretionary advisory clients or any other accounts
managed or advised by Employees of the Firm for a fee.
The determination that a transaction of an Access Person may conflict with
a Client transaction will be subjective and individualized and may include
questions about timely and adequate dissemination of information, availability
of bids and offers, as well as many other factors deemed pertinent for that
transaction or series of transactions. It is possible that a cancellation or
reversal of a transaction could be costly to an Access Person or his/her family.
Therefore, great care is required to adhere to the Firm's trading restrictions
and avoid conflicts or the appearance of conflicts.
4) Participation in Dividend Reinvestment Plans and Systematic Purchase
Plans.
Advisory Persons may purchase securities through dividend reinvestment
plans or systematic purchase plans without processing such transactions through
the Firm's trading desk. Purchases are permitted only after the Employee has:
(i) provided notice in writing to his/her Supervisor and the Compliance
Department prior to opening an account or placing an initial purchase, and (ii)
obtained the written approval of his/her Supervisor and the Compliance
Department prior to opening an account or placing an initial purchase. Even
after the Advisory Person has obtained approval to invest in such a plan, the
Advisory Person must provide the Compliance Department with duplicate copies of
statements within ten days after the end of each quarter. Such report or
statements must contain all of the information required to be reported with
respect to transactions in Covered Securities under II(F)(2) above. The
Compliance Department will maintain copies of all such transaction reports.
5) Reporting All Other Securities Transactions.
Because the obligations of an investment adviser to maintain records of
Employee's personal securities transactions is broader than the type of
transactions discussed above in this Section, all Employees have the following
additional reporting obligations. Any transaction in a Covered Security not
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required to be placed through the Firm's trading desk in which an Employee has
any beneficial interest or ownership (such as, real estate or oil and gas
limited partnership interests and other privately placed securities and funds)
must be reported to the Compliance Department. This report must be submitted
within ten days after the end of each quarter and include: the title, price,
number of shares and principal amount of each Covered Security involved, the
date and nature of the transaction (i.e. buy/sell), the name of the broker or
bank used, if any, interest rate and maturity, if applicable, and the date on
which the report is submitted. This report may be in any form, including a copy
of a confirmation or monthly statement. However, no report is necessary for any
transaction in an account in which the Employee has no control or influence.
6) Initial and Annual Reporting Requirements.
Each Access Person shall initially disclose in writing to the Compliance
Department within 10 business days of becoming an Access Person, and annually
thereafter within 30 business days after each
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calendar year-end, the title, number of shares and principal amount of all
Covered Securities beneficially owned by such Access Person as of the date of
becoming a Access Person, or as of the preceding December 31 for annual
reporting and the name of the broker or bank with whom the Access Person
maintains an account in which he or she has beneficial ownership of any
security. The first such annual report under this amended Code of Ethics shall
be made by January 30, 2001. An Access Person need not make an Initial or Annual
Report for Covered Securities held in any account over which the Employee has no
direct or indirect influence or control.
F. CONFIDENTIALITY & OBLIGATIONS OF EMPLOYEES
During the period of employment with the Firm an Employee will have access
to certain "confidential information" concerning the Firm and its clients. This
information is a valuable asset and the sole property of the Firm and may not be
misappropriated and used outside of the Firm by an Employee or former Employee.
"Confidential Information", defined as all information not publicly available
about the business of the Firm, may include, but is not limited to, Client and
prospect names and records, research, trading and portfolio information and
systems, information concerning externally managed entities or accounts which
have been considered or made on behalf of fee paying clients, and the financial
records of the Firm and/or its Employees. In order to protect the interests of
the Firm, an Employee or ex-Employee shall not, without the express written
consent of the Firm's Chief Executive Officer, disclose directly or indirectly
confidential information to anyone outside of the Firm. An Employee should be
extremely careful to avoid inadvertent disclosures and to exercise maximum
effort to keep confidential information confidential. Any questions concerning
the confidentiality of information should be directed to the Chief Executive
Officer or the General Counsel. An abuse of the Firm's policy of confidentiality
could subject an Employee to immediate disciplinary action that may include
dismissal from the Firm.
G. OUTSIDE EMPLOYMENT, ASSOCIATIONS AND BUSINESS ACTIVITIES
1) Outside Employment and Associations.
It is ▇▇▇▇▇▇'▇ policy not to permit Advisory Persons to hold outside
positions of authority, including that of being an officer, partner, director or
employee of another business entity (except in the case of entities managed by
the Firm). Also, ▇▇▇▇▇▇ requires that all Advisory Persons make their positions
with the Firm a full-time job. The approval of ▇▇▇▇▇▇, and in some cases the
approval of the NASD, is required before any Advisory Person may hold any
outside position for any business organization, regardless of whether such
position is compensated or not. Any exception to this policy must be approved in
writing by the Firm's Chief Executive Officer (or other person as he may
delegate) and the Access Person's Supervisor, and a copy of such approval shall
be provided by the Advisory Person to the Compliance Department. Any change in
the status of such approved position immediately must be reported in writing to
the Compliance Department and the Advisory Person's Supervisor. Any income or
compensation received by an Advisory Person for serving in such position must be
paid in full to the Firm. Under no circumstance may an Advisory Person represent
or suggest that ▇▇▇▇▇▇ has approved or recommended the business activities of
the outside organization or any person associated
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with it.
2) Outside Business Activities.
To further avoid actual or potential conflicts of interest and to maintain
impartial investment advice, and equally important, the appearance of impartial
investment advice, each Advisory Person must disclose in writing to the
Compliance Department any special relationships and/or investments or business
activities that they or their families have which could influence the investment
activities of the Firm. If an Employee has any questions about any activities
and the need for disclosure, the Employee should be cautious and direct any
questions to the Firm's General Counsel or Compliance Department.
H. Certification of Compliance by Access Persons.
Each Access Person is required to certify annually that (i) he or she has
read and understands the Code, (ii) recognizes that he or she is subject to the
Code, and (iii) he or she has disclosed or reported all Personal Securities
Transactions required to be disclosed or reported under the Code. The Firm shall
annually distribute a copy of the Code and request certification by all Persons
Subject to this Code and shall be responsible for ensuring that all personnel
comply with the certification requirement.
Each Access Person who has not engaged in any personal securities
transactions during the preceding year for which a report was required to be
filed pursuant to the Code shall include a certification to that effect in his
or her annual certification.
I. Annual Report to the Trust's Board of Trustees.
The officers of the Trust shall prepare an annual report to the board of
trustees of the Trust that:
1. summarizes existing procedures concerning personal investing and any
changes in those procedures during the past year;
2. describes issues that arose during the previous year under the Code or
procedures concerning personal investing, including but not limited to
information about material violations of the Code and sanctions
imposed;
3. certifies to the board that the Trust has adopted procedures
reasonably necessary to prevent its Investment Personnel and Access
Persons from violating the Code; and
4. identifies any recommended changes in existing restrictions or
procedures based upon experience under the Code, evolving industry
practices, or developments in applicable laws or regulations.
III. POLICY STATEMENT ON ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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A. BACKGROUND
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Trading securities while in possession of material, nonpublic information
or improperly communicating that information to others may expose you to
stringent penalties. Criminal sanctions may include a fine of up to $1,000,000
and/or ten years imprisonment. The Securities and Exchange Commission (SEC) can
recover the profits gained or losses avoided through the violative trading,
obtain a penalty of up to three times the illicit windfall and issue an order
permanently barring you from the securities industry. Finally, you may be sued
by investors seeking to recover damages for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ violations.
Regardless of whether a government inquiry occurs, ▇▇▇▇▇▇ views seriously
any violation of this Policy Statement. Such violations constitute grounds for
disciplinary sanctions, including dismissal.
The law of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is unsettled; an individual legitimately may be
uncertain about the application of the Policy Statement in a particular
circumstance. Often, a single question can forestall disciplinary action or
complex legal problems. You should direct any questions relating to the Policy
Statement to the General Counsel, or, in her absence, a member of the Stock
Selection Group, or the Compliance Department. You also must notify the General
Counsel, or, in her absence, a member of the Stock Selection Group or the
Compliance Department immediately if you have any reason to believe that a
violation of the Policy Statement has occurred or is about to occur.
B. POLICY STATEMENT ON ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
No person to whom this Policy Statement applies may trade, either
personally or on behalf of others (such as Clients), while in possession of
material, nonpublic information; nor may such persons communicate material,
nonpublic information to others in violation of the law. This Policy Statement
is drafted broadly; it will be applied and interpreted in a similar manner.
This Policy Statement applies to securities trading and information handling by
all Access Persons (including their spouses, minor children and adult members of
their households).
The section below reviews principles important to this Policy Statement.
1. What is Material Information?
Information is "material" when there is a substantial likelihood that a
reasonable investor would consider it important in making his or her investment
decisions. Generally, this is information whose disclosure will have a
substantial effect on the price of a company's securities. No simple "bright
line" test exists to determine when information is material; assessments of
materiality involve a highly fact-specific inquiry. For this reason, you should
direct any questions about whether information is material to the General
Counsel, or, in her absence, a member of the Stock Selection Group, or
Compliance Department.
Material information often relates to a company's results and operations
including, for example, dividend changes, earnings results, changes in
previously released earnings estimates, significant merger or acquisition
proposals or agreements, major litigation, liquidation problems, and
extraordinary management developments.
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Material information also may relate to the market for a company's
securities. Information about a significant order to purchase or sell
securities may, in some contexts, be deemed material. Similarly, prepublication
information regarding reports in the financial press also may be deemed
material.
2. What is Nonpublic Information?
Information is "nonpublic" until it has been disseminated broadly to
investors in the marketplace. Tangible evidence of such dissemination is the
best indication that the information is public. For example, information is
public after it has become available to the general public through a public
filing with the SEC or some other governmental agency, the Dow ▇▇▇▇▇ "tape" or
the WALL STREET JOURNAL or some other publication of general circulation, and
after sufficient time has passed so that the information has been disseminated
widely.
3. Identifying Inside Information
Before executing any trade for yourself or others, including Clients, you
must determine whether you have access to material, nonpublic information. If
you think that you might have access to material, nonpublic information, you
should take the following steps:
i. Immediately alert the Trading Department to restrict trading in the
security by placing the security on the restricted list maintained in
the trading room. No reason or explanation should be given to the
Trading Department for the restriction.
ii. Report the information and proposed trade immediately to the General
Counsel, , or a member of the Stock Selection Group.
iii. Do not purchase or sell the securities on behalf of yourself or
others, including Clients.
iv. Do not communicate the information inside or outside ▇▇▇▇▇▇ other than
to the above individuals.
v. After the above individuals have reviewed the issue, the Firm will
determine whether the information is material and nonpublic and, if
so, what action the Firm should take.
4. Contacts with Public Companies
For ▇▇▇▇▇▇, contacts with public companies represent an important part of
our research efforts. ▇▇▇▇▇▇ may make investment decisions on the basis of the
Firm's conclusions formed through such contacts and analysis of publicly-
available information. Difficult legal issues arise, however, when, in the
course of these contacts, an Access Person becomes aware of material, nonpublic
information. This could happen, for example, if a company's Chief Financial
Officer prematurely discloses quarterly results to an analyst or an investor
relations representative makes a selective disclosure of adverse news to a
handful of investors. In such situations, ▇▇▇▇▇▇ must make a judgment as to its
further conduct. To protect yourself, Clients and the Firm, you should contact
the General Counsel, or in her absence, a
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member of the Stock Selection Group, or Compliance Department immediately if you
believe that you may have received material, nonpublic information.
5. Tender Offers
▇▇▇▇▇▇ offers represent a particular concern in the law of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
for two reasons. First, tender offer activity often produces extraordinary
gyrations in the price of the target company's securities. Trading during this
time period is more likely to attract regulatory attention (and produces a
disproportionate percentage of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ cases). Second, the SEC has
adopted a rule which expressly forbids trading and "tipping" while in possession
of material, nonpublic information regarding a tender offer received from the
tender offeror, the target company or anyone acting on behalf of either.
Employees should exercise particular caution any time they become aware of
nonpublic information relating to a tender offer.
C. PROCEDURES TO IMPLEMENT THE POLICY STATEMENTON ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
1. Personal Securities Trading
The restrictions on Employee trading and procedures to implement those
restrictions and the Firm's reporting obligations, which are set forth in
Section II above, constitute the same procedures to implement this Policy
Statement. Review those procedures carefully and direct any questions about
their scope or applicability to the General Counsel or the Compliance
Department.
2. Restrictions on Disclosures
▇▇▇▇▇▇ Employees shall not disclose any nonpublic information (whether or
not it is material) relating to ▇▇▇▇▇▇ or its securities transactions to any
person outside ▇▇▇▇▇▇ (unless such disclosure has been authorized by ▇▇▇▇▇▇).
Material, nonpublic information may not be communicated to anyone, including
persons within ▇▇▇▇▇▇, except as provided in Section III(B)(3) above. Such
information must be secured. For example, access to files containing material,
nonpublic information and computer files containing such information should be
restricted, and conversations containing such information, if appropriate at
all, should be conducted in private.
IV. RETENTION OF RECORDS
--------------------
The Compliance Department or the Secretary of the Trust will maintain the
records listed below for a period of five years. Such records shall be
maintained at the Firm's principal place of business in an easily accessible
place:
(i) a list of all persons subject to the Code during that period;
12
(ii) receipts signed by all persons subject to the Code acknowledging
receipt of copies of the Code and acknowledging that they are subject
to it;
(iii) a copy of each Code of Ethics that has been in effect at any time
during the period;
(iv) a copy of each report filed pursuant to the Code and a record of any
known violations and actions taken as a result thereof during the
period as well as a record of all persons responsible for reviewing
these reports; and
(v) a copy of any decision and the reasons supporting the decision, to
approve the acquisition by Investment Personnel of Limited Offerings.
13
ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS AND STATEMENT ON
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
FOR ACCESS PERSONS
Code of Ethics. ▇▇▇▇▇▇ Associates L.P. ("HALP"), ▇▇▇▇▇▇ Associates
Securities L.P. ("HASLP") and ▇▇▇▇▇▇ Associates Investment Trust (the "Trust")
have adopted a written Code of Ethics and Statement on ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"Code") to avoid potential conflicts of interest by ▇▇▇▇ and HASLP personnel and
to govern the use and handling of material non-public information. A copy of the
Code is attached to this acknowledgement. As a condition of your continued
employment with HALP and HASLP, and/or the retention of your position, if any,
as an officer of the Trust, you are required to read, understand and abide by
the Code.
Compliance Program. The Code requires that all personnel furnish to the
Compliance Department information regarding any investment account in which you
have a "beneficial interest." You are also required to furnish to the Compliance
Department copies of your monthly or quarterly account statements, or other
documents, showing all purchases or sales of securities in any such account, or
which are effected by you or for your benefit, or the benefit of any member of
your household. Additionally, you are required to furnish a report of your
personal securities holdings within ten days of commencement of your employment
with HALP or HASLP and annually thereafter. These requirements apply to any
investment account, such as an account at a brokerage house, trust account at a
bank, custodial account or similar types of accounts.
This compliance program also requires that you report any contact with any
securities issuer, government or its personnel, or others, that, in the usual
course of business, might involve material non-public financial information. The
Code requires that you bring to the attention of the General Counsel any
information you receive from any source which might be material non-public
information.
Any questions concerning the Code should be directed to the General Counsel
or the Compliance Department.
I affirm that I have read and understand the Code. I agree to the terms and
conditions set forth in the Code.
----------------------------------- ---------------
Signature Date
1
ANNUAL AFFIRMATION OF COMPLIANCE
FOR ACCESS PERSONS
I affirm that:
1. I have again read and, during the past year to the best of my
knowledge, have complied with the Code of Ethics and Statement of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Code").
2. I have provided to the Compliance Department the names and addresses
of each investment account that I have with any firm, including, but
not limited to, broker-dealers, banks and others. (List of known
accounts attached.)
3. I have provided to the Compliance Department copies of account
statements or other reports showing each and every transaction in any
security in which I have a beneficial interest, as defined in the
Code, during the most recently ended calendar year
or
During the most recent calendar year there were no transactions in any
security in which I had a beneficial interest required to be reported
pursuant to the Code.
4. I have provided to the Compliance Department a report of my personal
securities holdings as of the end of the most recent calendar year,
including all required information for each security in which I have
any direct or indirect beneficial ownership.
----------------------------------- --------------
Signature Date
APPENDIX A
Examples of Beneficial Interest
For purposes of the Code, you will be deemed to have a beneficial interest
in a security if you have the opportunity, directly or indirectly, to profit or
share in any profit derived from a transaction in the security. Examples of
beneficial ownership under this definition include:
. securities you own, no matter how they are registered, and including
securities held for you by others (for example, by a custodian or
broker, or by a relative, executor or administrator) or that you have
pledged to another (as security for a loan, for example);
. securities held by a trust of which you are a beneficiary (except
that, if your interest is a remainder interest and you do not have or
participate in investment control of trust assets, you will not be
deemed to have a beneficial interest in securities held by the trust);
. securities held by you as trustee or co-trustee, where either you or
any member of your immediate family (i.e., spouse, children or
descendants, stepchildren, parents and their ancestors, and
stepparents, in each case treating a legal adoption as blood
relationship) has a beneficial interest (using these rules) in the
trust.
. securities held by a trust of which you are the settlor, if you have
the power to revoke the trust without obtaining the consent of all the
beneficiaries and have or participate in investment control;
. securities held by any partnership in which you are a general partner,
to the extent of your interest in partnership capital or profits;
. securities held by a personal holding company controlled by you alone
or jointly with others;
. securities held by (i) your spouse, unless legally separated, or you
and your spouse jointly, or (ii) your minor children or any immediate
family member of you or your spouse (including an adult relative),
directly or through a trust, who is sharing your home, even if the
securities were not received from you and the income from the
securities is not actually used for the maintenance of your household;
or
. securities you have the right to acquire (for example, through the
exercise of a derivative security), even if the right is not presently
exercisable, or securities as to which, through any other type of
arrangement, you obtain benefits substantially equivalent to those of
ownership.
You will not be deemed to have beneficial ownership of securities in the
following situations:
. securities held by a limited partnership in which you do not have a
controlling interest and do not have or share investment control over
the partnership's portfolio; and
APPENDIX A
. securities held by a foundation of which you are a trustee and donor,
provided that the beneficiaries are exclusively charitable and you
have no right to revoke the gift.
These examples are not exclusive. There are other circumstances in which you may
be deemed to have a beneficial interest in a security. Any questions about
whether you have a beneficial interest should be directed to the General Counsel
or Compliance Department.