Form 485BPOS LITMAN GREGORY FUNDS

September 17, 2021 1:27 PM EDT

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Paul Hastings LLP

101 California Street, 48th Floor

San Francisco, California 94111

1(415) 856-7007

davidhearth@paulhastings.com

September 17, 2021

VIA EDGAR

Litman Gregory Funds Trust

1676 N. California Blvd., Suite 500

Walnut Creek, California 94596

 

Re:

Litman Gregory Funds Trust - File Nos. 333-10015 and 811-07763

Ladies and Gentlemen:

We hereby consent to the inclusion of our law firm’s name as counsel to the Litman Gregory Funds Trust (the “Registrant”), as shown in Post-Effective Amendment No. 106 to the Registrant’s Registration Statement on Form N-1A.

Very truly yours,

/s/ David A. Hearth

David A. Hearth

for PAUL HASTINGS LLP

FIRST PACIFIC ADVISORS, LP

and

FPA FUNDS

CODE OF ETHICS

July 2021

 

A.

BACKGROUND

First Pacific Advisors, LP (“FPA” or the “Company”) serves as the investment adviser to FPA Funds Trust (the “Trust”), FPA New Income, Inc., FPA U.S. Core Equity Fund, Inc., Bragg Capital Trust (“Bragg Trust”) and Source Capital, Inc. (each a “Fund” and collectively with the Trust and Bragg Trust, the “FPA Funds”). In addition, FPA serves as the investment adviser to certain separately managed accounts, sub-advised mutual funds, and FPA Private Funds (together with the FPA Funds, the “Clients”). This Code of Ethics (“CODE”) is being adopted by the FPA Funds and FPA in compliance with the requirements of Rule 17j-1 under the Investment Company Act of 1940, as amended (the “IC Act”), and Sections 204A and 206 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and Rule 204A-1 thereunder, to effectuate the purposes and objectives of those provisions. These provisions make it unlawful for any Employee (as defined below), officer or director of the Funds, the Trust, the Bragg Trust, or FPA, in connection with the purchase or sale by such person of a security held or to be acquired by a Client:1

 

   

To employ a device, scheme or artifice to defraud the Client;

 

   

To make to the Client any untrue statement of a material fact or omit to state to the Client a material fact necessary in order to make the statements made, in light of the circumstances in which they are made, not misleading;

 

   

To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon the Client; or

 

   

To engage in a manipulative practice with respect to the Client.

Each reference herein to “Employee” means:

 

   

all FPA personnel;

 

   

certain consultants employed by FPA from time to time, as determined by FPA’s Chief Compliance Officer (the “CCO”); and

 

   

certain of FPA’s temporary workers, as determined from time to time by the CCO, who are hired on a temporary basis, including those employed by a third party, and interns.

 

 

1

A security is deemed to be “held or to be acquired” if within the most recent fifteen (15) calendar days it (i) is or has been held by a Client, or (ii) is being or has been considered by FPA for purchase by the Client.

 

1


This CODE is predicated on the principle that FPA owes a fiduciary duty to its Clients. As a fiduciary, FPA at all times must serve in its Clients’ best interests and comply with all applicable provisions of the Federal Securities Laws (as defined below). FPA’s employees must avoid activities, interests, and relationships that run contrary to the best interests of Clients, whether as a result of a possible conflict of interest, the improper use of confidential information, diversion of an investment opportunity, or other impropriety with respect to dealing with or acting on behalf of a Client. FPA has implemented separate policies and procedures that seek to address the aforementioned potential conflicts, including, but not limited to:

 

   

INSIDER TRADING

 

   

TRADE AGGREGATION AND ALLOCATION, BEST EXECUTION, AND SOFT DOLLARS

 

   

BUSINESS GIFTS AND ENTERTAINMENT

 

   

OUTSIDE BUSINESS ACTIVITIES

 

   

POLITICAL CONTRIBUTIONS

This CODE does not attempt to identify all possible conflicts of interest, and literal compliance with each specific provision will not act as a shield from liability for personal trading or other conduct that violates a fiduciary duty to Clients. Although no written code can take the place of personal integrity, the following, in addition to common sense and sound judgment, should serve as a guide to the minimum standards of proper conduct.

 

B.

REPORTING VIOLATIONS

Improper actions by FPA or its Employees could have severe negative consequences for FPA, its Clients, including investors in its pooled investment vehicles (“Investors”), and its Employees. Impropriety, or even the appearance of impropriety, could negatively impact all Employees, including people who had no involvement in the problematic activities.

Employees must promptly report any improper or suspicious activities, including any suspected violations of the CODE, to the CCO. Issues can be reported in person, or by telephone, email, or written letter. Reports of potential issues may be made anonymously. Any reports of potential problems will be thoroughly investigated by the CCO, who will report directly to the Directors of the General Partner on the matter. Any problems identified during the review will be addressed in ways that reflect FPA’s fiduciary duty to its Clients.

An Employee’s identification of a material compliance issue will be viewed favorably by FPA’s senior executives. Retaliation against any Employee who reports a violation of the CODE in good faith is strictly prohibited and will be cause for corrective action, up to and including dismissal. If an Employee believes that he or she has been retaliated against, he or she should notify a Director of the General Partner and/or the CCO.

 

2


If the CCO determines that a material violation of this CODE has occurred, he/she will promptly report the violation, and any associated action(s), to the Directors of the General Partner. If the Directors of the General Partner determine that the material violation may involve a fraudulent, deceptive or manipulative act, FPA will report its findings to the FPA Funds’ Board of Directors or Trustees pursuant to Rule 17j-1. The FPA Funds have separately adopted a WHISTLEBLOWER POLICY with respect to complaints involving the FPA Funds.

 

C.

DEFINITIONS

“Access Person” means any director, officer, or employee of: (i) the FPA Funds; (ii) FPA, including their spouses/partners or their Immediate Families (as defined below); or (iii) any company in a control relationship to the FPA Funds or FPA.2 In addition, “Access Person” means any natural person in a control relationship to the FPA Funds or FPA who obtains information concerning recommendations made to a Client with regard to the purchase or sale of Covered Securities. Unless otherwise determined by the FPA Funds’ CCO in writing, Independent FPA Fund Trustees/Directors and third-party FPA Fund officers are deemed not to be Access Persons under this Code on the grounds that they do not have regular access to information or recommendations regarding the purchase or sale of Covered Securities and risk of abuse is deemed minimal.

“Automatic Investment Plan” means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.

A security is “being considered for purchase or sale” or is “being purchased or sold” when a recommendation to purchase or sell the security has been made and communicated, which includes when a Client has a pending “buy” or “sell” order with respect to a security, and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation. “Purchase or sale of a security” includes the writing, purchasing or selling of an option to purchase or sell a security.

“Beneficial Interest” means the opportunity, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to profit, or share in any profit derived from, a transaction in the subject securities. An Access Person is deemed to have a Beneficial Interest in securities owned by members of his or her Immediate Family. Common examples of Beneficial Interest include joint accounts, spousal accounts, Uniform Transfers to Minors Act accounts, partnerships, trusts, and controlling interests in corporations. Uncertainty as to whether an Access Person has a Beneficial Interest in a security should be brought to FPA’s Compliance Department (“Compliance”). Such questions will be resolved in accordance with, and this definition shall be subject to, the definition of “beneficial owner” found in Rules 16a-1(a)(2) and (5) promulgated under the Securities Exchange Act of 1940, as amended.

 

 

2

For purposes of this Code, “control” has the same meaning as it does under Section 2(a)(9) of the IC Act.

 

3


“Board” refers to the Board of Directors of the Funds and the Board of Trustees of the Trust.

“Covered Security” means a security as defined in Section 202(a)(18) of the Advisers Act and Section 2(a)(36) of the IC Act.3 For the avoidance of doubt, exchange-traded funds (“ETFs”), closed-end funds (such as Source Capital, Inc.), Private Placements, and limited offerings are also considered Covered Securities. Also included in the category of investments that are considered Covered Securities are exchange-traded crypto-currency related securities and businesses (e.g., Coinbase (NASDAQ: COIN), crypto “futures” (e.g., instruments traded on the CME or any other authorized exchange)), private crypto funds, Initial Coin Offerings (“ICOs”), Security Token Offerings (“STOs”), and security tokens. All Covered Securities are subject to pre-clearance and reporting requirements outlined below.

A Covered Security does not include: (i) direct obligations of the Government of the United States; (ii) bankers’ acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments (maturity of less than 366 days at issuance and rated in one of the two highest rating categories by a nationally recognized statistical rating organization), and repurchase agreements; (iii) shares issued by money market funds; (iv) shares issued by open-end funds (other than Reportable Funds, as defined below); (v) interests in 529 college savings plans; (vi) shares issued by unit investment trusts that are invested exclusively in one or more open-end registered investment companies; (vii) physical commodities, (e.g., gold coins), including foreign currencies; (ix) currency (FX) forwards; and (x) non-exchange traded crypto-currencies that act more like currencies (i.e., Bitcoin, Ethereum, Dogecoin, Litecoin, Ripple, etc.), and are not listed above under Covered Securities. Any question as to whether a particular investment constitutes a “security” or a ‘Covered Security’ should be referred to Compliance.

“Employee-Related Account” means an account for any of the following persons: (i) the Employee, (ii) the Employee’s Immediate Family (as defined); and (iii) an entity or individual for whom/which the Employee acts as general partner / managing member, trustee, executor or agent.4

 

 

3 

A Security means any note, stock, treasury stock, security future, 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.

4

FPA Private Funds for which an Employee or group of Employees hold a greater than 25% Beneficial Interest are exempt from the following provisions: Sections D.2 and G.; provided however, such funds shall be subject to FPA’s Trade Aggregation and Allocation, Best Execution, and Soft Dollars policies and procedures.

 

4


“Equivalent Security” means any security issued by the same entity as the issuer of a Covered Security, including options, rights, stock appreciation rights, warrants, preferred stock, restricted stock, phantom stock, futures on single securities, bonds, and other obligations of that company or security otherwise convertible into that security. Options on securities and futures on single securities are included even if, technically, they are issued by the Options Clearing Corporation, a futures clearing corporation, or a similar entity.

Federal Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the IC Act, the Advisers Act, Title V of the Gramm-Leach-Bliley Act (governing disclosure of nonpublic personal information), and any rules adopted by the U.S. Securities and Exchange Commission (the “Commission”) under any of these statutes, the Bank Secrecy Act (imposing restrictions designed to prevent financial intermediaries from being used in money laundering activities) as it applies to mutual funds and investment advisers, and any rules adopted thereunder by the Commission or the Department of the Treasury.

“Immediate Family” includes your spouse/domestic partner, minor children and/or stepchildren, and other Relatives who live with you (including adult children and/or stepchildren) if you contribute to their financial support. The definition also includes adoptive relationships. “Relative” means relative by blood, marriage or adoption and not more remote than a first cousin.

“Independent Trustee” means a member of the Board who is not affiliated with FPA and who does not otherwise meet the definition of “interested person” of the Funds or the Trust under Section 2(a)(19) of the IC Act.

Initial Public Offering” means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934.

“Private Placement” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(5) or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act of 1933.

“Reportable Fund” means any open-end fund for which FPA serves as an investment adviser or sub-adviser as defined in Section 2(a)(20) of the IC Act or any open-end fund whose investment adviser or principal underwriter controls FPA, is controlled by FPA, or is under common control with FPA.

“Third-party Fund officer” means an officer of a Fund that is an employee of a Fund service provider that is not FPA or an affiliate of FPA.

“Trustee” means a member of the Board of Directors of the Funds or the Board of Trustees of the Trust.

 

5


D.

PROHIBITED TRANSACTIONS

 

1.

No Access Person, Independent Trustee, or Third-party Fund officer shall:

 

  (a)

Engage in any act, practice or course of conduct, which would violate the provisions of Rules 17j-1 and 204A-1 set forth above.

 

  (b)

Transact in any Covered or Equivalent Security if the Access Person, Independent Trustee, or Third-party Fund officer knows that, at the time of such personal transaction, the Covered or Equivalent Security:

 

  (1)

is being considered for purchase or sale for Clients, or

 

  (2)

is being purchased or sold for Clients.

 

  (c)

Disclose to other persons the portfolio holdings of Clients, except as expressly permitted by FPA.5 In addition, except as required to effectuate securities transactions on behalf of a Client or for other legitimate business purposes, Access Persons must keep non-public information about Clients (including former Clients) in strict confidence, including the Client’s identity (unless the Client consents), the Client’s financial circumstances, and advice furnished to the Client by FPA. Compliance procedures regarding the use and treatment of confidential information are set forth in FPA’s PRIVACY POLICY and FPA’s INFORMATION SECURITY POLICY.

 

  (d)

“Front-run” any Client transaction, which is a practice generally understood to be knowingly personally trading ahead of or in anticipation of client orders.

 

  (e)

Acquire personally or beneficially any securities in an Initial Public Offering (IPO), in order to preclude any possibility of such person profiting from his or her position with FPA or the FPA Funds. Fixed income IPOs are excluded from this prohibition. Access Persons must pre-clear any such purchases with Compliance, as described below.

NOTE: This prohibition only applies to Independent Trustees and Third-party Fund officers to the extent that such Independent Trustee or Third-party Fund officer obtains information concerning recommendations made to the FPA Funds regarding the purchase or sale of securities in an IPO by the FPA Funds.

 

  (f)

Purchase personally or beneficially any securities in a Private Placement,6 without prior approval of Compliance, as described below. Any person authorized to purchase securities in a Private Placement shall disclose that investment when such person plays a part in any subsequent consideration of an investment [on behalf of a Client] in the issuer. In such circumstances, FPA’s decision to purchase securities of the issuer shall be subject to independent review by investment personnel with no personal interest in the issuer.

 

 

5 

This prohibition is rooted in the fiduciary principle that information concerning the identity of security holdings and financial circumstances of its Clients is confidential.

6 

FPA Private Funds are exempt from the requirements set forth in Section D.1.(f).

 

6


NOTE: This prohibition only applies to Independent Trustees and Third-party Fund officers to the extent that such Independent Trustee or Third-party Fund officer obtains information concerning recommendations made to the FPA Funds regarding the purchase or sale of Private Placements by the FPA Funds.

 

2.

No Access Person shall, personally or beneficially:

 

  (a)

Transact in Covered or Equivalent Securities that are held in any Client account.7

Existing positions held by Client accounts that also are held by Access Persons in any account in which the Access Person has a Beneficial Interest, control, or trading authority may not be sold/covered without the approval of Compliance, as described below. Such approval shall not be granted if the amount of the transaction is above a deminimus dollar amount (i.e., $10,000 per day per security) and there is an open block trade in such security.

 

  (b)

Transact in Covered Securities within the seven (7) calendar day period prior to transaction(s) for a Client in the same or an Equivalent Security if Compliance determines that the Access Person had knowledge that such security was under consideration for purchase or sale. Access Persons who transact in a Covered Security within such period may be required to unwind the transaction at their own cost if Compliance determines that the Access Person had or is deemed to have had knowledge of the Client transaction at the time of their personal or beneficial investment.

Access Persons should be aware that if they sell short a Covered Security and a Client account transacts in the same or an Equivalent Security within seven (7) calendar days, they may be prevented from covering their short transaction with a subsequent purchase.

 

  (c)

Purchase and sell, or sell and purchase, the same (or Equivalent) Covered Securities within sixty (60) calendar days. This prohibition applies to short sales and option transactions. Options transactions require the expiration date to be at a minimum sixty (60) days from trade date. This prohibition applies without regard to tax lot considerations and without regard to profitability. Any exceptions to this policy (e.g., if a security is experiencing unprecedented losses) require advance written approval from the CCO or designee.

 

 

7 

ETFs that are based on a broad-based index are exempt from this restriction. However, they are still subject to the other prohibitions described in Section D, as well as to the pre-clearance and reporting requirements described herein. FPA Private Funds are exempt from this restriction, as well as the seven (7) calendar day restriction set forth in Section D.2.(b).

 

7


Trades made in violation of this prohibition may be required to be unwound, if possible. Otherwise, any profits realized on such short-term trades shall be subject to disgorgement to a qualified charity, with the exception of trades in shares of an FPA Fund, in which case any profits realized shall be subject to disgorgement to such FPA Fund.

 

E.

RESTRICTED LIST

Compliance maintains a “Restricted List” of companies about which a determination has been made by the Legal Department (“Legal”) and/or the CCO that it is prudent to restrict trading activity. This might include, for example, a company about which investment personnel may have acquired material, nonpublic information. Legal generally only communicates the Restricted List to Employees who need to know as part of their job function. Employees are not permitted to: (i) disclose the name of any company on the Restricted List to anyone outside the firm; or (ii) discuss any company on the Restricted List with anyone outside the firm.

As a general rule, trading is restricted for companies appearing on FPA’s Restricted List, both for Client and Employee accounts. Similarly, any determination to remove a company from the Restricted List must be approved by Legal. Restrictions with regard to securities on the Restricted List extend to Equivalent Securities.

 

F.

EXEMPTED TRANSACTIONS

The prohibitions of Subparagraphs D.1.(b), D.2.(a), D.2.(b), and D.2.(c) shall not apply to:

 

  1.

Purchases or sales effected in any account over which the Access Person has no direct or indirect influence or control, and Compliance has exempted such account from personal securities transaction reporting;

 

  2.

Purchases or sales that are non-volitional on the part of the Access Person or Client, as applicable;

 

  3.

Transactions which are part of an Automatic Investment Plan;

 

  4.

Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired; and

 

  5.

Acquisitions through stock dividends, dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs, or other similar corporate reorganizations or distributions generally applicable to all holders of the same class of securities.

 

8


G.

COMPLIANCE PROCEDURES

FPA utilizes a web-based compliance reporting platform (“Personal Trading Control Center” or “PTCC”) to facilitate Access Persons’ completion of compliance obligations, and certain forms and disclosures required by this CODE. Employee Related Accounts and holdings reports (as set forth below), must be reported through PTCC, unless Compliance permits acceptance of such reports in another form. PTCC is available at https://aca.complysci.com/default.aspx. To the extent that all required information is included in the broker feeds linked to Employee Related Accounts in PTCC, the reports set forth in the Reporting Requirements section below will be deemed complete. Access Persons should note, however, if Covered Securities are held directly, as is the case of Private Placements, they must manually enter the information such that it is included in applicable reports.

Access Persons are encouraged to establish new Employee Related Accounts at PTCC-eligible brokers. With respect to non-PTCC eligible accounts, Access Persons are required to ensure that Compliance receives duplicate account statements within the time periods required by the CODE.

 

  1.

Pre-clearance. All Access Persons shall receive prior written approval8 from Compliance before purchasing or selling Covered or Equivalent Securities, including investments in Private Placements, closed-end funds, ETFs, and certain crypto-currency related investments. Transactions in open-end mutual funds, including Reportable Funds, are not subject to the pre-clearance requirement. Prior to approval of a transaction, Compliance will consider, among other things, the following:

 

  (a)

If the security requested for pre-clearance is a sale transaction (or a buy-to-cover of an existing short position) of a Covered or Equivalent security that is currently held by any Client account, and is above the deminimus amount (i.e., $10,000/day per security), Compliance will confirm whether an open order in the same security or a related security is currently on the trade blotter. Compliance will also seek to confirm with the portfolio manager(s) if they have an expectation (to the best of their knowledge) of transacting in the security within the next seven (7) days. If the amount of the sales transaction (or a buy-to-cover of an existing short position) is at or below the deminimus amount, the transaction will typically be allowed (unless another restriction applies).

 

  (b)

If the security requested for pre-clearance is a buy (or sell short) transaction in an ETF that is currently held by any Client account, Compliance will confirm whether: (i) the ETF is based on a broad-based index; and (ii) an open order in the same ETF is currently on the trade blotter.

 

 

8 

In the event that the Access Person requesting pre-clearance is unable to submit a written request for pre-clearance, Compliance may grant telephonic approval and will document such approval in writing.

 

9


  (c)

If the security requested for pre-clearance is on FPA’s Restricted List, Compliance will review the facts and circumstances surrounding both the pre-clearance request and the reason for the inclusion of the security on the Restricted List.

In all cases, pre-clearance approval is only effective on the day the approval is granted.9

 

  2.

Reporting Requirements. In order to provide FPA with information to enable it to determine with reasonable assurance whether there are any indications of scalping,10 front-running, other abusive trading, or the appearance of a conflict of interest with the trading on behalf of Clients, all Access Persons shall submit the following reports to Compliance showing all holdings and transactions in Covered or Equivalent Securities and securities accounts in which the person has, or by reason of such transaction acquires, any direct or indirect Beneficial Interest. For the avoidance of doubt, Reportable Funds are Covered Securities and therefore subject to the Reporting Requirements set forth below.

 

  (a)

Disclosure of Personal Holdings. All Access Persons shall disclose to Compliance all accounts that hold any securities (including any accounts that may hold “Non-Covered Securities”) and all holdings in Covered Securities within ten (10) calendar days of becoming an Access Person (which must be current as of a date not more than forty-five (45) calendar days before the report is submitted) (the “Initial Report”)11 and annually thereafter (which must be current as of a date not more than forty-five (45) calendar days before submitting the report) (the “Annual Report”). Such reports shall include:

 

  (1)

The title, number of shares and principal amount of each Covered Security in which the Access Person has any direct or indirect Beneficial Interest;

 

  (2)

The name of any broker, dealer or bank with whom the Access Person maintains an account in which securities are held for the direct or indirect benefit of the Access Person; and

 

  (3)

The date that the report is submitted by the Access Person.

 

  (b)

Quarterly Reporting Requirements. Except as provided in Subparagraphs G.3. and G.6. of this Section, Access Persons shall report transactions in any Covered or Equivalent Security in which such person has, or by reason of such transaction acquires, any direct

 

9 

Compliance recognizes that there may be a timing issue for foreign transactions, whereby a pre-approval may be granted on a certain day, but when the transaction is executed, it may already be the next day in the country of origin. This is acceptable as long as the Employee executes the transaction on the date of pre-approval.

10 

Scalping occurs when an employee purchases securities for clients for the sole purpose of increasing the value of the same securities held in such employee’s personal accounts.

11 

Along with the Initial Report, such Access Person must complete an initial certification that they have received, read, and understood the Code and that they agree to comply with the terms thereof. Access Persons are required to complete this certification in PTCC.

 

10


  or indirect Beneficial Interest in the security. Reports required to be made under this Subparagraph shall be made not later than thirty (30) calendar days after the end of the calendar quarter in which the transaction to which the report relates was effected and shall contain the following information:12

 

  (1)

The date of the transaction, the title and the number of shares, and the principal amount of each security involved;

 

  (2)

The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

 

  (3)

The price at which the transaction was effected;

 

  (4)

The name of the broker, dealer or bank with or through whom the transaction was effected; and

 

  (5)

The date that the report is submitted by the Access Person.

With respect to any account established by the Access Person in which any securities (including Non-Covered Securities) were held during the quarter for the direct or indirect benefit of the Access Person, such information shall contain:

 

  (1)

The name of the broker, dealer or bank with which the Access Person established the account;

 

  (2)

The date that the account was established; and

 

  (3)

The date that the report is submitted by the Access Person.

Employees are reminded that they must also report transactions by members of their Immediate Family in accounts over which the Employee has a direct or indirect influence or control.

 

  (c)

Access Persons are not required to make reports under this Section to the extent that information in the report would duplicate information received by FPA pursuant to Rule 204-2(a)(13) of the Advisers Act and that such information is received no later than thirty (30) days after the applicable calendar quarter end.

 

  3.

Each Independent Trustee or Third-party Fund officer who would be required to make an initial or annual holdings report solely by reason of being a Trustee or Third-party Fund officer is exempted from making such a report.

 

  4.

Each Independent Trustee or Third-party Fund officer need only report a transaction in a Covered Security if such Trustee or Third-party Fund officer, at the time of the transaction knew, or, in the ordinary course of fulfilling his official duties as a Trustee or Third-party

 

12 

All Access Persons shall be required to submit a report for all periods, including those periods in which no securities transactions were effected (i.e., negative reporting).

 

11


Fund officer, should have known that, during the fifteen (15) day period immediately preceding or after the date of the transaction by the Trustee or Third-party Fund officer, such security is or was purchased or sold by the FPA Funds or is or was being considered for purchase or sale by the FPA Funds.

 

  5.

Except as provided in Subparagraph G.2(c) of this Section, Access Persons, with respect to any account in which such person holds any Covered Securities for his or her direct or indirect benefit, shall direct their broker-dealers to send to Compliance duplicate account statements.

 

  6.

Exceptions from Reporting Requirements. Access Persons need not make a report under this Section with respect to: (i) transactions effected for, and Covered Securities held in, any account over which the person has no direct or indirect influence or control if such account has been exempted in writing from reporting by Compliance,13 and (ii) transactions effected pursuant to an Automatic Investment Plan.

 

  7.

Certification of Compliance with the CODE. Every Access Person shall certify within ten (10) calendar days of hire, annually, and upon any material changes to the CODE that:

 

  (a)

He or she has read and understand the CODE and recognizes that he or she is subject thereto;

 

  (b)

He or she has complied with the requirements of the CODE and will continue to do so; and

 

  (c)

He or she has reported all personal securities transactions required to be reported pursuant to the requirements of the Code.

 

 

13 

In making this determination, Compliance may ask for supporting documentation, such as a copy of the applicable account agreement and/or a written certification from the account manager. In addition, the Access Person will be required to complete additional certifications to confirm the Access Person’s lack of influence or control over the account. To the extent the Access Person is able to direct a trade in an otherwise non-discretionary account, e.g., in the case of tax-loss harvesting or an investment in a Private Placement where the Access Person must sign the offering documents, the Access Person must pre-clear such transaction through PTCC and ensure it is included in the quarterly and annual reports, as necessary.

 

12


H.

IMPLEMENTATION, REVIEW, AND SANCTIONS

 

  1.

Implementation and Review. Compliance has primary responsibility for enforcing the CODE. Access Persons are required to promptly report any violations of the CODE to Compliance. Enforcement of the CODE includes reviewing the transaction reports and assessing whether Access Persons followed all required internal procedures (e.g., pre-clearance). In this connection, Compliance periodically will compare reports of personal securities transactions with completed and contemplated Client transactions to determine whether noncompliance with the CODE or other applicable trading procedures may have occurred. Access Persons should note that technical compliance with the CODE’s procedures does not automatically insulate from scrutiny trades that show a pattern of abuse of an Access Person’s fiduciary duties to all Clients.

 

  2.

Sanctions. If a violation of this CODE occurs or a preliminary determination is made that a violation may have occurred, a report of the alleged violation may be made to the Board and to the Directors of the General Partner. Sanctions for CODE violations may include any or all of the following: (a) a written censure; (b) temporary or permanent suspension of trading for any Employee-Related Account; (c) disgorgement of profit to a qualified charity; and/or (d) any other sanction deemed appropriate by the Board and the Directors of the General Partner.

 

I.

REPORTS TO THE BOARD

No less frequently than annually, Compliance shall furnish to the Board a written report that:

 

  1.

Describes any issues arising under the CODE or procedures since the last report, including, but not limited to, information about material violations of the CODE and sanctions imposed in response to material violations; and

 

  2.

Certifies that FPA, the Funds and the Trust have adopted procedures reasonably necessary to prevent Access Persons from violating the CODE.

 

J.

RETENTION OF RECORDS

This CODE; a list of all persons required to make reports and review reports hereunder from time to time, as shall be updated by Compliance; a copy of each report made by an Access Person hereunder; each memorandum made by Compliance hereunder and a record of any violation hereof and any action taken as a result of such violation; and all other records required under Rules 17j-1 and 204A-1 shall be maintained by FPA, the Funds, the Trust, and the Bragg Trust as required under those provisions.

 

13


K.

TEMPORARY EXEMPTION FROM CODE APPLICATION

Employees of FPA on approved leaves of absence (e.g., maternity leave) may not be subject to the pre-clearance and reporting provisions of the CODE, provided that they meet the following requirements:

 

  1.

They do not participate in, obtain information with respect to, or make recommendations as to, the purchase and sale of securities on behalf of any Client;

 

  2.

They do not have access to information regarding the day-to-day investment activities of FPA;

 

  3.

They do not devote significant time to the activities of FPA; and

 

  4.

Compliance approves such an exemption in writing.

REVISION HISTORY

Adopted: May 2, 2005

Revised: February 13, 2015

Revised: May 12, 2015

Revised: February 8, 2016

Revised: May 14, 2018

Revised: June 5, 2018

Revised: October 10, 2019

Revised: January 24, 2020; Effective: January 7, 2020

Revised: November 1, 2020 (Add Bragg Capital Trust)

Revised: February 8, 2021 (Remove FPA Capital Fund, Inc.; Update name of FPA U.S. Value Fund, Inc.)

Revised: July 8, 2021; Crypto-currency related updates effective: May 21, 2021

 

14

3.

CODE OF ETHICS

NOTE: See CODE OF ETHICS SUPPLEMENT DATED JUNE 7, 2021, at the end of this Code of Ethics.

 

  A.

Definitions

Access Persons are responsible for reading and being familiar with each of the definitions below, which are used throughout the Code of Ethics. It is important that you understand the meaning of the definitions as their meaning may be more expansive or restrictive than in another context. All defined terms are capitalized in the Code of Ethics.

 

   

“1933 Act” – Securities Act of 1933, as amended.

 

   

“1934 Act” – Securities Exchange Act of 1934, as amended.

 

   

“1940 Act” – Investment Company Act of 1940, as amended.

 

   

“529 Plan” – A qualified tuition program or college savings plan that meets the requirements of Section 529 of the IRC.

 

   

“Access Person(s)” – Any partner, officer, director, employee, intern, or consultant1 who has or may obtain access to non-public information regarding Clients’ purchase or sale of Securities, or non-public information regarding the portfolio holdings of any Client, or any person who is involved in making investment decisions on behalf of Clients, or who has access to such recommendations that are non-public. As the Adviser’s primary business is providing investment advice, all personnel are presumed to be Access Persons unless otherwise confirmed with the CCO. Each Access Person is required to understand and comply with applicable reporting requirements of this Code.2

 

   

“Access Person Account” – Any account holding Reportable Securities in which an Access Person has Beneficial Ownership.

 

   

“Adviser”, “Firm”, or “WIC” – Water Island Capital, LLC and companies controlling, controlled by, or under common control with the Adviser, such as WIC UK.

 

   

“Advisers Act” – Investment Advisers Act of 1940, as amended.

 

   

“Automatic Investment Plan” – A program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation without affirmative action by the account owner, such as a dividend reinvestment plan.

 

   

“Beneficial Ownership” – Having or sharing the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in Securities. Generally, an individual is considered to have a “Beneficial Ownership” interest in Securities held in any account that is owned individually or jointly with others or is maintained by or for:

 

   

A Family Member;

 

   

Any individuals who live in the Access Person’s household and over whose purchases, sales or trading activities the Access Person exercises control or investment discretion;

 

   

Any persons for whom the Access Person provides financial support and (i) whose financial affairs are controlled by the Access Person, or (ii) for whom the Access Person provides discretionary advisory services with respect to such person’s ownership of Securities;

 

 

1 

The CCO shall determine on a case-by-case basis whether interns, consultants, and temporary employees are Access Persons.

2 

A list of all Access Persons will be maintained by the Firm’s Compliance Department.


   

Any trust or other arrangement that names the Access Person as a beneficiary or remainderman; or

 

   

Any partnership, corporation, or other entity in which the Access Person has a 25% or greater beneficial interest, or in which the Access Person exercises, either individually or together with others, effective control.

 

   

“Bribery” or “Bribe” – The offering, promising, giving, accepting, or soliciting of an advantage as an inducement for an action which is illegal, improper, unethical, or a breach of trust. Inducements can take the form of Gifts, loans, fees, rewards, or other advantages, including offers of employment. The FCPA does not require the Bribe to have been consummated or to have succeeded in producing the desired outcome to be unlawful.

 

   

“Business Partner” – Any person or entity not affiliated with the Adviser that does business with or seeks to do business with the Adviser or its affiliates, such as a Client, prospective client, broker/dealer, custodian bank, consultant, vendor, prospective vendor, and those working on their behalf, including, but not limited to, auditors, lawyers, accountants, and outsourced officers and independent trustees of a fund the Firm sponsors or manages.

 

   

“CCO” – The individual designated by the Adviser to serve as Chief Compliance Officer.

 

   

“Charitable Contribution” – Any donation or gift of value to an entity which qualifies as a charitable organization under section 501(c)(3) of the IRC, including the donation of time.

 

   

“Client” or “Client Account” – Any fund or account advised or sub-advised by the Adviser, and, for purposes of the Code, any investors in a Private Fund sponsored by the Adviser or an affiliate of the Adviser.

 

   

“Code” - This Code of Ethics, as amended.

 

   

“Conflict of Interest” – Any activity or relationship in which a person’s interests interfere or compete with the interests of Clients or the Firm.

 

   

“Covered Associate” - Any general partner, managing member, or executive officer of the Adviser, any employee who solicits a US Government Entity that is a state or political subdivision of a state for the Adviser and any person who supervises, directly or indirectly, such employee, and any Political Action Committee controlled by the Adviser. Executive officers include the president, a vice president in charge of a principal business unit, division or function, and any other officer of the Adviser or any other person who performs policy-making functions for the Adviser.

 

   

“Derivative” – A Security whose price is dependent upon or derived from one or more underlying assets. Derivatives can either be traded over the counter (OTC) or on an exchange. Futures contracts, forward contracts, swaps, Options, and warrants are common forms of Derivatives.

 

   

“Entertainment” – A situation when an Access Person entertains or is entertained by a third party and there is an opportunity for the Access Person to discuss matters relating to Firm business with the third party at the event.

 

   

“ERISA Plan” – A private-industry employee benefit plan. The term “employee benefit plan” includes defined benefit plans (e.g., pension plans), defined contribution plans (e.g., 401(k) plans, simplified employee retirement plans (or SEPs), employee stock ownership plans (or ESOPs), and profit sharing plans), employee welfare benefit plans (e.g., group health plans), and Taft-Hartley Plans. ERISA Plans do not include retirement plans set up and maintained by Government Entities or churches.

 

   

“Ethics Committee” – A committee composed of the CCO, the Firm’s Managing Member or designee, and a third employee chosen by the CCO and Managing Member. The Ethics Committee may be empaneled from time to time at the request of the CCO or another member of the committee to determine disciplinary action for violations of the Code.

 

2


   

“EC” – European Commission.

 

   

“EU” – European Union.

 

   

“Exchange-Traded Fund” or “ETF” – An Investment Company that issues Securities that trade in the secondary market and which are redeemable only in large aggregations called creation units.

 

   

“Exempt Account” – Any of the following accounts:

 

   

Mutual Fund-Only Accounts (unless they hold a fund that is advised/sub-advised by WIC);

 

   

529 Plan;

 

   

Water Island Capital, LLC Retirement Plan3;

 

   

WIC UK’s Pension Plan; and

 

   

Any other account that is incapable of holding Reportable Securities.

 

   

“Exempt Security” – Includes the following Securities:

 

   

Direct obligations of the US government (i.e., any Security directly issued or guaranteed as to principal or interest by the US, such as Treasury bills or notes)4;

 

   

Cash or cash equivalents, bankers’ acceptances, bank certificates of deposit, commercial paper, bank repurchase agreements and other high-quality short-term debt instruments;

 

   

Shares issued by money market funds;

 

   

Shares issued by Open-End Investment Companies that are registered under the 1940 Act, provided they are not: (i) ETFs; or (ii) mutual funds managed or sub-advised by the Adviser;

 

   

Interests in unit trusts and Open-End Investment Companies that are authorized by the FCA for sale in the UK;

 

   

Interests in unit-linked life and pension products sold in the UK;

 

   

UCITS (i.e., mutual funds based in the EU); and

 

   

Bitcoin, Ethereum, and any other cryptocurrency that is pre-approved as an Exempt Security in writing by the CCO. NOTE: Transactions in other cryptocurrencies, as well as Options and other Derivative transactions on all cryptocurrencies, are Reportable Securities.

 

   

“Facilitation Payment” – A payment made to expedite a lower-level Public Official’s performance of routine government actions to which the Firm is entitled.

 

   

“Family Member” – Includes any of the following:

 

   

Spouse or domestic partner;

 

   

Children under the age of 18;

 

   

Children who are 18 or older (unless they do not live in the same household as the Access Person and the Access Person does not contribute in any way to their support); and

 

   

Any of these other people who live in the Access Person’s household: stepchildren, grandchildren, parents, stepparents, grandparents, siblings (e.g., brothers and sisters), mothers-in-law, fathers-in-law, daughters-in-law, sons-in-law, brothers-in-law, and sisters-in-law, including any adoptive relationships.

 

   

“FCA” – The UK’s Financial Conduct Authority.

 

   

“FCPA” – The Foreign Corrupt Practices Act of 1977, as amended.

 

 

3 

Employee transactions and holdings information relating to funds managed by WIC in the Water Island Capital, LLC Retirement Plan are maintained by the administrator of the plan and available to Compliance to review upon request.

4 

Municipal Securities do not fall into the category of “direct obligations of the US government” and are therefore not excluded from the definition of “Reportable Security”.

 

3


   

“Federal Securities Laws” – The 1933 Act, the 1934 Act, the Sarbanes-Oxley Act of 2002, the 1940 Act, the Advisers Act, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to funds and investment advisers, and any rules adopted thereunder by the SEC or the Department of the Treasury.

 

   

“FINRA” – Financial Industry Regulatory Authority.

 

   

“Gift” – Any item of value, including favors, presents, and gratuities, received from a Business Partner, unless exempted under the Code.

 

   

“Government Entity” – Any national, regional, territorial, state, province, district, county, city, town, village, or other municipal government or political subdivision thereof, whether in the US or other country, including:

 

   

Any board, agency, authority, or instrumentality of the Government Entity;

 

   

Any pool of assets sponsored or established by the Government Entity;

 

   

Any plan or program of a Government Entity, including, but not limited to, a defined benefit plan or a state general fund;

 

   

Any entity that is owned or controlled by the Government Entity; and

 

   

Officers, agents, or employees of the Government Entity, acting in their official capacity.

Sovereign wealth funds and public pension funds are typically Government Entities.

 

   

“Initial Public Offering” or “IPO” – The first offering of a company’s Securities to the public through an allocation by the underwriter.

 

   

“Insider Trading” – The act of trading in Securities while having Material Non-Public Information regarding the Securities or communicating MNPI to others.

 

   

“Investment Club” – A membership organization where investors make joint decisions on which Securities to buy or sell. The Securities are generally held in the name of the Investment Club.

 

   

“Investment Company” – A company that issues Securities that represent an undivided interest in the net assets held by the company. The Federal Securities Laws categorize Investment Companies into three basic types:

 

   

Open-End Investment Companies (generally known as mutual funds);

 

   

Closed-end investment companies (generally known as closed-end funds); and

 

   

Unit Investment Trusts.

ETFs are a type of exchange-traded investment product that must register with the SEC under the 1940 Act as either an Open-End Investment Company or a Unit Investment Trust.

 

   

“IRC” – The Internal Revenue Code of 1986, as amended.

 

   

“Limited Offering” – An offering that is exempt from registration pursuant to sections 4(a)(2) or 4(6) of the 1933 Act, or pursuant to Rules 504, 505, or 506 of Regulation D; also known as a “Private Placement”. Examples of Private Placements include limited partnerships, certain co- operative investments in real estate, commingled investment vehicles such as hedge funds and private equity funds, and investments in family-owned businesses.

 

   

“Market Manipulation” – The act of artificially affecting the price of a Security or otherwise influencing the behavior of the market for personal gain.

 

   

“Material Non-Public Information” or “MNPI” – Information that (i) has not been made generally available to the public5, and that (ii) a reasonable investor would likely consider important in making an investment decision6. Access Persons should consult with Compliance about any question as to whether information constitutes MNPI.

 

 

5 

Examples of effective disclosure include:

 

   

Public filings with the SEC or similar regulator;

 

   

Information appearing in publications of general circulation;

 

   

Company press releases; and

 

   

Company meetings with members of the press and public.

 

6 

Information that could reasonably be expected to affect the price of Securities is typically considered material.

 

4


   

“Meal” – An event, the main purpose of which is eating food. Therefore, events where eating is not the main purpose but at which food is served, such as cocktail parties or music events, are considered Entertainment, not Meals.

 

   

“Municipal Security” – A bond, note, warrant, certificate of participation, or other obligation issued by a state or local government or their agencies or authorities (such as cities, towns, villages, counties, or special districts).

 

   

“Mutual Fund-Only Account” – An account that allows the account holder to invest only in mutual funds. Such accounts do not have the capability of holding Reportable Securities (including ETFs).

 

   

“Open-End Investment Company” – An Investment Company that continually creates new shares on demand. A mutual fund registered under the 1940 Act is an Open-End Investment Company.

 

   

“Option” – A Security that gives the investor the right, but not the obligation, to buy or sell a specific Security at a specified price within a specified time frame. Any Access Person who buys/sells an Option is generally deemed to have purchased/sold the underlying Security when the Option was purchased/sold.7

 

   

“Outside Business Activity” – Includes the following:

 

   

Being engaged in any outside business;

 

   

Being employed by, or receiving compensation from, any other person, entity, or business organization;

 

   

Serving as a director of a public or private company or on the board (or in any similar capacity) of any other organization outside of your obligations to the Firm, including not- for-profit organizations; or

 

   

Being involved in any other endeavor that may interfere with your responsibilities to the Firm.

 

   

“Political Action Committee” – Any political committee that raises and spends money contributions, directly or indirectly, to candidates and Political Parties. Non-profit, tax-exempt groups organized under section 501(c)(3) of the IRC that operate for religious, charitable, scientific, or educations purposes are not considered to be “Political Action Committees.”

 

   

“Political Activity” – The participation in any fundraising activity or performance of any work for the campaign of any candidate for, or incumbent of, a federal, state, or local political office or a political office in any non-US country.

 

   

“Political Contribution” – Any gift, subscription, loan, advance, or deposit of money or anything of value made in any country to:

 

   

A candidate for, or incumbent of, a federal, state, or local political office;

 

   

A Political Party; or

 

   

A Political Action Committee.

 

   

“Political Party” – Any political organization that typically seeks to influence government policy, usually by nominating their own candidates and trying to seat them in political office.

 

   

“Private Fund” – A pooled investment vehicle, such as a hedge fund, that is not subject to registration requirements under the 1933 Act and the 1940 Act. A Private Fund is an example of a Limited Offering.

 

   

“Private Placement” – See “Limited Offering”.

 

 

7 

Example: If an Access Person buys a call (put) Option, the Access Person is considered to have purchased (sold) the underlying Security on the date the Option was purchased. If an Access Person sells a call (put) Option, the Access Person is considered to have sold (purchased) the underlying Security on the date the Option was sold.

 

5


   

“Public Official” or “Official” – Includes any of the following:

 

   

Any person who is employed in a full- or part-time capacity by a Government Entity, or by public or independent agencies, public enterprises, state-owned businesses, state-controlled businesses, or public academic institutions;

 

   

Any individual who holds a legislative or judicial position of any kind (whether appointed or elected);

 

   

Any individual who conducts a public function for a public agency or public enterprise;

 

   

Any official, staff member, agent, or representative of: (i) a Government Entity; (ii) a Political Party; (iii) a public international organization, such as the United Nations, the World Bank, the International Monetary Fund, or EU; or

 

   

Candidates for political office.

The term “Public Official” also includes any person (including any election committee for the person) who was, at the time of the contribution, an incumbent or candidate for elective office of a Government Entity, if the office:

 

   

Is directly or indirectly responsible for, or can influence the outcome of, the hiring of the Firm; or

 

   

Has authority to appoint any person who is directly or indirectly responsible for, or can influence the outcome of, the hiring of the Firm by a Government Entity.

 

   

“Reportable Security” – Any Security, except (i) Exempt Securities, or (ii) Securities in an Exempt Account or in a Third-Party Managed Account.

 

   

“Restricted Security” – Any Reportable Security that:

 

  (1)

A Client Account owns or is in the process of buying or selling;

 

  (2)

The Firm is researching, analyzing, or considering buying or selling for a Client or Client Account (see pre-clearance procedures for Investment and Risk team members); or

 

  (3)

Is subject to a restriction on trading issued by Compliance pursuant to the Firm’s Insider Trading policies and procedures.

Exceptions: The following Securities will not be considered Restricted Securities by Compliance unless Compliance has placed a restriction on trading a particular Security:

 

   

The purchase or sale by an Access Person of 250 shares or less (not to exceed US$100,000) per trading day in Securities of companies comprising the S&P 500 Index or NASDAQ 100 Index; or

 

   

Broad-based ETFs with market capitalizations greater than US$5 billion.

NOTE: While an exception has been granted for transactions in these Securities, such transactions remain subject to the Code’s pre-clearance, reporting, and minimum 30-day holding period requirements.

 

   

“SEC” – The US’s Securities and Exchange Commission.

 

   

“Security” – Any note, stock, treasury stock, initial coin offering, security future, 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, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing. Any questions about whether an instrument is a Security for purposes of the Code of Ethics should be directed to the CCO. For the avoidance of doubt, the term “Security” as used in this Code includes all ETFs.

 

6


   

“Taft-Hartley Plan” – A collectively bargained plan maintained by more than one employer (i.e., a multi-employer plan), usually within the same or related industries, and a labor union.

 

   

“Third-Party Managed Account” – Also known as a “Non-Discretionary Account”. An account in which an Access Person has (i) Beneficial Ownership but no direct or indirect influence or control over the investment decision-making process, (ii) no knowledge of transactions until after they are completed, and (ii) entered into an agreement with a third-party providing the third-party with full discretionary authority over the trading in the account.8 NOTE: You must obtain written pre-approval from Compliance before you may rely on the exemption from the pre-clearance requirement afforded to Third-Party Managed Accounts under the Code.9

 

   

“Travel” – Any type of travel, accommodation, or lodging.

 

   

“UCITS” – An Undertaking for Collective Investment in Transferable Securities based in the EU (i.e., an Open-End Investment Company regulated by the EC).

 

   

“UK” – United Kingdom.

 

   

“UK Bribery Act” – UK’s Bribery Act 2010, as amended.

 

   

“Union Plan” – A Taft-Hartley-Plan.

 

   

“Unit Investment Trust” – An Investment Company that offers a fixed (unmanaged) portfolio of securities having a definite life.

 

   

“US” – United States.

 

   

“US State/Local Official” – Any incumbent or candidate for state or local office in the US, or any election committee of that person. For example, a US State/Local Official includes a federal office holder (e.g., a Representative or Senator) who is running for state office. It also includes a state office holder (e.g., a Governor) who is running for federal office.

 

   

“WIC UK” – Water Island Capital U.K. Limited.

 

  B.

Introduction

Water Island Capital, LLC is registered as an investment adviser under the Advisers Act. Rule 204A-1 under the Advisers Act requires all registered investment advisers to adopt a code of ethics that sets forth standards of conduct for Access Persons and requires them to comply with applicable Federal Securities Laws.

 

 

8 

Pursuant to an agreement and in actual practice, an investment adviser or broker (who is not an Access Person or Family Member, the Adviser, or an affiliate of the Adviser) has full discretionary authority to purchase and sell Securities in a Third-Party Managed Account without prior notification to, discussion with or consent of the accountholder or his/her representatives (including the Access Person or Family Member). The Access Person and/or Family Member retains no discretion over decisions to purchase or sell Securities in the account, and communications with the adviser or broker are limited to confirmations and account statements, fee discussions, and other communications and discussions that do not relate to purchases or sales of specific Securities. If an Access Person or Family Member shares discretion with an adviser, has veto authority over an adviser’s trade recommendations, or has any ability to effect trades in an account, the account will not be deemed a Third-Party Managed Account for purposes of the Code.

9 

In order for Compliance to deem an account a Third-Party Managed Account, Compliance must obtain an acceptable written acknowledgement from the adviser that the Access Person or Family Member has no direct or indirect influence or control regarding any transactions to be made in the relevant account. At its discretion, Compliance may also require that Access Persons provide a copy of, or relevant excerpt from, the investment advisory agreement that the Access Person or their Family Member has entered with the adviser. Compliance may require Access Persons to obtain and provide periodically an updated acknowledgement from the relevant adviser that the Access Person and/or Family Member has had no influence or control regarding any transactions made in the Third-Party Managed Account.

 

7


This Code establishes the standards of conduct required of all WIC Access Persons. The Code is designed to govern personal Securities trading activities in a manner consistent with the Advisers Act and Rule 17j-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as other regulatory requirements.

The information collected pursuant to this Code is a required element of the Firm’s reporting to the Board of Trustees of each registered Investment Company advised or sub-advised by the Firm.

 

  C.

Standards of Business Conduct

WIC has set out basic principles in this Code to guide the day-to-day business activities of its employees. Among other things, employees are not permitted to:

 

   

Defraud any Client or prospective Client in any manner;

 

   

Mislead any Client or prospective Client, including by making a false statement or a statement that omits material facts;

 

   

Engage in any act, practice, or course of conduct which operates or would operate as a fraud or deceit upon any Client or prospective Client; or

 

   

Engage in any manipulative practice with respect to any Client or prospective Client.

WIC has a fiduciary duty to act in the best interests of its Clients. High ethical standards are essential to maintaining the confidence of Clients, including investors in funds managed by the Firm. The Firm’s success and long-term business interests are best served by adherence to the principle that the interests of Clients come first. Accordingly, the Firm has adopted the following principles to be followed by all its employees:

 

   

You must put the interests of the Firm’s Clients before your own personal interests and must act honestly and fairly in all respects in dealings with Clients;

 

   

You must effect all personal Securities transactions in a manner that avoids any actual or perceived conflict between your personal interests and those of our Clients and fund shareholders;

 

   

You must avoid actions or activities that allow you or your family to take inappropriate advantage from your position with the Firm, or that bring into question your independence or judgment;

 

   

You must not disclose Material Non-Public Information to others or engage in the purchase or sale, or recommend or suggest the purchase or sale, of any Security to which such information relates; and

 

   

You must comply with all Federal Securities Laws.

Moreover, employees are expected to:

 

   

Conduct business fairly and honestly;

 

   

Report information accurately and truthfully; and

 

   

Treat others fairly and respectively.

Adherence to the Code of Ethics is a basic condition of employment by the Firm. If you have any doubt as to the propriety of any activity, you should consult with Compliance.

 

8


  D.

Personal Trading

1. Maintenance and Oversight of Personal Trading

The Firm must be in a position to properly oversee the personal trading activity of its Access Persons. To assist with this oversight requirement, the Firm uses ACA Compliance Group’s Compliance Employee Level Filing (“ELF”), a web-based platform designed to facilitate the collection and analysis of the information required by Rule 204A-1. The personal trading activity in the ELF system is reviewed by Compliance personnel with oversight responsibility. Each Access Person has been provided an ELF account to comply with many of the reporting requirements of this Code, such as maintenance of Access Person Account information, pre-clearance requests, transaction records, Initial and Annual Holdings Reports, new employee on-boarding, document distribution, annual and ad-hoc certifications/attestations, and compliance questionnaires.

For the avoidance of doubt, securities transactions effected by Client Accounts, including Private Funds, mutual funds, and ETFs advised by WIC, are exempt from the personal trading pre-clearance and reporting requirements of this Code.10 However, transactions by Access Persons and their Family Members in Securities issued by such funds (e.g., transactions in interests in Private Funds, mutual funds, and ETFs advised by WIC) are subject to the Code’s personal trading requirements.

 

  2.

Access Person Accounts

The Firm requires that all Access Person Accounts be held with broker/dealers that can provide electronic transaction and holdings feeds directly to ELF. A list of such brokers may be obtained from Compliance. All new Access Person Accounts must be pre-approved by Compliance prior to being opened by submitting a “New Brokerage Account” notification via the ELF system. It is the responsibility of each Access Person to ensure all their Access Person Accounts have been approved by Compliance and linked to ELF. Failure to report an account may be treated as a serious breach of this Code.

 

  3.

Pre-Clearance Requirement

It is the responsibility of Access Persons to ensure that all Securities transactions being considered for their Access Person Accounts are not subject to a restriction contained in this Code.

Prior to execution, Access Persons are required to obtain pre-clearance through the ELF system for all Reportable Securities transactions in their Access Person Accounts. Pre-clearance is not considered obtained until the Access Person receives an electronic notification from the ELF system that the transaction has been “approved”.

Pre-clearance for transactions in Reportable Securities will only be effective until the end of the trading day on which the pre-clearance authorization is granted, unless otherwise specified by Compliance in writing.

Limit orders that extend beyond the end of the trading day are allowed only if the Access Person continues to seek and obtain pre-clearance in ELF through the date of execution of the limit order. If at any time the limit order is denied in ELF, the limit order must be cancelled by the Access Person.

 

 

10 

Compliance conducts surveillance of trading in all accounts managed by WIC.

 

9


  A.

Private Placements/Limited Offerings

Access Persons must obtain approval from Compliance prior to a transaction in a Limited Offering, including Private Funds managed by WIC. Access Persons seeking approval to transact in a Limited Offering must submit a request via email to Compliance, and furnish any prospectus, private placement memoranda, subscription documents and/or other materials about the investment as Compliance may request. If the request is approved, Compliance will add the Private Placement to the list of Securities in the ELF system, at which time the Access Person can submit the request through ELF. The effective period for pre-approval for a private placement is at the discretion of Compliance but will be limited to a reasonable period of time prior to the date of the intended transaction.

 

  B.

Pre-Clearance Procedures for Investment, Risk, Operations, and Data and Technology Team Members

All Investment, Risk, Operations, and Data and Technology team members are also required to obtain written approval from the Trading team prior to requesting pre-clearance in the ELF system for any trades in their Access Person Accounts. The Trading team will not approve trades in Securities that WIC is researching, analyzing, or considering buying or selling for a Client or Client Account. The Trading team will copy Compliance on all approvals. Compliance will notify the Trading Team immediately of any violations of these procedures.

 

  C.

Exceptions to the Pre-Clearance Requirement

Pre-clearance is not required with respect to the following transactions:

 

   

Transactions in Exempt Securities;

 

   

Transactions made pursuant to an Automatic Investment Plan;

 

   

Involuntary transactions11;

 

   

Receipt of rights issued by an issuer pro rata to all holders of a class of the issuer’s securities (NOTE: The exercise or sale of such rights does require pre-clearance);

 

   

Transactions in an Exempt Account (except that pre-clearance is required for transactions in funds that are advised/sub-advised by WIC within the Water Island Capital, LLC Retirement Plan);

 

   

Transactions in a Third-Party Managed Account; and

 

   

Bona fide Gifts or contributions of Securities, including inheritances12.

Please consult with Compliance if you are uncertain whether pre-clearance is required for a transaction in a particular Security.

 

 

11 

Examples include stock dividends, dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs, and other similar corporate actions generally applicable to all holders of the same class of Securities and sales of fractional shares.

12 

A “bona fide Gift or contribution” is one where the donor does not receive anything of monetary value in return.

 

10


  D.

Transactions by Family Members in Employee Benefit, Stock, Stock Option, and Deferred Compensation Plans

The purchase of an employer’s Securities under a bona fide employee benefit, stock, or deferred compensation plan by a Family Member who is an employee of the organization offering the plan does not require pre-clearance but must be reported.

The receipt of Options in an employer’s Securities under a bona fide employee stock Option plan or deferred compensation plan by a Family Member who is an employee of the organization offering the plan does not require pre-clearance or reporting.

The exercise of Options in an employer’s Securities done under a bona fide employee stock Option or deferred compensation plan by a Family Member who is an employee of the organization offering the plan does not require pre-clearance but must be reported.

The sale of an employer’s Securities requires both pre-clearance and reporting.

 

  E.

Restrictions on Access Person Securities Transactions

 

  1.

Restricted Securities

Access Persons may not acquire Beneficial Ownership of Restricted Securities in their Access Person Accounts (except in Third-Party Managed Accounts).

 

  2.

Sale of a Restricted Security

If an Access Person holds a Security in an Access Person Account that subsequently becomes a Restricted Security, the Access Person may be permitted to sell the position under the following circumstances:

 

   

The sale may only take place on a day when the Firm is not contemplating trading in the Security;

 

   

A pre-approval request must be submitted through ELF. Once pre-approval has been rejected by ELF, the Access Person must then submit the request to Compliance; and

 

   

Compliance may approve or reject the request, in writing, based on discussions with Trading staff.

 

   

If approved, Compliance will document its approval in ELF and the sale can only take place by the Access Person on the same day approval is obtained in ELF.

 

  3.

Initial Public Offerings

Access Persons are prohibited from acquiring for their Access Person Accounts any Security distributed in an Initial Public Offering until trading of the Security commences in the secondary market.

 

  4.

Other Prohibited Transactions

The following Securities transactions are always prohibited and will not be authorized under any circumstances, unless otherwise indicated below:

 

   

Material Non-Public Information – Any transaction in a Security by an Access Person who possesses MNPI regarding the Security or the issuer of the Security is prohibited.

 

11


   

Market Manipulation – Transactions intended to raise, lower, or maintain the price of any Security or to create a false appearance of active trading are prohibited.

 

   

Unlawful or Prohibited Investment Company Transactions – Access Persons shall not knowingly participate in or facilitate late trading, market timing, or any other activity with respect to any Investment Company in violation of applicable law or the provisions of the fund’s disclosure documents.

 

   

Investment Clubs – Since each member of an Investment Club generally participates in the investment decision-making process, Access Persons and their Family Members are prohibited from participating in an Investment Club unless the Access Person obtains prior written approval from Compliance.

 

   

Other – Any other transaction deemed by the CCO to involve a Conflict of Interest, possible diversions of corporate opportunity, or an appearance of impropriety, is prohibited.

 

  5.

30-Day Holding Period Requirement

The Firm believes that short-term or excessive personal trading by its Access Persons can raise Conflicts of Interests. Except as otherwise approved by Compliance in very limited circumstances (such as an unforeseen financial hardship), Access Persons are subject to a minimum 30-calendar day holding period for any Reportable Security in their Access Person Accounts (except in Third-Party Managed Accounts).13

 

  6.

Excessive Trading

The Firm generally discourages short-term trading strategies, and employees are cautioned that such strategies may inherently carry a higher risk of regulatory and other scrutiny. Excessive or inappropriate trading that interferes with job performance or compromises the duty that the Firm owes its Clients will not be tolerated. The CCO reserves the right to limit the number of pre-clearance requests that may be submitted periodically by Access Persons.

 

  F.

Reporting Requirements

Access Persons are required to submit certain reporting to Compliance as set forth below. In addition to the reporting requirements disclosed below, the CCO reserves the right to require additional reporting to the extent deemed necessary.

 

  1.

Acknowledgement of Receipt of Code of Ethics

Compliance will provide each Access Person with a copy of the Code and any amendments to the Code. Within 10 calendar days of receiving a copy of the Code or any amendment (or the effective date of such amendment), each Access Person must submit a certification to Compliance via the ELF system acknowledging their receipt of, and their agreement to comply with, the Code or any amendment.

 

 

13 

The 30-calendar day holding period requirement will be applied across all Access Person Accounts on a last-in first-out basis (i.e., it is not applied account-by-account, on a first-in first-out basis, or on a specific identification lot basis).

 

12


  2.

Holdings Reports

 

  A.

Initial Holdings Report

Within 10 calendar days after an Access Person joins WIC or otherwise becomes covered by the Code, the Access Person must submit an Initial Holdings Report via the ELF system disclosing all Reportable Securities of which they have Beneficial Ownership (including Securities held in Third-Party Managed Accounts). Holdings in Exempt Accounts and holdings of Exempt Securities are not reportable. The information required in the Initial Holdings Report is described below. The information contained in the Initial Holdings Report must be current as of a date no more than 45 days prior to the date the Access Person becomes covered by the Code (i.e., generally, the start date of employment).

 

  B.

Annual Holdings Report

Each Access Person must submit an Annual Holdings Report via the ELF system disclosing all Reportable Securities of which they have Beneficial Ownership (including Securities held in Third-Party Managed Accounts) at least once in each 12-month period on a date specified by Compliance. Holdings in Exempt Accounts and holdings of Exempt Securities are not reportable. The information required in the Annual Holdings Report is described below. The information contained in the Annual Holdings Report must be current as of a date no more than 45 days prior to the date the report was submitted.

 

  C.

Initial and Annual Holdings Report Information Requirements

The Initial and Annual Holdings Reports must include, at a minimum: (i) the name of each Reportable Security in which the Access Person has Beneficial Ownership; (ii) the exchange ticker symbol or CUSIP/ISIN/SEDOL number of each Reportable Security held; (iii) the type of Reportable Security held; (iv) the number of shares (or quantity) of each Reportable Security held; (v) the principal amount (or value) of each Reportable Security; (vi) the name of the broker, dealer, or bank with which the Access Person (or Family Member) maintains an account in which each Reportable Security is held; (vii) the account title; and (viii) the account number. Similar information for Securities other than Exempt Securities held in Third-Party Managed Accounts is also required.

Holdings information for Access Person Accounts that provide electronic feeds to ELF will be pre-populated within the Annual Holdings Report. If any holdings information is missing, incomplete, or inaccurate, you must correct it before submitting the report.

 

  3.

Quarterly Transaction Reports

Within 30 days after the end of each calendar quarter, all Access Persons must submit a report via the ELF system listing all Reportable Securities transactions effected in their Access Person Accounts (including transactions in Securities held in Third-Party Managed Accounts) during the prior quarter. Transactions in Exempt Accounts and Exempt Securities transactions are not reportable. Access Persons who did not effect any Reportable Securities transactions during the previous quarter are required to submit a certification in ELF indicating that no Reportable Securities transactions need to be reported.

The Quarterly Transaction Report must include, at a minimum: (i) the name of each Reportable Security traded; (ii) the exchange ticker symbol or CUSIP/ISIN/SEDOL number of the Reportable Security traded; (iii) the number of shares (or quantity) of each transaction; (iv) the principal amount (or value) of each

 

13


transaction; (v) the nature or type of transaction (i.e., purchase, sale, or any other type of acquisition or disposition); (vi) the price at which each transaction was effected; (vii) the name of the broker, dealer, or bank through which the transaction was effected; and (viii) the date of each transaction.

Reportable Securities transaction information for Access Person Accounts that provide electronic feeds to ELF will be pre-populated within the Quarterly Transaction Report. If any information is missing, incomplete, or inaccurate, you must correct it before submitting the report.

 

  4.

New Account Reporting

All Access Persons are required to disclose in ELF any new accounts opened in which they have a Beneficial Ownership interest that hold, or have the capability of holding, Reportable Securities.

Access Persons must report new accounts by the earliest of the following dates: (i) no later than 30 calendar days after the account is opened; or (ii) one calendar day before trading in the new account.

Access Persons do not need to disclose Exempt Accounts.

 

  5.

Ongoing Account Reporting

 

  A.

Electronic Broker Feeds

Access Persons are required to turn on electronic feeds for all reportable accounts that are held with brokers that offer electronic feeds into ELF. Absent exceptional circumstances, if the broker of a reportable account does not offer an electronic feed, the account must be migrated promptly to a broker that provides such feeds into ELF. Electronic broker feeds are not required for 401(k) Plan accounts or employee stock option/purchase plan accounts offered by a Family Member’s employer for which an electronic feed is unavailable.

 

  B.

Duplicate Account Statements

If a reportable account does not supply an electronic feed into ELF, duplicate copies of all account statements (or holdings reports and transaction summaries originating from the broker, such as screen shots from the broker’s website) relating to the account must be provided to Compliance no less frequently than quarterly within 30 calendar days after the end of each calendar quarter. The account statements must reflect the holdings, transactions, and other activity in the account, if any.

Access Persons do not need to provide account statements for Exempt Accounts.

 

  G.

Gifts, Meals, Entertainment, Travel, and Charitable Contributions

 

  1.

General Provisions

Gifts and Entertainment can foster goodwill in business relationships; however, the giving or receiving of Gifts and Entertainment to or from Business Partners could call into question the independence of the Firm’s or an employee’s judgment as a fiduciary of its Clients. If the Firm and/or an employee was found to be acting in a position of undisclosed conflict of interest, it could be considered a breach of fiduciary duty.

 

14


WIC is relying on the professional attitude and good judgment of its employees to ensure that the Firm fully complies with all applicable policies and regulatory requirements. WIC, along with its employees and third parties that act on its behalf, are required to comply with the FCPA and, when applicable, other regulations governing bribery or payments to Public Officials in jurisdictions in which the Firm does business (e.g., the UK Bribery Act). Certain employees are registered representatives licensed to sell securities and sponsored by a brokerage firm (unaffiliated with WIC) that is registered with FINRA. These employees are required to comply with such brokerage firm’s written policies and procedures and FINRA rules relating to gifts, gratuities, and non-cash compensation.

All situations that an employee may encounter cannot possibly be addressed in Firm policies. If there are any questions as to the appropriateness of any Gift, Meal, Entertainment, or Travel item, event, or activity, it is the responsibility of the employee to seek guidance from Compliance.

The policy’s overriding principle is that employee’s (a) may not accept Gifts, Meals, Entertainment, Travel, or other things of material value in any situation where it could influence their decision-making on behalf of the Firm or make the employee feel beholden to a Business Partner; and (b) may not provide or offer Gifts, Meals, Entertainment, Travel, or other things of material value to persons with which the Firm does business that could be viewed as overly generous or aimed at influencing decision-making or making a Business Partner feel beholden to the Firm or any employee.

Employees are to be cognizant of the appearance of Gifts and Entertainment, especially from the perspective of our Clients or the media. Employees must not offer, give, or accept inappropriate Gifts, Entertainment, or other benefits to or from third parties, such as those that may be considered Bribes, corruption, or violate sexual harassment or hostile workplace laws (e.g., adult entertainment or other entertainment/venues that would not be considered business appropriate).

Moreover, employees may not accept or give Gifts, Meals, Entertainment, or Travel that exceed what is “reasonable and customary” under the circumstances of the business relationship.

“Reasonable and customary” generally means something that is:

 

   

Appropriate under the circumstances;

 

   

Consistent with acceptable business practices in the applicable geographical location; and

 

   

Not lavish, extravagant, or excessive.

When an employee believes special circumstances, such as customary business practices, justify an exception to the limits described below, and the exception would not otherwise be prohibited by local law or regulations, the request for an exception should be submitted to the CCO via ELF by submitting a Gift or Business Entertainment pre-clearance request (as appropriate).

The following general restrictions also apply:

 

   

Employees may not personally contribute to cover costs that would otherwise violate the value limits specified in this policy without prior approval from the CCO;

 

   

Employees may not attempt to circumvent specified limits by splitting costs amongst employees;

 

15


   

If an employee wants to accept more than one invitation to a Meal or Entertainment event (e.g., for a Family Member or friend), the employee must obtain pre-approval from the CCO via ELF by submitting a Business Entertainment pre-clearance request;

 

   

Employees may not solicit a Gift or anything else of value (including Meals, Entertainment, or Travel) from a Business Partner;

 

   

Employees may not accept a Gift or anything else of value (including Meals, Entertainment, or Travel) from a broker as compensation for directing Client portfolio transactions to such broker; and

 

   

Employees may not provide Gifts, Meals, Entertainment, or Travel to any Business Partner in excess of any limit(s) set by such Business Partner.

With respect to dollar limits and reporting thresholds, Gifts and Entertainment must be valued at the higher of cost or market (resale) value. For example, the market value of a ticket to a sold-out event may exceed its face value. Employees are responsible for researching the market value of event tickets. If there is any question about the appropriateness or valuation of any Gift or Entertainment event, employees should consult Compliance.

 

  2.

ERISA Plans, Union Plans, Labor Unions, and Public Officials

ERISA prohibits the acceptance of fees, kickbacks, Gifts, loans, money, and anything of value that are given with the intent of influencing decision-making with respect to any employee benefit plan. Many public employee benefit plans are subject to similar restrictions. Employees may never offer Gifts or other favors for the purpose of influencing decisions of existing or prospective ERISA Clients.

Entertainment of ERISA or public plan trustees may be permissible if there is a business purpose for the Entertainment (e.g., review of account performance), but any such Entertainment must be consistent with the Code of Conduct of the ERISA Plan.

A Gift, Meal, Entertainment, or Travel received from a Business Partner in connection with services rendered to an ERISA Plan may not be accepted unless pre-approval is obtained from the CCO via ELF.

A Gift, Meal, Entertainment, or Travel may also not be provided to an official, employee, or other representative of an ERISA Plan, Union Plan, labor union, or a Public Official without obtaining pre-approval from the CCO via ELF.

Firm-sponsored events involving an ERISA Plan, Union Plan, or a Public Official also require pre-approval from the CCO.

Facilitation Payments made to Public Officials are prohibited without pre-approval from the CCO. Legally required administrative fees for fast-track services are not considered Facilitation Payments, or Gifts, and are allowed as long as they are transparent and are paid to a Government Entity, but not to a Public Official or other individual or entity.

 

16


  3.

Accepting Gifts, Meals, Entertainment, and Travel

 

  A.

Receipt of Gifts

Limit - Employees are limited to accepting Gifts that have an aggregate value of not more than US$100 per calendar year from a single donor/Business Partner unless pre-approval is obtained from the CCO via ELF.

Employees may not accept Gifts of cash, cash equivalents (e.g., a gift card or iTunes or Uber credits), or securities from a Business Partner in any amount.

The following items are not considered “Gifts” for purposes of this policy:

 

   

Usual and customary promotional items marked with a Business Partner’s logo (e.g., umbrellas, tote bags, shirts, etc.);

 

   

Food items shared with colleagues and consumed on the Firm’s premises (e.g., candy, cookies, and items of a like nature); and

 

   

Usual and customary Gifts given to or by employees based on a family relationship (e.g., the Business Partner and employee have a family relationship), provided that the family relationship has already been disclosed to Compliance.

Gifts for infrequent life events (e.g., a wedding gift or congratulatory gift for the birth or adoption of a child) are not subject to the annual limit provided they are “reasonable and customary”, personal in nature and not in relation to the business of the Firm. In determining whether a Gift is “personal in nature and not in relation to the business” of the Firm, Compliance will consider the nature of any pre-existing personal relationship between the donor and the recipient.

Reporting - Employees are required to report all accepted Gifts via the ELF system within 30 calendar days from the date of receipt.

 

  B.

Receipt of Meals

Limit - Meals provided to employees may generally be accepted without reimbursement to the Business Partner, and without a specified limit, provided the cost and frequency of such Meals does not exceed what is “reasonable and customary” under the circumstances of the business relationship.

Meals provided to employees by Business Partners that exceed what is considered “reasonable and customary” under the circumstances of the business relationship must be reimbursed personally by the employee.

Reporting - Meals received that are considered “reasonable and customary” do not need to be reported.

 

  C.

Receipt of Entertainment

Limit - Employees may not accept Entertainment with a cost or market (resale) value greater than US$300 per occasion or US$1,000 per calendar year from the same donor/Business Partner unless pre-approval is obtained from the CCO via ELF.

 

17


Employees may not accept Entertainment unless (i) there is a business purpose for such event (e.g., relationship building) and (ii) both the employee and the donor are present. If an event or activity is not attended with the Business Partner or there is not an opportunity at the event or activity to discuss business matters, then the event or activity is considered a Gift.

From time to time, compliance may impose additional restrictions with respect to the receipt of certain Entertainment events, such as limiting the number of events an employee may attend or prohibiting attendance at certain events.

Reporting - All Entertainment accepted must be reported in ELF within 30 calendar days from the date of receipt.

 

  D.

Receipt of Travel

Limit - Travel should generally not be accepted from third parties unless an employee is at a business meeting, Meal, or Entertainment event with a Business Partner and the Business Partner, who is not associated with an ERISA Plan, pays for local transportation related to the meeting or event.

Otherwise, an employee may not accept Travel without obtaining pre-approval from the CCO via ELF.

Reporting - All Travel taken by an employee paid for by a third party outside the limited exception specified above must be reported in ELF (via a Business Entertainment notification) within 30 calendar days from the date of receipt, providing details of the Travel, the cost, and the purpose of the trip.

 

  4.

Providing Gifts, Meals, Entertainment, and Travel

 

  A.

Giving Gifts

Limit - Employees may not give any Gift(s) with an aggregate value in excess of US$100 per calendar year to any Business Partner, person associated with a securities or financial organization, including brokerage firms or other investment management firms, or to members of the news media. Please note that some Business Partners may have Gift policies that are more restrictive and may be prohibited from accepting Gifts other than promotional items from the Firm.

Employees may not give Gifts of cash, cash equivalents (e.g., a gift card or iTunes or Uber credits), or securities to a Business Partner in any amount.

Reporting - All Gifts provided to third parties must be reported in ELF or in an expense report submitted to Finance within 30 calendar days from the date the Gift was given.

 

  B.

Providing Meals

Employees may provide Meals to a third party without a specified limit, where such provision would be “reasonable and customary” under the circumstances of the business relationship.

Reporting - All Meals provided to third parties must be reported in ELF (via a Business Entertainment notification) or in an expense report submitted to Finance within 30 calendar days from the date the Meal was provided.

 

18


  C.

Providing Entertainment

Limit - Employees may not provide Entertainment to a Business Partner with a cost or market (resale) value greater than US$300 per person per occasion or US$1,000 per person per calendar year unless pre-approval is obtained from the CCO via ELF.

Employees may not provide Entertainment unless (i) there is a business purpose for such event (e.g., relationship building) and (ii) both the employee and the recipient are present. If an event or activity is not attended with the Business Partner or there is not an opportunity at the event or activity to discuss business matters, then the event or activity is considered a Gift.

Reporting - All Entertainment provided to third parties must be reported in ELF or in an expense report submitted to Finance within 30 calendar days from the date the Entertainment was provided.

 

  D.

Providing Travel

Limit - Travel should generally not be provided to third parties unless an employee is at a business meeting, Meal, or Entertainment event with a Business Partner who is not associated with an ERISA Plan, Union Plan, labor union, or a Public Official, and the employee pays for local transportation related to the meeting or event.

Otherwise, Travel may only be provided under exceptional circumstances and with the prior approval of the CCO.

Reporting - All Travel provided to third parties must be reported in ELF (via a Business Entertainment notification) or in an expense report submitted to Finance within 30 calendar days from the date the Travel was provided.

 

  5.

Charitable Contributions

Employees may not solicit a Charitable Contribution from a Business Partner without prior approval from the CCO, who shall maintain a record of each such solicitation.

From time to time, the Firm or its employees may be solicited by Business Partners or otherwise wish to make Charitable Contributions. Employees must obtain pre-approval from the CCO for all business-related Charitable Contributions. Business-related Charitable Contributions include, but are not necessarily limited to, the following:

 

   

Charitable Contributions solicited by or on behalf of a Business Partner or Public Official; and

 

   

Charitable Contributions to be made to an organization associated with a Business Partner or Public Official.

Employees may otherwise make Charitable Contributions without preclearance or reporting.

 

19


  6.

Reporting in ELF and Expense Reports

If a Business Partner provides Gifts, Entertainment, or Travel to multiple employees, each employee is individually responsible for reporting their receipt of such Gifts, Entertainment, or Travel in ELF. Conversely, if an employee provides Gifts, Meals, Entertainment, or Travel to a Business Partner and more than one employee participates, only one employee is required to report the item, event, or activity in ELF or in an expense report, but the employee must identify all participants in attendance.

Although employees may delegate the task of reporting into ELF or an expense report to a designee, the responsibility to ensure that all reporting complies with this policy and has been reported in an accurate and timely manner lies with each employee who received or gave the Gift, Meal, Entertainment, or Travel item.

Employees must make all certifications via ELF required by Compliance pertaining to Gifts, Meals, Entertainment, Travel, and Charitable Contributions.

 

  H.

Outside Business Activities and Other Potential Conflicts of Interest

 

  1.

General Provisions

The Firm requires that employees devote their full professional attention to the interests of the Firm and its Clients. Employees have a fiduciary duty towards Clients and must not place their personal interests before the interests of Clients or the Firm. Compliance with this duty can best be achieved by avoiding activities, interests, or associations outside of the Firm that could interfere with, or give the appearance of interfering with, an employee’s ability to act in the best interests of Clients or the Firm or perform work for Clients or the Firm objectively and effectively. Employees must fully disclose all material facts concerning potential Conflicts of Interest that do arise with respect to any Client or the Firm. The appearance of a Conflict of Interest may be just as harmful to the Firm’s reputation as an actual conflict.

An “Outside Business Activity” includes the following:

 

   

Being engaged in any outside business;

 

   

Being employed by, or receiving compensation from, any other person, entity, or organization;

 

   

Serving as a director of a public or private company or on the board (or in any similar capacity) of any other organization outside of your obligations to the Firm, including not-for-profit organizations; or

 

   

Being involved in any other endeavor that may interfere with your responsibilities to the Firm.

A potential “Conflict of Interest” occurs when the personal interests, activities, or relationships of an employee could potentially interfere or compete with the interests of Clients or the Firm.

Examples of potential Conflicts of Interest include the following (not an exhaustive list):

 

   

Either you or a Family Member serves as a director, officer, owner, partner, employee, or agent of, or consultant to, any firm or organization that does business with or seeks to do business with the Firm (e.g., Clients, prospective Clients, consultants, vendors, broker/dealers, custodian banks, etc.) or any competitor of the Firm;

 

20


   

Either you or a Family Member receives any compensation from, or has a direct or indirect Material Economic Interest in, any Business Partner or competitor of the Firm;

 

   

Either you or a Family Member is employed by a Government Entity; or

 

   

Either you or a Family Member is involved in any other activity, relationship, or association that could be perceived as a potential Conflict of Interest of your duties to Clients or the Firm.

A “Material Economic Interest” means an economic interest that could, or might reasonably be thought to, influence judgment or action. As an example, an investment representing less than one-tenth of 1% of a class of outstanding securities of a publicly held company would generally not be considered a Material Economic Interest.

 

  2.

Restrictions on Outside Business Activities and Other Activities, Interests, and Relationships

Employees are prohibited from participating in an Outside Business Activity if the proposed activity could:

 

   

Violate any law or regulation;

 

   

Involve prolonged absences during business hours;

 

   

Interfere with, or give the appearance of interfering with, the employee’s ability to act in the best interests of Clients or the Firm or perform work for Clients or the Firm objectively and effectively; or

 

   

Create adverse publicity or potential liability for, or potentially harm the reputation of, the Firm.

No employee may:

 

   

Improperly cause the Firm to take action, or fail to take action, for their personal benefit rather than the benefit of Clients or the Firm;

 

   

Misuse their position with the Firm, or confidential information that belongs to Clients or the Firm, for personal gain; or

 

   

Compete with the Firm.

For example, an employee may not:

 

   

Commit the Firm to any agreement or arrangement with any entity in which they, directly or through a Family Member, have any Material Economic Interest;

 

   

Appropriate any business opportunity for personal gain;

 

   

Enter into any business or financial relationship personally with a Business Partner if such employee is responsible for the relationship between the Firm and the Business Partner;

 

   

Make any investment or enter into any transaction that, because of the employee’s position, is offered as a personal favor or is made available on terms or conditions more favorable than those generally available to the public; or

 

   

Engage in personal investment transactions to an extent that diverts the employee’s attention from or impairs the performance of their duties in relation to the business of the Firm and its Clients.

 

21


  3.

Pre-Clearance Requirement

Employees must inform their immediate supervisor and obtain pre-clearance from the CCO via ELF before they engage in any Outside Business Activity.

All approved Outside Business Activities are subject to the following conditions:

 

   

The employee is prohibited from implying that they are acting on behalf of, or as a representative of, the Firm;

 

   

The employee is prohibited from using the Firm’s offices, equipment, or stationery for any purpose not directly related to the Firm’s business; and

 

   

The employee must immediately report to the CCO any material changes with respect to the Outside Business Activity, as well as any Conflicts of Interest that may arise after the activity is approved.

Since changing circumstances may require a reappraisal of an employee’s Outside Business Activities, WIC reserves the right to revoke a prior consent to engage in any Outside Business Activity at any time.

 

  4.

Reporting Requirements

Employees are required to report all Outside Business Activities and any other activity, interest, or relationship that could present a potential Conflict of Interest or potentially harm the Firm’s reputation.

Employees have an ongoing obligation to provide updated information in ELF relating to any previously approved Outside Business Activity or potential Conflict of Interest should there be a material change to their title, position, or association with an organization or other relevant facts and circumstances.

Employees are required to disclose any affiliation with any company or fund that the Firm is considering for investment or is invested in on behalf of a Client.

Employees must also make all certifications via ELF required by Compliance pertaining to Outside Business Activities and potential Conflicts of Interest.

 

  I.

Political Contributions and Activities

 

  1.

General Provisions

Federal, state, and local laws and regulations place certain restrictions on Political Contributions and Political Activities of companies and their employees.

Such laws and regulations include, but are not limited to, Rule 206(4)-5 under the Advisers Act (also known as the “Pay-to-Play Rule”), all national, state, provincial, and other municipal election and campaign laws, all laws and regulations relating to the solicitation of investment advisory services from Government Entities, the FCPA (which generally prohibits US firms from making payments to non-US Officials for the purpose of obtaining or retaining business with, or directing business to, any person), and the UK Bribery Act (which governs how companies can behave when seeking overseas contracts).

 

22


As a result, a violation of these laws and regulations, including this policy, could cause the Firm to forfeit compensation, bar WIC from doing business (including forcing WIC to resign from an existing Client mandate), subject WIC to fines or penalties (including the two-year “time-out” provision in Rule 206(4)-5 under the Advisers Act), and damage WIC’s reputation.

All Political Contributions, including in-kind contributions and other payments made to Public Officials, and all Political Activities engaged in by the Firm or by employees of the Firm must comply with this policy and all applicable laws and regulations in the jurisdictions in which such Political Contributions are made or such Political Activities are engaged in.

Moreover, employees engaging in Political Activities are expected to do so as private citizens and must always make clear that their views and actions are their own, and not those of the Firm.

 

  A.

General Restrictions and Prohibitions

The Firm and its employees are prohibited from engaging in the following activities:

 

   

Soliciting or Coordinating Political Contributions – The Firm and its employees are prohibited from solicitating or coordinating a Political Contribution from another employee or any other person or coercing or pressuring another employee or person to support or oppose any political candidate or election;

 

   

Use of Firm Facilities or Resources – The Firm and its employees are prohibited from using Firm assets, funds, equipment (e.g., letterhead, copy machines, phones, computers, fax machines, email, etc.), personnel, workplace or other resources for political campaigns, fundraising, or other similar political purposes without pre-approval from the CCO;

 

   

Political Office – No employee may seek political office or accept political appointment without first obtaining the requisite pre-approval(s) for Outside Business Activities;

 

   

Gifts and Entertainment – The Firm and its employees may not give or provide Gifts and/or Entertainment directly or indirectly to a Public Official (including immediate family members of the Public Official) without pre-approval from the CCO; and

 

   

Kickbacks and Bribes – The Firm and its employees are prohibited from making a Political Contribution or engaging in a Political Activity for the purpose of influencing a Public Official’s decision to hire or retain the Firm. Neither the Firm nor its employees may make any payment to a Public Official without pre-approval from the CCO.

Employees may not engage in pay-to-play conduct indirectly, such as by directing or funding Political Contributions through third parties such as spouses, lawyers, or companies affiliated with the Adviser, if that conduct would violate any law, rule, or regulation if the Adviser or employee did it directly.

Moreover, the Firm may not pay a third party, such as a solicitor or placement agent, to solicit a Government Entity on behalf of the Adviser, unless that third party is an SEC-registered investment adviser, broker-dealer, or municipal advisor subject to similar pay-to-play restrictions and the requirements for paid solicitation arrangements as described in the Firm’s Advertising and Marketing Policy are satisfied.

 

  B.

Rule 206(4)-5 under the Advisers Act

Rule 206(4)-5 under the Advisers Act prohibits investment advisers from providing advisory services for compensation to a US Government Entity (i.e., any state or political subdivision or any agency, authority,

 

23


or instrumentality thereof) either directly or through a covered investment pool14 if the adviser or its Covered Associates have made a Political Contribution within the previous two years to an elected official of a state (or political subdivision of a state) who is in a position to influence the selection of the adviser.

Exceptions - Political Contributions that would otherwise disqualify an adviser from providing investment advisory services to a US Government Entity can be made under the following circumstances:

 

   

De Minimis ContributionsSEC rules permit a Covered Associate to make contributions to US State/Local Officials for whom they were entitled to vote at the time of the contribution if, in the aggregate, the contributions do not exceed US$350 to any one official, per election. If the Covered Associate was not entitled to vote for the official at the time of the contribution, such contribution may not exceed US$150, in the aggregate, to any one official, per election.

 

   

New Covered Associates – Contributions made by new Covered Associates more than six months prior to joining the adviser will not disqualify the adviser, as long as such Covered Associates do not solicit Clients for the adviser.

 

   

Returned Contributions – In very limited circumstances, an adviser might not be disqualified from providing investment advisory services to a US Government Entity if the prohibited contribution was less than US$350, is discovered within four months of the date of the contribution, and returned within 60 days after the date of discovery. The Firm may not take advantage of this exception more than two times per calendar year, and not more than once per Covered Associate regardless of the time period.

 

  C.

Lobbying Activities

For the purpose of this policy, “lobbying” is defined as the attempt to influence, or supporting the attempt to influence, the decisions of a Public Official or public entity, including but not limited to decisions surrounding the award or terms of a business contract or business arrangement. These activities can occur at the federal, state, or local levels and include activities done on behalf of the Firm by third parties.

Any employee who engages in lobbying activities may be construed as a lobbyist under relevant laws. The employee, third party, and/or the Firm may be required to register as a lobbyist with the relevant authorities and satisfy such authorities’ reporting requirements.

Lobbying activities engaged in or conducted by employees for personal or individual reasons are not subject to this policy as long as the employee does not (i) act as a representative of the Firm, or (ii) use Firm facilities or resources to promote any lobbying activity.

Employees should contact Compliance prior to engaging in any activities that could be construed as lobbying.

 

 

14 

A “covered investment pool” means: (i) any investment company registered under the 1940 Act that is an investment option of a plan or program of a US Government Entity; or (ii) any company that would be an investment company under section 3(a) of the 1940 Act but for the exclusion provided from that definition by either section 3(c)(1), section 3(c)(7), or section 3(c)(11) of the 1940 Act (e.g., the Private Funds offered by the Firm).

 

24


  2.

Pre-Clearance Requirement

All employees must obtain pre-approval from Compliance for all Political Contributions (whether at the federal, state, or local level) via the ELF system, including:

 

   

Political Contributions that are paid from accounts held in the name of the employee and those jointly held with others; and

 

   

Political Contributions that are made by the employee’s spouse, domestic partner, and/or minor children.

Employees must also obtain pre-approval from Compliance prior to engaging in any Political Activity or lobbying activity.

 

  3.

Reporting Requirements

After obtaining pre-clearance, employees must ensure that all Political Contributions that they or their spouse, domestic partner, and/or minor children have made and all Political Activities they have engaged in are properly reported in ELF within 30 calendar days of the date the Political Contribution was made or the Political Activity occurred.

New employees are required to report all Political Contributions made within the two years preceding the start of employment with the Firm.15

Employees must also make all certifications via ELF required by Compliance pertaining to Political Contributions and Political Activities.

 

  4.

Recordkeeping Requirements

Advisers that have US Government Entity Clients, or that provide investment advisory services to a covered investment pool in which a US Government Entity investor invests, are required to make and keep records for five years of:

 

   

The names, titles, and business and residence addresses of all Covered Associates;

 

   

All direct or indirect Political Contributions made by the Firm or Covered Associates to an official of a US Government Entity, or direct or indirect payments to a Political Party of a state or political subdivision thereof, or to a Political Action Committee. These records must include the name and title of each contributor, the amount and date of each contribution or payment, the name and title of each recipient (including any city/county/state or other political subdivision) of a contribution or payment, and whether any such contribution was the subject of the exception for certain returned contributions;

 

   

The name and business address of any person or entity to whom the Firm provides or agrees to provide, directly or indirectly, payment to solicit a US Government Entity for investment advisory services on its behalf;

 

   

All US Government Entities whose accounts were identified as those of a US Government Entity at or around the time of the initial investment to the Firm or one of its Client servicing employees or Covered Associates;

 

 

15 

Rule 206(4)-5 under the Advisers Act includes a two-year “look back” provision for certain Covered Associates.

 

25


   

All US Government Entities that sponsor or establish a 529 Plan and have selected a fund advised by the Firm as an option to be offered by such 529 Plan;

 

   

All US Government Entities that have been solicited to invest in a fund advised by the Firm either (i) by a Covered Associate, or (ii) by an intermediary of the fund if a Covered Associate or Client servicing employee of the Firm participated in or was involved in such solicitation, regardless of whether such US Government Entity invested in the fund; and

 

   

All US Government Entities that invest in funds advised by the Firm whose accounts can reasonably be identified as being held in the name or for the benefit of such US Government Entity on the records of the fund or the transfer agent.

 

  5.

Compliance Monitoring

Compliance will monitor all requests for new Client Accounts and subscriptions to identify any US federal, state, or local Government Entities (including pension and other benefit plans of such entities) that may become Clients of the Firm or investors in its funds. Compliance will review Political Contributions made by Covered Associates for the prior two years to determine whether the Firm will be permitted to provide services to such Clients or investors, and if contributions have been made, whether corrective action, including seeking a return of the contribution, should be taken. With respect to investment companies advised by the Firm, Compliance will obtain from the transfer agent, on a quarterly basis, a list of shareholder accounts that may be coded as Government Entities. Compliance will assess such information and make a reasonable determination as to whether the accounts are deemed to be a state or local US Government Entity.

 

  J.

Anti-Bribery and Anti-Corruption

 

  1.

General Provisions

WIC and its employees are subject to and must comply with the FCPA and, when applicable, the anti-bribery and anti-corruption laws of other jurisdictions in which the Firm does business (e.g., the UK Bribery Act).

The FCPA prohibits improper payment to, or other improper transactions with, non-US Officials to influence performance of official duties. The FCPA prohibits offering to pay, paying, promising to pay, or authorizing the payment, directly or indirectly through a third party, of money or anything of value to any non-US Official in order to influence any act or decision of the Official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business. The FCPA applies to US entities and persons and their officers, directors, and employees. Non-US persons are also subject to the FCPA to the extent that they carry out any part of any prohibited activity in or from the US.

Business and Client-related investment activities of the Firm that may raise issues under the FCPA include:

 

   

Raising funds or capital or seeking investment management Clients outside the US (including from foreign government or state-owned investment entities or sovereign wealth funds);

 

   

Acquisition of a significant or controlling interest in a non-US company;

 

   

Investment in an entity or joint venture owned or partially owned by a non-US government; and

 

   

Use of consultants, agents, or other third parties in soliciting non-US investors or Clients or in seeking or making non-US investments.

 

26


The Firm’s policy prohibits employees from offering or paying any Bribes or other types of improper inducements to any person for any purpose, nor shall employees solicit or accept any Bribes or improper inducements. This prohibition also includes Bribes or inducements indirectly offered or paid through an agent or another third party, and it applies irrespective of the source of the funds, item of value, or other advantage.

WIC also expects employees to act in accordance with the appropriate standards of professional and ethical conduct and to not engage in any corrupt activities or behavior.

 

  2.

Prohibited Payments

Employees are prohibited from paying, offering to pay, or promising to pay money or anything of value (including Gifts, Meals, Entertainment, and Travel) to a Public Official, directly or indirectly, with the intent to induce the recipient to misuse his or her official position, to obtain any improper advantage or to direct business wrongfully to the Firm. Additional examples of the types of payments that may be considered payments of value that can violate the FCPA include:

 

   

In-kind contributions;

 

   

Investment opportunities;

 

   

Subcontracts;

 

   

Positions in joint ventures;

 

   

Favorable contracts;

 

   

Consulting fees;

 

   

Business opportunities or employment (hiring) opportunities for family members of Public Officials;

   

Political contributions; and

 

   

Charitable donations and sponsorships.

In certain cases, providing a payment or other inducement to a person known to be an immediate family member of a Public Official may be the equivalent of providing a thing of value to the Public Official directly. Similarly, providing a payment or other inducement to any person knowing that all or part of its will be passed on to a Public Official is equally subject to these restrictions.

 

  3.

Permissible Payments

The FCPA permits payment or reimbursement of reasonable and bona fide expenses of a non-US Official

(e.g., travel and lodging expenses) relating to the promotion, demonstration, or explanation of a product or service or to the execution or performance of a contract with a foreign government. Even though not expressly permitted under the UK Bribery Act, guidance has been put forth by the regulator that it will not take action against a company if such expenditures are reasonable. Travel costs and modest and reasonable business Meals and Entertainment that are incidental to business discussions generally will fit within this exception.16

 

 

16 

A Public Official generally should be invited to Meals and Entertainment events only when the Meal or Entertainment is incidental to genuine, necessary business discussions with the Public Official. For example, a modest Meal or Entertainment may be provided to a Public Official when it is incidental to lawful lobbying and complies with the laws and regulations of the local jurisdiction.

 

27


The giving of customary Gifts, or the provision of modest Meals or Entertainment in connection with business discussions to Public Officials, is not barred by the FCPA or UK Bribery Act so long as the provision of such benefits is not “corrupt”, meaning not intended to wrongfully influence the recipient. It is not likely that the giving of a customary and modest Gift, Meal, or Entertainment item is intended to influence the decision-making of a Public Official or to be perceived as such.

Gifts generally should be given to Public Officials only in connection with national, traditional, or religious holidays or, where customary, to celebrate significant personal events such as marriages or births. Gifts branded with the Firm’s logo are preferred if such Gifts are socially acceptable in the jurisdiction. Even branded Gifts should be given in small quantities having low cash value. Gifts should be given openly, so that supervisors of a Public Official can see that a Gift is being tendered. For example, it is preferable that Gifts be sent to the office of employment of a Public Official and not to his or her home, hotel, or other address.

The FCPA permits certain small “facilitating” or “expediting” payments to non-US Officials to ensure that they perform routine, non-discretionary governmental duties (e.g. expediting permits, licenses, or other official documents; processing governmental papers, such as visas and work orders; providing police protection, mail pick-up and delivery; providing phone service, power and water supply, or protecting perishable products; and scheduling inspections associated with contract performance or transit of goods across country). However, the UK, Canada, and certain other jurisdictions do not recognize the legality of Facilitation Payments and may not draw any distinction from Bribes.17

 

  4.

Compliance Pre-Approval

Employees are required to obtain written approval from Compliance prior to:

 

   

Entering into an arrangement on behalf of the Firm or any of its Clients with a third-party intermediary who will act as placement agent or otherwise assist in the solicitation of investors or Clients outside the US;

 

   

Entering into a transaction on behalf of the Firm or any of its Clients for the acquisition of a significant or controlling interest in a non-US company;

 

   

Entering into a joint venture on behalf of the Firm or any of its Clients to be owned or to be partially owned by a foreign government or Public Official; and

 

   

Providing any Gift, Meal, Entertainment, or Travel item to a Public Official or immediate family member or guest of a Public Official.

For the avoidance of doubt, in the event an employee or agent determines that a failure to make a payment may result in personal harm or detention, the employee of agent should make such payment and report the incident to the CCO as soon as practicable for documentation as a possible exception to this policy.

 

 

17 

Technically illegal under the UK Bribery Act, the UK Ministry of Justice guidance recognizes that total eradication is a long-term objective and will need to be worked towards over a period of time. The Organisation for Economic Co-operation and Development (OECD) in its Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions (November 2009) encourages companies to prohibit or discourage small Facilitation Payments.

 

28


  5.

Use and Appointment of Agents

If the Firm uses a third-party agent, including a placement agent, to assist with introductions to investors, identifying potential investments, or marketing and distribution of the Firm’s funds and services, such agent will be subject to:

 

   

Due diligence prior to appointment;

 

   

A written agreement between the Firm and the agent. This agreement will contain an anti-bribery and anti-corruption clause which outlines the standards of conduct WIC expects from the agent based on this policy; and

 

   

Periodic attestations from the agent that they are in compliance with their written agreement with the Firm.

The type and scope of due diligence and number and type of attestations or certifications to be required in any case may vary depending on the circumstances and relative risk of each particular situation.

 

  K.

Administration of the Code of Ethics

 

  1.

Administering and Monitoring Compliance

The CCO is responsible for administering and monitoring compliance with the Code. The CCO shall:

 

   

Develop policies and procedures reasonably designed to implement and enforce the Code;

 

   

Be authorized to grant and document exceptions or exemptions on an individual or group basis, to any provision of the Code, provided that such exceptions or exemptions are consistent with the spirit of the principles of the Code and of the Firm (e.g., they would not be inconsistent with Clients’ interests) and applicable law;

 

   

Be authorized to designate one or more persons to have the authority and responsibility when necessary and appropriate to handle, without limitation, the compliance functions outlined within the Code, compliance manual, and other policies and procedures, including reviewing transaction and holdings reports and other reporting and certifications submitted by Access Persons;

 

   

Be authorized to resolve issues of whether information received by an employee constitutes MNPI;

 

   

Investigate any suspected violation of the Code and shall communicate promptly to an Access Person/employee any suspected violation of the Code by such person;

 

   

Be authorized to determine disciplinary sanctions or remedial action for violations of the Code;

 

   

Bring material violations of the Code to the Ethics Committee’s and Management Committee’s attention;

 

   

Conduct periodic training to explain and reinforce the terms of the Code;

 

   

Answer questions regarding the Code, and keep up-to-date on changes in applicable laws and regulations;

 

   

Maintain confidential information regarding personal transactions and holdings and only disclose such information to persons with clear need-to-know, including regulators and other parties when required or deemed necessary or appropriate by the CCO in conformance with law or the provisions of the Code; and

 

29


   

Review the Code on at least an annual basis for adequacy and the effectiveness of its implementation and recommend to the Management Committee any amendments as are necessary or appropriate.

No member of Compliance may review his or her own transactions.18

The CCO will also review the Adviser’s Form ADV, Part 2A brochure on at least an annual basis to ensure that the brochure accurately described the Firm’s Code and any Conflicts of Interest that may arise from the personal trading and other activities by Access Persons/employees.

 

  2.

Confidentiality

Compliance will use its best efforts to assure the personal holdings information of Access Persons is treated confidentially. However, the Firm is required by law to review, retain, and, in certain circumstances, disclose documents containing personal holdings information. Therefore, such information will be available for inspection by appropriate regulatory agencies and by other parties within and outside the Firm as necessary to evaluate compliance with the Code or other requirements applicable to the Firm.

Information relating to violations of the Code and certain employee activities (e.g., Outside Business Activities and Conflicts of Interest) may be reportable to Clients, regulators, and other parties as required by law.

 

  3.

Training

All Access Persons/employees are required to attend any mandatory training sessions conducted by Compliance concerning the Code.

 

  4.

Recordkeeping Requirements

Copies of Access Person/employee reports and certifications, pre-clearance requests, confirmations, and account statements, compliance reviews, and each version of the Code will be maintained as required by applicable recordkeeping requirements. A record of all persons who are or were required to make reports pursuant to the Code, and the period(s) they were required to do so, and a record of each violation of the Code, and of any action taken as result of the violation, will also be maintained.

 

  5.

Violations

Failure of any Access Person/employee to obtain proper approvals or make any report as required under the Code may result in sanctions. Sanctions or remedies could include, but are not necessarily limited to, a letter of reprimand, escalation to management, fines donated to charity, forced sale of Securities, forfeiture of or reimbursement for any item received, profit disgorgement, suspension of personal trading rights, and/or suspension or termination of employment. In addition, violators may be subject to civil or criminal penalties.

 

 

18 

The Firm currently has two compliance officers. The Compliance Officer is responsible for reviewing the CCO’s transaction reports and vice versa. In the absence of the Compliance Officer, the Firm’s Managing Member will be responsible for reviewing the CCO’s compliance with the Code.

 

30


Final disciplinary sanctions or remedial action will be determined by the CCO and/or the Firm’s Ethics Committee, which may take into account certain factors, including, but not limited to, whether the violation was inadvertent, any pattern or practice of violations, the materiality of the activity, and any harm caused.

Where an Access Person is required to reverse a transaction in question and forfeit any profit or absorb any loss associated or derived as a result, the amount of profit shall be calculated by Compliance and shall be remitted by the Access Person to a charitable organization or other place selected by the Firm. The Access Person must provide evidence of the remittance no later than 10 calendar days after being notified in writing by Compliance of the amount to be remitted.

Failure to abide promptly to a directive from the CCO or management to reverse a trade or forfeit profits or to take other corrective steps requested by the Firm (e.g., actively seeking the return of a Political Contribution in violation of the Code) may result in the imposition of additional sanctions.

 

  6.

Reporting Violations

As required by Rule 204A-1 under the Advisers Act, Access Persons are required to report any violation, whether actual or suspected, of the Code promptly to the CCO. It will be considered a violation of the Code for an Access Person to fail to report a known violation or withhold relevant or material information concerning a known violation of the Code.

Any reports of violations from Access Persons/employees will be treated confidentially to the extent permitted by law and investigated promptly and appropriately.

Reports of violations of the Code may be submitted to the CCO on an anonymous basis. Access Persons/employees who wish to report a violation anonymously may do so by sending a letter to the CCO marked as “Personal and Confidential”. If the CCO is involved in the violation or is unreachable, Access Persons/employees may report a violation to the Firm’s Managing Member.

Retaliation against any Access Person/employee who reports a violation in good faith is prohibited and constitutes a further violation of the Code. Furthermore, nothing in this section of the Code, or in any other Firm policy, restricts the ability of an Access Person/employee to report matters to the SEC, or to take any other action in conformance with the SEC’s Whistleblower Rules under Section 21F of the 1934 Act.

 

  L.

Mutual Fund Board Reporting and Approval of the Code of Ethics

The Firm serves as adviser or sub-adviser to a number of mutual funds and ETFs. The Board of Trustees of each mutual fund and ETF advised or sub-advised by the Firm, including a majority of the independent trustees/directors, must approve the Firm’s Code of Ethics. In addition, no less frequently than annually, the Firm must provide each mutual fund Board a written report that:

 

   

Describes any issues arising under the Code since the previous report to the Board, including, but not limited to, information about material violations of the Code or procedures and sanctions imposed in response to the material violations; and

 

   

Certifies that the Firm has adopted procedures reasonably necessary to prevent Access Persons from violating the Code.

 

31


The Firm’s CCO is required to notify the Board of each mutual fund and ETF advised or sub-advised by the Firm of any material changes to the Code of Ethics within six months of adoption of any such change. The CCO will also provide a memorandum describing the changes to the Code and the reasons for the changes, if applicable.

 

32


3.1

CODE OF ETHICS SUPPLEMENT DATED JUNE 7, 2021

Effective immediately, the following changes are applicable to the Code:

 

  1.

All references to “ELF” in the Code are replaced with “ComplianceAlpha.”

This change is a result of the Firm’s upgrade from ACA Compliance Group’s Compliance Employee Level Filing (ELF) platform to the Employee Compliance module of ACA Compliance Group’s ComplianceAlpha platform, effective June 7, 2021.

 

  2.

Section ‘D.3. Pre-Clearance Requirement’ is amended as follows:

 

   

A. Private Placements/Limited Offerings

Access Persons may submit a request to transact in a Limited Offering (i.e., a Private Placement) directly in ComplianceAlpha without having to first submit the request via email to Compliance.

 

   

B. Pre-Clearance Procedures for Investment, Risk, Operations, and Data and Technology Team Members

This section is removed in entirety. Investment, Risk, Operations, and Data and Technology team members no longer are required to obtain written approval from the Trading team prior to requesting pre-clearance in ComplianceAlpha.

 

   

C. Exceptions to the Pre-Clearance Requirement

Pre-clearance is no longer required for transactions in funds that are advised/sub-advised by WIC and that are held directly within the Water Island Capital, LLC Retirement Plan (an “Exempt Account”).19

 

  3.

Section ‘E.2. Sale of a Restricted Security’ is amended as follows:

 

   

The second bullet is replaced with the following:

“A pre-approval request must be submitted through ComplianceAlpha. Once pre-approval has been rejected (denied) by ComplianceAlpha, the Access Person must then submit the request to Trading staff by e-mail, copying Compliance; and”20

 

 

19 

For the avoidance of doubt, pre-clearance of transactions in funds that are advised/sub-advised by WIC in any account outside of the Water Island Capital, LLC Retirement Plan is still required (in ComplianceAlpha).

20 

For the avoidance of doubt, this procedure only pertains to sales of Securities that have been denied in ComplianceAlpha, and Compliance is under no obligation to inform any Access Person the reason for any rejection of a transaction regardless of any discussions with (or communications from) Trading staff.

 

33

LOGO

 

 

 

LOGO

 

 

Sponsor

Guggenheim Partners Investment Management, LLC

Chief Compliance Officer

Owner

GPIM Director of Policies & Procedures

Contact

Arik.Hirschfeld@GuggenheimPartners.com

Effective Date

April 1, 2021

By receiving, reading or reviewing this Code of Ethics (the “Code”) in whole or in part, you agree to the following terms and conditions:

The Code and all of its contents are the proprietary and confidential property of Guggenheim Partners Investment Management, LLC and its affiliated entities (“Guggenheim”), and may not be used by any other person, firm or individual and may not be redistributed except with the written permission of Guggenheim.

It is being provided to you in connection with the conduct of due diligence and for no other purpose or use.

IT MAY NOT BE REPRODUCED OR REDISTRIBUTED; IS NOT INTENDED AS A DISCLOSURE OF ANY SORT; IT MAY BE CHANGED AT ANY TIME IN ANY MANNER WITHOUT THE CONSENT OF ANY PERSON AND WITHOUT NOTICE, IN THE SOLE DISCRETION OF GUGGENHEIM; THERE IS NO COMMITMENT TO FOLLOW ANY PROCESS OR PROVISIONS DESCRIBED IN THIS CODE OTHER THAN THOSE SPECIFICALLY REQUIRED BY APPLICABLE LAW, RULES OR REGULATIONS; GUGGENHEIM MAY, IN ITS DISCRETION, DEVIATE FROM THE PROCESSES AND PROVISIONS DESCRIBED IN THIS CODE AT ANY TIME, INCLUDING WITHOUT LIMITATION, WHERE GUGGENHEIM DETERMINES THAT SUCH A DEVIATION IS PERMISSIBLE, NECESSARY, APPROPRIATE AND/OR DESIRABLE.

 

LOGO


LOGO

Table of Contents

 

1.

  

Objectives of the Code of Ethics

   4

2.

  

Who is Subject to the Code?

   4

3.

  

Who Administers the Code?

   5
  

3.1.

  

Chief Compliance Officer

   5
  

3.2.

  

Code of Ethics Compliance Platform

   6

4.

  

Fiduciary Duty to Clients

   7
  

4.1.

  

Managing Conflicts

   7
  

4.2.

  

Confidentiality and Safeguarding Information

   7
  

4.3.

  

Prohibition on Front Running

   7
  

4.4.

  

Compliance with the Code of Ethics

   8

5.

  

Reporting of Personal Trading

   8
  

5.1.

  

Which Investment Accounts Do Access Persons Need to Report?

   8
  

5.2.

  

Required Initial Holdings Reports and Certifications

   10
  

5.3.

  

Required Quarterly Transaction Reports

   11
  

5.4.

  

Annual Holdings Reports and Certifications

   13

6.

  

Pre-clearance for Personal Trading

   13
  

6.1.

  

Trades Requiring Pre-Clearance

   14
  

6.2.

  

Trades Not Requiring Pre-Clearance

   15
  

6.3.

  

Prohibited Transactions

   16

7.

  

Trading Restrictions

   17
  

7.1.

  

For All Trading

   17
  

7.2.

  

Excessive Trading in Reportable Accounts

   18
  

7.3.

  

Holding Period – Thirty-Day Prohibition on Buying/Selling Covered Securities

   18
  

7.4.

  

Section 16 Reporting for Certain Closed-End Mutual Funds

   19

8.

  

Annual Review

   19

9.

  

Retention of Records

   19

10.

  

Sanctions

   20

11.

  

Interpretations and Exceptions

   20

12.

  

Appendix A – Reference Guide for Covered Security Pre-Clearance and Reporting Requirements

   21

13.

  

Appendix B – Option Trading Pre-Clearance Requirements

   23


LOGO

 

1.

Objectives of the Code of Ethics

Guggenheim Partners Investment Management, LLC (“GPIM” or the “Advisor”), its subsidiaries and affiliated investment advisers are committed to conducting our investment advisory business with the highest legal and ethical standards. We aim to uphold our reputation of integrity and professionalism in the furtherance of the interests of our clients and in a manner that is consistent with all applicable laws, rules and regulations. This reputation is a vital business asset and has generated the trust and confidence of GPIM’s clients.

Accordingly, the Advisor has adopted this Code of Ethics (the “Code”) to effectuate the purposes and objectives of Rule 204A-1 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and in accordance with industry best practices. All persons associated with the Advisor are responsible for knowing and understanding the policies and guidelines contained in the Code. Our conduct should reflect GPIM’s values, demonstrate ethical leadership, and promote a work environment that upholds our reputation for integrity, ethical conduct and trust. The Code sets forth the general principles and standards of conduct expected from you. It cannot and is not intended to cover every scenario or circumstances under which you may face business and personal conflicts. Technical compliance is not enough and you are expected to comply with the spirit of the Code.

The GPIM Compliance Department monitors, surveils and escalates to the business when appropriate. The GPIM Chief Compliance Officer (“CCO”) and GPIM Compliance Department should be contacted for advice and recommendations as to compliance with regulatory requirements, the Code and together with the GPIM Compliance Manual (“Manual”), the Compliance Program. However, the business has primary authority and control over the investment activities and operation of GPIM and for managing employees. Access Persons should contact Guggenheim Partners’ Central Compliance – Employee Activities Group (“Central Compliance”) with any questions on employee trading and activities.

 

2.

Who is Subject to the Code?

As a condition of employment, all individual employees, officers, principals, partners and directors of GPIM (generally referred to as “Employees”) are required to comply with the Code. In addition, the following categories of persons are considered to be Access Persons and are required to comply with the Code together with Employees. “Access Person1 includes any:

 

  a.

Employee, Director, officer, manager, principal and partner of the Advisor (or other persons occupying a similar status or performing similar functions), or other person who provides advice on behalf of the Advisor or is subject to the Advisor’s supervision and control; or

 

 

1

This includes any arrangement where the Access Person serves as an agent, executor, trustee or in another capacity.

 

 

 

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  b.

Any person who:

 

  i.

Has access to nonpublic information regarding any of the Advisor’s client’s purchases or sales of securities, or nonpublic information regarding the portfolio holdings of any client account the Advisor or their affiliates manage, or any fund which is advised or sub-advised by the Advisor (or certain affiliates, where applicable);

 

  ii.

Makes recommendations or investment decisions on behalf of the Advisor;

 

  iii.

Has the power to exercise a controlling influence over the management and policies of the Advisor, or over investment decisions, who obtains information concerning recommendations made to a client account with regard to the purchase or sale of a security;

 

  iv.

The CCO shall determine on a case-by-case basis whether a temporary employee (e.g., consultant or intern) should be considered an Access Person. Such determination shall be made based upon an application of the criteria provided above, whether an appropriate confidentiality agreement is in place, and such other information as may be necessary to ensure that proprietary information is protected. As such, temporary employees may only be subject to certain sections of the Code, such as certifying to it, or may be exempt from certain reporting requirements such as not having to hold their reportable accounts at the permitted broker-dealers; or

 

  v.

Any person deemed to be an Access Person by the CCO.

 

3.

Who Administers the Code?

 

  3.1.

Chief Compliance Officer

 

  3.1.1.

Responsibilities

The Advisor’s Compliance Department (the “GPIM Compliance Department”) is responsible for administering the Code of Ethics under the auspices and responsibility of the CCO and the Advisor’s senior management. The CCO will delegate appropriate responsibilities to designated members of the GPIM Compliance Department. Central Compliance administers certain sections of the Code of Ethics pertaining to Employee activities.2

 

  3.1.2.

Reporting of Violations

If an Access Person becomes aware of a violation of the Code, the Access Person has an obligation to report the matter promptly to the CCO. Nothing in this policy prohibits an Access Person from contacting a securities regulator.

 

 

2

Central Compliance – Employee Activities Group can be contacted at: GPIMEmployeeActivities@GuggenheimPartners.com

 

 

 

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  3.1.3.

Review of Violations

The GPIM Compliance Department will review all violations of the Code and oversee any appropriate investigation and subsequent response. As the designee of senior management, the CCO shall have the right to make final and binding interpretations of the Code and may grant, using his/her discretion, exceptions to certain of the Code’s requirements and restrictions.

 

   

No Employee, who in good faith reports a violation of the Code, shall suffer harassment, retaliation or with respect to a report concerning a violation by another Employee, adverse employment consequences.

 

   

An Employee who retaliates against someone who has reported a violation in good faith may be subject to disciplinary action. Alternatively, the Advisor will treat any malicious or knowingly false report of a violation to be a serious offense and may discipline the Employee making such a report.

 

  3.1.4.

Review of CCO Compliance with Code

A member of senior management of the Advisor or any other person designated (e.g., a member of the Legal Department or the Global Head of Compliance or his/her designee), who may or may not be an Employee of the Advisor, is responsible for reviewing the CCO’s personal trading reports and Code certifications required under the Code. If the CCO is in violation of the Code, senior management will impose the appropriate sanction(s).

 

  3.1.5.

Employee Cooperation

Employees are encouraged to share questions, concerns, suggestions or complaints with the GPIM Compliance Department. Reports of violations or suspected violations will be kept confidential to the extent possible, but consistent with the need to conduct an adequate investigation.

 

  3.2.

Code of Ethics Compliance Platform

 

  3.2.1.

Use of Compliance Platform

The Advisor utilizes an electronic Compliance Platform, to manage the Code’s reporting and certification obligations. Access Persons are required to use the Compliance Platform, to the extent practical.

 

   

Code reporting requirements are to be completed through the Compliance Platform (including certifications, personal securities transactions covered by the Code, disciplinary disclosures, outside business affiliations, private transactions, board memberships, and gifts and entertainment) or through an alternate manner approved by the GPIM Compliance Department.

 

 

 

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At the time of designation as an Access Person, Central Compliance will provide all Access Persons with login information and instructions for using the Compliance Platform.

 

  3.2.2.

Electronic Reporting

Quarterly personal securities transaction reporting and annual holdings reporting will be completed electronically, to the extent practical. In order for duplicate brokerage statements to be sent directly to the Compliance Platform or for electronic feeds to be established, Access Persons may need to provide appropriate authorization to their brokers.

 

  3.2.3.

Exceptions to Electronic Reporting

On a case by case basis and at the discretion of Central Compliance, paper reports and certifications may be accepted in lieu of electronic reporting on the Compliance Platform.

 

4.

Fiduciary Duty to Clients

 

  4.1.

Managing Conflicts

Access Persons owe a fiduciary duty to clients and have an obligation to act in their clients’ best interests. Access Persons must scrupulously avoid serving personal or conflicted interests ahead of the interests of clients. Conflicts and potential conflicts can arise in a variety of situations. All Access Persons must also seek to identify and appropriately address potential conflicts between and among client accounts as well. One client’s interests may not be favored over the interests of another. The Manual, available via OneGuggenheim, includes the Private Transactions Conflicts of Interests Review Policy that provides additional guidance and procedures for addressing potential conflicts within a business transaction context.

 

  4.2.

Confidentiality and Safeguarding Information

Unless permitted in writing prior to disclosure, information regarding clients or their accounts may not be shared with persons outside of the Advisor, such as vendors, family members, or market participants. In particular, information regarding the trading intentions of clients or the Advisor on behalf of its clients may not be shared. Access Persons may have information regarding clients, their investment strategies, strategic plans, assets, holdings, transactions, personnel matters and other information. This information must remain confidential and may not be shared outside the Advisor.

 

  4.3.

Prohibition on Front Running

Front-running, trading opposite the Advisor’s client account(s), or engaging in conduct that may be construed as front-running, is strictly prohibited under the Code. For example, front-running would include an Access Person purchasing a Covered Security any time within

 

 

 

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seven days ahead of when the Advisor’s client account(s) purchases the same Covered Security, or the sale of a Covered Security any time within seven days ahead of when the Advisor’s client account(s) sells the same Covered Security. An example of trading opposite the Advisor’s client account(s) would include the sale of a Covered Security any time within seven days after the Advisor’s client account(s) purchases the same Covered Security or the purchase of a Covered Security any time within seven days after the Advisor’s client account(s) sells the same Covered Security. Proprietary, Access Persons’, and discretionary accounts will be monitored for front-running.

 

  4.4.

Compliance with the Code of Ethics

Each Access Person will receive a copy of the Code and any subsequent material amendments to the Code, and each Access Person must acknowledge receipt of the Code in writing not less frequently than on an annual basis, and generally on a quarterly basis. Each Access Person is required to certify that he/she (i) has read and understands the Code, (ii) is aware that he/she is subject to the provisions of the Code, (iii) has complied with the Code at all times during the previous calendar year, and (iv) has, during the previous calendar year, reported all holdings and transactions that he/she is required to report pursuant to the Code. The acknowledgement of receipt and certification may be made electronically through a manner specified by the GPIM Compliance Department. A current copy of the Code is available via OneGuggenheim.

 

5.

Reporting of Personal Trading

It is the sole responsibility of the Access Person to ensure that all reporting requirements are completed by the timeframes set forth by the Code. This may mean that the Access Person may have to enter information manually, provide statements or follow up with his/her broker-dealer or bank.

 

  5.1.

Which Investment Accounts Do Access Persons Need to Report?

Generally, any account which is in the name of the Access Person and members of his/her Immediate Family3, which can, even if the account does not currently, hold Covered Securities (as defined in Section 5.3.1 below) will need to be reported.

 

  5.1.1.

Report any of the following Investment Accounts:

 

  a.

The Access Person has Beneficial Ownership4 over an Investment Account.

 

 

3

Immediate Family includes, but is not limited to, a spouse, child, grandchild, stepchild, parent, grandparent, sibling, mother or father-in-law, son or daughter-in-law, or brother or sister-in-law, and adoptive relationships, living in the same household, or otherwise dependent on the Access Person. Access Persons may rebut this presumption if they are able to provide the Advisor with satisfactory assurances that they have no material interest in the account and exercise no control over investment decisions made regarding the account. Access Persons should consult with Central Compliance for guidance regarding this process.

4 

A person has Beneficial Ownership if he or she, directly or indirectly through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary (financial) interest in a (i) security or (ii) accounts which can hold securities, including but not limited to: individual, joint, partnership, custodial, trust, IRA, UGMA and KEOGH accounts. The determination of Beneficial Ownership is the responsibility of each Access Person: it is a fact-based decision.

 

 

 

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  b.

Any Investment Account with a broker-dealer or bank over which the Access Person has investment decision-making authority (including accounts that the Access Person is named on, such as being a guardian, executor or trustee, as well as accounts that Access Person is not named on such as an account owned by another person but for which the Access Person has been granted trading authority).

 

  c.

Any Investment Account with a broker-dealer or bank established by a partnership, corporation, or other entity in which the Access Person has a direct or indirect interest through any formal or informal understanding or agreement.

 

  d.

Any college savings account in which the Access Person has investment discretion and where the account has the ability to invest in Covered Securities.

 

  e.

Any account in which the Access Person’s Immediate Family is the owner. Access Persons are presumed to have investment decision-making authority for, and therefore should report, any Investment Account of a member of their Immediate Family if they live in the same household.

 

  f.

Any 401(k) accounts from a previous employer which can, or offer the ability to, hold Covered Securities.

 

  g.

Any other account that the CCO deems appropriate in light of the Access Person’s interest or involvement.

All Investment Accounts of new Access Persons and any Investment Accounts of current Access Persons must be maintained with brokerage firms designated and approved by Central Compliance.5 The CCO or his designee may grant exceptions in writing to this policy on a limited basis. However, in general, personal trading in such accounts will be prohibited. Further, Access Person will be responsible for ensuring that the account statements and trade confirmations for Investment Accounts held away from designated brokerage firms are received by Central Compliance within 20 days after each quarter-end and reflect current account information as of the respective quarter-end.

Existing Investment Accounts of new Access Persons which are not held at the permitted broker-dealers must be transferred within 90 calendar days from the date the Access Person is so designated; the failure to transfer within this time will be considered a violation of the Code. Any request to extend the 90 day transfer deadline must be accompanied by a written explanation by the current broker-dealer as to the reason for delay. Central Compliance may grant specific exceptions in writing.

 

 

5 

The list of designated Broker Dealers is available on OneGuggenheim at: http://oneguggenheim/Compliance/Pages/Designated-Broker-Dealers.aspx?type=GPIM?Source=http://oneguggenheim/compliance/Pages/default.aspx

 

 

 

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  5.1.2.

Independently managed/third-party discretionary account reporting:

 

  a.

Access Persons must disclose independently managed/third-party discretionary accounts, i.e., where the person has “no direct or indirect influence or control”.

 

  b.

Access Persons are required to obtain a signed copy of the Managed Account Letter (provided by Central Compliance) from their third-party investment advisor confirming that the advisor has authority to effect transactions on behalf of the account without obtaining prior consent of the Access Person and that the Access Person does not direct trades in the account. Access Persons are required to annually renew their Managed Account Letters confirming third-party discretion.

 

  c.

Access Persons should immediately notify Central Compliance in writing if there are any changes in control over the account or if there are any changes to the relationship between the trustee or third-party investment advisor and the Access Person (i.e., independent professional or friend or relative, unaffiliated versus affiliated firm). Please note that an immediate family member with discretion over a covered account is not considered a third-party advisor.

 

  d.

Trades in independently managed/third-party discretionary accounts, including trades in Covered Securities, are not subject to the pre-clearance requirements and trading restrictions of the Code.

 

  e.

Certain Access Persons (as determined and communicated by Central Compliance) are required to maintain independently managed/third-party discretionary accounts with brokerage firms designated and approved by Central Compliance.

 

  5.1.3.

New Investment Accounts

Prior to opening a new Investment Account, Access Persons are required to submit a Personal Account Pre-Clearance Form through the Compliance Platform and obtain written approval to establish the Investment Account from Central Compliance. Upon opening a reportable Investment Account or obtaining an interest in an Investment Account that requires reporting, the account number must be reported within 5 calendar days of funding the Investment Account via the Compliance Platform or as otherwise permitted by Central Compliance.

 

  5.2.

Required Initial Holdings Reports and Certifications

Information that is required when you initially become subject to the Advisor’s Code:

 

  a.

Access Persons must report all of their Investment Accounts. (See Section 5.1.1 for more information.)

 

 

 

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  b.

The report must include copies of statements which include the name of the broker/dealer or bank, title on the account, security names (and as applicable the exchange ticker symbol or CUSIP number), and the number of shares and principal amount of all holdings.

 

  i.

If the Access Person’s brokerage firm provides automatic feeds to the Compliance Platform, the Advisor will obtain account information electronically, after the Access Person has completed the appropriate authorizations as required by the brokerage firm.

 

  c.

All required account information must be reported within 10 calendar days from the date on which the Access Person becomes an Employee of the Advisor and is so designated as an Access Person, and the information must be current as of a date no more than 45 calendar days prior to the date the person becomes an Access Person.

 

  d.

Access Persons must complete a form certifying receipt and acknowledgement of the Code.

 

  5.3.

Required Quarterly Transaction Reports

 

  5.3.1.

Information required on a quarterly basis:

Access Persons must report all their quarterly transactions in Covered Securities in which they have a direct or indirect beneficial ownership, within at least 30 calendar days after each quarter end. The report must include transaction details consistent with regulatory requirements, including: (i) the date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each reportable Covered Security involved; (ii) the nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); (iii) the price of the Covered Security at which the transaction was effected; (iv) the name of the broker, dealer or bank with or through which the transaction was effected; and (v) the date the Access Person submits the report.

Covered Securities” for purposes of the Code, are any financial instrument related to a security, including:

 

   

Equities / Stocks

 

   

Corporate, U.S. (Government) Agency and Municipal Bonds and Notes

 

   

High-Quality Short-term Bonds (maturity at issuance of less than 366 days)

 

   

Exchange Traded Funds (ETFs)6

 

 

6 

See Section 6.2 Trades Not Requiring Pre-Clearance, for an exception from pre-clearance for certain broad-based ETFs.

 

 

 

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Options7 and Futures on any Covered Security, ETF or on any group or (broad-based) index of securities (e.g., put, call or straddle)

 

   

Futures on U.S. Government obligations, Currencies and Commodities8

 

   

Private Investments (as defined in Section 6.1 below). Please note that a Private Investment and Loan Pre-Clearance Form (available via OneGuggenheim) must be completed prior to any new private investment.

 

   

Closed-end Mutual Funds

 

   

Open-end Mutual Funds managed, advised or sub-advised by the Advisor or an affiliate

 

   

Unit Investment Trusts (UIT)

 

   

Foreign Unit Trust (i.e., UCITs) and Foreign Mutual Fund

 

   

Indirect investments in cryptocurrencies through products deemed a “security” under applicable law (e.g., cryptocurrency-related entities deriving a substantial amount of revenue therefrom) or private investments, ETFs and Investment Trusts that invest directly and primarily in cryptocurrencies.9 Note: The regulatory landscape around cryptocurrencies and related products is evolving and GPIM’s policy towards such products is subject to change depending on emerging regulatory requirements and firm and client activity. Certain cryptocurrencies may be restricted and require pre-clearance and reporting in the future.

 

   

Miscellaneous: Treasury Stock; Debentures; Evidence of Indebtedness; Investment Contracts; Voting Trust Certificates; Certificates of Deposit for a Security; Limited Partnerships; Certificates of Interest or Participation in any Profit-Sharing Agreement; Collateral RIC-Certificates; Fractional Undivided Interests in Oil, Gas or other Mineral Rights; Pre-Organizational Certificates or Subscriptions; or Transferable Shares.

 

   

Any other instrument that is considered a “security” under the applicable securities laws.

The term “Covered Securities” does not include obligations/debt of the U.S. Government, bank loans, bankers’ acceptances, bank certificates of deposit, commercial paper, repurchase agreements, money-market funds, shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, none of which are reportable funds, or open-end mutual funds which the Advisor or its affiliates, as applicable, do not manage, advise or sub-advise.

 

 

7 

See Appendix B for pre-clearance requirements applicable to certain option trading strategies and transaction legs.

8 

See Section 6.3 Prohibited Transactions for permitted categories of trading in certain futures on currencies and commodities.

9 

For direct investments in cryptocurrencies, see Section 6.2 Trades Not Requiring Pre-Clearance. Private Investments that invest directly and primarily in cryptocurrencies should be pre-cleared in accordance with Section 6.1.2 Trades Requiring Pre-Clearance. For any questions on whether an investment is an indirect security-related investment in cryptocurrencies, please contact Central Compliance.

 

 

 

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Note: Access Persons should be aware that investments in Guggenheim Funds through its Employee Investment Program are reportable as Covered Securities. From time to time, the Compliance Platform may not receive all duplicate statements from brokers or may not receive them on a timely basis. In those cases, Access Persons will be notified by Central Compliance and must provide copies of the statements to Central Compliance who will forward the information to the Compliance Platform. If the brokerage firm does not provide automatic feeds to the Compliance Platform, Access Person will be responsible for providing duplicate statements for such Investment Accounts to Central Compliance within 20 days after each quarter-end and reflect current account information as of the respective quarter-end. The CCO or designee may provide exceptions to this policy on a limited basis.

 

  5.4.

Annual Holdings Reports and Certifications

 

  5.4.1.

Information required on an annual basis:

 

   

Access Persons must provide a list of all Covered Securities in which they or their Immediate Family have a direct or indirect interest, including those not held in an account at a broker-dealer or bank. The list must include the title, number of shares and principal amount of each Covered Security. Access Persons must report the account number, account name and financial institution for each Investment Account with a broker-dealer or bank for which they are required to report.

 

   

Access Persons must report all accounts and holdings within 30 calendar days after each year end via the Compliance Platform, or as otherwise permitted by Central Compliance, and the information must be current as of a date no more than 45 calendar days prior to the date the report is submitted.

 

   

Access Persons must also certify annually that they have complied with the requirements and have disclosed all holdings required to be disclosed pursuant to the requirements of the Code. In addition, Access Persons must respond to personal disciplinary history questions.

 

6.

Pre-clearance for Personal Trading

All Access Persons must pre-clear all trades in their Investment Accounts (except as provided below) through the Compliance Platform prior to execution. Prior to participating in any Private Investments (as defined below), all Access Persons must pre-clear (i.e., receive approval for) the proposed transactions through Central Compliance. This is necessary in order to verify that there is no conflict between the desired trade and the Advisor’s current activities or the interests of the

 

 

 

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Advisor and its clients. For the avoidance of doubt, Access Persons must also pre-clear any trades in Investment Accounts and Private Investments in the name of or on behalf of members of their Immediate Family (see footnote 3).

Approvals to trade in an Investment Account are generally only good on the day they are sought. If an Access Person receives approval to trade a security and does not execute the trade on the day the approval is received, the trade will need to be pre-cleared again if the Access Person still wants to execute the trade.

If an Access Person is in possession of material non-public information about any security, the Access Person must not trade on it, in accordance with GPIM’s Insider Trading Policy (see the Manual for more information), despite pre-clearing the trade and receiving approval.

 

  6.1.

Trades Requiring Pre-Clearance

 

  1.

Covered Securities: Unless excluded below, Access Persons must pre-clear all trades in Covered Securities through the Compliance Platform, which checks the trade against the Guggenheim Investments Restricted List and any other applicable rules and guidelines. (See Section 5.3.1 for a list of Covered Securities and Appendix A for reference guide on pre-clearance and reporting requirements for Covered Securities.)10

 

  2.

Private Investments: Private Investments include, but are not limited to investments in: hedge funds, private equity funds, venture capital funds, other private fund vehicles (including Investment Trusts that invest directly and primarily in cryptocurrencies), privately-held companies, investments in commercial properties or residential properties (excluding primary residence) where income is earned on the property (e.g., a secondary residence that is used as rental property or listed as vacation rental on Airbnb) and private placement offerings of digital assets (e.g., agreements for future digital assets). Private Investments also include: (i) loans to or from such entities, and any other entities formed for the purpose of engaging in business activity; (ii) loans to or from individuals who are not Immediate Family of the Access Person; and (iii) loans to or from individuals who are Immediate Family of the Access Person for the purpose of engaging in business activity. Loans to or from Immediate Family of the Access Person that are entirely of a personal nature and loans that are covered within the Standing Exceptions per Section 6.3 in the Manual (Personal Loans) do not need to be pre-cleared.

Access Persons should contact Central Compliance with any questions as to which loans need to be pre-cleared.11 New Access Persons must disclose all of their existing

 

 

10 

Certain Covered Securities may need to be pre-cleared in accordance with requirements for pre-clearance of private investments (see below in Section 6.1 Trades Requiring Pre-Clearance) – i.e., by completing the Private Investment and Loan Pre-Clearance Form.

11 

For the avoidance of doubt, certain personal loans remain prohibited as more fully described in Section 6.3 Personal Loans in the Manual, and any financing for Private Investments, including properties and loans must be consistent with this policy.

 

 

 

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Private Investments, as well as those of their Immediate Family members, within 10 days of becoming an Access Person. The Central Compliance Employee Activities Group will send an email to all new Access Persons with the Private Investment Disclosure Form, which they must complete. Existing Access Persons are required to disclose existing Private Investments that were entered into prior to policy changes and seek prior written approval to invest in any new Private Investments on their own behalf, and on behalf of their Immediate Family members, and must complete the Private Investment and Loan Pre-Clearance Form (available via OneGuggenheim) and provide information about the investment to assist Central Compliance with the review of the request.

The Guggenheim Capital Conflicts Review Committee (“CRC”) may also review Private Investment requests for approval, as necessary. Approval by the CRC is required in the event that it is determined that a proposed or existing Private Investment involves one or more potential or actual significant conflicts of interest.

 

  6.2.

Trades Not Requiring Pre-Clearance

 

  1.

Government Securities/Certain Other Debt Instruments: Trades in any direct obligations of the U.S. Government (including futures on U.S. Government obligations), bankers’ acceptances, bank certificates of deposit, commercial paper and repurchase agreements are not required to be pre-cleared.

 

  2.

Money Market Funds: Trades in any investment company or fund that is a money market fund are not required to be pre-cleared.

 

  3.

Open-End Mutual Funds: Trades in open-end mutual funds that are advised or sub-advised by the Advisor or affiliates are not required to be pre-cleared.

 

  4.

Broad-based Exchange Traded Funds (“ETFs”): A list of these ETFs is available on the GPIM Compliance page on OneGuggenheim and available here:

 

  5.

Direct Investments in Cryptocurrencies12: Cryptocurrencies (e.g. digital assets such as bitcoin (BTC), litecoin (LTC) and ethereum (ETH)) are considered commodities and not securities, under current regulatory guidance. Therefore, direct investments in cryptocurrencies are currently outside the scope of the Code and do not require pre-clearance or reporting. Indirect investments in cryptocurrencies through investment entities or products deemed a security, are Covered Securities requiring pre-clearance under the Code (See Section 5.3.1).

Note: The regulatory landscape around cryptocurrencies and related products is evolving and GPIM’s policy towards such products is subject to change depending on emerging regulatory requirements and firm and client activity. Certain cryptocurrencies may be restricted and require pre-clearance and reporting in the future.

 

 

12 

Cryptocurrency generally means any virtual currency (e.g., bitcoin, litecoin, ethereum, etc.) or digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value that does not have indicia of being a security under the federal securities laws.

 

 

 

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  6.

No Knowledge: Securities transactions where no knowledge of the transaction exists before it is completed are not required to be pre-cleared. For example, a transaction effected by a trustee of a blind trust or discretionary trades involving an investment partnership, when the Access Person is neither consulted nor advised of the trade before it is executed, are not required to be pre-cleared.

 

  7.

Certain Corporate Actions: Any acquisition of securities through stock dividends, automatic dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs, exercise of rights, tender offer transactions or other similar corporate reorganizations or distributions generally applicable to all holders of the same class of securities are not required to be pre-cleared.

 

  8.

Non-volitional transactions: Any transaction which is non-volitional (i.e., the Access Person did not have any direct influence or control), such as acquisitions in automatic investment and stock purchase plans, automatic dividend reinvestments or sales from a margin account due to a bona fide margin call, or acquisition by gift or inheritance are not required to be pre-cleared.

 

  9.

Miscellaneous: Any transaction in any other securities as the CCO or Central Compliance may designate.

 

  6.3.

Prohibited Transactions

 

  1.

Investment Clubs: Participation in Investment Clubs is prohibited. Generally, an Investment Club is a group of people who pool their money to make investments. Usually, Investment Clubs are organized as partnerships and after members study different investments, the group decides to buy or sell based on a majority vote of the members. If you have any questions regarding whether an arrangement is an Investment Club, please contact Central Compliance.

 

  2.

Initial Public Offerings (“IPOs”): Trades in IPOs are prohibited. Access Persons are prohibited from acquiring any securities offered in connection with an IPO. For the avoidance of doubt, the prohibition on IPOs also extends to initial issuances of securities issued as digital assets (sometimes referred to as “Initial Coin Offerings” or “ICOs”13). You should contact Central Compliance is you are not certain whether a particular digital asset is a security.

 

  3.

Commodity Interests: Trading in Commodity Interests and related Futures as well as futures and options on virtual currencies, are generally prohibited, except for the following types of futures: (i) Futures referencing broad-based securities indices (for

 

 

13 

The prohibition on trading ICOs and futures and options on virtual currencies extends to Immediate Family, as defined in Section 5.1.

 

 

 

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  example; S&P 500; NASDAQ 1000; and Russell 2000); (ii) Futures referencing major currencies (for example: Euro; Yen; Australian Dollar; and British Pound); (iii) Futures referencing the following physical commodities: Gold; Silver; Oil; and Natural Gas; and (iv) Futures referencing U.S. Government debt obligations (for example: 30 year Treasury bond; 10/5 year Treasury Notes; and long-term Treasury Bonds).

Access Persons should consult with Central Compliance with regard to whether a particular instrument is a commodity interest. Senior management, together with the CCO, may grant exceptions to this prohibition on a case-by-case basis and such exceptions will be conditioned on compliance with certain requirements.

 

  4.

Blackout Period: Access Persons are prohibited from purchasing or selling, directly or indirectly, any Covered Security in which you had (or by reason of such transaction acquire) any beneficial ownership, at any time within seven (7) calendar days before or after the time that the same or related Covered Security is purchased or sold in a GPIM client account.

Exception to Blackout Period

The blackout period does not apply to trading in a Covered Security meeting the following criteria:

 

   

the market value of the proposed transaction is less than $25,000;

 

   

the 30-day rolling average trading volume is over 1 million shares; and

 

   

Guggenheim Investments’ trade activity is less than 5% of the security’s 7-day rolling average volume.

The exception to the blackout period does not apply to the purchase or sale of options, transactions in a Covered Security listed on the Guggenheim Investments Restricted List, and any derivatives and futures.

Note: Access Persons should request pre-clearance of the proposed transaction in the Compliance Platform, which will calculate whether the transaction in the Covered Security meets the exception criteria and approve or deny the trade accordingly.

 

7.

Trading Restrictions

 

  7.1.

For All Trading

In addition to reporting and pre-clearance obligations, the Code also includes restrictions regarding the manner in which Covered Securities may be traded and held in any reportable Investment Accounts. (See Section 5.1.1 for more information.)

Regardless of whether a transaction is specifically prohibited in the Code, no person subject to the Code may engage in any personal securities transactions that (i) impact their ability to

 

 

 

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carry out their assigned duties or (ii) increase the possibility of an actual or apparent conflict of interest. Access Persons are prohibited from the following under any circumstances:

 

  7.1.1.

Market Manipulation

Securities transactions may not be executed with the intent to raise, lower, or maintain the price of any security or to falsely create the appearance of trading activity.

 

  7.1.2.

Trading on Inside Information

Transactions (e.g., purchases or sales) of any security cannot be made if in possession of material non-public information about the security or the issuer of the security. (Please also refer to the Manual for the Insider Trading Policy.)

 

  7.1.3.

Front-running

No Access Person may trade ahead of a client transaction. (See Section 4.3 for more information.)

 

  7.2.

Excessive Trading in Reportable Accounts

Access Persons may not engage in excessive trading in their reportable Investment Accounts. Access Persons shall not make more than 60 Covered Securities trades in any reporting quarter. Transactions that do not require pre-clearance are not included in the total, and buy or sell transactions respectively, executed in the same security on the same day, are considered to be one transaction (i.e., an approved transaction executed in lots throughout the day is considered one transaction).

Option Strategies

The multiple transactions that make up an option trading strategy, such as option spreads, will be counted as individual transactions towards the excessive trading limit.

 

  7.3.

Holding Period – Thirty-Day Prohibition on Buying/Selling Covered Securities

Access Persons are prohibited from purchasing and then selling, or selling and then purchasing the same Covered Security within 30 calendar days of the initial transaction.

This prohibition does not apply to independently managed/third-party discretionary accounts or transactions that are not subject to pre-clearance requirements.

In situations where multiple transactions have occurred in the same covered security, the holding period will calculate from the date of the most recent purchase of the relevant covered security across all accounts, regardless of the holding period of prior transactions in the same covered security.

 

 

 

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  7.4.

Section 16 Reporting for Certain Closed-End Mutual Funds

Section 16 of the Securities Exchange Act of 1934 requires insiders (directors and officers or the issuer of the securities) to file (i) an initial report with the SEC disclosing status as an insider (reporting person) and beneficial ownership of securities at the time of attaining such status (Form 3); (ii) changes in beneficial ownership (Form 4); and (iii) annual statement of changes in beneficial ownership (Form 5).

Access Persons must promptly email:

GIIntermediaryDistributionSection16Filings@guggenheimpartners.com, but in no event more than 24 hours, after any transaction in CEFs advised or sub-advised by the Advisor or an affiliate. Such reporting is required to make mandatory regulatory filings within the required time period.

 

8.

Annual Review

The GPIM Compliance Department will review the adequacy of the policies and procedures contained in the Code and the effectiveness of its implementation on an annual basis. This review will consider any changes in the business activity of the Advisor and any changes to the Advisers Act or applicable regulations that might suggest a need to revise the policies and procedures contained herein. In addition, the GPIM Compliance Department will consider the need for interim reviews in response to significant compliance events, changes in business arrangements or regulatory developments.

 

9.

Retention of Records

GPIM will maintain records as set forth below in accordance with Rule 204-2(a)(12) and (13) under the Advisers Act and will make available for examination by the SEC.

 

   

A copy of the Code and any other Code which is, or at any time within the past five years has been, in effect, will be preserved in an easily accessible place;

 

   

A list of all Access Persons who are, or within the past five years have been, required to submit reports under the Code, will be preserved in an easily accessible place;

 

   

A copy of each report made by an Access Person under the Code will be preserved for a period of not less than five years from the end of the fiscal year in which it is made, the first two years in an easily accessible place;

 

   

A copy of each duplicate brokerage confirmation and each periodic statement provided under the Code will be preserved for a period of not less than five years from the end of the fiscal year in which it is made, the first two years in an easily accessible place.

 

   

A record of any Code violation and of any sanctions taken will be preserved in an easily accessible place for a period of not less than five years following the end of the fiscal year in which the violation occurred;

 

 

 

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A copy of all Acknowledgements of Receipt and Annual Certifications as required by the Code for each Access Person who is currently, or within the past five years was required to provide such Acknowledgement of Receipt or Annual Certification; and

 

   

GPIM will maintain a record of any decision, and the reasons supporting the decision, to approve the acquisition of a Private Investment, for at least five years after the end of the fiscal year in which the approval is granted.

Central Compliance will use best efforts to assure that all requests for pre-clearance, all personal securities transaction reports and all reports of securities holdings are treated as “Personal and Confidential.” However, such documents will be available for inspection by appropriate regulatory agencies, and by other parties within the Advisor and its affiliates as are necessary to evaluate compliance with, or sanctions under, the Code.

 

10.

Sanctions

The Code is designed to facilitate compliance with applicable laws and to reinforce the Advisor’s reputation for integrity in the conduct of their businesses. For violations of the Code, sanctions may be imposed as deemed appropriate by the GPIM Compliance Department with Central Compliance and as applicable in coordination with senior management. Escalation will depend on the severity and frequency of the infraction considering the facts and circumstances such as potential or actual harm or reputational risk to clients, prospects or the Advisor. A pattern of violations that individually do not violate the law, but which taken together demonstrate a pattern of lack of respect for the Code, may result in disciplinary action, including termination of employment.

Specifically, the Access Person shall be subject to remedial actions which may include, but are not limited to, any one or more of the following: (1) personal trading restriction; (2) verbal warning and/or letter of instruction; (3) written memo or letter of caution (including requirement for additional training) or other measures; (4) enhanced supervision or management plan; (5) decrease in compensation, performance measure or other penalty; (6) termination of employment; or (7) referral to civil or governmental authorities for possible civil or criminal prosecution. If the Access Person is normally eligible for a discretionary bonus, violations of the Code may also reduce or eliminate the discretionary portion of his/her bonus.

 

11.

Interpretations and Exceptions

The GPIM Compliance Department shall have the right to make final and binding interpretations of the Code and may grant, at its discretion, exceptions to certain of the prohibited transactions as described in the Code. Any memorandum created regarding the granting of any such exceptions will be retained. Each Access Person must obtain written approval from the GPIM Compliance Department before taking any action regarding such an exception.

 

 

 

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12.

Appendix A – Reference Guide for Covered Security Pre-Clearance and Reporting Requirements

 

Security / Financial Instrument

Type                                               

  

Pre-Clearance Required

  

Reporting (Quarterly

Transactions / Annual

Holdings)

Equities / Stocks    YES    YES
Corporate, U.S. (Government) Agency and Municipal Bonds and Notes    YES    YES
U.S. Government Obligations and Debt    NO    NO
High Quality Short-term Bonds (maturity at issuance of less than 366 days)    YES    YES
Broad-based Exchange-Traded Funds (ETFs) meeting certain criteria (see current list of applicable ETFs on OneGuggenheim – available here)    NO14    YES
All other Exchange Traded Funds (i.e., not broad-based ETFs meeting criteria)    YES    YES
Options15 and Futures on any Covered Security, ETF or on any group or (broad-based) index of securities    YES    YES
Futures on U.S. Government Obligations    NO    YES
Certain Futures on Currencies and Commodities16    YES    YES
Private Investments, certain Loans and secondary Commercial and Residential Property17    YES    YES
Unit Investment Trusts (UITs)    YES    YES
Unit Investment Trusts (UITs) investing exclusively in open-end mutual funds.    NO    NO

 

 

14 

See Section 6.2 Trades Not Requiring Pre-Clearance, for an exemption from pre-clearance for certain broad-based ETFs.

15 

See Appendix B for pre-clearance requirements applicable to various option trading strategies and transaction legs.

16 

See Section 6.3 Prohibited Transactions for permitted categories of trading in certain futures on currencies and commodities.

17 

See Section 6.1 Trades Requiring Pre-Clearance for further guidance.

 

 

 

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Foreign Unit Trusts (i.e. UCITS) or Foreign Mutual Fund    YES    YES
Closed-end Mutual Funds (regardless of whether advised or sub-advised by the Advisor or an affiliate)    YES    YES
Open-end Mutual Funds    NO    NO
Open-end Mutual Funds advised or sub- advised by the Advisor or an affiliate    NO    YES
Money Market Funds    NO    NO
Indirect investments in    YES    YES
Cryptocurrencies18      
Direct investments in Cryptocurrencies    NO    NO
Miscellaneous: Treasury Stock; Debenture; Evidence of Indebtedness; Investment Contract; Voting Trust Certificate; Certificate of Deposit for a Security; Limited Partnerships; Certificate of Interest or Participation in any Profit-Sharing Agreement; Collateral-RIC Certificate; Fractional Undivided interest in Oil, Gas or other Mineral Right; Pre-Organizational Certificate or Subscription; Transferable Shares    YES    YES
Bank Loans; Bankers’ Acceptances; Bank Certificates of Deposit; Commercial Paper; Repurchase Agreements    NO    NO

 

 

18 

Cryptocurrency-related entities deriving a substantial amount of revenue therefrom, or private investments, ETFs and investment trusts investing directly and primarily in cryptocurrencies.

 

 

 

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13.

Appendix B – Option Trading Pre-Clearance Requirements

 

Buying a Call Option

  

Pre-Clearance Required

Entering into Transaction   
Buy to Open    YES
Closing Transaction   
Sell to Close    YES
Let it Expire    NO
Exercise (i.e. buy underlying) and Hold    YES
Exercise (i.e. buy underlying) and Immediately Sell    YES for each trade (prohibited because of 30-day holding period)

 

Writing/Selling a Call Option

  

Pre-Clearance Required

Entering into Transaction   
Write/Sell Option    YES
Closing Transaction   
Expires    NO
Exercised (if own underlying)    NO
Exercised (if naked/do not own underlying – i.e. buy security to deliver)    YES
Buy same Call Option    YES

 

Buying a Put Option

  

Pre-Clearance Required

Entering into Transaction   
Buy to Open    YES
Closing Transaction   
Sell to Close    YES
Let it Expire    NO
Exercise (if own underlying - i.e. sell underlying)    YES
Exercise (if do not own underlying - i.e. buy underlying first)    YES for each trade (prohibited because of 30-day holding period)

 

Writing/Selling a Put Option

  

Pre-Clearance Required

Entering into Transaction   
Write/Sell Option    YES
Closing Transaction   
Expires    NO
Exercised (i.e. buy underlying)    NO

 

 

 

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