AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 2016
File No. 033-42484
File No. 811-06400
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 274 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 275 /X/
THE ADVISORS' INNER CIRCLE FUND
(Exact Name of Registrant as Specified in Charter)
101 Federal Street
Boston, Massachusetts 02110
(Address of Principal Executive Offices, Zip Code)
1-800-932-7781
(Registrant's Telephone Number)
Michael Beattie
c/o SEI Investments
One Freedom Valley Drive
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
Copy to:
Sean Graber, Esquire Dianne M. Descoteaux, Esquire
Morgan, Lewis & Bockius LLP c/o SEI Investments
1701 Market Street One Freedom Valley Drive
Philadelphia, Pennsylvania 19103 Oaks, Pennsylvania 19456
It is proposed that this filing become effective (check appropriate box)
--------------------------------------------------------------------------------
/ / Immediately upon filing pursuant to paragraph (b)
/ / On [date] pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / On [date] pursuant to paragraph (a) of Rule 485
--------------------------------------------------------------------------------
THE ADVISORS' INNER CIRCLE FUND
EDGEWOOD GROWTH FUND
PROSPECTUS
[DATE]
INSTITUTIONAL SHARES TICKER SYMBOL: EGFIX
RETAIL SHARES TICKER SYMBOL: EGFFX
SERVICE SHARES TICKER SYMBOL: [_____]
INVESTMENT ADVISER:
EDGEWOOD MANAGEMENT LLC
THE U.S. SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
ABOUT THIS PROSPECTUS
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN
EASILY REVIEW THIS IMPORTANT INFORMATION. FOR DETAILED INFORMATION ABOUT THE
FUND, PLEASE SEE:
EDGEWOOD GROWTH FUND -- INSTITUTIONAL SHARES .............................. XX
INVESTMENT OBJECTIVE ................................................. XX
FEES AND EXPENSES OF THE FUND ........................................ XX
PRINCIPAL INVESTMENT STRATEGIES ...................................... XX
PRINCIPAL RISKS OF INVESTING IN THE FUND ............................. XX
PERFORMANCE INFORMATION .............................................. XX
INVESTMENT ADVISER ................................................... XX
PORTFOLIO MANAGERS ................................................... XX
EDGEWOOD GROWTH FUND -- RETAIL SHARES ..................................... XX
INVESTMENT OBJECTIVE ................................................. XX
FEES AND EXPENSES OF THE FUND ........................................ XX
PRINCIPAL INVESTMENT STRATEGIES ...................................... XX
PRINCIPAL RISKS OF INVESTING IN THE FUND ............................. XX
PERFORMANCE INFORMATION .............................................. XX
INVESTMENT ADVISER ................................................... XX
PORTFOLIO MANAGERS ................................................... XX
EDGEWOOD GROWTH FUND -- SERVICE SHARES .................................... XX
INVESTMENT OBJECTIVE ................................................. XX
FEES AND EXPENSES OF THE FUND ........................................ XX
PRINCIPAL INVESTMENT STRATEGIES ...................................... XX
PRINCIPAL RISKS OF INVESTING IN THE FUND ............................. XX
PERFORMANCE INFORMATION .............................................. XX
INVESTMENT ADVISER ................................................... XX
PORTFOLIO MANAGERS ................................................... XX
SUMMARY INFORMATION ABOUT THE PURCHASE AND SALE OF FUND
SHARES, TAXES AND FINANCIAL INTERMEDIARY COMPENSATION ..................... XX
MORE INFORMATION ABOUT RISK ............................................... XX
MORE INFORMATION ABOUT FUND INVESTMENTS ................................... XX
INFORMATION ABOUT PORTFOLIO HOLDINGS ...................................... XX
MORE INFORMATION ABOUT THE INVESTMENT ADVISER ............................. XX
INVESTMENT TEAM ........................................................... XX
PURCHASING, SELLING AND EXCHANGING FUND SHARES ............................ XX
PAYMENTS TO FINANCIAL INTERMEDIARIES ...................................... XX
OTHER POLICIES ............................................................ XX
DIVIDENDS AND DISTRIBUTIONS ............................................... XX
TAXES ..................................................................... XX
FINANCIAL HIGHLIGHTS ...................................................... XX
HOW TO OBTAIN MORE INFORMATION ABOUT THE FUND ...................... BACK COVER
i
EDGEWOOD GROWTH FUND -- INSTITUTIONAL SHARES
INVESTMENT OBJECTIVE
The investment objective of the Edgewood Growth Fund (the "Fund") is to provide
long-term growth of capital.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
INSTITUTIONAL
SHARES
--------------------------------------------------------------------------------
Management Fees 1.00%
--------------------------------------------------------------------------------
Other Expenses [XX]%
-------
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses [XX]%
--------------------------------------------------------------------------------
Less Fee Waivers and/or Expense Reimbursements(1) ([XX])%
-------
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses After Fee Waivers [XX]%
and/or Expense Reimbursements
--------------------------------------------------------------------------------
(1) Edgewood Management LLC (the "Adviser") has contractually agreed to waive
fees and reimburse expenses to the extent necessary to keep Total Annual
Fund Operating Expenses (excluding interest, taxes, brokerage commissions,
acquired fund fees and expenses and non-routine expenses (collectively,
"excluded expenses")) from exceeding 1.00% of the average daily net assets
of the Fund's Institutional Shares until February 28, 2018 (the
"contractual expense limit"). In addition, if at any point Total Annual
Fund Operating Expenses (not including excluded expenses) are below the
contractual expense limit, the Adviser may receive from the Fund the
difference between the Total Annual Fund Operating Expenses (not including
excluded expenses) and the contractual expense limit to recover all or a
portion of its prior fee waivers or expense reimbursements made during the
preceding three year period during which this agreement (or any prior
agreement) was in place. This agreement may be terminated by the Board of
Trustees (the "Board") of The Advisors' Inner Circle Fund (the "Trust") or
by the Adviser, upon ninety (90) days' prior written notice, effective as
of the close of business on February 28, 2018, provided that, in the case
of termination by the Adviser, such action shall be authorized by
resolution of a majority of the Trustees who are not interested persons of
the Trust or by a vote of a majority of the outstanding voting securities
of the Trust.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses (including one year of capped expenses in each
period) remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
INSTITUTIONAL SHARES $[XX] $[XX] $[XX] $[XX]
1
PORTFOLIO TURNOVER
The Fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
total annual fund operating expenses or in the example, affect the Fund's
performance. During its most recent fiscal year, the Fund's portfolio turnover
rate was [XX]% of the average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
The Fund is non-diversified and primarily invests in a core group of 15-35
equity securities, including both common stocks and sponsored American
Depositary Receipts ("ADRs"). The Fund is flexibly managed, with the ability
to invest in equity securities of a smaller number of issuers and/or industry
sectors than diversified mutual funds. The Fund focuses on U.S. companies that
the Adviser believes are quality companies with stock that offer the potential
for future price appreciation.
In selecting investments for the Fund, the Adviser seeks to identify companies
possessing fundamentally strong market positions in growing industries,
exceptional earnings power, and consistency of earnings performance, with a
particular focus on growing companies experiencing superior rates of return
over varying economic cycles. Investment decisions are based upon a fundamental
analysis that emphasizes company-specific research. The goal of the process is
to invest in growth companies in both established and growing industries that
display the following characteristics: a record of consistent earnings power;
an earnings growth rate in excess of the S&P 500 Growth Index; a dominant
market position or proven strength; attractive fundamental financial valuation;
superior management; management/insider ownership; and an industry growth rate
in excess of the growth of gross domestic product ("GDP"). The Fund's
investments are expected to have a bias toward larger capitalization issuers
(those with market capitalizations in excess of $10 billion), but the Fund may
also invest in small-capitalization (between $100 million and $4 billion) and
medium-capitalization (between $4 billion and $10 billion) companies.
The Fund intends to buy and hold securities for the long-term and seeks to keep
moderate portfolio turnover. However, the Adviser may sell a security in
response to deterioration in a company's business prospects, performance or
financial strength, when the security's price is no longer justifiable or if
the security demonstrates earnings disappointments.
PRINCIPAL RISKS OF INVESTING IN THE FUND
As with all mutual funds, there is no guarantee that the Fund will achieve its
investment objective. You could lose money by investing in the Fund. A FUND
SHARE IS NOT A BANK DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FDIC OR
ANY OTHER GOVERNMENT AGENCY. The principal risk factors affecting shareholders'
investments in the Fund are set forth below.
EQUITY RISK -- Since it purchases equity securities, the Fund is subject to the
risk that stock prices will fall over short or extended periods of time.
Historically, the equity markets have moved in cycles, and the value of the
Fund's equity securities may fluctuate drastically from day-to-day. Individual
companies may report poor results or be negatively affected by industry and/or
economic trends and developments. The prices of securities issued by such
companies may suffer a decline in response. These factors contribute to price
volatility, which is the principal risk of investing in the Fund.
NON-DIVERSIFICATION RISK -- The Fund is non-diversified and its investment
strategy often results in a core group of stocks of companies that it believes
hold the most growth potential. As a result, poor
2
performance or adverse economic events affecting one or more of these companies
could have a greater impact on the Fund than it would on another mutual fund
with a broader range of investments.
SMALL- AND MEDIUM-CAPITALIZATION COMPANY RISK -- To the extent that the Fund
invests in small- and medium-capitalization companies, the Fund may be subject
to additional risk. The small- and mid-capitalization companies in which the
Fund may invest may be more vulnerable to adverse business or economic events
than larger, more established companies. In particular, investments in these
small- and mid-sized companies may pose additional risks, including liquidity
risk, because these companies tend to have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small- and mid-cap stocks may be more volatile than those of larger
companies. These securities may be traded over-the-counter or listed on an
exchange.
FOREIGN COMPANY RISK -- When the Fund invests in foreign securities, it will be
subject to risks not typically associated with domestic securities. Although
ADRs are an alternative to directly purchasing the underlying foreign
securities in their national markets and currencies, they are also subject to
many of the risks associated with investing directly in foreign securities.
Foreign investments can be riskier and more volatile than investments in the
United States. Adverse political and economic developments or changes in the
value of foreign currency can make it difficult for the Fund to sell its
securities and could reduce the value of your shares. Securities of foreign
companies may not be registered with the U.S. Securities and Exchange
Commission (the "SEC") and foreign companies are generally not subject to the
regulatory controls imposed on U.S. issuers and, as a consequence, there is
generally less publically available information about foreign securities than
is available about domestic securities. Income from foreign securities owned by
the Fund may be reduced by a withholding tax at the source, which tax would
reduce income received from the securities comprising the portfolio. Foreign
securities may also be more difficult to value than securities of U.S.
issuers.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund by showing changes in the Fund's
Institutional Shares' performance from year to year and by showing how the
Fund's Institutional Shares' average annual returns for 1, 5 and 10 years and
since the Fund's inception compare with those of a broad measure of market
performance. Of course, the Fund's past performance (before and after taxes)
does not necessarily indicate how the Fund will perform in the future. Updated
performance information is available on the Fund's website at
www.edgewoodfunds.com or by calling 1-800-791-4226.
2007 21.52%
2008 (39.14)%
2009 30.73%
2010 12.15%
2011 3.73%
2012 18.72%
2013 37.19%
2014 13.50%
2015 11.59%
2016 [XX]%
BEST QUARTER WORST QUARTER
18.65% (26.44)%
(09/30/2010) (12/31/2008)
3
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2016
This table compares the Fund's Institutional Shares' average annual total
returns for periods ended December 31, 2016 to those of appropriate broad based
indices.
After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns will depend on an investor's tax
situation and may differ from those shown. After-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts ("IRAs").
EDGEWOOD GROWTH FUND - 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
INSTITUTIONAL SHARES (2/28/2006)
---------------------------------------------------------------------------------------------------------------
FUND RETURN BEFORE TAXES [XX]% [XX]% [XX]% [XX]%
FUND RETURN AFTER TAXES ON DISTRIBUTIONS [XX]% [XX]% [XX]% [XX]%
FUND RETURN AFTER TAXES ON DISTRIBUTIONS AND [XX]% [XX]% [XX]% [XX]%
SALE OF FUND SHARES
S&P 500 GROWTH INDEX RETURN (REFLECTS NO [XX]% [XX]% [XX]% [XX]%
DEDUCTION FOR FEES, EXPENSES, OR TAXES)
S&P 500 INDEX RETURN (REFLECTS NO DEDUCTION FOR [XX]% [XX]% [XX]% [XX]%
FEES, EXPENSES, OR TAXES)
INVESTMENT ADVISER
Edgewood Management LLC
PORTFOLIO MANAGERS
Mr. Alan W. Breed, President and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Lawrence G. Creel, Partner and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Scott Edwardson, Managing Director, has managed the Fund since its
inception in 2006.
Mr. Alexander Farman-Farmaian, Vice Chairman and Member of the Board of
Managers, has managed the Fund since its inception in 2006.
Mr. Peter Jennison, Partner and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Kevin R. Seth, Partner and Member of the Board of Managers, has managed the
Fund since its inception in 2006.
Mr. Nicholas A. Stephens, CFA, Partner and Member of the Board of Managers, has
managed the Fund since its inception in 2006.
4
FOR IMPORTANT INFORMATION ABOUT THE PURCHASE AND SALE OF FUND SHARES, TAXES AND
FINANCIAL INTERMEDIARY COMPENSATION, PLEASE TURN TO "SUMMARY INFORMATION ABOUT
THE PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL INTERMEDIARY
COMPENSATION" ON PAGE [XX] OF THE PROSPECTUS.
5
EDGEWOOD GROWTH FUND -- RETAIL SHARES
INVESTMENT OBJECTIVE
The investment objective of the Edgewood Growth Fund (the "Fund") is to provide
long-term growth of capital.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
RETAIL SHARES
--------------------------------------------------------------------------------
Management Fees 1.00%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees 0.25%
--------------------------------------------------------------------------------
Other Expenses [XX]%
-------
--------------------------------------------------------------------------------
Shareholder Servicing Fees [XX]%
--------------------------------------------------------------------------------
Other Operating Expenses [XX]%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses [XX]%
--------------------------------------------------------------------------------
Less Fee Waivers and/or Expense Reimbursements(1) ([XX])%
-------
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses After Fee Waivers [XX]%
and/or Expense Reimbursements
--------------------------------------------------------------------------------
(1) Edgewood Management LLC (the "Adviser") has contractually agreed to waive
fees and reimburse expenses to the extent necessary to keep Total Annual
Fund Operating Expenses (excluding interest, taxes, brokerage commissions,
Distribution and/or Service (12b-1) Fees, Shareholder Servicing Fees,
acquired fund fees and expenses and non-routine expenses (collectively,
"excluded expenses")) from exceeding 1.00% of the average daily net assets
of the Fund's Retail Shares until February 28, 2018 (the "contractual
expense limit"). In addition, if at any point Total Annual Fund Operating
Expenses (not including excluded expenses) are below the contractual
expense limit, the Adviser may receive from the Fund the difference between
the Total Annual Fund Operating Expenses (not including excluded expenses)
and the contractual expense limit to recover all or a portion of its prior
fee waivers or expense reimbursements made during the preceding three year
period during which this agreement (or any prior agreement) was in place.
This agreement may be terminated by the Board of Trustees (the "Board") of
The Advisors' Inner Circle Fund (the "Trust") or by the Adviser, upon
ninety (90) days' prior written notice, effective as of the close of
business on February 28, 2018, provided that, in the case of termination by
the Adviser, such action shall be authorized by resolution of a majority of
the Trustees who are not interested persons of the Trust or by a vote of a
majority of the outstanding voting securities of the Trust.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses (including one year of capped expenses in each
period) remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
RETAIL SHARES $[XX] $[XX] $[XX] $[XX]
6
PORTFOLIO TURNOVER
The Fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
total annual fund operating expenses or in the example, affect the Fund's
performance. During its most recent fiscal year, the Fund's portfolio turnover
rate was [XX] % of the average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
The Fund is non-diversified and primarily invests in a core group of 15-35
equity securities, including both common stocks and sponsored American
Depositary Receipts ("ADRs"). The Fund is flexibly managed, with the ability
to invest in equity securities of a smaller number of issuers and/or industry
sectors than diversified mutual funds. The Fund focuses on U.S. companies that
the Adviser believes are quality companies with stock that offer the potential
for future price appreciation.
In selecting investments for the Fund, the Adviser seeks to identify companies
possessing fundamentally strong market positions in growing industries,
exceptional earnings power, and consistency of earnings performance, with a
particular focus on growing companies experiencing superior rates of return
over varying economic cycles. Investment decisions are based upon a fundamental
analysis that emphasizes company-specific research. The goal of the process is
to invest in growth companies in both established and growing industries that
display the following characteristics: a record of consistent earnings power;
an earnings growth rate in excess of the S&P 500 Growth Index; a dominant
market position or proven strength; attractive fundamental financial valuation;
superior management; management/insider ownership; and an industry growth rate
in excess of the growth of gross domestic product ("GDP"). The Fund's
investments are expected to have a bias toward larger capitalization issuers
(those with market capitalizations in excess of $10 billion), but the Fund may
also invest in small-capitalization (between $100 million and $4 billion) and
medium-capitalization (between $4 billion and $10 billion) companies.
The Fund intends to buy and hold securities for the long-term and seeks to keep
moderate portfolio turnover. However, the Adviser may sell a security in
response to deterioration in a company's business prospects, performance or
financial strength, when the security's price is no longer justifiable or if
the security demonstrates earnings disappointments.
PRINCIPAL RISKS OF INVESTING IN THE FUND
As with all mutual funds, there is no guarantee that the Fund will achieve its
investment objective. You could lose money by investing in the Fund. A FUND
SHARE IS NOT A BANK DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FDIC OR
ANY OTHER GOVERNMENT AGENCY. The principal risk factors affecting shareholders'
investments in the Fund are set forth below.
EQUITY RISK -- Since it purchases equity securities, the Fund is subject to the
risk that stock prices will fall over short or extended periods of time.
Historically, the equity markets have moved in cycles, and the
7
value of the Fund's equity securities may fluctuate drastically from
day-to-day. Individual companies may report poor results or be negatively
affected by industry and/or economic trends and developments. The prices of
securities issued by such companies may suffer a decline in response. These
factors contribute to price volatility, which is the principal risk of
investing in the Fund.
NON-DIVERSIFICATION RISK -- The Fund is non-diversified and its investment
strategy often results in a core group of stocks of companies that it believes
hold the most growth potential. As a result, poor performance or adverse
economic events affecting one or more of these companies could have a greater
impact on the Fund than it would on another mutual fund with a broader range of
investments.
SMALL- AND MEDIUM-CAPITALIZATION COMPANY RISK -- To the extent that the Fund
invests in small- and medium-capitalization companies, the Fund may be subject
to additional risk. The small- and mid-capitalization companies in which the
Fund may invest may be more vulnerable to adverse business or economic events
than larger, more established companies. In particular, investments in these
small- and mid-sized companies may pose additional risks, including liquidity
risk, because these companies tend to have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small- and mid-cap stocks may be more volatile than those of larger
companies. These securities may be traded over-the-counter or listed on an
exchange.
FOREIGN COMPANY RISK -- When the Fund invests in foreign securities, it will be
subject to risks not typically associated with domestic securities. Although
ADRs are an alternative to directly purchasing the underlying foreign
securities in their national markets and currencies, they are also subject to
many of the risks associated with investing directly in foreign securities.
Foreign investments can be riskier and more volatile than investments in the
United States. Adverse political and economic developments or changes in the
value of foreign currency can make it difficult for the Fund to sell its
securities and could reduce the value of your shares. Securities of foreign
companies may not be registered with the U.S. Securities and Exchange
Commission (the "SEC") and foreign companies are generally not subject to the
regulatory controls imposed on U.S. issuers and, as a consequence, there is
generally less publically available information about foreign securities than
is available about domestic securities. Income from foreign securities owned by
the Fund may be reduced by a withholding tax at the source, which tax would
reduce income received from the securities comprising the portfolio. Foreign
securities may also be more difficult to value than securities of U.S.
issuers.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund by showing changes in the Fund's Retail
Shares' performance from year to year and by showing how the Fund's Retail
Shares' average annual returns for 1, 5 and 10 years and since the Fund's
inception compare with those of a broad measure of market performance. Of
course, the Fund's past performance (before and after taxes) does not
necessarily indicate how the Fund will perform in the future. Updated
performance information is available on the Fund's website at
www.edgewoodfunds.com or by calling 1-800-791-4226.
2007 21.13%
2008 (39.90)%
2009 30.94%
2010 11.97%
2011 3.53%
2012 18.64%
2013 37.59%
2014 13.04%
2015 11.18%
2016 [XX]%
BEST QUARTER WORST QUARTER
18.97% (26.89)%
(09/30/2010) (12/31/2008)
8
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2016
This table compares the Fund's Retail Shares' average annual total returns for
periods ended December 31, 2016 to those of appropriate broad based indices.
After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns will depend on an investor's tax
situation and may differ from those shown. After-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts ("IRAs").
EDGEWOOD GROWTH FUND - RETAIL 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
SHARES (2/28/2006)
----------------------------------------------------------------------------------------------------------------
FUND RETURN BEFORE TAXES [XX]% [XX]% [XX]% [XX]%
FUND RETURN AFTER TAXES ON DISTRIBUTIONS [XX]% [XX]% [XX]% [XX]%
FUND RETURN AFTER TAXES ON DISTRIBUTIONS AND [XX]% [XX]% [XX]% [XX]%
SALE OF FUND SHARES
S&P 500 GROWTH INDEX RETURN (REFLECTS NO [XX]% [XX]% [XX]% [XX]%
DEDUCTION FOR FEES, EXPENSES, OR TAXES)
S&P 500 INDEX RETURN (REFLECTS NO DEDUCTION FOR [XX]% [XX]% [XX]% [XX]%
FEES, EXPENSES, OR TAXES)
INVESTMENT ADVISER
Edgewood Management LLC
PORTFOLIO MANAGERS
Mr. Alan W. Breed, President and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Lawrence G. Creel, Partner and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Scott Edwardson, Managing Director, has managed the Fund since its
inception in 2006.
Mr. Alexander Farman-Farmaian, Vice Chairman and Member of the Board of
Managers, has managed the Fund since its inception in 2006.
Mr. Peter Jennison, Partner and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Kevin R. Seth, Partner and Member of the Board of Managers, has managed the
Fund since its inception in 2006.
9
Mr. Nicholas A. Stephens, CFA, Partner and Member of the Board of Managers, has
managed the Fund since its inception in 2006.
FOR IMPORTANT INFORMATION ABOUT THE PURCHASE AND SALE OF FUND SHARES, TAXES AND
FINANCIAL INTERMEDIARY COMPENSATION, PLEASE TURN TO "SUMMARY INFORMATION ABOUT
THE PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL INTERMEDIARY
COMPENSATION" ON PAGE [XX] OF THE PROSPECTUS.
10
EDGEWOOD GROWTH FUND -- SERVICE SHARES
INVESTMENT OBJECTIVE
The investment objective of the Edgewood Growth Fund (the "Fund") is to provide
long-term growth of capital.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
SERVICE SHARES
--------------------------------------------------------------------------------
Management Fees 1.00%
--------------------------------------------------------------------------------
Other Expenses [XX]%
-------
--------------------------------------------------------------------------------
Shareholder Servicing Fees [XX]%
--------------------------------------------------------------------------------
Other Operating Expenses [XX]%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses [XX]%
--------------------------------------------------------------------------------
Less Fee Waivers and/or Expense Reimbursements(1) ([XX])%
-------
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses After Fee Waivers [XX]%
and/or Expense Reimbursements
--------------------------------------------------------------------------------
(1) Edgewood Management LLC (the "Adviser") has contractually agreed to waive
fees and reimburse expenses to the extent necessary to keep Total Annual
Fund Operating Expenses (excluding interest, taxes, brokerage commissions,
Shareholder Servicing Fees, acquired fund fees and expenses and non-routine
expenses (collectively, "excluded expenses")) from exceeding 1.00% of the
average daily net assets of the Fund's Service Shares until February 28,
2018 (the "contractual expense limit"). In addition, if at any point Total
Annual Fund Operating Expenses (not including excluded expenses) are below
the contractual expense limit, the Adviser may receive from the Fund the
difference between the Total Annual Fund Operating Expenses (not including
excluded expenses) and the contractual expense limit to recover all or a
portion of its prior fee waivers or expense reimbursements made during the
preceding three year period during which this agreement (or any prior
agreement) was in place. This agreement may be terminated by the Board of
Trustees (the "Board") of The Advisors' Inner Circle Fund (the "Trust") or
by the Adviser, upon ninety (90) days' prior written notice, effective as
of the close of business on February 28, 2018, provided that, in the case
of termination by the Adviser, such action shall be authorized by
resolution of a majority of the Trustees who are not interested persons of
the Trust or by a vote of a majority of the outstanding voting securities
of the Trust.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses (including one year of capped expenses in each
period) remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SERVICE $[XX] $[XX] $[XX] $[XX]
SHARES
11
PORTFOLIO TURNOVER
The Fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
total annual fund operating expenses or in the example, affect the Fund's
performance. During its most recent fiscal year, the Fund's portfolio turnover
rate was [XX]% of the average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
The Fund is non-diversified and primarily invests in a core group of 15-35
equity securities, including both common stocks and sponsored American
Depositary Receipts ("ADRs"). The Fund is flexibly managed, with the ability
to invest in equity securities of a smaller number of issuers and/or industry
sectors than diversified mutual funds. The Fund focuses on U.S. companies that
the Adviser believes are quality companies with stock that offer the potential
for future price appreciation.
In selecting investments for the Fund, the Adviser seeks to identify companies
possessing fundamentally strong market positions in growing industries,
exceptional earnings power, and consistency of earnings performance, with a
particular focus on growing companies experiencing superior rates of return
over varying economic cycles. Investment decisions are based upon a fundamental
analysis that emphasizes company-specific research. The goal of the process is
to invest in growth companies in both established and growing industries that
display the following characteristics: a record of consistent earnings power;
an earnings growth rate in excess of the S&P 500 Growth Index; a dominant
market position or proven strength; attractive fundamental financial valuation;
superior management; management/insider ownership; and an industry growth rate
in excess of the growth of gross domestic product ("GDP"). The Fund's
investments are expected to have a bias toward larger capitalization issuers
(those with market capitalizations in excess of $10 billion), but the Fund may
also invest in small-capitalization (between $100 million and $4 billion) and
medium-capitalization (between $4 billion and $10 billion) companies.
The Fund intends to buy and hold securities for the long-term and seeks to keep
moderate portfolio turnover. However, the Adviser may sell a security in
response to deterioration in a company's business prospects, performance or
financial strength, when the security's price is no longer justifiable or if
the security demonstrates earnings disappointments.
PRINCIPAL RISKS OF INVESTING IN THE FUND
As with all mutual funds, there is no guarantee that the Fund will achieve its
investment objective. You could lose money by investing in the Fund. A FUND
SHARE IS NOT A BANK DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FDIC OR
ANY OTHER GOVERNMENT AGENCY. The principal risk factors affecting shareholders'
investments in the Fund are set forth below.
EQUITY RISK -- Since it purchases equity securities, the Fund is subject to the
risk that stock prices will fall over short or extended periods of time.
Historically, the equity markets have moved in cycles, and the value of the
Fund's equity securities may fluctuate drastically from day-to-day. Individual
companies may report poor results or be negatively affected by industry and/or
economic trends and developments. The prices of securities issued by such
companies may suffer a decline in response. These factors contribute to price
volatility, which is the principal risk of investing in the Fund.
12
NON-DIVERSIFICATION RISK -- The Fund is non-diversified and its investment
strategy often results in a core group of stocks of companies that it believes
hold the most growth potential. As a result, poor performance or adverse
economic events affecting one or more of these companies could have a greater
impact on the Fund than it would on another mutual fund with a broader range of
investments.
SMALL- AND MEDIUM-CAPITALIZATION COMPANY RISK -- To the extent that the Fund
invests in small- and medium-capitalization companies, the Fund may be subject
to additional risk. The small- and mid-capitalization companies in which the
Fund may invest may be more vulnerable to adverse business or economic events
than larger, more established companies. In particular, investments in these
small- and mid-sized companies may pose additional risks, including liquidity
risk, because these companies tend to have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small- and mid-cap stocks may be more volatile than those of larger
companies. These securities may be traded over-the-counter or listed on an
exchange.
FOREIGN COMPANY RISK -- When the Fund invests in foreign securities, it will be
subject to risks not typically associated with domestic securities. Although
ADRs are an alternative to directly purchasing the underlying foreign
securities in their national markets and currencies, they are also subject to
many of the risks associated with investing directly in foreign securities.
Foreign investments can be riskier and more volatile than investments in the
United States. Adverse political and economic developments or changes in the
value of foreign currency can make it difficult for the Fund to sell its
securities and could reduce the value of your shares. Securities of foreign
companies may not be registered with the U.S. Securities and Exchange
Commission (the "SEC") and foreign companies are generally not subject to the
regulatory controls imposed on U.S. issuers and, as a consequence, there is
generally less publically available information about foreign securities than
is available about domestic securities. Income from foreign securities owned by
the Fund may be reduced by a withholding tax at the source, which tax would
reduce income received from the securities comprising the portfolio. Foreign
securities may also be more difficult to value than securities of U.S.
issuers.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund by showing changes in the Fund's
performance from year to year and by showing how the Fund's average annual
returns for 1, 5 and 10 years and since the Fund's inception compare with those
of a broad measure of market performance.
The Fund's Service Shares had not commenced operations as of the date of this
prospectus, and, therefore, the Fund's Service Shares' performance information
is not presented. The performance information provided shows the returns of
the Fund's Retail Shares, which are also offered in this prospectus. The
Service Shares would have substantially similar performance as the Retail
Shares because the shares are invested in the same portfolio of securities and
the annual returns would differ only to the extent that the expenses of the
Service Shares are lower than the expenses of the Retail Shares.
Of course, the Fund's past performance (before and after taxes) does not
necessarily indicate how the Fund will perform in the future. Updated
performance information is available on the Fund's website at
www. edgewoodfunds.com or by calling 1-800-791-4226.
13
2007 21.13%
2008 (39.90)%
2009 30.94%
2010 11.97%
2011 3.53%
2012 18.64%
2013 37.59%
2014 13.04%
2015 11.18%
2016 [XX]%
BEST QUARTER WORST QUARTER
18.97% (26.89)%
(09/30/2010) (12/31/2008)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2016
This table compares the Fund's average annual total returns for periods ended
December 31, 2016 to those of appropriate broad based indices.
After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns will depend on an investor's tax
situation and may differ from those shown. After-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts ("IRAs").
EDGEWOOD GROWTH FUND - SERVICE 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
SHARES (2/28/2006)
------------------------------------------------------------------------------------------------------------------
FUND RETURN BEFORE TAXES [XX]% [XX]% [XX]% [XX]%
FUND RETURN AFTER TAXES ON DISTRIBUTIONS [XX]% [XX]% [XX]% [XX]%
FUND RETURN AFTER TAXES ON DISTRIBUTIONS AND [XX]% [XX]% [XX]% [XX]%
SALE OF FUND SHARES
S&P 500 GROWTH INDEX RETURN (REFLECTS NO [XX]% [XX]% [XX]% [XX]%
DEDUCTION FOR FEES, EXPENSES, OR TAXES)
S&P 500 INDEX RETURN (REFLECTS NO DEDUCTION FOR [XX]% [XX]% [XX]% [XX]%
FEES, EXPENSES, OR TAXES)
INVESTMENT ADVISER
Edgewood Management LLC
PORTFOLIO MANAGERS
Mr. Alan W. Breed, President and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Lawrence G. Creel, Partner and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Scott Edwardson, Managing Director, has managed the Fund since its
inception in 2006.
Mr. Alexander Farman-Farmaian, Vice Chairman and Member of the Board of
Managers, has managed the Fund since its inception in 2006.
14
Mr. Peter Jennison, Partner and Member of the Board of Managers, has managed
the Fund since its inception in 2006.
Mr. Kevin R. Seth, Partner and Member of the Board of Managers, has managed the
Fund since its inception in 2006.
Mr. Nicholas A. Stephens, CFA, Partner and Member of the Board of Managers, has
managed the Fund since its inception in 2006.
FOR IMPORTANT INFORMATION ABOUT THE PURCHASE AND SALE OF FUND SHARES, TAXES AND
FINANCIAL INTERMEDIARY COMPENSATION, PLEASE TURN TO "SUMMARY INFORMATION ABOUT
THE PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL INTERMEDIARY
COMPENSATION" ON PAGE [XX] OF THE PROSPECTUS.
15
SUMMARY INFORMATION ABOUT THE PURCHASE AND SALE OF FUND SHARES, TAXES AND
FINANCIAL INTERMEDIARY COMPENSATION
PURCHASE AND SALE OF FUND SHARES
To purchase shares of the Fund for the first time, you must invest at least
$100,000 for Institutional Shares (including for IRAs) and at least $3,000 for
Retail Shares and Service Shares ($2,000 for IRAs). The Fund may accept
investments of smaller amounts in its sole discretion. There are no minimums
for subsequent investments.
If you own your shares directly, you may redeem your shares on any day that the
New York Stock Exchange (the "NYSE") is open for business by contacting the
Fund directly by mail or telephone at 1-800-791-4226.
If you own your shares through an account with a broker or other institution,
contact that broker or institution to redeem your shares. Your broker or
institution may charge a fee for its services in addition to the fees charged
by the Fund.
TAX INFORMATION
The Fund intends to make distributions that may be taxed as ordinary income or
capital gains, unless you are investing through a tax-deferred arrangement,
such as a 401(k) plan or IRA, in which case your distribution will be taxed
when withdrawn from the tax-deferred account.
PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If you purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another
investment. Ask your salesperson or visit your financial intermediary's web
site for more information.
16
MORE INFORMATION ABOUT RISK
Investing in the Fund involves risk and there is no guarantee that the Fund
will achieve its goal. The Adviser's judgments about the markets, the economy
or companies may not anticipate actual market movements, economic conditions or
company performance, and these judgments may affect the return on your
investment. In fact, no matter how good of a job the Adviser does, you could
lose money on your investment in the Fund, just as you could with similar
investments.
The value of your investment in the Fund is based on the value of the
securities the Fund holds. These prices change daily due to economic and other
events that affect particular companies and other issuers. These price
movements, sometimes called volatility, may be greater or lesser depending on
the types of securities the Fund owns and the markets in which they trade. The
effect on the Fund of a change in the value of a single security will depend on
how widely the Fund diversifies its holdings. The Fund is non-diversified,
meaning that it may invest a large percentage of its assets in a single issuer
or a relatively small number of issuers.
EQUITY RISK - Equity securities include publicly and privately issued equity
securities, common and preferred stocks, warrants, rights to subscribe to
common stock and convertible securities, as well as instruments that attempt to
track the price movement of equity indices. Investments in equity securities
and equity derivatives in general are subject to market risks that may cause
their prices to fluctuate over time. The value of such securities convertible
into equity securities, such as warrants or convertible debt, is also affected
by prevailing interest rates, the credit quality of the issuer and any call
provision. Fluctuations in the value of equity securities in which a mutual
fund invests will cause the fund's net asset value ("NAV") to fluctuate. An
investment in a portfolio of equity securities may be more suitable for
long-term investors who can bear the risk of these share price fluctuations.
FOREIGN SECURITY RISK - Investments in securities of foreign companies or
governments (including direct investments as well as through ADRs) can be more
volatile than investments in U.S. companies or governments. Diplomatic,
political, or economic developments, including nationalization or
appropriation, could affect investments in foreign companies. Foreign
securities markets generally have less trading volume and less liquidity than
U.S. markets. In addition, the value of securities denominated in foreign
currencies, and of dividends from such securities, can change significantly
when foreign currencies strengthen or weaken relative to the U.S. dollar.
Financial statements of foreign issuers are governed by different accounting,
auditing, and financial reporting standards than the financial statements of
U.S. issuers and may be less transparent and uniform than in the United States.
Thus, there may be less information publicly available about foreign issuers
than about most U.S. issuers. Transaction costs are generally higher than those
in the United States and expenses for custodial arrangements of foreign
securities may be somewhat greater than typical expenses for custodial
arrangements of similar U.S. securities. Some foreign governments levy
withholding taxes against dividend and interest income. Although in some
countries a portion of these taxes are recoverable, the non-recovered portion
will reduce the income received from the securities comprising the portfolio.
MORE INFORMATION ABOUT FUND INVESTMENTS
The investment objective of the Fund is to provide long-term growth of capital.
This investment objective may be changed without shareholder approval.
The investments and strategies described in this prospectus are those that the
Fund uses under normal conditions. In the event that the Adviser determines
that securities meeting the Fund's investment objectives are not readily
available for purchase, the Fund may hold uninvested assets in cash or money
market instruments in order to maintain liquidity. In addition, during unusual
economic or market
17
conditions, or for temporary defensive purposes, the Fund may invest up to 100%
of its assets in money market instruments and other cash equivalents that would
not ordinarily be consistent with its investment objectives. If the Fund
invests in this manner, it may not achieve its investment objective. The Fund
will only make temporary defensive investments if the Adviser believes that the
risk of loss outweighs the opportunity for growth of total return.
This prospectus describes the Fund's principal investment strategies, and the
Fund will normally invest in the types of securities described in this
prospectus. In addition to the investments and strategies described in this
prospectus, the Fund also may invest to a lesser extent in other securities,
use other strategies and engage in other investment practices that are not part
of its principal investment strategy. These investments and strategies, as
well as those described in this prospectus, are described in detail in the
Fund's Statement of Additional Information ("SAI") (for information on how to
obtain a copy of the SAI see the back cover of this prospectus). Of course,
there is no guarantee that the Fund will achieve its investment goal.
INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund generally publishes a complete alphabetical list of its portfolio
holdings on a quarterly basis, forty-five (45) days after the end of the fiscal
quarter. The portfolio information described above can be found on the internet
at http://aicfundholdings.com/edgewood. The information will generally remain
available until replaced by new portfolio holdings information as described
above. The Adviser may exclude any portion of the Fund's portfolio holdings
from such publication when deemed to be in the best interest of the Fund.
Please consult the Fund's SAI for a full description of the policies and
procedures that govern disclosure of the Fund's portfolio holdings.
MORE INFORMATION ABOUT THE INVESTMENT ADVISER
Edgewood Management LLC is a New York limited liability company formed in 2006
and is the successor to Edgewood Management Company, founded in 1974. The
Adviser is located at 535 Madison Avenue, 15th Floor, New York, New York 10022.
As of December 31, 2016, the Adviser had approximately $[XX] billion in assets
under management.
The Adviser makes investment decisions for the Fund and continuously reviews,
supervises and administers the Fund's investment program. The Board supervises
the Adviser and establishes policies that the Adviser must follow in its
management activities. For its services, the Adviser is entitled to a fee,
which is calculated daily and paid monthly, at an annual rate of 1.00% based on
the average daily net assets of the Fund.
The Adviser has contractually agreed to waive fees and reimburse expenses to
the extent necessary to keep total annual Fund operating expenses (excluding
interest, taxes, brokerage commissions, distribution and/or service (12b-1)
fees, shareholder servicing fees, acquired fund fees and expenses and
non-routine expenses (collectively, "excluded expenses")) from exceeding 1.00%
of the average daily net assets of each of the Fund's share classes until
February 28, 2018 (the "contractual expense limit"). In addition, if at any
point Total Annual Fund Operating Expenses (not including excluded expenses)
are below the contractual expense limit, the Adviser may receive from the Fund
the difference between the Total Annual Fund Operating Expenses (not including
excluded expenses) and the contractual expense limit to recover all or a
portion of its prior fee waivers or expense reimbursements made during the
preceding three year period during which this agreement (or any prior
agreement) was in place. This agreement may be terminated by the Board or by
the Adviser, upon ninety (90) days' prior written notice, effective as of the
close of business on February 28, 2018, provided that, in the case of
termination by the Adviser, such
18
action shall be authorized by resolution of a majority of the Trustees who are
not interested persons of the Trust or by a vote of a majority of the
outstanding voting securities of the Trust.
For the fiscal year ended October 31, 2016, the Fund paid [XX]% of its average
daily net assets (after fee waivers) in advisory fees to the Adviser.
A discussion regarding the basis for the Board's approval of the Fund's
investment advisory agreement will be available in the Fund's Semi-Annual
Report to Shareholders dated April 30, 2017, which will cover the period from
November 1, 2016 to April 30, 2017.
INVESTMENT TEAM
The Edgewood Growth Fund is managed by a team of investment professionals. The
following members of the investment team are jointly and primarily responsible
for the day-to-day management of the Fund and have served on the portfolio
management team of the Fund since its inception in 2006.
Mr. Alan W. Breed joined the Adviser in 1994 as a Partner and has served as
President of the Adviser since June 1998, after serving as a Managing Director
from January 1994 to June 1998. Mr. Breed has more than 33 years of investment
experience.
Mr. Lawrence G. Creel has served as a Partner of the Adviser since February
1997. Mr. Creel has more than 31 years of investment experience.
Mr. Scott Edwardson has served as Managing Director of the Adviser since
December 2010, after serving as Senior Research Analyst of the Adviser from May
2000 to December 2010. Mr. Edwardson has more than 18 years of investment
experience.
Mr. Alexander Farman-Farmaian has served as Vice Chairman and Partner of the
Adviser since January 2006. Mr. Farman-Farmaian has more than 29 years of
investment experience.
Mr. Peter Jennison has served as a Partner of the Adviser since January 2006.
Mr. Jennison has more than 31 years of investment experience.
Mr. Kevin R. Seth has served as a Partner of the Adviser since February 1995.
Mr. Seth has more than 34 years of investment experience.
Mr. Nicholas A. Stephens, CFA, has served as a Partner of the Adviser since
January 1993. Mr. Stephens has more than 32 years of investment experience.
The Fund's SAI provides additional information about the portfolio managers'
compensation, other accounts managed, and ownership of Fund shares.
PURCHASING, SELLING AND EXCHANGING FUND SHARES
This section tells you how to purchase and sell (sometimes called "redeem")
Retail, Institutional and Service Shares of the Fund.
For information regarding the federal income tax consequences of transactions
in shares of the Fund, including information about cost basis reporting, see
"Taxes."
19
HOW TO CHOOSE A SHARE CLASS
The Fund offers three classes of shares to investors: Institutional Shares,
Retail Shares and Service Shares. Each share class has its own shareholder
eligibility criteria, investment minimums, cost structure and other features.
The following summarizes the primary features of Institutional Shares, Retail
Shares and Service Shares. Contact your financial intermediary or the Fund for
more information about the Fund's share classes and how to choose between
them.
------------------------------------------------------------------------------------------------------------------------------
CLASS NAME ELIGIBLE INVESTORS INVESTMENT MINIMUMS FEES
------------------------------------------------------------------------------------------------------------------------------
Institutional Primarily institutional investors Initial -- $100,000, including No 12b-1 Fee
Shares for IRAs
No shareholder
Subsequent -- None servicing fee
------------------------------------------------------------------------------------------------------------------------------
Retail Shares Primarily individual investors Initial -- $3,000 ($2,000 for 0.25% 12b-1 Fee
IRAs)
Shareholder servicing fee
Subsequent -- None in an amount not to
exceed 0.25%
------------------------------------------------------------------------------------------------------------------------------
Service Shares Generally purchased through an Initial -- $3,000 ($2,000 for No 12b-1 Fee
account with financial IRAs)
intermediaries such as financial Shareholder servicing fee
planners, investment advisors, Subsequent -- None in an amount not to
broker-dealers or other financial exceed 0.25%
institutions
------------------------------------------------------------------------------------------------------------------------------
Institutional Shares, Retail Shares and Service Shares are offered to investors
who purchase shares directly from the Fund or through certain financial
intermediaries such as financial planners, investment advisors, broker-dealers
or other financial institutions. An investor may be eligible to purchase more
than one share class. However, if you purchase shares through a financial
intermediary, you may only purchase that class of shares which your financial
intermediary sells or services. Certain classes provide for higher 12b-1 fees
and/or shareholder servicing fees to be paid to financial intermediaries. These
payments may create a conflict of interest by influencing a financial
intermediary to offer such classes, even though less expensive classes could
increase the return on your investment. Your financial intermediary can tell
you which class of shares is available through the intermediary.
The Fund reserves the right to change the criteria for eligible investors and
accept initial investments of smaller amounts in its sole discretion.
HOW TO PURCHASE FUND SHARES
To purchase shares directly from the Fund through its transfer agent, complete
and send in the application. If you need an application or have questions,
please call 1-800-791-4226.
All investments must be made by check, Automated Clearing House ("ACH"), or
wire. All checks must be made payable in U.S. dollars and drawn on U.S.
financial institutions. The Fund does not accept purchases made by third-party
checks, credit cards, credit card checks, cash, traveler's checks, money orders
or cashier's checks.
The Fund reserves the right to reject any specific purchase order for any
reason. The Fund is not intended for short-term trading by shareholders in
response to short-term market fluctuations. For more information about the
Fund's policy on short-term trading, see "Excessive Trading Policies and
Procedures."
20
The Fund does not generally accept investments by non-U.S. persons. Non-U.S.
persons may be permitted to invest in the Fund subject to the satisfaction of
enhanced due diligence. Please contact the Fund for more information.
BY MAIL
REGULAR MAIL ADDRESS
Edgewood Growth Fund
P.O. Box 219009
Kansas City, Missouri 64121-9009
EXPRESS MAIL ADDRESS
Edgewood Growth Fund
c/o DST Systems, Inc.
430 West 7th Street
Kansas City, Missouri 64105
The Fund does not consider the U.S. Postal Service or other independent
delivery services to be its agents. Therefore, deposit in the mail or with such
services of purchase orders does not constitute receipt by the Fund's transfer
agent. The share price used to fill the purchase order is the next price
calculated by the Fund after the Fund's transfer agent receives the order in
proper form at the P.O. Box provided for regular mail delivery or the office
address provided for express mail delivery.
BY WIRE
To open an account by wire, call 1-800-791-4226 for details. To add to an
existing account by wire, wire your money using the wiring instructions set
forth below (be sure to include the Fund name, the share class and your account
number).
WIRING INSTRUCTIONS
UMB Bank, N.A.
ABA#: 101000695
Edgewood Growth Fund
DDA# 9870523965
Ref: account number/account name/share class
RETAIL SHARES - BY AUTOMATIC INVESTMENT PLAN (VIA ACH)
You may not open an account via ACH. However, once you have established an
account, you can set up an automatic investment plan by mailing a completed
application to the Fund. Purchases can be made monthly, quarterly,
semi-annually, or annually in amounts of at least $100. To cancel or change a
plan, write to the Fund at: Edgewood Growth Fund, P.O. Box 219009, Kansas City,
Missouri 64121-9009 (Express Mail Address: Edgewood Growth Fund, c/o DST
Systems, Inc., 430 West 7th Street, Kansas City, Missouri 64105). Please allow
up to 15 days to create the plan and 3 days to cancel or change it.
PURCHASES IN-KIND
Subject to the approval of the Fund, an investor may purchase shares of the
Fund with liquid securities and other assets that are eligible for purchase by
the Fund (consistent with the Fund's investment policies and restrictions) and
that have a value that is readily ascertainable in accordance with the Fund's
valuation policies. These transactions will be effected only if the Adviser
deems the security to be an
21
appropriate investment for the Fund. Assets purchased by the Fund in such
transactions will be valued in accordance with procedures adopted by the Fund.
The Fund reserves the right to amend or terminate this practice at any time.
GENERAL INFORMATION
You may purchase shares on any day that the NYSE is open for business (a
"Business Day"). Shares cannot be purchased by Federal Reserve wire on days
when either the NYSE or the Federal Reserve is closed. The price per share (the
offering price) will be the next-determined NAV per share after the Fund or
authorized institution (defined below) receives your purchase order in proper
form. "Proper form" means that the Fund is provided a complete and signed
account application, including the investor's social security number or tax
identification number, and other identification required by law or regulation.
The Fund calculates its NAV once each Business Day as of the close of normal
trading on the NYSE (normally, 4:00 p.m., Eastern Time). To receive the current
Business Day's NAV, the Fund or authorized institution must receive your
purchase order in proper form before 4:00 p.m., Eastern Time. If the NYSE
closes early - such as on days in advance of certain holidays - the Fund
reserves the right to calculate NAV as of the earlier closing time. The Fund
will not accept orders that request a particular day or price for the
transaction or any other special conditions.
Shares will not be priced on days that the NYSE is closed for trading,
including nationally observed holidays. Since securities that are traded on
foreign exchanges may trade on days when the NYSE is closed, the value of the
Fund may change on days when you are unable to purchase or redeem shares.
BUYING OR SELLING SHARES THROUGH A FINANCIAL INTERMEDIARY
In addition to being able to buy and sell Fund shares directly from the Fund
through its transfer agent, you may also buy or sell shares of the Fund through
accounts with financial intermediaries such as brokers and other institutions
that are authorized to place trades in Fund shares for their customers. When
you purchase or sell Fund shares through a financial intermediary (rather than
directly from the Fund), you may have to transmit your purchase and sale
requests to the financial intermediary at an earlier time for your transaction
to become effective that day. This allows the financial intermediary time to
process your requests and transmit them to the Fund prior to the time the Fund
calculates its NAV that day. Your financial intermediary is responsible for
transmitting all purchase and redemption requests, investment information,
documentation and money to the Fund on time. If your financial intermediary
fails to do so, it may be responsible for any resulting fees or losses. Unless
your financial intermediary is an authorized institution, orders transmitted by
the financial intermediary and received by the Fund after the time NAV is
calculated for a particular day will receive the following day's NAV.
Certain financial intermediaries, including certain broker-dealers and
shareholder organizations, are authorized to act as agent on behalf of the Fund
with respect to the receipt of purchase and redemption orders for Fund shares
("authorized institutions"). Authorized institutions are also authorized to
designate other intermediaries to receive purchase and redemption orders on the
Fund's behalf. The Fund will be deemed to have received a purchase or
redemption order when an authorized institution or, if applicable, an
authorized institution's designee, receives the order. Orders will be priced at
the Fund's next computed NAV after they are received by an authorized
institution or an authorized institution's designee. To determine whether your
financial intermediary is an authorized institution or an authorized
institution's designee such that it may act as agent on behalf of the Fund with
respect to purchase and redemption orders for Fund shares, you should contact
your financial intermediary directly.
22
If you deal directly with a financial intermediary, you will have to follow its
procedures for transacting with the Fund. Your financial intermediary may
charge a fee for your purchase and/or redemption transactions. For more
information about how to purchase or sell Fund shares through a financial
intermediary, you should contact your financial intermediary directly.
HOW THE FUND CALCULATES NAV
The NAV of the Fund's shares is determined by dividing the total value of the
Fund's portfolio investments and other assets, less any liabilities, by the
total number of shares outstanding. In calculating NAV, the Fund generally
values its investment portfolio at market price. If market prices are not
readily available or the Fund reasonably believes that they are unreliable,
such as in the case of a security value that has been materially affected by
events occurring after the relevant market closes, the Fund is required to
price those securities at fair value as determined in good faith using methods
approved by the Board. Pursuant to the policies adopted by, and under the
ultimate supervision of the Board, these methods are implemented through the
Trust's Fair Value Pricing Committee, members of which are appointed by the
Board. The Fund's determination of a security's fair value price often involves
the consideration of a number of subjective factors, and is therefore subject
to the unavoidable risk that the value that the Fund assigns to a security may
be higher or lower than the security's value would be if a reliable market
quotation for the security was readily available.
Although the Fund invests primarily in the stocks of U.S. companies that are
traded on U.S. exchanges, there may be limited circumstances in which the Fund
would price such securities at fair value-for example, if the exchange on which
a portfolio security is principally traded closed early or if trading in a
particular security was halted during the day and did not resume prior to the
time the Fund calculated its NAV.
With respect to any non-U.S. securities held by the Fund, the Fund may take
factors influencing specific markets or issuers into consideration in
determining the fair value of a non-U.S. security. Foreign securities markets
may be open on days when the U.S. markets are closed. In such cases, the value
of any foreign securities owned by the Fund may be significantly affected on
days when investors cannot buy or sell shares. In addition, due to the
difference in times between the close of the foreign markets and the time the
Fund prices its shares, the value the Fund assigns to securities generally will
not be the same as the quoted or published prices of those securities on their
primary markets or exchanges. In determining fair value prices, the Fund may
consider any relevant information related to the securities, such as the
performance of securities on their primary exchanges, foreign currency
appreciation/depreciation or securities market movements in the United States.
MINIMUM INVESTMENTS
To purchase Institutional Shares of the Fund for the first time, including an
initial purchase through an IRA, you must invest at least $100,000. To purchase
Retail and Service Shares of the Fund for the first time, you must invest at
least $3,000 ($2,000 for an IRA). There are no minimums for subsequent
investments. The Fund may accept initial investments of smaller amounts in its
sole discretion.
FUND CODES
The Fund's reference information listed below will be helpful to you when you
contact the Fund to purchase shares, check daily NAV or obtain additional
information.
EDGEWOOD GROWTH FUND TICKER SYMBOL CUSIP FUND CODE
--------------------------------------------------------------------------------
Retail Shares EGFFX 0075W0742 2130
--------------------------------------------------------------------------------
Institutional Shares EGFIX 0075W0759 2131
--------------------------------------------------------------------------------
Service Shares [___] [_______] [__]
23
HOW TO SELL YOUR FUND SHARES
If you own your shares directly, you may sell your shares on any Business Day
by contacting the Fund's transfer agent directly by mail or telephone at
1-800-791-4226.
If you own your shares through an account with a broker or other institution,
contact that broker or institution to sell your shares. Your broker or
institution may charge a fee for its services in addition to the fees charged
by the Fund.
Certain redemption requests will require a signature guarantee by an eligible
guarantor institution. Eligible guarantors include commercial banks, savings
and loans, savings banks, trust companies, credit unions, member firms of a
national stock exchange, or any other member or participant of an approved
signature guarantor program. For example, signature guarantees may be required
if your address of record has changed in the last 30 days, if you want the
proceeds sent to a bank other than the bank of record on your account, or if
you ask that the proceeds be sent to a different person or address. Please note
that a notary public is not an acceptable provider of a signature guarantee and
that the Fund must be provided with the original guarantee. Signature
guarantees are for the protection of Fund shareholders. Before it grants a
redemption request, the Fund may require a shareholder to furnish additional
legal documents to ensure proper authorization.
Accounts held by a corporation, trust, fiduciary or partnership, may require
additional documentation along with a signature guaranteed letter of
instruction. The Fund participates in the Paperless Legal Program (the
"Program"), which eliminates the need for accompanying paper documentation on
legal securities transfers. Requests received with a Medallion Signature
Guarantee will be reviewed for the proper criteria to meet the guidelines of
the Program and may not require additional documentation. Please contact
Shareholder Services at 1-800-791-4226 for more information.
The sale price will be the next-determined NAV after the Fund receives your
request in proper form.
BY MAIL
To redeem shares by mail, please send a letter to the Fund signed by all
registered parties on the account specifying:
o The Fund name;
o The account number;
o The dollar amount or number of shares you wish to redeem;
o The account name(s);
o The share class; and
o The address to which redemption (sale) proceeds should be sent.
All registered shareholders must sign the letter in the exact name(s) in which
their account is registered and must designate any special capacity in which
they are registered.
24
REGULAR MAIL ADDRESS
Edgewood Growth Fund
P.O. Box 219009
Kansas City, Missouri 64121-9009
EXPRESS MAIL ADDRESS
Edgewood Growth Fund
c/o DST Systems, Inc.
430 West 7th Street
Kansas City, Missouri 64105
The Fund does not consider the U.S. Postal Service or other independent
delivery services to be its agents. Therefore, deposit in the mail or with such
services of sell orders does not constitute receipt by the Fund's transfer
agent. The share price used to fill the sell order is the next price calculated
by the Fund after the Fund's transfer agent receives the order in proper form
at the P.O. Box provided for regular mail delivery or the office address
provided for express mail delivery.
BY TELEPHONE
To redeem shares by telephone, you must first establish the telephone
redemption privilege (and, if desired, the wire or ACH redemption privileges)
by completing the appropriate sections of the account application. Call
1-800-791-4226 to redeem your shares. Based on your instructions, the Fund will
mail your proceeds to you or send them to your bank by either Fed wire or ACH.
RETAIL SHARES - BY SYSTEMATIC WITHDRAWAL PLAN (VIA ACH)
If your account balance is at least $10,000, you may transfer as little as $100
per month from your account to another financial institution through a
Systematic Withdrawal Plan (via ACH). To participate in this service, you must
complete the appropriate sections of the account application and mail it to the
Fund.
RECEIVING YOUR MONEY
Normally, the Fund will send your sale proceeds within seven days after the
Fund receives your request. Your proceeds can be wired to your bank account
(may be subject to a $10 fee), sent to you by check or sent via ACH to your
bank account once you have established banking instructions with the Fund. IF
YOU ARE SELLING SHARES THAT WERE RECENTLY PURCHASED BY CHECK OR THROUGH ACH,
REDEMPTION PROCEEDS MAY NOT BE AVAILABLE UNTIL YOUR CHECK HAS CLEARED OR THE
ACH TRANSACTION HAS BEEN COMPLETED (WHICH MAY TAKE UP TO 15 DAYS FROM YOUR DATE
OF PURCHASE).
REDEMPTIONS IN-KIND
The Fund generally pays sale (redemption) proceeds in cash. However, under
unusual conditions that make the payment of cash unwise and for the protection
of the Fund's remaining shareholders the Fund might pay all or part of your
redemption proceeds in securities with a market value equal to the redemption
price (redemption in-kind). It is highly unlikely that your shares would ever
be redeemed in-kind, but if they were you would have to pay transaction costs
to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption. In addition, you would continue to
be subject to the risks of any market fluctuation in the value of the
securities you receive in-kind until they are sold.
25
INVOLUNTARY REDEMPTIONS OF YOUR SHARES
If your account balance drops below $1,000 because of redemptions, you may be
required to sell your shares. The Fund will provide you at least 30 days'
written notice to give you time to add to your account and avoid the
involuntary redemption of your shares.
SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES
The Fund may suspend your right to sell your shares or delay payment of
redemption proceeds for more than seven days during times when the NYSE is
closed, other than during customary weekends or holidays, or as otherwise
permitted by the SEC. More information about this is in the SAI.
TELEPHONE TRANSACTIONS
Purchasing and selling Fund shares over the telephone is extremely convenient,
but not without risk. Although the Fund has certain safeguards and procedures
to confirm the identity of callers and the authenticity of instructions, the
Fund is not responsible for any losses or costs incurred by following telephone
instructions it reasonably believes to be genuine. If you or your financial
institution transact with the Fund over the telephone, you will generally bear
the risk of any loss.
HOW TO EXCHANGE YOUR FUND SHARES
At no charge, you may convert one class of shares of the Fund directly to
another class of shares of the Fund by writing to or calling the Fund, subject
to the fees and expenses of such other class of shares, and provided that you
meet the eligibility requirements applicable to investing in such other class
of shares, as set forth in this prospectus. You may only convert shares between
accounts with identical registrations (i.e., the same names and addresses). A
conversion between share classes of the Fund is not a taxable event.
PAYMENTS TO FINANCIAL INTERMEDIARIES
The Fund and/or the Adviser may compensate financial intermediaries for
providing a variety of services to the Fund and/or its shareholders. Financial
intermediaries include affiliated or unaffiliated brokers, dealers, banks
(including bank trust departments), trust companies, registered investment
advisers, financial planners, retirement plan administrators, insurance
companies, and any other institution having a service, administration, or any
similar arrangement with the Fund, its service providers or their respective
affiliates. This section briefly describes how financial intermediaries may be
paid for providing these services. For more information please see "Payments to
Financial Intermediaries" in the SAI.
In addition to these payments, your financial intermediary may charge you
account fees, transaction fees for buying or redeeming shares of the Fund, or
other fees for servicing your account. Your financial intermediary should
provide a schedule of its fees and services to you upon request.
DISTRIBUTION PLAN
The Fund has adopted a distribution plan under Rule 12b-1 of the Investment
Company Act of 1940, as amended, for Retail Shares that allows the Fund to pay
distribution and/or service fees for the sale and distribution of Fund shares,
and for services provided to shareholders. Because these fees are paid out of
the Fund's assets on an on-going basis, over time these fees will increase the
cost of your investment and
26
may cost you more than paying other types of sales charges. The maximum annual
Rule 12b-1 fee for Retail Shares of the Fund is 0.25% .
SHAREHOLDER SERVICING PLAN
The Fund has adopted a shareholder servicing plan that provides that the Fund
may pay financial intermediaries for shareholder services in an annual amount
not to exceed 0.25% based on the average daily net assets of the Fund's Retail
Shares and Service Shares. The services for which financial intermediaries are
compensated may include record-keeping, transaction processing for
shareholders' accounts and other shareholder services.
OTHER PAYMENTS BY THE FUND
The Fund may enter into agreements with financial intermediaries pursuant to
which the Fund may pay financial intermediaries for non-distribution-related
sub-transfer agency, administrative, sub-accounting, and other shareholder
services. Payments made pursuant to such agreements are generally based on
either (1) a percentage of the average daily net assets of Fund shareholders
serviced by a financial intermediary, or (2) the number of Fund shareholders
serviced by a financial intermediary. Any payments made pursuant to such
agreements may be in addition to, rather than in lieu of, distribution or
shareholder services fees the Fund may pay to financial intermediaries pursuant
to the Fund's distribution plan or shareholder servicing plan.
OTHER PAYMENTS BY THE ADVISER
From time to time, the Adviser and/or its affiliates, in their discretion, may
make payments to certain affiliated or unaffiliated financial intermediaries to
compensate them for the costs associated with distribution, marketing,
administration and shareholder servicing support for the Fund. These payments
are sometimes characterized as "revenue sharing" payments and are made out of
the Adviser's and/or its affiliates' own legitimate profits or other resources,
and may be in addition to any payments made to financial intermediaries by the
Fund. A financial intermediary may provide these services with respect to Fund
shares sold or held through programs such as retirement plans, qualified
tuition programs, fund supermarkets, fee-based advisory or wrap fee programs,
bank trust programs, and insurance (e.g., individual or group annuity)
programs. In addition, financial intermediaries may receive payments for making
shares of the Fund available to their customers or registered representatives,
including providing the Fund with "shelf space," placing it on a preferred or
recommended fund list, or promoting the Fund in certain sales programs that are
sponsored by financial intermediaries. To the extent permitted by SEC and
Financial Industry Regulatory Authority ("FINRA") rules and other applicable
laws and regulations, the Adviser and/or its affiliates may pay or allow other
promotional incentives or payments to financial intermediaries.
The level of payments made by the Adviser and/or its affiliates to individual
financial intermediaries varies in any given year and may be negotiated on the
basis of sales of Fund shares, the amount of Fund assets serviced by the
financial intermediary or the quality of the financial intermediary's
relationship with the Adviser and/or its affiliates. These payments may be more
or less than the payments received by the financial intermediaries from other
mutual funds and may influence a financial intermediary to favor the sales of
certain funds or share classes over others. In certain instances, the payments
could be significant and may cause a conflict of interest for your financial
intermediary. Any such payments will not change the NAV or price of the Fund's
shares.
27
Please contact your financial intermediary for information about any payments
it may receive in connection with the sale of Fund shares or the provision of
services to Fund shareholders, as well as information about any fees and/or
commissions it charges.
OTHER POLICIES
EXCESSIVE TRADING POLICIES AND PROCEDURES
The Fund is intended for long-term investment purposes only and discourages
shareholders from engaging in "market timing" or other types of excessive
short-term trading. This frequent trading into and out of the Fund may present
risks to the Fund's long-term shareholders and could adversely affect
shareholder returns. The risks posed by frequent trading include interfering
with the efficient implementation of the Fund's investment strategies,
triggering the recognition of taxable gains and losses on the sale of Fund
investments, requiring the Fund to maintain higher cash balances to meet
redemption requests, and experiencing increased transaction costs.
In addition, because the Fund may invest in foreign securities traded primarily
on markets that close prior to the time the Fund determines its NAV, the risks
posed by frequent trading may have a greater potential to dilute the value of
Fund shares held by long-term shareholders than funds investing exclusively in
U.S. securities. In instances where a significant event that affects the value
of one or more foreign securities held by the Fund takes place after the close
of the primary foreign market, but before the time that the Fund determines its
NAV, certain investors may seek to take advantage of the fact that there will
be a delay in the adjustment of the market price for a security caused by this
event until the foreign market reopens (sometimes referred to as "price" or
"time zone" arbitrage). Shareholders who attempt this type of arbitrage may
dilute the value of their Fund's shares if the price of the Fund's foreign
securities does not reflect their fair value. Although the Fund has procedures
designed to determine the fair value of foreign securities for purposes of
calculating its NAV when such an event has occurred, fair value pricing,
because it involves judgments which are inherently subjective, may not always
eliminate the risk of price arbitrage.
The Fund's service providers will take steps reasonably designed to detect and
deter frequent trading by shareholders pursuant to the Fund's policies and
procedures described in this prospectus and approved by the Board. For purposes
of applying these policies, the Fund's service providers may consider the
trading history of accounts under common ownership or control. The Fund's
policies and procedures include:
o Shareholders are restricted from making more than four "round trips"
into or out of the Fund over any rolling 12 month period. If a
shareholder exceeds this amount, the Fund and/or its service providers
may, at their discretion, reject any additional purchase orders. The
Fund defines a "round trip" as a purchase into the Fund by a
shareholder, followed by a subsequent redemption out of the Fund, of
an amount the Adviser reasonably believes would be harmful or
disruptive to the Fund.
o The Fund reserves the right to reject any purchase request by any
investor or group of investors for any reason without prior notice,
including, in particular, if the Fund or the Adviser reasonably
believes that the trading activity would be harmful or disruptive to
the Fund.
The Fund and/or its service providers seek to apply these policies to the best
of their abilities uniformly and in a manner they believe is consistent with
the interests of the Fund's long-term shareholders. The Fund does not knowingly
accommodate frequent purchases and redemptions by Fund shareholders.
28
Although these policies are designed to deter frequent trading, none of these
measures alone nor all of them taken together eliminate the possibility that
frequent trading in the Fund will occur. Systematic purchases and redemptions
are exempt from these policies.
Financial intermediaries (such as investment advisers and broker-dealers) often
establish omnibus accounts in the Fund for their customers through which
transactions are placed. The Fund has entered into "information sharing
agreements" with these financial intermediaries, which permit the Fund to
obtain, upon request, information about the trading activity of the
intermediary's customers that invest in the Fund. If the Fund or its service
providers identify omnibus account level trading patterns that have the
potential to be detrimental to the Fund, the Fund or its service providers may,
in their sole discretion, request from the financial intermediary information
concerning the trading activity of its customers. Based upon a review of that
information, if the Fund or its service providers determine that the trading
activity of any customer may be detrimental to the Fund, they may, in their
sole discretion, request the financial intermediary to restrict or limit
further trading in the Fund by that customer. If the Fund is not satisfied that
the intermediary has taken appropriate action, the Fund may terminate the
intermediary's ability to transact in Fund shares. When information regarding
transactions in the Fund's shares is requested by the Fund and such information
is in the possession of a person that is itself a financial intermediary to a
financial intermediary (an "indirect intermediary"), any financial intermediary
with whom the Fund has an information sharing agreement is obligated to obtain
transaction information from the indirect intermediary or, if directed by the
Fund, to restrict or prohibit the indirect intermediary from purchasing shares
of the Fund on behalf of other persons.
The Fund and its service providers will use reasonable efforts to work with
financial intermediaries to identify excessive short-term trading in omnibus
accounts that may be detrimental to the Fund. However, there can be no
assurance that the monitoring of omnibus account level trading will enable the
Fund to identify or prevent all such trading by a financial intermediary's
customers. Please contact your financial intermediary for more information.
CUSTOMER IDENTIFICATION AND VERIFICATION
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account.
What this means to you: When you open an account, the Fund will ask your name,
address, date of birth, and other information that will allow the Fund to
identify you. This information is subject to verification to ensure the
identity of all persons opening a mutual fund account.
The Fund is required by law to reject your new account application if the
required identifying information is not provided.
In certain instances, the Fund is required to collect documents to fulfill its
legal obligation. Documents provided in connection with your application will
be used solely to establish and verify a customer's identity.
Attempts to collect the missing information required on the application will be
performed by either contacting you or, if applicable, your broker. If this
information cannot be obtained within a reasonable timeframe established in the
sole discretion of the Fund your application will be rejected.
29
Upon receipt of your application in proper form (or upon receipt of all
identifying information required on the application), your investment will be
accepted and your order will be processed at the next-determined NAV.
The Fund reserves the right to close or liquidate your account at the
next-determined NAV and remit proceeds to you via check if it is unable to
verify your identity. Attempts to verify your identity will be performed within
a reasonable timeframe established in the sole discretion of the Fund.
Further, the Fund reserves the right to hold your proceeds until your original
check clears the bank, which may take up to 15 days from the date of purchase.
In such an instance, you may be subject to a gain or loss on Fund shares and
will be subject to corresponding tax implications.
ANTI-MONEY LAUNDERING PROGRAM
Customer identification and verification is part of the Fund's overall
obligation to deter money laundering under federal law. The Fund has adopted
an anti-money laundering compliance program designed to prevent the Fund from
being used for money laundering or the financing of illegal activities. In
this regard, the Fund reserves the right to: (i) refuse, cancel or rescind any
purchase order; (ii) freeze any account and/or suspend account services; and/or
(iii) involuntarily close your account in cases of threatening conduct or
suspected fraudulent or illegal activity. These actions will be taken when, in
the sole discretion of Fund management, they are deemed to be in the best
interest of the Fund or in cases when the Fund is requested or compelled to do
so by governmental or law enforcement authority. If your account is closed at
the request of governmental or law enforcement authority, you may not receive
proceeds of the redemption if the Fund is required to withhold such proceeds.
UNCLAIMED PROPERTY
Each state has unclaimed property rules that generally provide for escheatment
(or transfer) to the state of unclaimed property under various circumstances.
Such circumstances include inactivity (e.g., no owner-initiated contact for a
certain period), returned mail (e.g., when mail sent to a shareholder is
returned by the post office, or "RPO," as undeliverable), or a combination of
both inactivity and returned mail. Once it flags property as unclaimed, the
Fund will attempt to contact the shareholder, but if that attempt is
unsuccessful, the account may be considered abandoned and escheated to the
state. More information on unclaimed property and how to maintain an active
account is available through your state or by calling 1-800-791-4226.
DIVIDENDS AND DISTRIBUTIONS
The Fund distributes its net investment income and makes distributions of its
net realized capital gains, if any, at least annually. If you own Fund shares
on the Fund's record date, you will be entitled to receive the distribution.
You will receive dividends and distributions in the form of additional Fund
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify the Fund in writing prior to the date of the distribution. Your
election will be effective for dividends and distributions paid after the Fund
receives your written notice. To cancel your election, simply send the Fund
written notice.
30
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT
FEDERAL, STATE AND LOCAL INCOME TAXES. Below is a summary of U.S. federal
income tax consequences of investing in the Fund. This summary does not apply
to shares held in an IRA or other tax-qualified plans, which are not subject to
current tax. Transactions relating to shares held in such accounts may,
however, be taxable at some time in the future. This summary is based on
current tax laws, which may change.
The Fund intends to distribute substantially all of its net investment income
and net realized capital gains, if any. The dividends and distributions you
receive, whether in cash or reinvested in additional shares of the Fund may be
subject to federal, state and local taxation, depending upon your tax
situation. Income distributions, including distributions of net short-term
capital gains but excluding distributions of qualified dividend income, are
generally taxable at ordinary income tax rates. Long-term capital gains
distributions and distributions that are reported by the Fund as qualified
dividend income are generally taxable at the rates applicable to long-term
capital gains and currently set at a maximum tax rate for individuals at 20%
(lower rates apply to individuals in lower tax brackets). Once a year the Fund
(or its administrative agent) will send you a statement showing the types and
total amount of distributions you received during the previous year.
You should note that if you purchase shares just before a distribution, the
purchase price would reflect the amount of the upcoming distribution. In this
case, you would be taxed on the entire amount of the distribution received,
even though, as an economic matter, the distribution simply constitutes a
return of your investment. This is known as "buying a dividend" and should be
avoided by taxable investors.
Each sale of Fund shares may be a taxable event. For tax purposes, an exchange
of your Fund shares for shares of a different fund is the same as a sale. The
gain or loss on the sale of Fund shares generally will be treated as a
short-term capital gain or loss if you held the shares for 12 months or less,
or a long-term capital gain or loss if you held the shares for longer.
U.S. individuals with income exceeding $200,000 ($250,000 if married and filing
jointly) are subject to a 3.8% Medicare contribution tax on their "net
investment income," including interest, dividends, and capital gains (including
capital gains realized on the sale or exchange of shares of the Fund).
The Fund (or its administrative agent) must report to the Internal Revenue
Service ("IRS") and furnish to Fund shareholders cost basis information for
Fund shares purchased on or after January 1, 2012, and sold on or after that
date. In addition to reporting the gross proceeds from the sale of Fund shares,
the Fund (or its administrative agent) is also required to report the cost
basis information for such shares and indicate whether these shares have a
short-term or long-term holding period. For each sale of Fund shares, the Fund
will permit shareholders to elect from among several IRS-accepted cost basis
methods, including the average basis method. In the absence of an election, the
Fund will use the average basis method as the default cost basis method. The
cost basis method elected by a Fund shareholder (or the cost basis method
applied by default) for each sale of Fund shares may not be changed after the
settlement date of each such sale of Fund shares. Fund shareholders should
consult their tax advisors to determine the best IRS-accepted cost basis method
for their tax situation and to obtain more information about cost basis
reporting. Shareholders also should carefully review any cost basis information
provided to them and make any additional basis, holding period or other
adjustments that are required when reporting these amounts on their federal
income tax returns.
To the extent that the Fund invests in foreign securities, it may be subject to
foreign withholding taxes with respect to dividends or interest the Fund
received from sources in foreign countries. If more than 50% of the total
assets of the Fund consist of foreign securities, the Fund will be eligible to
elect to treat some of those taxes as a distribution to shareholders, which
would allow shareholders to offset some of their U.S. federal income tax. The
Fund (or its administrative agent) will notify you if it makes such an
31
election and provide you with the information necessary to reflect foreign
taxes paid on your income tax return.
MORE INFORMATION ABOUT TAXES IS IN THE SAI.
32
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Institutional
and Retail Shares of the Fund. This information is intended to help you
understand the Fund's financial performance for the past five fiscal years.
Some of this information reflects financial information for a single Fund
share. The total returns in each table represent the rate that an investor
would have earned (or lost) on an investment in the Fund, assuming reinvestment
of all dividends and distributions. The information provided below has been
audited by [XX], independent registered public accounting firm of the Fund.
The financial statements and the unqualified opinion of [XX] are included in
the 2016 Annual Report of the Fund, which is available upon request by calling
the Fund at 1-800-791-4226.
No information is shown for Service Shares of the Fund because they had not
commenced operations as of the end of the Fund's last fiscal year.
33
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
----------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES
----------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
October October October October October
31, 31, 31, 31, 31,
2016 2015 2014 2013 2012
----------------------------------------------------------------------------------
Net Asset Value,
Beginning of Year ........................ $[XX] $21.35 $17.46 $13.33 $11.86
Income (Loss) from Operations:
Net Investment Income (Loss)(1) ....... [XX] (0.02) (0.04) (0.01) --
----- ------- ------- ------- -------
Net Realized and Unrealized Gain ...... [XX] 2.34 4.16 4.17 1.47
----- ------- ------- ------- -------
Total from Operations .............. [XX] 2.32 4.12 4.16 1.47
----- ------- ------- ------- -------
Dividends and Distributions:
Net Investment Income ................. [XX] -- -- (0.03) --
Net Realized Gain ..................... [XX] (1.00) (0.23) -- --
----- ------- ------- ------- -------
Total Distributions ...................... [XX] (1.00) (0.23) (0.03) --
----- ------- ------- ------- -------
Net Asset Value, End of Year ............. $[XX] $22.67 $21.35 $17.46 $13.33
===== ======= ======= ======= =======
TOTAL RETURN+ ............................ [XX]% 11.37% 23.89% 31.24% 12.39%
===== ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Year (Thousands) ... $[XX] $4,753,281 $3,403,172 $2,348,571 $1,651,696
Ratio of Expenses to Average Net
Assets ................................ [XX]% 1.00% 1.00% 1.00% 1.00%
Ratio of Expenses to Average Net
Assets (Excluding Waivers and Fees
Paid Indirectly) ...................... [XX]% 1.09% 1.10% 1.11% 1.13%
Ratio of Net Investment Income
(Loss) to Average Net Assets .......... [XX]% (0.10)% (0.20)% (0.06)% 0.01%
Portfolio Turnover Rate ............... [XX]% 24% 41% 40% 38%
+ TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN WAIVED
AND ASSUMED BY THE ADVISER DURING THE PERIOD. RETURNS SHOWN DO NOT REFLECT
THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS
OR THE REDEMPTION OF FUND SHARES.
(1) CALCULATED USING AVERAGE SHARES.
AMOUNTS DESIGNATED AS "-" ARE $0 OR HAVE BEEN ROUNDED TO $0.
34
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
----------------------------------------------------------------------------------------------------------------------------
RETAIL SHARES
----------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
October October October October October
31, 31, 31, 31, 31,
2016 2015 2014 2013 2012
----------------------------------------------------------------------------------
Net Asset Value, Beginning of
Year ....................................... $[XX] $20.91 $17.13 $13.03 $11.61
Income (Loss) from Operations:
Net Investment Loss(1) .................. [XX] (0.10) (0.10) (0.07) (0.05)
----- ------- ------- ------- -------
Net Realized and Unrealized ............. [XX] 2.28 4.11 4.17 1.47
Gain ----- ------- ------- ------- -------
Total from Operations ...................... [XX] 2.18 4.01 4.10 1.42
----- ------- ------- ------- -------
Distributions:
Net Investment Income ................... [XX] -- -- -- --
Net Realized Gain ....................... [XX] (1.00) (0.23) -- --
----- ------- ------- ------- -------
Total Distributions ........................ [XX] (1.00) (0.23) -- --
----- ------- ------- ------- -------
Net Asset Value, End of Year ............ $[XX] $22.09 $20.91 $17.13 $13.03
===== ======= ======= ======= =======
TOTAL RETURN+ .............................. [XX]% 10.92% 23.71% 31.47% 12.23%
===== ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Year
(Thousands) ............................. $[XX] $297,947 $211,175 $164,324 $122,930
Ratio of Expenses to Average
Net Assets .............................. [XX]% 1.39% 1.35% 1.41% 1.39%
Ratio of Expenses to Average
Net Assets (Excluding Waivers
and Fees Paid Indirectly) ............... [XX]% 1.48% 1.45% 1.53% 1.52%
Ratio of Net Investment Loss to
Average Net Assets ...................... [XX]% (0.49)% (0.53)% (0.45)% (0.37)%
Portfolio Turnover Rate ................. [XX]% 24% 41% 40% 38%
+ TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN WAIVED
AND ASSUMED BY THE ADVISER DURING THE PERIOD. RETURNS SHOWN DO NOT REFLECT
THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS
OR THE REDEMPTION OF FUND SHARES.
(1) CALCULATED USING AVERAGE SHARES.
AMOUNTS DESIGNATED AS "-" ARE $0 OR HAVE BEEN ROUNDED TO $0.
35
THE ADVISORS' INNER CIRCLE FUND
EDGEWOOD GROWTH FUND
INVESTMENT ADVISER
Edgewood Management LLC
535 Madison Avenue, 15th Floor
New York, New York 10022
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
MORE INFORMATION ABOUT THE FUND IS AVAILABLE, WITHOUT CHARGE, THROUGH THE
FOLLOWING:
STATEMENT OF ADDITIONAL INFORMATION ("SAI"): The SAI, dated [date], as it may
be amended from time to time, includes detailed information about the Fund and
The Advisors' Inner Circle Fund. The SAI is on file with the U.S. Securities
and Exchange Commission (the "SEC") and is incorporated by reference into this
prospectus. This means that the SAI, for legal purposes, is a part of this
prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS: These reports list the Fund's holdings and
contain information from the Adviser about strategies and recent market
conditions and trends and their impact on Fund performance. The reports also
contain detailed financial information about the Fund.
TO OBTAIN AN SAI OR ANNUAL OR SEMI-ANNUAL REPORT OR MORE INFORMATION:
BY TELEPHONE: 1-800-791-4226
BY MAIL: Edgewood Growth Fund
P.O. Box 219009
Kansas City, Missouri 64121-9009
BY INTERNET: www.edgewoodfunds.com
FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual
Reports, as well as other information about The Advisors' Inner Circle Fund,
from the EDGAR Database on the SEC's website at: http://www.sec.gov. You may
review and copy documents at the SEC Public Reference Room in Washington, DC
(for information on the operation of the Public Reference Room, call
202-551-8090). You may request documents by mail from the SEC, upon payment of
a duplicating fee, by writing to: U.S. Securities and Exchange Commission,
Public Reference Section, Washington, DC 20549-1520. You may also obtain this
information, upon payment of a duplicating fee, by e-mailing the SEC at the
following address: [email protected].
THE TRUST'S INVESTMENT COMPANY ACT REGISTRATION NUMBER IS 811-06400.
[Inventory Code]
STATEMENT OF ADDITIONAL INFORMATION
EDGEWOOD GROWTH FUND
(INSTITUTIONAL CLASS SHARES TICKER SYMBOL: EGFIX)
(RETAIL SHARES TICKER SYMBOL: EGFFX)
(SERVICE SHARES TICKER SYMBOL: [_____])
A SERIES OF THE ADVISORS' INNER CIRCLE FUND
[DATE]
INVESTMENT ADVISER:
EDGEWOOD MANAGEMENT LLC
This Statement of Additional Information ("SAI") is not a prospectus. It is
intended to provide additional information regarding the activities and
operations of The Advisors' Inner Circle Fund (the "Trust") and the Edgewood
Growth Fund (the "Fund"). This SAI is incorporated by reference into and should
be read in conjunction with the prospectus dated [date], as it may be amended
from time to time ("Prospectus"). Capitalized terms not defined herein are
defined in the Prospectus. The financial statements with respect to the Fund
for the fiscal year ended October 31, 2016, including the notes thereto and the
report of [XX] thereon, as contained in the 2016 Annual Report to Shareholders,
are incorporated by reference into and deemed to be part of this SAI. A copy of
the Fund's 2016 Annual Report to Shareholders must accompany the delivery of
this SAI. Shareholders may obtain copies of the Fund's Prospectus or Annual
Report free of charge by writing to the Fund at P.O. Box 219009, Kansas City,
Missouri 64121-9009 or calling toll-free at 1-800-791-4226.
i
TABLE OF CONTENTS
THE TRUST ................................................................. S-XX
ADDITIONAL INFORMATION ABOUT INVESTMENT OBJECTIVES AND POLICIES ........... S-XX
DESCRIPTION OF PERMITTED INVESTMENTS ...................................... S-XX
INVESTMENT LIMITATIONS .................................................... S-XX
THE ADVISER ............................................................... S-XX
THE PORTFOLIO MANAGERS .................................................... S-XX
THE ADMINISTRATOR ......................................................... S-XX
THE DISTRIBUTOR ........................................................... S-XX
PAYMENTS TO FINANCIAL INTERMEDIARIES ...................................... S-XX
THE TRANSFER AGENT ........................................................ S-XX
THE CUSTODIAN ............................................................. S-XX
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ............................. S-XX
LEGAL COUNSEL ............................................................. S-XX
TRUSTEES AND OFFICERS OF THE TRUST ........................................ S-XX
PURCHASING AND REDEEMING SHARES ........................................... S-XX
DETERMINATION OF NET ASSET VALUE .......................................... S-XX
TAXES ..................................................................... S-XX
FUND TRANSACTIONS ......................................................... S-XX
PORTFOLIO HOLDINGS ........................................................ S-XX
DESCRIPTION OF SHARES ..................................................... S-XX
SHAREHOLDER LIABILITY ..................................................... S-XX
LIMITATION OF TRUSTEES' LIABILITY ......................................... S-XX
PROXY VOTING .............................................................. S-XX
CODES OF ETHICS ........................................................... S-XX
5% AND 25% SHAREHOLDERS ................................................... S-XX
APPENDIX A -- DESCRIPTION OF RATINGS ...................................... A-1
APPENDIX B -- PROXY VOTING POLICIES AND PROCEDURES ........................ B-1
[Date] [Inventory Code]
ii
THE TRUST
GENERAL. The Fund is a separate series of the Trust. The Trust is an open-end
investment management company established under Massachusetts law as a
Massachusetts voluntary association (commonly known as a business trust) under
a Declaration of Trust dated July 18, 1991, as amended and restated February
18, 1997 and amended May 15, 2012 (the "Declaration of Trust"). The Declaration
of Trust permits the Trust to offer separate series ("funds") of shares of
beneficial interest ("shares"). The Trust reserves the right to create and
issue shares of additional funds. Each fund is a separate mutual fund, and each
share of each fund represents an equal proportionate interest in that fund. All
consideration received by the Trust for shares of any fund and all assets of
such fund belong solely to that fund and would be subject to liabilities
related thereto. The Fund pays its (i) operating expenses, including fees of
its service providers, expenses of preparing prospectuses, proxy solicitation
material and reports to shareholders, costs of custodial services and
registering its shares under federal and state securities laws, pricing and
insurance expenses, brokerage costs, interest charges, taxes and organization
expenses, and (ii) pro rata share of the Fund's other expenses, including audit
and legal expenses. Expenses attributable to a specific fund shall be payable
solely out of the assets of that fund. Expenses not attributable to a specific
fund are allocated across all of the funds on the basis of relative net assets.
The other funds of the Trust are described in one or more separate statements
of additional information.
DESCRIPTION OF MULTIPLE CLASSES OF SHARES. The Trust is authorized to offer
shares of the Fund in Institutional Shares, Retail Shares and Service Shares.
The different classes provide for variations in certain distribution and
shareholder servicing expenses and in the minimum initial investment
requirements and investor eligibility. Minimum investment requirements and
investor eligibility are described in the Prospectus. For more information on
distribution and shareholder servicing expenses, see "Payments to Financial
Intermediaries" in this SAI. The Trust reserves the right to create and issue
additional classes of shares.
VOTING RIGHTS. Each shareholder of record is entitled to one vote for each
share held on the record date for the meeting. The Fund will vote separately on
matters relating solely to it. As a Massachusetts voluntary association, the
Trust is not required, and does not intend, to hold annual meetings of
shareholders. Approval of shareholders will be sought, however, for certain
changes in the operation of the Trust and for the election of the Board of
Trustees of the Trust (each a "Trustee" and together, the "Board") under
certain circumstances. Under the Declaration of Trust, the Trustees have the
power to liquidate the Fund without shareholder approval. While the Trustees
have no present intention of exercising this power, they may do so if the Fund
fails to reach a viable size within a reasonable amount of time or for such
other reasons as may be determined by the Board.
In addition, a Trustee may be removed by the remaining Trustees or by
shareholders at a special meeting called upon written request of shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the shareholders requesting the meeting.
Any series of the Trust created on or after November 11, 1996 may reorganize or
merge with one or more other series of the Trust or of another investment
company. Any such reorganization or merger shall be pursuant to the terms and
conditions specified in an agreement and plan of reorganization authorized and
approved by the Trustees and entered into by the relevant series in connection
therewith. In addition, such reorganization or merger may be authorized by vote
of a majority of the Trustees then in office and, to the extent permitted by
applicable law and the Declaration of Trust, without the approval of
shareholders of any series.
S-1
ADDITIONAL INFORMATION ABOUT INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objective and principal investment strategies are
described in the Prospectus. The following information supplements, and should
be read in conjunction with, the Prospectus. For a description of certain
permitted investments discussed below, see "Description of Permitted
Investments" in this SAI.
EDGEWOOD GROWTH FUND. The Fund seeks to provide long-term growth of capital.
The Fund is non-diversified and will primarily invest in a core group of 15-35
equity securities, such as common stocks and American Depositary Receipts
("ADRs"). The Fund is flexibly managed, with the ability to invest in equity
securities of a smaller number of issuers and/or industry sectors than
diversified mutual funds. There can be no assurance that the Fund will achieve
its investment objective. The investment objective of the Fund is
non-fundamental and may be changed without shareholder approval.
As its principal investment strategy, the Fund invests primarily in equity
securities of issuers that Edgewood Management LLC (the "Adviser") believes are
quality companies whose stock offers potential for future appreciation as
described in the Prospectus. In selecting investments for the Fund, the Adviser
seeks to identify companies possessing fundamentally strong market positions in
growing industries, exceptional earnings power, and consistency of earnings
performance. Focus is concentrated toward growing companies experiencing
superior rates of return over varying economic cycles. Investment decisions are
based upon a fundamental analysis that emphasizes company specific research.
The goal of the process is to invest in growth companies in established and
growing industries that display the following characteristics: record of
consistent earnings power; earnings growth rate in excess of the S&P 500 Growth
Index; dominant market position or proven strength; attractive fundamental
financial valuation; superior management; management/insider ownership; and
industry growth rate in excess of the growth of gross domestic product ("GDP").
A security may be sold if there is a fundamental deterioration, the price is no
longer justifiable and/or if the security demonstrates earnings
disappointments. When consistent with the investment strategy and specific
policies of the Fund, the Fund may hold uninvested assets in cash or similar
investments.
NON-DIVERSIFICATION. The Fund is classified as a "non-diversified" investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
which means that a relatively high percentage of assets of the Fund may be
invested in obligations of a limited number of issuers. The value of the shares
of the Fund may be more susceptible to any single economic, political or
regulatory occurrence that the shares of a diversified investment company would
be. The Fund intends to satisfy the diversification requirements necessary to
qualify as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), which generally requires that the Fund be
diversified (i.e., that it will not invest more than 5% of its assets in the
securities of any one issuer) with respect to 50% of its assets.
DESCRIPTION OF PERMITTED INVESTMENTS
The following are descriptions of the permitted investments and investment
practices and the associated risk factors. The Fund may invest in any of the
following instruments or engage in any of the following investment practices
unless such investment or activity is inconsistent with or is not permitted by
the Fund's stated investment policies, including those stated below.
AMERICAN DEPOSITARY RECEIPTS. ADRs as well as other "hybrid" forms of ADRs,
including European Depositary Receipts ("EDRs") and Global Depositary Receipts
("GDRs"), are certificates evidencing ownership of shares of a foreign issuer.
These certificates are issued by depository banks and generally trade on an
established market in the United States or elsewhere. The underlying shares are
held in trust by a custodian bank or similar financial institution in the
issuer's home country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various services,
including forwarding dividends and interest and corporate actions. ADRs are
alternatives to directly purchasing the underlying foreign securities in their
national markets and currencies. However, ADRs continue to be subject to many
of the risks associated with investing directly in foreign securities.
Investments in the securities of foreign issuers may subject the Fund to
investment risks that differ in some respects from those related to investments
in securities of U.S. issuers. Such risks include future adverse political and
economic developments, possible imposition of withholding taxes on income,
possible seizure, nationalization or expropriation of foreign deposits,
possible establishment of exchange controls or taxation at the source or
greater fluctuation in value due to changes in exchange
S-2
rates. Foreign issuers of securities often engage in business practices
different from those of domestic issuers of similar securities, and there may
be less information publicly available about foreign issuers. In addition,
foreign issuers are, generally speaking, subject to less government supervision
and regulation and different accounting treatment than are those in the United
States.
ADRs can be sponsored or unsponsored. While these types are similar, there are
differences regarding a holder's rights and obligations and the practices of
market participants. A depository may establish an unsponsored facility without
participation by (or acquiescence of) the underlying issuer; typically,
however, the depository requests a letter of non-objection from the underlying
issuer prior to establishing the facility. Holders of unsponsored depositary
receipts generally bear all the costs of the facility. The depository usually
charges fees upon the deposit and withdrawal of the underlying securities, the
conversion of dividends into U.S. dollars or other currency, the disposition of
non-cash distributions, and the performance of other services. The depository
of an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the underlying issuer or to pass
through voting rights to depositary receipt holders with respect to the
underlying securities. Sponsored depositary receipt facilities are created in
generally the same manner as unsponsored facilities, except that sponsored
depositary receipts are established jointly by a depository and the underlying
issuer through a deposit agreement. The deposit agreement sets out the rights
and responsibilities of the underlying issuer, the depository, and the
depositary receipt holders. With sponsored facilities, the underlying issuer
typically bears some of the costs of the depositary receipts (such as dividend
payment fees of the depository), although most sponsored depositary receipts
holders may bear costs such as deposit and withdrawal fees. Depositories of
most sponsored depositary receipts agree to distribute notices of shareholder
meetings, voting instructions, and other shareholder communications and
information to the depositary receipt holders at the underlying issuer's
request.
EQUITY SECURITIES. Equity securities represent ownership interests in a company
or partnership and consist of common stocks, preferred stocks, warrants to
acquire common stock and securities convertible into common stock. Investments
in equity securities in general are subject to market risks that may cause
their prices to fluctuate over time. Fluctuations in the value of equity
securities in which the Fund invests will cause the net asset value of the Fund
to fluctuate. The Fund purchases equity securities traded in the United States
on registered exchanges or the over-the-counter market. Equity securities are
described in more detail below:
o COMMON STOCK. Common stock represents an equity or ownership interest in
an issuer. In the event an issuer is liquidated or declares bankruptcy, the
claims of owners of bonds and preferred stock take precedence over the
claims of those who own common stock.
o PREFERRED STOCK. Preferred stock represents an equity or ownership
interest in an issuer that pays dividends at a specified rate and that has
precedence over common stock in the payment of dividends. In the event an
issuer is liquidated or declares bankruptcy, the claims of owners of bonds
take precedence over the claims of those who own preferred and common
stock.
o WARRANTS. Warrants are instruments that entitle the holder to buy an
equity security at a specific price for a specific period of time. Changes
in the value of a warrant do not necessarily correspond to changes in the
value of its underlying security. The price of a warrant may be more
volatile than the price of its underlying security, and a warrant may offer
greater potential for capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying security and do not represent any rights in the assets of
the issuing company. A warrant ceases to have value if it is not exercised
prior to its expiration date. These factors can make warrants more
speculative than other types of investments.
o CONVERTIBLE SECURITIES. Convertible securities are bonds, debentures,
notes, preferred stocks or other securities that may be converted or
exchanged (by the holder or by the issuer) into shares of the underlying
common stock (or cash or securities of equivalent value) at a stated
exchange ratio. A convertible security may also be called for redemption or
conversion by the issuer after a particular date and under certain
circumstances (including a specified price) established upon issue. If a
convertible security held by the Fund is called for redemption or
conversion, the Fund could be required to tender it for
S-3
redemption, convert it into the underlying common stock, or sell it to a
third party.
Convertible securities generally have less potential for gain or loss than
common stocks. Convertible securities generally provide yields higher than
the underlying common stocks, but generally lower than comparable
non-convertible securities. Because of this higher yield, convertible
securities generally sell at a price above their "conversion value," which
is the current market value of the stock to be received upon conversion.
The difference between this conversion value and the price of convertible
securities will vary over time depending on changes in the value of the
underlying common stocks and interest rates. When the underlying common
stocks decline in value, convertible securities will tend not to decline to
the same extent because of the interest or dividend payments and the
repayment of principal at maturity for certain types of convertible
securities. However, securities that are convertible other than at the
option of the holder generally do not limit the potential for loss to the
same extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible securities
may also be expected to increase. At the same time, however, the difference
between the market value of convertible securities and their conversion
value will narrow, which means that the value of convertible securities
will generally not increase to the same extent as the value of the
underlying common stocks. Because convertible securities may also be
interest-rate sensitive, their value may increase as interest rates fall
and decrease as interest rates rise. Convertible securities are also
subject to credit risk, and are often lower-quality securities.
o SMALL AND MEDIUM CAPITALIZATION ISSUERS. Investing in equity securities of
small and medium capitalization companies often involves greater risk than
is customarily associated with investments in larger capitalization
companies. This increased risk may be due to the greater business risks of
smaller size, limited markets and financial resources, narrow product lines
and frequent lack of depth of management. The securities of smaller
companies are often traded in the over- the-counter market and even if
listed on a national securities exchange may not be traded in volumes
typical for that exchange. Consequently, the securities of smaller
companies are less likely to be liquid, may have limited market stability,
and may be subject to more abrupt or erratic market movements than
securities of larger, more established growth companies or the market
averages in general.
EXCHANGE TRADED FUNDS ("ETFS"). ETFs are investment companies whose shares are
bought and sold on a securities exchange. An ETF holds a portfolio of
securities designed to track a particular market segment or index. Some
examples of ETFs are SPDRs([R]), DIAMONDS(SM), NASDAQ 100 Index Tracking
Stock(SM) ("QQQs(SM)"), and iShares([R]). The Fund could purchase an ETF to
temporarily gain exposure to a portion of the U.S. or foreign market while
awaiting an opportunity to purchase securities directly. The risks of owning an
ETF generally reflect the risks of owning the underlying securities it is
designed to track, although lack of liquidity in an ETF could result in it
being more volatile than the underlying portfolio of securities and ETFs have
management fees that increase their costs versus the costs of owning the
underlying securities directly. See also "Securities of Other Investment
Companies" below.
FIXED INCOME SECURITIES. Fixed income securities include bonds, notes,
debentures and other interest-bearing securities that represent indebtedness.
The market value of the fixed income investments in which the Fund invests will
change in response to interest rate changes and other factors. During periods
of falling interest rates, the values of outstanding fixed income securities
generally rise. Conversely, during periods of rising interest rates, the values
of such securities generally decline. Moreover, while securities with longer
maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the rating of any
fixed income security and in the ability of an issuer to make payments of
interest and principal also affect the value of these investments. Changes in
the value of these securities will not necessarily affect cash income derived
from these securities but will affect the Fund's net asset value.
FOREIGN SECURITIES. Foreign securities include equity securities of foreign
entities, obligations of foreign branches of U.S. banks and of foreign banks,
including, without limitation, European Certificates of Deposit, European Time
Deposits, European Bankers' Acceptances, Canadian Time Deposits, Europaper and
Yankee Certificates of Deposit, and investments in Canadian Commercial Paper
and foreign securities. These instruments have investment risks that differ in
some respects from those related to investments in obligations of U.S. domestic
issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income,
possible seizure, nationalization, or expropriation of foreign deposits, the
possible establishment of exchange controls or taxation at the source, greater
fluctuations
S-4
in value due to changes in exchange rates, or the adoption of other foreign
governmental restrictions which might adversely affect the payment of principal
and interest on such obligations. Such investments may also entail higher
custodial fees and sales commissions than domestic investments. Foreign issuers
of securities or obligations are often subject to accounting treatment and
engage in business practices different from those respecting domestic issuers
of similar securities or obligations. Foreign branches of U.S. banks and
foreign banks may be subject to less stringent reserve requirements than those
applicable to domestic branches of U.S. banks.
In June 2016, the United Kingdom (the "UK") voted in a referendum to leave the
European Union ("EU"). Although the precise timeframe for "Brexit" is
uncertain, it is currently expected that the UK will seek to withdraw from the
EU by invoking article 50 of the Lisbon Treaty with an anticipated completion
date within two years from notifying the European Council of the UK's intention
to withdraw. It is unclear how withdrawal negotiations will be conducted and
what the potential consequences may be. In addition, it is possible that
measures could be taken to revote on the issue of Brexit, or that portions of
the UK could seek to separate and remain a part of the EU. As a result of the
political divisions within the UK and between the UK and the EU that the
referendum vote has highlighted and the uncertain consequences of a Brexit, the
UK and European economies and the broader global economy could be significantly
impacted, which may result in increased volatility and illiquidity, and
potentially lower economic growth on markets in the UK, Europe and globally
that could potentially have an adverse effect on the value of the Fund's
investments.
MONEY MARKET SECURITIES. Money market securities include: short-term U.S.
government securities; custodial receipts evidencing separately traded interest
and principal components of securities issued by the U.S. Treasury; commercial
paper rated in the highest short-term rating category by a nationally
recognized statistical ratings organization ("NRSRO"), such as Standard &
Poor's Rating Services ("S&P") or Moody's Investor Service ("Moody's"), or
determined by the Adviser to be of comparable quality at the time of purchase;
short-term bank obligations (certificates of deposit, time deposits and
bankers' acceptances) of U.S. commercial banks with assets of at least $1
billion as of the end of their most recent fiscal year; and repurchase
agreements involving such securities. Each of these money market securities are
described in this SAI. For a description of ratings, see "Appendix A --
Description of Ratings" to this SAI.
U.S. GOVERNMENT SECURITIES. The Fund may invest in U.S. government securities.
Securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities include U.S. Treasury securities, which are backed by the full
faith and credit of the U.S. Treasury and which differ only in their interest
rates, maturities, and times of issuance. U.S. Treasury bills have initial
maturities of one-year or less; U.S. Treasury notes have initial maturities of
one to ten years; and U.S. Treasury bonds generally have initial maturities of
greater than ten years. U.S. Treasury notes and bonds typically pay coupon
interest semi-annually and repay the principal at maturity. Certain U.S.
government securities are issued or guaranteed by agencies or instrumentalities
of the U.S. government including, but not limited to, obligations of U.S.
government agencies or instrumentalities such as the Federal National Mortgage
Association ("Fannie Mae"), the Government National Mortgage Association
("Ginnie Mae"), the Small Business Administration, the Federal Farm Credit
Administration, the Federal Home Loan Banks, Banks for Cooperatives (including
the Central Bank for Cooperatives), the Federal Land Banks, the Federal
Intermediate Credit Banks, the Tennessee Valley Authority, the Export-Import
Bank of the United States, the Commodity Credit Corporation, the Federal
Financing Bank, the Student Loan Marketing Association, the National Credit
Union Administration and the Federal Agricultural Mortgage Corporation ("Farmer
Mac").
Some obligations issued or guaranteed by U.S. government agencies and
instrumentalities, including, for example, Ginnie Mae pass-through
certificates, are supported by the full faith and credit of the U.S. Treasury.
Other obligations issued by or guaranteed by federal agencies, such as those
securities issued by Fannie Mae, are supported by the discretionary authority
of the U.S. government to purchase certain obligations of the federal agency.
Additionally, some obligations are issued by or guaranteed by federal agencies,
such as those of the Federal Home Loan Banks, which are supported by the right
of the issuer to borrow from the U.S. Treasury. While the U.S. government
provides financial support to such U.S. government-sponsored federal agencies,
no assurance can be given that the U.S. government will always do so, since the
U.S. government is not so obligated by law. Guarantees of principal by U.S.
government agencies or instrumentalities may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of principal and
interest do not extend to the value or yield of these securities nor to the
value of the Fund's shares.
S-5
On September 7, 2008, the U.S. Treasury announced a federal takeover of Fannie
Mae and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), placing the
two federal instrumentalities in conservatorship. Under the takeover agreement,
the U.S. Treasury agreed to acquire $1 billion of senior preferred stock of
each instrumentality and obtained warrants for the purchase of common stock of
each instrumentality (the "Senior Preferred Stock Purchase Agreement" or
"Agreement"). Under the Agreement, the U.S. Treasury pledged to provide up to
$200 billion per instrumentality as needed, including the contribution of cash
capital to the instrumentalities in the event their liabilities exceed their
assets. This was intended to ensure that the instrumentalities maintain a
positive net worth and meet their financial obligations, preventing mandatory
triggering of receivership. On December 24, 2009, the U.S. Treasury announced
that it was amending the Agreement to allow the $200 billion cap on the U.S.
Treasury's funding commitment to increase as necessary to accommodate any
cumulative reduction in net worth through the end of 2012. The unlimited
support the U.S. Treasury extended to the two companies expired at the
beginning of 2013 -- Fannie Mae's support is now capped at $125 billion and
Freddie Mac has a limit of $149 billion.
On August 17, 2012, the U.S. Treasury announced that it was again amending the
Agreement to terminate the requirement that Fannie Mae and Freddie Mac each pay
a 10% annual dividend. Instead, the companies will transfer to the U.S.
Treasury on a quarterly basis all profits earned during a quarter that exceed a
capital reserve amount of $3 billion. It is believed that the new amendment
puts Fannie Mae and Freddie Mac in a better position to service their debt
because the companies no longer have to borrow from the U.S. Treasury to make
fixed dividend payments. As part of the new terms, Fannie Mae and Freddie Mac
also will be required to reduce their investment portfolios at an annual rate
of 15 percent instead of the previous 10 percent, which puts each of them on
track to cut their portfolios to a targeted $250 billion in 2018.
Fannie Mae and Freddie Mac are the subject of several continuing class action
lawsuits and investigations by federal regulators over certain accounting,
disclosure or corporate governance matters, which (along with any resulting
financial restatements) may adversely affect the guaranteeing entities.
Importantly, the future of the entities is in serious question as the U.S.
government reportedly is considering multiple options, ranging from
nationalization, privatization, consolidation, or abolishment of the entities.
U.S. TREASURY OBLIGATIONS. U.S. Treasury obligations consist of direct
obligations of the U.S. Treasury, including Treasury bills, notes and bonds,
and separately traded interest and principal component parts of such
obligations, including those transferable through the Federal book-entry system
known as Separate Trading of Registered Interest and Principal of Securities
("STRIPS"). The STRIPS program lets investors hold and trade the individual
interest and principal components of eligible Treasury notes and bonds as
separate securities. Under the STRIPS program, the principal and interest
components are separately issued by the U.S. Treasury at the request of
depository financial institutions, which then trade the component parts
separately.
COMMERCIAL PAPER. Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few to 270 days.
BANK OBLIGATIONS. The Fund may invest in obligations issued by banks and other
savings institutions. Investments in bank obligations include obligations of
domestic branches of foreign banks and foreign branches of domestic banks.
Such investments in domestic branches of foreign banks and foreign branches of
domestic banks may involve risks that are different from investments in
securities of domestic branches of U.S. banks. These risks may include future
unfavorable political and economic developments, possible withholding taxes on
interest income, seizure or nationalization of foreign deposits, currency
controls, interest limitations, or other governmental restrictions which might
affect the payment of principal or interest on the securities held by the Fund.
Additionally, these institutions may be subject to less stringent reserve
requirements and to different accounting, auditing, reporting and recordkeeping
requirements than those applicable to domestic branches of U.S. banks. Bank
obligations include the following:
o BANKERS' ACCEPTANCES. Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by a commercial bank. Corporations use
bankers' acceptances to finance the shipment and storage of goods and to
furnish dollar exchange. Maturities are generally six months or less.
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o CERTIFICATES OF DEPOSIT. Certificates of deposit are interest-bearing
instruments with a specific maturity. They are issued by banks and savings
and loan institutions in exchange for the deposit of funds and normally can
be traded in the secondary market prior to maturity. Certificates of
deposit with penalties for early withdrawal will be considered illiquid.
o TIME DEPOSITS. Time deposits are non-negotiable receipts issued by a bank
in exchange for the deposit of funds. Like a certificate of deposit, it
earns a specified rate of interest over a definite period of time; however,
it cannot be traded in the secondary market. Time deposits with a
withdrawal penalty or that mature in more than seven days are considered to
be illiquid securities.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
financial institutions. A repurchase agreement is an agreement under which the
Fund acquires a security from a commercial bank, broker, or dealer, and
simultaneously agrees to resell such security to the seller at an agreed upon
price and date (normally, the next business day). Because the security
purchased constitutes collateral for the repurchase obligation, a repurchase
agreement may be considered a loan that is collateralized by the security
purchased. The acquisition of a repurchase agreement may be deemed to be an
acquisition of the underlying securities if the obligation of the seller to
repurchase the securities is collateralized fully. The Fund follows certain
procedures designed to minimize the risks inherent in such agreements. These
procedures include effecting repurchase transactions only with creditworthy
financial institutions whose condition will be continually monitored by the
Adviser. Under all repurchase agreements entered into by the Fund, the
custodian or its agent must take possession of the underlying collateral. In
the event of a default or bankruptcy by a selling financial institution, the
Fund will seek to liquidate such collateral. However, the exercising of the
Fund's right to liquidate such collateral could involve certain costs or delays
and, to the extent that proceeds from any sale upon a default of the obligation
to repurchase were less than the repurchase price, the Fund could suffer a
loss. The Fund may enter into "tri-party" repurchase agreements. In "tri-party"
repurchase agreements, an unaffiliated third party custodian maintains accounts
to hold collateral for the Fund and its counterparties and, therefore, the Fund
may be subject to the credit risk of those custodians. It is the current policy
of the Fund not to invest in repurchase agreements that do not mature within
seven days if any such investment, together with any other illiquid assets held
by the Fund, amounts to more than 15% of the Fund's total assets. The
investments of the Fund in repurchase agreements, at times, may be substantial
when, in the view of the Adviser, liquidity or other considerations so
warrant.
SECURITIES OF OTHER INVESTMENT COMPANIES. The Fund may invest in shares of
other investment companies, to the extent permitted by applicable law and
subject to certain restrictions. These investment companies typically incur
fees that are separate from those fees incurred directly by the Fund. The
Fund's purchase of such investment company securities results in the layering
of expenses, such that shareholders would indirectly bear a proportionate share
of the operating expenses of such investment companies, including advisory
fees, in addition to paying the Fund's expenses. Unless an exception is
available, Section 12(d)(1)(A) of the 1940 Act prohibits a fund from (i)
acquiring more than 3% of the voting shares of any one investment company, (ii)
investing more than 5% of its total assets in any one investment company, and
(iii) investing more than 10% of its total assets in all investment companies
combined, including its ETF investments.
For hedging or other purposes, the Fund may invest in investment companies that
seek to track the composition and/or performance of specific indexes or
portions of specific indexes. Certain of these investment companies, known as
ETFs, are traded on a securities exchange. (See "Exchange Traded Funds" above).
The market prices of index-based investments will fluctuate in accordance with
changes in the underlying portfolio securities of the investment company and
also due to supply and demand of the investment company's shares on the
exchange upon which the shares are traded. Index-based investments may not
replicate or otherwise match the composition or performance of their specified
index due to transaction costs, among other things.
Pursuant to orders issued by the U.S. Securities and Exchange Commission (
"SEC") to each of certain iShares, Market Vectors, Vanguard, ProShares,
PowerShares, Guggenheim (formerly, Claymore), Direxion, Wisdom Tree, Rydex,
First Trust and SPDR ETFs and procedures approved by the Board, the Fund may
invest in these ETFs in excess of the 3% limit described above, provided that
the Fund otherwise complies with the conditions of the SEC order, as it may be
amended, and any other applicable investment limitations. Neither these ETFs
nor their investment advisers make any representations regarding the
advisability of investing in the ETFs.
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SECURITIES LENDING. The Fund may lend portfolio securities to brokers, dealers
and other financial organizations that meet capital and other credit
requirements or other criteria established by the Board. These loans, if and
when made, may not exceed 33 1/3% of the total asset value of the Fund
(including the loan collateral). The Fund will not lend portfolio securities to
the Adviser or its affiliates unless permissible under the 1940 Act and the
rules and promulgations thereunder. Loans of portfolio securities will be fully
collateralized by cash, letters of credit or U.S. government securities, and
the collateral will be maintained in an amount equal to at least 100% of the
current market value of the loaned securities by marking to market daily. Any
gain or loss in the market price of the securities loaned that might occur
during the term of the loan would be for the account of the Fund.
The Fund may pay a part of the interest earned from the investment of
collateral, or other fee, to an unaffiliated third party for acting as the
Fund's securities lending agent, but will bear all of any losses from the
investment of collateral.
By lending its securities, the Fund may increase its income by receiving
payments from the borrower that reflect the amount of any interest or any
dividends payable on the loaned securities as well as by either investing cash
collateral received from the borrower in short-term instruments, or obtaining a
fee from the borrower when U.S. government securities or letters of credit are
used as collateral. Investing cash collateral subjects the Fund to market risk.
The Fund remains obligated to return all collateral to the borrower under the
terms of its securities lending arrangements, even if the value of investments
made with the collateral decline. Accordingly, if the value of a security in
which the cash collateral has been invested declines, the loss would be borne
by the Fund, and the Fund may be required to liquidate other investments in
order to return collateral to the borrower at the end of the loan. The Fund
will adhere to the following conditions whenever its portfolio securities are
loaned: (i) the Fund must receive at least 100% cash collateral or equivalent
securities of the type discussed above from the borrower; (ii) the borrower
must increase such collateral whenever the market value of the securities rises
above the level of such collateral; (iii) the Fund must be able to terminate
the loan on demand; (iv) the Fund must receive reasonable interest on the loan,
as well as any dividends, interest or other distributions on the loaned
securities and any increase in market value; (v) the Fund may pay only
reasonable fees in connection with the loan (which fees may include fees
payable to the lending agent, the borrower, the Fund's administrator and the
custodian); and (vi) voting rights on the loaned securities may pass to the
borrower, provided, however, that if a material event adversely affecting the
investment occurs, the Fund must terminate the loan and regain the right to
vote the securities. The Board has adopted procedures reasonably designed to
ensure that the foregoing criteria will be met. Loan agreements involve certain
risks in the event of default or insolvency of the borrower, including possible
delays or restrictions upon the Fund's ability to recover the loaned securities
or dispose of the collateral for the loan, which could give rise to loss
because of adverse market action, expenses and/or delays in connection with the
disposition of the underlying securities.
FUTURES AND OPTIONS ON FUTURES. A futures contract is an agreement between two
parties whereby one party agrees to sell and the other party agrees to buy a
specified amount of a specific security at a specified future time and at a
specified price. An option on a futures contract gives the purchaser the right,
in exchange for a premium, to assume a position in a futures contract at a
specified exercise price during the term of the option. The Fund will reduce
the risk that it will be unable to close out a futures contract by only
entering into futures contracts that are traded on a national futures exchange
regulated by the Commodities Futures Trading Commission ("CFTC"). The Fund may
use futures contracts and related options for bona fide hedging; attempting to
offset changes in the value of securities held or expected to be acquired or be
disposed of; attempting to minimize fluctuations in foreign currencies;
attempting to gain exposure to a particular market, index or instrument; or
other risk management purposes. To the extent futures and/or options on futures
are employed by the Fund, such use will be in accordance with Rule 4.5 of the
Commodity Exchange Act ("CEA").
Consistent with the CFTC's new regulations, the Trust, on behalf of the Fund,
has filed a notice of exclusion from the definition of the term "commodity pool
operator" ("CPO") under the CEA pursuant to CFTC Rule 4.5 and, therefore, the
Fund is not subject to registration or regulation as a CPO under the CEA. As a
result, the Fund will be limited in its ability to use futures, options on such
futures, commodity options and certain swaps. Complying with the limitations
may restrict the Adviser's ability to implement the Fund's investment
strategies and may adversely affect the Fund's performance.
An index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the index value at the
close of trading of the contract and the price at which the futures contract is
originally struck. No physical delivery of the securities comprising the index
is made;
S-8
generally contracts are closed out prior to the expiration date of the
contract.
When the Fund purchases or sells a futures contract, or sells an option
thereon, the Fund is required to "cover" its position in order to limit
leveraging and related risks. With respect to futures contracts that are
contractually required to "cash settle," the Fund may cover its position by
maintaining with its custodian bank (and marking-to-market on a daily basis), a
segregated account consisting of cash or liquid securities that, when added to
any amounts deposited with a futures commission merchant as margin, are equal
to the market value of the futures contract, rather than the notional value of
the contract, or otherwise "cover" its position in a manner consistent with the
1940 Act or the rules and SEC interpretations thereunder. The segregated
account functions as a practical limit on the amount of leverage which the Fund
may undertake and on the potential increase in the speculative character of the
Fund's outstanding portfolio securities. Additionally, such segregated accounts
will generally assure the availability of adequate funds to meet the
obligations of the Fund arising from such investment activities. However, by
segregating assets in an amount equal to the net obligation rather than the
notional amount of cash settled futures, the Fund will have the ability to
employ leverage to a greater extent than if it set aside cash or other liquid
securities equal to the notional amount of the contract, which may increase the
risk associated with such transactions.
The Fund may also cover its long position in a futures contract by purchasing a
put option on the same futures contract with a strike price (i.e., an exercise
price) as high or higher than the price of the futures contract. In the
alternative, if the strike price of the put is less than the price of the
futures contract, the Fund will segregate cash or liquid securities equal in
value to the difference between the strike price of the put and the price of
the futures contract. The Fund may also cover its long position in a futures
contract by taking a short position in the instruments underlying the futures
contract, or by taking positions in instruments with prices which are expected
to move relatively consistently with the futures contract. The Fund may cover
its short position in a futures contract by taking a long position in the
instruments underlying the futures contracts, or by taking positions in
instruments with prices which are expected to move relatively consistently with
the futures contract.
The Fund may cover its sale of a call option on a futures contract by taking a
long position in the underlying futures contract at a price less than or equal
to the strike price of the call option. In the alternative, if the long
position in the underlying futures contract is established at a price greater
than the strike price of the written (sold) call, the Fund will maintain in a
segregated account cash or liquid securities equal in value to the difference
between the strike price of the call and the price of the futures contract. The
Fund may also cover its sale of a call option by taking positions in
instruments with prices which are expected to move relatively consistently with
the call option. The Fund may cover its sale of a put option on a futures
contract by taking a short position in the underlying futures contract at a
price greater than or equal to the strike price of the put option, or, if the
short position in the underlying futures contract is established at a price
less than the strike price of the written put, the Fund will maintain in a
segregated account cash or liquid securities equal in value to the difference
between the strike price of the put and the price of the futures contract. The
Fund may also cover its sale of a put option by taking positions in instruments
with prices which are expected to move relatively consistently with the put
option.
There are significant risks associated with the Fund's use of futures contracts
and related options, including the following: (1) the success of a hedging
strategy may depend on the Adviser's ability to predict movements in the prices
of individual securities, fluctuations in markets and movements in interest
rates; (2) there may be an imperfect or no correlation between the changes in
market value of the securities held by the Fund and the prices of futures and
options on futures; (3) there may not be a liquid secondary market for a
futures contract or option; (4) trading restrictions or limitations may be
imposed by an exchange; and (5) government regulations may restrict trading in
futures contracts and options on futures. In addition, some strategies reduce
the Fund's exposure to price fluctuations, while others tend to increase its
market exposure.
OPTIONS. The Fund may purchase and write put and call options on indices and
enter into related closing transactions. A put option on a security gives the
purchaser of the option the right to sell, and the writer of the option the
obligation to buy, the underlying security at any time during the option
period. A call option on a security gives the purchaser of the option the right
to buy, and the writer of the option the obligation to sell, the underlying
security at any time during the option period. The premium paid to the writer
is the consideration for undertaking the obligations under the option
contract.
The Fund may purchase and write put and call options on foreign currencies
(traded on U.S. and foreign exchanges or over-the-counter markets) to manage
its exposure to exchange rates. Call options on foreign currency written by the
Fund will be
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"covered," which means that the Fund will own an equal amount of the underlying
foreign currency.
Put and call options on indices are similar to options on securities except
that options on an index give the holder the right to receive, upon exercise of
the option, an amount of cash if the closing level of the underlying index is
greater than (or less than, in the case of puts) the exercise price of the
option. This amount of cash is equal to the difference between the closing
price of the index and the exercise price of the option, expressed in dollars
multiplied by a specified number. Thus, unlike options on individual
securities, all settlements are in cash, and gain or loss depends on price
movements in the particular market represented by the index generally, rather
than the price movements in individual securities.
All options written on indices or securities must be covered. When the Fund
writes an option on a security, an index or a foreign currency, it will
establish a segregated account containing cash or liquid securities in an
amount at least equal to the market value of the option and will maintain the
account while the option is open or will otherwise cover the transaction.
The Fund may trade put and call options on securities, securities indices and
currencies, as the Adviser determines is appropriate in seeking the Fund's
investment objective, and except as restricted by the Fund's investment
limitations. See "Investment Limitations" below.
The initial purchase (sale) of an option contract is an "opening transaction."
In order to close out an option position, the Fund may enter into a "closing
transaction," which is simply the sale (purchase) of an option contract on the
same security with the same exercise price and expiration date as the option
contract originally opened. If the Fund is unable to effect a closing purchase
transaction with respect to an option it has written, it will not be able to
sell the underlying security until the option expires or the Fund delivers the
security upon exercise.
The Fund may purchase put and call options on securities to protect against a
decline in the market value of the securities in its portfolio or to anticipate
an increase in the market value of securities that the Fund may seek to
purchase in the future. The Fund purchasing put and call options pays a premium
therefore. If price movements in the underlying securities are such that
exercise of the options would not be profitable for the Fund, loss of the
premium paid may be offset by an increase in the value of the Fund's securities
or by a decrease in the cost of acquisition of securities by the Fund.
The Fund may write covered call options on securities as a means of increasing
the yield on its assets and as a means of providing limited protection against
decreases in its market value. When the Fund writes an option, if the
underlying securities do not increase or decrease to a price level that would
make the exercise of the option profitable to the holder thereof, the option
generally will expire without being exercised and the Fund will realize as
profit the premium received for such option. When a call option of which the
Fund is the writer is exercised, the Fund will be required to sell the
underlying securities to the option holder at the strike price, and will not
participate in any increase in the price of such securities above the strike
price. When a put option of which the Fund is the writer is exercised, the Fund
will be required to purchase the underlying securities at a price in excess of
the market value of such securities.
The Fund may purchase and write options on an exchange or over-the-counter.
Over-the-counter options ("OTC" options) differ from exchange-traded options in
several respects. They are transacted directly with dealers and not with a
clearing corporation, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a
wider range of expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded on an exchange,
pricing is done normally by reference to information from a market maker. It is
the SEC's position that OTC options are generally illiquid.
The market value of an option generally reflects the market price of an
underlying security. Other principal factors affecting market value include
supply and demand, interest rates, the pricing volatility of the underlying
security and the time remaining until the expiration date.
Risks associated with options transactions include: (1) the success of a
hedging strategy may depend on an ability to predict movements in the prices of
individual securities, fluctuations in markets and movements in interest rates;
(2) there may be an imperfect correlation between the movement in prices of
options and the securities underlying them; (3) there may not be a
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liquid secondary market for options; and (4) while the Fund will receive a
premium when it writes covered call options, it may not participate fully in a
rise in the market value of the underlying security.
ILLIQUID SECURITIES. Illiquid securities are securities that cannot be sold or
disposed of in the ordinary course of business (within seven days) at
approximately the prices at which they are valued. Because of their illiquid
nature, illiquid securities must be priced at fair value as determined in good
faith pursuant to procedures approved by the Board. Despite such good faith
efforts to determine fair value prices, the Fund's illiquid securities are
subject to the risk that the security's fair value price may differ from the
actual price which the Fund may ultimately realize upon its sale or
disposition. Difficulty in selling illiquid securities may result in a loss or
may be costly to the Fund. Under the supervision of the Board, the Adviser
determines the liquidity of the Fund's investments. In determining the
liquidity of the Fund's investments, the Adviser may consider various factors,
including (1) the frequency and volume of trades and quotations, (2) the number
of dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, and (4) the nature of the security and the
market in which it trades (including any demand, put or tender features, the
mechanics and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the method of
soliciting offers, the time required to dispose of the security, and the
ability to assign or offset the rights and obligations of the security). The
Fund will not hold more than 15% of its net assets in illiquid securities.
RESTRICTED SECURITIES. Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933,
as amended (the "1933 Act") or an exemption from registration. As consistent
with the Fund's investment objectives, the Fund may invest in Section 4(a)(2)
commercial paper. Section 4(a)(2) commercial paper is issued in reliance on an
exemption from registration under Section 4(a)(2) of the 1933 Act and is
generally sold to institutional investors who purchase for investment. Any
resale of such commercial paper must be in an exempt transaction, usually to an
institutional investor through the issuer or investment dealers who make a
market in such commercial paper. The Trust believes that Section 4(a)(2)
commercial paper is liquid to the extent it meets the criteria established by
the Board. The Trust intends to treat such commercial paper as liquid and not
subject to the investment limitations applicable to illiquid securities or
restricted securities.
SHORT SALES. As is consistent with the Fund's investment objectives, the Fund
may engage in short sales that are either "uncovered" or "against the box." A
short sale is "against the box" if at all times during which the short position
is open, the Fund owns at least an equal amount of the securities or securities
convertible into, or exchangeable without further consideration for, securities
of the same issue as the securities that are sold short. A short sale against
the box is a taxable transaction to the Fund with respect to the securities
that are sold short.
Uncovered short sales are transactions under which the Fund sells a security it
does not own. To complete such a transaction, the Fund must borrow the security
to make delivery to the buyer. The Fund then is obligated to replace the
security borrowed by purchasing the security at the market price at the time of
the replacement. The price at such time may be more or less than the price at
which the security was sold by the Fund. Until the security is replaced, the
Fund is required to pay the lender amounts equal to any dividends or interest
that accrue during the period of the loan. To borrow the security, the Fund
also may be required to pay a premium, which would increase the cost of the
security sold. The proceeds of the short sale will be retained by the broker,
to the extent necessary to meet margin requirements, until the short position
is closed out.
Until the Fund closes its short position or replaces the borrowed security, the
Fund will: (a) maintain a segregated account containing cash or liquid
securities at such a level that the amount deposited in the account plus the
amount deposited with the broker as collateral will equal the current value of
the security sold short or (b) otherwise cover the Fund's short position.
SPECIAL RISKS OF CYBER ATTACKS. As with any entity that conducts business
through electronic means in the modern marketplace, the Fund, and its service
providers, may be susceptible to operational and information security risks
resulting from cyber attacks. Cyber attacks include, among other behaviors,
stealing or corrupting data maintained online or digitally, denial of service
attacks on websites, the unauthorized monitoring, release, misuse, loss,
destruction or corruption of confidential information, unauthorized access to
relevant systems, compromises to networks or devices that the Fund and its
service providers use to service the Fund's operations, operational disruption
or failures in the physical infrastructure or operating systems that support
the Fund and its service providers, or various other forms of cyber security
breaches. Cyber attacks affecting the Fund or the Adviser, the Fund's
distributor, custodian, or any other of the Fund's intermediaries or service
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providers may adversely impact the Fund and its shareholders, potentially
resulting in, among other things, financial losses or the inability of Fund
shareholders to transact business. For instance, cyber attacks may interfere
with the processing of shareholder transactions, impact the Fund's ability to
calculate its net asset value, cause the release of private shareholder
information or confidential business information, impede trading, subject the
Fund to regulatory fines or financial losses and/or cause reputational damage.
The Fund may also incur additional costs for cyber security risk management
purposes designed to mitigate or prevent the risk of cyber attacks. Such costs
may be ongoing because threats of cyber attacks are constantly evolving as
cyber attackers become more sophisticated and their techniques become more
complex. Similar types of cyber security risks are also present for issuers of
securities in which the Fund may invest, which could result in material adverse
consequences for such issuers and may cause the Fund's investments in such
companies to lose value. There can be no assurance that the Fund, the Fund's
service providers, or the issuers of the securities in which the Fund invests
will not suffer losses relating to cyber attacks or other information security
breaches in the future.
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following investment limitations are fundamental, which means that the Fund
cannot change them without approval by the vote of a majority of the
outstanding shares of the Fund. The phrase "majority of the outstanding shares"
means the vote of (i) 67% or more of the Fund's shares present at a meeting, if
more than 50% of the outstanding shares of the Fund are present or represented
by proxy, or (ii) more than 50% of the Fund's outstanding shares, whichever is
less.
The Fund may not:
1. Concentrate investments in a particular industry or group of industries,
as concentration is defined under the 1940 Act, the rules and regulations
thereunder or any exemption therefrom, as such statute, rules or
regulations may be amended or interpreted from time to time.
2. Borrow money or issue senior securities (as defined under the 1940 Act),
except to the extent permitted under the 1940 Act, the rules and
regulations thereunder or any exemption therefrom, as such statute, rules
or regulations may be amended or interpreted from time to time.
3. Make loans, except to the extent permitted under the 1940 Act, the rules
and regulations thereunder or any exemption therefrom, as such statute,
rules or regulations may be amended or interpreted from time to time.
4. Purchase or sell commodities or real estate, except to the extent
permitted under the 1940 Act, the rules and regulations thereunder or any
exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.
5. Underwrite securities issued by other persons, except to the extent
permitted under the 1940 Act, the rules and regulations thereunder or any
exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.
NON-FUNDAMENTAL POLICIES
In addition to the investment objective of the Fund, the following investment
limitations of the Fund are non-fundamental and may be changed by the Board
without shareholder approval.
The Fund may not:
1. Purchase any securities which would cause 25% or more of the total assets
of the Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply to investments in obligations
issued or guaranteed by the U.S. government, its agencies or
S-12
instrumentalities and repurchase agreements involving such securities. For
purposes of this limitation: (i) utility companies will be classified
according to their services, for example, gas distribution, gas
transmission, electric and telephone will each be considered a separate
industry; and (ii) financial service companies will be classified according
to the end users of their services, for example, automobile finance, bank
finance and diversified finance will each be considered a separate
industry.
2. Borrow money from a bank in an amount exceeding 33 1/3% of the value of
its total assets, provided that, for purposes of this limitation,
investment strategies that either obligate the Fund to purchase securities
or require the Fund to segregate assets are not considered to be borrowing.
Asset coverage of at least 300%, including the amount borrowed, is required
for all borrowing, except where the Fund has borrowed money for temporary
purposes in an amount not exceeding 5% of its total assets.
3. Make loans if, as a result, more than 33 1/3% of its total assets would be
lent to other parties, except that the Fund may: (i) purchase or hold debt
instruments in accordance with its investment objective and policies; (ii)
enter into repurchase agreements; and (iii) lend its securities.
4. Purchase or sell real estate, real estate limited partnership interests,
physical commodities or commodities contracts except that the Fund may
purchase: (i) marketable securities issued by companies which own or invest
in real estate (including real estate investment trusts), commodities or
commodities contracts; and (ii) commodities contracts relating to financial
instruments, such as financial futures contracts and options on such
contracts.
5. Hold illiquid securities in an amount exceeding, in the aggregate, 15% of
the Fund's net assets.
Except with respect to Fund policies concerning borrowing, if a percentage
restriction is adhered to at the time of an investment, a later increase or
decrease in percentage resulting from changes in values or assets will not
constitute a violation of such restriction. With respect to the limitation on
illiquid securities, in the event that a subsequent change in net assets or
other circumstances causes the Fund to exceed its limitation, the Fund will
take steps to bring the aggregate amount of illiquid instruments back within
the limitations as soon as reasonably practicable. With respect to the
limitation on borrowing, in the event that a subsequent change in net assets or
other circumstances cause the Fund to exceed its limitation, the Fund will take
steps to bring the aggregate amount of borrowing back within the limitations
within three days thereafter (not including Sundays and holidays).
The following descriptions of certain provisions of the 1940 Act may assist
investors in understanding the above policies and restrictions:
CONCENTRATION. The SEC staff has defined concentration as investing 25% or more
of an investment company's total assets in an industry or group of industries,
with certain exceptions.
BORROWING. The 1940 Act presently allows a fund to borrow from any bank in an
amount up to 33 1/3% of its total assets (including the amount borrowed) and to
borrow for temporary purposes in an amount not exceeding 5% of the value of its
total assets.
SENIOR SECURITIES. Senior securities may include any obligation or instrument
issued by a fund evidencing indebtedness. The 1940 Act generally prohibits
funds from issuing senior securities, although it does not treat certain
transactions as senior securities, such as short sales, firm commitment
agreements and standby commitments, with appropriate earmarking or segregation
of assets to cover such obligation.
LENDING. Under the 1940 Act, a fund may only make loans if expressly permitted
by its investment policies.
UNDERWRITING. Under the 1940 Act, underwriting securities involves a fund
purchasing securities directly from an issuer for the purpose of selling
(distributing) them or participating in any such activity either directly or
indirectly. Under the 1940 Act, a diversified fund may not make any commitment
as underwriter, if immediately thereafter the amount of its outstanding
S-13
underwriting commitments, plus the value of its investments in securities of
issuers (other than investment companies) of which it owns more than 10% of the
outstanding voting securities, exceeds 25% of the value of its total assets.
COMMODITIES AND REAL ESTATE. The 1940 Act does not directly restrict an
investment company's ability to invest in commodities or real estate, but does
require that every investment company have a fundamental investment policy
governing such investments.
THE ADVISER
GENERAL. Edgewood Management LLC, located at 535 Madison Avenue, 15th Floor,
New York, New York 10022, serves as the investment adviser to the Fund. The
Adviser is a New York limited liability company formed in 2006 and is the
successor to Edgewood Management Company, founded in 1974. Alan Breed is the
largest shareholder of Edgewood Management Company I, Inc., the majority owner
of the Adviser. The Adviser is a professional investment management firm
registered with the SEC under the Investment Advisers Act of 1940, as amended.
As of December 31, 2016, the Adviser had approximately $[XX] billion in assets
under management.
ADVISORY AGREEMENT WITH THE TRUST. The Trust and the Adviser have entered into
an investment advisory agreement dated February 27, 2006 (the "Advisory
Agreement"). Under the Advisory Agreement, the Adviser serves as investment
adviser and makes the investment decisions for the Fund and continuously
reviews, supervises and administers the investment program of the Fund, subject
to the supervision of, and policies established by, the Board.
After the initial two-year term, the continuance of the Advisory Agreement must
be specifically approved at least annually: (i) by the vote of the Trustees or
by a vote of the majority of the outstanding voting securities of the Fund; and
(ii) by the vote of a majority of the Trustees who are not parties to the
Advisory Agreement or "interested persons" of any party thereto, cast in person
at a meeting called for the purpose of voting on such approval. The Advisory
Agreement will terminate automatically in the event of its assignment, and is
terminable at any time without penalty by the Board or by a majority of the
outstanding voting securities of the Fund, or, by the Adviser, on not less than
30 days' nor more than 60 days' written notice to the Trust. As used in the
Advisory Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" have the same meaning as such terms in
the 1940 Act.
ADVISORY FEES PAID TO THE ADVISER. For its services under the Advisory
Agreement, the Adviser is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of 1.00% of the average daily net assets of the
Fund.
The Adviser has contractually agreed to waive fees and reimburse expenses to
the extent necessary to keep total annual Fund operating expenses (excluding
interest, taxes, brokerage commissions, distribution and/or service (12b-1)
fees, shareholder servicing fees, acquired fund fees and expenses and
non-routine expenses (collectively, "excluded expenses")) from exceeding 1.00%
of the average daily net assets of each of the Fund's share classes until
February 28, 2018 (the "contractual expense limit"). In addition, if at any
point Total Annual Fund Operating Expenses (not including excluded expenses)
are below the contractual expense limit, the Adviser may receive from the Fund
the difference between the Total Annual Fund Operating Expenses (not including
excluded expenses) and the contractual expense limit to recover all or a
portion of its prior fee waivers or expense reimbursements made during the
preceding three year period during which this agreement (or any prior
agreement) was in place. This agreement may be terminated by the Board or by
the Adviser, upon ninety (90) days' prior written notice, effective as of the
close of business on February 28, 2018, provided that, in the case of
termination by the Adviser, such action shall be authorized by resolution of a
majority of the Trustees who are not interested persons of the Trust or by a
vote of a majority of the outstanding voting securities of the Trust.
For the fiscal years ended October 31, 2014, 2015 and 2016, the Fund paid the
Adviser the following advisory fees:
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------------------------------------------------------------------------------------------------------------------------------------
CONTRACTUAL
ADVISORY FEES FEES WAIVED BY ADVISER TOTAL FEES PAID (AFTER WAIVERS) TO
ADVISER
------------------------------------------------------------------------------------------------------------------------------------
2014 2015 2016 2014 2015 2016 2014 2015 2016
------------------------------------------------------------------------------------------------------------------------------------
$30,905,500 $42,215,854 $[XX] $3,038,537 $3,793,371 $[XX] $27,866,963 $38,422,483 $[XX]
------------------------------------------------------------------------------------------------------------------------------------
THE PORTFOLIO MANAGERS
This section includes information about the Fund's portfolio managers,
including information about other accounts they manage, the dollar range of
Fund shares they own and how they are compensated.
COMPENSATION. The Adviser compensates the Fund's portfolio managers for their
management of the Fund and other accounts managed by the Adviser. Each of the
Fund's portfolio mangers' compensation consists of a fixed cash salary and
retirement plan benefits. The portfolio managers are also paid a discretionary
cash bonus which takes into account performance of the products they manage and
profitability of the firm. In general, the discretionary cash bonus is
determined based on the Fund's and the other accounts' pre-tax performance as
compared to a particular benchmark over varying time-periods and economic
cycles. The bonus also is based on other subjective factors, such as
leadership, ideas and overall contributions to the investment team.
FUND SHARES OWNED BY PORTFOLIO MANAGERS. The following table shows the dollar
amount range of each portfolio manager's "beneficial ownership" of shares of
the Fund. Dollar amount ranges disclosed are established by the SEC.
"Beneficial ownership" is determined in accordance with Rule 16a-1(a)(2) under
the Securities Exchange Act of 1934, as amended (the "1934 Act").
--------------------------------------------------------------------------------
NAME DOLLAR RANGE OF FUND SHARES(1)
--------------------------------------------------------------------------------
Alan W. Breed Over $1,000,000
--------------------------------------------------------------------------------
Lawrence G. Creel Over $1,000,000
--------------------------------------------------------------------------------
Scott Edwardson None
--------------------------------------------------------------------------------
Alexander Farman-Farmaian None
--------------------------------------------------------------------------------
Peter Jennison Over $1,000,000
--------------------------------------------------------------------------------
Kevin R. Seth $500,001 - $1,000,000
--------------------------------------------------------------------------------
Nicholas A. Stephens Over $1,000,000
--------------------------------------------------------------------------------
(1) Valuation date is October 31, 2016.
OTHER ACCOUNTS. In addition to the Fund, certain portfolio managers are
responsible for the day-to-day management of certain other accounts, as listed
below. The information below is provided as of October 31, 2016.
-------------------------------------------------------------------------------------------------------------------
REGISTERED OTHER POOLED
INVESTMENT COMPANIES INVESTMENT VEHICLES OTHER ACCOUNTS
--------------------------------------------------------------------------------------------
NUMBER NUMBER NUMBER
OF TOTAL ASSETS OF TOTAL ASSETS OF TOTAL ASSETS
NAME ACCOUNTS (MILLIONS) ACCOUNTS (MILLIONS) ACCOUNTS (MILLIONS)
-------------------------------------------------------------------------------------------------------------------
Alan W. Breed [XX] $[XX] [XX] $[XX] [XX](1) $[XX]
-------------------------------------------------------------------------------------------------------------------
Lawrence G. Creel [XX] $[XX] [XX] $[XX] [XX](1) $[XX]
-------------------------------------------------------------------------------------------------------------------
Scott Edwardson [XX] $[XX] [XX] $[XX] [XX](1) $[XX]
-------------------------------------------------------------------------------------------------------------------
Alex Farman-Farmaian [XX] $[XX] [XX] $[XX] [XX](1) $[XX]
-------------------------------------------------------------------------------------------------------------------
Peter Jennison [XX] $[XX] [XX] $[XX] [XX](1) $[XX]
-------------------------------------------------------------------------------------------------------------------
Kevin R. Seth [XX] $[XX] [XX] $[XX] [XX](1) $[XX]
-------------------------------------------------------------------------------------------------------------------
Nicholas A. Stephens [XX] $[XX] [XX] $[XX] [XX](1) $[XX]
-------------------------------------------------------------------------------------------------------------------
(1) [XX] accounts are subject to a performance-based advisory fee with
aggregated assets under management of $[XX] as of October 31, 2016.
CONFLICTS OF INTEREST. The Adviser also manages other accounts. The investment
process is the same for similar accounts,
S-15
including the Fund, and is driven by proprietary team-oriented, in-depth,
fundamental research. The investment research team is organized by industry
coverage and supports all of the accounts managed in each of the Adviser's
investment strategies. Each of the Adviser's investment strategies is managed
by a portfolio team. Weekly research meetings provide a forum where the
Adviser's investment professionals discuss current investment ideas. Generally,
the entire portfolio team, or a sub-set of the team, then debates the merits of
recommendations, taking into account the prevailing market environment, the
portfolio's current composition, and the relative value of alternative
investments. Investment decisions are made by majority agreement of the
portfolio team.
The portfolio managers' management of "other accounts" may give rise to
potential conflicts of interest in connection with their management of the
Fund's investments, on the one hand, and the investments of the other accounts,
on the other. The other accounts may have the same investment objective as the
Fund. Therefore, a potential conflict of interest may arise as a result of the
identical investment objectives, whereby the portfolio manager could favor one
account over another. Another potential conflict could include the portfolio
managers' knowledge about the size, timing and possible market impact of Fund
trades, whereby a portfolio manager could use this information to the advantage
of other accounts and to the disadvantage of the Fund. However, the Adviser has
established policies and procedures to ensure that the purchase and sale of
securities among all accounts it manages are fairly and equitably allocated.
Personal accounts may give rise to potential conflicts of interest. The
Adviser's employees will, from time to time, for their own account, purchase,
sell, hold or own securities or other assets which may be recommended for
purchase, sale or ownership for one or more clients. The Adviser has a Code of
Ethics which regulates trading in personal accounts. Personal accounts are
reported to compliance and certain personal transactions are pre-approved by
compliance. Compliance also reviews personal trading activity regularly.
THE ADMINISTRATOR
GENERAL. SEI Investments Global Funds Services (the "Administrator"), a
Delaware statutory trust, has its principal business offices at One Freedom
Valley Drive, Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), is the owner of all beneficial interest in the Administrator.
SEI Investments and its subsidiaries and affiliates, including the
Administrator, are leading providers of fund evaluation services, trust
accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers. The Administrator
and its affiliates also serve as administrator or sub-administrator to other
mutual funds.
ADMINISTRATION AGREEMENT WITH THE TRUST. The Trust and the Administrator have
entered into an administration agreement dated November 14, 1991, as amended
and restated November 12, 2002 (the "Administration Agreement"). Under the
Administration Agreement, the Administrator provides the Trust with
administrative services, including regulatory reporting and all necessary
office space, equipment, personnel and facilities.
The Administration Agreement provides that the Administrator shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Administrator in the performance of its duties or
from reckless disregard by it of its duties and obligations thereunder.
ADMINISTRATION FEES PAID TO THE ADMINISTRATOR. For its services under the
Administration Agreement, the Administrator is paid a fee, which varies based
on the average daily net assets of the Fund, subject to certain minimums. For
the fiscal years ended October 31, 2014, 2015 and 2016, the Fund paid the
following amounts for these services:
--------------------------------------------------------------------------------
ADMINISTRATION FEES PAID
--------------------------------------------------------------------------------
2014 2015 2016
--------------------------------------------------------------------------------
$1,920,364 $2,297,574 $[XX]
--------------------------------------------------------------------------------
S-16
THE DISTRIBUTOR
GENERAL. The Trust and SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments and an affiliate of the
Administrator, are parties to a distribution agreement dated November 14, 1991,
as amended and restated November 14, 2005 and as amended August 30, 2010
("Distribution Agreement"). The principal business address of the Distributor
is One Freedom Valley Drive, Oaks, Pennsylvania 19456.
The continuance of the Distribution Agreement must be specifically approved at
least annually (i) by the vote of the Trustees or by a vote of the majority of
the shareholders of the Trust; and (ii) by the vote of a majority of the
Trustees who are not "interested persons" of the Trust and have no direct or
indirect financial interest in the operations of the Distribution Agreement or
any related agreement, cast in person at a meeting called for the purpose of
voting on such approval. The Distribution Agreement will terminate
automatically in the event of its assignment (as such term is defined in the
1940 Act), and is terminable at any time without penalty by the Board or by a
majority of the outstanding shares of the Trust, upon not more than 60 days'
written notice by either party.
PAYMENTS TO FINANCIAL INTERMEDIARIES
DISTRIBUTION PLAN. The Trust has adopted a Distribution Plan with respect to
the Retail Shares (the "Plan") in accordance with the provisions of Rule 12b-1
under the 1940 Act, which regulates circumstances under which an investment
company may directly or indirectly bear expenses relating to the distribution
of its shares. Continuance of the Plan must be approved annually by a majority
of the Trustees and by a majority of the Trustees who are not interested
persons (as defined in the 1940 Act) of the Trust and have no direct or
indirect financial interest in the Plan or in any agreements related to the
Plan ("Qualified Trustees"). The Plan requires that quarterly written reports
of amounts spent under the Plan and the purposes of such expenditures be
furnished to and reviewed by the Trustees. The Plan may not be amended to
increase materially the amount that may be spent thereunder without approval by
a majority of the outstanding shares of the Fund. All material amendments of
the Plan will require approval by a majority of the Trustees and of the
Qualified Trustees.
The Plan provides a method of paying for distribution and shareholder services,
which may help the Fund grow or maintain asset levels to provide operational
efficiencies and economies of scale, provided by the Distributor or other
financial intermediaries that enter into agreements with the Distributor. The
Fund may make payments to financial intermediaries, such as banks, savings and
loan associations, insurance companies, investment counselors, broker-dealers,
mutual fund "supermarkets" and the Distributor's affiliates and subsidiaries,
as compensation for services, reimbursement of expenses incurred in connection
with distribution assistance or provision of shareholder services. The
Distributor may, at its discretion, retain a portion of such payments to
compensate itself for distribution services and distribution related expenses
such as the costs of preparation, printing, mailing or otherwise disseminating
sales literature, advertising, and prospectuses (other than those furnished to
current shareholders of the Fund), promotional and incentive programs, and such
other marketing expenses that the Distributor may incur.
Under the Plan, the Distributor or financial intermediaries may receive up to
0.25% of the average daily net assets of the Retail Shares as compensation for
distribution and shareholder services. The Plan is characterized as a
compensation plan since the distribution fee will be paid to the Distributor
without regard to the distribution or shareholder service expenses incurred by
the Distributor or the amount of payments made to financial intermediaries. The
Trust intends to operate the Plan in accordance with its terms and with
Financial Industry Regulatory Authority ("FINRA") rules concerning sales
charges.
PAYMENTS UNDER THE DISTRIBUTION PLAN. For the fiscal years ended October 31,
2014, 2015 and 2016, the Fund paid the Distributor the following fees, with no
distribution fees retained by the Distributor:
--------------------------------------------------------------------------------
DISTRIBUTION FEES PAID
--------------------------------------------------------------------------------
SHARE CLASS 2014 2015 2016
--------------------------------------------------------------------------------
Retail Shares $466,463 $600,920 $[XX]
--------------------------------------------------------------------------------
SHAREHOLDER SERVICING PLAN. The Fund has adopted a shareholder servicing plan
under which shareholder servicing fees of up to 0.25% of average daily net
assets of the Retail Shares and Service Shares will be paid to financial
intermediaries. Under the plan, financial intermediaries may perform, or may
compensate other financial intermediaries for performing, certain
S-17
shareholder and administrative services, including: (i) maintaining shareholder
accounts; (ii) arranging for bank wires; (iii) responding to shareholder
inquiries relating to the services performed by the financial intermediaries;
(iv) responding to inquiries from shareholders concerning their investment in
the Fund; (v) assisting shareholders in changing dividend options, account
designations and addresses; (vi) providing information periodically to
shareholders showing their position in the Fund; (vii) forwarding shareholder
communications from the Fund such as proxies, shareholder reports, annual
reports, and dividend and capital gain distribution and tax notices to
shareholders; (viii) processing purchase, exchange and redemption requests from
shareholders and placing orders with the Fund or its service providers; (ix)
providing sub-accounting services; (x) processing dividend and capital gain
payments from the Fund on behalf of shareholders; (xi) preparing tax reports;
and (xii) providing such other similar non-distribution services as the Fund
may reasonably request to the extent that the financial intermediary is
permitted to do so under applicable laws or regulations.
OTHER PAYMENTS BY THE FUND. The Fund may enter into agreements with financial
intermediaries pursuant to which the Fund may pay financial intermediaries for
non-distribution-related sub-transfer agency, administrative, sub-accounting,
and other shareholder services. Payments made pursuant to such agreements are
generally based on either (1) a percentage of the average daily net assets of
Fund shareholders serviced by a financial intermediary, or (2) the number of
Fund shareholders serviced by a financial intermediary. Any payments made
pursuant to such agreements may be in addition to, rather than in lieu of,
distribution or shareholder services fees the Fund may pay to financial
intermediaries pursuant to the Fund's distribution plan or shareholder
servicing plan.
OTHER PAYMENTS BY THE ADVISER. The Adviser and/or its affiliates, in their
discretion, may make payments from their own resources and not from Fund assets
to affiliated or unaffiliated brokers, dealers, banks (including bank trust
departments), trust companies, registered investment advisers, financial
planners, retirement plan administrators, insurance companies, and any other
institution having a service, administration, or any similar arrangement with
the Fund, its service providers or their respective affiliates, as incentives
to help market and promote the Fund and/or in recognition of their
distribution, marketing, administrative services, and/or processing support.
These additional payments may be made to financial intermediaries that sell
Fund shares or provide services to the Fund, the Distributor or shareholders of
the Fund through the financial intermediary's retail distribution channel
and/or fund supermarkets. Payments may also be made through the financial
intermediary's retirement, qualified tuition, fee-based advisory, wrap fee bank
trust, or insurance (e.g., individual or group annuity) programs. These
payments may include, but are not limited to, placing the Fund in a financial
intermediary's retail distribution channel or on a preferred or recommended
fund list; providing business or shareholder financial planning assistance;
educating financial intermediary personnel about the Fund; providing access to
sales and management representatives of the financial intermediary; promoting
sales of Fund shares; providing marketing and educational support; maintaining
share balances and/or for sub-accounting, administrative or shareholder
transaction processing services. A financial intermediary may perform the
services itself or may arrange with a third party to perform the services.
The Adviser and/or its affiliates may also make payments from their own
resources to financial intermediaries for costs associated with the purchase of
products or services used in connection with sales and marketing, participation
in and/or presentation at conferences or seminars, sales or training programs,
client and investor entertainment and other sponsored events. The costs and
expenses associated with these efforts may include travel, lodging, sponsorship
at educational seminars and conferences, entertainment and meals to the extent
permitted by law.
Revenue sharing payments may be negotiated based on a variety of factors,
including the level of sales, the amount of Fund assets attributable to
investments in the Fund by financial intermediaries customers, a flat fee or
other measures as determined from time to time by the Adviser and/or its
affiliates. A significant purpose of these payments is to increase the sales of
Fund shares, which in turn may benefit the Adviser through increased fees as
Fund assets grow.
Investors should understand that some financial intermediaries may also charge
their clients fees in connection with purchases of shares or the provision of
shareholder services.
S-18
THE TRANSFER AGENT
DST Systems, Inc., 333 W. 11th Street, Kansas City, Missouri 64105 (the
"Transfer Agent"), serves as the Fund's transfer agent and dividend disbursing
agent under a transfer agency agreement with the Trust.
THE CUSTODIAN
U.S. Bank National Association, 800 Nicollett Mall, Minneapolis, Minnesota
55402-4302 (the "Custodian"), serves as custodian of the Fund. The Custodian
holds cash, securities and other assets of the Fund as required by the 1940
Act.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
[XX] serves as independent registered public accounting firm for the Fund. The
financial statements and notes thereto incorporated by reference have been
audited by [XX], as indicated in their report with respect thereto, and are
incorporated by reference in reliance on the authority of their report as
experts in accounting and auditing.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, Pennsylvania
19103-2921, serves as legal counsel to the Trust.
TRUSTEES AND OFFICERS OF THE TRUST
BOARD RESPONSIBILITIES. The management and affairs of the Trust and its series,
including the Fund described in this SAI, are overseen by the Trustees. The
Board has approved contracts, as described above, under which certain companies
provide essential management services to the Trust.
Like most mutual funds, the day-to-day business of the Trust, including the
management of risk, is performed by third party service providers, such as the
Adviser, Distributor and Administrator. The Trustees are responsible for
overseeing the Trust's service providers and, thus, have oversight
responsibility with respect to risk management performed by those service
providers. Risk management seeks to identify and address risks, i.e., events or
circumstances that could have material adverse effects on the business,
operations, shareholder services, investment performance or reputation of the
funds. The funds and their service providers employ a variety of processes,
procedures and controls to identify various possible events or circumstances,
to lessen the probability of their occurrence and/or to mitigate the effects of
such events or circumstances if they do occur. Each service provider is
responsible for one or more discrete aspects of the Trust's business (e.g., the
Adviser is responsible for the day-to-day management of the Fund's portfolio
investments) and, consequently, for managing the risks associated with that
business. The Board has emphasized to the funds' service providers the
importance of maintaining vigorous risk management.
The Trustees' role in risk oversight begins before the inception of a fund, at
which time certain of the fund's service providers present the Board with
information concerning the investment objectives, strategies and risks of the
fund as well as proposed investment limitations for the fund. Additionally, the
fund's adviser provides the Board with an overview of, among other things, its
investment philosophy, brokerage practices and compliance infrastructure.
Thereafter, the Board continues its oversight function as various personnel,
including the Trust's Chief Compliance Officer, as well as personnel of the
adviser and other service providers, such as the fund's independent
accountants, make periodic reports to the Audit Committee or to the Board with
respect to various aspects of risk management. The Board and the Audit
Committee oversee efforts by management and service providers to manage risks
to which the funds may be exposed.
The Board is responsible for overseeing the nature, extent and quality of the
services provided to the funds by the adviser and receives information about
those services at its regular meetings. In addition, on an annual basis, in
connection with its consideration of whether to renew the advisory agreement
with the adviser, the Board meets with the adviser to review such services.
Among other things, the Board regularly considers the adviser's adherence to
the funds' investment restrictions and
S-19
compliance with various fund policies and procedures and with applicable
securities regulations. The Board also reviews information about the funds'
investments, including, for example, portfolio holdings schedules and reports
on the adviser's use of derivatives in managing the funds, if any, as well as
reports on the funds' investments in ETFs, if any.
The Trust's Chief Compliance Officer reports regularly to the Board to review
and discuss compliance issues and fund and adviser risk assessments. At least
annually, the Trust's Chief Compliance Officer provides the Board with a report
reviewing the adequacy and effectiveness of the Trust's policies and procedures
and those of its service providers, including the adviser. The report addresses
the operation of the policies and procedures of the Trust and each service
provider since the date of the last report; any material changes to the
policies and procedures since the date of the last report; any recommendations
for material changes to the policies and procedures; and any material
compliance matters since the date of the last report.
The Board receives reports from the funds' service providers regarding
operational risks and risks related to the valuation and liquidity of portfolio
securities. The Trust's Fair Value Pricing Committee makes regular reports to
the Board concerning investments for which market quotations are not readily
available. Annually, the independent registered public accounting firm reviews
with the Audit Committee its audit of the funds' financial statements, focusing
on major areas of risk encountered by the funds and noting any significant
deficiencies or material weaknesses in the funds' internal controls.
Additionally, in connection with its oversight function, the Board oversees
fund management's implementation of disclosure controls and procedures, which
are designed to ensure that information required to be disclosed by the Trust
in its periodic reports with the SEC are recorded, processed, summarized, and
reported within the required time periods. The Board also oversees the Trust's
internal controls over financial reporting, which comprise policies and
procedures designed to provide reasonable assurance regarding the reliability
of the Trust's financial reporting and the preparation of the Trust's financial
statements.
From their review of these reports and discussions with the adviser, the Chief
Compliance Officer, the independent registered public accounting firm and other
service providers, the Board and the Audit Committee learn in detail about the
material risks of the funds, thereby facilitating a dialogue about how
management and service providers identify and mitigate those risks.
The Board recognizes that not all risks that may affect the funds can be
identified and/or quantified, that it may not be practical or cost-effective to
eliminate or mitigate certain risks, that it may be necessary to bear certain
risks (such as investment-related risks) to achieve the funds' goals, and that
the processes, procedures and controls employed to address certain risks may be
limited in their effectiveness. Moreover, reports received by the Trustees as
to risk management matters are typically summaries of the relevant information.
Most of the funds' investment management and business affairs are carried out
by or through the funds' adviser and other service providers, each of which has
an independent interest in risk management but whose policies and the methods
by which one or more risk management functions are carried out may differ from
the funds' and each other's in the setting of priorities, the resources
available or the effectiveness of relevant controls. As a result of the
foregoing and other factors, the Board's ability to monitor and manage risk, as
a practical matter, is subject to limitations.
MEMBERS OF THE BOARD. There are eight members of the Board, six of whom are not
interested persons of the Trust, as that term is defined in the 1940 Act
("independent Trustees"). Robert Nesher, an interested person of the Trust,
serves as Chairman of the Board. George Sullivan, Jr., an independent Trustee,
serves as the lead independent Trustee. The Trust has determined its leadership
structure is appropriate given the specific characteristics and circumstances
of the Trust. The Trust made this determination in consideration of, among
other things, the fact that the independent Trustees constitute a
super-majority (75%) of the Board, the fact that the chairperson of each
Committee of the Board is an independent Trustee, the amount of assets under
management in the Trust, and the number of funds (and classes of shares)
overseen by the Board. The Board also believes that its leadership structure
facilitates the orderly and efficient flow of information to the independent
Trustees from fund management.
The Board has two standing committees: the Audit Committee and Governance
Committee. The Audit Committee and the Governance Committee are chaired by an
independent Trustee and composed of all of the independent Trustees. In
addition, the Board has a lead independent Trustee.
In his role as lead independent Trustee, Mr. Sullivan, among other things: (i)
presides over Board meetings in the absence of the Chairman of the Board; (ii)
presides over executive sessions of the independent Trustees; (iii) along with
the Chairman of the
S-20
Board, oversees the development of agendas for Board meetings; (iv) facilitates
communication between the independent Trustees and management, and among the
independent Trustees; (v) serves as a key point person for dealings between the
independent Trustees and management; and (vi) has such other responsibilities
as the Board or independent Trustees determine from time to time.
Set forth below are the names, years of birth, position with the Trust and
length of time served, and the principal occupations and other directorships
held during at least the last five years of each of the persons currently
serving as a Trustee. There is no stated term of office for the Trustees.
Nevertheless, an independent Trustee must retire from the Board as of the end
of the calendar year in which such independent Trustee first attains the age of
seventy-five years; provided, however, that, an independent Trustee may
continue to serve for one or more additional one calendar year terms after
attaining the age of seventy-five years (each calendar year a "Waiver Term")
if, and only if, prior to the beginning of such Waiver Term: (1) the Governance
Committee (a) meets to review the performance of the independent Trustee; (b)
finds that the continued service of such independent Trustee is in the best
interests of the Trust; and (c) unanimously approves excepting the independent
Trustee from the general retirement policy set out above; and (2) a majority of
the Trustees approves excepting the independent Trustee from the general
retirement policy set out above. Unless otherwise noted, the business address
of each Trustee is SEI Investments Company, One Freedom Valley Drive, Oaks,
Pennsylvania 19456.
--------------------------------------------------------------------------------------------------------------------
POSITION WITH PRINCIPAL
TRUST AND LENGTH OCCUPATIONS OTHER DIRECTORSHIPS
NAME AND YEAR OF BIRTH OF TIME SERVED IN THE PAST 5 YEARS HELD IN THE PAST 5 YEARS
--------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
--------------------------------------------------------------------------------------------------------------------
Robert Nesher Chairman of the SEI employee 1974 to Current Directorships: Trustee of
(Born: 1946) Board of Trustees(1) present; currently The Advisors' Inner Circle Fund II,
(since 1991) performs various Bishop Street Funds, The KP Funds,
services on behalf of SEI Daily Income Trust, SEI
SEI Investments for Institutional International Trust, SEI
which Mr. Nesher is Institutional Investments Trust, SEI
compensated. Vice Institutional Managed Trust,
Chairman of The SEI Asset Allocation Trust,
Advisors' Inner Circle SEI Tax Exempt Trust,
Fund III, Winton Adviser Managed Trust, New
Series Trust, Winton Covenant Funds, SEI Insurance
Diversified Products Trust and SEI Catholic
Opportunities Fund Values Trust. Director of SEI
(closed-end Structured Credit Fund, LP, SEI
investment company) Global Master Fund plc, SEI Global
and Gallery Trust. Assets Fund plc, SEI Global
President, Chief Investments Fund plc, SEI
Executive Officer and Investments--Global Funds
Trustee of SEI Daily Services, Limited, SEI Investments
Income Trust, Global, Limited, SEI Investments
SEI Tax Exempt (Europe) Ltd., SEI Investments--
Trust, SEI Unit Trust Management (UK)
Institutional Managed Limited, SEI Multi-Strategy Funds
Trust, SEI PLC and SEI Global Nominee Ltd.
Institutional
International Trust, Former Directorships: Director of
SEI Institutional SEI Opportunity Fund, L.P. to 2010.
Investments Trust, Director of SEI Alpha Strategy
SEI Asset Allocation Portfolios, LP to 2013. Trustee of
Trust, Adviser SEI Liquid Asset Trust to 2016.
Managed Trust, New
Covenant Funds, SEI
Insurance Products
Trust and SEI
Catholic Values Trust.
President and Director
of SEI Structured
Credit Fund, LP.
President, Chief
Executive Officer and
Director of SEI Alpha
Strategy Portfolios,
LP, June 2007 to
September 2013.
President and Director
of SEI Opportunity
Fund, L.P. to 2010.
Vice Chairman of
O'Connor EQUUS
(closed-end
investment company)
to April 2016. President
Chief Executive Officer and
Trustee of SEI Liquid Asset
Trust to 2016.
--------------------------------------------------------------------------------------------------------------------
S-21
--------------------------------------------------------------------------------------------------------------------
POSITION WITH PRINCIPAL
TRUST AND LENGTH OCCUPATIONS OTHER DIRECTORSHIPS
NAME AND YEAR OF BIRTH OF TIME SERVED IN THE PAST 5 YEARS HELD IN THE PAST 5 YEARS
--------------------------------------------------------------------------------------------------------------------
William M. Doran Trustee(1) Self-Employed Current Directorships: Trustee of
(Born: 1940) (since 1991) Consultant since 2003. The Advisors' Inner Circle Fund II,
Partner at Morgan, Bishop Street Funds, The KP Funds,
Lewis & Bockius LLP The Advisors' Inner Circle Fund III,
(law firm) from 1976 Winton Series Trust, Winton
to 2003. Counsel to the Diversified Opportunities Fund
Trust, SEI Investments, (closed-end investment company),
SIMC, the Gallery Trust, SEI Daily Income
Administrator and the Trust, SEI Institutional International
Distributor. Trust, SEI Institutional Investments
Trust, SEI Institutional Managed Trust,
SEI Asset Allocation Trust, SEI Tax
Exempt Trust, Adviser Managed
Trust, New Covenant Funds, SEI
Insurance Products Trust and SEI
Catholic Values Trust. Director of
SEI Investments (Europe), Limited,
SEI Investments--Global Funds
Services, Limited, SEI Investments
Global, Limited, SEI Investments
(Asia), Limited, SEI Global
Nominee Ltd. and SEI Investments --
Unit Trust Management (UK)
Limited. Director of the Distributor
since 2003.
Former Directorships: Director of
SEI Alpha Strategy Portfolios, LP to
2013. Trustee of O'Connor EQUUS
(closed-end investment company)
until April 2016. Trustee of SEI Liquid
Asset Trust to 2016.
--------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
--------------------------------------------------------------------------------------------------------------------
John K. Darr Trustee Retired. Chief Current Directorships: Trustee of
(Born: 1944) (since 2008) Executive Officer, The Advisors' Inner Circle Fund II,
Office of Finance, Bishop Street Funds and The KP
Federal Home Loan Funds. Director of Federal Home
Banks, from 1992 to Loan Bank of Pittsburgh, Meals on
2007. Wheels, Lewes/Rehoboth Beach and
West Rehoboth Land Trust.
--------------------------------------------------------------------------------------------------------------------
S-22
--------------------------------------------------------------------------------------------------------------------
POSITION WITH PRINCIPAL
TRUST AND LENGTH OCCUPATIONS OTHER DIRECTORSHIPS
NAME AND YEAR OF BIRTH OF TIME SERVED IN THE PAST 5 YEARS HELD IN THE PAST 5 YEARS
--------------------------------------------------------------------------------------------------------------------
Joseph T. Grause, Jr. Trustee Self-Employed Current Directorships: Trustee of
(Born: 1952) (since 2011) Consultant since The Advisors' Inner Circle Fund II,
January 2012. Director Bishop Street Funds and The KP
of Endowments and Funds. Director of The Korea Fund,
Foundations, Inc.
Morningstar
Investment
Management,
Morningstar, Inc.,
2010 to
2011. Director of
International
Consulting and Chief
Executive Officer of
Morningstar
Associates Europe
Limited, Morningstar,
Inc., 2007 to 2010.
Country Manager --
Morningstar UK
Limited, Morningstar,
Inc., 2005 to 2007.
--------------------------------------------------------------------------------------------------------------------
Mitchell A. Johnson Trustee Retired. Private Current Directorships: Trustee of
(Born: 1942) (since 2005) Investor since 1994. The Advisors' Inner Circle Fund II,
Bishop Street Funds, The KP Funds,
SEI Asset Allocation Trust, SEI
Daily Income Trust, SEI Institutional
International Trust, SEI Institutional
Managed Trust, SEI Institutional
Investments Trust,
SEI Tax Exempt Trust,
Adviser Managed Trust, New
Covenant Funds, SEI Insurance
Products Trust and SEI Catholic
Values Trust. Director of Federal
Agricultural Mortgage Corporation
(Farmer Mac) since 1997.
Former Directorships: Director of
SEI Alpha Strategy Portfolios, LP to
2013. Trustee of SEI SEI Liquid Asset
to 2016.
--------------------------------------------------------------------------------------------------------------------
Betty L. Krikorian Trustee Vice President, Current Directorships: Trustee of
(Born: 1943) (since 2005) Compliance, AARP The Advisors' Inner Circle Fund II,
Financial Inc., from Bishop Street Funds and The KP
2008 to 2010. Self- Funds.
Employed Legal and
Financial Services
Consultant since 2003.
Counsel (in-house) for
State Street Bank from
1995 to 2003.
--------------------------------------------------------------------------------------------------------------------
S-23
--------------------------------------------------------------------------------------------------------------------
POSITION WITH PRINCIPAL
TRUST AND LENGTH OCCUPATIONS OTHER DIRECTORSHIPS
NAME AND YEAR OF BIRTH OF TIME SERVED IN THE PAST 5 YEARS HELD IN THE PAST 5 YEARS
--------------------------------------------------------------------------------------------------------------------
Bruce Speca Trustee Global Head of Asset Current Directorships: Trustee of
(Born: 1956) (since 2011) Allocation, Manulife The Advisors' Inner Circle Fund II,
Asset Management Bishop Street Funds and The KP
(subsidiary of Funds.
Manulife Financial),
2010 to 2011.
Executive Vice
President -- Investment
Management Services,
John Hancock
Financial Services
(subsidiary of
Manulife Financial),
2003 to 2010.
--------------------------------------------------------------------------------------------------------------------
George J. Sullivan, Jr. Trustee Retired since January Current Directorships: Trustee/
(Born: 1942) (since 1999) 2012. Self-Employed Director of State Street Navigator
Lead Independent Consultant, Newfound Securities Lending Trust, The
Trustee Consultants Inc., Advisors' Inner Circle Fund II,
1997 to 2011. Bishop Street Funds, The KP Funds,
SEI Structured Credit Fund, LP, SEI
Daily Income Trust, SEI Institutional
International Trust, SEI Institutional
Investments Trust, SEI Institutional
Managed Trust, SEI Asset Allocation
Trust, SEI Tax Exempt Trust, Adviser
Managed Trust, New Covenant
Funds, SEI Insurance Products Trust
and SEI Catholic Values Trust.
Member of the independent review
committee for SEI's Canadian-
registered mutual funds.
Former Directorships: Director of
SEI Opportunity Fund, L.P. to 2010.
Director of SEI Alpha Strategy
Portfolios, LP to 2013. Trustee of
SEI Liquid Asset Trust to 2016.
--------------------------------------------------------------------------------------------------------------------
(1) Denotes Trustees who may be deemed to be "interested" persons of the Fund
as that term is defined in the 1940 Act by virtue of their affiliation with
the Distributor and/or its affiliates.
INDIVIDUAL TRUSTEE QUALIFICATIONS
The Trust has concluded that each of the Trustees should serve on the Board
because of their ability to review and understand information about the funds
provided to them by management, to identify and request other information they
may deem relevant to the performance of their duties, to question management
and other service providers regarding material factors bearing on the
management and administration of the funds, and to exercise their business
judgment in a manner that serves the best interests of the funds' shareholders.
The Trust has concluded that each of the Trustees should serve as a Trustee
based on their own experience, qualifications, attributes and skills as
described below.
The Trust has concluded that Mr. Nesher should serve as Trustee because of the
experience he has gained in his various roles with SEI Investments, which he
joined in 1974, his knowledge of and experience in the financial services
industry, and the experience he has gained serving as a trustee of the Trust
since 1991.
The Trust has concluded that Mr. Doran should serve as Trustee because of the
experience he gained serving as a Partner in the Investment Management and
Securities Industry Practice of a large law firm, his experience in and
knowledge of the financial
S-24
services industry, and the experience he has gained serving as a trustee of the
Trust since 1991.
The Trust has concluded that Mr. Darr should serve as Trustee because of his
background in economics, the business experience he gained in a variety of
roles with different financial and banking institutions and as a founder of a
money management firm, his knowledge of the financial services industry, and
the experience he has gained serving as a trustee of the Trust since 2008.
The Trust has concluded that Mr. Grause should serve as Trustee because of the
knowledge and experience he gained in a variety of leadership roles with
different financial institutions, his knowledge of the mutual fund and
investment management industries, and his past experience as an interested
trustee and chair of the investment committee for a multi-managed investment
company.
The Trust has concluded that Mr. Johnson should serve as Trustee because of the
experience he gained as a senior vice president, corporate finance, of a
Fortune 500 company, his experience in and knowledge of the financial services
and banking industries, the experience he gained serving as a director of other
mutual funds, and the experience he has gained serving as a trustee of the
Trust since 2005.
The Trust has concluded that Ms. Krikorian should serve as Trustee because of
the experience she gained serving as a legal and financial services consultant,
in-house counsel to a large custodian bank and Vice President of Compliance of
an investment adviser, her background in fiduciary and banking law, her
experience in and knowledge of the financial services industry, and the
experience she has gained serving as a trustee of the Trust since 2005.
The Trust has concluded that Mr. Speca should serve as Trustee because of the
knowledge and experience he gained serving as president of a mutual fund
company and portfolio manager for a $95 billion complex of asset allocation
funds, and his over 25 years of experience working in a management capacity
with mutual fund boards.
The Trust has concluded that Mr. Sullivan should serve as Trustee because of
the experience he gained as a certified public accountant and financial
consultant, his experience in and knowledge of public company accounting and
auditing and the financial services industry, the experience he gained as an
officer of a large financial services firm in its operations department, and
his experience from serving as a trustee of the Trust since 1999.
In its periodic assessment of the effectiveness of the Board, the Board
considers the complementary individual skills and experience of the individual
Trustees primarily in the broader context of the Board's overall composition so
that the Board, as a body, possesses the appropriate (and appropriately
diverse) skills and experience to oversee the business of the funds.
BOARD COMMITTEES. The Board has established the following standing committees:
o AUDIT COMMITTEE. The Board has a standing Audit Committee that is composed
of each of the independent Trustees of the Trust. The Audit Committee
operates under a written charter approved by the Board. The principal
responsibilities of the Audit Committee include: (i) recommending which
firm to engage as each fund's independent registered public accounting firm
and whether to terminate this relationship; (ii) reviewing the independent
registered public accounting firm's compensation, the proposed scope and
terms of its engagement, and the firm's independence; (iii) pre-approving
audit and non-audit services provided by each fund's independent registered
public accounting firm to the Trust and certain other affiliated entities;
(iv) serving as a channel of communication between the independent
registered public accounting firm and the Trustees; (v) reviewing the
results of each external audit, including any qualifications in the
independent registered public accounting firm's opinion, any related
management letter, management's responses to recommendations made by the
independent registered public accounting firm in connection with the audit,
reports submitted to the Committee by the internal auditing department of
the Administrator that are material to the Trust as a whole, if any, and
management's responses to any such reports; (vi) reviewing each fund's
audited financial statements and considering any significant disputes
between the Trust's management and the independent registered public
accounting firm that arose in connection with the preparation of those
financial statements; (vii) considering, in consultation with the
independent registered public accounting firm and the Trust's senior
internal accounting executive, if any, the independent registered public
accounting firms' reports on the
S-25
adequacy of the Trust's internal financial controls; (viii) reviewing, in
consultation with each fund's independent registered public accounting
firm, major changes regarding auditing and accounting principles and
practices to be followed when preparing each fund's financial statements;
and (ix) other audit related matters. Messrs. Darr, Grause, Johnson, Speca
and Sullivan and Ms. Krikorian currently serve as members of the Audit
Committee. Mr. Sullivan serves as the Chairman of the Audit Committee. The
Audit Committee meets periodically, as necessary, and met [XX (XX)] times
during the most recently completed fiscal year.
o GOVERNANCE COMMITTEE. The Board has a standing Governance Committee
(formerly the Nominating Committee) that is composed of each of the
independent Trustees. The Governance Committee operates under a written
charter approved by the Board. The principal responsibilities of the
Governance Committee include: (i) considering and reviewing Board
governance and compensation issues; (ii) conducting a self-assessment of
the Board's operations; (iii) selecting and nominating all persons to serve
as independent Trustees and evaluating the qualifications of "interested"
Trustee candidates; and (iv) reviewing shareholder recommendations for
nominations to fill vacancies on the Board if such recommendations are
submitted in writing and addressed to the Committee at the Trust's office.
Ms. Krikorian and Messrs. Darr, Grause, Johnson, Speca and Sullivan
currently serve as members of the Governance Committee. Ms. Krikorian
serves as the Chairman of the Governance Committee. The Governance
Committee meets periodically, as necessary, and met [XX (XX)] times during
the most recently completed fiscal year.
FAIR VALUE PRICING COMMITTEE. The Board has also established a standing Fair
Value Pricing Committee that is composed of various representatives of the
Trust's service providers, as appointed by the Board. The Fair Value Pricing
Committee operates under procedures approved by the Board. The principal
responsibility of the Fair Value Pricing Committee is to determine the fair
value of securities for which current market quotations are not readily
available. The Fair Value Pricing Committee's determinations are reviewed by
the Board. During the most recently completed fiscal year, the Fair Value
Pricing Committee was a Board committee, and met [XX] ([XX]) times.
FUND SHARES OWNED BY BOARD MEMBERS. The following table shows the dollar amount
range of each Trustee's "beneficial ownership" of shares of the Fund as of the
end of the most recently completed calendar year. Dollar amount ranges
disclosed are established by the SEC. "Beneficial ownership" is determined in
accordance with Rule 16a-1(a)(2) under the 1934 Act. The Trustees and officers
of the Trust own less than 1% of the outstanding shares of the Trust.
-------------------------------------------------------------------------------------------------
DOLLAR RANGE OF FUND SHARES AGGREGATE DOLLAR RANGE OF SHARES
NAME (FUND)(1) (ALL FUNDS IN THE FUND COMPLEX)(1,2)
-------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
-------------------------------------------------------------------------------------------------
Doran None None
-------------------------------------------------------------------------------------------------
Nesher None None
-------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
-------------------------------------------------------------------------------------------------
Darr None $10,001-$50,000
-------------------------------------------------------------------------------------------------
Grause None Over $100,000
-------------------------------------------------------------------------------------------------
Johnson None None
-------------------------------------------------------------------------------------------------
Krikorian None None
-------------------------------------------------------------------------------------------------
Speca None None
-------------------------------------------------------------------------------------------------
Sullivan None None
-------------------------------------------------------------------------------------------------
(1) Valuation date is December 31, 2016.
(2) The Trust is the only investment company in the Fund Complex.
BOARD COMPENSATION. The Trust paid the following fees to the Trustees during
the Fund's most recently completed fiscal year.
S-26
---------------------------------------------------------------------------------------------------------
PENSION OR
RETIREMENT ESTIMATED
AGGREGATE BENEFITS ACCRUED ANNUAL BENEFITS
COMPENSATION AS PART OF FUND UPON TOTAL COMPENSATION FROM THE
NAME FROM THE TRUST EXPENSES RETIREMENT TRUST AND FUND COMPLEX(1)
---------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
---------------------------------------------------------------------------------------------------------
Doran $0 N/A N/A $0 for service on one (1) board
---------------------------------------------------------------------------------------------------------
Nesher $0 N/A N/A $0 for service on one (1) board
---------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
---------------------------------------------------------------------------------------------------------
Darr $[XX] N/A N/A $[XX] for service on one (1)
board
---------------------------------------------------------------------------------------------------------
Grause $[XX] N/A N/A $[XX] for service on one (1)
board
---------------------------------------------------------------------------------------------------------
Johnson $[XX] N/A N/A $[XX]for service on one (1)
board
---------------------------------------------------------------------------------------------------------
Krikorian $[XX] N/A N/A $[XX] for service on one (1)
board
---------------------------------------------------------------------------------------------------------
Speca $[XX] N/A N/A $[XX]for service on one (1)
board
---------------------------------------------------------------------------------------------------------
Sullivan $[XX] N/A N/A $[XX] for service on one (1)
board
---------------------------------------------------------------------------------------------------------
(1) The Trust is the only investment company in the Fund Complex.
TRUST OFFICERS. Set forth below are the names, years of birth, position with
the Trust and length of time served, and the principal occupations for the last
five years of each of the persons currently serving as executive officers of
the Trust. There is no stated term of office for the officers of the Trust.
Unless otherwise noted, the business address of each officer is SEI Investments
Company, One Freedom Valley Drive, Oaks, Pennsylvania 19456. The Chief
Compliance Officer is the only officer who receives compensation from the Trust
for his services.
Certain officers of the Trust also serve as officers of one or more mutual
funds for which SEI Investments Company or its affiliates act as investment
manager, administrator or distributor.
-----------------------------------------------------------------------------------------------------------------
NAME AND YEAR POSITION WITH TRUST AND
OF BIRTH LENGTH OF TIME SERVED PRINCIPAL OCCUPATIONS IN PAST 5 YEARS
-----------------------------------------------------------------------------------------------------------------
Michael Beattie President Director of Client Service, SEI Investments
(Born: 1965) (since 2011) Company, since 2004.
-----------------------------------------------------------------------------------------------------------------
Stephen Connors Treasurer, Controller and Chief Director, SEI Investments, Fund Accounting since
(Born: 1984) Financial Officer 2014. Audit Manager, Deloitte &
(since 2015) Touche LLP, from 2011 to 2014. Audit Supervisor,
BBD, LLP (formerly Briggs, Bunting &
Dougherty, LLP), from 2007 to 2011.
-----------------------------------------------------------------------------------------------------------------
Dianne M. Vice President and Secretary Counsel at SEI Investments since 2010. Associate
Descoteaux (since 2011) at Morgan, Lewis & Bockius LLP from 2006 to
(Born: 1977) 2010.
-----------------------------------------------------------------------------------------------------------------
Russell Emery Chief Compliance Officer Chief Compliance Officer of SEI Structured Credit
(Born: 1962) (since 2006) Fund, LP since June 2007. Chief Compliance
Officer of SEI Alpha Strategy Portfolios, LP from
June 2007 to September 2013. Chief Compliance
Officer of The Advisors' Inner Circle Fund II,
Bishop Street Funds, The KP Funds, The Advisors'
Inner Circle Fund III, Winton Series Trust, Winton
Diversified Opportunities Fund (closed-end
investment company), Gallery Trust, SEI
Institutional Managed Trust, SEI Asset Allocation
Trust, SEI Institutional International Trust, SEI
Institutional Investments Trust, SEI Daily Income
Trust, SEI Liquid Asset Trust, SEI Tax Exempt
Trust, Adviser Managed Trust, New Covenant
Funds, SEI Insurance Products Trust and SEI
Catholic Values Trust. Chief Compliance Officer
of SEI Opportunity Fund, L.P. until 2010. Chief
Compliance Officer of O'Connor EQUUS (closed-
end investment company) until to 2016. Chief
Compliance Officer of SEI Liquid Asset Trust
to 2016.
-----------------------------------------------------------------------------------------------------------------
S-27
-----------------------------------------------------------------------------------------------------------------
NAME AND YEAR POSITION WITH TRUST AND
OF BIRTH LENGTH OF TIME SERVED PRINCIPAL OCCUPATIONS IN PAST 5 YEARS
-----------------------------------------------------------------------------------------------------------------
Lisa Whittaker Vice President and Assistant Attorney, SEI Investments Company (2012-
(Born: 1978) Secretary (since 2013) present). Compliance Officer, The Glenmede Trust
Company, N.A. (2011-2012). Associate, Drinker Biddle
& Reath LLP (2006-2011).
-----------------------------------------------------------------------------------------------------------------
John Y. Kim Vice President and Assistant Attorney, SEI Investments Company (2014-
(Born: 1981) Secretary (since 2014) present). Associate, Stradley Ronon Stevens &
Young, LLP (2009-2014).
-----------------------------------------------------------------------------------------------------------------
Bridget E. Sudall Anti-Money Laundering Compliance Senior Associate and AML Officer, Morgan
(Born: 1980) Officer and Privacy Officer Stanley Alternative Investment Partners from April
(since 2015) 2011 to March 2015. Investor Services Team Lead,
Morgan Stanley Alternative Investment Partners
from 2007 to 2011.
-----------------------------------------------------------------------------------------------------------------
PURCHASING AND REDEEMING SHARES
Purchases and redemptions may be made through the Transfer Agent on any day the
New York Stock Exchange (the "NYSE") is open for business. Shares of the Fund
are offered and redeemed on a continuous basis. Currently, the Trust is closed
for business when the following holidays are observed: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by the Fund in
lieu of cash. Shareholders may incur brokerage charges on the sale of any such
securities so received in payment of redemptions. A shareholder will at all
times be entitled to aggregate cash redemptions from all funds of the Trust up
to the lesser of $250,000 or 1% of the Trust's net assets during any 90-day
period. The Trust has obtained an exemptive order from the SEC that permits the
Trust to make in-kind redemptions to those shareholders of the Trust that are
affiliated with the Trust solely by their ownership of a certain percentage of
the Trust's investment portfolios.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption during times when the NYSE is
closed, other than during customary weekends or holidays, for any period on
which trading on the NYSE is restricted (as determined by the SEC by rule or
regulation), or during the existence of an emergency (as determined by the SEC
by rule or regulation) as a result of which disposal or valuation of the Fund's
securities is not reasonably practicable, or for such other periods as the SEC
has by order permitted. The Trust also reserves the right to suspend sales of
shares of the Fund for any period during which the NYSE, the Adviser, the
Administrator, the Transfer Agent and/or the Custodian are not open for
business.
DETERMINATION OF NET ASSET VALUE
GENERAL POLICY. The Fund adheres to Section 2(a)(41), and Rule 2a-4 thereunder,
of the 1940 Act with respect to the valuation of portfolio securities. In
general, securities for which market quotations are readily available are
valued at current market value, and all other securities are valued at fair
value in accordance with procedures adopted by the Board. In complying with the
1940 Act, the Trust relies on guidance provided by the SEC and by the SEC staff
in various interpretive letters and other guidance.
S-28
EQUITY SECURITIES. Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available (except
for securities traded on NASDAQ), including securities traded over the counter,
are valued at the last quoted sale price on an exchange or market (foreign or
domestic) on which they are traded on the valuation date (or at approximately
4:00 p.m. Eastern Time if such exchange is normally open at that time), or, if
there is no such reported sale on the valuation date, at the most recent quoted
bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price
will be used. If such prices are not available or determined to not represent
the fair value of the security as of the Fund's pricing time, the security will
be valued at fair value as determined in good faith using methods approved by
the Board.
MONEY MARKET SECURITIES AND OTHER DEBT SECURITIES. If available, money market
securities and other debt securities are priced based upon valuations provided
by recognized independent, third-party pricing agents. Such values generally
reflect the last reported sales price if the security is actively traded. The
third-party pricing agents may also value debt securities by employing
methodologies that utilize actual market transactions, broker-supplied
valuations, or other methodologies designed to identify the market value for
such securities. Such methodologies generally consider such factors as security
prices, yields, maturities, call features, ratings and developments relating to
specific securities in arriving at valuations. Money market securities and
other debt securities with remaining maturities of sixty days or less may be
valued at their amortized cost, which approximates market value. If such prices
are not available or determined to not represent the fair value of the security
as of the Fund's pricing time, the security will be valued at fair value as
determined in good faith using methods approved by the Board.
FOREIGN SECURITIES. The prices for foreign securities are reported in local
currency and converted to U.S. dollars using currency exchange rates. Exchange
rates are provided daily by recognized independent pricing agents.
DERIVATIVES AND OTHER COMPLEX SECURITIES. Exchange traded options on securities
and indices purchased by the Fund generally are valued at their last trade
price or, if there is no last trade price, the last bid price. Exchange traded
options on securities and indices written by the Fund generally are valued at
their last trade price or, if there is no last trade price, the last asked
price. In the case of options traded in the over-the-counter market, if the OTC
option is also an exchange traded option, the Fund will follow the rules
regarding the valuation of exchange traded options. If the OTC option is not
also an exchange traded option, the Fund will value the option at fair value in
accordance with procedures adopted by the Board.
Futures and swaps cleared through a central clearing house ("centrally cleared
swaps") are valued at the settlement price established each day by the board of
the exchange on which they are traded. The daily settlement prices for
financial futures are provided by an independent source. On days when there is
excessive volume or market volatility, or the future or centrally cleared swap
does not end trading by the time the Fund calculates net asset value, the
settlement price may not be available at the time at which the Fund calculates
its net asset value. On such days, the best available price (which is typically
the last sales price) may be used to value the Fund's futures or centrally
cleared swaps position.
Foreign currency forward contracts are valued at the current day's interpolated
foreign exchange rate, as calculated using the current day's spot rate, and the
thirty, sixty, ninety and one-hundred eighty day forward rates provided by an
independent source.
If available, non-centrally cleared swaps, collateralized debt obligations,
collateralized loan obligations and bank loans are priced based on valuations
provided by an independent third party pricing agent. If a price is not
available from an independent third party pricing agent, the security will be
valued at fair value as determined in good faith using methods approved by the
Board.
USE OF THIRD-PARTY INDEPENDENT PRICING AGENTS AND INDEPENDENT BROKERS. Pursuant
to contracts with the Administrator, prices for most securities held by the
Fund are provided daily by third-party independent pricing agents that are
approved by the Board. The valuations provided by third-party independent
pricing agents are reviewed daily by the Administrator.
If a security price cannot be obtained from an independent, third-party pricing
agent, the Administrator shall seek to obtain a bid price from at least one
independent broker.
S-29
FAIR VALUE PROCEDURES. Securities for which market prices are not "readily
available" or which cannot be valued using the methodologies described above
are valued in accordance with Fair Value Procedures established by the Board
and implemented through the Fair Value Pricing Committee. The members of the
Fair Value Pricing Committee report, as necessary, to the Board regarding
portfolio valuation determinations. The Board, from time to time, will review
these methods of valuation and will recommend changes which may be necessary to
assure that the investments of the Fund are valued at fair value.
Some of the more common reasons that may necessitate a security being valued
using Fair Value Procedures include: the security's trading has been halted or
suspended; the security has been de-listed from a national exchange; the
security's primary trading market is temporarily closed at a time when under
normal conditions it would be open; the security has not been traded for an
extended period of time; the security's primary pricing source is not able or
willing to provide a price; trading of the security is subject to local
government-imposed restrictions; or a significant event with respect to a
security has occurred after the close of the market or exchange on which the
security principally trades and before the time the Fund calculates net asset
value. When a security is valued in accordance with the Fair Value Procedures,
the Fair Value Pricing Committee will determine the value after taking into
consideration relevant information reasonably available to the Fair Value
Pricing Committee.
TAXES
The following is only a summary of certain additional U.S. federal income tax
considerations generally affecting the Fund and its shareholders that is
intended to supplement the discussion contained in the Prospectus. The
discussion is based on the Code and the regulations issued thereunder as in
effect on the date of this SAI. New legislation, as well as administrative
changes or court decisions, may significantly change the conclusions expressed
herein, and may have a retroactive effect with respect to the transactions
contemplated herein. No attempt is made to present a detailed explanation of
the tax treatment of the Fund or its shareholders, and the discussion here and
in the Prospectus is not intended as a substitute for careful tax planning.
Shareholders are urged to consult their tax advisors with specific reference to
their own tax situations, including their state, local, and foreign tax
liabilities.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY ("RIC"). The Fund intends to
qualify and elects to be treated as a RIC. By following such a policy, the Fund
expects to eliminate or reduce to a nominal amount the federal taxes to which
it may be subject. A fund that qualifies as a RIC will generally not be subject
to federal income taxes on the net investment income and net realized capital
gains that the fund timely distributes to its shareholders. The Board reserves
the right not to maintain the qualification of the Fund as a RIC if it
determines such course of action to be beneficial to shareholders.
In order to qualify as a RIC under the Code, the Fund must distribute annually
to its shareholders at least 90% of its net investment income (which, includes
dividends, taxable interest and the excess of net short-term capital gains over
net long-term capital losses, less operating expenses) and at least 90% of its
net tax exempt interest income, for each tax year, if any, to its shareholders
(the "Distribution Requirement") and also must meet certain additional
requirements. Among these requirements are the following: (i) at least 90% of
the Fund's gross income each taxable year must be derived from dividends,
interest, payments with respect to certain securities loans and gains from the
sale or other disposition of stock, securities, or foreign currencies, or other
income (including but not limited to certain gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities, or currencies, and net income derived from an interest in a
qualified publicly traded partnership (the "Qualifying Income Test"); and (ii)
at the close of each quarter of the Fund's taxable year: (A) at least 50% of
the value of its total assets must be represented by cash and cash items, U.S.
government securities, securities of other RICs and other securities, with such
other securities limited, in respect to any one issuer, to an amount not
greater than 5% of the value of the Fund's total assets and that does not
represent more than 10% of the outstanding voting securities of such issuer,
including the equity securities of a qualified publicly traded partnership, and
(B) not more than 25% of the value of its total assets is invested in the
securities (other than U.S. government securities or securities of other RICs)
of any one issuer or the securities (other than the securities of another RIC)
of two or more issuers that the Fund controls and which are engaged in the same
or similar trades or businesses or related trades or businesses, or the
securities of one or more qualified publicly traded partnerships (the "Asset
Test").
S-30
Although the Fund intends to distribute substantially all of its net investment
income and may distribute its capital gains for any taxable year, the Fund will
be subject to federal income taxation to the extent any such income or gains
are not distributed.
If the Fund fails to satisfy the Qualifying Income or Asset Tests in any
taxable year, the Fund may be eligible for relief provisions if the failures
are due to reasonable cause and not willful neglect and if a penalty tax is
paid with respect to each failure to satisfy the applicable requirements.
Additionally, relief is provided for certain DE MINIMIS failures of the
diversification requirements where the Fund corrects the failure within a
specified period. If the Fund fails to maintain qualification as a RIC for a
tax year, and the relief provisions are not available, the Fund will be subject
to federal income tax at regular corporate rates without any deduction for
distributions to shareholders. In such case, its shareholders would be taxed as
if they received ordinary dividends, although corporate shareholders could be
eligible for the dividends received deduction (subject to certain limitations)
and individuals may be able to benefit from the lower tax rates available to
qualified dividend income. In addition, the Fund could be required to recognize
unrealized gains, pay substantial taxes and interest, and make substantial
distributions before requalifying as a RIC. The Board reserves the right not to
maintain the qualification of the Fund as a RIC if it determines such course of
action to be beneficial to shareholders.
The Fund may elect to treat part or all of any "qualified late year loss" as if
it had been incurred in the succeeding taxable year in determining the Fund's
taxable income, net capital gain, net short-term capital gain, and earnings and
profits. The effect of this election is to treat any such "qualified late year
loss" as if it had been incurred in the succeeding taxable year in
characterizing Fund distributions for any calendar year. A "qualified late year
loss" generally includes net capital loss, net long-term capital loss, or net
short-term capital loss incurred after October 31 of the current taxable year
(commonly referred to as "post-October losses") and certain other late-year
losses.
The treatment of capital loss carryovers for the Fund is similar to the rules
that apply to capital loss carryovers of individuals, which provide that such
losses are carried over by the Fund indefinitely. If the Fund has a "net
capital loss" (that is, capital losses in excess of capital gains) for a
taxable year beginning after December 22, 2010 (a "Post-2010 Loss"), the excess
of the Fund's net short-term capital losses over its net long-term capital
gains is treated as a short-term capital loss arising on the first day of the
Fund's next taxable year, and the excess (if any) of the Fund's net long-term
capital losses over its net short-term capital gains is treated as a long-term
capital loss arising on the first day of the Fund's next taxable year. The
Fund's unused capital loss carryforwards that arose in taxable years that began
on or before December 22, 2010 ("Pre-2011 Losses") are available to be applied
against future capital gains, if any, realized by the Fund prior to the
expiration of those carryforwards, generally eight years after the year in
which they arose. The Fund's Post-2010 Losses must be fully utilized before the
Fund will be permitted to utilize carryforwards of Pre-2011 Losses. In
addition, the carryover of capital losses may be limited under the general loss
limitation rules if the Fund experiences an ownership change as defined in the
Code.
FEDERAL EXCISE TAX. Notwithstanding the Distribution Requirement described
above, which generally requires the Fund to distribute at least 90% of its
annual investment company taxable income and the excess of its exempt interest
income (but does not require any minimum distribution of net capital gain), the
Fund will be subject to a nondeductible 4% federal excise tax to the extent it
fails to distribute, by the end of the calendar year at least 98% of its
ordinary income and 98.2% of its capital gain net income (the excess of short-
and long-term capital gains over short- and long-term capital losses) for the
one-year period ending on October 31 of such year (including any retained
amount from the prior calendar year on which the Fund paid no federal income
tax). The Fund intends to make sufficient distributions to avoid liability for
federal excise tax, but can make no assurances that such tax will be completely
eliminated. The Fund may in certain circumstances be required to liquidate Fund
investments in order to make sufficient distributions to avoid federal excise
tax liability at a time when the Adviser might not otherwise have chosen to do
so, and liquidation of investments in such circumstances may affect the ability
of the Fund to satisfy the requirement for qualification as a RIC.
DISTRIBUTIONS TO SHAREHOLDERS. The Fund receives income generally in the form
of dividends and interest on investments. This income, plus net short-term
capital gains, if any, less expenses incurred in the operation of the Fund,
constitutes the Fund's net investment income from which dividends may be paid
to you. Any distributions by the Fund from such income will be taxable to you
as ordinary income or at the lower capital gains rates that apply to
individuals receiving qualified dividend income, whether you take them in cash
or in additional shares.
S-31
Distributions by the Fund will be eligible for the reduced tax rates applicable
to qualified dividend income. Distributions by the Fund are currently eligible
for the reduced maximum tax rate to individuals currently set at 20% (lower
rates apply to individuals in lower tax brackets) to the extent that the Fund
receives qualified dividend income on the securities it holds and the Fund
reports the distributions as qualified dividend income. Qualified dividend
income is, in general, dividend income from taxable domestic corporations and
certain foreign corporations (e.g., foreign corporations incorporated in a
possession of the United States or in certain countries with a comprehensive
tax treaty with the United States, or the stock of which is readily tradable on
an established securities market in the United States). A dividend will not be
treated as qualified dividend income to the extent that: (i) the shareholder
has not held the shares on which the dividend was paid for more than 60 days
during the 121-day period that begins on the date that is 60 days before the
date on which the shares become "ex-dividend" (which is the day on which
declared distributions (dividends or capital gains) are deducted from the
Fund's assets before it calculates the net asset value) with respect to such
dividend, (ii) the Fund has not satisfied similar holding period requirements
with respect to the securities it holds that paid the dividends distributed to
the shareholder), (iii) the shareholder is under an obligation (whether
pursuant to a short sale or otherwise) to make related payments with respect to
substantially similar or related property, or (iv) the shareholder elects to
treat such dividend as investment income under section 163(d)(4)(B) of the
Code. Therefore, if you lend your shares in the Fund, such as pursuant to a
securities lending arrangement, you may lose the ability to treat dividends
(paid while the shares are held by the borrower) as qualified dividend income.
Distributions by the Fund of its net short-term capital gains will be taxable
as ordinary income. Capital gain distributions consisting of the Fund's net
capital gains will be taxable as long-term capital gains for individual
shareholders currently set at a maximum rate of 20% regardless of how long you
have held your shares in the Fund. The Fund will report annually to its
shareholders the federal tax status of all distributions made by the Fund.
In the case of corporate shareholders, the Fund's distributions (other than
capital gain distributions) generally qualify for the dividends-received
deduction to the extent such distributions are so reported and do not exceed
the gross amount of qualifying dividends received by the Fund for the year.
Generally, and subject to certain limitations (including certain holding period
limitations), a dividend will be treated as a qualifying dividend if it has
been received from a domestic corporation. All such qualifying dividends
(including the deducted portion) must be included in your alternative minimum
taxable income calculation.
To the extent that the Fund makes a distribution of income received by the Fund
in lieu of dividends (a "substitute payment") with respect to securities on
loan pursuant to a securities lending transaction, such income will not
constitute qualified dividend income to individual shareholders and will not be
eligible for the dividends received deduction for corporate shareholders.
If the Fund's distributions exceed its taxable income and capital gains
realized during a taxable year, all or a portion of the distributions made in
the same taxable year may be recharacterized as a return of capital to
shareholders. A return of capital distribution will generally not be taxable,
but will reduce each shareholder's cost basis in the Fund and result in a
higher reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
A dividend or distribution received shortly after the purchase of shares
reduces the net asset value of the shares by the amount of the dividend or
distribution and, although in effect a return of capital, will be taxable to
the shareholder. If the net asset value of shares were reduced below the
shareholder's cost by dividends or distributions representing gains realized on
sales of securities, such dividends or distributions would be a return of
investment though taxable to the shareholder in the same manner as other
dividends or distributions.
The Fund (or its administrative agent) will inform you of the amount of your
ordinary income dividends, qualified dividend income and capital gain
distributions, if any, and will advise you of their tax status for federal
income tax purposes shortly after the close of each calendar year. If you have
not held your shares for a full year, the Fund may designate and distribute to
you, as ordinary income, qualified dividend income or capital gain, a
percentage of income that is not equal to the actual amount of such income
earned during the period of your investment in the Fund.
Dividends declared to shareholders of record in October, November or December
and actually paid in January of the following year will be treated as having
been received by shareholders on December 31 of the calendar year in which
declared. Under this rule, therefore, a shareholder may be taxed in one year on
dividends or distributions actually received in January of the following year.
S-32
SALES, EXCHANGES OR REDEMPTIONS. Any gain or loss recognized on a sale,
exchange, or redemption of shares of the Fund by a shareholder who is not a
dealer in securities will generally, for individual shareholders, be treated as
a long-term capital gain or loss if the shares have been held for more than
twelve months and otherwise will be treated as a short-term capital gain or
loss. However, if shares on which a shareholder has received a net capital gain
distribution are subsequently sold, exchanged, or redeemed and such shares have
been held for six months or less, any loss recognized will be treated as a
long-term capital loss to the extent of the net capital gain distribution. In
addition, the loss realized on a sale or other disposition of shares will be
disallowed to the extent a shareholder repurchases (or enters into a contract
to or option to repurchase) shares within a period of 61 days (beginning 30
days before and ending 30 days after the disposition of the shares). This loss
disallowance rule will apply to shares received through the reinvestment of
dividends during the 61-day period.
U.S. individuals with income exceeding $200,000 ($250,000 if married and filing
jointly) are subject to a 3.8% Medicare contribution tax on their "net
investment income," including interest, dividends, and capital gains (including
capital gains realized on the sale or exchange of shares of the Fund).
The Fund (or its administrative agent) must report to the Internal Revenue
Service ("IRS") and furnish to Fund shareholders the cost basis information for
Fund shares purchased on or after January 1, 2012, and sold on or after that
date. In addition to the requirement to report the gross proceeds from the sale
of Fund shares, the Fund is also required to report the cost basis information
for such shares and indicate whether these shares had a short-term or long-term
holding period. For each sale of Fund shares, the Fund will permit Fund
shareholders to elect from among several IRS-accepted cost basis methods,
including the average basis method. In the absence of an election, the Fund
will use the average basis method as its default cost basis method. The cost
basis method elected by the Fund shareholder (or the cost basis method applied
by default) for each sale of Fund shares may not be changed after the
settlement date of each such sale of Fund shares. Fund shareholders should
consult with their tax advisors to determine the best IRS-accepted cost basis
method for their tax situation and to obtain more information about cost basis
reporting.. Shareholders also should carefully review the cost basis
information provided to them and make any additional basis, holding period or
other adjustments that are required when reporting these amounts on their
federal income tax returns.
TAX TREATMENT OF COMPLEX SECURITIES. The Fund may invest in complex securities
and these investments may be subject to numerous special and complex tax rules.
These rules could affect the Fund's ability to qualify as a RIC, affect whether
gains and losses recognized by the Fund are treated as ordinary income or
capital gain, accelerate the recognition of income to the Fund and/or defer the
Fund's ability to recognize losses, and, in limited cases, subject the Fund to
U.S. federal income tax on income from certain of its foreign securities. In
turn, these rules may affect the amount, timing or character of the income
distributed to you by the Fund.
With respect to investments in STRIPS, treasury receipts, and other zero coupon
securities which are sold at original issue discount and thus do not make
periodic cash interest payments, the Fund will be required to include as part
of its current income the imputed interest on such obligations even though the
Fund has not received any interest payments on such obligations during that
period. Because the Fund intends to distribute all of its net investment income
to its shareholders, the Fund may have to sell Fund securities to distribute
such imputed income which may occur at a time when the Adviser would not have
chosen to sell such securities and which may result in taxable gain or loss.
FOREIGN TAXES. Dividends and interest received by the Fund may be subject to
income, withholding or other taxes imposed by foreign countries and U.S.
possessions that would reduce the yield on the Fund's stock or securities. Tax
conventions between certain countries and the United States may reduce or
eliminate these taxes. Foreign countries generally do not impose taxes on
capital gains with respect to investments by foreign investors.
TAX-EXEMPT SHAREHOLDERS. Certain tax-exempt shareholders, including qualified
pension plans, individual retirement accounts, salary deferral arrangements,
401(k)s, and other tax-exempt entities, generally are exempt from federal
income taxation except with respect to their unrelated business taxable income
("UBTI"). Under current law, the Fund generally serves to block UBTI from being
realized by its tax-exempt shareholders. However, notwithstanding the
foregoing, the tax-exempt
S-33
shareholder could realize UBTI by virtue of an investment in the Fund where,
for example: (i) the Fund invests in residual interests of Real Estate Mortgage
Investment Conduits ("REMICs"), (ii) the Fund invests in a real estate
investment trust that is a taxable mortgage pool ("TMP") or that has a
subsidiary that is a TMP or that invests in the residual interest of a REMIC,
or (iii) shares in the Fund constitute debt-financed property in the hands of
the tax-exempt shareholder within the meaning of section 514(b) of the Code.
Charitable remainder trusts are subject to special rules and should consult
their tax advisor. The IRS has issued guidance with respect to these issues and
prospective shareholders, especially charitable remainder trusts, are strongly
encouraged to consult their tax advisors regarding these issues.
BACKUP WITHHOLDING. The Fund will be required in certain cases to withhold at a
28% withholding rate and remit to the U.S. Treasury the amount withheld on
amounts payable to any shareholder who: (i) has provided the Fund either an
incorrect tax identification number or no number at all; (ii) is subject to
backup withholding by the IRS for failure to properly report payments of
interest or dividends; (iii) has failed to certify to the Fund that such
shareholder is not subject to backup withholding; or (iv) has failed to certify
to the Fund that the shareholder is a U.S. person (including a resident
alien).
NON-U.S. INVESTORS. Any non-U.S. investors in the Fund may be subject to U.S.
withholding and estate tax and are encouraged to consult their tax advisors
prior to investing in the Fund. Foreign shareholders (i.e., nonresident alien
individuals and foreign corporations, partnerships, trusts and estates) are
generally subject to U.S. withholding tax at the rate of 30% (or a lower tax
treaty rate) on distributions derived from taxable ordinary income. The Fund
may, under certain circumstances, report all or a portion of a dividend as an
"interest-related dividend" or a "short-term capital gain dividend," which
would generally be exempt from this 30% U.S. withholding tax, provided certain
other requirements are met. Short-term capital gain dividends received by a
nonresident alien individual who is present in the U.S. for a period or periods
aggregating 183 days or more during the taxable year are not exempt from this
30% withholding tax. Gains realized by foreign shareholders from the sale or
other disposition of shares of the Fund generally are not subject to U.S.
taxation, unless the recipient is an individual who is physically present in
the U.S. for 183 days or more per year. Foreign shareholders who fail to
provide an applicable IRS form may be subject to backup withholding on certain
payments from the Fund. Backup withholding will not be applied to payments that
are subject to the 30% (or lower applicable treaty rate) withholding tax
described above. Different tax consequences may result if the foreign
shareholder is engaged in a trade or business within the United States. In
addition, the tax consequences to a foreign shareholder entitled to claim the
benefits of a tax treaty may be different than those described above.
A U.S. withholding tax at a 30% rate will be imposed on dividends effective
July 1, 2014 (and proceeds of sales in respect of Fund shares (including
certain capital gain dividends) received by Fund shareholders beginning after
December 31, 2018) for shareholders who own their shares through foreign
accounts or foreign intermediaries if certain disclosure requirements related
to U.S. accounts or ownership are not satisfied. The Fund will not pay any
additional amounts in respect to any amounts withheld.
TAX SHELTER REPORTING REGULATIONS. Under U.S. Treasury regulations, generally,
if a shareholder recognizes a loss of $2 million or more for an individual
shareholder or $10 million or more for a corporate shareholder, the shareholder
must file with the IRS a disclosure statement on Form 8886. Direct shareholders
of portfolio securities are in many cases excepted from this reporting
requirement, but under current guidance, shareholders of a RIC such as the Fund
are not excepted. Future guidance may extend the current exception from this
reporting requirement to shareholders of most or all RICs. The fact that a loss
is reportable under these regulations does not affect the legal determination
of whether the taxpayer's treatment of the loss is proper. Shareholders should
consult their tax advisors to determine the applicability of these regulations
in light of their individual circumstances.
STATE TAXES. Depending upon state and local law, distributions by the Fund to
its shareholders and the ownership of such shares may be subject to state and
local taxes. Rules of state and local taxation of dividend and capital gains
distributions from RICs often differ from rules for federal income taxation
described above. It is expected that the Fund will not be liable for any
corporate excise, income or franchise tax in Massachusetts if it qualifies as a
RIC for federal income tax purposes.
Many states grant tax-free status to dividends paid to you from interest earned
on direct obligations of the U.S. government, subject in some states to minimum
investment requirements that must be met by the Fund. Investment in Ginnie Mae
or Fannie Mae securities, banker's acceptances, commercial paper, and
repurchase agreements collateralized by U.S. government
S-34
securities do not generally qualify for such tax-free treatment. The rules on
exclusion of this income are different for corporate shareholders. Shareholders
are urged to consult their tax advisors regarding state and local taxes
applicable to an investment in the Fund.
The Fund's shares held in a tax-qualified retirement account will generally not
be subject to federal taxation on income and capital gains distributions from
the Fund until a shareholder begins receiving payments from its retirement
account. Because each shareholder's tax situation is different, shareholders
should consult their tax advisor about the tax implications of an investment in
the Fund.
FUND TRANSACTIONS
BROKERAGE TRANSACTIONS. Generally, equity securities, both listed and
over-the-counter, are bought and sold through brokerage transactions for which
commissions are payable. Purchases from underwriters will include the
underwriting commission or concession, and purchases from dealers serving as
market makers will include a dealer's mark-up or reflect a dealer's mark-down.
Money market securities and other debt securities are usually bought and sold
directly from the issuer or an underwriter or market maker for the securities.
Generally, the Fund will not pay brokerage commissions for such purchases. When
a debt security is bought from an underwriter, the purchase price will usually
include an underwriting commission or concession. The purchase price for
securities bought from dealers serving as market makers will similarly include
the dealer's mark up or reflect a dealer's mark down. When the Fund executes
transactions in the over-the-counter market, it will generally deal with
primary market makers unless prices that are more favorable are otherwise
obtainable.
In addition, the Adviser may place a combined order for two or more accounts it
manages, including the Fund, engaged in the purchase or sale of the same
security if, in its judgment, joint execution is in the best interest of each
participant and will result in best price and execution. Transactions involving
commingled orders are allocated in a manner deemed equitable to each account or
fund. Although it is recognized that, in some cases, the joint execution of
orders could adversely affect the price or volume of the security that a
particular account or the Fund may obtain, it is the opinion of the Adviser
that the advantages of combined orders outweigh the possible disadvantages of
separate transactions.
For the fiscal years ended October 31, 2014, 2015 and 2016, the Fund paid the
following aggregate brokerage commissions on portfolio transactions:
--------------------------------------------------------------------------------
AGGREGATE DOLLAR AMOUNT OF BROKERAGE COMMISSIONS PAID
--------------------------------------------------------------------------------
2014 2015 2016
--------------------------------------------------------------------------------
$1,670,850 $1,359,755 $[XX]
--------------------------------------------------------------------------------
BROKERAGE SELECTION. The Trust does not expect to use one particular broker or
dealer, and when one or more brokers is believed capable of providing the best
combination of price and execution, the Adviser may select a broker based upon
brokerage or research services provided to the Adviser. The Adviser may pay a
higher commission than otherwise obtainable from other brokers in return for
such services only if a good faith determination is made that the commission is
reasonable in relation to the services provided.
Section 28(e) of the 1934 Act permits the Adviser, under certain circumstances,
to cause the Fund to pay a broker or dealer a commission for effecting a
transaction in excess of the amount of commission another broker or dealer
would have charged for effecting the transaction in recognition of the value of
brokerage and research services provided by the broker or dealer. In addition
to agency transactions, the Adviser may receive brokerage and research services
in connection with certain riskless principal transactions, in accordance with
applicable SEC guidance. Brokerage and research services include: (1)
furnishing advice as to the value of securities, the advisability of investing
in, purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities; (2) furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and the performance of accounts; and (3) effecting
securities transactions and performing functions incidental thereto (such as
clearance, settlement, and custody). In the case of research services, the
Adviser believes that access to independent investment research is beneficial
to its investment decision-making processes and, therefore,
S-35
to the Fund.
To the extent that research services may be a factor in selecting brokers, such
services may be in written form or through direct contact with individuals and
may include information as to particular companies and securities as well as
market, economic, or institutional areas and information which assists in the
valuation and pricing of investments. Examples of research-oriented services
for which the Adviser might utilize Fund commissions include research reports
and other information on the economy, industries, sectors, groups of
securities, individual companies, statistical information, political
developments, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance and other analysis. The
Adviser may use research services furnished by brokers in servicing all client
accounts and not all services may necessarily be used in connection with the
account that paid commissions to the broker providing such services.
Information so received by the Adviser will be in addition to and not in lieu
of the services required to be performed by the Adviser under the Advisory
Agreement. Any advisory or other fees paid to the Adviser are not reduced as a
result of the receipt of research services.
In some cases the Adviser may receive a service from a broker that has both a
"research" and a "non-research" use. When this occurs, the Adviser makes a good
faith allocation, under all the circumstances, between the research and
non-research uses of the service. The percentage of the service that is used
for research purposes may be paid for with client commissions, while the
Adviser will use its own funds to pay for the percentage of the service that is
used for non-research purposes. In making this good faith allocation, the
Adviser faces a potential conflict of interest, but the Adviser believes that
its allocation procedures are reasonably designed to ensure that it
appropriately allocates the anticipated use of such services to their research
and non-research uses.
From time to time, the Adviser may purchase new issues of securities for
clients, including the Fund, in a fixed price offering. In these situations,
the seller may be a member of the selling group that will, in addition to
selling securities, provide the Adviser with research services. FINRA has
adopted rules expressly permitting these types of arrangements under certain
circumstances. Generally, the seller will provide research "credits" in these
situations at a rate that is higher than that which is available for typical
secondary market transactions. These arrangements may not fall within the safe
harbor of Section 28(e).
During the fiscal year ended October 31, 2016, the Fund paid the following
commissions on brokerage transactions directed to brokers pursuant to an
agreement or understanding whereby the broker provides research or other
brokerage services to the Adviser:
----------------------------------------------------------------------------------------------------------------------
TOTAL DOLLAR AMOUNT OF BROKERAGE COMMISSIONS FOR TOTAL DOLLAR AMOUNT OF TRANSACTIONS INVOLVING
RESEARCH SERVICES BROKERAGE COMMISSIONS FOR RESEARCH SERVICES
----------------------------------------------------------------------------------------------------------------------
$[XX] $[XX]
----------------------------------------------------------------------------------------------------------------------
BROKERAGE WITH FUND AFFILIATES. The Fund may execute brokerage or other agency
transactions through registered broker-dealer affiliates of either the Fund or
the Adviser for a commission in conformity with the 1940 Act and rules
promulgated by the SEC. The 1940 Act requires that commissions paid to the
affiliate by the Fund for exchange transactions not exceed "usual and
customary" brokerage commissions. The rules define "usual and customary"
commissions to include amounts which are "reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
being purchased or sold on a securities exchange during a comparable period of
time." The Trustees, including those who are not "interested persons" of the
Fund, have adopted procedures for evaluating the reasonableness of commissions
paid to affiliates and review these procedures periodically.
For the fiscal years ended October 31, 2014, 2015 and 2016, the Fund did not
pay any brokerage commissions on portfolio transactions effected by affiliated
brokers.
SECURITIES OF "REGULAR BROKER-DEALERS." The Fund is required to identify any
securities of its "regular brokers and dealers" (as such term is defined in the
1940 Act) that the Fund held during its most recent fiscal year. During the
fiscal year ended October 31, 2016, the Fund did not hold any securities of
regular brokers and dealers.
S-36
PORTFOLIO TURNOVER RATES. Portfolio turnover rate is defined under SEC rules as
the value of the securities purchased or securities sold, excluding all
securities whose maturities at the time of acquisition were one-year or less,
divided by the average monthly value of such securities owned during the year.
Based on this definition, instruments with remaining maturities of less than
one-year are excluded from the calculation of the portfolio turnover rate.
Instruments excluded from the calculation of portfolio turnover generally would
include the futures contracts in which the Fund may invest since such contracts
generally have remaining maturities of less than one-year. The Fund may at
times hold investments in other short-term instruments, such as repurchase
agreements, which are excluded for purposes of computing portfolio turnover.
For the fiscal years ended October 31, 2015 and 2016, the Fund's portfolio
turnover rates were as follows:
--------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATES
--------------------------------------------------------------------------------
2015 2016
--------------------------------------------------------------------------------
24% [XX]%
--------------------------------------------------------------------------------
PORTFOLIO HOLDINGS
The Board has approved policies and procedures that govern the timing and
circumstances regarding the disclosure of Fund portfolio holdings information
to shareholders and third parties. These policies and procedures are designed
to ensure that disclosure of information regarding the Fund's portfolio
securities is in the best interests of Fund shareholders, and include
procedures to address conflicts between the interests of the Fund's
shareholders, on the one hand, and those of the Fund's Adviser, principal
underwriter or any affiliated person of the Fund, the Adviser, or its principal
underwriter, on the other. Pursuant to such procedures, the Board has
authorized the Adviser's Chief Compliance Officer (the "Authorized Person") to
authorize the release of the Fund's portfolio holdings, as necessary, in
conformity with the foregoing principles. The Authorized Person reports at
least quarterly to the Board regarding the implementation of such policies and
procedures.
Pursuant to applicable law, the Fund is required to disclose its complete
portfolio holdings quarterly, within 60 days of the end of each fiscal quarter
(currently, each January 31, April 30, July 31 and October 31). The Fund
discloses a complete schedule of investments in its Semi-Annual and Annual
Reports which are distributed to the Fund's shareholders after the second and
fourth fiscal quarters. The Fund's complete schedule of investments following
the first and third fiscal quarters will be available in quarterly holdings
reports filed with the SEC on Form N-Q. Quarterly holdings reports filed with
the SEC on Form N-Q are not distributed to Fund shareholders, but are
available, free of charge, on the EDGAR database on the SEC's website at
www.sec.gov.
The Fund provides information about its complete portfolio holdings on the
internet at http://aicfundholdings.com/edgewood. This information is provided
on a quarterly basis, forty-five (45) days after the end of the fiscal quarter,
and is publicly available to all shareholders until updated to reflect the next
applicable period. The Adviser may exclude any portion of the Fund's portfolio
holdings from publication when deemed to be in the best interest of the Fund.
The Fund may provide ratings and rankings organizations with the same
information at the same time it is filed with the SEC or one day after it is
made available on the internet web site.
The Fund's policies and procedures provide that the Authorized Person may
authorize disclosure of portfolio holdings information to third parties at
differing times and/or with different lag times than the information posted to
the internet, provided that the recipient is, either by contractual agreement
or otherwise by law, (i) required to maintain the confidentiality of the
information and (ii) prohibited from using the information to facilitate or
assist in any securities transactions or investment program. No compensation or
other consideration is paid to or received by any party in connection with the
disclosure of portfolio holdings information, including the Fund, Adviser and
its affiliates or recipients of the Fund's portfolio holdings information. The
Fund will review a third party's request for portfolio holdings information to
determine whether the third party has legitimate business objectives in
requesting such information. Legitimate business objectives may include but are
not necessarily limited to: disclosure for required due diligence purposes;
disclosure to a newly hired investment adviser or sub-adviser; or disclosure to
a rating agency for use in developing a rating.
The Adviser currently has two arrangements to provide Fund portfolio holdings
information to third parties prior to the date on
S-37
which portfolio holdings information is posted on the Fund's web site. These
arrangements are with Ayco Company, L.P. and Wells Fargo Bank, N.A.,
respectively. In each arrangement, the Adviser provides to the respective third
party Fund portfolio holdings information as of the end of each calendar
quarter, generally within 10 days after the quarter end. The information
provided to these third parties, until made publicly available, is considered
confidential and will not be distributed to the public nor traded upon. The
Fund believes this disclosure serves a legitimate business purpose. No
compensation is received by the Fund or the Adviser in connection with the
disclosure of portfolio holdings information. The Trust's Chief Compliance
Officer will regularly review these arrangements and will make periodic reports
to the Board regarding disclosure pursuant to such arrangements.
In addition, the Fund's service providers, such as the Custodian, Administrator
and Transfer Agent, may receive portfolio holdings information as frequently as
daily in connection with their services to the Fund. In addition to any
contractual provisions relating to confidentiality of information that may be
included in the service providers contract with the Trust, these arrangements
impose obligations on the Fund's service providers that would prohibit them
from disclosing or trading on the Fund's non-public information. Financial
printers and pricing information vendors may receive portfolio holdings
information, as necessary, in connection with their services to the Fund.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
funds and shares of each fund. Each share of a fund represents an equal
proportionate interest in that fund with each other share. Shares are entitled
upon liquidation to a pro rata share in the net assets of the fund.
Shareholders have no preemptive rights. The Declaration of Trust provides that
the Board may create additional series or classes of shares. All consideration
received by the Trust for shares of any fund and all assets in which such
consideration is invested would belong to that fund and would be subject to the
liabilities related thereto. Share certificates representing shares will not be
issued. The Fund's shares, when issued, are fully paid and non-assessable.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the
obligations of the trust. Even if, however, the Trust were held to be a
partnership, the possibility of the shareholders incurring financial loss for
that reason appears remote because the Declaration of Trust contains an express
disclaimer of shareholder liability for obligations of the Trust and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any shareholder held personally liable for the
obligations of the Trust.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his
or her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the
Declaration of Trust that they have not acted in good faith in the reasonable
belief that their actions were in the best interests of the Trust. However,
nothing in the Declaration of Trust shall protect or indemnify a Trustee
against any liability for his or her willful misfeasance, bad faith, gross
negligence or reckless disregard of his or her duties. Nothing contained in
this section attempts to disclaim a Trustee's individual liability in any
manner inconsistent with the federal securities laws.
PROXY VOTING
The Board has delegated responsibility for decisions regarding proxy voting for
securities held by the Fund to the Adviser. The Adviser will vote such proxies
in accordance with its proxy voting policies and procedures, which are included
in Appendix B
S-38
to this SAI.
The Trust is required to disclose annually the Fund's complete proxy voting
record during the most recent 12-month period ended June 30 on Form N-PX. This
voting record is available: (i) without charge, upon request, by calling
1-800-791-4226; and (ii) on the SEC's website at http://www.sec.gov.
CODES OF ETHICS
The Board, on behalf of the Trust, has adopted a Code of Ethics pursuant to
Rule 17j-1 under the 1940 Act. In addition, the Adviser, the Distributor and
the Administrator have adopted Codes of Ethics pursuant to Rule 17j-1. These
Codes of Ethics (each a "Code of Ethics" and together the "Codes of Ethics")
apply to the personal investing activities of trustees, officers and certain
employees ("access persons"). Rule 17j-1 and the Codes of Ethics are designed
to prevent unlawful practices in connection with the purchase or sale of
securities by access persons. Under each Code of Ethics, access persons are
permitted to invest in securities, including securities that may be purchased
or held by the Fund, but are required to report their personal securities
transactions for monitoring purposes. In addition, certain access persons are
required to obtain approval before investing in initial public offerings or
private placements or are prohibited from making such investments. Copies of
these Codes of Ethics are on file with the SEC, and are available to the
public.
5% AND 25% SHAREHOLDERS
As of February [XX], 2017, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% and
25% or more of any class of the shares of the Fund. The Trust believes that
most of the shares referred to below were held by the persons listed below in
account for their fiduciary, agency or custodial customers. Persons owning of
record or beneficially more than 25% of the Fund's outstanding shares may be
deemed to control the Fund within the meaning of the 1940 Act. Shareholders
controlling the Fund may have a significant impact on any shareholder vote of
the Fund.
--------------------------------------------------------------------------------
NAME AND ADDRESS NUMBER OF SHARES CLASS OF SHARES % OF CLASS
--------------------------------------------------------------------------------
[XX] [XX] [XX] [XX]%
--------------------------------------------------------------------------------
S-39
APPENDIX A -- DESCRIPTION OF RATINGS
DESCRIPTION OF RATINGS
The following descriptions of securities ratings have been published by Moody's
Investors Services, Inc. ("Moody's"), Standard & Poor's ("S&P"), and Fitch
Ratings ("Fitch"), respectively.
DESCRIPTION OF MOODY'S GLOBAL RATINGS
Ratings assigned on Moody's global long-term and short-term rating scales are
forward-looking opinions of the relative credit risks of financial obligations
issued by non-financial corporates, financial institutions, structured finance
vehicles, project finance vehicles, and public sector entities. Long-term
ratings are assigned to issuers or obligations with an original maturity of one
year or more and reflect both on the likelihood of a default on contractually
promised payments and the expected financial loss suffered in the event of
default. Short-term ratings are assigned to obligations with an original
maturity of thirteen months or less and reflect both on the likelihood of a
default on contractually promised payments and the expected financial loss
suffered in the event of default.
DESCRIPTION OF MOODY'S GLOBAL LONG-TERM RATINGS
Aaa Obligations rated Aaa are judged to be of the highest quality, subject to
the lowest level of credit risk.
Aa Obligations rated Aa are judged to be of high quality and are subject to
very low credit risk.
A Obligations rated A are judged to be upper-medium grade and are subject to
low credit risk.
Baa Obligations rated Baa are judged to be medium-grade and subject to moderate
credit risk and as such may possess certain speculative characteristics.
Ba Obligations rated Ba are judged to be speculative and are subject to
substantial credit risk.
B Obligations rated B are considered speculative and are subject to high credit
risk.
Caa Obligations rated Caa are judged to be speculative of poor standing and are
subject to very high credit risk.
Ca Obligations rated Ca are highly speculative and are likely in, or very near,
default, with some prospect of recovery of principal and interest.
C Obligations rated C are the lowest rated and are typically in default, with
little prospect for recovery of principal or interest.
NOTE: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.
HYBRID INDICATOR (HYB)
The hybrid indicator (hyb) is appended to all ratings of hybrid securities
issued by banks, insurers, finance companies, and securities firms. By their
terms, hybrid securities allow for the omission of scheduled dividends,
interest, or principal payments, which can potentially result in impairment if
such an omission occurs. Hybrid securities may also be subject to contractually
allowable write-downs of principal that could result in impairment. Together
with the hybrid indicator, the long-term obligation rating assigned to a hybrid
security is an expression of the relative credit risk associated with that
security.
DESCRIPTION OF MOODY'S GLOBAL SHORT-TERM RATINGS
P-1 Issuers (or supporting institutions) rated Prime-1 have a superior ability
to repay short-term debt obligations.
A-1
P-2 Issuers (or supporting institutions) rated Prime-2 have a strong ability to
repay short-term debt obligations.
P-3 Issuers (or supporting institutions) rated Prime-3 have an acceptable
ability to repay short-term obligations.
NP Issuers (or supporting institutions) rated Not Prime do not fall within any
of the Prime rating categories.
DESCRIPTION OF MOODY'S U.S. MUNICIPAL SHORT-TERM OBLIGATION RATINGS
The Municipal Investment Grade ("MIG") scale is used to rate U.S. municipal
bond anticipation notes of up to three years maturity. Municipal notes rated on
the MIG scale may be secured by either pledged revenues or proceeds of a
take-out financing received prior to note maturity. MIG ratings expire at the
maturity of the obligation, and the issuer's long-term rating is only one
consideration in assigning the MIG rating. MIG ratings are divided into three
levels--MIG 1 through MIG 3--while speculative grade short-term obligations are
designated SG.
Moody's U.S. municipal short-term obligation ratings are as follows:
MIG 1 This designation denotes superior credit quality. Excellent protection is
afforded by established cash flows, highly reliable liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG 2 This designation denotes strong credit quality. Margins of protection are
ample, although not as large as in the preceding group.
MIG 3 This designation denotes acceptable credit quality. Liquidity and
cash-flow protection may be narrow, and market access for refinancing is likely
to be less well-established.
SG This designation denotes speculative-grade credit quality. Debt instruments
in this category may lack sufficient margins of protection.
DESCRIPTION OF MOODY'S DEMAND OBLIGATION RATINGS
In the case of variable rate demand obligations ("VRDOs"), a two-component
rating is assigned: a long or short-term debt rating and a demand obligation
rating. The first element represents Moody's evaluation of risk associated with
scheduled principal and interest payments. The second element represents
Moody's evaluation of risk associated with the ability to receive purchase
price upon demand ("demand feature"). The second element uses a rating from a
variation of the MIG scale called the Variable Municipal Investment Grade
("VMIG") scale.
Moody's demand obligation ratings are as follows:
VMIG 1 This designation denotes superior credit quality. Excellent protection
is afforded by the superior short-term credit strength of the liquidity
provider and structural and legal protections that ensure the timely payment of
purchase price upon demand.
VMIG 2 This designation denotes strong credit quality. Good protection is
afforded by the strong short-term credit strength of the liquidity provider and
structural and legal protections that ensure the timely payment of purchase
price upon demand.
VMIG 3 This designation denotes acceptable credit quality. Adequate protection
is afforded by the satisfactory short-term credit strength of the liquidity
provider and structural and legal protections that ensure the timely payment of
purchase price upon demand.
SG This designation denotes speculative-grade credit quality. Demand features
rated in this category may be supported by a liquidity provider that does not
have an investment grade short-term rating or may lack the structural and/or
legal protections necessary to ensure the timely payment of
purchase price upon demand.
A-2
DESCRIPTION OF S&P'S ISSUE CREDIT RATINGS
An S&P's issue credit rating is a forward-looking opinion about the
creditworthiness of an obligor with respect to a specific financial obligation,
a specific class of financial obligations, or a specific financial program
(including ratings on medium-term note programs and commercial paper programs).
It takes into consideration the creditworthiness of guarantors, insurers, or
other forms of credit enhancement on the obligation and takes into account the
currency in which the obligation is denominated. The opinion reflects S&P's
view of the obligor's capacity and willingness to meet its financial
commitments as they come due, and may assess terms, such as collateral security
and subordination, which could affect ultimate payment in the event of
default.
Issue credit ratings can be either long-term or short-term. Short-term ratings
are generally assigned to those obligations considered short-term in the
relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days--including commercial paper.
Short-term ratings are also used to indicate the creditworthiness of an obligor
with respect to put features on long-term obligations. Medium-term notes are
assigned long-term ratings.
Issue credit ratings are based, in varying degrees, on S&P's analysis of the
following considerations:
o Likelihood of payment--capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;
o Nature of and provisions of the obligation; and the promise S&P imputes;
o Protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy
and other laws affecting creditors' rights.
Issue ratings are an assessment of default risk, but may incorporate an
assessment of relative seniority or ultimate recovery in the event of default.
Junior obligations are typically rated lower than senior obligations, to
reflect the lower priority in bankruptcy. (Such differentiation may apply when
an entity has both senior and subordinated obligations, secured and unsecured
obligations, or operating company and holding company obligations.)
DESCRIPTION OF S&P'S LONG-TERM ISSUE CREDIT RATINGS*
AAA An obligation rated 'AAA' has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA An obligation rated 'AA' differs from the highest-rated obligations only to
a small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A An obligation rated 'A' is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB An obligation rated 'BBB' exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity of the obligor to meet its financial commitment on the
obligation.
BB; B; CCC; CC; AND C Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are
regarded as having significant speculative characteristics. 'BB' indicates the
least degree of speculation and 'C' the highest. While such obligations will
likely have some quality and protective characteristics, these may be
outweighed by large uncertainties or major exposures to adverse conditions.
BB An obligation rated 'BB' is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
A-3
B An obligation rated 'B' is more vulnerable to nonpayment than obligations
rated 'BB', but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.
CCC An obligation rated 'CCC' is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC An obligation rated 'CC' is currently highly vulnerable to nonpayment. The
'CC' rating is used when a default has not yet occurred, but S&P expects
default to be a virtual certainty, regardless of the anticipated time to
default.
C An obligation rated 'C' is currently highly vulnerable to nonpayment, and the
obligation is expected to have lower relative seniority or lower ultimate
recovery compared to obligations that are rated higher.
D An obligation rated 'D' is in default or in breach of an imputed promise. For
non-hybrid capital instruments, the 'D' rating category is used when payments
on an obligation are not made on the date due, unless S&P believes that such
payments will be made within five business days in the absence of a stated
grace period or within the earlier of the stated grace period or 30 calendar
days. The 'D' rating also will be used upon the filing of a bankruptcy petition
or the taking of similar action and where default on an obligation is a virtual
certainty, for example due to automatic stay provisions. An obligation's rating
is lowered to 'D' if it is subject to a distressed exchange offer.
NR This indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
obligation as a matter of policy.
* The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating
categories.
DESCRIPTION OF S&P'S SHORT-TERM ISSUE CREDIT RATINGS
A-1 A short-term obligation rated 'A-1' is rated in the highest category by
S&P. The obligor's capacity to meet its financial commitment on the obligation
is strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.
A-2 A short-term obligation rated 'A-2' is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.
A-3 A short-term obligation rated 'A-3' exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.
B A short-term obligation rated 'B' is regarded as vulnerable and has
significant speculative characteristics. The obligor currently has the capacity
to meet its financial commitments; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet its
financial commitments.
C A short-term obligation rated 'C' is currently vulnerable to nonpayment and
is dependent upon favorable business, financial, and economic conditions for
the obligor to meet its financial commitment on the obligation.
D A short-term obligation rated 'D' is in default or in breach of an imputed
promise. For non-hybrid capital instruments, the 'D' rating category is used
when payments on an obligation are not made on the date due, unless S&P
believes that such payments will be made within any stated grace period.
However, any stated grace period longer than five business days will be treated
as five business days. The 'D' rating also will be used upon
the filing of a bankruptcy petition or the taking of a similar action and
A-4
where default on an obligation is a virtual certainty, for example due to
automatic stay provisions. An obligation's rating is lowered to 'D' if it is
subject to a distressed exchange offer.
DESCRIPTION OF S&P'S MUNICIPAL SHORT-TERM NOTE RATINGS
An S&P's U.S. municipal note rating reflects S&P's opinion about the liquidity
factors and market access risks unique to the notes. Notes due in three years
or less will likely receive a note rating. Notes with an original maturity of
more than three years will most likely receive a long-term debt rating. In
determining which type of rating, if any, to assign, S&P's analysis will review
the following considerations:
o Amortization schedule--the larger the final maturity relative to other
maturities, the more likely it will be treated as a note; and
o Source of payment--the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note.
S&P's municipal short-term note ratings are as follows:
SP-1 Strong capacity to pay principal and interest. An issue determined to
possess a very strong capacity to pay debt service is given a plus (+)
designation.
SP-2 Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.
SP-3 Speculative capacity to pay principal and interest.
DESCRIPTION OF FITCH'S CREDIT RATINGS
Fitch's credit ratings provide an opinion on the relative ability of an entity
to meet financial commitments, such as interest, preferred dividends, repayment
of principal, insurance claims or counterparty obligations. Credit ratings are
used by investors as indications of the likelihood of receiving the money owed
to them in accordance with the terms on which they invested.
The terms "investment grade" and "speculative grade" have established
themselves over time as shorthand to describe the categories 'AAA' to 'BBB'
(investment grade) and 'BB' to 'D' (speculative grade). The terms "investment
grade" and "speculative grade" are market conventions, and do not imply any
recommendation or endorsement of a specific security for investment purposes.
"Investment grade" categories indicate relatively low to moderate credit risk,
while ratings in the "speculative" categories either signal a higher level of
credit risk or that a default has already occurred.
Fitch's credit ratings do not directly address any risk other than credit risk.
In particular, ratings do not deal with the risk of a market value loss on a
rated security due to changes in interest rates, liquidity and other market
considerations. However, in terms of payment obligation on the rated liability,
market risk may be considered to the extent that it influences the ABILITY of
an issuer to pay upon a commitment. Ratings nonetheless do not reflect market
risk to the extent that they influence the size or other conditionality of the
OBLIGATION to pay upon a commitment (for example, in the case of index-linked
bonds).
In the default components of ratings assigned to individual obligations or
instruments, the agency typically rates to the likelihood of non-payment or
default in accordance with the terms of that instrument's documentation. In
limited cases, Fitch may include additional considerations (i.e. rate to a
higher or lower standard than that implied in the obligation's documentation).
In such cases, the agency will make clear the assumptions underlying the
agency's opinion in the accompanying rating commentary.
DESCRIPTION OF FITCH'S LONG-TERM CORPORATE FINANCE OBLIGATIONS RATINGS
AAA Highest credit quality. 'AAA' ratings denote the lowest expectation of
credit risk. They are assigned only in cases of exceptionally strong capacity
for payment of financial commitments. This capacity is highly unlikely to be
adversely affected by
A-5
foreseeable events.
AA Very high credit quality. 'AA' ratings denote expectations of very low
credit risk. They indicate very strong capacity for payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.
A High credit quality. 'A' ratings denote expectations of low credit risk. The
capacity for payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to adverse business or economic
conditions than is the case for higher ratings.
BBB Good credit quality. 'BBB' ratings indicate that expectations of credit
risk are currently low. The capacity for payment of financial commitments is
considered adequate but adverse business or economic conditions are more likely
to impair this capacity.
BB Speculative. 'BB' ratings indicate an elevated vulnerability to credit risk,
particularly in the event of adverse changes in business or economic conditions
over time; however, business or financial alternatives may be available to
allow financial commitments to be met.
B Highly speculative. 'B' ratings indicate that material credit risk is
present.
CCC Substantial credit risk. 'CCC' ratings indicate that substantial credit
risk is present.
CC Very high levels of credit risk. 'CC' ratings indicate very high levels of
credit risk.
C Exceptionally high levels of credit risk. 'C' ratings indicate exceptionally
high levels of credit risk.
Defaulted obligations typically are not assigned 'RD' or 'D' ratings, but are
instead rated in the 'B' to 'C' rating categories, depending upon their
recovery prospects and other relevant characteristics. This approach better
aligns obligations that have comparable overall expected loss but varying
vulnerability to default and loss.
Note: The modifiers "+" or "-" may be appended to a rating to denote relative
status within major rating categories. Such suffixes are not added to the 'AAA'
obligation rating category, or to corporate finance obligation ratings in the
categories below 'CCC'.
DESCRIPTION OF FITCH'S SHORT-TERM RATINGS
A short-term issuer or obligation rating is based in all cases on the
short-term vulnerability to default of the rated entity or security stream and
relates to the capacity to meet financial obligations in accordance with the
documentation governing the relevant obligation. Short-Term Ratings are
assigned to obligations whose initial maturity is viewed as "short term" based
on market convention. Typically, this means up to 13 months for corporate,
sovereign, and structured obligations, and up to 36 months for obligations in
U.S. public finance markets.
Fitch's short-term ratings are as follows:
F1 Highest short-term credit quality. Indicates the strongest intrinsic
capacity for timely payment of financial commitments; may have an added "+" to
denote any exceptionally strong credit feature.
F2 Good short-term credit quality. Good intrinsic capacity for timely payment
of financial commitments.
F3 Fair short-term credit quality. The intrinsic capacity for timely payment of
financial commitments is adequate.
B Speculative short-term credit quality. Minimal capacity for timely payment of
financial commitments, plus heightened vulnerability to near term adverse
changes in financial and economic conditions.
A-6
C High short-term default risk. Default is a real possibility.
RD Restricted default. Indicates an entity that has defaulted on one or more of
its financial commitments, although it continues to meet other financial
obligations. Applicable to entity ratings only.
D Default. Indicates a broad-based default event for an entity, or the default
of a short-term obligation.
A-7
APPENDIX B -- PROXY VOTING POLICIES AND PROCEDURES
COMPLIANCE MANUAL
[GRAPHIC OMITTED] EFFECTIVE MARCH 20, 2014
PROXY VOTING POLICY AND PROCEDURES
In accordance with Rule 206(4)-6 under the Advisers Act, as a registered
investment adviser with voting authority over proxies for clients' securities,
Edgewood must adopt policies and procedures reasonably designed to ensure that
Edgewood votes proxies in the best interest of clients; discloses information
to clients about those policies and procedures; and describe to clients how
they may obtain information about how Edgewood has voted the clients' proxies.
As indicated below, Julianne Mulhall has been designated as the Proxy Officer
and is primarily responsible for compliance with the Firm's proxy voting
policies.
A. The SEC has indicated that a discretionary investment manager is required
to exercise voting authority with respect to client securities, even if the
investment advisory agreement is silent on this point, unless the client
has specifically retained voting authority.
B. Where Edgewood has an obligation to vote, (1) the Proxy Officer will vote
all stock, by proxy or in person, pursuant to Edgewood's Voting Guidelines,
(2) a written record of such voting will be kept by Edgewood, and (3)
Edgewood's Investment Committee (the "Committee") will supervise the voting
of stock (subject to the review of Edgewood's Chief Compliance Officer and
senior management) and will establish and maintain Voting Guidelines to
carry out this function consistent with the foregoing principles. Edgewood
may retain a third party to assist it in coordinating and voting proxies
with respect to client securities. If so, the Proxy Officer shall monitor
the third party to assure that all proxies are being properly voted and
appropriate records are being retained.
C. Edgewood will vote proxies in accordance with client instructions. In the
absence of specific voting guidelines from the client or material
conflicts, Edgewood will vote proxies in what it judges are the best
interests of its client/shareholders.
D. The Committee has adopted general positions regarding selected proxy
proposals that periodically are considered at annual meetings. Edgewood
will generally vote in favor of routine corporate housekeeping proposals,
including election of directors (where no corporate governance issues are
implicated), selection of auditors, and increases in or reclassification of
common stock. Edgewood will generally vote against proposals that make it
more difficult to replace members of the issuer's board of directors,
including proposals to stagger the board, cause management to be
overrepresented on the board, introduce cumulative voting, introduce
unequal voting rights, and create supermajority voting.
E. For other proposals not addressed in the following guidelines, the
Committee shall determine whether a proposal is in the best interests of
its clients. Decisions are made exclusively in accordance with the economic
interests of the account. Except where required under the terms of the
governing instrument, social interests are not among the criteria employed
by the Committee. The Committee's opinion concerning the management and
prospects of the
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issuer may be taken into account, where appropriate, with special
consideration given to the Master List issuers held in Edgewood's model
portfolios. The Committee may take into account, among other things, the
effect of the proposal on the underlying value of the securities (including
the effect on marketability of the securities, potential legal issues
arising from the proposal, and the effect of the proposal on future
prospects of the issuer), the makeup of the issuer's Board of Directors,
including the number and quality of both management and non-management
directors, the likelihood of a change in such makeup or quality of
directors, the necessity of providing the directors with sufficient tools
and flexibility to properly discharge their duties as directors, the
desirability of providing directors with sufficient time to carefully
consider any proposals made to the issuer that might significantly affect
the result or nature of activities or ownership of the issuer, and the
quality of communications from the corporation to its shareholders. In
considering anti- takeover provisions, consideration may be given to
whether or not the proposal is part of a package of anti-takeover proposals
or whether other anti-takeover measures are already in place. Insufficient
information or vague or ambiguous wording may indicate that a vote against
a proposal is appropriate even though the Committee agrees with the
principle of the proposal. Conversely, a vote in support of a
well-principled proposal may be appropriate despite inferior format or
ambiguity in language or provisions.
F. The Chief Compliance Officer will identify any conflicts that exist
between the interests of Edgewood and its clients. This examination will
include a review of the relationship of the firm with the issuer of each
security to determine if the issuer is a client of Edgewood or has some
other relationship with Edgewood or one of its clients.
G. If a material conflict exists, Edgewood will determine whether voting in
accordance with the Voting Guidelines and factors described above is in the
best interests of the client. The firm will also determine whether it is
appropriate to disclose the conflict to the affected clients and, except in
the case of clients that are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), give the clients the
opportunity to vote their proxies themselves. In the case of ERISA clients,
if the Investment Management Agreement reserves to the ERISA client the
authority to vote proxies when Edgewood determines it has a material
conflict that affects its best judgment as an ERISA fiduciary, the firm
will give the ERISA client the opportunity to vote the proxies themselves,
or Edgewood will engage a third party to vote the proxies involved.
H. Edgewood will disclose in its Form ADV Part 2 that clients may contact the
Proxy Officer, Julianne Mulhall, via e-mail at [email protected] or
telephone at 212-652-9100 in order to obtain information on how Edgewood
voted such client's proxies, and to request a copy of these policies and
procedures. If a client requests this information, the Proxy Officer will
prepare a written response to the client that lists, with respect to each
voted proxy that the client has inquired about, (1) the name of the issuer;
(2) the proposal voted upon and (3) how Edgewood voted the client's proxy.
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I. A concise summary of these Proxy Voting Policies and Procedures will be
included in Edgewood's Form ADV Part 2, and will be updated whenever these
policies and procedures are changed.
J. The Proxy Officer will maintain records relating to Edgewood's proxy
voting procedures. These may include electronic records. Records will be
maintained and preserved for five years from the end of the fiscal year
during which the last entry was made on a record, with records for the
first two years kept in the firm's offices. Edgewood will retain the
following records:
1) Edgewood's proxy voting policies and procedures, and any amendments
thereto;
2) Proxy statements received by Edgewood concerning securities held in
Edgewood accounts, provided however that Edgewood may rely on
retention in the SEC EDGAR system, the CDS SEDAR system or other
publicly available electronic repository for those proxy statements
that are so available;
3) A record of each vote that Edgewood casts;
4) A copy of any document Edgewood created that was material to making a
decision how to vote proxies, or that memorializes that decision; and
5) A copy of each written client request for information on how Edgewood
voted such client's proxies, and a copy of any written response to any
(written or oral) client request for information on how the firm voted
its proxies.
K. Proxy Voting Guidelines
1) ELIMINATE PREEMPTIVE RIGHTS: GENERALLY IN FAVOR. Preemptive rights
may result in a loss of financing flexibility and could prevent
management from raising capital advantageously. There is potential for
abuse if new equity securities are issued at a discount to the market
price of existing securities. This may result in a transfer of value
from existing to new shareholders. However, instances of abuse are
unusual and there are expenses involved in issuing securities on a
preemptive basis.
2) INDEMNIFICATION OF DIRECTORS, I.E., LIMITING OR ELIMINATING LIABILITY
FOR MONETARY DAMAGES FOR VIOLATING THE DUTY OF CARE: GENERALLY IN
FAVOR. Indemnification is generally necessary to attract qualified
Board nominees in a litigious corporate environment. Monetary
liability generally is not eliminated or limited for any breach of
duty of loyalty, acts or omissions not in good faith, and any
transactions in which the director derived an improper personal
benefit.
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3) CUMULATIVE VOTING: GENERALLY OPPOSED. Cumulative voting may prevent
the majority of shareholders from electing a majority of the Board.
Cumulative voting requires fewer votes to obtain a Board seat.
Therefore it promotes single interest representation on the Board,
which may not represent the interest or concerns of all shareholders.
4) EXECUTIVE STOCK OPTION PLANS: GENERALLY OPPOSED IF EXERCISE PRICE IS
BELOW MARKET PRICE OR IF DILUTION UNDER THE PLAN WOULD BE GREATER THAN
10%, PARTICULARLY IF THE COMPANY IS MATURE OR EXECUTIVE COMPENSATION
IS EXCESSIVE. For rapidly growing, cash-short issuers where executive
salaries are reasonable may approve a plan where dilution exceeds 10%.
5) SHAREHOLDER ACTION BY WRITTEN CONSENT: GENERALLY OPPOSED TO PROPOSALS
TO RESTRICT OR PROHIBIT SHAREHOLDERS' ABILITY TO TAKE ACTION BY
WRITTEN CONSENT. Shareholders may lose the ability to remove directors
or initiate a shareholder resolution if they have to wait for the next
scheduled meeting.
6) SHAREHOLDER RIGHT TO CALL A SPECIAL MEETING: GENERALLY OPPOSED TO
PROPOSALS TO ELIMINATE THE RIGHT OF SHAREHOLDERS TO CALL A SPECIAL
MEETING OR TO REQUIRE THE PETITION OF MORE THAN 25% OF SHAREHOLDERS TO
CALL A SPECIAL MEETING. Shareholders may lose the right to remove
directors or initiate a shareholder resolution if they cannot take
action until the next regularly scheduled meeting. This is especially
troublesome if shareholders do not have the right to act by written
consent.
7) SUPER-MAJORITY VOTE REQUIREMENTS: GENERALLY OPPOSED TO PROPOSALS
REQUIRING THAT A VOTE OF MORE THAN TWO-THIRDS BE REQUIRED TO AMEND ANY
BYLAW OR CHARTER PROVISION, OR APPROVE A MERGER OR OTHER BUSINESS
COMBINATION. Super-majority vote provisions may stifle bidder interest
in the issuer and thereby devalue its stock.
8) ANTI-GREENMAIL PROVISION: GENERALLY OPPOSED. Favor equal treatment
for all shareholders, but anti-greenmail provisions may severely limit
management's flexibility, for example, with respect to share
repurchase programs or ability to issue shares such as General Motor's
Class E and H with special features.
9) APPROVAL OF POISON PILLS: GENERALLY IN FAVOR. However, Edgewood would
generally be opposed when poison pills are utilized to prevent
takeover bids that would be in the best interest of shareholders or
when accompanied by super-majority requirements or inequitable voting
provisions. Certain shareholder rights plans, however, protect the
interest of shareholders by enabling the Board to respond in a
considered manner to unsolicited bids.
10) BLANK-CHECK PREFERRED STOCK: GENERALLY OPPOSED. Does provide in
financing but also can be used as an entrenchment device. Can be used
as a poison pill when distributed to stockholders with rights attached
or can be issued with superior voting rights to friendly parties.
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11) CLASSIFIED/STAGGERED BOARDS OF DIRECTORS -- GREATER-THAN-ANNUAL
ELECTION OF DIRECTORS: GENERALLY OPPOSED. Classified Boards do provide
stability and continuity; but, if someone wins proxy fights and
replaces a third of the directors, because of the difficulties
involved in running the issuer with a Board of Directors that is a
third hostile and because the vote would be seen as a loss of
confidence in management, the remaining directors might put the issuer
up for sale or accommodate the wishes of the dissident group. A
staggered Board could mean that a director who failed to attend
meetings or who voted in favor of actions that were harmful to
shareholders could not be removed for up to three years.
12) MAJORITY VOTE ELECTION OF DIRECTORS: GENERALLY IN FAVOR. Permits
removal of non-performing, unpopular or ineffective directors.
13) RECAPITALIZATION PLAN - ELIMINATE INEQUITABLE VOTING RIGHTS:
GENERALLY IN FAVOR. Fair voting provisions are critical elements of
shareholder ownership. One share = One vote structure promotes
Management and Board accountability.
14) ESTABLISH TERM LIMITS FOR DIRECTORS: GENERALLY OPPOSED. Experience
and continuity in Board representation fosters acute and prudent
oversight of Management.
15) INCREASE REQUIRED NUMBER/PERCENTAGE OF INDEPENDENT AND/OR
INDUSTRY-EXPERIENCED BOARD MEMBERS: GENERALLY IN FAVOR. Edgewood
favors independent Compensation Committees and industry-experienced
Board members to promote prudent management and effective Board
oversight. Edgewood generally opposes arbitrary restrictions,
percentages or minimum independent representation that may be
impractical or potentially remove effective Board members. Anti-Trust
statutes may inhibit recruitment of qualified, industry-experienced
Board members. Comprehensive Board orientations can provide the
requisite exposure to the business model.
16) SEPARATION OF BOARD CHAIRMAN AND CEO ROLES: GENERALLY IN FAVOR.
Separation of the primary Management (CEO) and Oversight (Board
Chairman) roles promotes accountability and objective evaluation of
performance.
17) INCREASE DIRECTOR / SENIOR MANAGEMENT LIABILITY: GENERALLY OPPOSED.
Management or Board liability in excess of legal or statutory
requirements would disadvantage the company in attracting and
retaining talented and qualified persons. Sarbanes-Oxley imposes
mandatory penalties against the CEO and CFO pursuant to misstatements
and omissions of material facts.
18) CONFIDENTIAL VOTING: GENERALLY IN FAVOR. Confidential voting
eliminates the opportunity for management to apply pressure to
Institutional shareholders with which a business relationship exists.
It should be noted that the Department of Labor's "Avon Letter" and
the Department of Labor's investigation of proxy voting violations in
1988 might have lessened the need for confidential voting.
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19) FAIR PRICE PROVISIONS: NO GENERAL POLICY. Generally opposed when
accompanied by super-majority provision, i.e., a clause requiring a
super majority shareholder vote to alter or repeal the fair price
provision, in excess of two-thirds. Also generally opposed if the
pricing formula is such that the price required is unreasonably high.
Generally in favor if provisions are designed to prevent two-tier,
front-end-loaded hostile tender offer; where no shareholder wants to
get caught in the second tier, so that effectively all shareholders
are coerced into accepting the offer.
20) MANAGEMENT / BOARD COMPENSATION: GENERALLY OPPOSED TO EXCESSIVE,
UNEARNED OR UNWARRANTED LEADERSHIP COMPENSATION. Generally in favor of
establishing reasonable or standardized compensation practices.
Generally in favor of compensation reflecting or contingent on
achievement of challenging performance objectives. Generally in favor
of guidelines reflecting compensation in comparable leadership roles
and/or compensation to internal non-managerial employees. Generally in
favor of compensation in the form of restricted stock and above market
options that vest with performance and/or tenure. It would be
difficult for an issuer to attract, retain and motivate top managers
without competitive compensation packages. Shareholder approval is
appropriate to deviate from guidelines.
21) GOLDEN PARACHUTES: GENERALLY OPPOSED TO EXCESSIVE, UNEARNED OR
UNWARRANTED LEADERSHIP SEVERANCE. GENERALLY IN FAVOR OF ESTABLISHING
REASONABLE OR STANDARDIZED SEVERANCE PRACTICES. Generally in favor of
severance calculations reflecting past/present annual compensation and
performance. It would be difficult for an issuer considered likely to
be taken over to attract and retain top managers without severance
packages for involuntary termination or significant reduction in
compensation, duties or relocation after a change in control.
Shareholder approval is appropriate to deviate from guidelines.
22) REINCORPORATION: GENERALLY IN FAVOR OF REINCORPORATION WITHIN THE
UNITED STATES TO POTENTIALLY EXPLOIT FAVORABLE REGULATORY OR TAX
TREATMENT OR ENVIRONMENTAL CONDITIONS. Generally opposed to
reincorporation outside of the United States. Should examine whether
change of state of incorporation would increase the capacity of
management to resist hostile takeovers.
23) "Say on Pay": GENERALLY IN FAVOR OF SAY ON PAY, SAY ON FREQUENCY AND
SAY ON GOLDEN PARACHUTE ISSUES. In support of annual advisory
shareholder votes and in support of management compensation not deemed
excessive.
The following proposals are GENERALLY APPROVED:
1) Election of management's nominees for Directors;
2) Appointment of Auditors;
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3) Change in the date or location of annual meetings;
4) For investment companies, continuation of company management,
investment advisers or distribution contracts;
5) Transaction of such other business as may properly come before the
meeting;
6) Receiving and/or approving financial reports;
7) Indemnification of Directors;
8) Change of control provisions;
9) Stock splits and stock dividends;
10) Equity & Incentive Plans (Including, but not limited to: Stock
Incentive Plans, Restricted Stock Plans, Management Stock Ownership
Plans, Senior Executive Incentive Plans, Employee Stock Purchase
Plans, Long-Term Incentive Plans, Performance Incentive Plans,
Non-Employee Directors Stock Compensation Plans, Share Purchase &
Option Plans);
11) Authority to issue additional debt;
12) Change in the number of authorized common shares;
13) Corporate name change;
14) Change in investment company agreements with advisers;
15) Stock option plans, unless exercise price is less than the market
price at the time of the grant or excessive dilution would occur under
the plan;
16) Removal of a Director only for cause;
17) Recoup unearned management bonuses;
18) Waiver of preemptive rights;
19) Fair pricing amendments unless accompanied by a super-majority
provision in excess of two-thirds;
20) Equal access proposals;
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21) Technical amendments to by-laws or charters;
22) Share repurchases; and
23) Spin-offs.
The following proposals are GENERALLY OPPOSED:
1) Creation of a second class of stock with unequal voting rights;
2) Fair pricing provisions when accompanied by a super-majority
provision in excess of two-thirds;
3) Amendment to bylaws by Board of Directors without shareholder
approval;
4) Elimination of shareholder right to call a special meeting or
requiring more than 25 % of shareholders to call a special meeting;
5) Elimination of shareholder action by written consent;
6) "Stakeholder" proposals;
7) Loans or guarantees of loans to Officers and Directors;
8) Super-majority provisions in excess of two-thirds;
9) A greater vote requirement to repeal a provision than to adopt it;
10) Permit cumulative voting; and
11) Preparation of reports concerning social issues (Including, but not
limited to: Employment Diversity, Equitable Compensation, Employment
Discrimination, Environmental Impact, Biodiversity Impact, Climate
Change Science, Toxic Substances, Human Rights, Social Responsibility,
Labor Ethics, Foreign Relationships/Arrangements, Animal Testing,
Regulatory & Litigation Risk, Political Contributions/Affiliations,
Regional/Geographical Issues, or Diseases).
When the Committee decides to vote against a proposal that is generally
approved or to vote in favor of a proposal that is generally opposed, the
reason for the exception will be recorded.
There is NO GENERAL POLICY with respect to mergers or other combinations, such
proposals will be evaluated on a case-by-case basis.
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PART C: OTHER INFORMATION
ITEM 28. EXHIBITS:
(a)(1) Amended and Restated Agreement and Declaration of Trust of The Advisors'
Inner Circle Fund (the "Registrant") dated July 18, 1991, as amended and
restated February 18, 1997, is incorporated herein by reference to exhibit
(1)(b) of Post-Effective Amendment No. 28 to the Registrant's Registration
Statement on Form N-1A (File No. 033-42484), filed with the U.S. Securities and
Exchange Commission (the "SEC") via EDGAR Accession No. 0000950109-97-001691 on
February 27, 1997.
(a)(2) Amendment No. 1, dated May 15, 2012, to the Registrant's Amended and
Restated Agreement and Declaration of Trust dated July 18, 1991, as amended and
restated February 18, 1997, is incorporated herein by reference to exhibit
(a)(2) of Post-Effective Amendment No. 190 to the Registrant's Registration
Statement on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000262 on May 23, 2012.
(b) Registrant's Second Amended and Restated By-Laws are incorporated herein by
reference to exhibit (b) of Post-Effective Amendment No. 179 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC via
EDGAR Accession No. 0001135428-12-000087 on February 28, 2012.
(c) Not Applicable.
(d)(1)(i) Investment Advisory Agreement, dated May 3, 1995, between the
Registrant and First Manhattan Co. is incorporated herein by reference to
exhibit (5)(g) of Post-Effective Amendment No. 24 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0000950109-96-001199 on February 28, 1996.
(d)(1)(ii) Amended and Restated Schedule, dated May 19, 1998, to the Investment
Advisory Agreement, dated May 3, 1995, between the Registrant and First
Manhattan Co. is incorporated herein by reference to exhibit (d)(9) of
Post-Effective Amendment No. 34 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001047469-98-021496 on May 21, 1998.
(d)(1)(iii) Investment Advisory Agreement, dated March 15, 1999, between the
Registrant and LSV Asset Management is incorporated herein by reference to
exhibit (d)(8) of Post-Effective Amendment No. 46 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-01-500070 on June 22, 2001.
(d)(1)(iv) Amended Schedule A, dated May 13, 2014, to the Investment Advisory
Agreement, dated March 15, 1999, between the Registrant and LSV Asset
Management is incorporated herein by reference to exhibit (d)(1)(v) of
Post-Effective Amendment No. 235 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-14-000403 on June 10, 2014.
(d)(1)(v) Investment Advisory Agreement, dated June 24, 2002, between the
Registrant and Acadian Asset Management LLC (formerly, Acadian Asset
Management, Inc.) is incorporated herein by reference to exhibit (d)(17) of
Post-Effective Amendment No. 55 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-02-000263 on August 30, 2002.
(d)(1)(vi) Amended Schedule A to the Investment Advisory Agreement, dated June
24, 2002, between the Registrant and Acadian Asset Management LLC (formerly,
Acadian Asset Management, Inc.) is incorporated herein by reference to exhibit
(d)(12) of Post-Effective Amendment No. 127 to the
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Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-10- 000392 on September 3,
2010.
(d)(1)(vii) Investment Advisory Agreement, dated June 24, 2002, between the
Registrant and Cambiar Investors, LLC is incorporated herein by reference to
exhibit (d)(19) of Post-Effective Amendment No. 55 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-02-000263 on August 30, 2002.
(d)(1)(viii) Amended Schedule A, dated August 30, 2016, to the Investment
Advisory Agreement, dated June 24, 2002, between the Registrant and Cambiar
Investors, LLC is incorporated herein by reference to exhibit (d)(1)(viii) of
Post-Effective Amendment No. 267 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-16-001529 on August 26, 2016.
(d)(1)(ix) Investment Advisory Agreement, dated June 24, 2002, between the
Registrant and Investment Counselors of Maryland, LLC is incorporated herein by
reference to exhibit (d)(23) of Post-Effective Amendment No. 55 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-02-000263 on August 30, 2002.
(d)(1)(x) Investment Advisory Agreement, dated June 24, 2002, between the
Registrant and C.S. McKee, L.P. is incorporated herein by reference to exhibit
(d)(24) of Post-Effective Amendment No. 55 to the Registrant's Registration
Statement on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR
Accession No. 0001135428-02-000263 on August 30, 2002.
(d)(1)(xi) Investment Advisory Agreement, dated August 8, 2008, between the
Registrant and Rice, Hall James & Associates LLC is incorporated herein by
reference to exhibit (d)(16) of Post-Effective Amendment No. 116 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-09-000641 on December 18,
2009.
(d)(1)(xii) Investment Advisory Agreement, dated June 24, 2002, between the
Registrant and Thompson, Siegel & Walmsley LLC (formerly, Thompson, Siegel &
Walmsley, Inc.) is incorporated herein by reference to exhibit (d)(27) of
Post-Effective Amendment No. 55 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-02-000263 on August 30, 2002.
(d)(1)(xiii) Amendment and Revised Schedule A, dated June 1, 2010, to the
Investment Advisory Agreement, dated June 24, 2002, between the Registrant and
Thompson, Siegel & Walmsley LLC (formerly, Thompson, Siegel & Walmsley, Inc.)
is incorporated herein by reference to exhibit (d)(21) of Post-Effective
Amendment No. 126 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-10-000336
on August 30, 2010.
(d)(1)(xiv) Investment Advisory Agreement, dated May 28, 2004, between the
Registrant and Haverford Investment Management, Inc. is incorporated herein by
reference to exhibit (d)(30) of Post-Effective Amendment No. 79 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-05-000093 on February 25,
2005.
(d)(1)(xv) Investment Advisory Agreement, dated December 16, 2005, between the
Registrant and Westwood Management Corp. is incorporated herein by reference to
exhibit (d)(28) of Post-Effective Amendment No. 88 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-06-000081 on February 28, 2006.
(d)(1)(xvi) Amended Schedule to the Investment Advisory Agreement, dated
December 16, 2005, between the Registrant and Westwood Management Corp., to be
filed by amendment.
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(d)(1)(xvii) Investment Advisory Agreement, dated February 27, 2006, between
the Registrant and Edgewood Management LLC is incorporated herein by reference
to exhibit (d)(33) of Post-Effective Amendment No. 95 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-07-000007 on January 12, 2007.
(d)(1)(xviii) Investment Advisory Agreement, dated March 10, 2010, between the
Registrant and Sands Capital Management, LLC is incorporated herein by
reference to exhibit (d)(30) of Post-Effective Amendment No. 123 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-10-000173 on April 30, 2010.
(d)(1)(xix) Investment Advisory Agreement, dated March 24, 2011, between the
Registrant and AlphaOne Investment Services, LLC is incorporated herein by
reference to exhibit (d)(35) of Post-Effective Amendment No. 206 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(1)(xx) Investment Advisory Agreement, dated June 20, 2011, between the
Registrant and Loomis, Sayles & Company, L.P. is incorporated herein by
reference to exhibit (d)(37) of Post-Effective Amendment No. 206 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(1)(xxi) Investment Advisory Agreement, dated December 19, 2011, between the
Registrant and CBRE Clarion Securities LLC is filed herewith.
(d)(1)(xxii) Revised Schedule A, dated May 15, 2013, to the Investment Advisory
Agreement between the Registrant and CBRE Clarion Securities LLC is
incorporated herein by reference to exhibit (d)(40) of Post-Effective Amendment
No. 214 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000354 on
June 28, 2013.
(d)(1)(xxiii) Investment Advisory Agreement, dated February 20, 2012, between
the Registrant and Hamlin Capital Management, LLC is incorporated herein by
reference to exhibit (d)(45) of Post-Effective Amendment No. 183 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000195 on March 28, 2012.
(d)(1)(xxiv) Investment Advisory Agreement, dated February 3, 2012, between the
Trust and Thomson Horstmann & Bryant, Inc. is incorporated herein by reference
to exhibit (d)(45) of Post-Effective Amendment No. 206 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(1)(xxv) Amended Schedule A to the Investment Advisory Agreement, dated
February 3, 2012, between the Trust and Thomson Horstmann & Bryant, Inc. is
incorporated herein by reference to exhibit (d)(49) of Post-Effective Amendment
No. 225 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000589 on
October 9, 2013.
(d)(1)(xxvi) Investment Advisory Agreement, dated May 1, 2014, between the
Registrant and Cornerstone Advisors, Inc. is incorporated herein by reference
to exhibit (d)(1)(xxviii) of Post-Effective Amendment No. 236 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000442 on June 24, 2014.
(d)(1)(xxvii) Amended Schedule A, dated August 30, 2016, to the Investment
Advisory Agreement, dated May 1, 2014, between the Registrant and Cornerstone
Advisors, Inc. is incorporated herein by reference to exhibit (d)(1)(xxvii) of
Post-Effective Amendment No. 266 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-16-001507 on August 24, 2016.
C-3
(d)(1)(xxviii) Investment Advisory Agreement, dated January 31, 2013, between
the Registrant and Harvest Global Investments Limited is incorporated herein by
reference to exhibit (d)(1)(xxix) of Post-Effective Amendment No. 236 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000442 on June 24, 2014.
(d)(1)(xxix) Investment Advisory Agreement, dated September 3, 2013, between
the Registrant and AT Investment Advisers, Inc. (formerly, Stein Roe Investment
Counsel, Inc.) is incorporated herein by reference to exhibit (d)(1)(xxx) of
Post-Effective Amendment No. 236 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-14-000442 on June 24, 2014.
(d)(1)(xxx) Investment Advisory Agreement, dated July 3, 2013, between the
Registrant and Fayez Sarofim & Co. is incorporated herein by reference to
exhibit (d)(74) of Post-Effective Amendment No. 219 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-13-000386 on July 26, 2013.
(d)(2)(i) Investment Sub-Advisory Agreement, dated December 27, 2011, between
Westwood Management Corp. and SKY Harbor Capital Management, LLC, relating to
the Westwood Short Duration High Yield Fund and Westwood Opportunistic High
Yield Fund, is incorporated herein by reference to exhibit (d)(29) of
Post-Effective Amendment No. 206 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(d)(2)(ii) Amended Schedule A, dated November 17, 2014, to the Investment
Sub-Advisory Agreement, dated December 27, 2011, between Westwood Management
Corp. and SKY Harbor Capital Management, LLC, relating to the Westwood Short
Duration High Yield Fund and Westwood Opportunistic High Yield Fund, is
incorporated herein by reference to exhibit (d)(2)(ii) of Post-Effective
Amendment No. 248 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-14-000803
on December 29, 2014.
(d)(2)(iii) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Parametric Portfolio Associates LLC, relating to
the Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(ii) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(iv) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and LSV Asset Management, relating to the
Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(iii) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(v) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Harris Associates L.P., relating to the
Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(iv) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(vi) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Thornburg Investment Management, Inc., relating
to the Cornerstone Advisors Global Public Equity Fund, is incorporated herein
by reference to exhibit (d)(2)(v) of Post-Effective Amendment No. 239 to the
C-4
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(vii) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Marsico Capital Management, LLC, relating to the
Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(vi) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(viii) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Cramer Rosenthal McGlynn LLC, relating to the
Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(viii) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(ix) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Fairpointe Capital LLC, relating to the
Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(ix) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(x) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Phocas Financial Corporation, relating to the
Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(x) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xi) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Allianz Global Investors Capital LLC, relating
to the Cornerstone Advisors Global Public Equity Fund, is incorporated herein
by reference to exhibit (d)(2)(xi) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xii) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Acadian Asset Management LLC, relating to the
Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(xii) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xiii) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Driehaus Capital Management LLC, relating to the
Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(xiii) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xiv) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and OFI SteelPath, Inc., relating to the Cornerstone
Advisors Income Opportunities Fund, is incorporated herein by reference to
exhibit (d)(2)(xiv) of Post-Effective Amendment No. 239 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xv) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and ClariVest Asset Management LLC, relating to the
Cornerstone Advisors Public Alternatives Fund and Cornerstone Advisors Global
Public Equity Fund, is incorporated herein by reference to exhibit
C-5
(d)(2)(xvi) of Post-Effective Amendment No. 239 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xvi) Amended Schedule A, dated December 15, 2014, to the Investment
Sub-Advisory Agreement, dated May 1, 2014, between Cornerstone Advisors, Inc.
and ClariVest Asset Management LLC, relating to the Cornerstone Advisors Public
Alternatives Fund and Cornerstone Advisors Global Public Equity Fund, is
incorporated herein by reference to exhibit (d)(2)(xvii) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(d)(2)(xvii) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Kayne Anderson Capital Advisors, L.P., relating
to the Cornerstone Advisors Real Assets Fund, is incorporated herein by
reference to exhibit (d)(2)(xvii) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xviii) Amendment, dated September 1, 2016, to the Investment
Sub-Advisory Agreement, dated May 1, 2014, between Cornerstone Advisors, Inc.
and Kayne Anderson Capital Advisors, L.P., relating to the Cornerstone Advisors
Real Assets Fund, is incorporated herein by reference to exhibit (d)(2)(xviii)
of Post-Effective Amendment No. 272 to the Registrant's Registration Statement
on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-16-001815 on October 31, 2016.
(d)(2)(xix) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and BlackRock Financial Management, LLC, relating to
the Cornerstone Advisors Real Assets Fund, is incorporated herein by reference
to exhibit (d)(2)(xviii) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xx) Investment Sub-Advisory Agreement, dated September 5, 2014, between
Cornerstone Advisors, Inc. and Numeric Investors, LLC, relating to the
Cornerstone Advisors Global Public Equity Fund and Cornerstone Advisors Public
Alternatives Fund, is incorporated herein by reference to exhibit (d)(2)(xx) of
Post-Effective Amendment No. 272 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-16-001815 on October 31, 2016.
(d)(2)(xxi) Investment Sub-Advisory Agreement, dated May 1, 2014, between
Cornerstone Advisors, Inc. and Strategic Income Management, LLC, relating to
the Cornerstone Advisors Income Opportunities Fund, is incorporated herein by
reference to exhibit (d)(2)(xx) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xxii) Investment Sub-Advisory Agreement, dated June 3, 2014, between
Cornerstone Advisors, Inc. and AJO, LP, relating to the Cornerstone Advisors
Public Alternatives Fund, is incorporated herein by reference to exhibit
(d)(2)(xxi) of Post-Effective Amendment No. 239 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(d)(2)(xxiii) Amended Schedule A, dated August 31, 2015, to the Investment
Sub-Advisory Agreement, dated June 3, 2014, between Cornerstone Advisors, Inc.
and AJO, LP, relating to the Cornerstone Advisors Public Alternatives Fund, is
incorporated herein by reference to exhibit (d)(2)(xxiii) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
C-6
(d)(2)(xxiv) Investment Sub-Advisory Agreement, dated June 3, 2014, between
Cornerstone Advisors, Inc. and Wells Fargo Portfolio Risk Advisors, a Division
of Structured Asset Investors, LLC, relating to the Cornerstone Advisors Public
Alternatives Fund, is incorporated herein by reference to exhibit (d)(2)(xxii)
of Post-Effective Amendment No. 239 to the Registrant's Registration Statement
on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-14-000551 on August 28, 2014.
(d)(2)(xxv) Investment Sub-Advisory Agreement, dated January 15, 2016, between
Cornerstone Advisors, Inc. and Robert W. Baird & Co. Incorporated, relating to
the Cornerstone Advisors Global Public Equity Fund, is incorporated herein by
reference to exhibit (d)(2)(xxv) of Post-Effective Amendment No. 263 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-16-001304 on April 29, 2016.
(d)(2)(xxvi) Investment Sub-Advisory Agreement, dated August 24, 2016, between
Cornerstone Advisors, Inc. and Franklin Advisers, Inc., relating to the
Cornerstone Advisors Core Plus Bond Fund, is incorporated herein by reference
to exhibit (d)(2)(xxvi) of Post-Effective Amendment No. 266 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-16-001507 on August 24, 2016.
(d)(2)(xxvii) Investment Sub-Advisory Agreement, dated August 24, 2016, between
Cornerstone Advisors, Inc. and Loomis, Sayles & Company, L.P., relating to the
Cornerstone Advisors Core Plus Bond Fund, is incorporated herein by reference
to exhibit (d)(2)(xxvii) of Post-Effective Amendment No. 266 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-16-001507 on August 24, 2016.
(d)(2)(xxviii) Investment Sub-Advisory Agreement, dated August 24, 2016,
between Cornerstone Advisors, Inc. and Metropolitan West Asset Management LLC,
relating to the Cornerstone Advisors Core Plus Bond Fund, is incorporated
herein by reference to exhibit (d)(2)(xxviii) of Post-Effective Amendment No.
266 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001507 on
August 24, 2016.
(d)(2)(xxix) Investment Sub-Advisory Agreement, dated August 24, 2016, between
Cornerstone Advisors, Inc. and Prime Advisors, Inc., relating to the
Cornerstone Advisors Core Plus Bond Fund, is incorporated herein by reference
to exhibit (d)(2)(xxix) of Post-Effective Amendment No. 266 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-16-001507 on August 24, 2016.
(d)(3)(i) Amended and Restated Expense Limitation Agreement, dated February 13,
2013, between the Registrant and LSV Asset Management, relating to the LSV
Funds, is incorporated herein by reference to exhibit (d)(10) of Post-Effective
Amendment No. 206 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000118
on March 1, 2013.
(d)(3)(ii) Amended Schedule A, dated May 13, 2014, to the Amended and Restated
Expense Limitation Agreement, dated February 13, 2013, between the Registrant
and LSV Asset Management, relating to the LSV Funds, is incorporated herein by
reference to exhibit (d)(3)(ii) of Post-Effective Amendment No. 235 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000403 on June 10, 2014.
(d)(3)(iii) Amended and Restated Expense Limitation Agreement, dated September
1, 2016, between the Registrant and Cambiar Investors, LLC, relating to the
Cambiar Funds, is incorporated herein by reference to exhibit (d)(3)(iii) of
Post-Effective Amendment No. 268 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-16-001670 on September 1, 2016.
C-7
(d)(3)(iv) Amended and Restated Expense Limitation Agreement, dated February
23, 2016, between the Registrant and Rice Hall James & Associates, LLC,
relating to the Rice Hall James Funds, is incorporated herein by reference to
exhibit (d)(3)(vi) of Post-Effective Amendment No. 263 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-16-001304 on April 29, 2016.
(d)(3)(v) Expense Limitation Agreement, dated March 1, 2008, between the
Registrant and Haverford Investment Management, Inc., relating to the Haverford
Quality Growth Stock Fund, is incorporated herein by reference to exhibit
(d)(25) of Post-Effective Amendment No. 206 to the Registrant's Registration
Statement on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR
Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(3)(vi) Amended and Restated Expense Limitation Agreement, dated February
10, 2015, between the Registrant and Westwood Management Corp., relating to the
Westwood Funds, is incorporated herein by reference to exhibit (d)(3)(ix) of
Post-Effective Amendment No. 254 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-15-000298 on April 20, 2015.
(d)(3)(vii) Amended Schedule A to the Amended and Restated Expense Limitation
Agreement, dated February 10, 2015, between the Registrant and Westwood
Management Corp., relating to the Westwood Funds, to be filed by amendment.
(d)(3)(viii) Amended and Restated Expense Limitation Agreement between the
Registrant and Edgewood Management LLC, relating to the Edgewood Growth Fund, to
be filed by amendment.
(d)(3)(ix) Expense Limitation Agreement, dated March 31, 2010, between the
Registrant and Sands Capital Management, LLC, relating to the Sands Capital
Global Growth Fund, is incorporated herein by reference to exhibit (d)(34) of
Post-Effective Amendment No. 206 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(d)(3)(x) Expense Limitation Agreement, effective as of March 28, 2011, between
the Registrant and AlphaOne Investment Services, LLC, relating to the AlphaOne
Small Cap Opportunities Fund, is incorporated herein by reference to exhibit
(d)(43) of Post-Effective Amendment No. 154 to the Registrant's Registration
Statement on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR
Accession No. 0001135428-11-000353 on June 29, 2011.
(d)(3)(xi) Expense Limitation Agreement, dated December 15, 2011, between the
Registrant and Loomis, Sayles & Company, L.P., relating to the Loomis Sayles
Full Discretion Institutional Securitized Fund, is incorporated herein by
reference to exhibit (d)(38) of Post-Effective Amendment No. 206 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(3)(xii) Amended and Restated Expense Limitation Agreement, dated May 14,
2013, between the Registrant and CBRE Clarion Securities LLC, relating to the
CBRE Clarion Funds, is incorporated herein by reference to exhibit (d)(41) of
Post-Effective Amendment No. 214 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000354 on June 28, 2013.
(d)(3)(xiii) Amended and Restated Expense Limitation Agreement, dated April 30,
2013, between the Registrant and Hamlin Capital Management, LLC, relating to
the Hamlin High Dividend Equity Fund, is incorporated herein by reference to
exhibit (d)(42) of Post-Effective Amendment No. 210 to the
C-8
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000257 on April 30, 2013.
(d)(3)(xiv) Expense Limitation Agreement, dated March 28, 2012, between the
Registrant and Thomson Horstmann & Bryant, Inc., relating to the Thomson
Horstmann & Bryant MicroCap Fund, is incorporated herein by reference to
exhibit (d)(46) of Post-Effective Amendment No. 206 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(3)(xv) Amended Schedule A to the Expense Limitation Agreement, dated March
28, 2012, between the Registrant and Thomson Horstmann & Bryant, Inc., relating
to the Thomson Horstmann & Bryant MicroCap Fund, is incorporated herein by
reference to exhibit (d)(50) of Post-Effective Amendment No. 225 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000589 on October 9, 2013.
(d)(3)(xvi) Expense Limitation Agreement, dated January 31, 2013, between the
Registrant and Harvest Global Investments Limited, relating to the Harvest
Funds, is incorporated herein by reference to exhibit (d)(3)(xix) of
Post-Effective Amendment No. 236 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-14-000442 on June 24, 2014.
(d)(3)(xvii) Expense Limitation Agreement, dated February 23, 2016, between the
Registrant and AT Investment Advisers, Inc., relating to the AT Funds, is
incorporated herein by reference to exhibit (d)(3)(xix) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(d)(3)(xviii) Expense Limitation Agreement, effective as of July 3, 2013,
between the Registrant and Fayez Sarofim & Co., relating to the Sarofim Equity
Fund, is incorporated herein by reference to exhibit (d)(75) of Post-Effective
Amendment No. 219 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000386
on July 26, 2013.
(e)(1)(i) Distribution Agreement, dated November 14, 1991, as amended and
restated November 14, 2005, between the Registrant and SEI Investments
Distribution Co. (formerly, SEI Financial Services Company) is incorporated
herein by reference to exhibit (e)(1)(i) of Post-Effective Amendment No. 252 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-15-000094 on February 27,
2015.
(e)(1)(ii) Amendment No. 1, effective as of August 30, 2010, to the
Distribution Agreement, dated November 14, 1991, as amended and restated
November 14, 2005, between the Registrant and SEI Investments Distribution Co.
(formerly, SEI Financial Services Company), is incorporated herein by reference
to exhibit (e)(3) of Post-Effective Amendment No. 158 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-11-000517 on September 16, 2011.
(e)(2)(i) Revised Form of Amended Sub-Distribution and Servicing Agreement for
SEI Investments Distribution Co., dated October 2007, is incorporated herein by
reference to exhibit (e)(2) of Post-Effective Amendment No. 76 to the
Registration Statement of The Advisors' Inner Circle Fund II (File No.
033-50718), filed with the SEC via EDGAR Accession No. 0001135428-08-000222 on
May 30, 2008.
(f) Not applicable.
C-9
(g)(1)(i) Amended and Restated Custody Agreement, dated February 12, 2013,
between the Registrant and U.S. Bank, National Association, is incorporated
herein by reference to exhibit (g)(1)(i) of Post-Effective Amendment No. 233 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-14-000296 on April 30,
2014.
(g)(1)(ii) Amendment, dated November 6, 2013, to the Amended and Restated
Custody Agreement dated February 12, 2013 between the Registrant and U.S. Bank,
National Association, is incorporated herein by reference to exhibit (g)(1)(ii)
of Post-Effective Amendment No. 233 to the Registrant's Registration Statement
on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-14-000296 on April 30, 2014.
(g)(2)(i) Custodian Agreement, dated June 26, 2001, between the Registrant and
MUFG Union Bank, N.A. (formerly, Union Bank of California, N.A.) is
incorporated herein by reference to exhibit (g)(2)(i) of Post-Effective
Amendment No. 266 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001507
on August 24, 2016.
(g)(2)(ii) Amended Appendix B, dated June 1, 2016, to the Custodian Agreement,
dated June 26, 2001, between the Registrant and MUFG Union Bank, N.A.
(formerly, Union Bank of California, N.A.) is incorporated herein by reference
to exhibit (g)(2)(ii) of Post-Effective Amendment No. 266 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-16-001507 on August 24, 2016.
(g)(3)(i) Custodian Agreement, dated November 25, 2014, between the Registrant
and Brown Brothers Harriman & Co. is incorporated herein by reference to
exhibit (g)(3)(i) of Post-Effective Amendment No. 266 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-16-001507 on August 24, 2016.
(g)(3)(ii) Amendment, dated May 12, 2015, to the Custodian Agreement, dated
November 25, 2014, between the Registrant and Brown Brothers Harriman & Co. is
incorporated herein by reference to exhibit (g)(3)(ii) of Post-Effective
Amendment No. 266 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001507
on August 24, 2016.
(g)(3)(iii) Amendment, dated November 6, 2015, to the Custodian Agreement,
dated November 25, 2014, between the Registrant and Brown Brothers Harriman &
Co. is incorporated herein by reference to exhibit (g)(3)(iii) of
Post-Effective Amendment No. 266 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-16-001507 on August 24, 2016.
(g)(3)(iv) Amendment, dated August 25, 2016, to the Custodian Agreement, dated
November 25, 2014, between the Registrant and Brown Brothers Harriman & Co. is
incorporated herein by reference to exhibit (g)(3)(iv) of Post-Effective
Amendment No. 272 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001815
on October 31, 2016.
(h)(1)(i) Administration Agreement, dated November 14, 1991, as amended and
restated November 12, 2002, between the Registrant and SEI Investments Global
Funds Services, is incorporated herein by reference to exhibit (h)(3) of
Post-Effective Amendment No. 206 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(h)(1)(ii) Amendment, dated June 11, 2014, relating to the LSV Funds, to the
Administration Agreement, dated November 14, 1991, as amended and restated
November 12, 2002, between the Registrant and SEI Investments Global Funds
Services, is incorporated herein by reference to exhibit (h)(1)(ii) of Post-
C-10
Effective Amendment No. 236 to the Registrant's Registration Statement on Form
N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-14-000442 on June 24, 2014.
(h)(1)(iii) Amendment, dated May 18, 2016, to the Administration Agreement,
dated November 14, 1991, as amended and restated November 12, 2002, between the
Registrant and SEI Investments Global Funds Services, is incorporated herein by
reference to exhibit (h)(1)(iii) of Post-Effective Amendment No. 268 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-16-001670 on September 1,
2016.
(h)(2)(i) Transfer Agency and Service Agreement, dated January 15, 2003,
between the Registrant and State Street Bank and Trust Company is incorporated
herein by reference to exhibit (h)(62) of Post-Effective Amendment No. 67 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-03-000495 on August 28,
2003.
(h)(2)(ii) AML Delegation Amendment, dated May 20, 2003, to the Transfer Agency
and Service Agreement, dated January 15, 2003, between the Registrant and State
Street Bank and Trust Company is incorporated herein by reference to exhibit
(h)(65) of Post-Effective Amendment No. 68 to the Registrant's Registration
Statement on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR
Accession No. 0001135428-03-000630 on December 29, 2003.
(h)(2)(iii) Agency Agreement, dated April 1, 2006, between the Registrant and
DST Systems, Inc., is incorporated herein by reference to exhibit (h)(7) of
Post-Effective Amendment No. 190 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000262 on May 23, 2012.
(h)(2)(iv) Amendment, dated April 1, 2009, to the Agency Agreement, dated April
1, 2006, between the Registrant and DST Systems, Inc. is incorporated herein by
reference to exhibit (h)(2)(vi) of Post-Effective Amendment No. 266 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-16-001507 on August 24, 2016.
(h)(2)(v) Amended Fee Schedule, dated August 30, 2012, to the Agency Agreement,
dated April 1, 2006, between the Registrant and DST Systems, Inc. is
incorporated herein by reference to exhibit (h)(10) of Post-Effective Amendment
No. 193 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on
August 22, 2012.
(h)(2)(vi) Amendment, dated November 13, 2013, to the Agency Agreement, dated
April 1, 2006, between the Registrant and DST Systems, Inc. is incorporated
herein by reference to exhibit (h)(2)(viii) of Post-Effective Amendment No. 266
to the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-16-001507 on August 24,
2016.
(h)(2)(vii) Transfer Agency Services Agreement between the Registrant and
Atlantic Shareholder Services, LLC, to be filed by amendment.
(h)(2)(viii) Transfer Agency Agreement between the Registrant and Boston
Financial Data Services, Inc., to be filed by amendment.
(h)(2)(ix) Amendment to the Transfer Agency Agreement between the Registrant
and Boston Financial Data Services, Inc., to be filed by amendment.
(h)(3)(i) Shareholder Services Plan is incorporated herein by reference to
exhibit (h)(3) of Post-Effective Amendment No. 261 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-16-001069 on February 26, 2016.
(h)(3)(ii) Amended Exhibit A to the Shareholder Services Plan is filed
herewith.
C-11
(i) Not Applicable.
(j) Not Applicable.
(k) Not Applicable.
(l) Not Applicable.
(m)(1)(i) Distribution Plan, dated August 8, 1994, as amended August 14, 2000,
is incorporated herein by reference to exhibit (m) of Post-Effective Amendment
No. 41 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0000950109-00-004829 on
December 13, 2000.
(m)(1)(ii) Schedule A, as last amended May 13, 2014, to the Distribution Plan,
dated August 8, 1994, as amended August 14, 2000, is incorporated herein by
reference to exhibit (m)(1)(ii) of Post-Effective Amendment No. 235 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000403 on June 10, 2014.
(m)(2)(i) Distribution Plan, dated September 17, 2002, relating to Investor
Shares of the Rice Hall James SMID Cap Portfolio (formerly, Rice Hall James Mid
Cap Portfolio), is incorporated herein by reference to exhibit (m)(6) of Post-
Effective Amendment No. 74 to the Registrant's Registration Statement on Form
N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-04-000242 on June 1, 2004.
(m)(2)(ii) Amended Schedule A, dated November 13, 2007, to the Distribution
Plan, dated September 17, 2002, relating to Investor Shares of the Rice Hall
James SMID Cap Portfolio (formerly, Rice Hall James Mid Cap Portfolio), is
incorporated herein by reference to exhibit (m)(4) of Post-Effective Amendment
No. 111 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-09-000276 on
July 2, 2009.
(n)(1) Registrant's Amended and Restated Rule 18f-3 Plan, dated February 21,
2007, including Schedules and Certificates of Class Designation thereto, is
incorporated herein by reference to exhibit (n) of Post-Effective Amendment No.
229 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-14-000099 on
February 28, 2014.
(n)(2) Schedule M and Certificates of Class Designation to the Registrant's
Amended and Restated Rule 18f-3 Plan, dated February 21, 2007, relating to the
LSV Funds, is incorporated herein by reference to exhibit (n)(1) of
Post-Effective Amendment No. 235 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-14-000403 on June 10, 2014.
(n)(3) Amended and Restated Schedule B and Certificates of Class Designation to
the Amended and Restated Rule 18f-3 Plan, dated February 21, 2007, relating to
the Cambiar Funds, is incorporated herein by reference to exhibit (n)(3) of
Post-Effective Amendment No. 258 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-15-000632 on August 28, 2015.
(n)(4) Amended and Restated Schedule D and Certificates of Class Designation to
the Amended and Restated Rule 18f-3 Plan, dated February 21, 2007, relating to
the Westwood Funds, is incorporated herein by reference to exhibit (n)(1)(iv)
of Post-Effective Amendment No. 254 to the Registrant's Registration Statement
on Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-15-000298 on April 20, 2015.
C-12
(n)(5) Schedule N and Certificates of Class Designation to the Registrant's
Amended and Restated Rule 18f-3 Plan, dated February 21, 2007, relating to the
Acadian Emerging Markets Portfolio, is incorporated herein by reference to
exhibit (n)(5) of Post-Effective Amendment No. 268 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-16-001670 on September 1, 2016.
(n)(6) Amended and Restated Schedule C and Certificates of Class Designation to
the Amended and Restated Rule 18f-3 Plan, dated February 21, 2007, relating to
the Edgewood Growth Fund, is filed herewith.
(o) Not Applicable.
(p)(1) Registrant's Code of Ethics, dated November 2007, is incorporated herein
by reference to exhibit (p)(1) of Post-Effective Amendment No. 100 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-07-000518 on November 15,
2007.
(p)(2) LSV Asset Management Revised Code of Ethics, dated September 25, 2015,
is incorporated herein by reference to exhibit (p)(2) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(p)(3) Cambiar Investors, LLC Revised Code of Ethics, dated April 1, 2016, is
incorporated herein by reference to exhibit (p)(3) of Post-Effective Amendment
No. 267 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001529 on
August 26, 2016.
(p)(4) Investment Counselors of Maryland, LLC Revised Code of Ethics, dated
November 2015, is incorporated herein by reference to exhibit (p)(4) of
Post-Effective Amendment No. 261 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-16-001069 on February 26, 2016.
(p)(5) C.S. McKee, LLP Revised Code of Ethics, dated April 18, 2013, is
incorporated herein by reference to exhibit (p)(5) of Post-Effective Amendment
No. 229 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-14-000099 on
February 28, 2014.
(p)(6) Thompson, Siegel & Walmsley, LLC Revised Code of Ethics, dated June 1,
2014, is incorporated herein by reference to exhibit (p)(6) of Post-Effective
Amendment No. 252 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-15-000094
on February 27, 2015.
(p)(7) First Manhattan Co. Revised Code of Ethics, dated December 2006, is
incorporated herein by reference to exhibit (p)(11) of Post-Effective Amendment
No. 97 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-07-000146 on
April 30, 2007.
(p)(8) Haverford Investment Management, Inc. Revised Code of Ethics, dated July
2012, is incorporated herein by reference to exhibit (p)(9) of Post-Effective
Amendment No. 206 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000118
on March 1, 2013.
(p)(9) Rice Hall James & Associates, LLC Revised Code of Ethics, dated January
2015, is filed herewith.
C-13
(p)(10) Acadian Asset Management LLC Revised Code of Ethics, dated January
2016, is incorporated herein by reference to exhibit (p)(10) of Post-Effective
Amendment No. 272 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001815
on October 31, 2016.
(p)(11) Westwood Management Corp. Revised Code of Ethics, dated July 28, 2015,
is incorporated herein by reference to exhibit (p)(11) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(p)(12) Edgewood Management LLC Revised Code of Ethics, dated October 1, 2015,
is incorporated herein by reference to exhibit (p)(12) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(p)(13) Sands Capital Management, LLC Revised Code of Ethics, dated January
2016, is filed herewith.
(p)(14) AlphaOne Investment Services, LLC Code of Ethics, dated May 1, 2011, is
incorporated herein by reference to exhibit (p)(20) of Post-Effective Amendment
No. 158 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-11-000517 on
September 16, 2011.
(p)(15) Loomis, Sayles & Company L.P. Revised Code of Ethics, dated August 11,
2016, is filed herewith.
(p)(16) CBRE Clarion Securities LLC Revised Code of Ethics, dated January 2014,
is incorporated herein by reference to exhibit (p)(16) of Post-Effective
Amendment No. 252 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-15-000094
on February 27, 2015.
(p)(17) SKY Harbor Capital Management, LLC Code of Ethics is incorporated
herein by reference to exhibit (p)(21) of Post-Effective Amendment No. 206 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1,
2013.
(p)(18) Hamlin Capital Management, LLC Revised Code of Ethics is incorporated
herein by reference to exhibit (p)(19) of Post-Effective Amendment No. 233 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-14-000296 on April 30,
2014.
(p)(19) Thomson Horstmann & Bryant, Inc. Revised Code of Ethics is incorporated
herein by reference to exhibit (p)(20) of Post-Effective Amendment No. 229 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-14-000099 on February 28,
2014.
(p)(20) SEI Investments Distribution Co. Code of Ethics, dated September 1,
2015, is incorporated herein by reference to exhibit (p)(20) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(p)(21) Cornerstone Advisors, Inc. Code of Ethics is incorporated herein by
reference to exhibit (p)(27) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
C-14
(p)(22) Parametric Portfolio Associates LLC Code of Ethics, dated May 3, 2012,
is incorporated herein by reference to exhibit (p)(28) of Post-Effective
Amendment No. 193 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000370
on August 22, 2012.
(p)(23) Harris Associates L.P. Revised Code of Ethics, dated September 21,
2016, is filed herewith.
(p)(24) Thornburg Investment Management Inc. Revised Code of Ethics, dated
March 2016, is filed herewith.
(p)(25) Marsico Capital Management, LLC Revised Code of Ethics is incorporated
herein by reference to exhibit (p)(25) of Post-Effective Amendment No. 261 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-16-001069 on February 26,
2016.
(p)(26) Cramer Rosenthal McGlynn LLC Revised Code of Ethics is incorporated
herein by reference to exhibit (p)(26) of Post-Effective Amendment No. 261 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-16-001069 on February 26,
2016.
(p)(27) Fairpointe Capital LLC Revised Code of Ethics, dated 2015, is
incorporated herein by reference to exhibit (p)(27) of Post-Effective Amendment
No. 261 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069 on
February 26, 2016.
(p)(28) Phocas Financial Corporation Code of Ethics is incorporated herein by
reference to exhibit (p)(35) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(29) Allianz Global Investors Capital LLC Code of Ethics, dated May 5, 2014,
is incorporated herein by reference to exhibit (p)(30) of Post-Effective
Amendment No. 252 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-15-000094
on February 27, 2015.
(p)(30) Driehaus Capital Management LLC Revised Code of Ethics, dated June 15,
2015, is incorporated herein by reference to exhibit (p)(30) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(p)(31) OFI SteelPath, Inc. Revised Code of Ethics, dated May 26, 2016, is filed
herewith.
(p)(32) ClariVest Asset Management LLC Revised Code of Ethics is filed herewith.
(p)(33) Kayne Anderson Capital Advisors, L.P. Revised Code of Ethics is filed
herewith.
(p)(34) BlackRock Financial Management, LLC Code of Ethics is incorporated
herein by reference to exhibit (p)(45) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(p)(35) Harvest Global Investments Limited Revised Code of Ethics, dated
October 2015, is incorporated herein by reference to exhibit (p)(36) of
Post-Effective Amendment No. 263 to the Registrant's Registration Statement on
Form N-1A (File No. 033-42484), filed with the SEC via EDGAR Accession No.
0001135428-16-001304 on April 29, 2016.
C-15
(p)(36) AT Investment Advisers, Inc. Code of Ethics, dated March 31, 2010, is
incorporated herein by reference to exhibit (p)(46) of Post-Effective Amendment
No. 221 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000503 on
September 4, 2013.
(p)(37) Fayez Sarofim & Co. Code of Ethics, dated October 27, 2014, is
incorporated herein by reference to exhibit (p)(38) of Post-Effective Amendment
No. 255 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-15-000328 on
April 30, 2015.
(p)(38) SEI Investments Global Funds Services Code of Ethics, dated February
2015, is incorporated herein by reference to exhibit (p)(39) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(p)(39) Numeric Investors LLC Revised Code of Ethics, dated August 2014, is
incorporated herein by reference to exhibit (p)(40) of Post-Effective Amendment
No. 261 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069 on
February 26, 2016.
(p)(40) Strategic Income Management, LLC Code of Ethics, dated March 2013, is
incorporated herein by reference to exhibit (p)(45) of Post-Effective Amendment
No. 229 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-14-000099 on
February 28, 2014.
(p)(41) AJO, LP Code of Ethics, dated January 2, 2009, is incorporated herein
by reference to exhibit (p)(45) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(p)(42) Wells Fargo Portfolio Risk Advisors, a Division of Structured Asset
Investors, LLC Code of Ethics, dated April 2014, is incorporated herein by
reference to exhibit (p)(46) of Post-Effective Amendment No. 239 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-14-000551 on August 28, 2014.
(p)(43) Robert W. Baird & Co. Incorporated Code of Ethics, dated November 30,
2015, is incorporated herein by reference to exhibit (p)(44) of Post-Effective
Amendment No. 261 to the Registrant's Registration Statement on Form N-1A (File
No. 033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001069
on February 26, 2016.
(p)(44) Franklin Advisers, Inc. Code of Ethics, dated May 1, 2013, is
incorporated herein by reference to exhibit (p)(45) of Post-Effective Amendment
No. 266 to the Registrant's Registration Statement on Form N-1A (File No.
033-42484), filed with the SEC via EDGAR Accession No. 0001135428-16-001507 on
August 24, 2016.
(p)(45) Metropolitan West Asset Management LLC Code of Ethics is incorporated
herein by reference to exhibit (p)(46) of Post-Effective Amendment No. 266 to
the Registrant's Registration Statement on Form N-1A (File No. 033-42484),
filed with the SEC via EDGAR Accession No. 0001135428-16-001507 on August 24,
2016.
(p)(46) Prime Advisors, Inc. Code of Ethics is incorporated herein by reference
to exhibit (p)(47) of Post-Effective Amendment No. 266 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-16-001507 on August 24, 2016.
C-16
(q)(1) Powers of Attorney for Ms. Betty L. Krikorian and Messrs. Robert A.
Nesher, William M. Doran, John K. Darr, George J. Sullivan, Jr., Mitchell A.
Johnson, Bruce Speca and Joseph T. Grause are incorporated herein by reference
to Exhibit (q) of Post-Effective Amendment No. 212 to the Registrant's
Registration Statement on Form N-1A (File No. 033-42484), filed with the SEC
via EDGAR Accession No. 0001135428-13-000327 on June 18, 2013.
(q)(2) Power of Attorney for Mr. Stephen Connors is incorporated herein by
reference to exhibit (q)(2) of Post-Effective Amendment No. 258 to the
Registrant's Registration Statement on Form N-1A (File No. 033-42484), filed
with the SEC via EDGAR Accession No. 0001135428-15-000632 on August 28, 2015.
ITEM 29. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
Not Applicable.
ITEM 30. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit (a) to
the Registrant's Registration Statement is incorporated herein by reference.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act") may be permitted to trustees, directors, officers and
controlling persons of the Registrant by the Registrant pursuant to the
Agreement and Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the SEC, such indemnification is against public policy as
expressed in the 1933 Act and, therefore, is unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of
such issues.
c-17
ITEM 31. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS:
The following lists any other business, profession, vocation or employment of a
substantial nature in which each investment adviser, and each director, officer
or partner of that investment adviser, is or has been engaged within the last
two fiscal years for his or her own account or in the capacity of director,
officer, employee, partner, or trustee. Unless noted below, none of the
investment advisers, and/or director, officer or partner of each investment
adviser, is or has been engaged within the last two fiscal years in any other
business, profession, vocation or employment of a substantial nature for his or
her own account or in the capacity of director, officer, employee, partner or
trustee.
ACADIAN ASSET MANAGEMENT LLC
Acadian Asset Management LLC ("Acadian") serves as the investment adviser to
the Acadian Emerging Markets Portfolio and as an investment sub-adviser to the
Cornerstone Advisors Global Public Equity Fund. The principal address of
Acadian is 260 Franklin Street, Boston, Massachusetts 02110. Acadian is an
investment adviser registered under the Investment Advisers Act of 1940. The
information listed below is for the fiscal years ended October 31, 2014 and
2015.
----------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS ADDRESS OF CONNECTION WITH OTHER
INVESTMENT ADVISER OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------------------
John Chisholm, Executive Acadian Asset Management (UK) Ltd Affiliated Directorships
Vice President, CIO, 110 Cannon Street, 4th Floor
Member of Board of London EC4N 6EU
Managers United Kingdom
------------------------------------------------------------------------
Acadian Asset Management (Australia) Affiliated Directorships
Ltd
20 Martin Place
Level 9, Suite 3
Sydney, NSW 2000
Australia
----------------------------------------------------------------------------------------------------
Churchill Franklin, CEO, Acadian Asset Management (Australia) Affiliated Directorships
Member of Board of Ltd
Managers 20 Martin Place
Level 9, Suite 3
Sydney, NSW 2000
Australia
------------------------------------------------------------------------
Acadian Asset Management (UK) Ltd Affiliated Directorships
110 Cannon Street, 4th Floor
London EC4N 6EU
United Kingdom
------------------------------------------------------------------------
Acadian Cayman Limited G.P. Affiliated Directorships
Maples Corporate Services Limited
PO Box 309
Ugland House
Grand Cayman, KY1-1104
Cayman Islands
----------------------------------------------------------------------------------------------------
Ronald Frashure, Chairman Acadian Asset Management (Singapore) Affiliated Directorships
of the Board of Managers Pte Ltd
8 Shenton Way, #37-02
Singapore 068811
----------------------------------------------------------------------------------------------------
C-18
------------------------------------------
Acadian Cayman Limited G.P.
Maples Corporate Services Limited
PO Box 309
Ugland House
Grand Cayman, KY1-1104
Cayman Islands
----------------------------------------------------------------------------------------------------
Mark Minichiello, Executive Acadian Asset Management (UK) Ltd Affiliated Directorships
Vice President, COO, 110 Cannon Street, 4th Floor
Treasurer, Secretary, London EC4N 6EU
Member of Board of United Kingdom
Managers ------------------------------------------------------------------------
Acadian Asset Management (Australia) Affiliated Directorships
Ltd
20 Martin Place
Level 9, Suite 3
Sydney, NSW 2000
Australia
------------------------------------------------------------------------
Acadian Asset Management (Singapore) Affiliated Directorships
Pte Ltd
8 Shenton Way, #37-02
Singapore 068811
------------------------------------------------------------------------
Acadian Asset Management (Japan) Affiliated Directorships
Marunouchi Trust Tower Main
1-8-3 Marunouchi, Chiyoda-ku
Tokyo 100-0005
Japan
----------------------------------------------------------------------------------------------------
Ross Dowd, Executive Vice Acadian Asset Management (UK) Ltd Affiliated Directorships
President, Head of Client 110 Cannon Street, 4th Floor
Service, Member of Board London EC4N 6EU
of Managers United Kingdom
------------------------------------------------------------------------
Acadian Cayman Limited G.P. Affiliated Directorships
Maples Corporate Services Limited
PO Box 309
Ugland House
Grand Cayman, KY1-1104
Cayman Islands
------------------------------------------------------------------------
Acadian Asset Management Affiliated Directorships
(Australia) Ltd
20 Martin Place
Level 9, Suite 3
Sydney, NSW 2000
Australia
------------------------------------------------------------------------
Acadian Asset Management (Singapore) Affiliated Directorships
Pte Ltd
8 Shenton Way, #37-02
Singapore 068811
----------------------------------------------------------------------------------------------------
C-19
------------------------------------------------------------------------
Acadian Asset Management (Japan) Affiliated Directorships
Marunouchi Trust Tower Main
1-8-3 Marunouchi, Chiyoda-ku
Tokyo 100-0005
Japan
----------------------------------------------------------------------------------------------------
Linda Gibson, Member of Executive Vice President and Head of Affiliated Directorships
Board of Managers Global Distribution -- OM Asset
Management PLC (a public company
traded on the NYSE);
5TH Floor Millennium Bridge House
2 Lambeth Hill
London
United Kingdom
EC4V 4GG
------------------------------------------------------------------------
Director, Executive Vice President and Affiliated Directorships
Head of Global Distribution -- OMAM Inc.
(f/k/a Old Mutual (US) Holdings Inc.) (a
holding company);
200 Clarendon Street, 53rd Floor
Boston, MA 02116
----------------------------------------- ------------------------------
Acadian Asset Management LLC (an Affiliated Directorships
investment advisor);
260 Franklin Street
Boston, MA 02110
----------------------------------------- ------------------------------
Barrow, Hanley, Mewhinney & Strauss, Affiliated Directorships
LLC (an investment advisor);
JPMorgan Chase Tower
2200 Ross Avenue, 31st Floor
Dallas, TX 75201
----------------------------------------- ------------------------------
OMAM (HFL) Inc. (f/k/a Old Mutual Affiliated Directorships
(HFL) Inc.) (a holding company for
Heitman affiliated financial services
firms);
200 Clarendon Street, 53rd Floor
Boston, MA 02116
----------------------------------------- ------------------------------
OMAM International Ltd. (f/k/a Old Affiliated Directorships
Mutual Asset Management International,
Ltd.) (an investment advisor);
Millenium Bridge House
2 Lambeth Hill
London
England
EC4V 4GG
----------------------------------------------------------------------------------------------------
Christopher Hadley, Executive Vice President and Chief Affiliated Directorships
Member of Board of Talent Officer -- OM Asset Management
Managers PLC (a public company traded on the
NYSE); 5TH Floor Millennium Bridge House
2 Lambeth Hill
London
United Kingdom
EC4V 4GG
----------------------------------------------------------------------------------------------------
C-20
------------------------------------------------------------------------
Executive Vice President and Chief Affiliated Directorships
Talent Officer -- OMAM Inc. (f/k/a
Old Mutual (US) Holdings Inc.)
(a holding company);
200 Clarendon Street, 53rd Floor
Boston, MA 02116
------------------------------------------------------------------------
Acadian Asset Management LLC (an Affiliated Directorships
investment advisor)
260 Franklin Street
Boston, MA 02110
------------------------ ---------------------------------------------------------------------------
Aidan Riordan, Member of Executive Vice President, Head of Affiliated Directorships
Board of Managers Affiliate Management - OM Asset
Management PLC (a public company
traded on the NYSE);
5TH Floor Millennium Bridge House
2 Lambeth Hill
London
United Kingdom
EC4V 4GG
------------------------------------------------------------------------
Executive Vice President, Head of Affiliated Directorships
Affiliate Management -- OMAM Inc.
(f/k/a Old Mutual (US) Holdings Inc.)
(a holding company);
200 Clarendon Street, 53rd Floor
Boston, MA 02116
------------------------------------------------------------------------
Acadian Asset Management LLC (an Affiliated Directorships
investment advisor);
260 Franklin Street
Boston, MA 02110
------------------------------------------------------------------------
Barrow, Hanley, Mewhinney & Strauss, Affiliated Directorships
LLC (an investment advisor);
JPMorgan Chase Tower
2200 Ross Avenue, 31st Floor
Dallas, TX 75201
------------------------------------------------------------------------
Campbell Global, LLC (an investment Affiliated Directorships
advisor)
One South West Columbia, Suite 1720
Portland, OR 97258
------------------------------------------------------------------------
Copper Rock Capital Partners LLC (an Affiliated Directorships
investment advisor);
200 Clarendon Street, 51st Floor
Boston, MA 02116
------------------------------------------------------------------------
OMAM (HFL) Inc. (f/k/a Old Mutual Affiliated Directorships
(HFL) Inc.) (a holding company for
Heitman affiliated financial services
firms);
200 Clarendon Street, 53rd Floor
Boston, MA 02116
------------------------------------------------------------------------
Investment Counselors of Maryland, LLC Affiliated Directorships
(an investment advisor);
300 East Lombard Street, Suite 810
Baltimore, MD 21202
----------------------------------------------------------------------------------------------------
C-21
------------------------------------------------------------------------
Thompson, Siegel & Walmsley LLC (an Affiliated Directorships
investment advisor)
6806 Paragon Pl., Ste. 300
Richmond, VA 23230
----------------------------------------------------------------------------------------------------
Stephen Belgrad, Member of Executive Vice President and Chief Affiliated Directorships
Board of Managers Financial Officer - OM Asset Management
PLC (a public company traded on the
NYSE);
5TH Floor Millennium Bridge House
2 Lambeth Hill
London
United Kingdom
EC4V 4GG
------------------------------------------------------------------------
Director, Executive Vice President and Affiliated Directorships
Chief Financial Officer -- OMAM Inc.
(f/k/a Old Mutual (US) Holdings Inc.) (a
holding company);
200 Clarendon Street, 53rd Floor
Boston, MA 02116
------------------------------------------------------------------------
Acadian Asset Management LLC (an Affiliated Directorships
investment advisor);
260 Franklin Street
Boston, MA 02110
------------------------------------------------------------------------
OMAM International Ltd. (f/k/a Old Affiliated Directorships
Mutual Asset Management International,
Ltd.) (an investment advisor)
Millenium Bridge House
2 Lambeth Hill
London
England
EC4V 4GG
----------------------------------------------------------------------------------------------------
AJO, LP
AJO, LP ("AJO") serves as an investment sub-adviser for the Cornerstone
Advisors Public Alternatives Fund. The principal address of AJO is 230 South
Broad Street, 20th Floor, Philadelphia, Pennsylvania 19102. AJO is an
investment adviser registered under the Investment Advisers Act of 1940. The
information listed below is for the fiscal years ended October 31, 2014 and
October 31, 2015.
----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS ADDRESS OF CONNECTION WITH OTHER
INVESTMENT ADVISER OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------------
RV Capital
Arup Datta Royal Group Building
Principal, Portfolio Manager Unit 15-05 Director
3 Phillip Street
Singapore 048693
----------------------------------------------------------------------------------------------
ALLIANZ GLOBAL INVESTORS U.S. LLC
Allianz Global Investors U.S. LLC ("AllianzGI US") serves as an investment
sub-adviser for the Cornerstone Advisors Global Public Equity Fund. The
principal address of AllianzGI US is 1633 Broadway, New York, New York 10019.
AllianzGI US is an investment adviser registered under the Investment Advisers
Act of 1940. The information listed below is for the fiscal years ended October
31, 2014 and 2015.
C-22
-------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-------------------------------------------------------------------------------------------------------
Douglas Eu Allianz Global Investors Managing Director, Chief
Holdings LLC Executive Officer,
1633 Broadway
New York, NY 10019
-------------------------------------------------------------------------------------------------------
Julian Sluyters, Member, Allianz Global Investors Managing Director, Chief
Executive Committee Allianz Holdings LLC Operating Officer
Global Investors U.S. 1633 Broadway
Holdings LLC New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Managing Director
Distributors LLC
1633 Broadway
New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Fund Chairman-Management Board
Management LLC
1633 Broadway
New York, NY 10019
-------------------------------------------------------------------------------------------------------
John Carroll, Member, Executive Allianz Global Investors Managing Director, Head of
Committee Allianz Global Holdings LLC Retail Distribution, Member-
Investors U.S. Holdings LLC 1633 Broadway Operating Committee
New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Managing Director, Chief
Distributors LLC Executive Officer, Head of Retail
1633 Broadway Distribution US
New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Fund Member--Management Board
Management LLC
1633 Broadway
New York, NY 10019
-------------------------------------------------------------------------------------------------------
Barbara Claussen, Member, Allianz Global Investors Managing Director, Chief
Executive Committee Allianz Holdings LLC Administrative Officer, Member-
Global Investors U.S. Holdings 1633 Broadway Operating Committee
LLC New York, NY 10019
--------------------------------------------------------------------
NFJ Investment Group LLC Managing Director
2100 Ross Ave, Suite 700
Dallas, TX 75201
-------------------------------------------------------------------------------------------------------
Benno Fischer, Member, NFJ Investment Group LLC Managing Director, Chief
Executive Committee Allianz 2100 Ross Ave, Suite 700 Investment Officer
Global Investors U.S. Holdings Dallas, TX 75201
LLC
-------------------------------------------------------------------------------------------------------
Douglas Forsyth, Member, Allianz Global Investors Chief Investment Officer Fixed
Executive Committee Allianz Holdings LLC Income US
Global Investors U.S. Holdings 1633 Broadway
LLC New York, NY 10019
-------------------------------------------------------------------------------------------------------
Jill Lohrfink, Member, Executive Allianz Global Investors Managing Director, Head of
Committee Allianz Global Holdings LLC Institutional--North America
Investors U.S. Holdings LLC 1633 Broadway
New York, NY 10019
-------------------------------------------------------------------------------------------------------
Scott Migliori, Member, Allianz Global Investors Managing Director, Chief
Executive Committee Allianz Holdings LLC Investment Officer Equity US
Global Investors U.S. Holdings 1633 Broadway
LLC New York, NY 10019
-------------------------------------------------------------------------------------------------------
C-23
-------------------------------------------------------------------------------------------------------
Herold Rohweder, Member, Allianz Global Investors Managing Director, Global Chief
Executive Committee Allianz Holdings LLC Investment Officer Multi-Asset
Global Investors U.S. Holdings 1633 Broadway
LLC New York, NY 10019
-------------------------------------------------------------------------------------------------------
Susan King, Member, Executive Allianz Global Investors Managing Director, Chief
Committee Allianz Global Holdings LLC Marketing Officer U.S.
Investors U.S. Holdings LLC 1633 Broadway
New York, NY 10019
--------------------------------------------------------------------
NFJ Investment Group LLC Managing Director, Chief
2100 Ross Ave, Suite 700 Marketing Officer U.S.
Dallas, TX 75201
--------------------------------------------------------------------
Allianz Global Investors Fund Managing Director, Chief
Management LLC Marketing Officer U.S.
1633 Broadway
New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Managing Director, Chief
Distributors LLC Marketing Officer U.S.
1633 Broadway
New York, NY 10019
-------------------------------------------------------------------------------------------------------
David Jobson, Member, Allianz Global Investors Managing Director, Head of
Executive Committee Allianz Holdings LLC Product Management and Strategy
Global Investors U.S. Holdings 1633 Broadway
LLC New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Fund Member--Management Board
Management LLC
1633 Broadway
New York, NY 10019
-------------------------------------------------------------------------------------------------------
Erin Bengtson-Olivieri, Member, Allianz Global Investors Managing Director, Chief
Executive Committee Allianz Holdings LLC Financial Officer
Global Investors U.S. Holdings 1633 Broadway
LLC, Chief Financial Officer New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Managing Director
Distributors LLC
1633 Broadway
New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Fund Member - Management Board,
Management LLC Managing Director, Chief
1633 Broadway Financial Officer
New York, NY 10019
-------------------------------------------------------------------------------------------------------
NFJ Investment Group LLC Managing Director, Chief
2100 Ross Ave, Suite 700 Financial Officer
Dallas, TX 75201
-------------------------------------------------------------------------------------------------------
Peter Bonanno, Chief Legal Allianz Global Investors Capital Director
Officer, Allianz Global Investors Limited (UK)
U.S. LLC (as of December 1, 2014) 353 Strand, London, WC2R 0HS
--------------------------------------------------------------------
Allianz Global Investors Managing Director
Distributors LLC
1633 Broadway
New York, NY 10019
--------------------------------------------------------------------
Allianz Global Investors Managing Director, General
Holdings LLC Counsel, Secretary, Secretary of
1633 Broadway Executive Committee and
New York, NY 10019 Secretary of Operating
Committee
--------------------------------------------------------------------
NFJ Investment Group LLC Managing Director, Chief Legal
2100 Ross Ave, Suite 700 Officer
Dallas, TX 75201
-------------------------------------------------------------------------------------------------------
C-24
-------------------------------------------------------------------------------------------------------
Paul Koo, Chief Compliance Allianz Global Investors Director, Deputy Head of U.S.
Officer Holdings LLC Compliance
1633 Broadway
New York, NY 10019
-------------------------------------------------------------------------------------------------------
ALPHAONE INVESTMENT SERVICES, LLC
AlphaOne Investment Services, LLC ("AlphaOne") serves as the investment adviser
for the AlphaOne Small Cap Opportunities Fund. The principal address of AlphaOne
is 789 E. Lancaster Avenue, Suite 120, Villanova, Pennsylvania 19085. AlphaOne
is an investment adviser registered under the Investment Advisers Act of 1940.
The information listed below is for the fiscal years ended October 31, 2014 and
2015.
-----------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-----------------------------------------------------------------------------------------
Paul Hondros, President IntrustNet Insurance Services, LLC Chairman
and CEO 7 Whippoorwill Rd.
Armonk, NY 10504
-----------------------------------------------------------------------------------------
AT INVESTMENT ADVISERS, INC.
AT Investment Advisers, Inc. ("AT") serves as the investment adviser for the AT
Disciplined Equity Fund, AT Income Opportunities Fund and AT Mid Cap Equity
Fund. The principal address of AT is One South Wacker Drive, Suite 3500,
Chicago, Illinois 60606. AT is an investment adviser registered with the SEC
under the Investment Advisers Act of 1940. The information listed below is for
the fiscal years ended October 31, 2014 and 2015.
-----------------------------------------------------------------------------------
NAME AND POSITION NAME AND PRINCIPAL BUSINESS CONNECTION WITH
WITH INVESTMENT ADVISER ADDRESS OF OTHER COMPANY OTHER COMPANY
-----------------------------------------------------------------------------------
Dan Brown, CFO CIBC World Markets Corp. Employee
425 Lexington Ave.
5th Floor
New York, NY 10017
-----------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, LLC
BlackRock Financial Management, LLC ("BlackRock") serves as an investment
sub-adviser for the Cornerstone Advisors Real Assets Fund. The principal
address of BlackRock is 55 East 52nd Street, New York, New York 10055.
BlackRock is an investment adviser registered under the Investment Advisers Act
of 1940.
The information required by this Item 31 with respect to each director, officer
or partner of BlackRock for the fiscal years ended October 31, 2014 and 2015 is
incorporated herein by reference to Form ADV filed by BlackRock with the SEC.
CAMBIAR INVESTORS, LLC
Cambiar Investors, LLC ("Cambiar") serves as the investment adviser to the
Cambiar Opportunity Fund, the Cambiar International Equity Fund, the Cambiar
Small Cap Fund, the Cambiar Unconstrained Equity Fund, the Cambiar SMID Fund,
the Cambiar Global Equity Fund and the Cambiar International Small
C-25
Cap Fund. The principal address of Cambiar is 200 Columbine Street, Suite 800,
Denver, Colorado 80206. Cambiar is an investment adviser registered under the
Investment Advisers Act of 1940.
During the fiscal years ended April 30, 2015 and 2016, no director, officer or
partner of Cambiar engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the capacity
of director, officer, employee, partner or trustee.
CBRE CLARION SECURITIES LLC
CBRE Clarion Securities LLC ("CBRE Clarion") serves as the investment adviser
for the CBRE Clarion Long/Short Fund and the CBRE Clarion Global Infrastructure
Value Fund. The principal address of CBRE Clarion is 201 King of Prussia Road,
Suite 600, Radnor, Pennsylvania 19087. CBRE Clarion is an investment adviser
registered under the Investment Advisers Act of 1940. The information listed
below is for the fiscal years ended October 31, 2014 and 2015.
-----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-----------------------------------------------------------------------------------------------
T. Ritson Ferguson CBRE Clarion Global Real Estate Interested Trustee
Chief Executive Officer Income Fund (IGR)
and Co-Chief Investment c/o 201 King of Prussia Road, Suite
Officer 600, Radnor, PA 19087
-----------------------------------------------------------------------------------------------
Jarrett B. Kling HC Capital Trust Trustee
Managing Director -- Sales 300 Barr Harbor Dr, Suite 500
and Marketing West Conshohocken, PA 19428
---------------------------------------------------------------
Boys and Girls Clubs of America National Trustee
1275 Peachtree Street NE
Atlanta, GA 30309-3506
-----------------------------------------------------------------------------------------------
William Zitelli CBRE Clarion Global Real Estate Chief Compliance Officer
General Counsel Income Fund (IGR)
c/o 201 King of Prussia Road, Suite
600, Radnor, PA 19087
-----------------------------------------------------------------------------------------------
Jonathan Blome CBRE Clarion Global Real Estate Chief Financial Officer
Chief Financial Officer Income Fund (IGR)
c/o 201 King of Prussia Road, Suite
600, Radnor, PA 19087
-----------------------------------------------------------------------------------------------
CLARIVEST ASSET MANAGEMENT LLC
ClariVest Asset Management LLC ("ClariVest") serves as an investment
sub-adviser for the Cornerstone Advisors Global Public Equity Fund and
Cornerstone Advisors Public Alternatives Fund. The principal address of
ClariVest is 3611 Valley Centre Drive, Suite 100, San Diego, California 92130.
ClariVest is an investment adviser registered under the Investment Advisers Act
of 1940. The information listed below is for the fiscal years ended October 31,
2014 and 2015.
-----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-----------------------------------------------------------------------------------------------
Richard Rossi Eagle Asset Management Inc. Director, President, Co-Chief
Manager 880 Carillon Parkway Operating Officer
St Petersburg, FL 33716
---------------------------------------------------------------------
Carillon Tower Advisers President, Co-Chief Operating
880 Carillon Parkway Officer
St. Petersburg, Florida 33716
---------------------------------------------------------------------
ClariVest Asset Management LLC Manager
3611 Valley Centre Drive
Suite 100
San Diego, CA 92130
-----------------------------------------------------------------------------------------------
C-26
-----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-----------------------------------------------------------------------------------------------
J. Cooper Abbott Eagle Asset Management Inc. Director, Executive Vice President
Manager 880 Carillon Parkway - Investments, Co-Chief Operating
St Petersburg, FL 33716 Officer
---------------------------------------------------------------------
Carillon Tower Advisers Co-Chief Operating Officer
880 Carillon Parkway
St. Petersburg, Florida 33716
---------------------------------------------------------------------
ClariVest Asset Management LLC Manager
3611 Valley Centre Drive
Suite 100
San Diego, CA 92130
-----------------------------------------------------------------------------------------------
Courtland James Eagle Asset Management Inc. Vice President, Business
Manager 880 Carillon Parkway Development
St Petersburg, FL 33716
---------------------------------------------------------------------
Carillon Tower Advisers Director
880 Carillon Parkway
St. Petersburg, Florida 33716
---------------------------------------------------------------------
ClariVest Asset Management LLC Manager
3611 Valley Centre Drive
Suite 100
San Diego, CA 92130
-----------------------------------------------------------------------------------------------
CORNERSTONE ADVISORS, INC.
Cornerstone Advisors, Inc. ("Cornerstone") serves as the investment adviser for
the Cornerstone Advisors Global Public Equity Fund, Cornerstone Advisors Income
Opportunities Fund, Cornerstone Advisors Public Alternatives Fund, Cornerstone
Advisors Real Assets Fund, and Cornerstone Advisors Core Plus Bond Fund. The
principal address of Cornerstone is 225 108th Avenue NE, Suite 400, Bellevue,
Washington 98004-5782. Cornerstone is an investment adviser registered under the
Investment Advisers Act of 1940. The information listed below is for the fiscal
years ended October 31, 2014 and 2015.
---------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
---------------------------------------------------------------------------------------
William Savoy BSquare Director
Director / Shareholder 110 -- 110th Avenue NE, Suite 200
Bellevue, WA 98004
-------------------------------------------------------------
Friends of Youth Director
---------------------------------------------------------------------------------------
Anne Farrell Seattle Foundation President Emeritus
Director 1200 -- 5th Avenue, Suite 1300
Seattle, WA 98101
-------------------------------------------------------------
Seattle University Trustee Emeritus
---------------------------------------------------------------------------------------
C-27
---------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
---------------------------------------------------------------------------------------
Delta Dental of Washington Director
-------------------------------------------------------------
KCTS Channel 9 Public Television Board Chairwoman
-------------------------------------------------------------
National Assoc. of Corporate Directors
Directors
---------------------------------------------------------------------------------------
Greg Collins Parker Smith & Feek (PS&F) President/CEO
Director 2233 112th Ave NE
Bellevue, WA 98004
-------------------------------------------------------------
Overlake Medical Center Board Chairman
-------------------------------------------------------------
Seattle Metropolitan Chamber of Director
Commerce
---------------------------------------------------------------------------------------
CRAMER ROSENTHAL MCGLYNN LLC
Cramer Rosenthal McGlynn LLC ("CRM") serves as an investment sub-adviser for
the Cornerstone Advisors Global Public Equity Fund. The principal address of
CRM is 520 Madison Avenue, 20th Floor, New York, New York 10022. CRM is an
investment adviser registered under the Investment Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of CRM engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
C.S. MCKEE, L.P.
C.S. McKee, L.P. ("C.S. McKee") serves as the investment adviser to the McKee
International Equity Portfolio. The principal address of C.S. McKee is One
Gateway Center, Pittsburgh, Pennsylvania 15222. C.S. McKee is an investment
adviser registered under the Investment Advisers Act of 1940. The information
listed below is for the fiscal years ended October 31, 2014 and 2015.
--------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------
Gregory M. Melvin Dartmouth Capital, Inc. President
Chief Investment Officer 750 Stonegate Drive
Wexford, PA 15090
--------------------------------------------------------------------------------
Michael J. Donnelly Blue Devil Capital President
2051 Murdstone Rd.
Pittsburgh, PA 15241
--------------------------------------------------------------------------------
DRIEHAUS CAPITAL MANAGEMENT LLC
Driehaus Capital Management LLC ("Driehaus") serves as an investment
sub-adviser for the Cornerstone Advisors Global Public Equity Fund. The
principal address of Driehaus is 25 East Erie Street, Chicago, Illinois
60611-2703. Driehaus is an investment adviser registered under the Investment
Advisers Act of 1940. The information listed below is for the fiscal years
ended October 31, 2014 and 2015.
C-28
-----------------------------------------------------------------------------------------------
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
-----------------------------------------------------------------------------------------------
Richard H. Driehaus Driehaus Capital Holdings Chairman
Chairman and Chief Investment LLLPo
Officer --------------------------------------------------------------
Driehaus Mutual Fundsoo Trustee
--------------------------------------------------------------
Driehaus Securities LLCooo Chairman
-----------------------------------------------------------------------------------------------
Robert H. Gordon Driehaus Capital Holdings President and Chief Executive
President and Chief Executive LLLPo Officer
Officer --------------------------------------------------------------
Driehaus Mutual Fundsoo President
--------------------------------------------------------------
Driehaus Securities LLCooo President and Chief Executive
Officer
-----------------------------------------------------------------------------------------------
Janet L. McWilliams Driehaus Capital Holdings Senior Vice President and
Managing Director, Secretary LLLPo Secretary
and General Counsel --------------------------------------------------------------
Driehaus Mutual Fundsoo Chief Legal Officer and Assistant
Vice President
--------------------------------------------------------------
Driehaus Securities LLCooo Managing Director, Secretary
and General Counsel
-----------------------------------------------------------------------------------------------
Michelle L. Cahoon Driehaus Capital Holdings Vice President, Treasurer and
Managing Director, Treasurer LLLPo Chief Financial Officer
and Chief Financial Officer --------------------------------------------------------------
Driehaus Mutual Fundsoo Vice President and Treasurer
--------------------------------------------------------------
Driehaus Securities LLCooo Managing Director, Treasurer
and Chief Financial Officer
-----------------------------------------------------------------------------------------------
Stephen T. Weber Driehaus Securities LLCooo Managing Director, Sales and
Managing Director, Sales and Relationship Management
Relationship Management
-----------------------------------------------------------------------------------------------
Thomas M. Seftenberg Driehaus Securities LLCooo Managing Director, Relationship
Managing Director, Relationship Management and Marketing
Management and Marketing
-----------------------------------------------------------------------------------------------
Michael R. Shoemaker Driehaus Mutual Fundsoo Chief Compliance Officer and
Assistant Vice President and Assistant Vice President
Chief Compliance Officer --------------------------------------------------------------
Driehaus Securities LLCooo Assistant Vice President and
Chief Compliance Officer
-----------------------------------------------------------------------------------------------
Michael P. Kailus Driehaus Mutual Fundsoo Assistant Secretary and Anti-
Assistant Secretary Money Laundering Compliance
Officer
--------------------------------------------------------------
Driehaus Securities LLCooo Assistant Secretary
-----------------------------------------------------------------------------------------------
o Driehaus Capital Holdings LLLP, located at 25 East Erie Street, Chicago, IL
60611, is a holding company and is the majority owner of Driehaus Capital
Management LLC and Driehaus Securities LLC.
oo Driehaus Mutual Funds, located at 25 East Erie Street, Chicago, IL 60611, is
an open-end management investment company registered with the U.S. Securities
and Exchange Commission under the Investment Company Act of 1940.
ooo Driehaus Securities LLC, located at 25 East Erie Street, Chicago, IL 60611,
is a limited-purpose broker-dealer registered with the Financial Industry
Regulatory Authority ("FINRA") and the U.S. Securities and Exchange
Commission.
C-29
EDGEWOOD MANAGEMENT LLC
Edgewood Management LLC ("Edgewood") serves as the investment adviser to the
Edgewood Growth Fund. The principal address of Edgewood is 535 Madison Avenue,
15th Floor, New York, New York 10022. Edgewood is an investment adviser
registered under the Investment Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Edgewood engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
FAIRPOINTE CAPITAL LLC
Fairpointe Capital LLC ("Fairpointe") serves as an investment sub-adviser for
the Cornerstone Advisors Global Public Equity Fund. The principal address of
Fairpointe is One North Franklin Street, Suite 3300, Chicago, Illinois
60606-2401. Fairpointe is an investment adviser registered under the Investment
Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Fairpointe engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
FAYEZ SAROFIM & CO.
Fayez Sarofim & Co. ("Fayez Sarofim") serves as the investment adviser for the
Sarofim Equity Fund. The principal address of Fayez Sarofim is 2907 Two Houston
Center, 909 Fannin Street, Houston, Texas 77010. Fayez Sarofim is an investment
adviser registered under the Investment Advisers Act of 1940. The information
listed below is for the fiscal years ended December 31, 2014 and 2015.
-----------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL
BUSINESS ADDRESS OF CONNECTION WITH OTHER
NAME AND POSITION WITH INVESTMENT ADVISER OTHER COMPANY COMPANY
-----------------------------------------------------------------------------------------------------
Sarofim Trust Co. Chairman
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------
Sarofim Realty Advisors Chairman and Director
Co.
8115 Preston Road
Suite 400
Dallas, TX 75225
-----------------------------------------------------
Fayez Sarofim Sarofim International Chairman, Chief
Chairman, Chief Executive Officer, Chief Management Company Executive Officer, Chief
Investment Officer and Director (2014); Two Houston Center Investment Officer and
Chairman, Co-Chief Investment Officer and Suite 2907 Director
Director (2015) Houston, TX 77010
-----------------------------------------------------
The Sarofim Group, Inc. Chairman, Chief
Two Houston Center Executive Officer and
Suite 2907 Director
Houston, TX 77010
-----------------------------------------------------
Kinder Morgan, Inc. Director
500 Dallas
Suite 1000
Houston, TX 77002
-----------------------------------------------------------------------------------------------------
C-30
-----------------------------------------------------------------------------------------------------
Christopher B. Sarofim Kemper Corporation Director
Vice Chairman One East Wacker Drive
Chicago, IL 60601
-----------------------------------------------------
Sarofim Trust Co. Vice Chairman
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------
Sarofim International Vice Chairman and
Management Company President
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------
The Sarofim Group, Inc. Director, Vice Chairman
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------------------------------------------------------
Raye G. White Sarofim Trust Co. President, Chief
Executive Vice President, Secretary, Two Houston Center Executive Officer,
Treasurer, Chief Compliance Officer Suite 2907 Treasurer and Director
and Director Houston, TX 77010
-----------------------------------------------------
Sarofim International Executive Vice
Management Company President, Secretary,
Two Houston Center Treasurer and Director
Suite 2907
Houston, TX 77010
-----------------------------------------------------
Sarofim Realty Advisors Secretary, Treasurer and
Co. Director
8115 Preston Road
Suite 400
Dallas, TX 75225
-----------------------------------------------------
The Sarofim Group, Inc. Executive Vice
Two Houston Center President, Secretary,
Suite 2907 Treasurer and Director
Houston, TX 77010
-----------------------------------------------------------------------------------------------------
William Gentry Lee, Jr., CFA Sarofim Trust Co. Senior Vice President
President (2014); Chief Executive Officer, Two Houston Center
Co-Chief Investment Officer and Director Suite 2907
(2015) Houston, TX 77010
-----------------------------------------------------
Sarofim International Senior Vice President
Management Company
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------
Sarofim Realty Advisors Senior Vice President
Co.
8115 Preston Road
Suite 400
Dallas, TX 75225
-----------------------------------------------------
The Sarofim Group, Inc. Director, President
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------------------------------------------------------
Ralph B. Thomas, CFA Sarofim Trust Co. Senior Vice President
Senior Vice President Two Houston Center and Director
Suite 2907
Houston, TX 77010
-----------------------------------------------------------------------------------------------------
C-31
-----------------------------------------------------------------------------------------------------
Sarofim International Senior Vice President
Management Company
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------
The Sarofim Group, Inc. Senior Vice President
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------------------------------------------------------
Charles E. Sheedy, CFA Sarofim Trust Co. Senior Vice President
Senior Vice President Two Houston Center and Director
Suite 2907
Houston, TX 77010
-----------------------------------------------------
Sarofim Realty Advisors Vice Chairman
Co.
8115 Preston Road
Suite 400
Dallas, TX 75225
-----------------------------------------------------
Sarofim International Senior Vice President
Management Company
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------
The Sarofim Group, Inc. Senior Vice President
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------------------------------------------------------
Alan R. Christensen, CFA Sarofim Trust Co. Vice President and Chief
Vice President and Chief Operating Officer Two Houston Center Operating Officer
(2014); President and Head of Investment Risk Suite 2907 (2014); Vice President
(2015) Houston, TX 77010 (2015)
-----------------------------------------------------
Sarofim International Vice President and Chief
Management Company Operating Officer
Two Houston Center (2014); Vice President
Suite 2907 (2015)
Houston, TX 77010
-----------------------------------------------------
The Sarofim Group, Inc. Vice President and Chief
Two Houston Center Operating Officer
Suite 2907 (2014); Vice President
Houston, TX 77010 (2015)
-----------------------------------------------------------------------------------------------------
Daniel S. Crumrine Sarofim Trust Co. Vice President, Chief
Vice President, Chief Financial Officer and Two Houston Center Financial Officer,
Deputy Chief Compliance Officer Suite 2907 Secretary and Director
Houston, TX 77010
-----------------------------------------------------
Sarofim Realty Advisors Vice President and Chief
Co. Financial Officer
8115 Preston Road
Suite 400
Dallas, TX 75225
-----------------------------------------------------
Sarofim International Vice President and Chief
Management Company Financial Officer
Two Houston Center
Suite 2907
Houston, TX 77010
-----------------------------------------------------
The Sarofim Group, Inc. Vice President and Chief
Two Houston Center Financial Officer
Suite 2907
Houston, TX 77010
-----------------------------------------------------------------------------------------------------
C-32
FIRST MANHATTAN CO.
First Manhattan Co. ("FMC") serves as the investment adviser for the FMC Select
Fund and FMC Strategic Value Fund. The principal address of FMC is 399 Park
Avenue, New York, New York 10022-7001. FMC is an investment adviser registered
under the Investment Advisers Act of 1940. The information listed below is for
the fiscal years ended October 31, 2014 and 2015.
------------------------------------------------------------------------------------------
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
------------------------------------------------------------------------------------------
David S. Gottesman, Senior Berkshire Hathaway, Inc. Member, Board of Directors
Managing Director 3555 Farnam Street
Omaha, NE 68131
------------------------------------------------------------------------------------------
Arthur J. Stainman, Senior Ark Restaurants Corp. Member, Board of Directors
Managing Director 85 Fifth Avenue, 14th Floor
New York, NY 10003
------------------------------------------------------------------------------------------
FRANKLIN ADVISERS, INC.
Franklin Advisers, Inc. ("Franklin Advisers") serves as an investment
sub-adviser for the Cornerstone Advisors Core Plus Bond Fund. The principal
address of Franklin Advisers is One Franklin Parkway, San Mateo, California
94403. Franklin Advisers is an investment adviser registered under the
Investment Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Franklin Advisers engaged in any other business, profession,
vocation or employment of a substantial nature for his or her own account or in
the capacity of director, officer, employee, partner or trustee.
HAMLIN CAPITAL MANAGEMENT, LLC
Hamlin Capital Management, LLC ("Hamlin") serves as the investment adviser for
the Hamlin High Dividend Equity Fund. The principal address of Hamlin is 640
Fifth Avenue, 6th Floor, New York, New York 10019. Hamlin is an investment
adviser registered under the Investment Advisers Act of 1940. The information
listed below is for the fiscal years ended December 31, 2014 and 2015.
-------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-------------------------------------------------------------------------------------
Mark Stitzer -- Managing Hamlin Capital Advisors, LLC Owner
Partner 5550 West Executive Drive,
Suite 540
Tampa, FL 33609
-------------------------------------------------------
Hamlin-Crest GP, LLC Owner
640 Fifth Avenue, 6th Floor
New York, NY 10019
-------------------------------------------------------------------------------------
Joseph Bridy -- Partner & Hamlin Capital Advisors, LLC Owner
Fixed Income Portfolio 5550 West Executive Drive,
Manager Suite 540
Tampa, FL 33609
-------------------------------------------------------
Hamlin-Crest GP, LLC Owner
640 Fifth Avenue, 6th Floor
New York, NY 10019
-------------------------------------------------------------------------------------
Chris D'Agnes -- Partner Hamlin Capital Advisors, LLC Owner
& Equity Portfolio 5550 West Executive Drive,
Manager Suite 540
Tampa, FL 33609
-------------------------------------------------------
Hamlin-Crest GP, LLC Owner
640 Fifth Avenue, 6th Floor
New York, NY 10019
-------------------------------------------------------------------------------------
C-33
-------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-------------------------------------------------------------------------------------
Charlie Garland -- Partner Hamlin Capital Advisors, LLC Owner
and Equity Portfolio 5550 West Executive Drive,
Manager Suite 540
Tampa, FL 33609
-------------------------------------------------------
Hamlin-Crest GP, LLC Owner
640 Fifth Avenue, 6th Floor
New York, NY 10019
-------------------------------------------------------------------------------------
Deborah Finegan -- Partner Hamlin Capital Advisors, LLC Owner
& Chief Operating Officer 5550 West Executive Drive,
Suite 540
Tampa, FL 33609
-------------------------------------------------------
Hamlin-Crest GP, LLC Owner
640 Fifth Avenue, 6th Floor
New York, NY 10019
-------------------------------------------------------------------------------------
HARRIS ASSOCIATES L.P.
Harris Associates L.P. ("Harris") is a registered investment adviser under the
Investment Advisers Act of 1940. Harris serves as an investment sub-adviser for
the Cornerstone Advisors Global Public Equity Fund. The directors and executive
officers of Harris, or Harris Associates, Inc. ("HAI"), its general partner,
have had as their sole business, profession, vocation or employment during the
past two years only their duties as executive officers/employees of Harris;
Harris' ultimate parent company, Natixis Global Asset Management ("NGAM"); HAI;
Harris Associates Investment Trust ("HAIT"), a U.S. registered investment
company consisting of the seven Oakmark Funds for which Harris serves as the
advisor and sponsor; and/or Harris Associates Securities L.P. ("HASLP"), an
affiliated limited-purpose broker-dealer of which Harris is a limited partner.
The business address of Harris, HAI, HAIT and HASLP is 111 S. Wacker Drive,
Suite 4600, Chicago, Illinois 60606. The information listed below is for the
fiscal years ended October 31, 2014 and 2015.
-------------------------------------------------------------------------------------------------
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
-------------------------------------------------------------------------------------------------
Robert M. Levy HAI Director, Chairman and Chief
Chairman, Chief Investment Investment Officer, U.S. Equity
Officer, U.S. Equity and --------------------------------------------------------------
Portfolio Manager HAIT Executive Vice President
--------------------------------------------------------------
HASLP Chairman
-------------------------------------------------------------------------------------------------
Kristi L. Rowsell HAI Director and President
President --------------------------------------------------------------
HAIT Trustee and President
--------------------------------------------------------------
HASLP President
-------------------------------------------------------------------------------------------------
Thomas E. Herman HAI Chief Financial Officer and
Chief Financial Officer and Treasurer
Treasurer --------------------------------------------------------------
HAIT Principal Financial Officer
--------------------------------------------------------------
HASLP Chief Financial Officer and
Treasurer
-------------------------------------------------------------------------------------------------
David G. Herro HAI Director, Deputy Chairman, since
Deputy Chairman, Chief 2015, and Chief Investment
Investment Officer, Officer, International Equity
International Equity, Portfolio --------------------------------------------------------------
Manager and Analyst HAIT Vice President and Portfolio
Manager (Oakmark Global Select
Fund, Oakmark International
Fund and Oakmark International
Small Cap Fund)
-------------------------------------------------------------------------------------------------
Anthony P. Coniaris HAI Director, Co-Chief Executive
Co-Chief Executive Officer, Officer, since 2015
Portfolio Manager and Analyst --------------------------------------------------------------
HAIT Vice President and Portfolio
Manager (Oakmark Select Fund)
-------------------------------------------------------------------------------------------------
C-34
-------------------------------------------------------------------------------------------------
Kevin G. Grant HAI Director, Co-Chief Executive
Co-Chief Executive Officer, Officer, since 2015
Portfolio Manager and Analyst --------------------------------------------------------------
HAIT Vice President and Portfolio
Manager (Oakmark Fund)
-------------------------------------------------------------------------------------------------
Colin P. McFarland HAI Chief Compliance Officer
Chief Compliance Officer
-------------------------------------------------------------------------------------------------
Clyde S. McGregor HAI Vice President
Vice President and Portfolio --------------------------------------------------------------
Manager HAIT Vice President and Portfolio
Manager (Oakmark Equity and
Income Fund and Oakmark
Global Fund)
-------------------------------------------------------------------------------------------------
Thomas W. Murray HAI Vice President and Director of
Vice President, Director of U.S. U.S. Research
Research, Portfolio Manager --------------------------------------------------------------
and Analyst HAIT Vice President and Portfolio
Manager (Oakmark Select Fund)
-------------------------------------------------------------------------------------------------
William C. Nygren HAI Vice President
Vice President, Portfolio --------------------------------------------------------------
Manager and Analyst HAIT Vice President and Portfolio
Manager (Oakmark Fund,
Oakmark Select Fund and
Oakmark Global Select Fund)
-------------------------------------------------------------------------------------------------
Janet L. Reali HAI Director, Vice President, General
Vice President, General Counsel and Secretary
Counsel and Secretary --------------------------------------------------------------
HAIT Vice President, Secretary and
Chief Legal Officer
--------------------------------------------------------------
HASLP General Counsel,Chief
Compliance Officer, Anti-Money
Laundering Officer and Secretary
-------------------------------------------------------------------------------------------------
Robert A. Taylor HAI Vice President and Director of
Vice President, Director of International Research
International Research, --------------------------------------------------------------
Portfolio Manager and Analyst HAIT Vice President and Portfolio
Manager (Oakmark Global Fund
and Oakmark International Fund)
-------------------------------------------------------------------------------------------------
Michael L. Manelli HAI Vice President
Vice President, Portfolio --------------------------------------------------------------
Manager and Analyst HAIT Vice President and Portfolio
Manager (Oakmont International
Small Cap Fund)
-------------------------------------------------------------------------------------------------
Pierre Servant HAI Director
--------------------------------------------------------------
Natixis Global Asset Chief Executive Officer and
Management Member of Executive Committee
21 quai d'Austerlitz 75013
Paris, France
-------------------------------------------------------------------------------------------------
John Hailer HAI Director
--------------------------------------------------------------
Natixis Global Asset President and Chief Executive
Management LLC Officer
399 Boylston Street
Boston, MA 02116
-------------------------------------------------------------------------------------------------
HARVEST GLOBAL INVESTMENTS LIMITED
Harvest Global Investments Limited ("Harvest") serves as the investment adviser
for the Harvest Funds China All Assets and the Harvest Funds Intermediate Bond.
The principal address of Harvest is 31/F One Exchange Square, 8 Connaught
Place, Central Hong Kong. Harvest is an investment adviser registered
under the Investment Advisers Act of 1940. The information listed below is for
the fiscal years ended December 31, 2014 and 2015.
C-35
--------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL CONNECTION WITH OTHER
INVESTMENT ADVISER BUSINESS ADDRESS OF OTHER COMPANY
COMPANY
--------------------------------------------------------------------------------
Zhao Xuejun Harvest Capital Management Director
Director Co Limited
8/F, China Resources
Building, No.8, Jianguomen
Beidajie, Beijing, China
-------------------------------------------------------
Harvest Wealth Management Director
Co., Ltd
Unit 4606-10, Shanghai Two
ifc, 8 Century Avenue,
Pudong New Area, Shanghai
P.R.C
-------------------------------------------------------
Harvest Real Estate Director
Investments (Cayman)
Limited
190 Elgin Avenue, George
Town Grand Cayman KY1-
9005, Cayman Islands
-------------------------------------------------------
Harvest Real Estate Director
Investment (HK) Limited
31/F, One Exchange Square,
8 Connaught Place, Central,
Hong Kong
-------------------------------------------------------
Harvest Seven Stars Media Director
Private Equity Group Limited
13/F, Gloucester Tower, The
Landmark, 15 Queen's Road,
Central, HK
-------------------------------------------------------
Harvest Hedge Investments Director
Limited
International Corporation
Services Ltd, P.O. box 472,
Harbour Place, 2nd Floor,
103 South Church Street,
George Town, Grand
Cayman, Cayman Islands
KY1-1106
-------------------------------------------------------
Harvest Hedge Greater China Director
Long-short Fund
31/F, One Exchange Square,
8 Connaught Place, Central,
Hong Kong
-------------------------------------------------------
C-36
-------------------------------------------------------
Harvest Hedge Greater China Director
Long-short Seed Fund
31/F, One Exchange Square,
8 Connaught Place, Central,
Hong Kong
-------------------------------------------------------
Harvest Hedge Greater China Director
Long-short US Fund
31/F, One Exchange Square,
8 Connaught Place, Central,
Hong Kong
-------------------------------------------------------
Harvest Hedge Greater China Director
Long-short Offshore Fund
31/F, One Exchange Square,
8 Connaught Place, Central,
Hong Kong
-------------------------------------------------------
Harvest Capital International Director
(Cayman) Limited
190 Elgin Avenue, George
Town
Grand Cayman KY1-9005
Cayman Islands
-------------------------------------------------------
Harvest Capital International Director
(Hong Kong) Limited
701, 7/F, Tower 2,
Silvercord, 30 Canton Road,
Tsim Sha Tsui, Kowloon,
Hong Kong
-------------------------------------------------------
igoldenbeta Network Director
Technology (Cayman)
Limited
190 Elgin Avenue, George
Town, Grand Cayman KY1-
9005, Cayman Islands
-------------------------------------------------------
iGoldenbeta Securities Director
Company Limited
31/F, Jardine House, 1
Connaught Place, Central,
Hong Kong
--------------------------------------------------------------------------------
Choy Peng Wah Harvest USA Incorporation Director
Director 160 Greentree Drive, Suite
101, City of Dover 19904,
Country of Kent, State of
Delaware.
-------------------------------------------------------
C-37
-------------------------------------------------------
HGI (USA) Holding LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
HGI (USA) Investments LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
HGI (USA) LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
Harvest Global Investments Director
(UK) Limited
5th Floor, 6 St. Andrew
Street,
London, EC4A 3AE
-------------------------------------------------------
Harvest Alternative Director
Investment Group Limited
P.O. Box 957, Offshore
Incorporations Centre, Road
Town, Tortola, British Virgin
Islands
--------------------------------------------------------------------------------
Li Ming Harvest Capital Management Director
Director Co Limited
8/F, China Resources
Building, No.8, Jianguomen
Beidajie, Beijing
--------------------------------------------------------------------------------
Wang Wei Harvest Capital Management Chief Risk Officer,
Director Co Limited Director
8/F, China Resources
Building, No.8, Jianguomen
Beidajie, Beijing
-------------------------------------------------------
Harvest Alternative Director
Investment Group Limited
Offshore Incorporations
Centre, Road Town, Tortola,
British Virgin Islands
-------------------------------------------------------
Harvest Alternative Director
Investments (HK) Limited
31/F, One Exchange Square,
8 Connaught Place, Central,
Hong Kong
-------------------------------------------------------
Harvest Capital International Director
(Cayman) Limited
190 Elgin Avenue, George
Town
Grand Cayman KY1-9005
Cayman Islands
-------------------------------------------------------
C-38
-------------------------------------------------------
Harvest Capital International Director
(Hong Kong) Limited
701, 7/F, Tower 2, Silvercord,
30 Canton Road, Tsim Sha
Tsui, Kowloon, Hong Kong
--------------------------------------------------------------------------------
Sun Chen Harvest USA Incorporation Director
Director 160 Greentree Drive, Suite
101, City of Dover 19904,
Country of Kent, State of
Delaware
-------------------------------------------------------
HGI (USA) Holding LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
HGI (USA) Investments LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
HGI (USA) LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
Harvest Global Investments Director
(UK) Limited
5th Floor, 6 St. Andrew
Street,
London, EC4A 3AE
-------------------------------------------------------
Harvest Alternative Director
Investments (HK) Limited
31/F, One Exchange Square,
8 Connaught Place, Central,
Hong Kong
--------------------------------------------------------------------------------
Kerry Chow Harvest USA Incorporation Director
Employee 160 Greentree Drive, Suite
101, City of Dover 19904,
Country of Kent, State of
Delaware.
-------------------------------------------------------
HGI (USA) Holding LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
HGI (USA) Investments LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
C-39
-------------------------------------------------------
HGI (USA) LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
Harvest Global Investments Director
(UK) Limited
5th Floor, 6 St. Andrew
Street,
London, EC4A 3AE
--------------------------------------------------------------------------------
David Tong Harvest USA Incorporation Director
Employee 160 Greentree Drive, Suite
101, City of Dover 19904,
Country of Kent, State of
Delaware.
-------------------------------------------------------
HGI (USA) Holding LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
HGI (USA) Investments LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
-------------------------------------------------------
HGI (USA) LLC Director
708 Third Avenue
Sixth Floor
New York, NY 10017
--------------------------------------------------------------------------------
Thomas Kwan DKJ Company Limited Director
Employee Flat E, 11/F, Block 4, Nam
Fu Estate, Quarry Bay, HK
--------------------------------------------------------------------------------
HAVERFORD FINANCIAL SERVICES, INC.
Haverford Financial Services, Inc. ("Haverford") serves as the investment
adviser for the Haverford Quality Growth Stock Fund. The principal address of
Haverford is Three Radnor Corporate Center, Suite 450, Radnor, Pennsylvania
19087-4546. Haverford is an investment adviser registered under the Investment
Advisers Act of 1940. The information listed below is for the fiscal years
ended October 31, 2014 and 2015.
----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------------
George W. Connell The Haverford Trust Company Vice Chairman & Indirect Owner
Vice Chairman & Owner 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Haverford Trust Securities, Inc. Vice Chairman & Indirect Owner
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
C-40
----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------------
Drexel Morgan & Co. CEO, President & Owner
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Drexel Morgan Capital Advisers, Director, Indirect Owner
Inc.
3 Radnor Corporate Center,
Suite 305
Radnor, PA 19087
------------------------------------------------------------------
Red Wing Management II, LLC Indirect Owner
3 Radnor Corporate Center,
Suite 305
Radnor, PA 19087
----------------------------------------------------------------------------------------------
Joseph J. McLaughlin The Haverford Trust Company Chairman & CEO
Chairman, CEO & President 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Haverford Trust Securities, Inc. Registered Representative
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
Binney H. C. Wietlisbach The Haverford Trust Company President, Director & Secretary
Executive Vice President 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Haverford Trust Securities, Inc. CEO & President
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
Henry B. Smith The Haverford Trust Company Vice President, CIO & Director
Vice President and CIO 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Haverford Trust Securities, Inc. Registered Representative
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
David Brune The Haverford Trust Company Vice President
Vice President 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
C-41
----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------------
Haverford Trust Securities, Inc. Registered Representative
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
John H. Donaldson The Haverford Trust Company Vice President
Vice President 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
Timothy A. Hoyle The Haverford Trust Company Vice President
Vice President 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Haverford Trust Securities, Inc. Registered Representative
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
Jeffrey M. Bagley The Haverford Trust Company Vice President
Vice President 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
MarieElena V. Ness The Haverford Trust Company VP & Chief Compliance Officer
Chief Compliance Officer 3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Haverford Trust Securities, Inc. VP & Chief Compliance Officer
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Drexel Morgan & Co. VP & Chief Compliance Officer
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Regulatory Compliance Assistance, Sole Member
LLC
----------------------------------------------------------------------------------------------
Paul S. Rovner The Haverford Trust Company VP, CFO, & Assistant Secretary
Chief Financial Officer & 3 Radnor Corporate Center,
Treasurer Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Haverford Trust Securities, Inc. VP & CFO
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
----------------------------------------------------------------------------------------------
C-42
----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------------
Drexel Morgan & Co. VP & Secretary
3 Radnor Corporate Center,
Suite 450
Radnor, PA 19087
------------------------------------------------------------------
Drexel Morgan Capital Advisers, VP & CFO
Inc.
3 Radnor Corporate Center,
Suite 305
Radnor, PA 19087
----------------------------------------------------------------------------------------------
INVESTMENT COUNSELORS OF MARYLAND, LLC
Investment Counselors of Maryland, LLC ("ICM") serves as the investment adviser
to the ICM Small Company Portfolio. The principal address of ICM is 300 East
Lombard Street, Suite 810, Baltimore, Maryland 21202. ICM is an investment
adviser registered under the Investment Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of ICM engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee."
KAYNE ANDERSON CAPITAL ADVISORS, L.P.
Kayne Anderson Capital Advisors, L.P. ("KACALP") serves as an investment
sub-adviser for the Cornerstone Advisors Real Assets Fund. The principal
address of KACALP is 1800 Avenue of the Stars, Third Floor, Los Angeles,
California 90067. KACALP is an investment adviser registered under the
Investment Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, the KACALP portfolio
manager responsible for the management of the Cornerstone Advisors Real Assets
Fund did not engage in any other business profession, vocation or employment of
a substantial nature in the capacity of director, officer, employee, partner or
trustee, other than serving as Executive Vice President, Assistant Treasurer
and Assistant Secretary of Kayne Anderson Energy Total Return Fund ("KYE"),
Kayne Anderson MLP Investment Company ("KYN"), Kayne Anderson Midstream/Energy
Fund ("KMF"), and Kayne Anderson Energy Development Company ("KED"). Each of
these are publicly traded closed-end funds managed by KA Fund Advisors, LLC an
affiliate of KACALP.
LOOMIS, SAYLES & COMPANY, L.P.
Loomis, Sayles & Company, L.P. ("Loomis Sayles") serves as the investment
adviser to the Loomis Sayles Full Discretion Institutional Securitized Fund and
as an investment sub-adviser for the Cornerstone Advisors Core Plus Bond Fund.
The address of Loomis Sayles is One Financial Center, Boston, Massachusetts
02111-2621. Loomis Sayles is an investment adviser registered under the
Investment Advisers Act of 1940. The information listed below is for the fiscal
years ended October 31, 2014 and 2015.
-------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-------------------------------------------------------------------------------------------------
Robert J. Blanding Loomis Sayles Distributors, Inc. Director
Chairman of the Board One Financial Center, Boston,
and Director MA 02111
---------------------------------------------------------------------
Loomis Sayles Investments Asia Pte. Director
Ltd.
10 Collyer Quay #14-06, Ocean
Financial Centre, Singapore 049315
---------------------------------------------------------------------
Loomis Sayles Investments Limited Alternate Director
The Economist Plaza, 25 St. James's
Street, London, England SW1A 1 HA
------------------------------------------------------------------------------------------------
C-43
-------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-------------------------------------------------------------------------------------------------
Natixis Asset Management Japan Co. Director
Ltd.
Hibiya Kokusai Building --4F -- 2-2-3,
Uchisaiwaicho Chiyoda-ku, Tokyo,
100-0011 -- Japan
-------------------------------------------------------------------------------------------------
Daniel J. Fuss Loomis Sayles Funds I Executive Vice President
Vice Chairman, Executive 399 Boylston Street, Boston,
Vice President, and MA 02116
Director ---------------------------------------------------------------------
Loomis Sayles Funds II Executive Vice President
399 Boylston Street, Boston,
MA 02116
-------------------------------------------------------------------------------------------------
Pierre Servant Natixis Global Asset Management CEO and Member of the
Director 21 quai d'Austerlitz, 75634 Paris Executive Board
cedex 13 - France
-------------------------------------------------------------------------------------------------
John T. Hailer Natixis Global Asset Management, President and CEO, U.S. & Asia
Director L.P.
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Natixis Funds Trust I Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Natixis Funds Trust II Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Natixis Funds Trust IV Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Gateway Trust Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Loomis Sayles Funds I Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Loomis Sayles Funds II Trustee
399 Boylston Street, Boston,
MA 02116
-------------------------------------------------------------------------------------------------
Kevin P. Charleston Loomis Sayles Funds I Trustee, President and Chief
Chief Executive Officer, 399 Boylston Street, Boston, Executive Officer
President, and Director MA 02116
---------------------------------------------------------------------
Loomis Sayles Funds II Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Natixis Funds Trust I Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Natixis Funds Trust II Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Natixis Funds Trust IV Trustee
399 Boylston Street, Boston,
MA 02116
-------------------------------------------------------------------------------------------------
C-44
-------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-------------------------------------------------------------------------------------------------
Gateway Trust Trustee
399 Boylston Street, Boston,
MA 02116
---------------------------------------------------------------------
Loomis Sayles Investments Limited Executive Vice President
The Economist Plaza, 25 St. James's
Street, London, England SW1A 1 HA
---------------------------------------------------------------------
Loomis Sayles Trust Co., LLC Manager and President
One Financial Center, Boston,
MA 02111
---------------------------------------------------------------------
Loomis Sayles Investments Asia Pte. Director
Ltd.
10 Collyer Quay #14-06, Ocean
Financial Centre, Singapore 049315
-------------------------------------------------------------------------------------------------
John F. Gallagher III Loomis Sayles Distributors, Inc. President
Executive Vice President, One Financial Center, Boston,
Director of Institutional MA 02111
Services, and Director ---------------------------------------------------------------------
Loomis Sayles Distributors, L.P. President
One Financial Center, Boston,
MA 02111
---------------------------------------------------------------------
Loomis Sayles Investments Asia Pte. Director
Ltd.
10 Collyer Quay #14-06, Ocean
Financial Centre, Singapore 049315
-------------------------------------------------------------------------------------------------
Jean S. Loewenberg Loomis Sayles Distributors, Inc. Director
Executive Vice President, One Financial Center, Boston,
General Counsel, MA 02111
Secretary, and Director ---------------------------------------------------------------------
Loomis Sayles Investments Limited General Counsel and Company
The Economist Plaza, 25 St. James's Secretary
Street, London, England SW1A 1 HA
---------------------------------------------------------------------
Loomis Sayles Trust Co., LLC Manager and Secretary
One Financial Center, Boston, MA
02111
---------------------------------------------------------------------
Loomis Sayles Investments Asia Pte. Director
Ltd.
10 Collyer Quay #14-06, Ocean
Financial Centre, Singapore 049315
-------------------------------------------------------------------------------------------------
John R. Gidman Loomis Sayles Solutions, LLC President
Executive Vice President, One Financial Center, Boston,
Chief Information Officer, MA 02111
and Director
-------------------------------------------------------------------------------------------------
Jaehoon Park, Executive Loomis Sayles Investments Asia Pte. Director
Vice President, Chief Ltd.
Investment Officer, and 10 Collyer Quay #14-06, Ocean
Director Financial Centre, Singapore 049315
-------------------------------------------------------------------------------------------------
Paul J. Sherba Loomis Sayles Distributors, Inc. Vice President and Treasurer
Executive Vice President, One Financial Center, Boston,
Chief Financial Officer, MA 02111
and Director ---------------------------------------------------------------------
Loomis Sayles Distributors, L.P. Vice President and Treasurer
One Financial Center, Boston,
MA 02111
-------------------------------------------------------------------------------------------------
C-45
-------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-------------------------------------------------------------------------------------------------
Loomis Sayles Trust Co., LLC Manager and Chief Financial
One Financial Center, Boston, Officer
MA 02111
---------------------------------------------------------------------
Loomis Sayles Investments Asia Pte. Director
Ltd.
10 Collyer Quay #14-06, Ocean
Financial Centre, Singapore 049315
---------------------------------------------------------------------
Loomis Sayles Investments Limited Chief Financial Officer
The Economist Plaza, 25 St. James's
Street, London, England SW1A 1 HA
------------------------------------------------------------------------------------------------
LSV ASSET MANAGEMENT
LSV Asset Management ("LSV") serves as the investment adviser to the LSV Value
Equity Fund, LSV Conservative Value Equity Fund, LSV Small Cap Value Fund, LSV
Global Value Fund, LSV U.S. Managed Volatility Fund and LSV Global Managed
Volatility Fund. LSV also serves as the investment sub-adviser to the
Cornerstone Advisors Global Public Equity Fund. The address of LSV is 155 North
Wacker Drive, Suite 4600, Chicago, Illinois 60606. LSV is an investment adviser
registered under the Investment Advisers Act of 1940. The information listed
below is for the fiscal years ended October 31, 2014 and 2015.
-------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
---------------------------- ------------------------------- ------------------------
Josh O'Donnell, Kirkland & Ellis LLP Partner
Chief Compliance Officer and 300 North LaSalle October 2010 to
Chief Legal Officer Chicago, IL 60654 November 2013
-------------------------------------------------------------------------------------
MARSICO CAPITAL MANAGEMENT, LLC
Marsico Capital Management, LLC ("Marsico") serves as an investment sub-adviser
for the Cornerstone Advisors Global Public Equity Fund. The principal address
of Marsico is 1200 17th Street, Suite 1600, Denver, Colorado 80202. Marsico is
an investment adviser registered under the Investment Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Marsico engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
METROPOLITAN WEST ASSET MANAGEMENT LLC
Metropolitan West Asset Management LLC ("MetWest") serves as an investment
sub-adviser for the Cornerstone Advisors Core Plus Bond Fund. The principal
address of MetWest is 865 S. Figueroa Street, Suite 1800, Los Angeles,
California 90017. MetWest is an investment adviser registered under the
Investment Advisers Act of 1940. The information listed below is for the fiscal
years ended October 31, 2014 and 2015.
The principal business address of The TCW Group, Inc., TCW Investment
Management Company, TCW Asset Management Company, and Trust Company of the West
is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017.
C-46
----------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------------------
Tad Rivelle The TCW Group, Inc. Chief Investment Officer, Fixed
Chief Investment Officer TCW Investment Management Income
Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
Laird Landmann The TCW Group, Inc. Group Managing Director
President, Group Managing TCW Investment Management
Director Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
David Lippman The TCW Group, Inc. Chief Executive Officer
Chief Executive Officer TCW Investment Management
Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
Stephen Kane The TCW Group, Inc. Group Managing Director
Group Managing Director TCW Investment Management
Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
Bryan T. Whalen The TCW Group, Inc. Group Managing Director
Group Managing Director TCW Investment Management
Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
Patrick A. Moore The TCW Group, Inc. Group Managing Director
Group Managing Director TCW Investment Management
Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
David Devito The TCW Group, Inc. Executive Vice President, Chief
Executive Vice President, TCW Investment Management Operating Officer
Chief Operating Officer Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
Jeffrey Engelsman The TCW Group, Inc. Global Chief Compliance Officer
Global Chief Compliance TCW Investment Management
Officer Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
Meredith Jackson The TCW Group, Inc. Executive Vice President,
Executive Vice President, TCW Investment Management General Counsel, Secretary
General Counsel, Secretary Company
TCW Asset Management
Company
Trust Company of the West
----------------------------------------------------------------------------------------------------
C-47
NUMERIC INVESTORS LLC
Numeric Investors LLC ("Numeric") serves as an investment sub-adviser for the
Cornerstone Advisors Global Public Equity Fund and Cornerstone Advisors Public
Alternatives Fund. The principal address of Numeric is 470 Atlantic Avenue, 6th
Floor, Boston, Massachusetts 02210. Numeric is an investment adviser
registered under the Investment Advisers Act of 1940. The information listed
below is for the fiscal years ended October 31, 2014 and 2015.
----------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------------------
Gregory Bond, Head of Hedge Numeric Holdings LLC Director (September 2014 --
Fund Strategies 470 Atlantic Avenue, Present)
6(th) Floor
Boston, MA 02210
----------------------------------------------------------------------------------------------------
C-48
----------------------------------------------------------------------------------------------------
Eric Burl, Director (Numeric Silvermine Capital Management President (January 2015 --
Holdings LLC) LLC Present)
281 Tresser Boulevard,
Suite 1102
Stamford, CT 06901
-------------------------------------------------------------------
Man Investments Inc. Director (January 2013 -- Present)
452 Fifth Avenue, 27th Floor President (July 2014 -- Present)
New York, NY 10018 Vice President (January 2013 --
July 2014)
-------------------------------------------------------------------
GLG LLC President (January 2014 --
452 Fifth Avenue, 27th Floor Present)
New York, NY 10018 Vice President (January 2013 --
January 2014)
----------------------------------------------------------------------------------------------------
Michael Even, Chief Executive Numeric Holdings LLC Director
Officer & President 470 Atlantic Avenue, 6th Floor
Boston, MA 02210
-------------------------------------------------------------------
The Trustees of Reservations Investment Committee Member
Fund
572 Essex Street
Beverly, MA 01915
-------------------------------------------------------------------
Massachusetts Pension Reserves Investment Committee Member
Investment Management Board
84 State Street, Suite 250
Boston, MA 02109
-------------------------------------------------------------------
Man Group plc Executive Committee Member
Riverbank House (September 2014 -- Present)
2 Swan Lane
London EC4R 3AD
United Kingdom
----------------------------------------------------------------------------------------------------
Antoine Forterre, Director __ __
(Numeric Holdings LLC)
----------------------------------------------------------------------------------------------------
Robert Furdak, Chief Investment Numeric Holdings LLC Director (2004 -- September
Officer & Head of Portfolio 470 Atlantic Avenue, 6th Floor 2014)
Management Boston, MA 02210
-------------------------------------------------------------------
Wellesley Youth Hockey Director
P.O. Box 812182
Wellesley, MA 02482
----------------------------------------------------------------------------------------------------
Richard Hanna, Chief Financial GLG LLC Vice President (January 2015 --
Officer 452 Fifth Avenue, 25th Floor Present)
New York, NY10018
-------------------------------------------------------------------
Silvermine Capital Management Vice President (January 2015 --
LLC Present)
281 Tresser Boulevard,
Suite 1102
Stamford, CT 06901
-------------------------------------------------------------------
C-49
-------------------------------------------------------------------
Man Americas Chief Operating Officer
452 Fifth Avenue, 27th Floor (September 2014 -- Present)
New York, NY 10018
-------------------------------------------------------------------
Numeric Emerging Markets Director (September 2014 --
Small Cap Core Offshore Fund April 2015)
Ltd.
Ogier Fiduciary Services (BVI)
Limited, Nemours Chambers,
P.O. Box 3170, Road Town,
Tortola, British Virgin Islands
-------------------------------------------------------------------
Numeric Multi-Strategy Market Director (2010 -- April 2015)
Neutral Levered Offshore Fund
Ltd.
Ogier Fiduciary Services (BVI)
Limited, Nemours Chambers,
P.O. Box 3170, Road Town,
Tortola, British Virgin Islands
-------------------------------------------------------------------
Numeric World Market Neutral Director (2010 -- May 2014)
Offshore Fund I Ltd.
Ogier Fiduciary Services (BVI)
Limited, Nemours Chambers,
P.O. Box 3170, Road Town,
Tortola, British Virgin Islands
-------------------------------------------------------------------
Numeric Absolute Return Fund Director (2011 -- April 2015)
Ltd.
Ogier Fiduciary Services (BVI)
Limited, Nemours Chambers,
P.O. Box 3170, Road Town,
Tortola, British Virgin Islands
-------------------------------------------------------------------
Numeric Socially Aware Multi- Director (2011 -- April 2015)
Strategy Fund Ltd.
Ogier Fiduciary Services (BVI)
Limited, Nemours Chambers,
P.O. Box 3170, Road Town,
Tortola, British Virgin Islands
----------------------------------------------------------------------------------------------------
Solomon Kuckelman, Secretary GLG LLC Secretary (June 2015 -- Present)
452 Fifth Avenue, 27th Floor
New York, NY 10018
-------------------------------------------------------------------
Man Investments Inc. Secretary & Legal Officer (July
452 Fifth Avenue, 27th Floor 2014 -- Present)
New York, NY 10018
-------------------------------------------------------------------
C-50
-------------------------------------------------------------------
FRM Investment Management Secretary (December 2014 --
(USA) LLC Present)
452 Fifth Avenue, 27th Floor
New York, NY 10018
-------------------------------------------------------------------
Silvermine Capital Management Secretary (June 2015 -- Present)
LLC
281 Tresser Boulevard,
Suite 1102
Stamford, CT 06901
----------------------------------------------------------------------------------------------------
Shanta Puchtler, Chief Man Group plc Executive Committee Member
Investment Officer & Head of Riverbank House (September 2014 -- Present)
Research 2 Swan Lane
London EC4R 3AD
United Kingdom
----------------------------------------------------------------------------------------------------
Emmanuel Roman, Director Man Group plc Director
(Numeric Holdings LLC) Riverbank House
2 Swan Lane
London EC4R 3AD
United Kingdom
-------------------------------------------------------------------
Grupo Prisa SA Director (2010 -- March 2015)
Avda. de los
Artesanos 6
28760 Tres Cantos
Madrid, Spain
-------------------------------------------------------------------
Hedge Fund Standards Board Director
Limited
New Bridge Street House
30-34 New Bridge Street
London EC4V 6BJ
-------------------------------------------------------------------
The Royal Marsden Cancer Director
Charity
The Royal Marsden Hospital
203 Fulham Road
London SW3 6JJ
-------------------------------------------------------------------
Greenhouse Sports Limited Director (2009 -- January 2015)
(formerly Greenhouse Schools
Project Limited)
35 Cosway Street
London NW1 5NS
-------------------------------------------------------------------
Tate Foundation Trustee/Director
Millbank
London SW1P 4RG
-------------------------------------------------------------------
University of Chicago Trustee (May 2015 -- Present)
The Royal Marsden Hospital
203 Fulham Road
London SW3 6JJ
-------------------------------------------------------------------
C-51
-------------------------------------------------------------------
Penguin Random House Limited Director (October 2015 --
80 Strand Present)
London WC2R 0RL
----------------------------------------------------------------------------------------------------
Dunyelle Rosen, Chief Li-Fraumeni Syndrome Board Member
Compliance Officer Association
P.O. Box 6458
Holliston, MA 01746
----------------------------------------------------------------------------------------------------
OFI STEELPATH, INC.
OFI SteelPath, Inc. ("OFI SteelPath") serves as an investment sub-adviser for
the Cornerstone Advisors Income Opportunities Fund. The principal address of
OFI SteelPath is 2100 McKinney Ave., Suite 1401, Dallas, Texas 75201. OFI
SteelPath is an investment adviser registered under the Investment Advisers Act
of 1940. The information listed below is for the fiscal years ended October 31,
2014 and 2015.
The business address of each Other Company listed below is 225 Liberty Street,
11th Floor, New York, NY 10281-1008, unless otherwise noted.
-----------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-----------------------------------------------------------------------------------------------
Kristie M. Feinberg Oppenheimer Acquisition Corp. Assistant Treasurer
Treasurer ---------------------------------------------------------------------
OppenheimerFunds, Inc. Treasurer
---------------------------------------------------------------------
OFI Global Asset Management, Inc. Senior Vice President &
Treasurer
---------------------------------------------------------------------
OppenheimerFunds Distributor, Inc. Assistant Treasurer
---------------------------------------------------------------------
OFI Global Institutional, Inc. Treasurer
---------------------------------------------------------------------
HarbourView Asset Management Treasurer
Corporation
---------------------------------------------------------------------
OFI Global Trust Company Director
---------------------------------------------------------------------
Oppenheimer Real Asset Treasurer
Management, Inc.
---------------------------------------------------------------------
OFI Private Investments, Inc. Treasurer
---------------------------------------------------------------------
Shareholder Services, Inc. Treasurer
6803 S. Tucson Way, Centennial,
CO 80112
---------------------------------------------------------------------
Trinity Investment Management Treasurer
Corporation
301 North Spring Street, Bellefonte,
PA 16823
-----------------------------------------------------------------------------------------------
C-52
-----------------------------------------------------------------------------------------------
Arthur S. Gabinet Oppenheimer Acquisition Corp. Vice President, Secretary &
General Counsel General Counsel
---------------------------------------------------------------------
OppenheimerFunds, Inc. Chief Legal Officer
---------------------------------------------------------------------
OFI Global Asset Management, Inc. Executive Vice President,
General Counsel & Secretary
---------------------------------------------------------------------
OppenheimerFunds Distributor, Inc. Chief Legal Officer
---------------------------------------------------------------------
OFI Global Institutional, Inc. Chief Legal Officer
---------------------------------------------------------------------
HarbourView Asset Management Chief Legal Officer
Corporation
---------------------------------------------------------------------
OFI Global Trust Company Chief Legal Officer
---------------------------------------------------------------------
Oppenheimer Real Asset Chief Legal Officer
Management, Inc.
---------------------------------------------------------------------
OFI Private Investments, Inc. Chief Legal Officer
---------------------------------------------------------------------
Shareholder Services, Inc. Chief Legal Officer
6803 S. Tucson Way, Centennial,
CO 80112
---------------------------------------------------------------------
Trinity Investment Management Chief Legal Officer
Corporation
301 North Spring Street, Bellefonte,
PA 16823
-----------------------------------------------------------------------------------------------
David M. Pfeffer Oppenheimer Acquisition Corp. Management Director &
Director and Chief Treasurer
Financial Officer ---------------------------------------------------------------------
OppenheimerFunds, Inc. Director & Chief Financial
Officer
---------------------------------------------------------------------
OFI Global Asset Management, Inc. Director, Executive Vice
President and Chief Financial
Officer
---------------------------------------------------------------------
OppenheimerFunds Distributor, Inc. Director & Chief Financial
Officer
---------------------------------------------------------------------
OFI Global Institutional, Inc. Director & Chief Financial
Officer
---------------------------------------------------------------------
HarbourView Asset Management Director, President & Chief
Corporation Financial Officer
---------------------------------------------------------------------
Oppenheimer Real Asset Director & Chief Financial
Management, Inc. Officer
---------------------------------------------------------------------
OFI Private Investments, Inc. Director & Chief Financial
Officer
-----------------------------------------------------------------------------------------------
C-53
---------------------------------------------------------------------
Shareholder Services, Inc. Director & Chief Financial
6803 S. Tucson Way, Centennial, Officer
CO 80112
---------------------------------------------------------------------
Trinity Investment Management Director & Chief Financial
Corporation Officer
301 North Spring Street, Bellefonte,
PA 16823
---------------------------------------------------------------------
Tremont Group Holdings, Inc. Director
555 Theodore Fremd Avenue, Rye,
NY 10580
-----------------------------------------------------------------------------------------------
Arthur P. Steinmetz Oppenheimer Acquisition Corp. Chief Executive Officer,
President and Director President & Management
Director
---------------------------------------------------------------------
OppenheimerFunds, Inc. Director
---------------------------------------------------------------------
OFI Global Asset Management, Inc. Chairman, Chief Executive
Officer, President & Director
---------------------------------------------------------------------
HarbourView Asset Management Director
Corporation
---------------------------------------------------------------------
Oppenheimer Real Asset Director & President
Management, Inc.
-----------------------------------------------------------------------------------------------
Mary Ann Picciotto OppenheimerFunds, Inc. Chief Compliance Officer
Chief Compliance Officer ---------------------------------------------------------------------
OFI Global Asset Management, Inc. Senior Vice President & Chief
Compliance Officer
---------------------------------------------------------------------
OFI Global Institutional, Inc. Chief Compliance Officer
---------------------------------------------------------------------
HarbourView Asset Management Chief Compliance Officer
Corporation
---------------------------------------------------------------------
OFI Global Trust Company Chief Compliance Officer
---------------------------------------------------------------------
Oppenheimer Real Asset Chief Compliance Officer
Management, Inc.
---------------------------------------------------------------------
OFI Private Investments, Inc. Chief Compliance Officer
---------------------------------------------------------------------
Trinity Investment Management Chief Compliance Officer
Corporation
301 North Spring Street, Bellefonte,
PA 16823
-----------------------------------------------------------------------------------------------
C-54
-----------------------------------------------------------------------------------------------
Janette Aprilante OppenheimerFunds, Inc. Secretary
Secretary ---------------------------------------------------------------------
OFI Global Asset Management, Inc. Vice President & Assistant
Secretary
---------------------------------------------------------------------
OppenheimerFunds Distributor, Inc. Secretary
---------------------------------------------------------------------
OFI Global Institutional, Inc. Secretary
---------------------------------------------------------------------
HarbourView Asset Management Secretary
Corporation
---------------------------------------------------------------------
OFI Global Trust Company Assistant Secretary
---------------------------------------------------------------------
Oppenheimer Real Asset Secretary
Management, Inc.
---------------------------------------------------------------------
OFI Private Investments, Inc. Secretary
---------------------------------------------------------------------
Shareholder Services, Inc. Secretary
6803 S. Tucson Way, Centennial,
CO 80112
---------------------------------------------------------------------
Trinity Investment Management Secretary
Corporation
301 North Spring Street, Bellefonte,
PA 16823
-----------------------------------------------------------------------------------------------
PARAMETRIC PORTFOLIO ASSOCIATES LLC
Parametric Portfolio Associates LLC ("Parametric") serves as an investment
sub-adviser for the Cornerstone Advisors Global Public Equity Fund. The
principal address of Parametric is 1918 Eighth Avenue, Suite 3100, Seattle,
Washington 98101. Parametric is an investment adviser registered under the
Investment Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Parametric engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
PHOCAS FINANCIAL CORPORATION
Phocas Financial Corporation ("Phocas") serves as an investment sub-adviser for
the Cornerstone Advisors Global Public Equity Fund. The principal address of
Phocas is 980 Atlantic Avenue, Suite 106, Alameda, California 94501-1001.
Phocas is an investment adviser registered under the Investment Advisers Act of
1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Phocas engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
PRIME ADVISORS, INC.
Prime Advisors, Inc. ("Prime") serves as an investment sub-adviser for the
Cornerstone Advisors Core Plus Bond Fund. The principal address of Prime is
22635 NE Marketplace Drive, Redmond, Washington 98053. Prime is an investment
adviser registered under the Investment Advisers Act of 1940.
During the years ended December 31, 2014 and 2015, no director, officer or
partner of Prime engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
RICE HALL JAMES & ASSOCIATES, LLC
Rice Hall James & Associates, LLC ("Rice Hall James") serves as the investment
adviser to the Rice Hall James Micro Cap Portfolio, Rice Hall James SMID Cap
Portfolio and Rice Hall James Small Cap Portfolio. The principal address of Rice
Hall James is 600 West Broadway, Suite 1000, San Diego, California 92101-3383.
Rice Hall James is an investment adviser registered under the Investment
Advisers Act of 1940.
C-55
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Rice Hall James engaged in any other business, profession,
vocation or employment of a substantial nature for his or her own account or in
the capacity of director, officer, employee, partner or trustee.
ROBERT W. BAIRD & CO. INCORPORATED
Robert W. Baird & Co. Incorporated ("Baird") serves as an investment
sub-adviser for the Cornerstone Advisors Global Public Equity Fund. The
principal address of Baird is 777 East Wisconsin Avenue, Milwaukee, Wisconsin
53202. Baird is an investment adviser registered under the Investment Advisers
Act of 1940. The information listed below is for the fiscal years ended October
31, 2014 and October 31, 2015.
------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS ADDRESS OF CONNECTION WITH OTHER
INVESTMENT ADVISER OTHER COMPANY COMPANY
------------------------------------------------------------------------------------------
Paul E. Purcell RiverFront Investment Holding Group, LLC Director
Chairman, Director 1214 East Cary Street
Richmond, Virginia 23219
------------------------------------------------------------------------------------------
Mary Ellen Stanek Journal Communications, Inc. Director
Director 333 West State Street
Milwaukee, Wisconsin 53203
----------------------------------------------------------------
West Bend Mutual Insurance Company Director
1900 South 18th Avenue
West Bend, Wisconsin 53095
----------------------------------------------------------------
Northwestern Mutual Life Insurance Director
Company
720 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
----------------------------------------------------------------
Wisconsin Energy Corporation and Director
Wisconsin Electric Power Company
231 West Michigan Street
P.O. Box 1331
Milwaukee, Wisconsin 53201
------------------------------------------------------------------------------------------
Terrance P. Maxwell Investors Real Estate Trust Trustee
Chief Financial Officer 1400 31st Avenue SW
P.O. Box 1988
Minot, North Dakota 58702
----------------------------------------------------------------
Greenhouse Funds GP LLC and Greenhouse Board of Managers
GP LLC
2711 Centerville Road
Wilmington, Delaware 19808
----------------------------------------------------------------
Art Commission Director
121 South Pinckney Street, Suite 220
Madison, Wisconsin 53703
----------------------------------------------------------------
University of Wisconsin -- Madison Lecturer
Madison, Wisconsin 53706
------------------------------------------------------------------------------------------
C-56
------------------------------------------------------------------------------------------
Patrick S. Lawton Waterstone Financial, Inc. Director
Director 11200 West Plank Court
Wauwatosa, Wisconsin 53226
----------------------------------------------------------------
BMO Harris Bradley Center Director
1001 North 4th Street
Milwaukee, Wisconsin 53203
------------------------------------------------------------------------------------------
Michael J. Schroeder RiverFront Investment Holding Group, LLC Director
Director 1214 East Cary Street
Richmond, Virginia 23219
----------------------------------------------------------------
Sanitas Brewing Company Director
1860 38th Street
Boulder, Colorado 80302
------------------------------------------------------------------------------------------
William Mahler Greenhouse Funds GP LLC and Greenhouse Board of Managers
Director GP LLC
2711 Centerville Road
Wilmington, Delaware 19808
------------------------------------------------------------------------------------------
SANDS CAPITAL MANAGEMENT, LLC
Sands Capital Management, LLC ("Sands Capital") serves as the investment
adviser to the Sands Capital Global Growth Fund. The principal address of Sands
Capital is 1101 Wilson Boulevard, Suite 2300, Arlington, Virginia 22209. Sands
Capital is an investment adviser registered under the Investment Advisers Act
of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Sands Capital engaged in any other business, profession, vocation
or employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
---------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
---------------------------------------------------------------------------------------------
Frank M. Sands Sands Capital Ventures, LLC Investment Board Member
Chief Executive Officer 1101 Wilson Boulevard
Suite 2300
Arlington, VA 22209
---------------------------------------------------------------------------------------------
Michael Rubin Sands Capital Ventures, LLC Managing Partner
Managing Director 1101 Wilson Boulevard
Suite 2300
Arlington, VA 22209
---------------------------------------------------------------------------------------------
Jonathan Goodman Sands Capital Ventures, LLC General Counsel and Chief
General Counsel and Officer 1101 Wilson Boulevard Compliance Officer
Suite 2300
Arlington, VA 22209
---------------------------------------------------------------------------------------------
Erin Soule Sands Capital Ventures, LLC Director of Finance &
Partner 1101 Wilson Boulevard Operations, Treasurer
Suite 2300
Arlington, VA 22209
---------------------------------------------------------------------------------------------
Stephen Nimmo Sands Capital Ventures, LLC Provides client relations service
Executive Managing Director 1101 Wilson Boulevard
Suite 2300
Arlington, VA 22209
---------------------------------------------------------------------------------------------
C-57
---------------------------------------------------------------------------------------------
Andrew Giordano Sands Capital Ventures, LLC Provides client relations service
Director, Client Relations 1101 Wilson Boulevard
Suite 2300
Arlington, VA 22209
---------------------------------------------------------------------------------------------
SKY HARBOR CAPITAL MANAGEMENT, LLC
SKY Harbor Capital Management LLC ("SKY Harbor") serves as investment
sub-adviser for the Registrant's Westwood Short Duration High Yield Fund and
Westwood Opportunistic High Yield Fund. The principal address of SKY Harbor is
20 Horseneck Lane, Greenwich, Connecticut 06830. SKY Harbor is an investment
adviser registered with the SEC under the Investment Advisers Act of 1940.
SKY Harbor's Board consists of three management directors who are the
co-founders of the firm and three outside directors. For the fiscal years ended
October 31, 2014 and 2015, none of the management directors, officers or
employees of SKY Harbor is or has been engaged in any other business,
profession, vocation or employment of a substantial nature for his or her own
account or in the capacity of director, officer, employee, partner or trustee.
The outside directors of SKY Harbor are engaged in other activities as set
forth in the chart below.
--------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------
David J. Wermuth Stone Point Capital, LLC Senior Principal and General
Director 20 Horseneck Lane Counsel
Greenwich, CT 06830 USA
--------------------------------------------------------------------------------------
Fayez S. Muhtadie Stone Point Capital, LLC Principal
Director 20 Horseneck Lane
Greenwich, CT 06830 USA
--------------------------------------------------------------------------------------
STRATEGIC INCOME MANAGEMENT, LLC
Strategic Income Management, LLC ("SiM") serves as an investment sub-adviser
for the Cornerstone Advisors Income Opportunities Fund. The principal address
of SiM is 1200 Westlake Avenue, N. Suite 713, Seattle, Washington 98109. SiM is
an investment adviser registered under the Investment Advisers Act of 1940. The
information listed below is for the fiscal years ended October 31, 2014 and
2015.
----------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------
Tim Black Plx Pharma, Inc. Board Member (resignation
COO, CCO 8285 El Rio Street, Suite 130 effective November 25, 2013)
Houston, TX 77054
----------------------------------------------------------------------------------------
THOMSON HORSTMANN & BRYANT, INC.
Thomson Horstmann & Bryant, Inc. ("THB") serves as the investment adviser for
the Thomson Horstmann & Bryant MicroCap Fund. The principal address of THB is
501 Merritt 7, Norwalk, Connecticut 06851. THB is an investment adviser
registered under the Investment Advisers Act of 1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of Thomson Horstmann & Bryant, Inc. engaged in any other business,
profession, vocation or employment of a substantial nature for his or her own
account or in the capacity of director, officer, employee, partner or trustee.
C-58
THOMPSON, SIEGEL & WALMSLEY LLC
Thompson, Siegel & Walmsley LLC ("TS&W") serves as the investment adviser to
the TS&W Equity Portfolio and the TS&W Fixed Income Portfolio. The principal
address of TS&W is 6806 Paragon Place, Suite 300, Richmond, Virginia 23230.
TS&W is an investment adviser registered under the Investment Advisers Act of
1940.
During the fiscal years ended October 31, 2014 and 2015, no director, officer
or partner of TS&W engaged in any other business, profession, vocation or
employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
THORNBURG INVESTMENT MANAGEMENT INC.
Thornburg Investment Management Inc. ("Thornburg") serves as an investment
sub-adviser to the Cornerstone Advisors Global Public Equity Fund. The
principal address of Thornburg is 2300 North Ridgetop Road, Santa Fe, New
Mexico, 87506. Thornburg is an investment adviser registered under the
Investment Advisers Act of 1940. The information listed below is for the fiscal
years ended October 31, 2014 and 2015.
----------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
----------------------------------------------------------------------------------------
Garrett Thornburg, Thornburg Securities Corporation(1), Chairman
Chairman 2300 North Ridgetop Road, Santa Fe
NM 87506
---------------------------------------------------------------
Thornburg Investment Trust, 2300 Chairman
North Ridgetop Road, Santa Fe NM
87506
----------------------------------------------------------------------------------------
(1) In addition to Thornburg Securities Corporation, Garrett Thornburg
maintains controlling beneficial interests in certain non-investment related
entities and non-operating entities established for estate planning or
investment purposes.
WELLS FARGO PORTFOLIO RISK ADVISORS, A DIVISION OF STRUCTURED ASSET INVESTORS,
LLC
Wells Fargo Portfolio Risk Advisors ("WFPRA"), a division of Structured Asset
Investors, LLC serves as an investment sub-adviser for the Cornerstone Advisors
Public Alternatives Fund. The principal address of WFPRA is 375 Park Avenue,
4th Floor, New York, New York 10152. WFPRA is an investment adviser registered
under the Investment Advisers Act of 1940. The information listed below is for
the fiscal years ended October 31, 2014 and 2015.
------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
------------------------------------------------------------------------------------
William Threadgill 2561 Enterprise LLC Member
Chief Administrative Officer 4 Adams Place
Harrison, NY 10528
------------------------------------------------------------------------------------
WESTWOOD MANAGEMENT CORP.
Westwood Management Corp. ("Westwood") serves as the investment adviser for
Westwood Large Cap Value Fund, Westwood Low Volatility Equity Fund, Westwood
SMidCap Plus Fund, Westwood SMidCap Fund, Westwood Small Cap Value Fund,
Westwood MLP and Strategic Energy Fund, Westwood Income Opportunity Fund,
Westwood Worldwide Income Opportunity Fund, Westwood Global Equity Fund,
Westwood Global Dividend Fund, Westwood Emerging Markets Fund, Westwood Short
Duration High Yield Fund, Westwood Opportunistic High Yield Fund, Westwood
Market Neutral Income Fund, Westwood Strategic Global Convertibles Fund and
Westwood Emerging Markets Plus Fund. The principal address of Westwood is 200
Crescent Court, Suite 1200, Dallas, Texas 75201. Westwood is an investment
adviser registered under the Investment Advisers Act of 1940. The information
listed below is for the fiscal years ended October 31, 2014 and 2015.
C-59
-----------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
-----------------------------------------------------------------------------------------------------
Brian Casey Westwood Holdings Group, Inc.o President and Chief
President and Chief Executive (NYSE: WHG) Executive Officer and
Officer and Director 200 Crescent Court, Suite 1200 Director
Dallas, TX 75201
---------------------------------------------------------------------
Westwood Trustoo Director
200 Crescent Court, Suite 1200
Dallas, TX 75201
---------------------------------------------------------------------
Westwood International Advisors Inc. (A) Chief Executive Officer and
181 Bay Street, Suite 2450 Director
Toronto, Ontario M5J 2S1
-----------------------------------------------------------------------------------------------------
Tiffany B. Kice Westwood Holdings Group, Inc.o Chief Financial Officer
Chief Financial Officer (NYSE: WHG)
200 Crescent Court, Suite 1200
Dallas, TX 75201
---------------------------------------------------------------------
Westwood International Advisors Inc. (A) Chief Financial Officer
181 Bay Street, Suite 2450
Toronto, Ontario M5J 2S1
---------------------------------------------------------------------
Westwood Trustoo Chief Financial Officer
200 Crescent Court, Suite 1200
Dallas, TX 75201
---------------------------------------------------------------------
Westwood Advisors, LLCooo Chief Financial Officer
One Pacific Place
1125 South 103rd Street, Ste. 580
Omaha, NE 68124
-----------------------------------------------------------------------------------------------------
Mark R. Freeman, CFA Westwood Holdings Group, Inc.o Chief Investment Officer
Executive Vice President and (NYSE: WHG)
Chief Investment Officer 200 Crescent Court, Suite 1200
Dallas, TX 75201
-----------------------------------------------------------------------------------------------------
Sylvia L. Fry Westwood Holdings Group, Inc.o Chief Compliance Officer
Chief Compliance Officer (NYSE: WHG)
200 Crescent Court, Suite 1200
Dallas, TX 75201
---------------------------------------------------------------------
Westwood Trustoo Chief Compliance Officer
200 Crescent Court, Suite 1200
Dallas, TX 75201
---------------------------------------------------------------------
Westwood Advisors, LLCooo Chief Compliance Officer
One Pacific Place
1125 South 103(rd) Street, Ste. 580
Omaha, NE 68124
-----------------------------------------------------------------------------------------------------
Julie K. Gerron Westwood Holdings Group, Inc.o General Counsel
General Counsel (NYSE: WHG)
200 Crescent Court, Suite 1200
Dallas, TX 75201
---------------------------------------------------------------------
Westwood International Advisors Inc. (A) General Counsel and Chief
181 Bay Street, Suite 2450 Compliance Officer
Toronto, Ontario M5J 2S1
---------------------------------------------------------------------
Westwood Trustoo Chief Compliance Officer
200 Crescent Court, Suite 1200
Dallas, TX 75201
---------------------------------------------------------------------
Westwood Advisors, LLCooo Chief Compliance Officer
One Pacific Place
1125 South 103(rd) Street, Ste. 580
Omaha, NE 68124
-------------------------------------------------------------------------------------------------------
* Westwood Management Corp., Westwood Trust, Westwood Advisors, LLC, and
Westwood International Advisors Inc. are wholly owned subsidiaries of
Westwood Holdings Group, Inc., a publicly traded company on the NYSE (NYSE:
WHG).
** Westwood Trust provides trust and custodial services and participation in
common trust funds that it sponsors to institutions and high net worth
individuals.
*** Westwood Advisors, LLC (formerly, McCarthy Group Advisors, LLC) is a SEC
registered investment adviser located in Omaha, NE that manages investment
limited liability companies.
(A) Westwood International Advisors Inc. is a Canadian Corporation located in
Toronto, Ontario that is registered as a Portfolio Manager and Exempt
Market Dealer with the Ontario Securities Commission (OSC) and the
Autorite des marches financiers ("AMF") in Quebec.
C-60
ITEM 32. PRINCIPAL UNDERWRITERS
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities
of the Registrant also acts as a principal underwriter, distributor or
investment adviser.
The Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), acts as distributor for:
SEI Daily Income Trust July 15, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund II January 28, 1993
Bishop Street Funds January 27, 1995
SEI Asset Allocation Trust April 1, 1996
SEI Institutional Investments Trust June 14, 1996
City National Rochdale Funds (f/k/a CNI Charter Funds) April 1, 1999
Causeway Capital Management Trust September 20, 2001
ProShares Trust November 14, 2005
Community Capital Trust (f/k/a Community Reinvestment
Act Qualified Investment Fund) January 8, 2007
TD Asset Management USA Funds July 25, 2007
SEI Structured Credit Fund, LP July 31, 2007
Global X Funds October 24, 2008
ProShares Trust II November 17, 2008
Exchange Traded Concepts Trust (f/k/a FaithShares Trust) August 7, 2009
Schwab Strategic Trust October 12, 2009
RiverPark Funds Trust September 8, 2010
Adviser Managed Trust December 10, 2010
New Covenant Funds March 23, 2012
Cambria ETF Trust August 30, 2012
Highland Funds I (f/k/a Pyxis Funds I) September 25, 2012
KraneShares Trust December 18, 2012
LocalShares Investment Trust May 6, 2013
SEI Insurance Products Trust September 10, 2013
The KP Funds September 19, 2013
The Advisors' Inner Circle Fund III February 12, 2014
J.P. Morgan Exchange-Traded Fund Trust April 1, 2014
Winton Series Trust December 11, 2014
SEI Catholic Values Trust March 24, 2015
SEI Hedge Fund SPC June 26, 2015
SEI Energy Debt Fund June 30, 2015
Winton Diversified Opportunities Fund September 1, 2015
Gallery Trust January 8, 2016
RiverPark Commercial Real Estate Fund August 12, 2016
The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services ("Funds
Evaluation") and automated execution, clearing and settlement of securities
transactions ("MarketLink").
C-61
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in
the answer to Item 25 of Part B. Unless otherwise noted, the business
address of each director or officer is One Freedom Valley Drive, Oaks, PA
19456.
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
---- ------------------- ----------------------
William M. Doran Director Trustee
Paul F. Klauder Director --
Wayne M. Withrow Director --
Kevin P. Barr Director, President & Chief Executive Officer --
Maxine J. Chou Chief Financial Officer, Chief Operations Officer,
& Treasurer --
Karen E. LaTourette Chief Compliance Officer, Anti-Money Laundering
Officer & Assistant Secretary --
John C. Munch General Counsel & Secretary --
Mark J. Held Senior Vice President --
John P. Coary Vice President & Assistant Secretary --
Lori L. White Vice President & Assistant Secretary --
Judith A. Hirx Vice President --
Jason McGhin Vice President --
Gary Michael Reese Vice President --
Robert M. Silvestri Vice President --
ITEM 33. LOCATION OF ACCOUNTS AND RECORDS:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6);
(8); (12); and 31a-1 (d), the required books and records are maintained at
the offices of Registrant's custodians:
U.S. Bank, National Association
800 Nicollett Mall
Minneapolis, Minnesota 55402-4302
MUFG Union Bank, N.A. (formerly known as Union Bank, N.A.)
350 California Street
6th Floor
San Francisco, California 94104
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109-3661
(b) With respect to Rules 31a-1(a); 31a-1 (b)(1),(4); (2)(C) and (D); (4);
(5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and
records are maintained at the offices of Registrant's administrator:
SEI Investments Global Funds Services
One Freedom Valley Drive
Oaks, Pennsylvania 19456
C-62
(c) With respect to Rules 31a-1 (b)(5), (6), (9) and (10) and 31a-1 (f), the
required books and records are maintained at the offices of the
Registrant's investment advisers:
Acadian Asset Management LLC
260 Franklin Street
Boston, Massachusetts 02110
AJO, LP
230 South Broad Street, 20th Floor
Philadelphia, Pennsylvania 19102
Allianz Global Investors U.S. LLC
1633 Broadway
New York, New York 10019
AlphaOne Investment Services, LLC
789 E Lancaster Avenue, Suite 120
Villanova, Pennsylvania 19085
AT Investment Advisers, Inc.
One South Wacker Drive, Suite 3500
Chicago, Illinois 60606
BlackRock Financial Management, LLC
55 East 52(nd) Street
New York, New York 10055
Cambiar Investors, LLC
200 Columbine Street, Suite 800
Denver, Colorado 80206
CBRE Clarion Securities LLC
201 King of Prussia Road, Suite 600
Radnor, Pennsylvania 19087
ClariVest Asset Management LLC
3611 Valley Centre Drive, Suite 100
San Diego, California 92130
Cornerstone Advisors, Inc.
225 108th Avenue NE, Suite 400
Bellevue, Washington 98004-5782
Cramer Rosenthal McGlynn LLC
520 Madison Avenue, 20th Floor
New York, New York 10022
C.S. McKee, LLP
One Gateway Center
Pittsburgh, Pennsylvania 15222
Driehaus Capital Management LLC
25 East Erie Street
Chicago, Illinois 60611-2703
Edgewood Management LLC
535 Madison Avenue, 15th Floor
New York, New York 10022
C-63
Fairpointe Capital LLC
One North Franklin Street, Suite 3300
Chicago, Illinois 60606-2401
Fayez Sarofim & Co.
2907 Two Houston Center
909 Fannin Street
Houston, Texas 77010
First Manhattan Co.
399 Park Avenue
New York, New York 10022-7001
Franklin Advisers, Inc.
One Franklin Parkway
San Mateo, California 94403
Hamlin Capital Management, LLC
640 Fifth Avenue, 6th Floor
New York, New York 10019
Harris Associates L.P.
111 S. Wacker Drive, Suite 4600
Chicago, Illinois 60606
Harvest Global Investments Limited
31/F One Exchange Square
8 Connaught Place,
Central Hong Kong
Haverford Financial Services, Inc.
Three Radnor Corporate Center, Suite 450
Radnor, Pennsylvania 19087-4546
Investment Counselors of Maryland, LLC
300 East Lombard Street Suite 810
Baltimore, Maryland 21202
Kayne Anderson Capital Advisors, L.P.
1800 Avenue of the Stars, Third Floor
Los Angeles, California 90067
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111-2621
LSV Asset Management
155 North Wacker Drive, Suite 4600,
Chicago, Illinois 60606
Marsico Capital Management, LLC
1200 17th Street, Suite 1600
Denver, Colorado 80202-5824
C-64
Metropolitan West Asset Management LLC
865 S. Figueroa Street, Suite 1800
Los Angeles, California 90017
Numeric Investors LLC
470 Atlantic Avenue, 6th Floor
Boston, Massachusetts 02210
OFI SteelPath, Inc.
2100 McKinney Ave., Suite 1401
Dallas, Texas 75201
Parametric Portfolio Associates LLC
1918 Eighth Avenue, Suite 3100
Seattle, Washington 98101
Phocas Financial Corporation
980 Atlantic Avenue, Suite 106
Alameda, California 94501-1001
Prime Advisors, Inc.
22635 NE Marketplace Drive
Redmond, Virginia 98053
Rice Hall James & Associates, LLC
600 West Broadway, Suite 1000
San Diego, California 92101-3383
Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Sands Capital Management, LLC
1101 Wilson Boulevard, Suite 2300
Arlington, Virginia 22209
SKY Harbor Capital Management, LLC
20 Horseneck Lane
Greenwich, Connecticut 06830
Strategic Income Management, LLC
1200 Westlake Ave N, Suite 713
Seattle, Washington 98109
Thomson Horstmann & Bryant, Inc.
501 Merritt 7
Norwalk, Connecticut 06851
Thompson, Siegel & Walmsley LLC
6806 Paragon Place, Suite 300
Richmond, Virginia 23230
Thornburg Investment Management, Inc.
2300 North Ridgetop Road
Santa Fe, New Mexico 87506
C-65
Wells Fargo Portfolio Risk Advisors,
a Division of Structured Asset Investors, LLC
375 Park Avenue
4th Floor
New York, New York 10152
Westwood Management Corp.
200 Crescent Court, Suite 1200
Dallas, Texas 75201
ITEM 34. MANAGEMENT SERVICES: None.
ITEM 35. UNDERTAKINGS: None.
C-66
NOTICE
A copy of the Agreement and Declaration of Trust for The Advisors' Inner Circle
Fund (the "Trust") is on file with the Secretary of State of the Commonwealth
of Massachusetts and notice is hereby given that this registration statement
has been executed on behalf of the Trust by an officer of the Trust as an
officer and by its trustees as trustees and not individually and the
obligations of or arising out of this registration statement are not binding
upon any of the trustees, officers, or shareholders individually but are
binding only upon the assets and property of the Trust.
C-67
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Post-Effective Amendment No. 274 to Registration Statement No. 033-42484 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Oaks, Commonwealth of Pennsylvania on the 30th day of December, 2016.
THE ADVISORS' INNER CIRCLE FUND
By: /s/ Michael Beattie
--------------------------
Michael Beattie, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date(s) indicated.
* Trustee December 30, 2016
------------------------------
John K. Darr
* Trustee December 30, 2016
------------------------------
William M. Doran
* Trustee December 30, 2016
------------------------------
Joseph T. Grause, Jr.
* Trustee December 30, 2016
------------------------------
Mitchell A. Johnson
* Trustee December 30, 2016
------------------------------
Betty L. Krikorian
* Trustee December 30, 2016
------------------------------
Robert A. Nesher
* Trustee December 30, 2016
------------------------------
Bruce Speca
* Trustee December 30, 2016
------------------------------
George J. Sullivan, Jr.
/s/ Michael Beattie President December 30, 2016
------------------------------
Michael Beattie
/s/ Stephen Connors Treasurer, Controller & December 30, 2016
------------------------------ Chief Financial Officer
Stephen Connors
* By: /s/ Dianne M. Descoteaux
-------------------------
Dianne M. Descoteaux
Attorney-in-Fact
C-68
EXHIBIT INDEX
(d)(1)(xxi) Investment Advisory Agreement, dated December 19, 2011, between
the Registrant and CBRE Clarion Securities LLC
(h)(3)(ii) Amended Exhibit A to the Shareholder Services Plan
(n)(6) Amended and Restated Schedule C and Certificates of Class
Designation to the Amended and Restated Rule 18f-3 Plan, dated
February 21, 2007, relating to the Edgewood Growth Fund
(p)(9) Rice Hall James & Associates, LLC Revised Code of Ethics, dated
January 2015
(p)(13) Sands Capital Management, LLC Revised Code of Ethics, dated
January 2016
(p)(15) Loomis, Sayles & Company L.P. Revised Code of Ethics, dated
August 11, 2016
(p)(23) Harris Associates L.P. Revised Code of Ethics, dated September
21, 2016
(p)(24) Thornburg Investment Management Inc. Revised Code of Ethics,
dated March 2016
(p)(31) OFI SteelPath, Inc. Revised Code of Ethics, dated May 26, 2016
(p)(32) ClariVest Asset Management LLC Revised Code of Ethics
(p)(33) Kayne Anderson Capital Advisors, L.P. Revised Code of Ethics
C-69
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT (the "Agreement") made as of this 19th day of
December, 2011 by and between THE ADVISORS' INNER CIRCLE FUND (the "Trust"), a
Massachusetts voluntary association (commonly known as a business trust)
registered as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and CBRE Clarion Securities LLC (the "Adviser"), a
Delaware limited liability company with its principal place of business at 201
King of Prussia Road, Suite 600, Radnor, PA 19087.
W I T N E S S E T H
WHEREAS, the Board of Trustees (the "Board") of the Trust has selected the
Adviser to act as investment adviser to the Trust on behalf of the series set
forth on Schedule A to this Agreement (the "Fund"), as such Schedule may be
amended from time to time upon mutual agreement of the parties, and to provide
certain related services, as more fully set forth below, and to perform such
services under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Trust and the Adviser do hereby agree as follows:
1. THE ADVISER'S SERVICES.
(a) DISCRETIONARY INVESTMENT MANAGEMENT SERVICES. The Adviser shall
act as investment adviser with respect to the Fund. In such capacity, the
Adviser shall, subject to the supervision of the Board, regularly provide
the Fund with investment research, advice and supervision and shall furnish
continuously an investment program for the Fund, consistent with the
investment objectives and policies of the Fund. The Adviser shall
determine, from time to time, what securities shall be purchased for the
Fund, what securities shall be held or sold by the Fund and what portion of
the Fund's assets shall be held uninvested in cash, subject always to the
provisions of the Trust's Agreement and Declaration of Trust, By-Laws and
its registration statement on Form N-1A (the "Registration Statement")
under the 1940 Act, and under the Securities Act of 1933, as amended (the
"1933 Act"), covering Fund shares, as filed with the Securities and
Exchange Commission (the "Commission"), and to the investment objectives,
policies and restrictions of the Fund, as each of the same shall be from
time to time in effect. To carry out such obligations, the Adviser shall
exercise full discretion and act for the Fund in the same manner and with
the same force and effect as the Fund itself might or could do with respect
to purchases, sales or other transactions, as well as with respect to all
other such things necessary or incidental to the furtherance or conduct of
such purchases, sales or other transactions. No reference in this Agreement
to the Adviser having full discretionary authority over the Fund's
investments shall in any way limit the right of the Board, in its sole
discretion, to establish or revise policies in connection with the
management of the Fund's assets or to otherwise exercise its right to
control the overall management of the Fund.
(b) COMPLIANCE. The Adviser agrees to comply with the requirements of
the 1940 Act, the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), the
1
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
the Commodity Exchange Act and the respective rules and regulations
thereunder, as applicable, as well as with all other applicable federal and
state laws, rules, regulations and case law that relate to the services and
relationships described hereunder and to the conduct of its business as a
registered investment adviser. The Adviser also agrees to comply with the
objectives, policies and restrictions set forth in the Registration
Statement, as amended or supplemented, of the Fund, and with any policies,
guidelines, instructions and procedures approved by the Board and provided
to the Adviser. In selecting the Fund's portfolio securities and performing
the Adviser's obligations hereunder, the Adviser shall cause the Fund to
comply with the diversification and source of income requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
for qualification as a regulated investment company. The Adviser shall
maintain compliance procedures that it reasonably believes are adequate to
ensure its compliance with the foregoing. No supervisory activity
undertaken by the Board shall limit the Adviser's full responsibility for
any of the foregoing.
(c) PROXY VOTING. The Board has the authority to determine how proxies
with respect to securities that are held by the Fund shall be voted, and
the Board has initially determined to delegate the authority and
responsibility to vote proxies for the Fund's securities to the Adviser. So
long as proxy voting authority for the Fund has been delegated to the
Adviser, the Adviser shall exercise its proxy voting responsibilities. The
Adviser shall carry out such responsibility in accordance with any
instructions that the Board shall provide from time to time, and at all
times in a manner consistent with Rule 206(4)-6 under the Advisers Act and
its fiduciary responsibilities to the Trust. The Adviser shall provide
periodic reports and keep records relating to proxy voting as the Board may
reasonably request or as may be necessary for the Fund to comply with the
1940 Act and other applicable law. Any such delegation of proxy voting
responsibility to the Adviser may be revoked or modified by the Board at
any time.
The Adviser is authorized to instruct the Fund's custodian and/or broker(s)
to forward promptly to the Adviser or designated service provider copies of
all proxies and shareholder communications relating to securities held in
the portfolio of the Fund (other than materials relating to legal
proceedings against the Fund). The Adviser may also instruct the Fund's
custodian and/or broker(s) to provide reports of holdings in the portfolio
of the Fund, either to the Adviser or its designated service provider. The
Adviser has the authority to engage a service provider to assist with
administrative functions related to voting Fund proxies. The Trust shall
direct the Fund's custodian and/or broker(s) to provide any assistance
requested by the Adviser in facilitating the use of a service provider. In
no event shall the Adviser have any responsibility to vote proxies that are
not received on a timely basis. The Trust acknowledges that the Adviser,
consistent with the Adviser's written proxy voting policies and procedures,
may refrain from voting a proxy if, in the Adviser's discretion, refraining
from voting would be in the best interests of the Fund and its
shareholders.
(d) RECORDKEEPING. The Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the
Fund, except as otherwise
2
provided herein or as may be necessary for the Adviser to supply to the
Trust or its Board the information required to be supplied under this
Agreement.
The Adviser shall maintain separate books and detailed records of all
matters pertaining to Fund assets advised by the Adviser required by Rule
31a-1 under the 1940 Act (other than those records being maintained by any
administrator, custodian or transfer agent appointed by the Fund) relating
to its responsibilities provided hereunder with respect to the Fund, and
shall preserve such records for the periods and in a manner prescribed
therefore by Rule 31a-2 under the 1940 Act (the "Fund Books and Records").
The Fund Books and Records shall be available to the Board at any time upon
request, shall be delivered to the Trust upon the termination of this
Agreement and shall be available without delay during any day the Trust is
open for business.
(e) HOLDINGS INFORMATION AND PRICING. The Adviser shall provide
regular reports regarding Fund holdings, and may, on its own initiative,
furnish the Trust and its Board from time to time with whatever information
the Adviser believes is appropriate for this purpose. The Adviser agrees to
notify the Trust promptly if the Adviser reasonably believes that the value
of any security held by the Fund may not reflect fair value. The Adviser
agrees to provide upon request any pricing information of which the Adviser
is aware to the Trust, its Board and/or any Fund pricing agent to assist in
the determination of the fair value of any Fund holdings for which market
quotations are not readily available or as otherwise required in accordance
with the 1940 Act or the Trust's valuation procedures for the purpose of
calculating the Fund net asset value in accordance with procedures and
methods established by the Board.
(f) COOPERATION WITH AGENTS OF THE TRUST. The Adviser agrees to
cooperate with and provide reasonable assistance to the Trust, any Trust
custodian or foreign sub-custodians, any Trust pricing agents and all other
agents and representatives of the Trust with respect to such information
regarding the Fund as such entities may reasonably request from time to
time in the performance of their obligations, provide prompt responses to
reasonable requests made by such persons and establish appropriate
interfaces with each so as to promote the efficient exchange of information
and compliance with applicable laws and regulations.
2. CODE OF ETHICS. The Adviser has adopted a written code of ethics that it
reasonably believes complies with the requirements of Rule 17j-1 under the 1940
Act, which it has provided to the Trust. The Adviser shall ensure that its
Access Persons (as defined in the Adviser's Code of Ethics) comply in all
material respects with the Adviser's Code of Ethics, as in effect from time to
time. Upon request, the Adviser shall provide the Trust with a (i) copy of the
Adviser's current Code of Ethics, as in effect from time to time, and (ii)
certification that it has adopted procedures reasonably necessary to prevent
Access Persons from engaging in any conduct prohibited by the Adviser's Code of
Ethics. Annually, the Adviser shall furnish a written report, which complies
with the requirements of Rule 17j-1, concerning the Adviser's Code of Ethics to
the Trust's Board. The Adviser shall respond to requests for information from
the Trust as to violations of the Code by Access Persons and the sanctions
imposed by the Adviser.
3
The Adviser shall immediately notify the Trust of any material violation of the
Code, whether or not such violation relates to a security held by the Fund.
3. INFORMATION AND REPORTING. The Adviser shall provide the Trust and its
officers with such periodic reports concerning the obligations the Adviser has
assumed under this Agreement as the Trust may from time to time reasonably
request.
(a) NOTIFICATION OF BREACH / COMPLIANCE REPORTS. The Adviser shall
notify the Trust's chief compliance officer immediately upon detection of
(i) any material failure to manage the Fund in accordance with its
investment objectives and policies or any applicable law; or (ii) any
material breach of any of the Fund's policies, guidelines or procedures, or
(iii) any breach of the Adviser's compliance policies or procedures that
has had, or is likely to have, a material impact on the Adviser's ability
to provide services to the Fund hereunder. In addition, the Adviser shall
provide a quarterly report regarding the Fund's compliance with its
investment objectives and policies, applicable law, including, but not
limited to the 1940 Act and Subchapter M of the Code, and the Fund's
policies, guidelines or procedures as applicable to the Adviser's
obligations under this Agreement. The Adviser agrees to correct any such
failure promptly and to take any action that the Board may reasonably
request in connection with any such breach. Upon request, the Adviser shall
also provide the officers of the Trust with supporting certifications in
connection with such officers' certifications of Fund financial statements
and disclosure controls pursuant to the Sarbanes-Oxley Act. The Adviser
will promptly notify the Trust in the event (i) the Adviser is served or
otherwise receives notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board,
or body, involving the affairs of the Trust (excluding class action suits
in which the Fund is a member of the plaintiff class by reason of the
Fund's ownership of shares in the defendant) or the compliance by the
Adviser with the federal or state securities laws or (ii) an actual change
in control of the Adviser resulting in an "assignment" (as defined in the
1940 Act) has occurred or is otherwise proposed to occur.
(b) BOARD AND FILINGS INFORMATION. The Adviser will provide the Trust
with any information reasonably requested regarding its management of the
Fund required for any meeting of the Board, or for any shareholder report,
Form N-CSR, Form N-Q, Form N-PX, Form N-SAR, amended registration
statement, proxy statement, or prospectus supplement to be filed by the
Trust with the Commission. The Adviser will make its officers and employees
available to meet with the Board from time to time on due notice to review
its investment management services to the Fund in light of current and
prospective economic and market conditions and shall furnish to the Board
such information as may reasonably be necessary in order for the Board to
evaluate this Agreement or any proposed amendments thereto.
(c) TRANSACTION INFORMATION. The Adviser shall furnish to the Trust
such information concerning portfolio transactions as may be necessary to
enable the Trust or its designated agent to perform such compliance testing
on the Fund and the Adviser's services as the Trust may, in its sole
discretion, determine to be appropriate. The
4
provision of such information by the Adviser to the Trust or its designated
agent in no way relieves the Adviser of its own responsibilities under this
Agreement.
4. BROKERAGE.
(a) PRINCIPAL TRANSACTIONS. In connection with purchases or sales of
securities for the account of the Fund, neither the Adviser nor any of its
directors, officers or employees will act as a principal or agent or
receive any commission except as permitted by the 1940 Act.
(b) PLACEMENT OF ORDERS. The Adviser shall arrange for the placing of
all orders for the purchase and sale of securities for the Fund's account
with brokers or dealers selected by the Adviser. In the selection of such
brokers or dealers and the placing of such orders, the Adviser is directed
at all times to seek for the Fund the most favorable execution and net
price available under the circumstances. It is also understood that it is
desirable for the Fund that the Adviser have access to brokerage and
research services provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers, consistent with section 28(e) of the 1934 Act
and any Commission staff interpretations thereof. Therefore, the Adviser is
authorized to place orders for the purchase and sale of securities for the
Fund with such brokers, subject to review by the Board from time to time
with respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to the
Adviser in connection with its or its affiliates' services to other
clients.
(c) AGGREGATED TRANSACTIONS. On occasions when the Adviser deems the
purchase or sale of a security to be in the best interest of the Fund as
well as other clients of the Adviser, the Adviser may, to the extent
permitted by applicable law and regulations, aggregate the order for
securities to be sold or purchased. In such event, the Adviser will
allocate securities or futures contracts so purchased or sold, as well as
the expenses incurred in the transaction, in the manner the Adviser
reasonably considers to be equitable and consistent with its fiduciary
obligations to the Fund and to such other clients under the circumstances.
(d) AFFILIATED BROKERS. The Adviser or any of its affiliates may act
as broker in connection with the purchase or sale of securities or other
investments for the Fund, subject to: (a) the requirement that the Adviser
seek to obtain best execution and price within the policy guidelines
determined by the Board and set forth in the Fund's current Registration
Statement; (b) the provisions of the 1940 Act; (c) the provisions of the
Advisers Act; (d) the provisions of the 1934 Act; and (e) other provisions
of applicable law. These brokerage services are not within the scope of the
duties of the Adviser under this Agreement. Subject to the requirements of
applicable law and any procedures adopted by the Board, the Adviser or its
affiliates may receive brokerage commissions, fees or other remuneration
from the Fund for these services in addition to the Adviser's fees for
services under this Agreement.
5
5. CUSTODY. Nothing in this Agreement shall permit the Adviser to take or
receive physical possession of cash, securities or other investments of the
Fund.
6. ALLOCATION OF CHARGES AND EXPENSES. The Adviser will bear its own costs
of providing services hereunder. Other than as herein specifically indicated,
the Adviser shall not be responsible for the Fund's expenses, including
brokerage and other expenses incurred in placing orders for the purchase and
sale of securities and other investment instruments.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) PROPERLY REGISTERED. The Adviser is registered as an investment
adviser under the Advisers Act, and will remain so registered for the
duration of this Agreement. The Adviser is not prohibited by the Advisers
Act or the 1940 Act from performing the services contemplated by this
Agreement, and to the best knowledge of the Adviser, there is no proceeding
or investigation that is reasonably likely to result in the Adviser being
prohibited from performing the services contemplated by this Agreement. The
Adviser agrees to promptly notify the Trust of the occurrence of any event
that would disqualify the Adviser from serving as an investment adviser to
an investment company. The Adviser is in compliance in all material
respects with all applicable federal and state law in connection with its
investment management operations.
(b) ADV DISCLOSURE. The Adviser has provided the Trust with a copy of
its Form ADV Part 1 as most recently filed with the SEC and its current
Part 2 and will, promptly after filing any amendment to its Form ADV with
the SEC updating its Part 2, furnish a copy of such amendments or updates
to the Trust's chief compliance officer. The information contained in the
Adviser's Form ADV is accurate and complete in all material respects and
does not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading.
(c) FUND DISCLOSURE DOCUMENTS. The Adviser has reviewed, and will in
the future review, the Registration Statement, summary prospectus,
prospectus, statement of additional information, periodic reports to
shareholders, reports and schedules filed with the Commission (including
any amendment, supplement or sticker to any of the foregoing) and
advertising and sales material relating to the Fund (collectively the
"Disclosure Documents") and represents and warrants that no information
furnished by the Adviser for inclusion in such Disclosure Documents (the
"Adviser Disclosure") includes or will include an untrue statement of
material fact and does not and will not omit any statement of material fact
known to the Adviser which is required to be stated therein or necessary to
make the statements therein not misleading.
(d) USE OF THE NAME "CBRE" OR "CLARION". The Adviser has the right to
use the name "CBRE" or "Clarion" in connection with its services to the
Trust and that, subject to the terms set forth in Section 8 of this
Agreement, the Trust shall have the right to use the name "CBRE" or
"Clarion" in connection with the management and operation of the Fund. The
Adviser is not aware of any threatened or existing actions, claims,
6
litigation or proceedings that would adversely affect or prejudice the
rights of the Adviser or the Trust to use the name "CBRE" or "Clarion."
(e) INSURANCE. The Adviser maintains errors and omissions insurance
coverage in an appropriate amount and shall provide prior written notice to
the Trust (i) of any changes in its insurance policies or insurance
coverage that has had, or is likely to have, a material impact on the
Adviser's services to the Trust hereunder; or (ii) if any material claims
will be made on its insurance policies. Furthermore, the Adviser shall,
upon reasonable request, provide the Trust with any information it may
reasonably require concerning the amount of or scope of such insurance.
(f) NO DETRIMENTAL AGREEMENT. The Adviser represents and warrants that
it has no arrangement or understanding with any party, other than the
Trust, that would influence the decision of the Adviser with respect to its
selection of securities for the Fund, and that all selections shall be done
in accordance with what is in the best interest of the Fund.
(g) CONFLICTS. The Adviser shall act honestly, in good faith and in
the best interests of the Trust including requiring any of its personnel
with knowledge of Fund activities to place the interest of the Fund first,
ahead of their own interests, in all personal trading scenarios that may
involve a conflict of interest with the Fund, consistent with its fiduciary
duties under applicable law.
(h) REPRESENTATIONS. The representations and warranties in this
Section 7 shall be deemed to be made on the date this Agreement is executed
and at the time of delivery of the quarterly compliance report required by
Section 3(a), whether or not specifically referenced in such report.
8. THE NAME "CBRE CLARION". The Adviser grants to the Trust a license to
use the name "CBRE Clarion" (the "Name") as part of the name of the Fund. The
foregoing authorization by the Adviser to the Trust to use the Name as part of
the name of the Fund is not exclusive of the right of the Adviser itself to use,
or to authorize others to use, the Name; the Trust acknowledges and agrees that,
as between the Trust and the Adviser, the Adviser has the right to use, or
authorize others to use, the Name. The Trust shall (1) only use the Name in a
manner consistent with uses approved by the Adviser; (2) use its best efforts to
maintain the quality of the services offered using the Name; (3) adhere to such
other specific quality control standards as the Adviser may from time to time
promulgate. At the request of the Adviser, the Trust will (a) submit to Adviser
representative samples of any promotional materials using the Name; and (b)
change the name of the Fund within three months of its receipt of the Adviser's
request, or such other shorter time period as may be required under the terms of
a settlement agreement or court order, so as to eliminate all reference to the
Name and will not thereafter transact any business using the Name in the name of
the Fund; provided, however, that the Trust may continue to use beyond such date
any supplies of prospectuses, marketing materials and similar documents that the
Trust had on the date of such name change in quantities not exceeding those
historically produced and used in connection with such Fund.
9. ADVISER'S COMPENSATION. The Fund shall pay to the Adviser, as
compensation
7
for the Adviser's services hereunder, a fee, determined as described in
Schedule A that is attached hereto and made a part hereof. Such fee shall be
computed daily and paid not less than monthly in arrears by the Fund.
The method for determining net assets of the Fund for purposes hereof shall
be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of Fund shares as described in
the Fund's prospectus. For any month during which this Agreement was not in
place for the full period (including in the event of termination of this
Agreement), the fee provided in this Section shall be computed subject to a pro
rata adjustment based on the number of days elapsed in such month as a
percentage of the total number of days in such month.
10. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Adviser is and shall be an independent contractor and, unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Trust or the Fund in any way or otherwise
be deemed to be an agent of the Trust or the Fund except as provided herein. If
any occasion should arise in which the Adviser gives any advice to its clients
concerning the shares of the Fund, the Adviser will act solely as investment
counsel for such clients and not in any way on behalf of the Fund.
11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in section 2(a)(4) of the 1940 Act); provided that such termination
shall not relieve the Adviser or the Trust of any liability incurred hereunder.
This Agreement may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
12. DURATION AND TERMINATION.
This Agreement shall become effective as of the date executed and shall
remain in full force and effect continually thereafter, subject to renewal as
provided in Section 12(c) and unless terminated automatically as set forth in
Section 11 hereof or until terminated as follows:
(a) The Trust may cause this Agreement to terminate either (i) by vote
of its Board or (ii) with respect to the Fund, upon the affirmative vote of
a majority of the outstanding voting securities of the Fund on thirty (30)
days written notice to the Adviser; Or
(b) The Adviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the Trust; or
(c) This Agreement shall automatically terminate two years from the
date of its execution unless its renewal is specifically approved at least
annually thereafter by (i) a majority vote of the Trustees, including a
majority vote of such Trustees who are not
8
interested persons of the Trust or the Adviser, at a meeting called for the
purpose of voting on such approval; or (ii) the vote of a majority of the
outstanding voting securities of the Fund; provided, however, that if the
continuance of this Agreement is submitted to the shareholders of the Fund
for their approval and such shareholders fail to approve such continuance
of this Agreement as provided herein, the Adviser may continue to serve
hereunder as to the Fund in a manner consistent with the 1940 Act and the
rules and regulations thereunder; and
(d) Termination of this Agreement pursuant to this Section shall be
without payment of any penalty.
In the event of termination of this Agreement for any reason, the Adviser
shall, immediately upon notice of termination or on such later date as may be
specified in such notice, cease all activity on behalf of the Fund and with
respect to any of its assets, except as otherwise required by any fiduciary
duties of the Adviser under applicable law. In addition, the Adviser shall
deliver the Fund Books and Records to the Trust by such means and in accordance
with such schedule as the Trust shall direct and shall otherwise cooperate, as
reasonably directed by the Trust, in the transition of portfolio asset
management to any successor of the Adviser.
13. CERTAIN DEFINITIONS. For the purposes of this Agreement:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" shall have the meaning as set forth in the 1940
Act, subject, however, to such exemptions as may be granted by the
Commission under the 1940 Act or any interpretations of the Commission
staff.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions
as may be granted by the Commission under the 1940 Act or any
interpretations of the Commission staff.
14. LIABILITY OF THE ADVISER.
(a) The Adviser shall have responsibility for the accuracy and
completeness (and liability for the lack thereof) of the Adviser Disclosure
contained in the Fund's Disclosure Documents in accordance with the
covenants set forth in Section 7(c) herein, provided that no changes to the
Adviser Disclosure regarding such matters are made to any applicable
Disclosure Documents without the prior written consent of the Adviser from
and after the time that the Adviser Disclosure was provided.
(b) The Adviser shall be liable to the Fund for any loss (including
transaction costs) incurred by the Fund as a result of any investment made
by the Adviser in contravention of: (i) any investment policy, guideline or
restriction set forth in the Registration Statement or as approved by the
Board from time to time and provided to the Adviser; or (ii) applicable
law, including but not limited to the 1940 Act and the Code (including but
not limited to the Fund's failure to satisfy the diversification or source
of income requirements of Subchapter M of the Code) (the investments
described in this
9
subsection (b) collectively are referred to as "Improper Investments").
(c) The Adviser shall indemnify and hold harmless the Trust, each
affiliated person of the Trust within the meaning of Section 2(a)(3) of the
1940 Act, and each person who controls the Trust within the meaning of
Section 15 of the 1933 Act (any such person, an "Indemnified Party")
against any and all losses, claims, damages, expenses or liabilities
(including the reasonable cost of investigating and defending any alleged
loss, claim, damage, expense or liability and reasonable counsel fees
incurred in connection therewith) to which any such person may become
subject under the 1933 Act, the 1934 Act, the 1940 Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages, expenses or liabilities (or actions in
respect thereof) arise out of or are based upon: (i) a breach by the
Adviser of this Agreement or of the representations and warranties made by
the Adviser herein; (ii) any Improper Investment; (iii) the Adviser's
willful misfeasance, bad faith, or negligence or reckless disregard of its
obligations and duties hereunder; or (iv) any untrue statement or alleged
untrue statement of a material fact contained in the Adviser Disclosure
included in any Disclosure Document or the omission or alleged omission
from the Adviser Disclosure included in a Disclosure Document of a material
fact known to the Adviser which is required to be stated therein or
necessary to make the statements therein not misleading (it being
understood, however, that this indemnification and agreement to hold
harmless shall not apply to the extent that any such untrue statement,
alleged untrue statement, omission or alleged omission is the result of any
change made to any applicable Disclosure Document without the prior written
consent or other acknowledgment of the Adviser from and after the time that
the Adviser Disclosure was provided for inclusion in the Disclosure
Document, as contemplated in Section 7(c) hereof); provided, however, that
nothing herein shall be deemed to protect any Indemnified Party who is a
Trustee or officer of the Trust against any liability to the Trust or to
its shareholders to which such Indemnified Party would otherwise be subject
by reason or willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such person's office
with the Trust. In no case shall the Adviser be liable under this indemnity
with respect to any claim made against any particular Indemnified Party
unless such Indemnified Party shall have notified the Adviser in writing
within ten business days after the summons or other first legal process
giving information of the nature of the claim shall have been served upon
the Trust or its controlling persons.
(d) Subject to the foregoing provisions of this Section 14, except
with respect to Adviser Disclosure or Improper Investments, the Adviser
shall not be liable for any losses, claims, damages, expenses or
liabilities (collectively, "losses") incurred or suffered by the Fund as a
result of any, error of judgment or mistake of law, or for any loss arising
out of any investment or for any act or omission in the execution of
securities transactions for the Fund, provided that nothing in this
Agreement shall protect the Adviser against any liability to the Fund to
which the Adviser would otherwise be subject by reason of willful
misfeasance, bad faith, or negligence in the performance of its duties
hereunder or by reason of its reckless disregard of its obligations and
duties hereunder. Except to the extent prohibited by the 1940 Act, the
Fund's Declaration of Trust or By-
10
Laws or any federal securities law, the Trust shall indemnify and hold
harmless the Adviser, each affiliated person of the Adviser within the
meaning of Section 2(a)(3) of the 1940 Act, and each person who controls
the Adviser within the meaning of Section 15 of the 1933 Act (any such
person, an "Indemnified Party") against any and all losses, claims,
damages, expenses or liabilities (including the reasonable cost of
investigating and defending any alleged loss, claim, damage, expense or
liability and reasonable counsel fees incurred in connection therewith) to
which any such person may become subject under the 1933 Act, the 1934 Act,
the 1940 Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages, expenses
or liabilities (or actions in respect thereof) arise out of out of or are
based upon the services provided by the Adviser under this Agreement and
result from the negligence, improper, fraudulent or unauthorized acts or
omissions by the Trust or its officers, trustees, agents, representatives,
or service providers, other than acts or omissions caused directly or
indirectly by the Adviser, provided that nothing in this Agreement shall
protect an Indemnified Party against any liability to the Fund to which the
Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations
and duties hereunder. In no case shall the Trust be liable under this
indemnity with respect to any claim made against any particular Indemnified
Party unless such Indemnified Party shall have notified the Trust in
writing within ten business days after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon the Adviser or its controlling persons.
(e) No Indemnified Party shall settle, terminate, appeal or otherwise
dispose of any claim that may fall under this indemnification section
without the prior written consent of the indemnifying party, which consent
shall not be unreasonably withheld.
15. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge and
agree that all litigation arising hereunder, whether direct or indirect, and of
any and every nature whatsoever shall be satisfied solely out of the assets of
the affected Fund and that no Trustee, officer or holder of shares of beneficial
interest of the Fund shall be personally liable for any of the foregoing
liabilities. The Trust's Certificate of Trust, as amended from time to time, is
on file in the Office of the Secretary of State of the Commonwealth of
Massachusetts. Such Certificate of Trust and the Trust's Agreement and
Declaration of Trust describe in detail the respective responsibilities and
limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest.
17. CHANGE IN THE ADVISER'S OWNERSHIP. The Adviser agrees that it shall
notify the Trust of any anticipated or otherwise reasonably foreseeable change
in the ownership of the
11
Adviser within a reasonable time prior to such change being effected.
18. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of Commonwealth of Massachusetts and the
Adviser consents to the jurisdiction of courts, both state and federal, in
Massachusetts, with respect to any dispute under this Agreement.
19. PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only, form no part of this Agreement and
shall not affect its construction.
20. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their duly authorized officers as of the date first
above written.
THE ADVISORS' INNER CIRCLE FUND, on behalf of the
Fund(s) listed on Schedule A
By: /s/ Mike Beattie
Name: Mike Beattie
Title: President
CBRE CLARION SECURITIES LLC
By: /s/ David J. Makowicz
Name: David J. Makowicz
Title: Chief Operating Officer
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED DECEMBER 19, 2011 BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
CBRE CLARION SECURITIES LLC
The Trust will pay to the Adviser as compensation for the Adviser's services
rendered, a fee, computed daily at an annual rate based on the average daily
net assets of the Fund in accordance the following fee schedule:
FUND RATE
CBRE Clarion Long Short Fund ..................................... 1.25%
A-1
EXHIBIT A
Fees
Bishop Street Funds
Maximum
Fund Name Class Fee
--------------------------------------------------------------------------------
Bishop Street Hawaii Municipal Bond Portfolio Institutional 0.25%
Class A 0.25%
Bishop Street High Grade Income Portfolio Institutional 0.25%
Bishop Street Strategic Growth Fund Institutional 0.25%
Bishop Street Dividend Value Fund Institutional 0.25%
Bishop Street Short-Duration Bond Fund Institutional 0.10%
The Advisors' Inner Circle Fund
Maximum
Fund Name Class Fee
--------------------------------------------------------------------------------
Acadian Emerging Markets Portfolio Investor 0.25%
Y 0.10%
AT Disciplined Equity Fund Investor 0.15%
AT Income Opportunity Fund Investor 0.15%
AT Mid Cap Equity Fund Investor 0.15%
Cambiar Opportunity Fund Investor 0.25%
Cambiar International Equity Fund Investor 0.25%
Cambiar Small Cap Fund Investor 0.25%
Cambiar Unconstrained Equity Fund Investor 0.25%
Cambiar SMID Fund Investor 0.25%
Cambiar Global Select Fund Investor 0.25%
Cambiar International Small Cap Institutional 0.25%
CBRE Clarion Long Short Fund Institutional 0.10%
Investor 0.20%
CBRE Clarion Global Infrastructure Value Fund Institutional 0.10%
Investor 0.20%
Cornerstone Advisors Fixed Income Fund Institutional 0.05%
Cornerstone Advisors Global Public Equity Fund Institutional 0.05%
Cornerstone Advisors Income Opportunities Fund Institutional 0.05%
Cornerstone Advisors Public Alternatives Fund Institutional 0.05%
Cornerstone Advisors Real Assets Fund Institutional 0.05%
Edgewood Growth Fund Retail 0.25%
Service 0.25%
Hamlin High Dividend Equity Fund Investor 0.25%
Sands Capital Global Growth Fund Investor 0.25%
THB MicroCap Fund Investor 0.25%
THB Small Cap Value Fund Investor 0.25%
Westwood SmidCap Fund Institutional 0.20%
Westwood SmidCap Plus Fund Institutional 0.20%
Westwood SmallCap Value Fund Institutional 0.20%
Westwood Opportunistic High Yield Fund Institutional 0.15%
Westwood Market Neutral Income Fund Institutional 0.15%
Westwood Income Opportunity Fund Institutional 0.15%
The Advisors' Inner Circle Fund II
Maximum
Fund Name Class Fee
--------------------------------------------------------------------------------
Hancock Horizon Government Money Market Fund Class A 0.25%
Instit'l
Sweep 0.25%
Hancock Horizon Core Bond Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Value Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Growth Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Burkenroad Small Cap Class A 0.25%
Class D 0.25%
Hancock Horizon U.S. Small Cap Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Diversified International Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Quantitative Long/Short Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Louisiana Tax-Free Income Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Mississippi Tax-Free Income Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Diversified Income Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Dynamic Asset Allocation Fund Class A 0.25%
Class C 0.25%
Hancock Horizon International Small Cap Fund Class A 0.25%
Class C 0.25%
Hancock Horizon Microcap Fund Class A 0.25%
Class C 0.25%
RQSI Small Cap Hedged Equity Fund Retail 0.25%
Westfield Capital Large Cap Growth Fund Investor 0.25%
Westfield Capital Dividend Growth Fund Investor 0.25%
Retirement
LM Capital Opportunistic Bond Fund Class 0.15%
Revised: August 16, 2016
AMENDED AND RESTATED
SCHEDULE C
TO
THE ADVISORS' INNER CIRCLE FUND
AMENDED AND RESTATED RULE 18F-3
MULTIPLE CLASS PLAN
DATED FEBRUARY 21, 2007
EDGEWOOD FUNDS
--------------------------------------------------------------------------------
INSTITUTIONAL RETAIL SERVICE
FUND SHARES SHARES SHARES
--------------------------------------------------------------------------------
Edgewood Growth Fund X X X
--------------------------------------------------------------------------------
EXHIBIT C.1
EDGEWOOD FUNDS
CERTIFICATE OF CLASS DESIGNATION
INSTITUTIONAL SHARES
1. CLASS SPECIFIC DISTRIBUTION ARRANGEMENTS, OTHER EXPENSES
Institutional Shares are sold without a load or sales charge, and do not
impose a shareholder service fee or asset-based sales charge.
2. ELIGIBILITY OF PURCHASERS
Institutional Shares are principally designed for purchase by institutional
investors, subject to the minimum investment requirement described in the
Fund's prospectus.
3. EXCHANGE PRIVILEGES
Institutional Shares do not have exchange privileges.
4. VOTING RIGHTS
Each Institutional Share shareholder will have one vote for each full
Institutional Share held and a fractional vote for each fractional
Institutional Share held. Institutional Share shareholders will have: (i)
exclusive voting rights regarding any matter submitted to shareholders that
relates solely to its distribution or shareholder servicing arrangements;
(ii) separate voting rights on any other matter submitted to shareholders
in which the interests of the Institutional Share shareholders differ from
the interests of holders of any other class; and (iii) in all other
respects the same rights and obligations as any other class.
5. CONVERSION RIGHTS
Shareholders of Institutional Shares of the Fund may convert such
Institutional Shares into Service Shares or Retail Shares of the Fund (an
"Intra-Fund Conversion"), if and to the extent an applicable Intra-Fund
Conversion privilege is disclosed in the prospectus and subject to the
terms and conditions set forth in the prospectus, provided that the
shareholder requesting the Intra-Fund Conversion meets the eligibility
requirements of the Service Shares or Retail Shares.
In the event that a shareholder no longer meets the eligibility
requirements for investment in Institutional Shares, the Fund may, in its
discretion, elect to convert such shareholder's Institutional Shares into a
Class of shares for which such shareholder does meet the eligibility
requirements. If such investor meets the eligibility requirements for more
than
one other Class, then such shareholder's Institutional Shares shall be
convertible into shares of the Class having the lowest total operating
expenses for which such shareholder meets the eligibility requirements.
EXHIBIT C.2
EDGEWOOD FUNDS
CERTIFICATE OF CLASS DESIGNATION
RETAIL SHARES
1. CLASS SPECIFIC DISTRIBUTION ARRANGEMENTS, OTHER EXPENSES
Retail Shares are sold without a load or sales charge, but are subject to a
shareholder service plan under which the Fund may pay an annual fee up to
0.25% of assets attributable to Retail Shares (the "Plan"). The fee is used
to compensate service providers for services and expenses incurred in
connection with shareholder or account maintenance services, or to
compensate service providers for providing ongoing account maintenance and
other services to Retail Shares shareholders (including, where applicable,
any underlying beneficial owners) identified in the Plan.
Retail Shares are also subject to a Rule 12b-1 fee. The Trust, on behalf of
the Fund, will reimburse the Distributor annually for expenses incurred in
connection with its distribution activities under the Distribution Plan
approved by the Board of Trustees not to exceed an annual rate of 0.25% of
the Fund's average daily net assets attributable to the Retail Shares of
the Fund. Such activities include those associated with the promotion and
sale of the Fund's Retail Shares including, without limitation, travel and
communication expenses and expenses for the compensation of and benefits
for sales personnel.
2. ELIGIBILITY OF PURCHASERS
Retail Shares are principally designed for purchase by individual
investors, subject to the minimum investment requirement described in the
Fund's prospectus.
3. EXCHANGE PRIVILEGES
Retail Shares do not have exchange privileges.
4. VOTING RIGHTS
Each Retail Share shareholder will have one vote for each full Retail Share
held and a fractional vote for each fractional Retail Share held. Retail
Share shareholders will have: (i) exclusive voting rights regarding any
matter submitted to shareholders that relates solely to its distribution or
shareholder servicing arrangements; (ii) separate voting rights on any
other matter submitted to shareholders in which the interests of the Retail
Share shareholders differ from the interests of holders of any other class;
and (iii) in all other respects the same rights and obligations as any
other class.
5. CONVERSION RIGHTS
Shareholders of Retail Shares of the Fund may convert such Retail Shares
into Service Shares or Institutional Shares of the Fund (an "Intra-Fund
Conversion"), if and to the extent an applicable Intra-Fund Conversion
privilege is disclosed in the prospectus and subject to the terms and
conditions set forth in the prospectus, provided that the shareholder
requesting the Intra-Fund Conversion meets the eligibility requirements of
the Service Shares or Institutional Shares.
In the event that a shareholder no longer meets the eligibility
requirements for investment in Retail Shares, the Fund may, in its
discretion, elect to convert such shareholder's Retail Shares into a Class
of shares for which such shareholder does meet the eligibility
requirements. If such investor meets the eligibility requirements for more
than one other Class, then such shareholder's Retail Shares shall be
convertible into shares of the Class having the lowest total operating
expenses for which such shareholder meets the eligibility requirements.
EXHIBIT C.3
EDGEWOOD FUNDS
CERTIFICATE OF CLASS DESIGNATION
SERVICE SHARES
1. CLASS SPECIFIC DISTRIBUTION ARRANGEMENTS, OTHER EXPENSES
Service Shares are sold without a load or sales charge, but are subject to
a shareholder service plan under which the Fund may pay an annual fee up to
0.25% of assets attributable to Service Shares (the "Plan"). The fee is
used to compensate service providers for services and expenses incurred in
connection with shareholder or account maintenance services, or to
compensate service providers for providing ongoing account maintenance and
other services to Service Shares shareholders (including, where applicable,
any underlying beneficial owners) identified in the Plan.
2. ELIGIBILITY OF PURCHASERS
Service Shares are principally designed for purchase through an account
with a financial intermediary, subject to the minimum investment
requirement described in the Fund's prospectus.
3. EXCHANGE PRIVILEGES
Service Shares do not have exchange privileges.
4. VOTING RIGHTS
Each Service Share shareholder will have one vote for each full Service
Share held and a fractional vote for each fractional Service Share held.
Service Share shareholders will have: (i) exclusive voting rights regarding
any matter submitted to shareholders that relates solely to its shareholder
servicing arrangements; (ii) separate voting rights on any other matter
submitted to shareholders in which the interests of the Service Share
shareholders differ from the interests of holders of any other class; and
(iii) in all other respects the same rights and obligations as any other
class.
5. CONVERSION RIGHTS
Shareholders of Service Shares of the Fund may convert such Service Shares
into Institutional Shares or Retail Shares of the Fund (an "Intra-Fund
Conversion"), if and to the extent an applicable Intra-Fund Conversion
privilege is disclosed in the prospectus and subject to the terms and
conditions set forth in the prospectus, provided that the shareholder
requesting the Intra-Fund Conversion meets the eligibility requirements of
the Institutional Shares or Retail Shares.
In the event that a shareholder no longer meets the eligibility
requirements for investment in Service Shares, the Fund may, in its
discretion, elect to convert such shareholder's Service Shares into a Class
of shares for which such shareholder does meet the eligibility
requirements. If such investor meets the eligibility requirements for more
than one other Class, then such shareholder's Service Shares shall be
convertible into shares of the Class having the lowest total operating
expenses for which such shareholder meets the eligibility requirements.
CODE OF ETHICS
Amended: January 2015
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GENERAL
The Code of Ethics is predicated on the principle that RHJ owes a fiduciary
duty to its clients. Accordingly, RHJ's Employees must avoid activities,
interests and relationships that run contrary (or appear to run contrary) to
the best interests of clients. At all times, RHJ must:
o PLACE CLIENT INTERESTS AHEAD OF RHJ'S -- As a fiduciary, RHJ must
serve in its clients' best interests. In other words, RHJ Employees
may not benefit at the expense of advisory clients. This concept is
particularly relevant when Employees are making personal investments
in securities traded by advisory clients.
o ENGAGE IN PERSONAL INVESTING THAT IS IN FULL COMPLIANCE WITH RHJ'S
CODE OF ETHICS -- Employees must review and abide by RHJ's Personal
Securities Transaction and Insider Trading Policies.
o AVOID TAKING ADVANTAGE OF YOUR POSITION -- Employees must not accept
investment opportunities, gifts or other gratuities from individuals
seeking to conduct business with RHJ, or on behalf of an advisory
client.
o MAINTAIN FULL COMPLIANCE WITH THE FEDERAL SECURITIES LAWS(1) --
Employees must abide by the standards set forth in Rule 204A-1 under
the Advisers Act.
Any questions with respect to RHJ's Code of Ethics should be directed to Janine
Marquez RHJ's Chief Compliance Officer (CCO) and/or President, Thao Buuhoan.
As discussed in greater detail below, Employees must promptly report any
violations of the Code of Ethics to the CCO. All reported Code of Ethics
violations will be treated as being made on an anonymous basis.
GUIDING PRINCIPLES & STANDARDS OF CONDUCT
All Employees of RHJ, and consultants closely associated with the Company, will
act with competence, dignity and integrity, in an ethical manner, when dealing
with clients, the public, prospects, third-party service providers and fellow
Employees. The following set of principles frame the professional and ethical
conduct that RHJ expects from its Employees and consultants:
o Act with integrity, competence, diligence, respect, and in an ethical
manner with the public, clients, prospective clients, Employees, and
colleagues in the investment profession;
o Place the interests of clients, and the interests of RHJ above one's
own personal interests;
o Adhere to the fundamental standard that you should not take
inappropriate advantage of your position;
o Avoid any actual or potential conflict of interest;
o Conduct all personal securities transactions in a manner consistent
with this policy;
o Use reasonable care and exercise independent professional judgment
when conducting investment analysis, making investment
recommendations, taking investment actions, and engaging in other
professional activities;
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(1) "Federal securities laws" means the Securities Act of 1933, the Securities
Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company
Act of 1940, the Investment Advisers Act of 1940, Title V of the
Gramm-Leach-Bliley Act, any rules adopted by the Commission under any of these
statutes, the Bank Secrecy Act as it applies to funds and investment advisers,
and any rules adopted thereunder by the Commission or the Department of the
Treasury.
o Practice and encourage others to practice in a professional and
ethical manner that will reflect favorably on you and the profession;
o Maintain and improve your professional competence and strive to
maintain and improve the competence of other investment professionals.
o Comply with applicable provisions of the federal securities laws. (2)
UNLAWFUL ACTIONS
It is unlawful for any Employee:
(a) To employ any device, scheme or artifice to defraud a client or RHJ
Fund;
(b) To make any untrue statement of a material fact to any client or RHJ
Fund or omit to state a material fact necessary in order to make the
statements made to a client or RHJ Fund, in light of the circumstances
under which they are made, not misleading;
(c) To engage in any act, practice or course of business that operates or
would operate as a fraud or deceit on a client or a RHJ Fund;
(d) To engage in any manipulative practice with respect to a client or
RHJ Fund.
1. PERSONAL SECURITY TRANSACTION POLICY
Employees may not purchase or sell any security in which the Employee has or
may acquire beneficial ownership (as defined further below) unless the
transaction occurs in an exempted security or the Employee has fully complied
with the requirements of this Personal Security Transaction Policy, as set
forth below.
The term "Access Person" means:
An "access person" is a supervised person who has access to nonpublic
information regarding any clients' purchase or sale of securities, and who is
involved in making securities recommendations to clients or has access to such
recommendations that are nonpublic. All Rice Hall James Employees are
considered Access Persons.
The term "security" includes 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,
pre-organization 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, 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.
A security would include, but not be limited to:
1. Common stock
2. Preferred stock
3. Closed-end mutual funds
4. Exchange Traded Funds (ETFs)
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(2) "Federal securities laws" means the Securities Act of 1933, the Securities
Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company Act
of 1940, the Investment Advisers Act of 1940, Title V of the Gramm-Leach-Bliley
Act, any rules adopted by the Commission under any of these statutes, the Bank
Secrecy Act as it applies to funds and investment advisers, and any rules
adopted thereunder by the Commission or the Department of the Treasury.
5. Corporate bonds
6. Municipal bonds
7. Options on stocks
The term "exempted security" includes:
o Direct obligations of the Government of the United States;
o Bankers' acceptances, bank certificates of deposit, commercial paper
and high quality short-term debt instruments, including repurchase
agreements;
o Shares issued by money market funds;
o Shares issued by open-end funds (excluding ETFs), other than
reportable funds (3); and
o Commodities, futures and options traded on a commodities exchange,
including currency futures that are not securities.
PRE-CLEARANCE PROCEDURES
RHJ's Employees must obtain written clearance for all personal securities
transactions before placing each transaction, with the exception of the
following transactions:
1. A purchase or sale of an Exchange Traded Fund (ETFs);
2. A purchase or sale of any closed-end mutual fund;
3. A purchase or sale of 50 bonds or less per day of any corporate bond or
municipal bond (excluding new offerings);
4. A purchase or sale of any exempted security; and
5. Shares issued by unit investment trusts that are invested exclusively in
one or more open-end funds.
RHJ reserves the right to disapprove any proposed transaction that may have the
appearance of improper conduct. Generally, Employees shall complete RHJ's
Pre-Clearance Form on Schwab Compliance Technologies' Personal Trading
Platform. All pre-clearance requests must be submitted to RHJ's CCO or someone
so designated by the CCO. Currently, Tom McDowell, Tim Todaro or Gary Rice may
also approve personal securities transactions. Once pre-clearance is granted to
an Employee, such Employee may only transact in that security for the remainder
of the day. If the Employee wishes to transact in that security on the
following or any other day, they must again obtain pre-clearance. Unless
otherwise noted, no pre-clearance is required for the exempted transactions
noted below.
BLACK OUT PERIODS
No employee shall buy or sell any security within seven (7) calendar days
before or after a trade in the same security for any client portfolio,
including the affiliated mutual fund portfolios. The CCO will review executed
client trades upon an employee requesting pre-clearance to ensure that no
trades have taken place within the last 7 days and will inquire with the
portfolio managers to determine if any client trades may be placed in the next
7 days.
HOLDING PERIOD
All employees are required to hold securities, including options and futures,
for a minimum of 30 days, to avoid short-term trading practices.
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A "Reportable Fund" means (a) any fund for which RHJ serves as the investment
adviser as defined in section 2(a)(20) of the Investment Company Act of 1940
(I.E., in most cases RHJ would need to be approved by the fund's board of
directors before you can serve); or (b) any fund whose investment adviser or
principal underwriter controls RHJ, is controlled by RHJ, or is under common
control with RHJ. Transaction in RHJ managed funds must be disclosed, but not
pre-cleared.
REPORTABLE SECURITIES
The term Reportable securities include all securities other than exempted
securities. Any fund in which RHJ serves as the investment adviser or
sub-adviser must be reported. RHJ requires Employees to provide periodic
reports (See REPORTING section below) regarding transactions and holdings in
ANY SECURITY, except exempted securities.
BENEFICIAL OWNERSHIP
Employees are considered to have beneficial ownership of securities if they
have or share a direct or indirect pecuniary interest in the securities.
Employees have a pecuniary interest in securities if they have the ability to
directly or indirectly profit from a securities transaction.
The following are examples of indirect pecuniary interests in securities:
o Securities held by members of Employees' immediate family sharing the
same household. Immediate family means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law. Adoptive relationships are included;
o Employees' interests as a general partner in securities held by a
general or limited partnership; and
o Employees' interests as a manager/member in the securities held by a
limited liability company.
Employees do not have an indirect pecuniary interest in securities held by
entities in which they hold an equity interest unless they are a controlling
equity holder or they share investment control over the securities held by the
entity.
The following circumstances constitute beneficial ownership by Employees of
securities held by a trust:
o Ownership of securities as a trustee where either the Employee or
members of the Employees' immediate family have a vested interest in
the principal or income of the trust;
o Ownership of a vested beneficial interest in a trust; and
o An Employee's status as a settlor/grantor of a trust, unless the
consent of all of the beneficiaries is required in order for the
Employee to revoke the trust.
EXEMPT TRANSACTIONS
The following transactions are considered exempt transactions (not to be
confused with exempt securities) and therefore do not require reporting under
the Personal Security Transaction Policy:
o Any security transaction in an account over which the Employee does
not have any direct or indirect influence or control. Purchases that
are part of an automatic investment plan. (4)
From time to time, the Compliance Officer may exempt certain transactions on a
fully documented trade-by-trade basis, provided it is consistent with Rule
17j-1.
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(4)"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.
INVESTMENTS IN LIMITED OFFERINGS AND INITIAL PUBLIC OFFERINGS ("IPOS")5
No Employee shall acquire, directly or indirectly, any Beneficial Ownership in
any limited offering or IPO without first obtaining prior approval of the
Compliance Officer in order to preclude any possibility of their profiting
improperly from their positions on behalf of a client. The Compliance Officer
shall (a) obtain from the Employee full details of the proposed transaction
(including written certification that the investment opportunity did not arise
by virtue of the Employee's activities on behalf of a client; and (b) conclude,
after consultation with a Portfolio Manager (who has no personal interest in
the issuer of the limited offering or IPO), that no clients have any
foreseeable interest in purchasing such security. A record of such approval by
the Compliance Officer and the reasons supporting those decisions shall be kept
as required in the Records section of this Policy. Please refer to Schwab
Compliance Technologies to complete the Limited Offering and IPO Request and
Reporting Form.
RESTRICTIONS ON NEW ISSUES OF EQUITY SECURITIES ("NEW ISSUES")(6)
No Employee shall acquire, directly or indirectly, any Beneficial Ownership in
any New Issue (including new issues of municipal bonds) without first obtaining
prior approval of the Compliance Officer in order to preclude any possibility
of their profiting improperly from their positions on behalf of a client. The
Compliance Officer shall (a) obtain from the Employee full details of the
proposed transaction (including written certification that the investment
opportunity did not arise by virtue of the Employee's activities on behalf of a
client; and (b) conclude, after consultation with a Portfolio Manager (who has
no personal interest in the issuer of the New Issue), that no clients have any
foreseeable interest in purchasing such security. A record of such approval by
the Compliance Officer and the reasons supporting those decisions shall be kept
as required in the RECORDS section of this Policy.
FINRA Rule 5130 prohibits the sale of New Issues to any account in which a
"restricted person" has a beneficial interest, except under certain situations.
The term "restricted person" includes any person of an investment adviser who
has the authority to buy or sell securities and an immediate family member of
such a restricted person that materially supports, or receives materially
support from, such person. Thus, all restricted persons of RHJ, including
members of RHJ's investment personnel, are prohibited, in almost all
circumstances except as noted in further detail below, from purchasing an NIES.
The prohibitions on the purchase and sale of New Issues with respect to Rule
5130 do not apply to: 1) ISSUER-DIRECTED SECURITIES, or those that are
specifically directed by the issuer to persons that are restricted persons
(i.e., directors), subject to certain conditions; 2) the account of a
restricted person who is an existing equity owner of an issuer (ANTI-DILUTION
PROVISIONS), subject to certain conditions; and 3) StandBy Purchasers, or those
who purchase and sell securities pursuant to a stand-by agreement subject to
certain conditions.
Employees are encouraged to review Rule 5130 and discuss such with the
Compliance Officer prior to the purchase and/or sale of any New Issues.
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(5) The term "limited offering" is defined as 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 Rules 504,505, or 506 of Regulation D. The term
"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 sections 13 or
15(d) of the Securities Exchange Act of 1934.
(6)The term "new issue" is defined as any initial public offering of an equity
security as defined in Section 3(a)(11) of the Securities Exchange Act of 1934,
made pursuant to a registration statement or offering circular. This
restriction does not apply to, among other securities: secondary offerings,
offerings of debt securities, offerings of a security of a commodity pool,
rights offerings, exchange offers, and offerings of convertible or preferred
securities. (See FINRA Rule 5130 Restrictions on the Purchase and Sale of IPOs
of Equity Securities).
REPORTING
In order to provide RHJ with information to enable it to determine with
reasonable assurance any indications of "scalping", "front-running" or the
appearance of a conflict of interest with the trading by RHJ clients, each
Employee of RHJ shall submit the following reports in Schwab Compliance
Technologies showing all transactions, except for exempt transactions listed
above, in securities, except for exempt securities listed above, in which the
person has, or by reason of such transaction acquires, any direct or indirect
Beneficial Ownership.
QUARTERLY TRANSACTION REPORTS
Employees need to authenticate personal trading accounts using Schwab
Compliance Technologies. If an Employee's trades are not available
electronically or transactions do not occur through a broker-dealer (i.e.,
purchase of a private investment fund), such transactions shall be manually
inputted by the employee on the Schwab Compliance Technologies platform, at a
minimum no later than thirty (30) days after the end of each calendar quarter.
The quarterly transaction reports shall contain at least the following
information for each transaction in a Reportable Security in which the Employee
had, or as a result of the transaction acquired, any direct or indirect
beneficial ownership(7): (a) the date of the transaction, the title, and as
applicable the exchange ticker symbol or CUSIP number, the interest rate and
maturity date (if applicable), the number of shares and the principal amount of
each Reportable Security involved; (b) the nature of the transaction (I.E.,
purchase, sale or any other type of acquisition or disposition); (c) the price
of the Reportable Security at which the transaction was effected; (d) the name
of the broker, dealer or bank with or through which the transaction was
effected; and (e) the date that the report is submitted. Quarterly reports also
required for any accounts established by an employee during the quarter in
which any securities were held for the direct or indirect benefit of the
employee.
Employees who do not maintain brokerage accounts for their own personal trading
will be required at a minimum to confirm in writing that they do not have
personal securities transactions to report. This acknowledgement can be
documented on the quarterly personal securities transaction report in Schwab
Compliance Technologies.
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EMPLOYEES ARE REMINDED THAT THEY MUST ALSO REPORT TRANSACTIONS BY MEMBERS OF THE
EMPLOYEE'S IMMEDIATE FAMILY INCLUDING SPOUSE, CHILDREN AND OTHER MEMBERS OF THE
HOUSEHOLD IN ACCOUNTS OVER WHICH THE EMPLOYEE HAS DIRECT OR INDIRECT INFLUENCE
OR CONTROL AND/OR BENEFICIAL OWNERSHIP
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INITIAL AND ANNUAL HOLDINGS REPORTS
New RHJ Employees are required to report all of their personal securities
holdings no later than 10 days after the commencement of their employment (SEE
SCHWAB COMPLIANCE TECHNOLOGIES' WELCOME
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(7)"Beneficial Ownership," as set forth under Rule 16a-1(a)(2), determines
whether a person is subject to the provision of Section 16 of the Securities
Exchange Act of 1934, and the rules and regulations thereunder, which generally
encompasses those situations in which the beneficial owner has the right to
enjoy some direct or indirect "pecuniary interest" (i.e., some economic
benefit) from the ownership of a security. This may also include securities
held by members of an Employee's immediate family sharing the same household;
provided however, this presumption may be rebutted. The term immediate family
means any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law and includes adoptive relationships. Any
report of beneficial ownership required thereunder shall not be construed as an
admission that the person making the report has any direct or indirect
beneficial ownership in the Covered Securities to which the report relates.
PACKAGE QUESTIONNAIRE). The initial holdings report must be current as of a
date not more than 45 days prior to the date the person becomes an Employee.
Existing Employees are required to provide RHJ with a complete list of
securities holdings on an annual basis, or on or before February 14(th) (as
determined by RHJ) of each year. The report shall be current as of December
31(st) , which is a date no more than 45 days from the final date the report is
due to be submitted. (SEE SCHWAB COMPLIANCE TECHNOLOGIES' ANNUAL QUESTIONNAIRE).
Each holdings report (both the initial and annual) must contain, at a minimum:
(a) the title and type of security, and as applicable the exchange ticker
symbol or CUSIP number, number of shares, and principal amount of each
reportable security in which the access person has any direct or indirect
beneficial ownership; (b) the name of any broker, dealer or bank with which the
access person maintains an account in which any securities are held for the
access person's direct or indirect benefit; and (c) the date the access person
submits the report.
Employees who do not have any securities holdings or maintain brokerage
accounts for their own personal trading will be required at a minimum to
confirm such in writing. This acknowledgement can be documented on the initial
and annual holdings report through Schwab Compliance Technologies.
TRADING AND REVIEW
Though not prohibited by this Personal Security Transaction Policy, RHJ does not
expect its Employees to engage in frequent short-term (60 days) trading. In
addition, except for limited circumstances and subject to pre-clearance
approval, RHJ forbids its Employees to trade opposite of the Company's
recommendations. RHJ strictly forbids "front-running" client accounts, which is
a practice generally understood to be Employees personally trading ahead of
client accounts. The CCO will closely monitor Employees' investment patterns to
detect these abuses. Thao Buuhoan, President and Chief Operating Officer (COO)
will monitor the CCO's personal securities transactions for compliance with the
Personal Security Transaction Policy.
The CCO shall also conduct a post-trade review of RHJ Employees' personal
trading. All Employee trades must be reported in Schwab Compliance Technologies
within thirty (30) days after the end of each calendar quarter. The CCO will
review all transaction and reporting to determine no violations have occurred.
The reason for the development of a post transaction review process is to
ensure that RHJ has developed procedures to supervise the activities of its
Employees. The comparison of Employee trades to those of advisory clients will
identify potential conflicts of interest or the appearance of a potential
conflict.
If RHJ discovers that an Employee is personally trading contrary to the
policies set forth above, the Employee shall meet with the Compliance Officer
and President to review the facts surrounding the transactions. This meeting
shall help RHJ to determine the appropriate course of action. The CCO may grant
written exceptions to the provisions of the Code based on equitable (e.g.,
rapid markets, hardship, satisfaction of a court order, etc.) or other
considerations. The exceptions may be granted to individuals or classes of
individuals, provided that no exception will be granted where the exceptions
would result in a violation of Rule 204A-1 of the Advisers Act or any other
federal securities laws.
REPORTING VIOLATIONS AND REMEDIAL ACTIONS
RHJ takes the potential for conflicts of interest caused by personal investing
very seriously. As such, RHJ requires its Employees to promptly report any
violations of the Code of Ethics to the CCO. RHJ's
management is aware of the potential matters that may arise as a result of this
requirement, and shall take action against any Employee that seeks retaliation
against another for reporting violations of the Code of Ethics.
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RHJ HAS ZERO TOLERANCE FOR RETALIATORY ACTIONS AND THEREFORE MAY SUBJECT
OFFENDERS TO MORE SEVERE ACTION THAN SET FORTH BELOW. IN ORDER TO MINIMIZE
THE POTENTIAL FOR SUCH BEHAVIOR, ALL REPORTS OF CODE OF ETHICS VIOLATIONS
WILL BE TREATED AS BEING MADE ON AN ANONYMOUS BASIS.
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If any violation of RHJ's Personal Security Transaction Policy is determined to
have occurred, the CCO may impose sanctions and take such other actions as he
deems appropriate, including, without limitation, requiring that the trades in
question be reversed, requiring the disgorgement of profits, issuing a letter
of caution or warning, issuing a suspension of personal trading rights or
suspension of employment (with or without compensation), imposing a fine,
making a civil referral to the SEC, making a criminal referral, and/or
terminating employment for cause or any combination of the foregoing. All
sanctions and other actions taken shall be in accordance with applicable
employment laws and regulations. Any profits forfeited shall be paid to the
applicable client(s), if any, or given to a charity, as the CCO shall determine
is appropriate.
No person shall participate in a determination of whether he or she has
committed a violation of this Policy or in the imposition of any sanction
against himself or herself.
DISCLOSURE
RHJ shall describe its Code of Ethics to clients in Part 2 of Form ADV and,
upon request, furnish clients with a copy of the Code of Ethics. All client
requests for RHJ's Code of Ethics shall be directed to the Compliance Officer.
RECORDKEEPING
RHJ shall maintain records in the manner and to the extent set forth below,
which records shall be available for appropriate examination by representatives
of the Securities and Exchange Commission or RHJ's management.
o A copy of this Policy and any other code which is, or at any time
within the past five years has been, in effect shall be preserved in
an easily accessible place;
o A record of any violation of this Policy and of any action taken as a
result of such violation shall 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 occurs;
o A record of all written acknowledgements (annual certifications) as
required by this Policy for each person who is currently, or with the
past five years was, an Employee of RHJ.
o A copy of each report made pursuant to this Policy by an Employee,
including any information provided in lieu of reports, shall be
preserved by the Company for at least five years after the end of the
fiscal year in which the report is made or the information is
provided, the first two years in an easily accessible place;
o A list of all persons who are, or within the past five years have
been, required to make reports pursuant to this Policy, or who are or
were responsible for reviewing these reports, shall be maintained in
an easily accessible place;
o A record of all pre-clearance requests, including the decisions made;
and
o The Company shall preserve a record of any decision, and the reasons
supporting the decision, to approve the acquisition of any limited
offering or IPO by Employees for at least five years after the end of
the fiscal year in which the approval is granted, the first two years
in an easily accessible place.
RESPONSIBILITY
The Compliance Officer will be responsible for administering the Personal
Security Transaction Policy. All questions regarding the policy should be
directed to the Compliance Officer.
2. INSIDER TRADING POLICY
Section 204A of the Advisers Act requires every investment adviser to
establish, maintain, and enforce written policies and procedures reasonably
designed, taking into consideration the nature of such investment adviser's
business, to prevent the misuse of material, non-public information by such
investment adviser or any person associated with such investment adviser. In
accordance with Section 204A, RHJ has instituted procedures to prevent the
misuse of non-public information.
Although "insider trading" is not defined in securities laws, it is generally
thought to be described as trading either personally or on behalf of others on
the basis of material non-public information or communicating material
non-public information to others in violation of the law. In the past,
securities laws have been interpreted to prohibit the following activities:
o Trading by an insider while in possession of material non-public
information; or
o Trading by a non-insider while in possession of material non-public
information, where the information was disclosed to the non-insider in
violation of an insider's duty to keep it confidential; or
o Communicating material non-public information to others in breach of
a fiduciary duty.
o RHJ's Insider Trading Policy applies to all of its Employees. Any
questions should be directed to the Compliance Officer and/or MP.
WHOM DOES THE POLICY COVER?
This policy covers all of RHJ's Employees as well as any transactions in any
securities participated in by family members, trusts or corporations directly
or indirectly controlled by such persons. In addition, the policy applies to
transactions engaged in by corporations in which the Employee is an officer,
director or 10% or greater stockholder and a partnership of which the Employee
is a partner unless the Employee has no direct or indirect control over the
partnership.
WHAT INFORMATION IS MATERIAL?
Individuals may not be held liable for trading on inside information unless the
information is material. "Material information" is generally defined as
information for which there is a substantial likelihood that an investor would
consider it important in making his or her investment decisions, or information
that is reasonably certain to have a substantial effect on the price of a
company's securities.
Advance knowledge of the following types of information is generally regarded
as "material":
o Dividend or earnings announcements
o Write-downs or write-offs of assets
o Additions to reserves for bad debts or contingent liabilities
o Expansion or curtailment of company or major division operations
o Merger, joint venture announcements
o New product/service announcements
o Discovery or research developments
o Criminal, civil and government investigations and indictments
o Pending labor disputes
o Debt service or liquidity problems
o Bankruptcy or insolvency problems
o Tender offers, stock repurchase plans, etc.
o Recapitalization
Information provided by a company could be material because of its expected
effect on a particular class of a company's securities, all of the company's
securities, the securities of another company, or the securities of several
companies. The misuse of material non-public information applies to all types
of securities, including equity, debt, commercial paper, government securities
and options.
Material information does not have to relate to a company's business. For
example, material information about the contents of an upcoming newspaper
column may affect the price of a security, and therefore be considered
material.
WHAT INFORMATION IS NON-PUBLIC?
In order for issues concerning insider trading to arise, information must not
only be material, but also non-public. "Non-public" information generally means
information that has not been available to the investing public.
Once material, non-public information has been effectively distributed to the
investing public, it is no longer classified as material, non-public
information. However, the distribution of non-public information must occur
through commonly recognized channels for the classification to change. In
addition, the information must not only be publicly disclosed, there must be
adequate time for the public to receive and digest the information. Lastly,
non-public information does not change to public information solely by
selective dissemination.
RHJ's Employees must be aware that even where there is no expectation of
confidentiality, a person may become an insider upon receiving material,
non-public information. Whether the "tip" made to the Employee makes him/her a
"tippee" depends on whether the corporate insider expects to benefit
personally, either directly or indirectly, from the disclosure.
The "benefit" is not limited to a present or future monetary gain; it could be
a reputational benefit or an expectation of a quid pro quo from the recipient
by a gift of the information. Employees may also become insiders or tippees if
they obtain material, non-public information by happenstance, at social
gatherings, by overhearing conversations, etc.
PENALTIES FOR TRADING ON INSIDER INFORMATION
Severe penalties exist for firms and individuals that engage in the act of
insider trading, including civil injunctions, treble damages, disgorgement of
profits and jail sentences. Further, fines for individuals and
firms found guilty of insider trading are levied in amounts up to three times
the profit gained or loss avoided, and up to the greater of $1,000,000 or three
times the profit gained or loss avoided, respectively.
PROCEDURES TO FOLLOW IF AN EMPLOYEE BELIEVES THAT HE/SHE POSSESSES MATERIAL,
NON-PUBLIC INFORMATION
If an Employee has questions as to whether they are in possession of material,
non-public information, they must inform the Compliance Officer and President,
CEO or Managing Member as soon as possible. From this point, the Employee,
Compliance Officer and Managing Members will conduct research to determine if
the information is likely to be considered important to investors in making
investment decisions, and whether the information has been publicly
disseminated.
Given the severe penalties imposed on individuals and firms engaging in insider
trading, Employees:
o Shall not trade the securities of any company in which they are
deemed insiders who may possess material, non-public information about
the company.
o Shall not engage in securities or derivatives transactions of any
company, except in accordance with RHJ's Personal Security Transaction
Policy and the securities laws.
o Shall submit personal security trading reports in accordance with the
Personal Security Transaction Policy.
o Shall not discuss any potentially material, non-public information
with colleagues, except as specifically required by their position.
o Shall immediately report the potential receipt of non-public
information to the CCO and President or CEO.
o Shall not proceed with any research, trading, etc. until the CCO and
President or CEO informs the Employee of the appropriate course of
action.
3. SERVING AS OFFICERS, TRUSTEES AND/OR DIRECTORS OF OUTSIDE ORGANIZATIONS
Employees may, under certain circumstances, be granted permission to serve as
directors, trustees or officers of outside organizations by completing the
Request for Approval of Outside Business Activity Form in Schwab Compliance
Technologies. These organizations can include public or private corporations,
partnerships, charitable foundations and other not-for-profit institutions.
Employees may also receive compensation for such activities.
As an outside board member or officer, an Employee may come into possession of
material non-public information about the outside company, or other public
companies. It is critical that a proper information barrier be in place between
RHJ and the outside organization, and that the Employee does not communicate
such information to other RHJ Employees in violation of the information
barrier.
Similarly, RHJ may have a business relationship with the outside organization
or may seek a relationship in the future. In those circumstances, the Employee
must not be involved in the decision to retain or hire RHJ.
RHJ Employees are prohibited from engaging in such outside activities without
the prior written approval from the Compliance Officer. Approval will be
granted on a case by case basis, subject to proper resolution of potential
conflicts of interest. Outside activities will be approved only if any conflict
of interest issues can be satisfactorily resolved and all of the necessary
disclosures are made on Part 2 of Form ADV.
4. GIFT POLICY
Employees may not accept investment opportunities, gifts or other gratuities
from individuals seeking to conduct business with RHJ, or on behalf of an
advisory client. However, Employees may accept gifts from a single giver in
aggregate amounts not exceeding $100 and may attend business meals, sporting
events and other entertainment events at the expense of a giver, as long as the
expense is reasonable and both the giver(s) and the Employee(s) are present.
All gifts received must be reported to the CCO, including the name of the giver
of the gift, the reason for the gift, a description of the gift and the date
the gift was received.
Employees may also give any gift to anyone who does business with the firm, not
in excess of $100. However, business meals, sporting events and other
entertainment events may be given so long as the expense is reasonable and the
employee giving the gift is present. All gifts given must be reported to the
CCO, including the name of the employee giving the gift, the reason for giving
the gift, a description of the gift being given and the date the gift was
given.
5. POLITICAL CONTRIBUTIONS
RHJ or any RHJ employee that is considered a "Covered Associate" (as defined
below) may not make Political Contributions (as defined below) to any one
candidate or official, per election that in the aggregate would exceed $150.00
if the Covered Associate could not vote for the candidate or official, or
$350.00 if the Covered Associate could vote for the candidate or official. All
RHJ employees must report their political contribution to the CCO using the
Reporting of Political or Charitable Contribution Form on Schwab Compliance
Technologies, within 10 days after the contribution has been made. The report
must include the name of the employee, the name of the office holder or
candidate that received the contribution, the office the recipient is running
for, the amount of the contribution, whether or not the contributing employee
is eligible to vote for the recipient and whether or not the official or
candidate has an existing or potential relationship with the Firm and/or the
contributing employee.
COVERED ASSOCIATE of RHJ means:
(i) Any general partner, managing member or executive officer, or other
individual with a similar status or function;
(ii) Any employee who solicits a government entity for RHJ and any person
who supervises, directly or indirectly, such employee; and
(iii) Any political action committee controlled by RHJ or by any person
described in paragraphs (i) and (ii) above.
POLITICAL CONTRIBUTION means any gift, subscription, loan, advance, or deposit
of money or anything of value made for:
(i) The purpose of influencing any election for federal, state or local
office;
(ii) Payment of debt incurred in connection with any such election; or
(iii) Transition or inaugural expenses of the successful candidate for
state or local office.
6. CHARITABLE CONTRIBUTIONS
Employees are NOT restricted in regards to giving personal charitable
contributions; however, RHJ or an RHJ employee on behalf of the Firm must
report all charitable contributions given by RHJ or an RHJ employee on behalf
of the Firm, using the Reporting of Political or Charitable Contribution Form
on Schwab Compliance Technologies, to the CCO within 10 days after the
contribution has been made. The information being reported must include the
name of the employee that gave the contribution, the name of the recipient of
the contribution, the amount of the contribution and whether or not the charity
or any
person associated with the charity has an existing or potential relationship
with the firm and/or the employee giving the contribution.
RESPONSIBILITY
The Compliance Officer will be responsible for administering the Insider
Trading, Serving as Officers, Trustees and/or Directors of Outside
Organizations, Gift Policies, Political Contributions and Charitable
Contributions. All questions regarding these policies should be directed to the
Compliance Officer.
[LOGO OMITTED]
SANDS CAPITAL
SANDS CAPITAL MANAGEMENT, LLC
CODE OF ETHICS
(Amended January 2016)
SANDS CAPITAL MANAGEMENT CODE OF ETHICS
TABLE OF CONTENTS
PAGE
-----
I. DEFINITIONS ......................................................... 1
II. STATEMENT OF GENERAL PRINCIPLES ..................................... 3
III. DUTY OF CONFIDENTIALITY ............................................. 3
IV. DISQUALIFIED PERSONS ................................................ 4
V. PROHIBITED TRANSACTIONS AND CONDUCT ................................. 4
A. Fraudulent Purchases or Sales ................................... 4
B. Initial Public Offerings and Limited Offerings .................. 5
C. Options and Short Sales ......................................... 5
D. Blackout Periods ................................................ 5
E. Securities Pre-Clearance ........................................ 5
F. Prohibition on Short-Term Trading Profits ....................... 6
G. Exempt Transactions ............................................. 6
H. Hardship Exemptions ............................................. 7
I. Directorships ................................................... 7
J. Co-Investments .................................................. 7
VI. REPORTING AND CERTIFICATION REQUIREMENTS ............................ 7
A. Duplicate Brokerage Statements .................................. 7
B. Initial Holdings Report ......................................... 7
C. Annual Holdings Reports ......................................... 8
D. Quarterly Transaction Reports ................................... 8
E. Exceptions to Reporting Requirements ............................ 9
F. Annual Certifications ........................................... 10
G. Reporting of Code Violations .................................... 10
VII. GIFTS & ENTERTAINMENT ............................................... 10
A. Reporting of Gifts & Entertainment .............................. 11
B. Additional Labor Organization Reporting ......................... 11
C. Exceptions ...................................................... 11
VIII. REPORTS TO FUND CLIENTS ............................................. 11
IX. SANCTIONS ........................................................... 12
X. OTHER DISCLAIMERS ................................................... 12
XI. RECORDS ............................................................. 12
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CODE OF ETHICS
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This Code of Ethics ("Code") is adopted by Sands Capital Management, LLC
("Sands Capital") pursuant to Section 204A of the Investment Advisers Act of
1940 and Rule 204A-1 thereunder, and Section 17(j) of the Investment Company
Act of 1940 and Rule 17j-1 thereunder, (1) to set forth standards of conduct
(including compliance with the federal securities laws); (2) to require
reporting of personal securities transactions, including transactions in mutual
funds advised and sub-advised by Sands Capital; and (3) to require prompt
reporting of violations of this Code.
This Code is applicable to every supervised person (as defined below) of Sands
Capital, and extends to activities both within and outside of their duties at
Sands Capital. Every supervised person is required to read this Code carefully,
to sign and return the accompanying acknowledgement, and to retain a copy of
this Code in a readily accessible place for reference.
Sands Capital's Compliance Team will notify access persons of their reporting
obligations under this Code. A summary of the Code is provided in Part 2A Item
11 of the ADV. Any questions regarding this Code should be directed to the
Chief Compliance Officer, a member of the Compliance Team and/or the General
Counsel.
I. DEFINITIONS
"Access person" means (i) any supervised person who has access to nonpublic
information regarding any client's purchase or sale of securities, or nonpublic
information regarding the portfolio holdings of any Reportable Fund, or who is
involved in making securities recommendations to clients, or who has access to
such recommendations that are nonpublic; and (ii) any advisory person (as
defined below). For this purpose, all supervised persons are presumed to be
access persons.
"Accredited investor" in the context of a natural person, includes anyone who:
earned income that exceeded $200,000 (or $300,000 together with a spouse) in
each of the prior two years, and reasonable expects the same for the current
year, or has a net worth over $1 million, either alone or together with a
spouse (excluding the value of the person's primary residence).
"Advisers Act" means the Investment Advisers Act of 1940, as amended, and the
rules and regulations promulgated thereunder by the U.S. Securities and
Exchange Commission.
"Advisory person" means (i) any employee who, in connection with his or her
regular functions or duties, makes, participates in, or obtains information
regarding the purchase or sale of covered securities by a Reportable Fund, or
whose functions relate to the making of any recommendations with respect to
such purchases or sales; and (ii) any natural person in a control relationship
to Sands Capital who obtains information concerning recommendations made to a
Reportable Fund with regard to the purchase or sale of covered securities by
the Reportable Fund.
"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.
"Beneficial ownership" is interpreted in a manner as it would be under Rule
16a-1(a)(2) under the Securities Exchange Act of 1934 in determining whether a
person has beneficial ownership of a security for purposes of Section 16 of the
Securities Exchange Act of 1934 and the rules and regulations thereunder. (See
Attachment A for more information about beneficial ownership.)
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"Chief Compliance Officer" means the individual (or his or her designee)
designated by Sands Capital as having the authority and responsibilities set
forth in this Code; PROVIDED, HOWEVER, that if that individual proposes to
engage in any conduct or transaction requiring approval or other action by the
Chief Compliance Officer, the approval shall be granted or other action shall
be taken by such other individual as Sands Capital shall designate.
"Control" has the meaning set forth in Section 2(a)(9) of the Investment
Company Act. Section 2(a)(9) provides that "control" means the power to
exercise a controlling influence over the management or policies of a company,
unless such power is solely the result of an official position with the
company. Ownership of more than 25% of a company's outstanding voting
securities is presumed to give the holder control over the company. The facts
and circumstances of a given situation may counter this presumption.
"Covered security" means a security as defined in Section 202(a)(18) of the
Advisers Act or Section 2(a)(36) of the Investment Company Act. "Covered
Security" includes notes, bonds, stocks, convertible securities, preferred
stock, options on securities, futures on broad-based market indices,
exchange-traded Funds (ETFs), warrants and rights, and shares of closed-end
Funds and Reportable Funds. "Covered Security" DOES NOT include direct
obligations of the United States Government, bankers' acceptances, bank
certificates of deposit, commercial paper and high quality short-term debt
instruments, including repurchase agreements, and shares issued by money market
and other open-end (mutual) Funds.
"Federal securities laws" means the Securities Act of 1933, the Securities
Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company
Act, the Advisers Act, Title V of the Gramm-Leach-Bliley Act, and any rules
adopted by the U.S. Securities and Exchange Commission under any of those
statutes, the Bank Secrecy Act as it applies to registered investment advisers
and investment companies, and any rules adopted thereunder by the U.S.
Securities and Exchange Commission or the Department of the Treasury.
"Fund" means an investment company registered under the Investment Company Act.
"General Counsel" means the Chief Legal Officer of Sands Capital or his or her
delegate.
"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 Sections 13 and
15(d) of the Securities Exchange Act of 1934.
"Investment Company Act" means the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated thereunder by the U.S. Securities and
Exchange Commission.
"Limited offering" means an offering that is exempt from registration under the
Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) or pursuant to
Rule 504, Rule 505 or Rule 506 under the Securities Act of 1933.
"Public company" means any company subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934.
"Purchase or sale of a security" includes, among other things, the writing of
an option to purchase or sell a security.
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"Reportable Fund" means any Fund, or separate investment portfolio of such
Fund, for which Sands Capital serves as an investment adviser as defined in
Section 2(a)(20) of the Investment Company Act. A list of Reportable Funds can
be obtained from the Compliance Team.
--------------------------------------------------------------------------------
"SUPERVISED PERSON" MEANS ANY PARTNER, OFFICER, DIRECTOR (OR OTHER PERSON
OCCUPYING A SIMILAR STATUS OR PERFORMING SIMILAR FUNCTIONS), OR STAFF MEMBER OF
SANDS CAPITAL, OR OTHER PERSON WHO PROVIDES INVESTMENT ADVICE ON BEHALF OF
SANDS CAPITAL AND IS SUBJECT TO THE SUPERVISION AND CONTROL OF SANDS CAPITAL.
ALL STAFF MEMBERS ARE CONSIDERED SUPERVISED PERSONS
--------------------------------------------------------------------------------
II. STATEMENT OF GENERAL PRINCIPLES
Sands Capital and its supervised persons owe a fiduciary duty to Sands
Capital's clients. As fiduciaries, Sands Capital and its supervised persons
stand in a special relationship of trust, confidence, and responsibility to
Sands Capital's clients. Accordingly, supervised persons must avoid activities,
interests and relationships that might interfere, or appear to interfere, with
making decisions in the best interests of clients. Supervised Persons must, at
all times, observe the following general fiduciary principles:
1. In the course of fulfilling your duties and responsibilities to
clients, you must place the interests of clients first;
2. You must conduct all of your personal securities transactions in full
compliance with this Code and in such a manner as to avoid any actual
or potential conflict of interest or any abuse of your position of
trust and responsibility; and
3. You must not take inappropriate advantage of your position.
Supervised Persons are required to comply with applicable federal securities
laws and must adhere to these general principles as well as comply with the
specific provisions of this Code. Supervised Persons must be aware that they
may be held personally liable for any improper or illegal acts committed during
their course of being supervised persons and that "ignorance of the law" is not
a defense. It bears emphasis that technical compliance with this Code will not
automatically insulate a supervised person from scrutiny where personal trading
or other activities that reflect a pattern of abuse of an individual's
fiduciary duty owed to clients. Conversely, a technical breach of the Code may
not necessarily cause any harm to Sands Capital and/or its clients and may
require additional subjective analysis by the Compliance Team in order to
determine impact.
III. DUTY OF CONFIDENTIALITY
Supervised Persons have the highest fiduciary obligation not to reveal
confidential information to any person that does not have a clear and
compelling need to know such information. They must keep confidential at all
times any nonpublic information they may obtain in the course of their duties
at Sands Capital, including but not limited to:
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1. information on clients, including personal identifying
information, such as name, address, Social Security Number or Tax
ID Number, and account information, such as recent or impending
securities transactions by or on behalf of clients, account
numbers and balances;
2. information on Sands Capital's personnel, including their pay,
benefits, position level and performance ratings; and
3. information on Sands Capital's business, including proprietary
investment strategies, technologies and business activities.
IV. DISQUALIFIED PERSONS
Section 9 of the Investment Company Act of 1940 Act prohibits persons who have
committed various acts from serving in certain capacities with respect to
mutual funds. Under Section 9(a), an "ineligible person" generally cannot serve
in the following capacities with respect to a Fund: employee, officer, trustee,
member of advisory board, investment adviser, or principal underwriter (each a
"Fund Position").
Section 9(a) describes four situations that make persons or entities ineligible
to serve in a Fund Position:
1. Persons with convictions within the last ten years that are tied
to securities transactions or employment in the securities field;
2. Persons with permanent or temporary injunctions from acting in
certain capacities in the securities arena;
3. Companies which have an affiliated person that are ineligible
under the first two situations above; or
4. Persons who are subject to an SEC order declaring them to be
ineligible under Section 9.
The Chief Compliance Officer will monitor for compliance with Section 9. The
Compliance Team must be promptly notified in the event a Staff Member becomes
subject to one of the above ineligible events or if they believe that they may
have hired or employed a disqualified person.
V. PROHIBITED TRANSACTIONS AND CONDUCT
A. FRAUDULENT PURCHASES OR SALES
Supervised Persons may not, directly or indirectly, in connection with the
purchase or sale of a security held or to be acquired by any client:
1. employ any device, scheme or artifice to defraud the client;
2. make to the client any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they
are made, not misleading;
3. engage in any act, practice or course of business which would
operate as a fraud or deceit upon the client; or
4. engage in any manipulative practice with respect to the client.
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B. INITIAL PUBLIC OFFERINGS AND LIMITED OFFERINGS
Supervised Persons may not, directly or indirectly, acquire ownership of any
security in an initial public offering or a limited offering without first
obtaining written approval of the Chief Compliance Officer or the General
Counsel. In the event approval is granted, the Chief Compliance Officer or the
General Counsel will document reasons for the approval.
C. OPTIONS AND SHORT SALES
Sands Capital expressly forbids the purchase or sale of options. Supervised
Persons of Sands Capital may never sell securities "short." However, an
exception is granted for any exchange traded funds and mutual funds that may
transact in options and/or short sales.
D. BLACKOUT PERIODS
Supervised Persons of Sands Capital are restricted in trading any security
involved in an "investment action" for the Sands Capital Select Growth, Global
Growth, Emerging Markets Growth and Technology Innovators strategies for a
specified "blackout period." An "investment action" is a decision to add (or
eliminate) a security to (or from), or increase (or reduce) the weighting of a
security in the Sands Capital strategies listed above. Supervised Persons may
not, directly or indirectly, purchase or sell any security involved in an
investment action during the following blackout period:
1. 10 calendar days before the beginning of the investment action;
2. during the investment action; and
3. 7 calendar days after the completion of the investment action
(for this purpose, an investment action is completed on the date
notification of such action is sent to advisory clients).
All current blackout and pre-clearance information is available on PTCC.
E. SECURITIES PRE-CLEARANCE
Supervised Persons are required to obtain pre-clearance from the Chief
Compliance Officer, or her designee prior to engaging in all personal equity
securities transactions. Requests for pre-clearance are submitted via the
Compliance Science PTCC trading platform. CERTAIN SECURITIES TYPES SUCH AS
OPENED ENDED MUTUAL FUNDS, ETFS, ANNUITIES, FIXED INCOME PRODUCTS INCLUDING US
GOVERNMENT SECURITIES, SYSTEMATIC INVESTMENT PLANS, RECEIPT OF SPOUSAL STOCK
OPTIONS OR GRANTS, AND NON-DISCRETIONARY ACCOUNTS ARE EXEMPT FROM PRE-CLEARANCE
REPORTING REQUIREMENT, AND MAY BE TRADED WITHOUT PRIOR CLEARANCE. Pre-clearance
requests for private equity transactions may be submitted via email and sent to
[email protected].
With regard to the window of trading 10 days prior to the start of an
investment action, the Compliance Team will analyze any breaches to determine
if the supervised person had prior knowledge of the investment action. In
addition, the Compliance Team will ascertain if the investment action had been
decided upon and communicated to supervised persons by the Portfolio Manager
Decision Teams. If prior knowledge is not established, the breach would not be
deemed a violation of the above policy.
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Subsequently, the supervised person is granted pre-clearance and the investment
action occurs within the 10 day window.
Requests for pre-clearance must be submitted via COMPLIANCE SCIENCE PTCC.
By requesting pre-clearance you represent that, to the best of your knowledge,
you (or the registered account holder):
1. have no knowledge of a pending investment action involving
the above security;
2. are not in possession of any material nonpublic information
concerning the security to which this request relates;
3. are not engaging in any manipulative or deceptive trading
activity; and
4. this transaction does not violate the "Short-Term Trading"
prohibition in the Code of Ethics.
The Compliance Team, in its sole discretion, has the right not to approve a
personal trade request. As such, you acknowledge to abide by the decisions of
the Compliance Team. Additionally, you acknowledge that authorization is only
valid for the day your personal trade request is approved plus one (1) business
day after approval is granted.
F. PROHIBITION ON SHORT-TERM TRADING PROFITS
Supervised Persons may not profit from the purchase and sale of the same (or
equivalent) covered securities within 30 calendar days. This prohibition DOES
NOT APPLY to transactions resulting in a loss.
G. EXEMPT TRANSACTIONS
The prohibitions and restrictions of this Section V do not apply to:
1. purchases or sales effected in any account over which the
supervised person has no direct or indirect influence or control;
2. purchases, sales or other acquisitions of securities which are
non-volitional on the part of the supervised person, such as
sales from a margin account pursuant to BONA FIDE margin calls,
stock dividends, stock splits, mergers, consolidations,
spin-offs, or other similar corporate reorganizations or
distributions;
3. purchases that are part of an automatic investment plan;
4. purchases effected upon the exercise of rights issued PRO RATA
to all holders of a class of its securities, to the extent such
rights were acquired from such issuer; and
5. acquisitions of securities through gifts or bequests.
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H. HARDSHIP EXEMPTIONS
A Supervised Person may submit to the Chief Compliance Officer or General
Counsel a request for an exemption from the blackout period of the personal
trading policy for an unforeseen hardship situation (e.g., the purchase of a
home, a large unforeseen expense, such as a medical expense). All requests must
be in writing and must state the reasons for the hardship. The Chief Compliance
Officer or General Counsel will make a determination in light of all relevant
facts and circumstances, including any actual or apparent conflict of interests
generated by the possible exception when reviewing exceptions. These exceptions
are granted rarely and only in extreme circumstances.
I. DIRECTORSHIPS
Supervised Persons may not serve on the board of directors of any public
company without first obtaining written approval of the Chief Compliance
Officer or General Counsel. Supervised Persons may not serve as a board of
director of any organization where Sands Capital directly serves as the
investment manager of funds owned and/or directed by that organization without
written approval from the Chief Compliance Officer.
J. CO-INVESTMENTS
Sands Capital through its affiliate Sands Capital Ventures, will from time to
time offer the opportunity to make co-investments of private equity
investments. Typically, this occurs when Sands Capital Ventures receives an
allocation that exceeds the maximum commitment for its funds/investors. Staff
members who choose to participate in any co-investment activity may receive
allocations based upon availability of the subscription, and accept all risks
up to and including the loss of their total investment. Requests for
co-investment opportunities must be pre-cleared by the CCO, or her designee
prior to the closing date of the transaction.
Staff members who engage in co-investment opportunities represent the
following:
1. They meet the guidelines of an accredited investor, as defined
by the SEC;
2. They are not aware of material conflicts of interest that would
preclude them from engaging in a com-investment opportunity;
3. To the best of their knowledge all co-investment opportunities
were first offered to the affiliates' clients prior to being
offered to any accredited staff members.
VI. REPORTING AND CERTIFICATION REQUIREMENTS
All reports pursuant to this Section VI shall be made to and reviewed by the
Compliance Team.
A. DUPLICATE BROKERAGE STATEMENTS
All supervised persons are required to instruct their broker-dealers, banks or
other financial services firms to provide duplicate statements (no less than
quarterly) for ANY ACCOUNT IN WHICH THEY HAVE ANY DIRECT OR INDIRECT BENEFICIAL
OWNERSHIP. These statements may be received electronically via the PTCC system
or in traditional paper format.
B. INITIAL HOLDINGS REPORT
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No later than 10 days after becoming a supervised person, every supervised
person shall report the following information:
1. the title and exchange ticker symbol or CUSIP number, type of
security, number of shares and principal amount (if applicable)
of each covered security in which he or she has any direct or
indirect beneficial ownership; or
2. in the event that the supervised person has no beneficial
ownership in any covered securities, either a statement to that
effect or the word "None" (or similar designation); and
3. the name of any broker, dealer or bank with which the supervised
person maintains an account in which ANY securities are held for
his or her direct or indirect benefit; and
4. the date the supervised person submits the report.
The information in an Initial Holdings Report must be current as of a date not
more than 45 days prior to the date the person became a supervised person.
C. ANNUAL HOLDINGS REPORTS
On or before February 14(th) of each year, every supervised person shall report
the following information:
1. the title and exchange ticker symbol or CUSIP number, type of
security, number of shares and principal amount (if applicable)
of each covered security in which the supervised person has any
direct or indirect beneficial ownership (generally, duplicate
brokerage statements will be used to satisfy this requirement);
or
2. in the event that he or she has no beneficial ownership in any
covered securities, either a statement to that effect or the word
"None" (or some similar designation); and
3. the name of any broker, dealer or bank with which the supervised
person maintains an account in which ANY securities are held for
his or her direct or indirect benefit; and
4. the date the supervised person submits the report.
The information in an Annual Holdings Report shall be current as of December
31(st) of the preceding year.
D. QUARTERLY TRANSACTION REPORTS
No later than 30 days after the end of each calendar quarter, every supervised
person shall report the following information:
1. WITH RESPECT TO ANY TRANSACTION DURING THE QUARTER in a covered
security in which the supervised person has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership
(generally, duplicate brokerage statements will be used to
satisfy this requirement):
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a. the trade date of the transaction, the title and exchange
ticker symbol or CUSIP number, the interest rate and
maturity date (if applicable), the number of shares and the
principal amount (if applicable) of each covered security
involved;
b. the nature of the transaction (I.E., purchase, sale or any
other type of acquisition or disposition);
c. the price of the covered security at which the transaction
was effected; and
d. the name of the broker, dealer or bank with or through
which the transaction was effected; or
e. in the event there were no such transactions during the
quarter, either a statement to that effect or the word
"None" (or some similar designation); and
f. the date the supervised person submits the report.
2. WITH RESPECT TO ANY ACCOUNT ESTABLISHED by the supervised person
in which any covered securities were held DURING THE QUARTER for
the direct or indirect benefit of the supervised person:
a. the name of the broker, dealer or bank with whom the
account is established; and
b. the date the account was established; or
c. in the event there were no such accounts established during
the quarter, either a statement to that effect or the word
"None" (or some similar designation); and
d. the date the supervised person submits the report.
E. EXCEPTIONS TO REPORTING REQUIREMENTS
A supervised person NEED NOT submit:
1. any report with respect to securities held in accounts over
which he or she has no direct or indirect influence or control;
2. a transaction report with respect to transactions effected
pursuant to an automatic investment plan;
3. a transaction report if the report would duplicate information
contained in broker trade confirmations or account statements
that are received by the Compliance Team with respect to such
person, so long as the Compliance Team receives the confirmations
or statements no later than 30 days after the end of the
applicable calendar quarter; and
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4. qualified tuition programs established pursuant to Section 529
of the Internal Revenue Code of 1986, otherwise known as 529
plans that are not managed by Sands Capital.
Any report required by this Section IV may contain a statement that the report
shall not be construed as an admission by the person making the report that he
or she has any direct or indirect beneficial ownership in the security to which
the report relates.
F. ANNUAL CERTIFICATIONS
All supervised persons shall certify in writing at least annually that (i) they
have read and understand this Code; (ii) recognize that they are subject to
this Code; and (iii) they will comply with the requirements of this Code,
including reporting all information required to be reported by this Code.
G. REPORTING OF CODE VIOLATIONS
Each supervised person is required to notify the Chief Compliance Officer
promptly if he or she knows of any violation of this Code. Failure to do so is
a violation of this Code. In the event that a matter implicates the Chief
Compliance Officer, notice of a violation may be provided to the General
Counsel or another executive officer of Sands Capital.
Consistent with Sands Capital's policies, no person or group within Sands
Capital shall retaliate, nor shall Sands Capital or any supervised person
tolerate any retaliation by any other person or group within the firm, directly
or indirectly, against anyone who, in good faith, reports any violation of this
Code or provides assistance to management or any other person or group,
including any governmental, regulatory or law enforcement body, investigating
any violation of this Code.
Sands Capital shall not reveal the identity of any person who reports a
violation of this Code and who asks that his or her identity as the person who
made such report remain confidential. Sands Capital shall not make any effort,
or tolerate any effort made by any other person or group, to ascertain the
identity of any person who reports a violation anonymously, unless (i) such
information is required to be disclosed by law or applicable legal process or
by applicable securities or commodities exchange, self-regulatory organization,
or other rules or regulations; or (ii) disclosure of such information, or
ascertaining such identity, is supported by a clear and compelling interest of
clients that is sufficient in the particular case to overcome an expectation of
anonymity.
VII. GIFTS & ENTERTAINMENT
By refusing inappropriate inducements of any kind, Supervised Persons will be
preserving assets of far greater value: their good name, the reputation of
Sands Capital, and our clients' financial welfare.
In the ordinary course of business, Supervised Persons may give and receive
modest business gifts and this policy is not intended to restrict normal
business activities. Supervised Persons may not give or accept any gift of more
than DE MINIMIS value (currently $250 per year) from any person, entity, client
or prospective client that does business with or is seeking to do business with
Sands Capital. Cash gifts of any amount are prohibited. A gift does not apply
to ordinary and usual business entertainment such as an occasional meal,
sporting event, theater production or comparable entertainment event so long as
it is neither so frequent nor so extensive as to raise any question of
propriety.
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At times it could be difficult to discern between a gift and entertainment. If
you are attending an event with the giver of the tickets to the event it is
typically considered entertainment while gifts are given and used/consumed only
by the Supervised Person. Please contact the Compliance Team if you are unable
to determine if something is a gift or entertainment.
Supervised Persons are prohibited from giving or providing any gift, including
a personal gift, to any official of a Public Fund without the express prior
approval of the Chief Compliance Officer or General Counsel.
A. REPORTING OF GIFTS & ENTERTAINMENT
All gifts of which you are the recipient must be reported in writing via email
to the Chief Compliance Officer or General Counsel if the value is reasonably
judged to exceed $250 per recipient. Reporting must include the name(s) of the
giver, the date, the organization of the giver, a description of the gift or
event, and the value or estimated value of the gift or event.
B. ADDITIONAL LABOR ORGANIZATION REPORTING
In addition, any gifts, payments of money or anything of value made directly or
indirectly by you to a labor organization or officer, agent, shop steward, or
other representative or employee of any labor organization (including union
officials serving in some capacity to a Taft-Hartley Plan) must be reported to
the Chief Compliance Officer. All items regardless of the amount or value must
be reported. Following are examples of potentially reportable items:
o Meals
o Gifts (e.g., holiday gifts)
o Travel and lodging costs
o Bar bills
o Sporting event tickets
o Theatre tickets
o Clothing or equipment
o Raffle donations
o Retirement dinners
o Golf (including charity golf tournaments)
o Hole sponsorships for golf tournament
o Advertising at union or Taft-Hartley fund related functions
o Sponsorship of union conferences, picnics, other events
o Donations to union related charities or scholarship funds
o Conferences attended by union officials, Supervised Persons, etc.
o Receptions attended by union officials, Supervised Persons, etc.
o Donations for apprenticeship graduation dinners
C. EXCEPTIONS
Exceptions to the gift limit may be made by the Chief Compliance Officer or
General Counsel. Supervised Persons should request exceptions for personal
circumstances in which the employee has a personal relationship with a third
party (such as receiving or providing personal gifts as wedding gifts or gifts
for the birth of a child).
VIII. REPORTS TO FUND CLIENTS
Sands Capital shall furnish to the board of directors/trustees of each
Reportable Fund, at the direction and timing specified by such boards, but no
less frequently than annually, a written report that (i) describes any issues
affecting the Reportable Fund arising under this Code or related procedures
since the last report, including, but not limited to, information about material
violations of this Code or such procedures and the sanctions imposed; and (ii)
certifies that Sands Capital has adopted procedures reasonably necessary to
prevent its supervised persons from violating this Code.
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IX. SANCTIONS
Supervised Persons who violate this Code will be subject to such sanctions as
deemed necessary and appropriate under the circumstances and in the best
interest of clients. The range of sanctions include but are not limited to a
written warning or reprimand, cancellation of trades, disgorgement of profits
or sale of positions at a loss, restriction on trading privileges, fines,
suspension of employment without pay, termination of employment, and/or
referral to regulatory or law enforcement authorities.
X. OTHER DISCLAIMERS
Notwithstanding the foregoing and anything else contained in these policies and
procedures, nothing in these policies and procedures is intended to prevent,
delay or otherwise restrict a staff member's rights under applicable law to
notify government authorities of suspected or actual wrongdoing by Sands
Capital or its employees and representatives.
XI. RECORDS
Sands Capital shall maintain such records relating to this Code of Ethics, in
the manner and as required by Rule 204-2(a)(12) under the Advisers Act and
Rules 17f-1(f) and 31a-1(f) under the Investment Company Act.
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ATTACHMENT A
BENEFICIAL OWNERSHIP
As used in the Code of Ethics, beneficial ownership is interpreted in the same
manner as it would be in determining whether a person is subject to Section 16
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except
that the determination of such ownership applies to all securities.
For the purposes of the Exchange Act, beneficial ownership includes:
(a) the receipt of benefits substantially equivalent to those of
ownership through relationship, understanding, agreement, contract or
other arrangements; or
(b) the power to vest or reinvest such ownership in oneself at once, or
at some future time.
Using the above definition as a broad guideline, the ultimate determination of
beneficial ownership will be made in light of the facts of the particular case.
Key factors are the degree of the individual's ability to exercise discretion
to invest in, sell or exercise voting rights of the security, and the ability
of the individual to benefit from the proceeds of the security.
1. SECURITIES HELD BY FAMILY MEMBERS
As a general rule, a person is regarded as having beneficial ownership of a
security held in the name of his or her spouse and their minor children. In the
absence of special circumstances, these family relationships ordinarily confer
benefits substantially equivalent to ownership.
In addition, absent countervailing facts, it is expected that a security held
by a relative who shares the same household as the reporting person will be
reported as beneficially owned by such person.
2. SECURITIES HELD BY A COMPANY
Generally, ownership of a security of a company does not constitute beneficial
ownership with respect to the holdings of the company in the securities of
another issuer. However, an owner of securities in a holding company will be
deemed to have beneficial ownership in the holdings of the holding company
where:
(a) the company is merely a medium through which one or several persons
in a small group invest or trade in securities; and
(b) the company has no other substantial business.
In such cases, the persons who are in a position of control of the holding
company are deemed to have beneficial interest in the securities of the holding
company.
3. SECURITIES HELD IN TRUST
Beneficial ownership of securities in a private trust includes:
(a) the ownership of securities as a trustee where either the trustee or
members of his or her immediate family have a vested interest in the
income or corpus of the trust;
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(b) the ownership of a vested beneficial interest in a trust; and
(c) the ownership of securities as a settlor of a trust in which the
settlor has the power to revoke the trust without obtaining the
consent of all the beneficiaries.
As used in this section, the "immediate family" of a trustee means:
(a) a son or daughter of the trustee or a descendent of either;
(b) a stepson or stepdaughter of the trustee;
(c) the father or mother of the trustee, or an ancestor of either;
(d) a stepfather or stepmother of the trustee; and
(e) a spouse of the trustee.
For the purposes of determining whether any of the foregoing relations exists,
a legally adopted child of a person shall be considered a child of such person
by blood.
4. MISCELLANEOUS ISSUES
Beneficial ownership does not include, however, a person's interest in
portfolio securities held by:
(a) any holding company registered under the Public Utility Holding
Company Act;
(b) any investment company registered under the Investment Company Act;
(c) a pension or retirement plan holding securities of an issuer whose
employees generally are the beneficiaries of the plan; and
(d) a business trust with over 25 beneficiaries.
Participation in a pension or retirement plan will result in beneficial
ownership of the portfolio securities if plan participants can withdraw and
trade the securities without withdrawing from the plan.
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LOOMIS, SAYLES & CO., L.P.
CODE OF ETHICS
------------------------------------
POLICY ON PERSONAL TRADING AND
RELATED ACTIVITIES
BY LOOMIS SAYLES PERSONNEL
------------------------------------
EFFECTIVE:
January 14, 2000
AS AMENDED:
August 11, 2016
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TABLE OF CONTENTS
1. INTRODUCTION ......................................................... 3
2. STATEMENT OF GENERAL PRINCIPLES ...................................... 3
3. A FEW KEY TERMS ...................................................... 4
3.1. Covered Security ................................................. 4
3.2. Beneficial Ownership ............................................. 5
3.3. Investment Control ............................................... 6
3.4. Maintaining Personal Accounts .................................... 7
4. SUBSTANTIVE RESTRICTIONS ON PERSONAL TRADING ......................... 8
4.1. Pre-clearance .................................................... 8
4.2. Good Until Canceled and Limit Orders ............................. 9
4.3. Short Term Trading Profits ....................................... 9
4.4. Restrictions on Round Trip Transactions in Loomis Advised Funds .. 10
4.5. Derivatives ...................................................... 10
4.6. Short Sales ...................................................... 11
4.7. Competing with Client Trades ..................................... 11
4.8. Large Cap/De Minimis Exemption ................................... 12
4.9. Investment Person Seven-Day Blackout Rule ........................ 12
4.10. Research Recommendations ...................................... 13
4.11. Initial Public Offerings ...................................... 14
4.12. Private Placement Transactions ................................ 15
4.13. Insider Trading ............................................... 15
4.14. Restricted and Concentration List ............................. 16
4.15. Loomis Sayles Hedge Funds ..................................... 17
4.16. Exemptions Granted by the Chief Compliance Officer ............ 17
5. PROHIBITED OR RESTRICTED ACTIVITIES .................................. 17
5.1. Public Company Board Service and Other Affiliations .............. 17
5.2. Participation in Investment Clubs and Private Pooled Vehicles .... 18
6. REPORTING REQUIREMENTS ............................................... 18
6.1. Initial Holdings Reporting, Account Disclosure and Acknowledgement
of Code .......................................................... 18
6.2. Brokerage Confirmations and Brokerage Account Statements ......... 19
6.3. Quarterly Transaction Reporting and Account Disclosure ........... 20
6.4. Annual Reporting ................................................. 21
6.5. Review of Reports by Chief Compliance Officer .................... 21
6.6. Internal Reporting of Violations to the Chief Compliance Officer . 21
7. SANCTIONS ............................................................ 22
8. RECORDKEEPING REQUIREMENTS ........................................... 22
9. MISCELLANEOUS ........................................................ 23
9.1. Confidentiality .................................................. 23
9.2. Disclosure of Client Trading Knowledge ........................... 23
9.3. Notice to Access Persons, Investment Persons and Research Analysts
as to Code Status .................................................... 23
9.4. Notice to Personal Trading Compliance of Engagement of Independent
Contractors .......................................................... 24
9.5. Questions and Educational Materials .................................. 24
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LOOMIS, SAYLES & CO., L.P.
CODE OF ETHICS
----------------------------------
POLICY ON PERSONAL TRADING AND
RELATED ACTIVITIES
----------------------------------
1. INTRODUCTION
This Code of Ethics ("Code") has been adopted by Loomis, Sayles &
Co., L.P. ("Loomis Sayles") to govern certain conduct of Loomis Sayles'
SUPERVISED PERSONS and personal trading in securities and related activities of
those individuals who have been deemed ACCESS PERSONS thereunder, and under
certain circumstances, those ACCESS PERSONS' family members and others in a
similar relationship to them.
The policies in this Code reflect Loomis Sayles' desire to detect and
prevent not only situations involving actual or potential conflicts of interest
or unethical conduct, but also those situations involving even the appearance
of these.
2. STATEMENT OF GENERAL PRINCIPLES
It is the policy of Loomis Sayles that no ACCESS PERSON or SUPERVISED
PERSON as such terms are defined under the Code, (please note that Loomis
Sayles treats all employees as ACCESS PERSONS) shall engage in any act,
practice or course of conduct that would violate the Code, the fiduciary duty
owed by Loomis Sayles and its personnel to Loomis Sayles' clients, Rule 204A-1
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the
provisions of Section 17(j) of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and Rule 17j-1 there under. It is required that
all ACCESS PERSONS must comply with all applicable laws, rules and regulations
including, but not limited to the FEDERAL SECURITIES LAWS. The fundamental
position of Loomis Sayles is, and has been, that it must at all times place the
interests of its clients first. Accordingly, your personal financial
transactions (and in some cases, those of your family members and others in a
similar relationship to you) and related activities must be conducted
consistently with this Code and in such a manner as to avoid any actual or
potential conflict of interest or abuse of your position of trust and
responsibility.
Without limiting in any manner the fiduciary duty owed by Loomis
Sayles to its clients, it should be noted that Loomis Sayles considers it
proper that purchases and sales be made by ACCESS PERSONS in the marketplace of
securities owned by Loomis Sayles' clients, PROVIDED that such securities
transactions comply with the spirit of, and the specific restrictions and
limitations set forth in the Code. In making personal investment decisions,
however, you must exercise extreme care to ensure that the provisions of the
Code are not violated and under no circumstances, may an ACCESS PERSON use the
knowledge of COVERED SECURITIES purchased or sold by any client of Loomis
Sayles or COVERED SECURITIES being considered for purchase or sale by any
client of Loomis Sayles to profit personally, directly or indirectly, by the
market effect of such transactions.
Improper trading activity can constitute a violation of the Code. The
Code can also be violated by an ACCESS PERSON'S failure to file required
reports, by making inaccurate or misleading reports or statements concerning
trading activity, or by opening an account with a non-SELECT BROKER without
proper approval as set forth in the Code.
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It is not intended that these policies will specifically address
every situation involving personal trading. These policies will be interpreted
and applied, and exceptions and amendments will be made, by Loomis Sayles in a
manner considered fair and equitable, but in all cases with the view of placing
Loomis Sayles' clients' interests paramount. It also bears emphasis that
technical compliance with the procedures, prohibitions and limitations of this
Code will not automatically insulate you from scrutiny of, and sanctions for,
securities transactions which indicate an abuse of Loomis Sayles' fiduciary
duty to any of its clients.
You are encouraged to bring any questions you may have about the Code
to PERSONAL TRADING COMPLIANCE.
PERSONAL TRADING COMPLIANCE, the CHIEF COMPLIANCE OFFICER and the
Loomis Sayles Ethics Committee will review the terms and provisions of the Code
at least annually, and make amendments as necessary. Any amendments to the Code
will be provided to you.
3. A FEW KEY TERMS
BOLDFACED terms have special meaning in this Code. The application of
a particular Code requirement to you may hinge on the elements of the
definition of these terms. See the GLOSSARY at the end of this Code for
definitions of these terms. In order to have a basic understanding of the Code,
however, you must have an understanding of the terms "COVERED SECURITY",
"BENEFICIAL OWNERSHIP" and "INVESTMENT CONTROL" as used in the Code.
3.1. COVERED SECURITY
This Code generally relates to transactions in and ownership of an
investment that is a COVERED SECURITY. Currently, this means any type of equity
or debt security (such as common and preferred stocks, and corporate and
government bonds or notes), any equivalent (such as ADRs), any derivative,
instrument representing, or any rights relating to, a COVERED SECURITY, and any
closely related security (such as certificates of participation, depository
receipts, collateral--trust certificates, put and call options, warrants, and
related convertible or exchangeable securities and securities indices). Shares
of closed-end funds, municipal obligations and securities issued by agencies
and instrumentalities of the U.S. government (e.g. GNMA obligations) are also
considered COVERED SECURITIES under the Code.
Additionally, the shares of any investment company registered under
the Investment Company Act and the shares of any collective investment vehicle
("CIV"), (e.g. SICAVs, OEICs, UCITs, etc.) that is advised, sub-advised, or
distributed by Loomis Sayles, Natixis, or a Natixis affiliate ("REPORTABLE
FUNDS") are deemed to be COVERED SECURITIES for purposes of certain provisions
of the Code. REPORTABLE FUNDS include open-end and closed-end funds and CIVs
that are advised, sub-advised, or distributed by Loomis Sayles, Natixis, or a
Natixis affiliate, but exclude money market funds. A current list of REPORTABLE
FUNDS is attached as EXHIBIT ONE and will be maintained on the firm's intranet
site under the Legal and Compliance page.
EXPLANATORY NOTE: WHILE THE DEFINITION OF REPORTABLE FUNDS ENCOMPASSES FUNDS OR
CIVS THAT ARE ADVISED, SUB-ADVISED AND/OR DISTRIBUTED BY
NATIXIS AND ITS AFFILIATES, ONLY THOSE FUNDS OR CIVS ADVISED
OR SUB-ADVISED BY LOOMIS SAYLES ("LOOMIS ADVISED FUND") ARE
SUBJECT TO CERTAIN TRADING RESTRICTIONS OF THE CODE
(SPECIFICALLY, THE SHORT-TERM TRADING PROFIT AND ROUND TRIP
TRANSACTION
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RESTRICTIONS). PLEASE REFER TO SECTION 4.3 AND 4.4 OF THE
CODE FOR FURTHER EXPLANATION OF THESE TRADING RESTRICTIONS.
ADDITIONALLY, EXHIBIT ONE DISTINGUISHES BETWEEN THOSE FUNDS
AND CIVS THAT ARE ONLY SUBJECT TO REPORTING REQUIREMENTS
UNDER THE CODE (ALL REPORTABLE FUNDS), AND THOSE THAT ARE
SUBJECT TO BOTH THE REPORTING REQUIREMENTS AND THE
AFOREMENTIONED TRADING RESTRICTIONS (LOOMIS ADVISED FUNDS).
Shares of exchange traded funds ("ETFs") and closed-end funds are
deemed to be COVERED SECURITIES for the purposes of certain provisions of the
Code. Broad based open-ended ETFs with either a market capitalization exceeding
U.S. $1 billion OR an average daily trading volume exceeding 1 million shares
(over a 90 day period); options on such ETFs, options on the indices of such
ETFs; and ETFs that invest 80% of their assets in securities that are not
subject to the pre-clearance requirements of the Code, are exempt from certain
provisions of the Code ("EXEMPT ETFS"). A current list of EXEMPT ETFS is
attached as Exhibit Two and will be maintained on the firm's intranet site
under the Legal and Compliance page.
EXPLANATORY NOTE: BROAD BASED OPEN-ENDED ETFS ARE DETERMINED BY PERSONAL TRADING
COMPLIANCE USING BLOOMBERG DATA.
All ACCESS PERSONS are expected to comply with the spirit of the
Code, as well as the specific rules contained in the Code. Therefore, while the
lists of REPORTABLE FUNDS and EXEMPT ETFS are subject to change, it is
ultimately the responsibility of all ACCESS PERSONS to review these lists which
can be found in EXHIBIT(S) ONE AND TWO, prior to making an investment in a
REPORTABLE FUND or ETF.
It should be noted that private placements, hedge funds and
investment pools are deemed to be COVERED SECURITIES for purposes of the Code
whether or not advised, sub-advised, or distributed by Loomis Sayles or a
Natixis investment adviser. Investments in such securities are discussed under
sections 4.12 and 5.2.
Please see EXHIBIT THREE for the application of the Code to a
specific COVERED SECURITY or instrument, including exemptions from
pre-clearance.
3.2. BENEFICIAL OWNERSHIP
The Code governs any COVERED SECURITY in which an Access Person has
any direct or indirect "BENEFICIAL OWNERSHIP." BENEFICIAL OWNERSHIP for
purposes of the Code means a direct or indirect "pecuniary interest" that is
held or shared by you directly or indirectly (through any contract,
arrangement, understanding, relationship or otherwise) in a COVERED SECURITY.
The term "pecuniary interest" in turn generally means your opportunity directly
or indirectly to receive or share in any PROFIT derived from a transaction in a
COVERED SECURITY, whether or not the COVERED SECURITY or the relevant account
is in your name and regardless of the type of account (i.e. brokerage account,
direct account, or retirement plan account). Although this concept is subject
to a variety of U.S. Securities and Exchange Commission ("SEC") rules and
interpretations, you should know that you are PRESUMED under the Code to have
an indirect pecuniary interest as a result of:
o ownership of a COVERED SECURITY by your spouse or minor children;
o ownership of a COVERED SECURITY by a live-in partner who shares your
household and combines his/her financial resources in a manner similar
to that of married persons;
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o ownership of a COVERED SECURITY by your other family members sharing
your household (including an adult child, a stepchild, a grandchild, a
parent, stepparent, grandparent, sibling, mother- or father-in-law,
sister- or brother-in-law, and son- or daughter-in-law);
o your share ownership, partnership interest or similar interest in
COVERED SECURITIES held by a corporation, general or limited
partnership or similar entity you control;
o your right to receive dividends or interest from a COVERED SECURITY
even if that right is separate or separable from the underlying
securities;
o your interest in a COVERED SECURITY held for the benefit of you alone
or for you and others in a trust or similar arrangement (including any
present or future right to income or principal); and
o your right to acquire a COVERED SECURITY through the exercise or
conversion of a "derivative COVERED SECURITY."
In addition, life events such as marriage, death of a family member
(i.e., inheritance), etc. may result in your acquiring BENEFICIAL OWNERSHIP
and/or INVESTMENT CONTROL over accounts previously belonging to others.
Therefore, any COVERED SECURITY, including REPORTABLE FUNDS, along with any
account that holds or can hold a COVERED SECURITY, including REPORTABLE FUNDS,
in which you have a BENEFICIAL OWNERSHIP and/or INVESTMENT CONTROL, as
described in Section 3.2 and Section 3.3 of the Code, resulting from marriage
or other life event must be reported to PERSONAL TRADING COMPLIANCE promptly,
and no later than the next applicable quarterly reporting period.
EXPLANATORY NOTE: ALL ACCOUNTS THAT HOLD OR CAN HOLD A COVERED SECURITY IN
WHICH AN ACCESS PERSON HAS BENEFICIAL OWNERSHIP ARE SUBJECT
TO THE CODE (SUCH ACCOUNTS INCLUDE, BUT ARE NOT LIMITED TO,
PERSONAL BROKERAGE ACCOUNTS, MUTUAL FUND ACCOUNTS, ACCOUNTS
OF YOUR SPOUSE, ACCOUNTS OF MINOR CHILDREN LIVING IN YOUR
HOUSEHOLD, FAMILY OF FUND ACCOUNTS, TRANSFER AGENT ACCOUNTS
HOLDING MUTUAL FUNDS OR BOOK ENTRY SHARES, IRAS, 401KS,
TRUSTS, DRIPS, ESOPS, ETC).
Please see EXHIBIT FOUR for specific examples of the types of
interests and accounts subject to the Code.
3.3. INVESTMENT CONTROL
The Code governs any COVERED SECURITY in which an ACCESS PERSON has
direct or indirect "INVESTMENT CONTROL." The term INVESTMENT CONTROL
encompasses any influence (i.e., power to manage, trade, or give instructions
concerning the investment disposition of assets in the account or to approve or
disapprove transactions in the account), whether sole or shared, direct or
indirect, you exercise over the account or COVERED SECURITY.
You should know that you are PRESUMED under the Code to have
INVESTMENT CONTROL as a result of having:
o INVESTMENT CONTROL (sole or shared) over your personal brokerage
account(s);
o INVESTMENT CONTROL (sole or shared) over an account(s) in the name of
your spouse or minor children, unless, you have renounced an interest
in your spouse's assets (subject to the approval of the CHIEF
COMPLIANCE OFFICER);
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o INVESTMENT CONTROL (sole or shared) over an account(s) in the name of
any family member, friend or acquaintance;
o Involvement in an Investment Club;
o Trustee power over an account(s); and
o The existence and/or exercise of a power of attorney over an account.
Please see EXHIBIT FOUR for specific examples of the types of
interests and accounts subject to the Code.
3.4. MAINTAINING PERSONAL ACCOUNTS
All ACCESS PERSONS who have personal accounts that hold or can hold
COVERED SECURITIES in which they have direct or indirect INVESTMENT CONTROL AND
BENEFICIAL OWNERSHIP are required to maintain such accounts at one of the
following firms: Ameriprise, Bank of America/Merrill Lynch, Charles Schwab,
Citi Personal Wealth Management, E*TRADE, Fidelity Investments, Interactive
Brokers, Morgan Stanley Smith Barney, TD Ameritrade, Scottrade, UBS, Vanguard,
or Wells Fargo (collectively, the "SELECT BROKERS"). Additionally, an ACCESS
PERSON may only purchase and hold shares of REPORTABLE FUNDS through either a
SELECT BROKER, directly from the REPORTABLE FUND through its transfer agent, or
through one or more of Loomis Sayles' retirement plans.
Accounts in which the ACCESS PERSON only has either INVESTMENT
CONTROL or BENEFICIAL OWNERSHIP; certain retirement accounts with an ACCESS
PERSON'S prior employer; accounts managed by an outside adviser in which the
ACCESS PERSON exercises no investment discretion; accounts in which the ACCESS
PERSON'S spouse is employed by another investment firm and must abide by that
firm's Code of Ethics; and/or the retirement accounts of an ACCESS PERSON'S
spouse may be maintained with a firm other than the SELECT BROKERS with the
approval of PERSONAL TRADING COMPLIANCE or the CHIEF COMPLIANCE OFFICER.
However, Access Persons are responsible for ensuring that PERSONAL TRADING
COMPLIANCE receives duplicate confirms as and when transactions are executed in
such accounts, and statements on a monthly basis, if available, or at least
quarterly. In addition, PERSONAL TRADING COMPLIANCe or the CHIEF COMPLIANCE
OFFICER may grant exemptions to the SELECT BROKER requirement for accounts not
used for general trading purposes such as ESOPs, DRIPs, securities held
physically or in book entry form, family of fund accounts or situations in
which the ACCESS PERSON has a reasonable hardship for maintaining their
accounts with a SELECT BROKER.
In addition, ACCESS PERSONS with a residence outside the U.S. are not
required to maintain their personal accounts with a SELECT BROKER. However,
such ACCESS PERSONS who have personal accounts that hold or can hold COVERED
SECURITIES, including REPORTABLE FUNDS in which they have direct or indirect
INVESTMENT CONTROL and/or BENEFICIAL OWNERSHIP, are responsible for ensuring
that PERSONAL TRADING COMPLIANCE receives duplicate confirms as and when
transactions are executed in the account, and statements on a monthly basis, if
available, or at least quarterly. All of the remaining requirements and
restrictions of the Code apply to ACCESS PERSONS with a residence outside the
U.S.
EXPLANATORY NOTE: WHILE CERTAIN ACCOUNTS MAY BE GRANTED AN EXEMPTION FROM
CERTAIN PROVISIONS OF THE CODE, INCLUSIVE OF THE SELECT
BROKER REQUIREMENT, THEY ARE STILL SUBJECT TO THE REPORTING
REQUIREMENTS OF THE CODE AND MAY BE SUBJECT TO THE PRE-
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CLEARANCE REQUIREMENTS OF THE CODE (E.G. JOINT ACCOUNTS).
THE TERMS OF A SPECIFIC EXEMPTION WILL BE OUTLINED IN AN
EXEMPTION MEMORANDUM WHICH IS ISSUED TO THE ACCESS PERSON BY
PERSONAL TRADING COMPLIANCE. AN ACCESS PERSON'S FAILURE TO
ABIDE BY THE TERMS AND CONDITIONS OF AN ACCOUNT EXEMPTION
ISSUED BY PERSONAL TRADING COMPLIANCE COULD RESULT IN A
VIOLATION OF THE CODE.
4. SUBSTANTIVE RESTRICTIONS ON PERSONAL TRADING
The following are substantive prohibitions and restrictions on ACCESS
PERSONS' personal trading and related activities. In general, the prohibitions
set forth below relating to trading activities apply to accounts holding
COVERED SECURITIES in which an ACCESS PERSON has BENEFICIAL OWNERSHIP AND
INVESTMENT CONTROL.
4.1. PRE-CLEARANCE
Each ACCESS PERSON must pre-clear through the PTA Pre-clearance
System ("PTA") all VOLITIONAL transactions in COVERED SECURITIES (i.e.
transactions in which the ACCESS PERSON has determined the timing as to when
the purchase or sale transaction will occur and amount of shares to be
purchased or sold) in which he or she has INVESTMENT CONTROL AND in which he or
she has or would acquire BENEFICIAL OWNERSHIP. Exceptions to the pre-clearance
requirement include, but are not limited to: Open-ended mutual funds and CIVs
meeting the criteria described below, EXEMPT ETFS listed in Exhibit Two, and US
Government Agency bonds (i.e. GNMA, FNMA, FHLMC), as set forth in EXHIBIT(S)
THREE AND FIVE.
EXPLANATORY NOTE: A CIV IS EXEMPT FROM PRECLEARANCE UNDER THE FOLLOWING
CONDITIONS: ISSUES SHARES THAT SHAREHOLDERS HAVE THE RIGHT
TO REDEEM ON DEMAND; CALCULATES AN NAV ON A DAILY BASIS IN A
MANNER CONSISTENT WITH THE PRINCIPLES OF SECTION 2(A)(41) OF
THE 1940 ACT AND RULE 2A-4 THEREUNDER; ISSUES AND REDEEMS
SHARES AT THE NAV NEXT DETERMINED AFTER RECEIPT OF THE
RELEVANT PURCHASE OR REDEMPTION ORDER CONSISTENT WITH THE
"FORWARD PRICING" PRINCIPLES OF RULE 22C-1 UNDER THE 1940
ACT; AND THERE IS NO SECONDARY MARKET FOR THE SHARES OF THE
CIV.
EXPLANATORY NOTE: FUTURES, OPTIONS AND SWAP TRANSACTIONS IN COVERED SECURITIES
MUST BE MANUALLY PRE-CLEARED BY PERSONAL TRADING COMPLIANCE
SINCE PTA CANNOT HANDLE SUCH TRANSACTIONS. INITIAL PUBLIC
OFFERINGS, PRIVATE PLACEMENT TRANSACTIONS, INCLUDING HEDGE
FUNDS WHETHER OR NOT THEY ARE ADVISED, SUB- ADVISED, OR
DISTRIBUTED BY LOOMIS SAYLES OR A NATIXIS INVESTMENT
ADVISER, PARTICIPATION IN INVESTMENT CLUBS AND PRIVATE
POOLED VEHICLES REQUIRE SPECIAL PRE-CLEARANCE AS DETAILED
UNDER SECTIONS 4.11, 4.12 AND 5.2 OF THE CODE.
EXPLANATORY NOTE: BROAD BASED OPEN-ENDED ETFS WITH EITHER A MARKET
CAPITALIZATION EXCEEDING $1BILLION OR AN AVERAGE DAILY
TRADING VOLUME EXCEEDING 1 MILLION SHARES (OVER A 90 DAY
PERIOD); OPTIONS ON SUCH ETFS, OPTIONS ON THE INDICES OF
SUCH ETFS; AND ETFS THAT INVEST 80% OF THEIR ASSETS IN
SECURITIES THAT ARE NOT SUBJECT TO THE PRE-CLEARANCE
REQUIREMENTS OF THE CODE, ARE EXEMPT FROM THE PRE-CLEARANCE
AND TRADING RESTRICTIONS SET FORTH IN SECTIONS 4.1, 4.3,
4.5, 4.6, 4.7, 4.9, AND 4.10 OF THE CODE. A LIST OF THE
EXEMPT ETFS IS PROVIDED IN
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EXHIBIT TWO OF THE CODE. ALL CLOSED END-FUNDS, CLOSED-END
ETFS, SECTOR BASED/NARROWLY DEFINED ETFS AND BROAD BASED
OPEN-ENDED ETFS WITH A MARKET CAPITALIZATION BELOW U.S. $1
BILLION AND AN AVERAGE DAILY TRADING VOLUME BELOW 1 MILLION
SHARES (OVER A 90 DAY PERIOD) ARE SUBJECT TO THE
PRE-CLEARANCE AND TRADING RESTRICTIONS DETAILED UNDER
SECTION 4 OF THE CODE.
ALL CLOSED-END FUNDS AND ETFS, INCLUDING THOSE EXEMPT ETFS
AND THEIR ASSOCIATED OPTIONS AS DESCRIBED ABOVE, ARE SUBJECT
TO THE REPORTING REQUIREMENTS DETAILED IN SECTION 6 OF THE
CODE.
Any transaction approved pursuant to the pre-clearance request
procedures MUST BE EXECUTED BY THE END OF THE TRADING DAY ON WHICH IT IS
APPROVED unless PERSONAL TRADING COMPLIANCE extends the pre-clearance for an
additional trading day. If the ACCESS PERSON'S trade has not been executed by
the end of the same trading day (or the next trading day in the case of an
extension), the pre-clearance will lapse and the ACCESS PERSON may not trade
without again seeking and obtaining pre-clearance of the intended trade.
For ACCESS PERSONS with a U.S. residence, pre-clearance requests can
only be submitted through PTA and/or to PERSONAL TRADING COMPLIANCE Monday --
Friday from 9:30am-4:00pm Eastern Standard Time. ACCESS PERSONS with a
residence outside the U.S. will be given separate pre-clearance guidelines
instructing them on the availability of PTA and PERSONAL TRADING COMPLIANCE
support hours.
If after pre-clearance is given and before it has lapsed, an ACCESS
PERSON becomes aware that a COVERED SECURITY as to which he or she obtained
pre-clearance has become the subject of a buy or sell order or is being
considered for purchase or sale for a client account, the ACCESS PERSON who
obtained the pre-clearance must consider the pre-clearance revoked AND MUST
NOTIFY PERSONAL TRADING COMPLIANCE IMMEDIATELY. If the transaction has already
been executed before the ACCESS PERSON becomes aware of such facts, no
violation will be considered to have occurred as a result of the ACCESS
PERSON'S transaction.
If an ACCESS PERSON has actual knowledge that a requested transaction
is nevertheless in violation of this Code or any provision thereof, approval of
the request will not protect the ACCESS PERSON'S transaction from being
considered in violation of the Code. The CHIEF COMPLIANCE OFFICER or PERSONAL
TRADING COMPLIANCE may deny or revoke pre-clearance for any reason that is
deemed to be consistent with the spirit of the Code.
4.2. GOOD UNTIL CANCELED AND LIMIT ORDERS
No ACCESS PERSON shall place a "good until canceled," "limit" or
equivalent order with his/her broker except that an ACCESS PERSON may utilize a
"day order with a limit" so long as the transaction is consistent with
provisions of this Code, including the pre-clearance procedures. All orders
must expire at the end of the trading day on which they are pre-cleared unless
otherwise extended by PERSONAL TRADING COMPLIANCE.
4.3. SHORT TERM TRADING PROFITS
No ACCESS PERSON may profit from the VOLITIONAL purchase and sale, OR
conversely the VOLITIONAL sale and purchase, of the same or equivalent COVERED
SECURITY (including LOOMIS ADVISED FUNDS) within 60 calendar days (unless the
sale involved shares of a COVERED SECURITY that were acquired more than 60 days
prior). Hardship exceptions may be requested (in advance) from PERSONAL TRADING
COMPLIANCE.
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An ACCESS PERSON may sell a COVERED SECURITY (including LOOMIS
ADVISED FUNDS) or cover an existing short position at a loss within 60 calendar
days. Such requests must be submitted through the PTA System and to PERSONAL
TRADING COMPLIANCE for approval because the PTA System does not have the
capability to determine whether the COVERED SECURITY will be sold at a gain or
a loss.
EXPLANATORY NOTE: FOR PURPOSES OF CALCULATING THE 60 DAY HOLDING PERIOD, THE
TRADE DATE OF A GIVEN PURCHASE OR SALE IS DEEMED TO BE DAY
ZERO. 60 FULL DAYS MUST PASS BEFORE AN ACCESS PERSON CAN
TRADE THAT SAME COVERED SECURITY FOR A PROFIT AND THEREFORE,
ALLOWING THE ACCESS PERSON TO DO SO ON THE 61ST DAY.
EXPLANATORY NOTE: THE SHORT TERM TRADING PROFITS PROVISION IS APPLICABLE TO
TRANSACTIONS THAT ARE EXECUTED ACROSS ALL OF AN ACCESS
PERSON'S ACCOUNTS. FOR EXAMPLE, IF AN ACCESS PERSON SOLD
SHARES OF ABC IN HIS/HER FIDELITY BROKERAGE ACCOUNT TODAY,
THAT ACCESS PERSON WOULD NOT BE ALLOWED TO BUY SHARES OF ABC
IN HIS/HER CHARLES SCHWAB IRA ACCOUNT AT A LOWER PRICE
WITHIN 60 DAYS FOLLOWING THE SALE.
EXPLANATORY NOTE: PLEASE REFER TO EXHIBIT ONE FOR A CURRENT LIST OF LOOMIS
ADVISED FUNDS. PLEASE ALSO NOTE THAT ALL CLOSED-END FUNDS
ARE SUBJECT TO THE TRADING RESTRICTIONS OF SECTION 4.3 OF
THE CODE.
4.4. RESTRICTIONS ON ROUND TRIP TRANSACTIONS IN LOOMIS ADVISED FUNDS
In addition to the 60 day holding period requirement for purchases
and sales of LOOMIS ADVISED FUNDS, an ACCESS PERSON is prohibited from
purchasing, selling and then re-purchasing shares of the same LOOMIS ADVISED
FUND within a 90 day period ("Round Trip Restriction"). The Round Trip
Restriction does not limit the number of times an ACCESS PERSON can purchase a
LOOMIS ADVISED FUND or sell a LOOMIS ADVISED FUND during a 90 day period. In
fact, subject to the holding period requirement described above, an ACCESS
PERSON can purchase a LOOMIS ADVISED FUND (through one or multiple
transactions) and can liquidate their position in that fund (through one or
several transactions) during a 90 day period. However, an ACCESS PERSON cannot
then reacquire a position in the same LOOMIS ADVISED FUND previously sold
within the same 90 day period.
The Round Trip Restriction will only apply to VOLITIONAL transactions
in LOOMIS ADVISED FUNDS. Therefore, shares of LOOMIS ADVISED FUNDS acquired
through a dividend reinvestment or dollar cost averaging program, and automatic
monthly contributions to the firm's 401K plan will not be considered when
applying the Round Trip Restriction.
Finally, all VOLITIONAL purchase and sale transactions of LOOMIS
ADVISED FUNDS, in any share class and in ANY employee account (i.e., direct
account with the LOOMIS ADVISED FUND, Select Broker account, 401K account,
etc.) will be matched for purposes of applying the Round Trip Restriction.
EXPLANATORY NOTE: ONLY LOOMIS ADVISED FUNDS ARE SUBJECT TO SECTION 4.4 OF THE
CODE. PLEASE REFER TO EXHIBIT ONE FOR A CURRENT LIST OF
LOOMIS ADVISED FUNDS.
4.5. DERIVATIVES
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No ACCESS PERSON shall use derivatives, including but not limited, to
options, futures, swaps or warrants on a COVERED SECURITY to evade the
restrictions of the Code. In other words, no ACCESS PERSON may use derivative
transactions with respect to a COVERED SECURITY if the Code would prohibit the
ACCESS PERSON from taking the same position directly in the underlying COVERED
SECURITY.
EXPLANATORY NOTE: WHEN TRANSACTING IN DERIVATIVES, ACCESS PERSONS MUST PRE-
CLEAR THE DERIVATIVE AND THE UNDERLYING SECURITY IN PTA AS
WELL AS RECEIVE MANUAL APPROVAL FROM PERSONAL TRADING
COMPLIANCE BEFORE EXECUTING THEIR TRANSACTION. PLEASE NOTE
THAT OPTIONS ON EXEMPT ETFS AND THE UNDERLYING INDEX OF THE
ETF, AS WELL AS FUTURES ON CURRENCIES, COMMODITIES, CASH
INSTRUMENTS (SUCH AS LOANS OR DEPOSITS), STOCK INDEXES AND
INTEREST RATES DO NOT REQUIRE PRE-CLEARANCE. FOR MORE
DETAILED INFORMATION, PLEASE SEE SECTION 4.1 OF THE CODE.
4.6. SHORT SALES
No ACCESS PERSON may purchase a put option, sell a call option, sell
a COVERED SECURITY short or otherwise take a short position in a COVERED
SECURITY then being held long in a Loomis Sayles client account, unless, in the
cases of the purchase of a put or sale of a call option, the option is on a
broad based index.
EXPLANATORY NOTE: IF AN ACCESS PERSON SEEKS PRE-CLEARANCE TO PURCHASE A PUT
OPTION OR SELL A CALL OPTION TO HEDGE AN EXISTING LONG
POSITION IN THE SAME UNDERLYING SECURITIES, PTC WILL COMPARE
THE VALUE OF THE UNDERLYING LONG POSITION TO THE OPTION TO
DETERMINE WHETHER THE ACCESS PERSON'S NET POSITION WOULD BE
LONG OR SHORT. IF SHORT, THE OPTION TRANSACTION WILL BE
DENIED.
4.7. COMPETING WITH CLIENT TRADES
Except as set forth in Section 4.8, an ACCESS PERSON may not,
directly or indirectly, purchase or sell a COVERED SECURITY (REPORTABLE FUNDS
are not subject to this rule.) when the ACCESS PERSON knows, or reasonably
should have known, that such COVERED SECURITIES transaction competes in the
market with any actual or considered COVERED SECURITIES transaction for any
client of Loomis Sayles, or otherwise acts to harm any Loomis Sayles client's
COVERED SECURITIES transactions.
Generally pre-clearance will be DENIED if:
o a COVERED SECURITY or a closely related COVERED SECURITY is the
subject of a pending "buy" or "sell" order for a Loomis Sayles
client until that buy or sell order is executed or withdrawn.
o the COVERED SECURITY is being considered for purchase or sale
for a Loomis Sayles client, until that security is no longer
under consideration for purchase or sale.
The PTA System has the information necessary to deny pre-clearance if
any of these situations apply. Therefore, if you receive an approval in PTA,
you may assume the COVERED
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SECURITY is not being considered for purchase or sale for a client account
UNLESS you have actual knowledge to the contrary, in which case the
pre-clearance you received is null and void. For COVERED SECURITIES requiring
manual pre-clearance (i.e. futures, options and other derivative transactions
in COVERED SECURITIES), the applicability of such restrictions will be
determined by PERSONAL TRADING COMPLIANCE upon the receipt of the pre-clearance
request.
4.8. LARGE CAP/DE MINIMIS EXEMPTION
An ACCESS PERSON who wishes to make a trade in a COVERED SECURITY
that would otherwise be denied pre-clearance solely because the COVERED
SECURITY is under consideration or pending execution for a client, as provided
in Section 4.7, will nevertheless receive approval when submitted for
pre-clearance provided that:
o the issuer of the COVERED SECURITY in which the ACCESS PERSON
wishes to transact has a market capitalization exceeding U. S. $5
billion (a "Large Cap Security"); AND
o the aggregate amount of the ACCESS PERSON'S transactions in that
Large Cap Security on that day across all personal accounts does
not exceed $10,000 USD.
Such transactions will be subject to all other provisions of the Code.
4.9. INVESTMENT PERSON SEVEN-DAY BLACKOUT RULE
No INVESTMENT PERSON shall, directly or indirectly, purchase or sell
any COVERED SECURITY (REPORTABLE FUNDS are not subject to this rule) within a
period of seven (7) calendar days (trade date being day zero) BEFORE and AFTER
the date that a Loomis Sayles client, with respect to which he or she has the
ability to influence investment decisions or has prior investment knowledge
regarding associated client activity, has purchased or sold such COVERED
SECURITY or a closely related COVERED SECURITY. It is ultimately the INVESTMENT
PERSON'S responsibility to understand the rules and restrictions of the Code
and to know what COVERED SECURITIES are being traded in his/her client(s)
account(s) or any account(s) with which he/she is associated.
EXPLANATORY NOTE: THE "SEVEN DAYS BEFORE" ELEMENT OF THIS RESTRICTION IS BASED
ON THE PREMISE THAT AN INVESTMENT PERSON WHO HAS THE ABILITY
TO INFLUENCE INVESTMENT DECISIONS OR HAS PRIOR INVESTMENT
KNOWLEDGE REGARDING ASSOCIATED CLIENT ACTIVITY CAN NORMALLY
BE EXPECTED TO KNOW, UPON EXECUTION OF HIS OR HER PERSONAL
TRADE, WHETHER ANY CLIENT AS TO WHICH HE OR SHE IS
ASSOCIATED, HAS TRADED, OR WILL BE TRADING IN THE SAME OR
CLOSELY RELATED COVERED SECURITY WITHIN SEVEN DAYS OF HIS OR
HER PERSONAL TRADE. FURTHERMORE, AN INVESTMENT PERSON WHO
HAS THE ABILITY TO INFLUENCE INVESTMENT DECISIONS HAS A
FIDUCIARY OBLIGATION TO RECOMMEND AND/OR AFFECT SUITABLE AND
ATTRACTIVE TRADES FOR CLIENTS REGARDLESS OF WHETHER SUCH
TRADES MAY CAUSE A PRIOR PERSONAL TRADE TO BE CONSIDERED AN
APPARENT VIOLATION OF THIS RESTRICTION. IT WOULD CONSTITUTE
A BREACH OF FIDUCIARY DUTY AND A VIOLATION OF THIS CODE TO
DELAY OR FAIL TO MAKE ANY SUCH RECOMMENDATION OR TRANSACTION
IN A CLIENT ACCOUNT IN ORDER TO AVOID A CONFLICT WITH THIS
RESTRICTION.
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IT IS UNDERSTOOD THAT THERE MAY BE PARTICULAR CIRCUMSTANCES
(I.E. NEWS ON AN ISSUER, A CLIENT INITIATED LIQUIDATION,
SUBSCRIPTION OR REBALANCING) THAT MAY OCCUR AFTER AN
INVESTMENT PERSON'S PERSONAL TRADE WHICH GIVES RISE TO AN
OPPORTUNITY OR NECESSITY FOR AN ASSOCIATED CLIENT TO TRADE
IN THAT COVERED SECURITY WHICH DID NOT EXIST OR WAS NOT
ANTICIPATED BY THAT PERSON AT THE TIME OF THAT PERSON'S
PERSONAL TRADE. PERSONAL TRADING COMPLIANCE WILL REVIEW ALL
EXTENUATING CIRCUMSTANCES WHICH MAY WARRANT THE WAIVING OF
ANY REMEDIAL ACTIONS IN A PARTICULAR SITUATION INVOLVING AN
INADVERTENT VIOLATION OF THIS RESTRICTION. IN SUCH CASES, AN
EXCEPTION TO THE INVESTMENT PERSON SEVEN-DAY BLACKOUT RULE
WILL BE GRANTED UPON APPROVAL BY THE CHIEF COMPLIANCE
OFFICER.
THE CHIEF COMPLIANCE OFFICER, OR DESIGNEE THEREOF, MAY GRANT
A WAIVER OF THE INVESTMENT PERSON SEVEN-DAY BLACKOUT RULE IF
THE INVESTMENT PERSON'S PROPOSED TRANSACTION IS CONFLICTING
WITH CLIENT "CASH FLOW" TRADING IN THE SAME SECURITY (I.E.,
PURCHASES OF A BROAD NUMBER OF PORTFOLIO SECURITIES IN ORDER
TO INVEST A CAPITAL ADDITION TO THE ACCOUNT OR SALES OF A
BROAD NUMBER OF SECURITIES IN ORDER TO GENERATE PROCEEDS TO
SATISFY A CAPITAL WITHDRAWAL FROM THE ACCOUNT). SUCH "CASH
FLOW" TRANSACTIONS ARE DEEMED TO BE NON- VOLITIONAL AT THE
SECURITY LEVEL SINCE THEY DO NOT CHANGE THE WEIGHTING OF THE
SECURITY BEING PURCHASED OR SOLD IN THE CLIENT'S PORTFOLIO.
EXPLANATORY NOTE: THE TRADE DATE OF AN INVESTMENT PERSON'S PURCHASE OR SALE
IS DEEMED TO BE DAY ZERO. ANY ASSOCIATED CLIENT TRADE
ACTIVITY EXECUTED, IN EITHER THAT COVERED SECURITY OR A
CLOSELY RELATED COVERED SECURITY, 7 FULL CALENDAR DAYS
BEFORE OR AFTER AN ACCESS PERSON'S TRADE WILL BE CONSIDERED
A VIOLATION OF THE INVESTMENT PERSON SEVEN-DAY BLACKOUT
RULE. FOR EXAMPLE, IF A CLIENT ACCOUNT PURCHASED SHARES OF
COMPANY ABC ON MAY 4TH, ANY ACCESS PERSON WHO IS ASSOCIATED
WITH THAT CLIENT ACCOUNT CANNOT TRADE ABC IN A PERSONAL
ACCOUNT UNTIL MAY 12TH WITHOUT CAUSING A POTENTIAL CONFLICT
WITH THE INVESTMENT PERSON SEVEN-DAY BLACKOUT RULE.
EXPLANATORY NOTE: WHILE THE INVESTMENT PERSON SEVEN-DAY BLACKOUT RULE IS
DESIGNED TO ADDRESS CONFLICTS BETWEEN INVESTMENT PERSONS AND
THEIR CLIENTS, IT IS THE FIDUCIARY OBLIGATION OF ALL ACCESS
PERSONS TO NOT AFFECT TRADES IN THEIR PERSONAL ACCOUNT IF
THEY HAVE PRIOR KNOWLEDGE OF CLIENT TRADING OR PENDING
TRADING ACTIVITY IN THE SAME OR EQUIVALENT SECURITIES. THE
PERSONAL TRADE ACTIVITY OF ALL ACCESS PERSONS IS MONITORED
BY PERSONAL TRADING COMPLIANCE FOR POTENTIAL CONFLICTS WITH
CLIENT TRADING ACTIVITY.
4.10. RESEARCH RECOMMENDATIONS
The Loomis Sayles Fixed Income RESEARCH ANALYSTS issue "Buy," "Sell,"
and "Hold" recommendations on the fixed income securities that they cover. The
Loomis Sayles Equity Research Analysts issue price targets and other types of
recommendations on the companies they cover, and certain Equity products have
their own research analysts that provide recommendations to their respective
investment teams. Collectively the fixed income and equity recommendations and
equity price targets are hereinafter referred to as "Recommendations".
RECOMMENDATIONS are intended to be used for the benefit of the firm's
clients. It is also understood ACCESS PERSONS may use RECOMMENDATIONS as a
factor in the investment decisions
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they make in their personal and other brokerage accounts that are covered by
the Code. The fact that RECOMMENDATIONS may be used by the firm's investment
teams for client purposes and ACCESS PERSONS may use them for personal reasons
creates a potential for conflicts of interests. Therefore, the following rules
apply to RECOMMENDATIONS:
o During the three (3) business day period BEFORE a RESEARCH ANALYST
issues a recommendation on a COVERED SECURITY, that the RESEARCH
ANALYST has reason to believe that his/her RECOMMENDATION is likely to
result in client trading in the COVERED SECURITY, the RESEARCH ANALYST
may not purchase or sell said COVERED SECURITY for any of his/her
personal brokerage accounts or other accounts covered by the Code.
EXPLANATORY NOTE: IT IS UNDERSTOOD THAT THERE MAY BE PARTICULAR CIRCUMSTANCES
SUCH AS A NEWS RELEASE, CHANGE OF CIRCUMSTANCE OR SIMILAR
EVENT THAT MAY OCCUR AFTER A RESEARCH ANALYST'S PERSONAL
TRADE WHICH GIVES RISE TO A NEED, OR MAKES IT APPROPRIATE,
FOR THE RESEARCH ANALYST TO ISSUE A RECOMMENDATION ON SAID
COVERED SECURITY. A RESEARCH ANALYST HAS AN AFFIRMATIVE DUTY
TO MAKE UNBIASED RECOMMENDATIONS AND ISSUE REPORTS, BOTH
WITH RESPECT TO THEIR TIMING AND SUBSTANCE, WITHOUT REGARD
TO HIS OR HER PERSONAL INTEREST IN THE COVERED SECURITY. IT
WOULD CONSTITUTE A BREACH OF A RESEARCH ANALYST'S FIDUCIARY
DUTY AND A VIOLATION OF THIS CODE TO DELAY OR FAIL TO ISSUE
A RECOMMENDATION IN ORDER TO AVOID A CONFLICT WITH THIS
RESTRICTION.
PERSONAL TRADING COMPLIANCE WILL REVIEW ANY EXTENUATING
CIRCUMSTANCES WHICH MAY WARRANT THE WAIVING OF ANY REMEDIAL
SANCTIONS IN A PARTICULAR SITUATION INVOLVING AN INADVERTENT
VIOLATION OF THIS RESTRICTION.
o ACCESS PERSONS are prohibited from using a RECOMMENDATION for
purposes of transacting in the COVERED SECURITY covered by the
RECOMMENDATION in their personal accounts and other accounts covered
by the Code until such time Loomis Sayles' clients have completed
their transactions in said securities in order to give priority to
Loomis Sayles' clients' best interests.
EXPLANATORY NOTE: PERSONAL TRADING COMPLIANCE utilizes various automated
reports to monitor ACCESS PERSONS' trading in COVERED
SECURITIES relative to RECOMMENDATIONS and associated client
transactions. It also has various tools to determine whether
a RECOMMENDATION has been reviewed by an ACCESS PERSON. An
ACCESS PERSON'S trading in a COVERED SECURITY following a
RECOMMENDATION and subsequent client trading in the same
security and in the same direction will be deemed a
violation of the Code unless PERSONAL TRADING COMPLIANCE
determines otherwise.
4.11. INITIAL PUBLIC OFFERINGS
Investing in INITIAL PUBLIC OFFERINGS of COVERED SECURITIES is
prohibited unless such opportunities are connected with your prior employment
compensation (i.e. options, grants, etc.) or your spouse's employment
compensation. No ACCESS PERSON may, directly or indirectly, purchase any
securities sold in an INITIAL PUBLIC OFFERING without obtaining prior written
approval from the CHIEF COMPLIANCE OFFICER.
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4.12. PRIVATE PLACEMENT TRANSACTIONS
No ACCESS PERSON may, directly or indirectly, purchase any COVERED
SECURITY offered and sold pursuant to a PRIVATE PLACEMENT TRANSACTION,
including hedge funds, without obtaining the advance written approval of
PERSONAL TRADING COMPLIANCE, the CHIEF COMPLIANCE OFFICER AND the applicable
ACCESS PERSON'S supervisor or other appropriate member of senior management. In
addition to addressing potential conflicts of interest between the ACCESS
PERSON'S PRIVATE PLACEMENT TRANSACTION and the firm's clients' best interests,
the pre-clearance of PRIVATE PLACEMENTS is designed to determine whether the
ACCESS PERSON may come into possession of material non-public information
("MNPI") on a publically traded company as a result of the PRIVATE PLACEMENT.
A PRIVATE PLACEMENT TRANSACTION approval must be obtained by
completing an automated Private Placement Pre-clearance Form which can be found
on the Legal and Compliance Intranet Homepage under 'Personal Trading
Compliance Forms'.
EXPLANATORY NOTE: IF YOU HAVE BEEN AUTHORIZED TO ACQUIRE A COVERED SECURITY
IN A PRIVATE PLACEMENT TRANSACTION, YOU MUST DISCLOSE TO
PERSONAL TRADING COMPLIANCE IF YOU ARE INVOLVED IN A
CLIENT'S SUBSEQUENT CONSIDERATION OF AN INVESTMENT IN THE
ISSUER OF THE PRIVATE PLACEMENT, EVEN IF THAT INVESTMENT
INVOLVES A DIFFERENT TYPE OR CLASS OF COVERED SECURITY. IN
SUCH CIRCUMSTANCES, THE DECISION TO PURCHASE SECURITIES OF
THE ISSUER FOR A CLIENT MUST BE INDEPENDENTLY REVIEWED BY AN
INVESTMENT PERSON WITH NO PERSONAL INTEREST IN THE ISSUER.
The purchase of additional shares, (including mandatory capital
calls), or the subsequent sale (partial or full) of a previously approved
PRIVATE PLACEMENT, must receive pre-clearance approval from the CHIEF
COMPLIANCE OFFICER. In addition, ALL transactions in PRIVATE PLACEMENTS must be
reported quarterly and annually as detailed in Section 6 of the Code.
EXPLANATORY NOTE: TO SUBMIT A PRE-CLEARANCE REQUEST FOR SUBSEQUENT TRADE
ACTIVITY IN A PRIVATE PLACEMENT, ACCESS PERSONS MUST
COMPLETE THE AUTOMATED PRIVATE PLACEMENT PRE-CLEARANCE FORM
WHICH WILL BE REVIEWED BY PERSONAL TRADING COMPLIANCE TO
ENSURE THERE ARE NO CONFLICTS WITH ANY UNDERLYING CODE
PROVISIONS INCLUDING THE SHORT-TERM TRADING RULE.
4.13. INSIDER TRADING
At the start of an ACCESS PERSON'S engagement with Loomis Sayles, and annually
thereafter, each ACCESS PERSON must acknowledge his/her understanding of and
compliance with the Loomis Sayles Insider Trading Policies and Procedures. The
firm's policy is to refrain from trading or recommending trading when in the
possession of MNPI.
Some examples of MNPI may include:
o Earnings estimates or dividend changes
o Positive or negative forthcoming news about an issuer
o Supplier discontinuances
o Mergers or acquisitions
- 15 -
If an ACCESS PERSON receives or believes that he/she may have received MNPI
with respect to a company, the Access Person MUST contact the CHIEF COMPLIANCE
OFFICER or General Counsel immediately, and MUST NOT:
o purchase or sell that security in question, including any
derivatives of that security;
o recommend the purchase or sale of that security, including any
derivatives of that security; or
o relate the information to anyone other than the CHIEF COMPLIANCE
OFFICER or General Counsel of Loomis Sayles.
If it has been determined that an ACCESS PERSON has obtained MNPI on a
particular company, its securities will generally be placed on the firm's
Restricted List thereby restricting trading by the firm's client accounts and
ACCESS PERSONS. The only exception to this policy is with the approval of the
CHIEF COMPLIANCE OFFICER or General Counsel of the firm, and then only in
compliance with the firm's Firewall Procedures.
Separately, ACCESS PERSONS must inform PERSONAL TRADING COMPLIANCE if a
spouse, partner and/or immediate family member ("RELATED PERSON") is an officer
and/or director of a publicly traded company in order to enable PERSONAL
TRADING COMPLIANCE to implement special pre-clearance procedures for said
Access Persons in order to prevent insider trading in the RELATED PERSON'S
company's securities.
ACCESS PERSONS should refer to the Loomis Sayles Insider Trading Policies
and Procedures which are available on the Legal and Compliance homepage of the
firm's Intranet, for complete guidance on dealing with MNPI.
4.14. RESTRICTED AND CONCENTRATION LIST
The Loomis Sayles Restricted and Concentration List ("Restricted List")
is designed to restrict Loomis Sayles and/or ACCESS PERSONS from trading in or
recommending, the securities of companies on the Restricted List for client
and/or ACCESS PERSONS personal accounts. Companies may be added to the
Restricted List if Loomis Sayles comes into possession of MNPI about a company.
A company's securities can also be added to the Restricted List due to the size
of the aggregate position Loomis Sayles' clients may have in the company.
Finally, there may be regulatory and/or client contractual restrictions that
may prevent Loomis Sayles from purchasing securities of its affiliates, and as
a result, the securities of all publicly traded affiliates of Loomis Sayles
will be added to the Restricted List. No conclusion should be drawn from the
addition of an issuer to the Restricted List. THE RESTRICTED LIST IS
CONFIDENTIAL, PROPRIETARY INFORMATION WHICH MUST NOT BE DISTRIBUTED OUTSIDE OF
THE FIRM.
At times, an ACCESS PERSON may have possession of MNPI on a specific
company as a result of his/her being behind a firewall. In such cases, PERSONAL
TRADING COMPLIANCE will create a specialized Restricted List in PTA for the
ACCESS PERSON behind the wall in order to prevent trading in the company's
securities until such time as the CHIEF COMPLIANCE OFFICER has deemed the
information in the Access Person's possession to be in the public domain or no
longer material.
If a security is added to either the Loomis Sayles firm-wide Restricted
List or an individual or group ACCESS PERSON Restricted List, ACCESS PERSONS
will be restricted from purchasing or selling
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all securities related to that issuer until such time as the security is
removed from the applicable Restricted List. The PTA System has the information
necessary to deny pre-clearance if these situations apply.
4.15. LOOMIS SAYLES HEDGE FUNDS
From time to time Loomis Sayles may manage hedge funds, and ACCESS
PERSONS of Loomis Sayles, including the hedge fund's investment team and
supervisors thereof may make personal investments in such hedge funds. At
times, especially during the early stages of a new hedge fund, there may be a
limited outside investors (i.e., clients and non-employee individual investors)
in such funds. In order to mitigate the appearance that investing personally in
a hedge fund can potentially be used as a way to benefit from certain trading
practices that would otherwise be prohibited by the Code if ACCESS PERSONS
engaged in such trading practices in their personal accounts, investment team
members of a hedge fund they manage are individually required to limit their
personal investments in such funds to no more than 20% of the hedge funds'
total assets. In addition, the supervisor of a hedge fund investment team must
limit his/her personal investment in such hedge fund to no more than 25% of the
hedge fund's total assets.
By limiting the personal interests in the hedge fund by their investment
teams and their supervisors in this manner, all of the portfolio trading
activity of the Loomis Sayles hedge funds is deemed to be exempt from the
pre-clearance and trading restrictions of the Code.
4.16. EXEMPTIONS GRANTED BY THE CHIEF COMPLIANCE OFFICER
Subject to applicable law, PERSONAL TRADING COMPLIANCE or the CHIEF
COMPLIANCE OFFICER may from time to time grant exemptions, other than or in
addition to those described in EXHIBIT FIVE, from the trading restrictions,
pre-clearance requirements or other provisions of the Code with respect to
particular individuals such as non-employee directors, consultants, temporary
employees, interns or independent contractors, and types of transactions or
COVERED SECURITIES, where, in the opinion of the CHIEF COMPLIANCE OFFICER, such
an exemption is appropriate in light of all the surrounding circumstances.
5. PROHIBITED OR RESTRICTED ACTIVITIES
5.1. PUBLIC COMPANY BOARD SERVICE AND OTHER AFFILIATIONS
To avoid conflicts of interest, MNPI and other compliance and
business issues, Loomis Sayles prohibits ACCESS PERSONS from serving as
officers or members of the board of any publicly traded entity. This
prohibition does not apply to service as an officer or board member of any
parent or subsidiary of the firm.
In addition, in order to identify potential conflicts of interests,
compliance and business issues, before accepting any service, employment,
engagement, connection, association, or affiliation in or within any
enterprise, business or otherwise, (herein after, collectively Outside
Activity(ies)), an ACCESS PERSON must obtain the advance written approval of
PERSONAL TRADING COMPLIANCE, the CHIEF COMPLIANCE OFFICER AND the applicable
ACCESS PERSON'S supervisor or other appropriate member of senior management.
An Outside Activity approval can be obtained by completing an
automated Outside Activity Form which can be found on the Legal and Compliance
Intranet Homepage under 'Personal Trading Compliance Forms'. In determining
whether to approve such Outside Activity, PERSONAL TRADING
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COMPLIANCE and the CHIEF COMPLIANCE OFFICER will consider whether such service
will involve an actual or perceived conflict of interest with client trading,
place impediments on Loomis Sayles' ability to trade on behalf of clients or
otherwise materially interfere with the effective discharge of Loomis Sayles'
or the ACCESS PERSON'S duties to clients.
EXPLANATORY NOTE: EXAMPLES OF OUTSIDE ACTIVITIES INCLUDE, BUT ARE NOT LIMITED
TO, FAMILY BUSINESSES, ACTING AS AN OFFICER, PARTNER OR
TRUSTEE OF AN ORGANIZATION OR TRUST, POLITICAL POSITIONS,
SECOND JOBS, PROFESSIONAL ASSOCIATIONS, ETC. OUTSIDE
ACTIVITIES THAT ARE NOT COVERED BY THE CODE ARE ACTIVITIES
THAT INVOLVE A CHARITY OR FOUNDATION, AS LONG AS YOU DO NOT
PROVIDE INVESTMENT OR FINANCIAL ADVICE TO THE ORGANIZATION.
EXAMPLES WOULD INCLUDE: VOLUNTEER WORK, HOMEOWNERS'
ORGANIZATIONS (SUCH AS CONDOS OR COOP BOARDS), OR OTHER
CIVIC ACTIVITIES.
5.2. PARTICIPATION IN INVESTMENT CLUBS AND PRIVATE POOLED VEHICLES
No ACCESS PERSON shall participate in an investment club or invest in
a hedge fund, or similar private organized investment pool (but not an SEC
registered open-end mutual fund) without the express permission of PERSONAL
TRADING COMPLIANCE, the CHIEF COMPLIANCE OFFICER AND the applicable ACCESS
PERSON'S supervisor or other appropriate member of senior management, whether
or not the investment vehicle is advised, sub-advised or distributed by Loomis
Sayles or a Natixis investment adviser.
6. REPORTING REQUIREMENTS
6.1. INITIAL HOLDINGS REPORTING, ACCOUNT DISCLOSURE AND ACKNOWLEDGEMENT OF
CODE
Within 10 days after becoming an ACCESS PERSON, each ACCESS PERSON must
file with PERSONAL TRADING COMPLIANCE, a report of all COVERED SECURITIES
holdings (including holdings of
REPORTABLE FUNDS) in which such ACCESS PERSON has BENEFICIAL OWNERSHIP or
INVESTMENT CONTROL. The information contained therein must be current as of a
date not more than 45 days prior to the individual becoming an ACCESS PERSON.
Additionally, within 10 days of becoming an ACCESS PERSON, such ACCESS
PERSON must report all brokerage or other accounts that hold or can hold
COVERED SECURITIES in which the ACCESS PERSON has BENEFICIAL OWNERSHIP or
INVESTMENT CONTROL. The information must be as of the date the person became an
ACCESS PERSON. An ACCESS PERSON can satisfy these reporting requirements by
providing PERSONAL TRADING COMPLIANCE with a current copy of his or her
brokerage account or other account statements, which hold or can hold COVERED
SECURITIES. An automated Initial Code of Ethics Certification and Disclosure
Form can be found on the Legal and Compliance Intranet Homepage under 'Personal
Trading Compliance Forms'. This form must be completed and submitted to
PERSONAL TRADING COMPLIANCE by the ACCESS PERSON within 10 days of becoming an
ACCESS PERSON. The content of the Initial Holdings information must include, at
a minimum, the title and type of security, the ticker symbol or CUSIP, number
of shares, and principal amount of each Covered Security (including Reportable
Funds) and the name of any broker, dealer or bank with which the securities are
held.
EXPLANATORY NOTE: LOOMIS SAYLES TREATS ALL OF ITS EMPLOYEES AND CERTAIN
CONSULTANTS AS ACCESS PERSONS. THEREFORE, YOU ARE DEEMED TO
BE AN ACCESS PERSON AS OF THE FIRST DAY YOU BEGIN WORKING
FOR THE FIRM.
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EXPLANATORY NOTE: TYPES OF ACCOUNTS IN WHICH ACCESS PERSONS ARE REQUIRED TO
REPORT INCLUDE, BUT ARE NOT LIMITED TO: PERSONAL BROKERAGE
ACCOUNTS, MUTUAL FUND ACCOUNTS, ACCOUNTS OF YOUR SPOUSE,
ACCOUNTS OF MINOR CHILDREN LIVING IN YOUR HOUSEHOLD, FAMILY
OF FUND ACCOUNTS, TRANSFER AGENT ACCOUNTS HOLDING MUTUAL
FUNDS OR BOOK ENTRY SHARES, IRAS, 401KS, TRUSTS, DRIPS,
ESOPS ETC. THAT EITHER HOLD OR CAN HOLD COVERED SECURITIES
(INCLUDING REPORTABLE FUNDS). IN ADDITION, PHYSICALLY HELD
SHARES OF COVERED SECURITIES MUST ALSO BE REPORTED. AN
ACCESS PERSON SHOULD CONTACT PERSONAL TRADING COMPLIANCE IF
THEY ARE UNSURE AS TO WHETHER AN ACCOUNT OR PERSONAL
INVESTMENT IS SUBJECT TO REPORTING UNDER THE CODE SO THE
ACCOUNT OR INVESTMENT CAN BE PROPERLY REVIEWED.
At the time of the initial disclosure period, each ACCESS PERSON must also
submit information pertaining to:
o His/her participation in any Outside Activity as described in Section
5.1 of the Code;
o His/her participation in an Investment Club as described in Section
5.2 of the Code;
o Holdings in PRIVATE PLACEMENTS including hedge funds; and
o A RELATED PERSON that is an officer and/or director of a publicly
traded company; if any.
Upon becoming an ACCESS PERSON, each ACCESS PERSON will receive a
copy of the Code, along with the Loomis Sayles Insider Trading Policies and
Procedures and Loomis Sayles Gifts, Business Entertainment and Political
Contributions Policies and Procedures. Within the 10 day initial disclosure
period and annually thereafter, each ACCESS PERSON must acknowledge that he or
she has received, read and understands the aforementioned policies and
recognize that he or she is subject hereto, and certify that he or she will
comply with the requirements of each.
6.2. BROKERAGE CONFIRMATIONS AND BROKERAGE ACCOUNT STATEMENTS
Each ACCESS PERSON must notify PERSONAL TRADING COMPLIANCE
IMMEDIATELY upon the opening of an account that holds or may hold COVERED
SECURITIES (including REPORTABLE FUNDS), IN WHICH SUCH ACCESS PERSON HAS
BENEFICIAL OWNERSHIP OR INVESTMENT CONTROL. In addition, if an account has been
granted an exemption to the SELECT BROKER requirement and/or the account is
unable to be added to the applicable SELECT BROKER'S daily electronic broker
feed, which supplies PTA with daily executed confirms and positions, PERSONAL
TRADING COMPLIANCE will instruct the broker dealer of the account to provide it
with duplicate copies of the account's confirmations and statements. If the
broker dealer cannot provide PERSONAL TRADING COMPLIANCE with confirms and
statements, the ACCESS PERSON is responsible for providing PERSONAL TRADING
COMPLIANCE with copies of such confirms as and when transactions are executed
in the account, and statements on a monthly basis, if available, but no less
than quarterly. Upon the opening of an account, an automated Personal Account
Information Form must be completed and submitted to PERSONAL TRADING
COMPLIANCE. This form can be found on the Legal and Compliance Intranet
Homepage under 'Personal Trading Compliance Forms'.
EXPLANATORY NOTE: IF THE OPENING OF AN ACCOUNT IS NOT REPORTED IMMEDIATELY TO
PERSONAL TRADING COMPLIANCE, BUT IS REPORTED DURING THE
CORRESPONDING QUARTERLY CERTIFICATION PERIOD, AND THERE HAS
NOT BEEN ANY TRADE ACTIVITY IN THE ACCOUNT, THEN THE ACCESS
PERSON WILL BE DEEMED TO HAVE NOT VIOLATED ITS REPORTING
OBLIGATIONS UNDER THIS SECTION OF THE CODE.
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EXPLANATORY NOTE: FOR THOSE ACCOUNTS THAT ARE MAINTAINED AT A SELECT BROKER
AND ARE ELIGIBLE FOR THE BROKER'S DAILY ELECTRONIC CONFIRM
AND POSITION FEED, ACCESS PERSONS DO NOT NEED TO PROVIDE
DUPLICATE CONFIRMS AND STATEMENTS TO PERSONAL TRADING
COMPLIANCE. HOWEVER, IT IS THE ACCESS PERSON'S
RESPONSIBILITY TO ACCURATELY REVIEW AND CERTIFY THEIR
QUARTERLY TRANSACTIONS AND ANNUAL HOLDINGS INFORMATION IN
PTA, AND TO PROMPTLY NOTIFY PERSONAL TRADING COMPLIANCE IF
THERE ARE ANY DISCREPANCIES.
6.3. QUARTERLY TRANSACTION REPORTING AND ACCOUNT DISCLOSURE
Utilizing PTA, each ACCESS PERSON must file a report of all VOLITIONAL
transactions in COVERED SECURITIES (including VOLITIONAL transactions in
REPORTABLE FUNDS) made during each calendar quarterly period in which such
ACCESS PERSON has, or by reason of such transaction acquires or disposes of, any
BENEFICIAL OWNERSHIP of a COVERED SECURITY (even if such ACCESS PERSON has no
direct or indirect INVESTMENT CONTROL over such COVERED SECURITY), or as to
which the ACCESS PERSON has any direct or indirect INVESTMENT CONTROL (even if
such ACCESS PERSON has no BENEFICIAL OWNERSHIP in such COVERED SECURITY).
NON-VOLITIONAL transactions in COVERED SECURITIES (including REPORTABLE FUNDS)
such as automatic monthly payroll deductions, changes to future contributions
within the Loomis Sayles Retirement Plans, dividend reinvestment programs,
dollar cost averaging programs, and transactions made within the Guided Choice
Program are still subject to the Code's annual reporting requirements. If no
transactions in any COVERED SECURITIES, required to be reported, were effected
during a quarterly period by an ACCESS PERSON, such ACCESS PERSON shall
nevertheless submit a report through PTA within the time frame specified below
stating that no reportable securities transactions were affected. The following
information will be available in electronic format for ACCESS PERSONS to verify
on their Quarterly Transaction report:
The date of the transaction, the title of the security, ticker symbol
or CUSIP, number of shares, and principal amount of each reportable security,
nature of the transaction (i.e., purchase, sale or any other type of
acquisition or disposition), the price of the transaction, and the name of the
broker, dealer or bank with which the transaction was effected. HOWEVER, THE
ACCESS PERSON IS RESPONSIBLE FOR CONFIRMING THE ACCURACY OF THIS INFORMATION
AND INFORMING PERSONAL TRADING COMPLIANCE IF HIS OR HER REPORTING INFORMATION
IS INACCURATE OR INCOMPLETE.
With the exception of those accounts described in EXHIBIT FOUR,
ACCESS PERSONS are also required to report each account that may hold or holds
COVERED SECURITIES (including accounts that hold or may hold REPORTABLE FUNDS)
in which such ACCESS PERSON has BENEFICIAL OWNERSHIP or
INVESTMENT CONTROL that have been opened or closed during the reporting period.
In addition, life events such as marriage, death of a family member (i.e.,
inheritance), etc. may result in your acquiring BENEFICIAL OWNERSHIP and/or
INVESTMENT CONTROL over accounts previously belonging to others. Therefore, any
COVERED SECURITY, including REPORTABLE FUNDS, along with any account that holds
or can hold a COVERED SECURITY, including REPORTABLE FUNDS, in which you have a
BENEFICIAL OWNERSHIP and/or INVESTMENT CONTROL, as described in Section 3.2 and
Section 3.3 of the Code, resulting from marriage or other life event must be
reported to PERSONAL TRADING COMPLIANCE promptly, and no later than the next
applicable quarterly reporting period.
Every quarterly report must be submitted no later than thirty (30)
calendar days after the close of each calendar quarter.
- 20 -
6.4. ANNUAL REPORTING
On an annual basis, as of a date specified by PERSONAL TRADING
COMPLIANCE, each ACCESS PERSON must file with PERSONAL TRADING COMPLIANCE a
dated annual certification which identifies all holdings in COVERED SECURITIES
(including REPORTABLE FUNDS) in which such ACCESS PERSON has BENEFICIAL
OWNERSHIP and/or INVESTMENT CONTROL. This reporting requirement also applies to
shares of COVERED SECURITIES, including shares of REPORTABLE FUNDS that were
acquired during the year in NON-VOLITIONAL transactions. Additionally, each
ACCESS PERSON must identify all personal accounts which hold or may hold
COVERED SECURITIES (including REPORTABLE FUNDS), in which such ACCESS PERSON
has BENEFICIAL OWNERSHIP and/or INVESTMENT CONTROL. The information in the
Annual Package shall reflect holdings in the ACCESS PERSON'S account(s) that
are current as of a date specified by PERSONAL TRADING COMPLIANCE. The
following information will be available in electronic format for ACCESS PERSONS
to verify on the Annual Holdings report:
The title of the security, the ticker symbol or CUSIP, number of
shares, and principal amount of each COVERED SECURITY (including REPORTABLE
FUNDS) and the name of any broker, dealer or bank with which the securities are
held. HOWEVER, THE ACCESS PERSON IS RESPONSIBLE FOR CONFIRMING THE ACCURACY OF
THIS INFORMATION AND INFORMING PERSONAL TRADING COMPLIANCE IF HIS OR HER
REPORTING INFORMATION IS INACCURATE OR INCOMPLETE.
Furthermore, on an annual basis, each ACCESS PERSON must acknowledge
and certify that during the past year he/she has received, read, understood and
complied with the Code, Insider Trading Policies and Procedures, and the
Policies and Procedures on Gifts, Business Entertainment, and Political
Contributions, except as otherwise disclosed in writing to PERSONAL TRADING
COMPLIANCE or the CHIEF COMPLIANCE OFFICER. Finally, as part of the annual
certification, each ACCESS PERSON must acknowledge and confirm any Outside
Activities in which he or she currently participates and any Related Person
that is an officer and/or director of a publicly traded company.
All material changes to the Code will be promptly distributed to
Access Persons, and also be distributed to SUPERVISED PERSONS on a quarterly
basis. On an annual basis, Supervised Persons will be asked to acknowledge
his/her receipt, understanding of and compliance with the Code.
Every annual report must be submitted no later than (45) calendar
days after the date specified by PERSONAL TRADING COMPLIANCE.
6.5. REVIEW OF REPORTS BY CHIEF COMPLIANCE OFFICER
The CHIEF COMPLIANCE OFFICER shall establish procedures as the CHIEF
COMPLIANCE OFFICER may from time to time determine appropriate for the review
of the information required to be compiled under this Code regarding
transactions by ACCESS PERSONS and to report any violations thereof to all
necessary parties.
6.6. INTERNAL REPORTING OF VIOLATIONS TO THE CHIEF COMPLIANCE OFFICER
Prompt internal reporting of any violation of the Code to the CHIEF
COMPLIANCE OFFICER or PERSONAL TRADING COMPLIANCE is required under Rule
204A-1. While the daily monitoring process undertaken by PERSONAL TRADING
COMPLIANCE is designed to identify any violations of the Code and handle any
such violations promptly, ACCESS PERSONS and SUPERVISED PERSONS are required to
promptly report any violations they learn of resulting from either their own
conduct or those of other ACCESS PERSONS or SUPERVISED PERSONS to the CHIEF
COMPLIANCE OFFICER or PERSONAL TRADING COMPLIANCE. It is incumbent upon Loomis
Sayles to create an environment that
- 21 -
encourages and protects ACCESS PERSONS or SUPERVISED PERSONS who report
violations. In doing so, individuals have the right to remain anonymous in
reporting violations. Furthermore, any form of retaliation against an
individual who reports a violation could constitute a further violation of the
Code, as deemed appropriate by the CHIEF COMPLIANCE OFFICER. All ACCESS PERSONS
and SUPERVISED PERSONS should therefore feel safe to speak freely in reporting
any violations.
7. SANCTIONS
Any violation of the substantive or procedural requirements of this
Code will result in the imposition of a sanction as set forth in the firm's
then current Sanctions Policy, or as the Ethics Committee may deem appropriate
under the circumstances of the particular violation. These sanctions may
include, but are not limited to:
o a letter of caution or warning (i.e. Procedures Notice);
o payment of a fine,
o requiring the employee to reverse a trade and realize losses or
disgorge any profits;
o restitution to an affected client;
o suspension of personal trading privileges;
o actions affecting employment status, such as suspension of employment
without pay, demotion or termination of employment; and
o referral to the SEC, other civil authorities or criminal authorities.
Serious violations, including those involving deception, dishonesty
or knowing breaches of law or fiduciary duty, will result in one or more of the
most severe sanctions regardless of the violator's history of prior
compliance.
EXPLANATORY NOTE: ANY VIOLATION OF THE CODE, FOLLOWING A "FIRST OFFENSE"
WHETHER OR NOT FOR THE SAME TYPE OF VIOLATION, WILL BE
TREATED AS A SUBSEQUENT OFFENSE.
Fines, penalties and disgorged profits will be donated to a charity
selected by the Loomis Sayles Charitable Giving Committee.
8. RECORDKEEPING REQUIREMENTS
Loomis Sayles shall maintain and preserve records, in an easily
accessible place, relating to the Code of the type and in the manner and form
and for the time period prescribed from time to time by applicable law.
Currently, Loomis Sayles is required by law to maintain and preserve:
o in an easily accessible place, a copy of this Code (and any prior
Code of Ethics that was in effect at any time during the past five
years) for a period of five years;
o in an easily accessible place a record of any violation of the Code
and of any action taken as a result of such violation for a period of
five years following the end of the fiscal year in which the violation
occurs;
o a copy of each report (or information provided in lieu of a report
including any manual pre-clearance forms and information relied upon
or used for reporting) submitted under the Code for a period of five
years, provided that for the first two years such copy must be
preserved in an easily accessible place;
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o copies of ACCESS PERSONS' and SUPERVISED PERSONS' written
acknowledgment of initial receipt of the Code and his/her annual
acknowledgement;
o in an easily accessible place, a record of the names of all ACCESS
PERSONS within the past five years, even if some of them are no longer
ACCESS PERSONS, the holdings and transactions reports made by these
Access Persons, and records of all Access Persons' personal securities
reports (and duplicate brokerage confirmations or account statements
in lieu of these reports);
o a copy of each report provided to any Investment Company as required
by paragraph (c)(2)(ii) of Rule 17j-1 under the 1940 Act or any
successor provision for a period of five years following the end of
the fiscal year in which such report is made, provided that for the
first two years such record shall be preserved in an easily accessible
place; and
o a written record of any decision and the reasons supporting any
decision, to approve the purchase by an ACCESS PERSON of any COVERED
SECURITY in an INITIAL PUBLIC OFFERING OR PRIVATE PLACEMENT
TRANSACTION or other limited offering for a period of five years
following the end of the fiscal year in which the approval is granted.
EXPLANATORY NOTE: UNDER RULE 204-2, THE STANDARD RETENTION PERIOD REQUIRED
FOR ALL DOCUMENTS AND RECORDS LISTED ABOVE IS FIVE YEARS, IN
EASILY ACCESSIBLE PLACE, THE FIRST TWO YEARS IN AN
APPROPRIATE OFFICE OF PERSONAL TRADING COMPLIANCE.
9. MISCELLANEOUS
9.1. CONFIDENTIALITY
Loomis Sayles will keep information obtained from any ACCESS PERSON
hereunder in strict confidence. Notwithstanding the forgoing, reports of
COVERED SECURITIES transactions and violations hereunder will be made available
to the SEC or any other regulatory or self-regulatory organizations to the
extent required by law rule or regulation, and in certain circumstances, may in
Loomis Sayles' discretion be made available to other civil and criminal
authorities. In addition, information regarding violations of the Code may be
provided to clients or former clients of Loomis Sayles that have been directly
or indirectly affected by such violations.
9.2. DISCLOSURE OF CLIENT TRADING KNOWLEDGE
No ACCESS PERSON may, directly or indirectly, communicate to any
person who is not an ACCESS PERSON or other approved agent of Loomis Sayles
(e.g., legal counsel) any non-public information relating to any client of
Loomis Sayles or any issuer of any COVERED SECURITY owned by any client of
Loomis Sayles, including, without limitation, the purchase or sale or
considered purchase or sale of a COVERED SECURITY on behalf of any client of
Loomis Sayles, except to the extent necessary to comply with applicable law or
to effectuate traditional asset management/operations activities on behalf of
the client of Loomis Sayles.
9.3. NOTICE TO ACCESS PERSONS, INVESTMENT PERSONS AND RESEARCH ANALYSTS
AS TO CODE STATUS
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PERSONAL TRADING COMPLIANCE will initially determine an employee's
status as an ACCESS PERSON, RESEARCH ANALYST or INVESTMENT PERSON and the
client accounts to which INVESTMENT PERSONS should be associated, and will
inform such persons of their respective reporting and duties under the Code.
All ACCESS PERSONS and/or the applicable supervisors thereof, have
an obligation to inform PERSONAL TRADING COMPLIANCE if an ACCESS PERSON'S
responsibilities change during the ACCESS PERSON'S tenure at Loomis Sayles.
9.4. NOTICE TO PERSONAL TRADING COMPLIANCE OF ENGAGEMENT OF INDEPENDENT
CONTRACTORS
Any ACCESS PERSON that engages as a non-employee service provider
("NESP"), such as a consultant, temporary employee, intern or independent
contractor shall notify PERSONAL TRADING COMPLIANCE of this engagement, and
provide to PERSONAL TRADING COMPLIANCE the information necessary to make a
determination as to how the Code shall apply to such NESP, if at all.
NESP's are generally not subject to the pre-clearance, trading
restrictions and certain reporting provisions of the Code. However, NESP's must
receive, review and acknowledge a Code of Ethics Compliance Statement that
further describes his/her Code requirements and fiduciary duties while engaged
with Loomis Sayles.
At times, NESP's are contracted to various departments at Loomis
Sayles where they may be involved or be privy to the investment process for
client accounts or the Loomis Sayles recommendation process. Prior to their
engagement, the Loomis Sayles Human Resources Department will notify PERSONAL
TRADING COMPLIANCE of these NESP's and depending on the facts and
circumstances, the NESP will be communicated what provisions of the Code will
apply to them during their engagement.
9.5. QUESTIONS AND EDUCATIONAL MATERIALS
Employees are encouraged to bring to PERSONAL TRADING COMPLIANCE any
questions you may have about interpreting or complying with the Code about
COVERED SECURITIES, accounts that hold or may hold COVERED SECURITIES or
personal trading activities of you, your family, or household members, your
legal and ethical responsibilities, or similar matters that may involve the
Code.
PERSONAL TRADING COMPLIANCE will from time to time circulate
educational materials or bulletins or conduct training sessions designed to
assist you in understanding and carrying out your duties under the Code. On an
annual basis, each ACCESS PERSON is required to successfully complete the Code
of Ethics and Fiduciary Duty Tutorial designed to educate ACCESS PERSONS on
their responsibilities under the Code and other Loomis Sayles policies and
procedures that generally apply to all employees.
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GLOSSARY OF TERMS
The BOLDFACE terms used throughout this policy have the following meanings:
1. "ACCESS PERSON" means an "access person" as defined from time to time in
Rule 17j-1 under the 1940 Act or any applicable successor provision.
Currently, this means any director, or officer of Loomis Sayles, or any
ADVISORY PERSON (as defined below) of Loomis Sayles, but does not include
any director who is not an officer or employee of Loomis Sayles or its
corporate general partner and who meets all of the following conditions:
a. He or she, in connection with his or her regular functions or duties,
does not make, participate in or obtain information regarding the
purchase or sale of Covered Securities by a registered investment
company, and whose functions do not relate to the making of
recommendations with respect to such purchases or sales;
b. He or she does not have access to nonpublic information regarding any
clients' purchase or sale of securities, or nonpublic information
regarding the portfolio holdings of any REPORTABLE FUND; and
c. He or she is not involved in making securities recommendations to
clients, and does not have access to such recommendations that are
nonpublic.
Loomis Sayles treats all employees as ACCESS PERSONS.
2. "ADVISORY PERSON" means an "advisory person" and "advisory representative"
as defined from time to time in Rule 17j-1 under the 1940 Act and Rule
204-2(a)(12) under the Advisers Act, respectively, or any applicable
successor provision. Currently, this means (i) every employee of Loomis
Sayles (or of any company in a CONTROL relationship to Loomis Sayles), who,
in connection with his or her regular functions or duties, makes,
participates in, or obtains information regarding the purchase or sale of a
COVERED SECURITY by Loomis Sayles on behalf of clients, or whose functions
relate to the making of any recommendations with respect to such purchases
or sales; and (ii) every natural person in a CONTROL relationship to Loomis
Sayles who obtains information concerning recommendations made to a client
with regard to the purchase or sale of a COVERED SECURITY. ADVISORY PERSON
also includes: (a) any other employee designated by PERSONAL TRADING
COMPLIANCE or the CHIEF COMPLIANCE OFFICER as an ADVISORY PERSON under this
Code; (b) any consultant, temporary employee, intern or independent
contractor (or similar person) engaged by Loomis Sayles designated as such
by PERSONAL TRADING COMPLIANCE or the CHIEF COMPLIANCE OFFICER as a result
of such person's access to information about the purchase or sale of
COVERED SECURITIES by Loomis Sayles on behalf of clients (by being present
in Loomis Sayles offices, having access to computer data or otherwise).
3. "BENEFICIAL OWNERSHIP" is defined in Section 3.2 of the Code.
4. "CHIEF COMPLIANCE OFFICER" refers to the officer or employee of Loomis
Sayles designated from time to time by Loomis Sayles to receive and review
reports of
- 1 -
purchases and sales by ACCESS PERSONS, and to address issues of personal
trading. "PERSONAL TRADING COMPLIANCE" means the employee or employees of
Loomis Sayles designated from time to time by the General Counsel of Loomis
Sayles to receive and review reports of purchases and sales, and to address
issues of personal trading, by the CHIEF COMPLIANCE OFFICER, and to act for
the CHIEF COMPLIANCE OFFICER in the absence of the CHIEF COMPLIANCE
OFFICER.
5. "COVERED SECURITY" is defined in Section 3.1 of the Code.
6. "EXEMPT ETF" is defined in Section 3.1 of the Code and a list of such
funds is found in Exhibit Two.
7. "FEDERAL SECURITIES LAWS" refers to the Securities Act of 1933, the
Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the
Investment Company Act of 1940, the Investment Advisers Act of 1940, 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 there under by the SEC or the U.S.
Department of the Treasury, and any amendments to the above mentioned
statutes.
8. "INVESTMENT CONTROL" is defined in Section 3.3 of the Code. This means
"control" as defined from time to time in Rule 17j-1 under the 1940 Act and
Rule 204-2(a)(12) under the Advisers Act or any applicable successor
provision. Currently, this means the power to directly or indirectly
influence, manage, trade, or give instructions concerning the investment
disposition of assets in an account or to approve or disapprove
transactions in an account.
9. "INITIAL PUBLIC OFFERING" means an "initial public offering" as defined
from time to time in Rule 17j-l under the 1940 Act or any applicable
successor provision. Currently, this means any offering of securities
registered under the Securities Act of 1933 the issuer of which immediately
before the offering, was not subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934.
10. "INVESTMENT COMPANY" means any INVESTMENT COMPANY registered as such under
the 1940 Act and for which Loomis Sayles serves as investment adviser or
subadviser or which an affiliate of Loomis Sayles serves as an investment
adviser.
11. "INVESTMENT PERSON" means all PORTFOLIO MANAGERS of Loomis Sayles and
other ADVISORY PERSONS who assist the PORTFOLIO MANAGERS in making and
implementing investment decisions for an INVESTMENT COMPANY or other client
of Loomis Sayles, including, but not limited to, designated RESEARCH
ANALYSTS and traders of Loomis Sayles. A person is considered an INVESTMENT
PERSON only as to those client accounts or types of client accounts as to
which he or she is designated by PERSONAL TRADING COMPLIANCE or the CHIEF
COMPLIANCE OFFICER as such. As to other accounts, he or she is simply an
ACCESS PERSON.
12. "LOOMIS ADVISED FUND" is any Reportable Fund advised or sub-advised by
Loomis Sayles. A list of these funds can be found in EXHIBIT ONE.
- 2 -
13. "NON-VOLITIONAL" transactions are any transaction in which the employee
has not determined the timing as to when the purchase or sale will occur
and the amount of shares to be purchased or sold, i.e. changes to future
contributions within the Loomis Sayles Retirement Plans, dividend
reinvestment programs, dollar cost averaging program, automatic monthly
payroll deductions, and any transactions made within the Guided Choice
Program. NON-VOLITIONAL transactions are not subject to the pre-clearance
or quarterly reporting requirements under the Code.
14. "PORTFOLIO MANAGER" means any individual employed by Loomis Sayles who has
been designated as a PORTFOLIO MANAGER by Loomis Sayles. A person is
considered a PORTFOLIO MANAGER only as to those client accounts as to which
he or she is designated by the CHIEF COMPLIANCE OFFICER as such. As to
other client accounts, he or she is simply an ACCESS PERSON.
15. "PRIVATE PLACEMENT TRANSACTION" means a "limited offering" as defined from
time to time in Rule 17j-l under the 1940 Act or any applicable successor
provision. Currently, this means an offering exempt from registration under
the Securities Act of 1933 pursuant to Section 4(2) or 4(6) or Rule 504,
505 or 506 under that Act, including hedge funds.
16. "RECOMMENDATION" means any change to a security's price target or other
type of recommendation in the case of an equity COVERED SECURITY, or any
initial rating or rating change in the case of a fixed income COVERED
SECURITY in either case issued by a RESEARCH ANALYST.
17. "REPORTABLE FUND" is defined in Section 3.1 of the Code, and a list of
such funds is found in EXHIBIT ONE.
18. "RESEARCH ANALYST" means any individual employed by Loomis Sayles who has
been designated as a RESEARCH ANALYST or RESEARCH ASSOCIATE by Loomis
Sayles. A person is considered a RESEARCH ANALYST only as to those COVERED
SECURITIES which he or she is assigned to cover and about which he or she
issues research reports to other INVESTMENT PERSONS or otherwise makes
recommendations to Investment Persons beyond publishing their research. As
to other securities, he or she is simply an ACCESS PERSON.
19. "SELECT BROKER" is defined in Section 3.4 of the Code.
20. "SUPERVISED PERSON" is defined in Section 202(a)(25) of the Advisers Act
and currently includes any partner, officer, director (or other person
occupying a similar status or performing similar functions), or employee of
Loomis Sayles, or other person who provides investment advice on behalf of
Loomis Sayles and is subject to the supervision and control of Loomis
Sayles.
21. "VOLITIONAL" transactions are any transactions in which the employee has
determined the timing as to when the purchase or sale transaction will
occur and amount of shares to be purchased or sold. VOLITIONAL transactions
are subject to the pre-clearance and reporting requirements under the Code.
- 3 -
Reportable Funds List(1)
EXHIBIT ONE -- (UPDATED Q3 2016)
The following funds are subject to the reporting requirements of the Code and
the Loomis Advised Funds are subject to Section 4.3 and 4.4 of the Code as
designated (LAF) below.
INVESTMENT COMPANY ACT REGISTERED FUNDS
(LAF) - Advanced Series Trust: AST Advanced Strategies Portfolio
(LAF) - Advanced Series Trust: AST Loomis Sayles Large Cap Growth
(LAF) -- AST Blackrock/Loomis Sayles Bond Portfolio
AEW Real Estate Fund
ASG Dynamic Allocation Fund
Aurora Horizons Fund
(LAF) - AXA Loomis Sayles Growth Portfolio
AXA Large Cap Core Managed Volatility Portfolio
(LAF) -- Bridge Builder Bond Fund
(LAF) -- Bridge Builder Core Plus Bond Fund
Bridge Builder Small/Mid Cap Value Fund
(LAF) - Columbia Active Portfolios Multi-Manager Growth Fund
(LAF) - Columbia Active Portfolios Multi-Mgr Total Rtrn Bond Fund
(LAF) -- Columbia Management Variable Annuity Large Cap Growth
Consulting Group Capital Markets -- Municipal Bond Investments
Cornerstone Advisors Global Public Equity Fund
(LAF) -- Fidelity Strategic Advisers Growth Fund
(LAF) -- Fidelity Strategic Advisers Multi Managers Fund
(LAF) -- Franklin K2 Alternative Strategies Fund
Gateway Equity Call Premium Fund
Gateway Fund
GAI Aurora Opportunites Fund LLC
(LAF) - Guidemark Opportunistic Fixed Income Fund
(LAF) - Guidestone Funds Extended Duration Bond Fund
(LAF) - Guidestone Funds Global Bond Fund
(LAF) -- Guidestone Growth Equity Fund
HC Capital Trust Commodity Returns Strategy Portfolio
JNL/Harris Oakmark Global Equity Fund
(LAF) - KP Fixed Income Fund
Laudus International Marketmasters Fund
(LAF) -- Litman Gregory Masters Alternative Strategies Fund
Litman Gregory Masters Equity Fund
Litman Gregory Masters International Fund
(LAF) - Loomis Sayles Bond Fund
(LAF) -- Loomis Sayles Dividend Income Fund
(LAF) - Loomis Sayles Core Plus Bond Fund
(LAF) -- Loomis Sayles Emerging Markets Opportunities Fund
(LAF) - Loomis Sayles Fixed Income Fund
(LAF) - Loomis Sayles Full Discretion Securitized Fund
(LAF) - Loomis Sayles Global Bond Fund
(LAF) - Loomis Sayles Global Equity & Income Fund
(LAF)- Loomis Sayles Global Growth Fund
(LAF) - Loomis Sayles Growth Fund
(LAF) - Loomis Sayles High Income Fund
(LAF) - Loomis Sayles High Income Opportunities Fund
(LAF) - Loomis Sayles Inflation Protected Securities Fund
(LAF) - Loomis Sayles Institutional High Income Fund
(LAF) - Loomis Sayles Intermediate Duration Bond Fund
(LAF) - Loomis Sayles Investment Grade Bond Fund
(LAF) - Loomis Sayles Investment Grade Fixed Income Fund
(LAF) - Loomis Sayles Securitized Asset Fund
(LAF) -- Loomis Sayles Senior Floating Rate and Fixed Income Fund
(LAF) - Loomis Sayles Small Cap Growth Fund
(LAF) - Loomis Sayles Small Cap Value Fund
(LAF) -- Loomis Sayles Small/Mid Cap Growth Fund
(LAF) - Loomis Sayles Strategic Alpha Fund
(LAF) - Loomis Sayles Value Fund
(LAF) - Mass Mutual Select Blue Chip Growth Fund
(LAF) - Mass Mutual Select Diversified Value Fund
Mass Mutual Select Focused Value Fund
Mass Mutual Select Overseas Fund
(LAF) -- Great West Loomis Sayles Bond Fund
(LAF) -- Great West Loomis Sayles Small Cap Value Fund
McDonnell Intermediate Municipal Bond Fund
(LAF) -- Mercer US Small/Mid Cap Growth Equity Fund
Metropolitan Series Fund - Harris Oakmark International Portfolio
(LAF) - Metropolitan Series Fund - Loomis Sayles Small Cap Portfolio
(LAF) - Metropolitan Series Fund - Loomis Sayles Small Cap Growth
(LAF) -- Met Series Funds -- LS Global Markets
Mirova Global Sustainable Equity Fund
(LAF) -- MML Equity Fund
MML Focused Equity Fund
MML International Equity Fund
(LAF) - Loomis Sayles Multi-Asset Income Fund
Natixis Oakmark Fund
(LAF) - Natixis Loomis Sayles Limited Term Government and Agency Fund
(LAF) - Natixis Loomis Sayles Strategic Income Fund
Natixis Oakmark International Fund
(LAF) - Natixis U.S. Equity Opportunities Fund
Northern Funds/Multi Manager Mid Cap Fund
(LAF) -- Northwestern Mutual Series Fund, Inc.
(LAF) - Penn Series Fund, Inc. Large Cap Value Fund
Pioneer Real Estate Shares
Pioneer Real Estate Shares VCT Portfolio
Port Street Institutional Opportunities Fund
(LAF) -- Principal Funds Global Multi-Strategy Fund
Principal Small Cap Value II Fund
(LAF) - Russell Investment Grade Bond Fund
Russell Investment Management Company Ltd. Global Equity Fund
(LAF) -- Russell Multi-Strategy Income Fund
Saratoga Advantage Trust/Mid Capitalization Portfolio
Seeyond Multi-Asset Allocation Fund
(LAF) - Transamerica Loomis Sayles Bond Fund
(LAF) - The Managers Fund -- Bond Fund
(LAF) - The Managers Fund -- Global Income Opportunity Fund
The Oakmark Equity and Income Fund
The Oakmark Fund
The Oakmark Global Fund
The Oakmark Global Select Fund
The Oakmark International Fund
The Oakmark International Small Cap Fund
The Oakmark Select Fund
(LAF) -- TransWestern Institutional Short Duration Government Bond Fund
(LAF) - USAA Growth Fund
Vaughn Nelson Select Fund
Vaughan Nelson Small Cap Value Fund
Vaughan Nelson Value Opportunity Fund
(LAF) - Wilshire Large Cap Growth Fund
COLLECTIVE INVESTMENT VEHICLES
*HEDGE FUNDS AND PRIVATE PLACEMENTS
(LAF) - Commodities Long Short Fund, LP
(LAF) - Commodities Long Short Fund, Ltd
(LAF) - Commodities Long Short Master Fund, Ltd
(LAF) - Corvid US Long Short Fund, LP
(LAF) - Corvid US Small Cap Fund, LP
(LAF) - Loomis Sayles Credit Alpha Master Fund, Ltd
(LAF) - Loomis Sayles Credit Long/Short Fund, LP
(LAF) - Loomis Sayles Credit Long/Short Fund (Offshore) Ltd.
(LAF) - Loomis Sayles Long/Short Equity Fund, LP
(LAF) - Loomis Sayles Senior Loan Fund LP
(LAF) - NHIT: Agency MBS Trust
(LAF) - NHIT: Core Disciplined Alpha Trust
(LAF) - NHIT: Core Fixed Income Trust
(LAF) - NHIT: Core Plus Fixed Income Trust
(LAF) - NHIT: Core Plus Full Discretion Trust
(LAF) - NHIT: Credit Asset Trust
(LAF) - NHIT: Dynamic Fixed Income Trust
(LAF) - NHIT: Emerging Markets Corporate Debt Trust
(LAF) - NHIT: Emerging Markets Opportunities Trust
(LAF) - NHIT: Global Fixed Income Trust
(LAF) - NHIT: Global Growth Trust
(LAF) - NHIT: High Yield Full Discretion Trust
(LAF) - NHIT: Intermediate Duration Fixed Income Trust
(LAF) - NHIT: Investment Grade Corporate Bond Trust
(LAF) - NHIT: Investment Intermediate Corporate Bond Trust
(LAF) - NHIT: Long Duration Corporate Bond Trust
(LAF) - NHIT: Long Duration Credit Trust
(LAF) - NHIT: Long Duration Government Credit Trust
(LAF) - NHIT: Multi Asset Real Return Trust
(LAF) - NHIT: Multi Sector Full Discretion Trust
(LAF) - NHIT: Securitized Credit Trust
(LAF) - NHIT: Senior Floating Rate and Fixed Income Trust
(LAF) - NHIT: Short Term Emerging Markets Bond Trust
(LAF) - NHIT: SRI Core Plus Fixed Income Trust
(LAF) - NHIT: Strategic Alpha Trust
(LAF) - NHIT: U.S. High Yield Bond Trust
(LAF) - NHIT: World Bond Trust
(LAF) - NHIT: World Credit Asset Trust
* Pre-clearance approval is required for all Private Placement purchases,
including Hedge Funds. In addition, the purchase of additional shares,
(including mandatory capital calls), or the subsequent sale (partial or full)
of a previously approved Private Placement or Hedge Fund, must receive
pre-clearance approval from the Chief Compliance Officer.
OFFSHORE FUNDS (NOT AVAILABLE TO US EMPLOYEES)
(LAF) -- Loomis Sayles Global Credit Fund
(LAF) -- Loomis Sayles Global Growth Equity
(LAF) -- Loomis Sayles Global Multi Asset Income Fund
(LAF) -- Loomis Sayles Strategic Alpha Bond Fund
(LAF) -- Loomis Sayles U.S. Aggregate Bond Fund
(LAF) - Loomis Sayles U.S. Growth Equity Fund
(LAF) -- Loomis Sayles World Credit Asset Fund
(LAF) -- Natixis Loomis Sayles Duration Hedged Global Corporate Bond
(LAF) -- Natixis Loomis Sayles Emerging Debt and Currencies Fund
(LAF) -- Natixis Loomis Sayles Global Opportunistic Bond Fund
(LAF) -- Natixis Loomis Sayles High Income Fund
(LAF) -- Natixis Loomis Sayles Institutional Global Corporate Bond Fund
(LAF) -- Natixis Loomis Sayles Institutional High Income Fund
(LAF) -- Natixis Loomis Sayles Multisector Income Fund
(LAF) - Natixis Loomis Sayles Senior Loan Fund
(LAF) -- Natixis Loomis Sayles Short Term Emerging Markets Bond Fund
(LAF) -- Natixis Loomis Sayles Sustainable Global Corporate Bond Fund
(LAF) -- Natixis Loomis Sayles U.S. Core Plus Bond Fund
(LAF) -- Natixis Loomis Sayles U.S. Research Fund
(LAF) -- NGAM Investment Funds -- Loomis Sayles Strategic Income Fund
(LAF) -- NGAM Investment Funds -- Loomis Sayles US Equity Leaders Fund
(1) Please note that this list is subject to change. Therefore, it is your
responsibility, as an ACCESS PERSON under the Code, to determine whether or
not an investment company or mutual fund is advised, sub-advised, or
distributed by Loomis Sayles, Natixis or a Natixis affiliate prior to
investing in such fund, and to ensure that you comply with all aspects of
the Code regarding your investment in a REPORTABLE FUND.
Exempt ETF List(1)
EXHIBIT TWO -- (UPDATED Q3 2016)
SYMBOL SECURITY NAME
AAXJ iShares MSCI All Country Ex Japan
AGG iShares Lehman Aggregate Bond Fund
ACWI iShares MSCI ACWI Index Fund
ASHR Deutsche X-Trackers Harvest CSI 300
BIL SPDR Barclays Capital
BIV Vanguard Intermediate Term
BKLN Powershares Senior Loan Portfolio
BLV Vanguard Long-Term Bond ETF
BND Vanguard Total Bond Market ETF
BOND PIMCO Total Return ETF
BNDX Vanguard Total Int'l Bond ETF
BSV Vanguard Short-Term Bond ETF
BWX SPDR Lehman International Treasury Bond ETF
CIU iShares Intermediate Credit
CSJ iShares Barclays Lehman 1-3 Year
CWB SPDR Barclays Capital Conv Sec
CLY iShares 10+ Year Credit Bond
DBA Powershares DB Agriculture
DBC PowerShares DB Commodity Index Tracking Fund
DBEF Deutsche X-Trackers MSCI EAFE Hedged Equity ETF
DBEU Deutsche X-Trackers MSCI Europe
DBJP DB X-Trackers MSCI Japan Hedged Equity Fund
DBO Powershares DB Oil Fund
DEM Wisdomtree Emerging Markets Equity Income
DES Wisdomtree Small Cap Dividend Fund
DHS Wisdomtree EQ Income Fund
DIA DIAMONDS Trust Series I
DVY iShares Dow Jones Select Dividend Index Fund
DXJ Wisdomtree Japan Hedged
EDC Direxion Daily EME Mkt BU 3X
EEM iShares MSCI Emerging Markets Index Fund
EEMV iShares MSCI Emerging Markets Minimum Volatility
EFA iShares MSCI EAFE Index Fund
EFAV iShares MSCI EAFE Minimum Volatility Index Fund
EFG iShares MSCI EAFE Growth ETF
EFV iShares MSCI EAFE Value Index Fund
EMB iShares JP Morgan Emerging Markets Bond Fund
EMLC Market Vectors Emerging Markets
EPI Wisdomtree India Earnings Fund
EPP iShares MSCI Pacific ex-Japan Index Fund
EUO Proshares Ultrashort Euro ETF
EWA iShares MSCI Australia Index Fund
EWC iShares MSCI Canada Index Fund
EWG iShares MSCI Germany Index ETF
EWH iShares MSCI Hong Kong Index Fund
EWI iShares MSCI Italy Capped ETF
EWJ iShares MSCI Japan Index Fund
EWL iShares MSCI Switzerland Fund
EWP iShares MSCI Spain Index Fund
EWQ iShares MSCI France Index Fund
EWT iShares MSCI Taiwan Index Fund
EWU iShares MSCI United Kingdom Index Fund
EWW iShares MSCI Mexico Index Fund
EWY iShares MSCI South Korea Index Fund
EWZ iShares MSCI Brazil
EZU MSCI EMU Index Fund ETF
SYMBOL SECURITY NAME
IWO iShares Russell 2000 Growth Index Fund
IWP iShares Russell Midcap Growth Index Fund
IWR iShares Russell Midcap Index Fund
IWS iShares Russell Midcap Value Index Fund
IWV iShares Russell 3000 Index Fund
IXUS iShares Core Intl Stock ETF
JNK SPDR Barclays Capital High
LQD iShares iBoxx Investment Grade Corporate Bond Fund
MBB iShares Barclays MBS Bond Fund
MDY Midcap SPDR Trust Series 1
MGK Vanguard Mega Cap 300 Growth ETF
MGV Vanguard Mega Value ETF
MIDD LN iShares FTSE 250
MINT PIMCO Enhanced Short Maturity
MUB iShares S&P Nat AMT -- Free Bond Fund
OEF iShares S&P 100 Index Fund
PCY Powershares Emerging Market Sov
PFF iShares S&P Pref Stk Index Fund
PGX PowerShares Preferred Portfolio
PRF PowerShares FTSE RAFI US
PRFZ PowerShares FTSE RAFI US 150
PWV Powershares Dyn L/C Value
PZA Powershares Insured National Muni Bond ETF
QID Ultrashort QQQ Proshares ETF
QLD Ultra QQQ ProShares
QQQ Powershares QQQ
RSP Rydex S&P Equal Weight ETF
RSX Market Vector Russ
SCHA Schwab US Small Cap ETF
SCHB Schwab US Broad Market ETF
SCHD Schwab US Dividend Equity ETF
SCHE Schwab Emerging Markets Equity
SCHF Schwab International Equity ETF
SCHG Schwab U.S. Large-Cap Growth
SCHM Schwab US Mid Cap ETF
SCHO Schwab Short Term U.S. Treasury ETF
SCHP Schwab U.S. TIPS ETF
SCHV Schwab US Large Cap Value
SCHX Schwab US Large Cap ETF
SCHZ Schwab US Aggregate Bond ETF
SCPB SPDR Barclays Capital Short
SCZ iShares MSCI EAFE Small Cap Index Fund
SDOG ALPS Sector Dividend Dogs ETF
SGOL ETFS Gold Trust
SEMB LN iShares JPMorgan Emerging Markets Bond Fund
SDS UltraShort S&P500 ProShares
SDY SPDR S&P Dividend ETF
SH Proshares TR S&P 500
SHM SPDR Nuveen Barclays Capital
SHV iShares Lehman Short Treasury Bond Fund
SHY iShares Lehman 1-3 Year Treasury Bond Fund
SHYG iShares 0-5 Year High Yield Corporate Bond ETF
SJNK SPDR Barclays Short-Term
SLV iShares Silver Trust
SPHQ Powershares S&P 500 High Q
SPLV Powershares S&P 500 Low Volatility Portfolio
FEZ SPDR Euro STOXX 50 ETF
FLOT iShares Floating Rate ETF
FNDF Schwab Fundamental Int'l Large Cap Index ETF
FNDX Schwab Fundamental U.S. Large Company Index ETF
FXI iShares FTSE/Xinhua China 25 Index Fund
GLD SPDR Gold Trust
GLL Proshares Ultrashort Gold
GOVT iShares Core US Treasury Bond
GSG iShares S&P GSCI Commodity
GVI iShares Intermediate Government Credit
HDV iShares High Dividend EQ PD
HEDJ Wisdomtree Europe Hedged Equity
HEFA iShares Currency Hedged MSCI EAFE ETF
HSPX LN HSBC S&P 500 ETF
HYD Market Vectors High Yld Muni
HYG iShares IBOXX H/Y Corp Bond
HYS PIMCO 0-5 Year High Yield Corp Bond Index Fund
IDV iShares DJ Intl Select Div
IAU iShares Comex Gold
IEF iShares Lehman 7-10 Year Treasury Bond Fund
IEFA iShares Core MSCI EAFE ETF
IEI iShares Barclays 3-7 Year Treasury Bond Fund
IEEM LN iShares MSCI Emerging Markets
IEMG iShares Core MSCI Emerging Markets ETF
IEUX LN iShares MSCI Europe EX UK
IEV iShares TR S&P Europe 350 Index Fund
IFFF LN iShares MSCI AC Far East Ex-Japan
IGLS LN iShares FTSE GILTS UK 0-5
IHYG LN IShares Market IBOXX Eur H/Y
IJPN LN iShares MSCI Japan Fund
IJH iShares S&P MidCap 400 Index Fund
IJJ iShares S&P MidCap 400/BARRA Value Index
IJK iShares S&P MidCap 400 Growth Index Fund
IJR iShares S&P SmallCap 600 Index Fund
IJS iShares S&P SmallCap 600 Value Index Fund
IJT iShares S&P SmallCap 600/BARRA Growth Index
ILF iShares TR S&P Latin Amer 40 Index Fund
IOO iShares S&P Global 100
INDA iShares MSCI India ETF
ITOT iShares Core S&P Total US Stock
ITPS LN iShares BG USD TIPS
ITR SPDR Barclays I/T CB ETF
IUSA LN iShares S&P 500 Index Fund
IVE iShares S&P 500 Value Index Fund
IVV iShares S&P 500 Index Fund/US
IVW iShares S&P 500 Growth Index Fund
IWB iShares Russell 1000 Index Fund
IWD iShares Russell 1000 Value Index Fund
IWF iShares Russell 1000 Growth Index Fund
IWM iShares Russell 2000 Index Fund
IWN iShares Russell 2000 Value Index Fund
SPXU ProShares UltraPro Short S&P 500
SPY SPDR Trust Series 1
SQQQ Proshares UltraPro Short QQQ
SSO Ultra S&P500 ProShares
STPZ PIMCO 1-5 Year US TIPS
SUB iShares S/T Natl Muni Bond ETF
SVXY Proshares Short VIX Short-Term Futures
TBF ProShares Short 20+ Treasury
TBT Proshares Ultrashort Lehman
TFI SPDR Nuveen Barclays Capital Municipal
TIP iShares Lehman Treasury Inflation Protected Sec Fund
TLT iShares Lehman 20+ Year Treasury Bond Fund
TNA Direxion Daily Small Cap Bull 3X
TQQQ Proshares Ultrapro QQQ
TWM Proshares UltraShort Russell 2000
TZA Direxion DLY Small Cap Bear 3X
UNG US Natural Gas Fund
UPRO ProShares UltraPro S&P 500
USMV iShares MSCI USA Minimum Volatility Index Fund
USO United States Oil Fund
UUP Powershares DB U.S. Dollar Index Fund ETF
VB Vanguard Index Funds
VBK Vanguard Small Cap Growth ETF
VBR Vanguard Small-Cap Value Fund
VCIT Vanguard Intermediate Term
VCSH Vanguard Short-Term Corporate Bond
VEA Vanguard Europe Pacific ETF
VEU Vanguard FTSE All-World ex-US ETF
VGK Vanguard European ETF
VIG Vanguard Dividend Appreciation ETF
VMBS Vanguard Mortgage Backed Sec
VO Vanguard Mid-Cap ETF
VOE Vanguard Mid Cap Value
VOO Vanguard S&P 500 ETF
VOT Vanguard Mid Cap Growth Index
VPL Vanguard Pacific ETF
VSS Vanguard FTSE All World X-US
VT Vanguard Total World Stock Index
VTI Vanguard Total Stock Market ETF
VTIP Vanguard Short Term TIPS
VTV Vanguard Value ETF
VUG Vanguard Growth ETF
VUKE LN Vanguard FTSE 100 ETF
VV Vanguard Large-Cap ETF
VWO Vanguard Emerging Markets ETF
VXF Vanguard Extended Market ETF
VXUS Vanguard Total International Stock Index Fund ETF
VYM Vanguard High Div Yield ETF
YCS Proshares Ultrashort Yen
(1) Exempt ETFs are broad based open-ended ETFs, as determined by Personal
Trading Compliance using Bloomberg data, with either a market
capitalization exceeding U.S. $1 billion OR an average daily trading volume
exceeding 1 million shares (over a 90 day period); options on such ETFs;
options on the indices of such ETFs; and ETFs that invest 80% of their
assets in securities that are not subject to the pre-clearance requirements
of the Code. Please note, as this list is subject to change, it is your
responsibility, as an ACCESS PERSON under the Code, to comply with all
aspects of the Code regarding your investments in ETFs and any associated
options. Also note that the securities listed above, as well as any
associated options, while exempt from preclearance, are still subject to
the reporting requirements of the Code.
SECURITIES
EXHIBIT THREE
------------------------------------------------------------------------------------------------------------------------------------
SUBJECT TO
TRADING
SUBJECT PRE- RESTRIC- QUARTERLY ANNUAL
INSTRUMENT TO CODE CLEARANCE TIONS(1) REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Bonds issued or guaranteed by Yes Yes Yes Yes Yes
any foreign sovereign government
or its agencies, instrumentalities
or authorities or supranational
issuers
------------------------------------------------------------------------------------------------------------------------------------
Company stock received through Yes *Yes/ Yes Yes Yes *Certain purchases and all subsequent
an employer (including options No sales of such securities must be
and warrants associated pre-cleared. Please see EXHIBITS
therewith) FOUR and FIVE for guidance.
------------------------------------------------------------------------------------------------------------------------------------
Derivatives involving Yes *Yes/ Yes Yes Yes *Derivatives tied to broad based
SECURITIES No indices or other exempt securities,
as well as futures on currencies,
commodities, cash instruments
(such as loans or deposits), stock
indexes and interest rates, do not
require pre-clearance.
------------------------------------------------------------------------------------------------------------------------------------
Equity or debt securities Yes Yes Yes Yes Yes
(such as common and
preferred stocks and
corporate and government
bonds or notes) and any
equivalent instrument
representing, or any rights
relating to, a SECURITY
(such as ADRs, certifications
of participation, depository
receipts, put and call
options, warrants, convertible
securities and securities indices)
------------------------------------------------------------------------------------------------------------------------------------
Closed-end funds, sector based Yes Yes Yes Yes Yes
ETFs, open-ended broad based
ETFs with a market capitalization
less than U.S. $1 billion AND
an average daily trading volume
below 1 million shares (over a
90 day period), closed-end UITs,
closed-end ETFs (including
options and futures
associated there with)
------------------------------------------------------------------------------------------------------------------------------------
----------------
(1) The substantive prohibitions and restrictions (including Competing with
Client Trades, Short Term Trading Profits, and the applicable Black-out
Periods) detailed in Section 4 of the Code apply to each SECURITY as noted.
SECURITIES
EXHIBIT THREE
------------------------------------------------------------------------------------------------------------------------------------
SUBJECT TO
TRADING
SUBJECT PRE- RESTRIC- QUARTERLY ANNUAL
INSTRUMENT TO CODE CLEARANCE TIONS(1) REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Open-ended broad based ETFs Yes No No Yes Yes
with either a market
capitalization exceeding
U.S. $1 billion OR an
average daily trading
volume exceeding 1 million
shares (over a 90 day period);
options on such ETFs, options
on the indices of such ETFs;
ETFs that invest 80% of their
assets in securities that are
not subject to the pre-clearance
requirements of the
Code; and open-ended UITs
------------------------------------------------------------------------------------------------------------------------------------
REPORTABLE FUNDS as defined Yes *Yes/ **Yes Yes Yes *Pre-clearance approval is required
under Section 3.1 of the Code. No for all Private Placement purchases,
Please see EXHIBIT ONE including Hedge Funds. In
for a list of REPORTABLE addition, the purchase of additional
FUNDS. shares, (including mandatory capital
calls), or the subsequent sale
(partial or full) of a previously
approved Private Placement or
Hedge Fund, must receive pre-clearance
approval from the Chief Compliance
Officer.
Transactions in all closed-end funds,
whether or not a particular closed-end
fund is a Reportable Fund, require
preclearance.
**Only those Reportable Funds that are
advised or sub-advised by Loomis Sayles
are subject to the trading restrictions
of the Code (specifically Short Term
Profit and Round Trip Transaction
restrictions). Please refer to EXHIBIT
ONE for a list of Loomis Advised Funds.
------------------------------------------------------------------------------------------------------------------------------------
SECURITIES
EXHIBIT THREE
------------------------------------------------------------------------------------------------------------------------------------
SUBJECT TO
TRADING
SUBJECT PRE- RESTRIC- QUARTERLY ANNUAL
INSTRUMENT TO CODE CLEARANCE TIONS(1) REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Private Placements, including Yes *Yes *Yes Yes Yes *Pre-clearance approval is required
hedge funds that are often sold for all Private Placement purchases,
as private placements including Hedge Funds. In addition,
the purchase of additional shares,
(including mandatory capital calls),
or the subsequent sale (partial or
full) of a previously approved
Private Placement or Hedge Fund, must
receive pre-clearance approval from
the Chief Compliance Officer.
Please consult Section 4.13 of the
Code and contact PERSONAL TRADING
COMPLIANCE.
------------------------------------------------------------------------------------------------------------------------------------
Municipal obligations Yes Yes Yes Yes Yes
------------------------------------------------------------------------------------------------------------------------------------
U.S. Government agencies Yes No No Yes Yes
(direct debt obligations
such as GNMA, FNMA,
FHLMCS, FHLB, FFCB,
FHA, FLB, SLMA, & TVA)
------------------------------------------------------------------------------------------------------------------------------------
Bank certificates of No N/A N/A N/A N/A
deposit
------------------------------------------------------------------------------------------------------------------------------------
Bankers' acceptances No N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
Commercial Paper No N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
Direct obligations of the No N/A N/A N/A N/A
United States Government
(i.e. Treasury securities,
as distinct from U.S.
Government agencies or
instrumentalities)
------------------------------------------------------------------------------------------------------------------------------------
Money Market Instruments No N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
SECURITIES
EXHIBIT THREE
------------------------------------------------------------------------------------------------------------------------------------
SUBJECT TO
TRADING
SUBJECT PRE- RESTRIC- QUARTERLY ANNUAL
INSTRUMENT TO CODE CLEARANCE TIONS(1) REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Open ended mutual funds and *No N/A N/A N/A N/A *CIVs are exempt from the Code under
certain collective investment the following conditions: The CIV
vehicles (CIV) other than issues shares that shareholders
Reportable Funds have the right to redeem on demand;
calculates an NAV on a daily basis in
a manner consistent with the
principles of Section 2(a)(41) of the
1940 Act and Rule 2a-4 thereunder;
issues and redeems shares at the
NAV next determined after receipt of
the relevant purchase or redemption
order consistent with the "forward
pricing" principles of Rule 22c-1
under the 1940 Act; and there is
no secondary market for the shares of
the CIV.
------------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements No N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNTS
EXHIBIT FOUR
The types of accounts that hold or can hold SECURITIES, that are typically
covered by the Code include, but are not limited to: personal brokerage
accounts; mutual fund accounts, Family of Fund accounts; joint accounts with a
spouse or live-in partner; individual accounts of spouses or live-in partners;
accounts of minor children living in your household; accounts of any relative
living in the same household as the ACCESS PERSON; accounts for which the
employee has trustee powers or power of attorney; and current and former
employer 401(k) and other retirement plans of the ACCESS PERSON and/or the
ACCESS PERSON'S spouse or live-in partner, transfer agent accounts holding
mutual funds or book entry shares, Trusts, IRAs, DRIPs, ESOPs, etc
The extent to which such accounts are governed by the Code will depend on the
ACCESS PERSON'S BENEFICIAL OWNERSHIP in and/or INVESTMENT CONTROL over the
account. Additionally, there are certain accounts that may not be obvious to an
ACCESS PERSON as being covered by the Code, and examples of such accounts have
been provided below. ACCESS PERSONS should contact PERSONAL TRADING COMPLIANCE
who will assist the ACCESS PERSON in determining the applicability of the Code
to a particular account(s).
------------------------------------------------------------------------------------------------------------------------------------
SUBJECT SELECT PRE- QUARTERLY ANNUAL
ACCOUNT TYPE TO CODE BROKER CLEARANCE REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Accounts in which the ACCESS Yes No No Yes Yes
PERSON has BENEFICIAL OWNERSHIP
but no direct or indirect
INVESTMENT CONTROL (i.e. an
account managed by an adviser
or a trust being managed by an
entity)
------------------------------------------------------------------------------------------------------------------------------------
Accounts in which the ACCESS Yes No No Yes Yes
PERSON has direct or indirect
INVESTMENT CONTROL but no
BENEFICIAL OWNERSHIP
------------------------------------------------------------------------------------------------------------------------------------
Accounts in which ACCESS PERSON Yes Yes Yes Yes Yes
has BENEFICIAL OWNERSHIP AND
direct or indirect INVESTMENT
CONTROL
------------------------------------------------------------------------------------------------------------------------------------
Accounts in which ACCESS PERSON No N/A N/A N/A N/A
has no BENEFICIAL OWNERSHIP and
no direct or indirect INVESTMENT
CONTROL
------------------------------------------------------------------------------------------------------------------------------------
OTHER ACCOUNTS
------------------------------------------------------------------------------------------------------------------------------------
Accounts of children who have No N/A N/A N/A N/A
reached majority that do not
share same household and over
which the Access Person
exercises no INVESTMENT
CONTROL
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNTS
EXHIBIT FOUR
------------------------------------------------------------------------------------------------------------------------------------
SUBJECT SELECT PRE- QUARTERLY ANNUAL
ACCOUNT TYPE TO CODE BROKER CLEARANCE REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Spouse's account where he/ Yes No No Yes Yes Requiries prior approval by Personal
she works at an investment Trading Compliance
firm and is subject to that
firm's personal trading
policies
------------------------------------------------------------------------------------------------------------------------------------
Accounts set up for an Yes No No Yes Yes The account does not require pre-
ESOP, DRIP or other clearance provided there is no
direct investment voluntary adjustment in the rate
programs at which you purchase or sell
SECURITIES within the account
------------------------------------------------------------------------------------------------------------------------------------
Physically held shares of Yes N/A Yes Yes Yes
SECURITIES
------------------------------------------------------------------------------------------------------------------------------------
MUTUAL FUND AND RETIREMENT ACCOUNTS
------------------------------------------------------------------------------------------------------------------------------------
401(k) plans which only *No No *No No No *Note, however, that transactions/
offer mutual funds registered holdings in closed end funds, if
under the Investment Company Act any, in such 401(k) plans are
(other than REPORTABLE FUNDS) as subject to preclearance and reporting.
investment choices (yours or
your spouse's account)
------------------------------------------------------------------------------------------------------------------------------------
401(k) plans which only offer *Yes Yes No Yes Yes *You must confirm the existence of
mutual funds registered under such an account for quarterly and
the Investment Company Act annual reporting and report only
(both REPORTABLE FUNDS and VOLITIONAL transactions in REPORTABLE
non-Reportable Funds) as FUNDS (NON-VOLITIONAL transactions are
investment choices (yours or not subject to reporting) and any
your spouse's account) transactions in closed-end funds on
a quarterly basis and holdings in
REPORTABLE and closed end funds on
an annual basis.
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNTS
EXHIBIT FOUR
------------------------------------------------------------------------------------------------------------------------------------
SUBJECT SELECT PRE- QUARTERLY ANNUAL
ACCOUNT TYPE TO CODE BROKER CLEARANCE REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
An account held directly with No N/A N/A N/A N/A
a non-Reportable Fund (or the
applicable fund's transfer
agent) (i.e. an account with
Janus, Putnam, etc.) that can
invest only in non-Reportable
Funds registered under the
Investment Company Act and
cannot invest in closed end
funds
------------------------------------------------------------------------------------------------------------------------------------
An account that can invest in *Yes No **Yes Yes Yes * Transactions in REPORTABLE FUNDS
both REPORTABLE and non- /No must be done with a SELECT BROKER,
Reportable Funds registered directly with REPORTABLE FUND, or
under the Investment Company through one or more of the Loomis
Act, but that is currently Sayles' retirement plans. You must
only invested in non-Reportable confirm the existence of such an account
Funds (including Uniform for quarterly and annual reporting and
Transfers to Minor Act and report only VOLITIONAL transactions in
Uniform Gifts to Minor Act REPORTABLE FUNDS (NON-VOLITIONAL
accounts (UTMA's and transactions are not subject to
UGMA's)) reporting) and any transactions in
closed end funds on a quarterly basis
and holdings in REPORTABLE and closed
end funds on an annual basis.
**Transactions in all closed-end funds,
whether or not a particular closed-end
fund is a Reportable Fund, require
preclearance.
------------------------------------------------------------------------------------------------------------------------------------
529 Plan accounts (or No N/A N/A N/A N/A
qualified tuition program
accounts)
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNTS
EXHIBIT FOUR
------------------------------------------------------------------------------------------------------------------------------------
SUBJECT SELECT PRE- QUARTERLY ANNUAL
ACCOUNT TYPE TO CODE BROKER CLEARANCE REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Loomis Sayles Capital No N/A N/A N/A N/A This account is not subject to the
Accumulation Benefit Code because participants do not have
Plan (CABP) any control over the investment options
for the account/plan. The plan is
simply an additional benefit from the
Loomis Sayles Funded Pension Plan.
When eligible for a distribution,
participants receive a cash payment
and not shares of the Loomis Sayles
Research Fund (the Fund is simply
used to track the value of a
participant's investment within the
plan).
------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS EXEMPT FROM PRE-CLEARANCE
EXHIBIT FIVE
------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN WHICH THE
ACCESS PERSON HAS EITHER
BENEFICIAL OWNERSHIP AND/OR
INVESTMENT CONTROL UNLESS SUBJECT PRE- QUARTERLY ANNUAL
OTHERWISE NOTED TO CODE CLEARANCE REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Purchases or sales of SECURITIES Yes No Yes Yes
which occur as a result of
operation of law, or any margin
call (provided such margin call
does not result from your
withdrawal of collateral
within 10 days before the call
and have no involvement in the
selection of the specific
SECURITIES to be sold)
------------------------------------------------------------------------------------------------------------------------------------
Purchases of SECURITIES which Yes No No Yes
are partof an automatic dividend
reinvestment plan, automatic
payroll deduction program, automatic
cash purchase or withdrawal
program or other similar automatic
transaction program, but only to
the extent you have made no
voluntary adjustment (up or
down) in the rate at which you
purchase or sell
------------------------------------------------------------------------------------------------------------------------------------
Purchase or sales of SECURITIES Yes No Yes Yes
for an account over which you have
no direct to indirect influence
or control
------------------------------------------------------------------------------------------------------------------------------------
Purchase of SECURITIES made by Yes No Yes Yes
exercising rights distributed by an
issueer PRO RATA to all other holders
of a class of its SECURITIES or
other interests, to the extent such
rights were acquired by you from
the issuer, and sales of such rights
so acquired
------------------------------------------------------------------------------------------------------------------------------------
Tenders of SECURITIES pursuant to Yes No Yes Yes
tender offers which are expressly
conditioned on the tender offeror's
acquisition of all of the SECURITIES
of the same class
------------------------------------------------------------------------------------------------------------------------------------
Transactions in SECURITIES by your Yes No Yes Yes
spouse (or person in a similar
relationship such that the
presumption of BENEFICIAL OWNERSHIP
arises) employed at another
investment firm provided that:
(a) you have no direct or indirect
influence or control over the
transactions; (b) the transactions
are effected solely through an account
in which you are not named and
(c) you have obtained pre-approval
from PERSONAL TRADING COMPLIANCE
or the REVIEW OFFICER to exempt the
account from the pre-clearance
requirements and certain trading
restrictions of the Code
------------------------------------------------------------------------------------------------------------------------------------
Receipt of SECURITIES as a Yes No Yes Yes
gift or bequest
------------------------------------------------------------------------------------------------------------------------------------
Making of personal or charitable Yes No Yes No
gift of SECURITIES
------------------------------------------------------------------------------------------------------------------------------------
NON-VOLITIONAL transactions in Yes No No *Yes *You must report holdings in
REPORTABLE FUNDS (i.e. changes to REPORTABLE FUNDS on an annual basis.
future contributions within the
Loomis Sayles Retirement Plans,
dividend reinvestment programs,
dollar cost averaging programs,
monthly payroll deductions,
transactions made within the
Guided Choice program or any
transaction in which the employee has
not determined the timing as to when
the purchase or sale will occur and
the amount of shares to be purchased
or sold.
------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS EXEMPT FROM PRE-CLEARANCE
EXHIBIT FIVE
------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN WHICH THE
ACCESS PERSON HAS EITHER
BENEFICIAL OWNERSHIP AND/OR
INVESTMENT CONTROL UNLESS SUBJECT PRE- QUARTERLY ANNUAL
OTHERWISE NOTED TO CODE CLEARANCE REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
VOLITIONAL transactions in REPORTABLE *Yes **Yes/ Yes Yes *While all transactions in
FUNDS listed on EXHIBIT ONE No Reportable Funds are subject
to the reporting requirements
of the Code only transactions
in Loomis Advised Funds are
subject the Code's trading
restrictions (specifically,
Short-Term Profit and
Round Trip Transaction
Restrictions).
**Pre-clearance approval is
required for all Private
Placement purchases, including
Hedge Funds. In addition, the
purchase of additional shares,
(including mandatory capital calls),
or the subsequent sale (partial or
full) of a previously approved
Private Placement or Hedge
Fund, must receive pre-
clearance approval from the
Chief Compliance Officer.
------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS EXEMPT FROM PRE-CLEARANCE
EXHIBIT FIVE
------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN WHICH THE
ACCESS PERSON HAS EITHER
BENEFICIAL OWNERSHIP AND/OR
INVESTMENT CONTROL UNLESS SUBJECT PRE- QUARTERLY ANNUAL
OTHERWISE NOTED TO CODE CLEARANCE REPORTING REPORTING COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
Transactions in all closed-end funds,
whether or not a particular closed-end
fund is a Reportable Fund, require
preclearance.
------------------------------------------------------------------------------------------------------------------------------------
VOLITIONAL transactions in EXEMPT Yes No Yes Yes
ETFS listed on EXHIBIT TWO
------------------------------------------------------------------------------------------------------------------------------------
All purchases and sales of Yes Yes Yes Yes
SECURITIES (unless otherwise noted)
------------------------------------------------------------------------------------------------------------------------------------
Sale of current or former employer Yes Yes Yes Yes
stock the Access Person or his/her
Spouse or live-in partner
received upon exercising stock options
------------------------------------------------------------------------------------------------------------------------------------
Harris Associates L.P.
PROCEDURES FOR PERSONAL TRADING BY EMPLOYEES
OVERVIEW
Harris Associates L.P. ("Harris" or the "Firm") has adopted a Code of Ethics
(the "Code") that governs the conduct of its employees, including trading in
any accounts in which employees have a beneficial ownership interest. All
employees of the Firm are subject to the Code. The Code includes a number of
specific restrictions on employee trading as well as procedures to implement
the trading restrictions and reporting requirements.
In addition to the restrictions set forth in the Code, the Firm has implemented
additional restrictions on trading by certain employees. Investment
professionals, managers of mutual funds, officers of the Oakmark Funds, and the
Firm's Chief Compliance Officer ("CCO") are subject to additional restrictions
relating to sales (or short sales) of securities on the Firm's Approved Lists
and purchases (or buys to cover) of securities by mutual fund portfolio
managers. These restrictions are set forth in Attachment 1 (Restrictions on
Purchases and Sales of Approved List Securities by Employees).
The CCO reports Code violations and non-compliance with these procedures to the
Firm's Audit Committee and to the boards of mutual funds advised by the Firm as
requested.
PROCEDURES FOR EMPLOYEE TRADING
MAINTAINING BROKERAGE ACCOUNTS
Employees are required by the Code to maintain all brokerage accounts with the
Firm's prime broker, Pershing LLC ("Pershing"), unless they have obtained
approval to maintain an outside brokerage account. Such approval is granted
only rarely (e.g., for discretionary accounts managed professionally by an
independent person), and the Firm receives copies of all such account
confirmations and statements.
RESTRICTION LISTS
The Firm has implemented procedures for employee trading that are designed to
reasonably ensure compliance with the Code and other trading restrictions.
These procedures include a process whereby employee trade requests must be
checked for compliance against the Firm's list of restrictions as part of
StarCompliance' s automated trade request process(1). The restriction lists are
updated a.) manually by the Compliance Department using a proprietary
application for securities recently added/removed from the Firm's project
lists, securities recently added to the Firm's Approved Lists, and b.) through
an automated interface to the Trade Order Management System that includes: open
orders, securities where the Firm holds more than 3.9% of the outstanding
shares of a U.S. issue or 7.5% of a non-U.S. issue; underlying securities when
the Firm is trading equity options; and securities traded within the previous
two days by any client advised by the Firm.
----------
(1) In the event StarCompliance is unavailable, all employee trade requests
must be checked manually against the restricted list on the Compliance Intranet
page.
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Harris Associates L.P.
PRE-APPROVAL REQUIREMENTS - DE MINIMIS RULES
All employees are required to enter their proposed personal trades into
StarCompliance as a trade request.
All trade requests for covered securities with a market cap under $750 million
USD will generally be automatically approved, provided the request does not
violate a restriction period. All trade requests for covered securities with
market caps of $750 million USD or more will be processed using an automated
set of rules within StarCompliance. Usually, an automated approval or denial
will be granted after the employee submits the trade request. If the employee
is an Investment Professional (e.g., Research Analyst, Research Assistant,
long-term research intern or Fund/Portfolio Manager) or Trader and the trade
request is for a security with a market cap of $750 million USD or more, the
President will make the decision for domestic trade requests and the
International CIO will make the decision for international trade requests. In
some instances, approvals may be rescinded later if the facts and circumstances
of the trade are found to violate the Firm's Code.
CORPORATE BONDS
If an employee is an Investment Professional requesting a purchase of any
corporate debt, irrespective of whether the related equity is on any Approved
List or not, or the debt issuer's market cap is above or below de minimus
thresholds, the request must be first presented to any Portfolio Manager of the
Oakmark Equity & Income Fund for prior consideration. If the Portfolio Manager
is not interested in purchasing the bond for the Oakmark Equity & Income Fund
or another client account, then the Investment Professional may submit a
pre-trade authorization request which will then be routed by StarCompliance for
review by the President.
LAST OUT RULE
Employees subject to the "Last Out" rule for sales of Approved List securities
(refer to Attachment 1 for the employee categories) must obtain prior approval
from the Firm's President (trade requests in StarCompliance will be
automatically routed for review by the President) prior to selling such
securities.
HOLDING LIMITS
The Firm also imposes holding limits on employees. Employees may not own more
than o% of the outstanding shares of any client-owned equity security or more
than 4% of the outstanding shares of any non-client-owned equity security.
MARGIN ACCOUNT PROHIBITIONS
Employees are prohibited from holding any client-owned or Approved Listed
security(2) on margin.
RESEARCH ANALYSTS' PROHIBITIONS
The President will generally not approve a Research Analyst's(3) request to
purchase a security that has a market capitalization in excess of USD $750
million. Approval will be granted only if the following conditions are met: (1)
the security is no longer on a Project List(4); and (2) the Research Analyst
has previously recommended the security for addition to an Approved List to an
appropriate stock selection group (e.g., Team I, SSG (or both) or Small Cap)
within the last 3 months; and the security was not added
----------
(2) Open-end mutual funds are not included in this prohibition. For purposes of
this rule, tracking stocks are to be rolled up to the parent company level and
applied accordingly.
(3) For purposes of this section only, the term Research Analyst will include
Research Associates and long-term interns in the Research groups.
(4) Removing a security from a Project List makes it subject to a cooling off
period for 2 days following the removal from the Project List by Compliance in
the Application (HALP Utility) Launcher. During the cooling off period, no one
may trade the security being removed from a Project List.
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Harris Associates L.P.
to an Approved List. If a Research Analyst is also a Fund Manager, then the
purchase restrictions applicable to the Fund Managers for the Oakmark Funds and
other advised and subadvised funds shall prevail in any instance of a conflict
with this section.
PROJECT LIST SALE WAIVERS
Employees may sell a security that is on the Project List subject to additional
approval requirements. Approval to sell a Project-Listed security must be
obtained from the Research Analyst who is monitoring the security, an
additional Research Analyst (as indicated on the SALE WAIVER FORM), the CIO,
General Counsel, and the CCO. The Sale Waiver Form is not part of the
StarCompliance system. However, one must still process a trade request using
StarCompliance and attach the trade request printout and the Sale Waiver Form
to the Trade Ticket.
REVIEWS OF EMPLOYEE TRADING
The Compliance Department and certain senior executive management regularly
review all personal trading by employees.
DAILY COMPLIANCE REVIEWS
A Compliance Officer(5) reviews the previous day's employee trades executed
through Pershing or other approved broker-dealers. The Compliance Officer
reviews such transactions against the trade restrictions applicable to each
employee. The Compliance Officer also reviews the transactions for proper
pre-approval and any potential conflicts of interest. If an employee's trade is
found to be in conflict with the Code or any applicable trade restriction, the
Compliance Officer will notify the CCO. The employee's trade may be cancelled
and booked into the Firm's error account. Employees whose trades that are found
to be in violation of the Code and its related employee trade restrictions are
not entitled to keep any gains resulting from the violation; these gains will
be kept by Harris. However, losses sustained by employees whose trades violate
the Code and its related employee trade restrictions are usually borne by the
employee, unless there are extenuating circumstances that would reasonably
justify moving the loss to the Firm's error account.
COMPLIANCE REVIEWS OF OUTSIDE ACCOUNT ACTIVITY
A Compliance Officer reviews transactions in all approved outside brokerage
accounts as trade confirmations and monthly statements are received. This
review covers the restrictions noted above. The Compliance Department maintains
a list of all approved outside brokerage accounts for employees. This list is
updated quarterly and sent to the President, General Counsel, and CCO.
QUARTERLY COMPLIANCE REVIEWS
Each employee is required to complete the Firm's Quarterly Compliance
Questionnaire and Transaction Report. All transactions reported on the
Questionnaire are reviewed by a Compliance Officer for conformity to the Firm's
Code and related employee trading restrictions, and exceptions are reported to
the CCO and General Counsel.
ADDITIONAL MANAGEMENT REVIEWS
Brokerage account statements of investment professionals are reviewed on a
semi-annual basis.
----------
(5) The General Counsel will review the CCO's trade activity.
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Harris Associates L.P.
o The President reviews holdings and transactions for the Chief Investment
Officer -- International, the Chief Investment Officer -- U. S. Equities,
the Director of U. S. Research, certain domestic mutual fund managers and
all separate account portfolio managers.
o The Director of U. S. Research reviews holdings and transactions for U. S.
research analysts, research assistants and long-term research interns.
o The Chief Investment Officer-International reviews holdings and
transactions for all international portfolio managers and research
analysts, research assistants and long-term research interns.
o The Chief Investment Officer-U. S. Equities reviews the President's
holdings and transactions.
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Harris Associates L.P.
ATTACHMENT 1
RESTRICTIONS ON PURCHASES AND SALES
OF APPROVED LIST SECURITIES BY EMPLOYEES
EFFECTIVE MARCH 1, 2004
In addition to the existing restrictions and pre-approval procedures for
employee trading in the Code of Ethics and Employee Trade Procedures, the
following rules became effective as of March 1, 2004:
1. "Last Out" Rule for Sales of Approved List Securities:
o The employees listed below cannot sell (or sell short) an
Approved List security (any security on the SSG, Small Cap or
International Approved Lists) until the later of: (1) two days
after the security is no longer owned by any mutual fund advised
or subadvised by the Firm or (2) two days after the security is
no longer on any Approved List.
o Employees subject to this "Last Out" rule include all investment
professionals (e. g. , Fund/Portfolio Managers, Research
Analysts, Research Associates and long-term Research Interns),
Traders, Trade Coordinators, Portfolio Specialists, Portfolio
Associates, the aforementioned persons' immediate supervisors, IT
Trading Technology staff, HAIT officers, the Firm's General
Counsel, and the Firm's Chief Compliance Officer.
o Any exceptions to the rule may be granted only for a showing of
"hardship" or to divest of de minimus shares of a security
acquired as the result of a corporate action, and must be
approved by the President, Chief Investment Officer, and General
Counsel.
o Existing holdings that were held prior to the effective date of
this rule will be "grandfathered"(6). Existing holdings that were
purchased prior to becoming a Harris employee or prior to the
employee becoming subject to the Last Out rule can be sold within
a 90 day period after the employee's start date provided such
sales are not within the restriction periods described in this
policy above and in the Code of Ethics, and are pre-approved by
Harris' President as described below. However, any subsequent
purchases of the same approved-listed security (or a new security
resulting from a corporate action related to the original
security) will be subject to the Last Out rule. Covered employees
relying on the grandfathering provision must provide
documentation that shows when the shares were purchased (e. g. ,
a brokerage statement with purchase date information).
o All sales subject to this rule (including sales of
"grandfathered" holdings) must be pre- approved by the President
(or in his or her absence, the Chief Investment Officer --
Domestic or the Chief Investment Officer - International).
2. Rules Restricting Securities Purchases By Fund Managers:
----------
(6) "Grandfathered" means that the sale request will not be subject to the
additional restrictions set forth under the Last Out Rule (with the exception
of the President pre-approval requirement).
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o Oakmark Funds: An Oakmark Fund manager cannot purchase (or buy to cover)
an equity security that is currently owned in any fund that he manages. In
addition, the following restrictions apply to managers of the funds listed
below:
--------------------------------------------------------------------------------
OAKMARK MUTUAL FUND FUND MANAGER RESTRICTION
--------------------------------------------------------------------------------
Oakmark Fund No purchases of shares of companies having
Oakmark Select Fund a market cap in excess of USD $2 billion.
Oakmark Global Select
--------------------------------------------------------------------------------
Oakmark International Fund No purchases of shares of non-U.S.
companies having a market cap in excess of
USD $2 billion.
--------------------------------------------------------------------------------
Oakmark International Small No purchases of shares of non-U.S.
Cap Fund companies having a market cap of greater
than USD $750 million.
--------------------------------------------------------------------------------
Oakmark Global Fund No purchases of shares of companies having
Oakmark Equity and Income Fund a market cap greater than USD $750
million.
--------------------------------------------------------------------------------
o ADVISED AND SUBADVISED FUNDS: If shares of an advised or subadvised fund
(where at least 2/3 of the fund's assets are managed by Harris Associates)
are eligible for purchase by a manager of the fund, the same restrictions
applicable to Oakmark Funds managers in the table immediately above will
apply (depending on whether the fund is domestic, international or global
and whether it is a small cap, large cap or all cap fund).
If shares of all of the advised or subadvised funds managed by a portfolio
manager are not eligible for purchase, the manager may purchase securities
owned by those funds or may purchase other securities, subject to all other
applicable employee trade restrictions (including the "Last Out" rule
above).
o Covered employees with existing holdings (whether grandfathered or not)
will not be required to sell their securities.
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Updated and Approved 10/30/2006 Updated
5/9/07, 11/8/10, 5/24/12, 5/22/14, 11/10/14, 3/9/16, 9/21/16
THORNBURG INVESTMENT MANAGEMENT
CODE OF BUSINESS CONDUCT AND ETHICS
MARCH 2016
POLICY OBJECTIVES
Honesty and integrity are hallmarks of Thornburg Investment Management, Inc.
(the "Firm"). The Firm has a fiduciary obligation to its Investment Clients,
and the Firm seeks the highest standards of ethics and conduct in all of its
business relationships.
This Code has been adopted by the Firm pursuant to paragraphs (a)(1), (2), (4)
and (5) of Rule 204A-1 under the Investment Advisers Act of 1940 with the
objectives of deterring wrongdoing and promoting (1) honest and ethical
conduct, including the ethical handling of actual or apparent conflicts of
interest between personal and professional relationships, (2) full, fair,
accurate, timely and understandable disclosure in reports and documents which
the Firm files with the Securities and Exchange Commission and in other public
communications made by the Firm, (3) compliance with applicable governmental
laws, rules and regulations, (4) prompt internal reporting of violations of
this Code, and (5) accountability for adherence to this Code.
This Code, together with the separately adopted Personal Securities
Transactions Policy, is intended to comprise the Firm's code of ethics
described in Rule 204A-1 under the Investment Advisers Act of 1940.
All records and reports created or maintained pursuant to this Code are
intended solely for the internal use of the Firm, are confidential, and in no
event constitute an admission by any person as to any fact, circumstance or
legal conclusion.
This Code is intended to function and harmonize with the Thornburg Investment
Trust Code of Business Conduct and Ethics. Where appropriate or necessary,
specific sections of this Code include a coordinating provision referencing the
appropriate section of the Thornburg Investment Trust Code of Business Conduct
and Ethics.
Please see the Glossary of Terms for definitions of terms used in this Code.
COMPLIANCE WITH LAWS, RULES AND REGULATIONS
As a registered investment adviser, the Firm is subject to regulation by the
Securities and Exchange Commission, and compliance with federal, state and
local laws. The Firm insists on strict compliance with the spirit and the
letter of these laws and regulations. The Firm expects its Supervised Persons
to comply with all laws, rules and regulations applicable to its operation and
business. Supervised Persons should seek guidance whenever they are in doubt as
to the applicability of any law, rule or regulation regarding any contemplated
course of action. The Firm holds information and training sessions to promote
compliance with laws, rules and regulations, including insider trading laws.
Please consult the various guidelines and policies which the Firm has prepared
in accordance with specific laws and regulations.
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A good guideline, if in doubt on a course of action, is to ALWAYS ASK FIRST,
ACT LATER -- IF YOU ARE UNSURE OF WHAT TO DO IN ANY SITUATION, SEEK GUIDANCE
BEFORE YOU ACT.
CONFLICTS OF INTEREST
Each Supervised Person shall be scrupulous in avoiding any conflict of interest
with regard to the Firm's interest. A "conflict of interest" occurs when an
individual's private interest interferes with the interests of the Firm or its
Investment Clients. A conflict situation can arise when a Supervised Person
pursues interests that prevent the individual from performing his or her duties
for the Firm or an Investment Client objectively and effectively. Conflicts of
interest also arise when a Supervised Person or member of the individual's
family receives undisclosed, improper benefits as a result of the individual's
positions with the Firm. ANY CONFLICT OF INTEREST THAT ARISES IN A SPECIFIC
SITUATION OR TRANSACTION, INCLUDING REPORTABLE OUTSIDE BUSINESS ACTIVITIES AS
DISCUSSED BELOW, MUST BE DISCLOSED BY THE INDIVIDUAL AND APPROVED IN WRITING BY
THE COMPLIANCE DEPARTMENT BEFORE TAKING ANY ACTION.
Matters involving a conflict of interest are prohibited as a matter of policy,
except when approved by the Firm's president or Chief Compliance Officer.
Conflicts of interest may not always be evident, and individuals should consult
with higher levels of management or legal counsel if they are uncertain about
any situation. In no event, however, shall investment in any security made in
accordance with the Firm's Policy on Personal Securities Transactions (or
comparable policy or code then in effect) be considered a conflict of interest
with the Firm.
COMMENT: THIS SECTION RELATING TO CONFLICTS OF INTEREST IS SUBSTANTIALLY
SIMILAR TO THE COMPARABLE SECTION IN THE THORNBURG INVESTMENT TRUST CODE OF
BUSINESS CONDUCT AND ETHICS, BUT SUPERVISED PERSONS SHOULD RECOGNIZE THAT (I)
THE TRUST'S CODE OF BUSINESS CONDUCT AND ETHICS GOVERNS CONFLICTS WITH INTEREST
OF THE TRUST, RATHER THAN THE FIRM AND ITS CLIENTS, AND (II) THE PROCEDURES FOR
REPORTING AND RESOLVING CONFLICT UNDER THE TRUST'S CODE OF BUSINESS CONDUCT AND
ETHICS IS DIFFERENT FROM THE PROCEDURE UNDER THIS CODE. IF AN INTEREST OF THE
SUPERVISED PERSON APPEARS TO CONFLICT WITH AN INTEREST OF THE TRUST AND THE
FIRM), THE SUPERVISED PERSON SHOULD MAKE A DISCLOSURE AND SEEK ANY APPROVAL
UNDER THE TRUST'S CODE OF BUSINESS CONDUCT AND ETHICS.
OBTAINING PRIOR APPROVAL FOR OUTSIDE BUSINESS ACTIVITIES. Prior to engaging in
any Reportable Outside Business Activity, an employee must complete and submit
an "Outside Business Activity Disclosure Form" (obtained from Compliance or the
Firm's intranet) to the Compliance Department, and receive written approval
from the Compliance Department. Failure to obtain such written approval may
result in disciplinary action up to and including termination. On an annual
basis, all employees will be required to certify their Reportable Outside
Business Activities.
FAMILY MEMBER SERVING AS A DIRECTOR OF A PUBLIC COMPANY. Employees must
disclose to Compliance any immediate family member (a child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
and shall include adoptive relationships) sharing the same household who serves
as a director of a public company.
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CORPORATE OPPORTUNITIES
Supervised Persons shall not take for themselves personally opportunities that
are discovered through the use of their position with the Firm, except with the
approval of the Firm's President or Chief Compliance Officer. Supervised
Persons of the Firm owe a duty to the Firm to advance its legitimate interests
when the opportunity to do so arises. In no event, however, shall investment in
any security made in accordance with the Firm's Policy on Personal Securities
Transactions (or comparable policy or code then in effect) be considered a
business opportunity of the Firm.
COMMENT: THIS SECTION RELATING TO CORPORATE OPPORTUNITIES IS SUBSTANTIALLY THE
SAME AS THE COMPARABLE SECTION ON THE THORNBURG INVESTMENT TRUST CODE OF
BUSINESS CONDUCT AND ETHICS, BUT SUPERVISED PERSONS SHOULD RECOGNIZE THAT (I)
THE TRUST'S CODE OF BUSINESS CONDUCT AND ETHICS GOVERNS OPPORTUNITIES OF THE
TRUST, RATHER THAN THE FIRM, AND (II) THE PROCEDURES FOR REPORTING AND
OBTAINING AN APPROVAL UNDER THE TRUST'S CODE OF BUSINESS CONDUCT AND ETHICS IS
DIFFERENT FROM THE PROCEDURE UNDER THIS CODE. IF AN OPPORTUNITY APPEARS TO
RELATE BOTH TO THE BUSINESS OF THE TRUST AND THE FIRM, THE SUPERVISED PERSON
SHOULD MAKE DISCLOSURE AND SEEK ANY APPROVAL UNDER THE TRUST'S CODE OF BUSINESS
CONDUCT AND ETHICS.
CONFIDENTIALITY
Supervised Persons shall exercise care in maintaining the confidentiality of
any confidential information respecting the Firm or its Investment Clients,
except when disclosure is authorized or legally mandated. Supervised Persons
should consult with the Firm's Chief Compliance Officer or legal counsel if
they believe that have a legal obligation to disclose confidential information.
Confidential information includes nonpublic information of the Firm that may be
helpful to competitors, or otherwise harmful to the Firm, or its Investment
Clients. Confidential information also includes information respecting the
portfolio holdings of Investment Clients (including particularly Investment
Company Clients). The obligation to preserve confidentiality of this
information continues after association with the Firm ends.
COMMENT: ATTENTION IS DIRECTED TO THE INTERNAL CONFIDENTIALITY AND PRIVACY
PROTECTIONS POLICY, WHICH APPEARS IN THE FIRM'S MANUAL OF POLICIES AND
PROCEDURES, AND WHICH WAS ADOPTED BY THE FIRM TO PROTECT THE NONPUBLIC PERSONAL
INFORMATION OF THE INVESTMENT CLIENTS OF THE FIRM AND THE SHAREHOLDERS OF
THORNBURG INVESTMENT TRUST. THIS SECTION RESPECTING CONFIDENTIALITY IS
SUBSTANTIALLY THE SAME AS THE COMPARABLE SECTION IN THE THORNBURG INVESTMENT
TRUST CODE OF BUSINESS CONDUCT AND ETHICS, EXCEPT THAT A SPECIFIC REFERENCE IS
MADE TO INFORMATION RESPECTING PORTFOLIO HOLDINGS OF INVESTMENT CLIENTS.
FAIR DEALING
Supervised Persons should endeavor to deal fairly with Investment Clients,
service providers and competitors, and shall not seek unfair advantage through
improper concealment, abuse of improperly acquired confidential information,
misrepresentation of material facts when the other party is known by the
Supervised Persons to rely justifiably on the individual to disclose those
facts truthfully, or improper and unfair dealing.
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FOREIGN CORRUPT PRACTICES ACT
The Foreign Corrupt Practices Act (the "FCPA") strictly prohibits unauthorized
facilitation payments to government officials of foreign countries, including
the payment of any money or anything of value to a foreign official for the
purposes of:
o Influencing any act or decision of a foreign official in his or her
official capacity (including, but not limited to, obtaining approval
for government issued permits, licenses or work visas);
o Inducing a foreign official to perform or abstain from performing any
act in violation of the foreign official's lawful duty;
o Securing any improper business advantage; or
o Inducing a foreign official to use his or her official influence with
a foreign government (or instrumentality thereof) to affect or
influence any act or decision of such government in order to assist
the inducer in obtaining or retaining business with the government, or
directing such business to any person.
In addition, many foreign countries have rules and regulations restricting
gifts to people who are employed by the government of that country. The Firm
intends to fully comply with all of those rules and regulations. If you are at
all uncertain about the applicability of the FCPA, or similar laws, to any
entertainment, gift or anything of value to any non-U.S. official, consult a
Compliance Officer.
BUSINESS GIFTS AND ENTERTAINMENT
The purpose of business entertainment and gifts in a commercial setting is to
create goodwill and sound working relationships, not to gain unfair advantage.
No gift or entertainment should ever be offered, given, provided or accepted by
any Supervised Person in connection with the Firm's business unless it (1) is
consistent with customary business practices, (2) is not excessive in value,
(3) cannot be construed as a bribe, payoff or kickback, (4) does not violate
any laws or regulations and (5) is pre-cleared by Compliance if a government
affiliated person (defined below) is involved, directly or indirectly. Receipt
of gifts or entertainment by Firm personnel involved in the purchase or sale of
registered investment company property that satisfies the criteria herein will
not be deemed to be compensation for the purchase or sale of property as
prohibited under Section 17(e)(1) of the Investment Company Act of 1940.
No Supervised Person shall provide to, or accept from, any client or
prospective client, or person or entity that does or seeks to do business with
or on behalf of the Firm, more than $100 worth of gifts per year (this limit
does not include nominal logo/promotional items). No Supervised Person may give
or accept cash or cash equivalent gifts -- gift cards that are not exchangeable
for cash, are not considered "cash equivalents." Supervised Persons may provide
to, or accept from, any client or prospective client, or person or entity that
does or seeks to do business with or on behalf of the Firm, a business
entertainment event such as a dinner, golf outing, theater or sporting event if
the person or entity providing the entertainment is present and as long as the
event is not extravagant or excessive so as to give the appearance of
impropriety. Meals provided in the Firm's office, a client's office, or in a
similar
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business setting, shall not be deemed entertainment and the Firm does not
require Access Persons to report these activities in their quarterly reports,
as described below.
On a quarterly basis, all Access Persons will be required to report by midnight
on the last day of the second month after quarter end, all entertainment and
gifts that were given and received within the previous quarter.
GIFTS AND ENTERTAINMENT TO GOVERNMENT AFFILIATED PERSONS. In addition to the
restrictions noted above, no gift, entertainment or any other thing of value
may be given, directly or indirectly, to any government affiliated person
unless the giving of such thing of value is pre-approved by Compliance. A
"government affiliated person" includes, but is not limited to, any person
affiliated with a governmental plan or a governmental entity, at any
jurisdictional level. "Anything of value" is very broadly defined and includes,
but is not limited to, logo/promotional items, meals (regardless of setting),
drinks, business entertainment events, including participation in Thornburg
campus seminars/events, and tickets to any type of event.
POLITICAL CONTRIBUTIONS AND POLITICAL ACTIVITY
Several federal and state regulations seek to prevent so-called "pay to play"
practices by investment advisors, such as when an investment advisor makes
campaign contributions to an elected official in order to influence the award
of advisory contracts to manage government investment accounts. Many of these
regulations restrict the ability of an investment advisor's directors, officers
and employees to make or solicit political contributions.
IN ORDER TO AVOID A VIOLATION OF THESE REGULATIONS, ALL SUPERVISED PERSONS ARE
PROHIBITED FROM ANY OF THE FOLLOWING ACTIVITIES, WHETHER DONE INDIVIDUALLY OR
IN THE NAME OF THE FIRM, UNLESS PRIOR APPROVAL HAS BEEN OBTAINED FROM THE
FIRM'S CHIEF COMPLIANCE OFFICER OR ANOTHER PERSON DESIGNATED BY THE FIRM'S
CHIEF COMPLIANCE OFFICER. If, after considering all relevant factors, the Chief
Compliance Officer or his designee determines that the proposed activity will
not violate applicable regulations, then the Chief Compliance Officer or his
designee shall approve the proposed activity. In making these determinations,
the Chief Compliance Officer or his designee may consult with other persons,
including the Firm's president and legal counsel.
1. Making a gift, subscription, loan, advance or deposit of money, or
giving anything else of value (each, a "Contribution"), to an
incumbent, candidate or successful candidate for elective office of
any State of the United States or political subdivision of a State of
the United States.
2. Making a Contribution to a political action committee, political
party or other entity organized to fund the political activities of an
incumbent, candidate or successful candidate for elective office of
any State of the United States or political subdivision of a State of
the United States.
3. Working on behalf of an incumbent, candidate or successful candidate
for elective office of any State of the United States or political
subdivision of a State of the United States (e.g., volunteering on a
political campaign), unless such work occurs outside of your normal
working hours with the Firm and involves no use of the Firm's
resources (e.g., the Firm's office space or telephones).
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4. Coordinating or soliciting any person (including a family member) or
political action committee to make a Contribution to an incumbent,
candidate or successful candidate for elective office of any State of
the United States or political subdivision of a State of the United
States, or to a state or local political party (e.g., hosting a
fundraising event on behalf of any such candidate).
COMMENT: ATTENTION IS ALSO DIRECTED TO THE FIRM'S THIRD-PARTY MARKETER
POLICY, WHICH PLACES CERTAIN RESTRICTIONS ON THE ABILITY OF THE FIRM
TO USE A THIRD PARTY TO SOLICIT CLIENTS.
5. Doing indirectly anything which the preceding four numbered
paragraphs would prohibit the Supervised Person from doing directly
COMMENT: EXAMPLES OF THE TYPES OF INDIRECT ACTIONS WHICH ARE
PROHIBITED INCLUDE, BUT ARE NOT LIMITED TO, (A) A SUPERVISED PERSON
COULD NOT FORM HIS OWN POLITICAL ACTION COMMITTEE AND MAKE
CONTRIBUTIONS THROUGH THAT POLITICAL ACTION COMMITTEE WHICH THE
SUPERVISED PERSON WOULD BE PROHIBITED FROM MAKING IN HIS OWN NAME; (B)
A SUPERVISED PERSON COULD NOT FUNNEL CONTRIBUTIONS THROUGH THIRD
PARTIES, SUCH AS ATTORNEYS, FAMILY MEMBERS, FRIENDS OR AFFILIATED
COMPANIES; (C) MAKING A CONTRIBUTION TO A CHARITABLE ORGANIZATION AT
THE REQUEST OF AN INCUMBENT, CANDIDATE OR SUCCESSFUL CANDIDATE FOR
ELECTIVE OFFICE OF ANY STATE OF THE UNITED STATES OR POLITICAL
SUBDIVISION OF A STATE OF THE UNITED STATES, IF THE PURPOSE IN MAKING
SUCH A CONTRIBUTION IS TO INDUCE THAT INCUMBENT, CANDIDATE OR
SUCCESSFUL CANDIDATE TO PROVIDE INVESTMENT ADVISORY BUSINESS TO THE
FIRM.
If you have any questions about these restrictions on political contributions
and political activities, please contact the Firm's Chief Compliance Officer
or, in his/her absence, another member of the Compliance Department, before
making the political contribution or participating in the political activity.
PROTECTION AND PROPER USE OF FIRM ASSETS
All Supervised Persons should endeavor to protect the assets of the Firm and
its Investment Clients, and pursue their efficient investment in accordance
with the Firm's business purposes. Any suspected incident of fraud or theft
should be immediately reported for investigation as hereinafter described under
the caption "Administration and Enforcement of the Code." The obligation of
Supervised Persons to protect the assets of the Firm includes its proprietary
information. Proprietary information includes intellectual property such as
trademarks and copyrights, as well as business, marketing and service plans,
databases, records, salary information, unpublished financial data and reports.
Unauthorized use or distribution of this information violates this Code.
INSIDER TRADING
All Supervised Persons should pay particular attention to potential violations
of insider trading laws. Insider trading (also referred to as "trading on
material nonpublic information," and which may include giving inside
information to other persons) is both unethical and illegal, and will be dealt
with if it occurs. SUPERVISED PERSONS ARE EXPECTED TO FAMILIARIZE THEMSELVES
WITH THE POLICY ON INSIDER TRADING, ADOPTED BY THE FIRM. If they have questions
about these guidelines, they should consult with the Firm's president, the
Chief Compliance Officer, or the Firm's legal counsel before making any trade
for the Firm or any personal trade, and before giving information to other
persons.
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COMMENT: ATTENTION IS DIRECTED TO THE FIRM'S POLICY ON INSIDER TRADING, WHICH
APPEARS IN COMPLIANCE'S MANUAL OF POLICIES AND PROCEDURES.
ADMINISTRATION AND ENFORCEMENT OF THE CODE CERTIFICATION
Each newly hired Supervised Person of the Firm will be provided a copy of the
Code. Each such individual must certify in writing within 30 days that they
have received a copy of the Code, read and understand all provisions of the
Code, and agree to comply with the applicable terms of the Code. The Firm will
provide its Supervised Persons with any amendments to the Code and will require
all such individuals to certify in writing that they have received, read and
understand the amendments. Each year the Chief Compliance Officer will conduct
an annual meeting with Supervised Persons to review the Code. Supervised
Persons will annually certify that they have read, understood and complied with
the Code, that they have made all of the reports required by the Code and have
not engaged in any prohibited conduct.
REPORTING VIOLATIONS
All Supervised Persons are required to promptly report any actual, apparent or
suspected violations of the Code to the Chief Compliance Officer. If the Chief
Compliance Officer or another compliance officer is not available the
individual should report the violation to their immediate supervisor who is
then responsible for reporting it to the Chief Compliance Officer. All reports
will be treated confidentially to the extent permitted by law and investigated
promptly.
SANCTIONS
Upon discovering a violation of this Policy, the Firm may impose such sanctions
as it deems appropriate, including, but not limited to, a letter of censure,
fine, suspension or termination of the violator's employment.
GLOSSARY
"ACCESS PERSON" means:
i. Any director or officer of any of the Firm.
ii. Any Supervised Person of the Firm, unless, in the Chief Compliance
Officer's sole discretion, a particular Supervised Person does not
have ongoing access to the Companies' headquarters or information
systems.
iii. Individuals who are registered with the FINRA as an associated person
of Thornburg Securities Corporation.
iv. Any director, officer, general partner or employee of any company in
a Control relationship with the Firm who, in connection with their
regular functions or duties, make, participate in, or obtain
information regarding the purchase or sale of Securities by any
Investment Client, or
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whose functions relate to the making of any recommendations with
respect to those purchases or sales.
v. Any natural person who is in a Control relationship with the Firm and
who obtains information concerning recommendations made to any
Investment Client with regard to the purchase or sale of Securities by
the Investment Client.
"CHIEF COMPLIANCE OFFICER" means, for purposes of this Code, the Firm's chief
compliance officer.
"FUND" means any series of Thornburg Investment Trust or any other Investment
Company as to which the Firm is an investment adviser or sub-adviser.
"INVESTMENT CLIENT" means any person with whom the Firm has a contract to
perform discretionary investment management services, including any series of
an Investment Company.
"INVESTMENT COMPANY" means a company registered as such under the Investment
Company Act of 1940.
"INVESTMENT COMPANY CLIENT" means any Investment Company (or series thereof )
as to which the Firm is an investment adviser or investment sub-adviser.
"POLICY ON PERSONAL SECURITIES TRANSACTIONS" means the Firm's written policy
of that name, as revised from time to time. This Policy can be found in the
Firm's Manual of Policies and Procedures.
"REPORTABLE OUTSIDE BUSINESS ACTIVITY" means any activity wherein an employee
of the Firm acts as an employee, independent contractor, sole proprietor,
officer, director or partner of another person, or is compensated, or has a
reasonable expectation of compensation, from any other person as a result of
any business activity outside the scope of their relationship with the Firm.
"SUPERVISED PERSON" means any director, managing director, officer (or other
person occupying a similar status or performing functions similar to any of
those persons) or employee of the Firm, and any other persons who are subject
to the Firm's supervision and control.
"TRUST" means Thornburg Investment Trust.
"TSC" means Thornburg Securities Corporation.
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THORNBURG INVESTMENT MANAGEMENT
THORNBURG INVESTMENT TRUST
THORNBURG SECURITIES CORPORATION
PERSONAL SECURITIES TRANSACTIONS POLICY
MARCH 2016
POLICY OBJECTIVES
Honesty and integrity are hallmarks of Thornburg Investment Management, Inc.
("TIM"), Thornburg Investment Trust (the "Trust") and Thornburg Securities
Corporation ("TSC") (singularly a "Company" or together the "Companies"). Each
of the Companies seeks the highest standards of ethics and conduct from its
employees in all of their business relationships, and TIM hereby acknowledges
its fiduciary obligations to its Investment Clients.
This Policy has been adopted by each of the Companies with the objectives of
promoting honesty and integrity, and preventing wrongdoing by the Companies'
employees. In particular, this Policy seeks to prevent an employee of the
Company, in connection with the direct or indirect purchase or sale by that
employee of Securities held or proposed to be purchased or sold by any
Investment Client, from:
1. employing any device, scheme or artifice to defraud any Investment
Client;
2. making any untrue statement of material fact to any Investment Client
or omitting to state a material fact necessary in order to make the
statements made to any Investment Client, in light of the
circumstances under which they are made, not misleading;
3. engaging in any act, practice or course of business that operated or
would act as a fraud or deceit on any Investment Client; or
4. engaging in any manipulative practice with respect to any Investment
Client.
This Policy is intended to constitute the Companies' written code of ethics as
required by Rule 17j-1 under the Investment Company Act of 1940. In addition,
this Policy together with a separately adopted Investment Adviser Code of
Business Conduct and Ethics, is intended to comprise TIM's code of ethics
described in Rule 204A-1 under the Investment Advisers Act of 1940. Any report
filed under this Policy will be deemed to satisfy both Rule 17j-1 and Rule
204A-1.
Please see the Glossary of Terms for definitions of terms used in this Policy.
PRIOR AUTHORIZATION FOR SECURITIES TRANSACTIONS
All Access Persons and their Family Members must obtain PRIOR authorization
from the Compliance Department for any Securities transactions, other than
those Securities transactions described below under "Transactions that Do Not
Require Prior Authorization." Access Persons must submit each request for
authorization through the STARCompliance system and are not permitted to
conduct such transaction until approval is received from the system. Certain
types of transactions, including those listed below, will be directed to a
Designated Compliance Officer for manual review and may require additional time
for an authorization decision:
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o Purchases of Securities distributed in an Initial Public Offering or
Limited Offering.
o Transactions involving Supervised Persons on the Prohibited List or
Securities on the Prohibited List. See "Prohibited List" below.
o Transactions involving Securities on the then-current Holdings List.
See "Holdings List" below.
Any transaction for which prior authorization is received MUST BE COMPLETED BY
11:59PM MST ON THE NEXT BUSINESS DAY AFTER SUCH AUTHORIZATION IS RECEIVED, with
the exception of purchases of securities distributed in an initial public
offering or limited offering.
The foregoing prior authorization requirements do not apply to transactions by
an Independent Trustee.
TRANSACTIONS THAT DO NOT REQUIRE PRIOR AUTHORIZATION
The following Securities transactions are exempt from the prior authorization
requirements described above:
o Purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control. No direct or
indirect influence or control means having no input about or advance
knowledge of the particular purchases or sales of securities or the
particular allocation of investments in an account.
o Purchases or sales for which the Access Person does not directly or
indirectly have Beneficial Ownership.
o Purchases or sales which are non-volitional on the part of the Access
Person.
o Purchases or sales through an Automatic Investment Plan.
o Purchases or sales of U. S. or foreign government or agency bonds.
o 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 issuers, and sales of such rights
so acquired.
o Purchases or sales of shares of any investment company registered as
such under the Investment Company Act, including but not limited to,
open-end funds, closed-end funds, unit investment trusts,
exchange-traded funds, and money market mutual funds.
o Purchases or sales of Securities for any Private Fund managed by TIM.
DERIVATIVE TRANSACTIONS
A transaction in any put or call option or any future on a security, will be
treated as a Securities Transaction under this Policy. For the purposes of this
Policy, derivative transactions will be divided into two categories: "call
equivalent positions" and "put equivalent positions." A "call equivalent
position" is treated as a purchase of the underlying security. Conversely, a
"put equivalent position" is treated as a sale of the underlying security.
HOLDINGS LIST
The Holdings List is a list of all securities held by any TIM client. A
Security will remain on the Holdings List for 15 calendar days after it is last
held by the Companies and will be considered on the list for the 15 day period
prior to it being initially held by TIM. Subject to prior authorization
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requirements set forth above under "Prior Authorization for Securities
Transactions," Access Persons are prohibited from purchasing any Security which
is on the then-current Holdings List, or which the Access Person knows is being
considered for purchase or sale by an Investment Client. Compliance will review
all personal transactions of Securities on the Holdings List and if it
determines that an Access Person received a benefit due to a transaction or
transactions by an Investment Client, the Access Person may be required to
disgorge such benefit, as determined by the Chief Compliance Officer. In
determining whether to require disgorgement, Compliance will consider various
factors including the length of time between the Access Person's trade and the
an Investment Client's trade. The receipt of prior authorization from
Compliance for a trade of a Security on the Holdings List does not prevent
Compliance from subsequently seeking disgorgement.
PROHIBITED LIST
The Chief Compliance Officer, or a Compliance Officer of his/her designation,
will maintain a Prohibited List. A Security will be placed on this list when it
is known by the Compliance Department that a Supervised Person possesses
material nonpublic information about or affecting the Security or its issuer. A
Supervised Person will be placed on this list when it is known by the
Compliance Department that such Supervised Person may possess material
nonpublic information about or affecting one or more Securities or their
issuers.
REPORTING REQUIREMENTS FOR ACCESS PERSONS
ACCESS PERSONS
Except as provided below for Independent Trustees, the Companies require all
Access Persons to file the following reports through the STARCompliance system:
o a STATEMENT OF OUTSIDE BROKERAGE ACTIVITY no later than 10 days after
being hired or designated as an Access Person.
o an INITIAL HOLDINGS REPORT no later than 10 days after being hired or
designated as an Access Person.
o an ANNUAL HOLDINGS REPORT by January 30(th) each year for the
previous twelve months beginning January 1(st) and ending December
31(st).
o a QUARTERLY TRANSACTIONS REPORT no later than 30 days after the end
of each calendar quarter.
See "Reporting of Personal Securities Ownership" below for more detail about
these reports.
Additionally, the Companies require all Access Persons to notify each firm that
maintains an outside brokerage account for them, or for a Family Member, of
their association with the Companies and the Companies' requirement to receive
duplicate copies of confirmations and periodic statements. TRUSTEES OF THE
TRUST An Independent Trustee (who would be required to file a report solely by
reason of being a trustee of the Trust) need not make: (i) an Initial Holdings
Report; (ii) an Annual Holdings Report; or (iii) a Quarterly Transaction
Report; except that the Trustee will need to file a Quarterly Transaction
Report if the Trustee knew or in the ordinary course of his duties as a Trustee
should have known that, during the 15-
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day period immediately before or after the Trustee's transaction in a Security,
the Trust purchased or sold the Security, or the Trust or TIM considered
purchasing or selling the Security.
REPORTING OF PERSONAL SECURITIES OWNERSHIP
STATEMENT OF OUTSIDE BROKERAGE ACTIVITY
This statement must be completed and returned to the Compliance Department no
later than 10 days after being hired or designated as an Access Person and
shall disclose each brokerage account in which they or a Family Member have any
Beneficial Ownership or, if the individual is also an associated person of TSC,
discretionary trading authority. The disclosure shall be on a form prescribed
by the Compliance Department and shall include the account number for each
account and the identity of the firm where the account is maintained. The
Compliance Department must be notified immediately in writing if a new outside
brokerage account is subsequently opened. Additionally, it is the
responsibility of each associated person of TSC to notify each firm where they
maintain a brokerage account required to be disclosed on a Statement of Outside
Brokerage Activity, that they are an associated person of TSC.
Once a Statement of Outside Brokerage Activity has been submitted through the
STARCompliance system, the Compliance Department will send a request to each
firm which maintains an outside brokerage account for that Access Person to
receive duplicate confirmation and periodic statements. It is the Access
Person's responsibility to ensure that the Compliance Department's request is
honored.
INITIAL AND ANNUAL HOLDINGS REPORTS
The INITIAL HOLDINGS REPORT must be filed by each Access Person through the
STARCompliance system no later 10 days after the individual is hired or
designated as an Access Person. Information contained in the report must be
current as of a date not more than 45 days prior to the date the individual
becomes an Access Person.
The ANNUAL HOLDINGS REPORT must be filed by each Access Person by January
30(th) each year. The information contained in the report must be from January
1(st) through December 31(st) of the previous year.
The INITIAL HOLDINGS REPORT and ANNUAL HOLDINGS REPORT must include the
following information for each Security in which the Access Person or Family
Member has any direct or indirect Beneficial Ownership:
o The title and type of each Security, and as applicable the exchange
ticker symbol or CUSIP number, number of shares, and principal amount.
o The name of each broker, dealer, bank, or other financial institution
maintaining a brokerage or other account for the Access Person or
Family Member and the account number assigned to it.
o The date the report is filed.
In lieu of including the above information on these reports, an Access Person
or his brokerage firm may submit duplicate trade confirmations or brokerage
account statements, provided that such confirmations or statements contain
information equivalent to what would otherwise be included in these reports.
You must ensure that all transactions placed within the designated period
appear on the report or in the duplicate confirmations or statements.
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QUARTERLY TRANSACTIONS REPORTS
A QUARTERLY TRANSACTION REPORT must be filed through the STARCompliance system
no later than 30 days after the end of each calendar quarter.
The QUARTERLY TRANSACTION REPORT must include the following information for
each Security in which the Access Person or Family Member has any direct or
indirect Beneficial Ownership:
o The date of each transaction, the title, and as applicable the
exchange ticker symbol or CUSIP number, interest rate and maturity
date, the number of shares, and the principal amount.
o The nature of the transaction that is, a purchase, sale or other type
of acquisition or disposition of the Security.
o The price at which the transaction was effected.
o The name of each broker, dealer, bank, or other financial institution
maintaining a brokerage or other account for the Access Person or
Family Member and the account number assigned to it.
o The date the report is filed.
In lieu of including the above information on this report, the Access Person or
his brokerage firm may submit duplicate trade confirmations or brokerage
account statements, provided that such confirmations or statements contain
information equivalent to what would otherwise be included in the report. You
must ensure that all transactions placed within the designated period appear on
the report or in the duplicate confirmations or statements.
The Chief Compliance Officer may waive the requirement to submit or extend the
filing deadline of the Quarterly Reports under certain circumstances, including
but not limited to Access Persons on maternity leave or extended medical leave.
REPORTING EXEMPTIONS
The Companies exempt the following holdings and transactions from the reporting
requirements:
o Holdings and transactions effected in any account over which the
Access Person has no direct or indirect influence or control. No
direct or indirect influence or control means having no input about or
advance knowledge of the particular purchases or sales of securities
or the particular allocation of investments in an account.
o Transactions effected pursuant to an Automatic Investment Plan.
o Holdings and transactions of shares of any registered open-end mutual
fund (including money market mutual funds), EXCEPT for shares of (i) a
Thornburg Fund or (ii) a mutual fund for which Thornburg acts as
sub-advisor. NOTE: SHARES OF ALL OTHER TYPES OF INVESTMENT COMPANIES,
INCLUDING BUT NOT LIMITED TO CLOSED-END INVESTMENT COMPANIES, UNIT
INVESTMENT TRUSTS, OR EXCHANGE-TRADED FUNDS, ARE SUBJECT TO THE
REPORTING REQUIREMENTS IN THIS POLICY.
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DESIGNATED BROKERAGE ACCOUNTS
Brokerage accounts of Access Persons must be held only at the following
approved designated broker-dealers (each a "Designated Broker"):
o Charles Schwab o RBC
o E*Trade o ScottTrade
o Fidelity o T. Rowe Price
o Interactive Brokers o TDAmeritrade
o Merrill Lynch o UBS
o Morgan Stanley o Wells Fargo
o Raymond James
The Compliance Department may waive or modify the above restriction, or
grandfather in brokerage accounts held at non-Designated Brokers prior to
December 2014. Additional firms may be added as approved designated
broker-dealers at the discretion of the Compliance Department.
ADMINISTRATION AND ENFORCEMENT OF THE POLICY
The Chief Compliance Officer will designate one or more compliance officers to
serve as a Filing and Review Officer. The Filing and Review Officer(s) will be
responsible for:
o Maintaining current and previous lists of all Access Persons.
o Maintaining a record of the Filing and Review Officers in such a
manner that the individuals serving in that capacity can be identified
for any period of time.
o Maintaining the Initial Holdings Reports, Annual Holdings Reports,
Quarterly Transactions Reports and Statements of Outside Brokerage
Activity that are filed, including all backup documentation.
o Maintaining a schedule of report filing dates. This schedule will
reflect any case in which a report was filed late, the date any
reminders were sent out and any sanctions imposed. If a report is not
filed within the required time the Filing and Review Officer will
advise the Chief Compliance Officer.
o Maintaining copies of the current and previous Holdings Lists.
o Maintaining evidence of any prior approval requests submitted through
the STARCompliance system.
o Maintaining records of waivers, including backup documentation of any
waivers issued.
o Monitoring personal Securities transactions and trading patterns
through the review of reports filed and review of the duplicate
confirmations and periodic account statements received. The Chief
Compliance Officer will review the personal Securities transactions of
the Filing and Review Officer.
o Reporting apparent violations to the Chief Compliance Officer.
o Maintaining a record of any violation, written violation reports and
record of any action taken as a result of the violation.
o Requesting duplicate confirmations and periodic statements for all
outside brokerage accounts.
o Maintaining records of requests for duplicate brokerage confirmations
and account statements, and files of duplicate brokerage confirmation
and account statements received.
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Certain documents may be maintained by the Filing and Review Officer(s) within
the STARCompliance system. See "Books and Records," below for the periods of
time records are to be retained.
The Filing and Review Officer(s) will seek to protect the confidentiality of
those records containing personal information about an Access Member or Family
Member, including information about the investment holdings or investment
trading activity of an Access Person or Family Member. Such information will
only be shared with members of the compliance department, outside counsel,
securities regulators and other persons who, in the judgment of the Filing and
Review Officer(s) or the Chief Compliance Officer, have a legitimate need to
know such information, or with persons to whom the Companies are under a legal
obligation to disclose such information.
CERTIFICATION
Each Supervised Person of the Companies will be provided a copy of this Policy
and must certify in writing no later than 30 days after receipt of the Policy,
that they have received a copy of this Policy, read and understand all
provisions of this Policy, and agree to comply with the applicable terms of
this Policy. The Companies will provide any amendments to the Policy and will
require all Supervised Persons to certify in writing that they have received,
read and understand the amendments. Each year the Chief Compliance Officer or
compliance officer designated by the Chief Compliance Officer will conduct an
annual meeting with all Supervised Persons of TIM and TSC to review the Policy
and will require all Supervised Persons to annually certify that they have
read, understood and complied with the Policy, that they have made all of the
reports required by the Policy and have not engaged in any prohibited conduct.
REPORTING VIOLATIONS
All Supervised Persons are required to promptly report any actual, apparent or
suspected violations of the Policy to the Chief Compliance Officer. If the
Chief Compliance Officer or another compliance officer is not available the
individual should report the violation to their immediate supervisor who is
then responsible for reporting it to the Chief Compliance Officer. All reports
will be treated confidentially to the extent permitted by law and investigated
promptly.
SANCTIONS
Upon discovering a violation of this Policy, each Company may impose such
sanctions as it deems appropriate, including, but not limited to, a letter of
censure, fine, suspension or termination of the violator's employment.
REPORTING TO COMPANY PRESIDENTS, THE BOARD OF TRUSTEES, AND INVESTMENT
COMPANIES
The Chief Compliance Officer shall provide a written report to the Trustees of
Thornburg Investment Trust at least annually. The report shall (i) describe any
significant issues arising under this Policy since the last report, including
but not limited to, any material violations of this Policy and any sanctions
imposed, and (ii) certify that the Trust, TIM, and TSC have each adopted
procedures reasonably necessary to prevent violations of this Policy.
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The Chief Compliance Officer shall provide a written report to investment
companies other than the Trust for which TIM acts as investment adviser or
sub-adviser, as may reasonably be requested. The report shall (i) describe any
significant issues arising under this Policy since the last report, including
but not limited to, any material violations of this Policy and any sanctions
imposed, and (ii) certify that TIM has adopted procedures reasonably necessary
to prevent violations of this Policy.
ANNUAL REVIEW
Pursuant to the review requirements of Rule 206(4)-7 under the Advisers Act and
Rule 38a-1 under the Investment Company Act, the Chief Compliance Officer shall
conduct a periodic review, no less often than annually, of the adequacy of the
Policy and the effectiveness of its implementation.
RECORDKEEPING
In its books and records (which may include maintenance of records through the
STARCompliance system) the Compliance Department will:
o Retain a copy of each version of this Policy that has been in effect
at any given time.
o Retain a record of any violations of this Policy, written violation
reports and any action taken as a result of the violation.
o Maintain Holdings and Transaction Reports and Statements of Outside
Brokerage Activity that are filed, including backup documentation.
o Maintain copies of duplicate brokerage confirmations and account
statements received and requests made.
o Maintain Request for Prior Clearance of Security Transactions forms,
and any backup documentation, and waivers granted.
o Maintain copies of Holdings Lists.
o Maintain copies of Prohibited Lists
o Maintain lists of Access Persons and Registered Representatives.
o Maintain schedule of report filing dates, reminders and sanctions
imposed.
o Maintain copies of reports to the Chief Compliance Officer, the
Trust, and the President.
o Maintain a record of persons designated as Filing and Review
Officers.
o Maintain sign in sheet and material distributed at the annual meeting
at which this Policy is reviewed with all Supervised Persons.
These items will be maintained for a total period of five years. For the first
two years these items will be stored in a designated area at the Companies'
principal place of business; after the two year period they may be moved and
stored offsite.
In its books and records, the Human Resources Department will:
o Maintain a record of all employee certifications/acknowledgements of
receipt of this Policy and any amendments hereto.
All records shall be maintained and preserved pursuant to the separately
adopted Document Retention and Destruction Policy for the time period indicated
in the current Books and Records Matrix.
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GLOSSARY OF TERMS
"ACCESS PERSON" means:
i. Any Trustee, director, officer or partner of any of the Companies.
ii. Any Supervised Person of any of the Companies, unless, in the
Chief Compliance Officer's sole discretion, a particular Supervised Person
does not have ongoing access to the Companies' headquarters or information
systems.
iii. Individuals who are registered with the FINRA as an associated
person of Thornburg Securities Corporation.
iv. Any director, officer, general partner or employee of any company
in a Control relationship with any of the Companies who, in connection with
their regular functions or duties, make, participate in, or obtain
information regarding the purchase or sale of Securities by any Investment
Client, or whose functions relate to the making of any recommendations with
respect to those purchases or sales.
v. Any natural person who is in a Control relationship with any of the
Companies and who obtains information concerning recommendations made to
any Investment Client with regard to the purchase or sale of Securities by
the Investment Client.
"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.
"BENEFICIAL OWNERSHIP" shall be interpreted in accordance with Rule 16a-1(a)(2)
under the Securities Exchange Act of 1934.
"CHIEF COMPLIANCE OFFICER" means the chief compliance officer for TIM.
"COMPLIANCE DEPARTMENT" means TIM's compliance department.
"CONTROL" shall be interpreted in accordance with Section 2(a)(9) of the
Investment Company Act of 1940.
"FAMILY MEMBER" means the members of an Access Person's immediate family (a
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and shall include adoptive relationships) sharing the same
household; provided, however, that the presumption of such beneficial ownership
by a Family Member may be rebutted by an Access Person.
"INDEPENDENT TRUSTEE" means a Trustee who is not an "interested person" of the
Trust within the meaning of Section 2(a)(19) of the Investment Company Act of
1940.
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"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 Sections 13 or
15(d) of the Securities Exchange Act of 1934.
"INVESTMENT CLIENT" means (1) any investment company registered as such under
the Investment Company Act of 1940 or series thereof or any component of such
series for which TIM is an investment adviser or investment sub-adviser; or (2)
any private accounts owned by any person for whom TIM is an investment adviser
or investment sub-adviser; (3) any customer of TSC.
"LIMITED OFFERING" means an offering exempt from registration under the
Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) thereof, or
pursuant to Rule 504, Rule 505 or Rule 506 adopted thereunder.
"PRIVATE FUND" means an investment vehicle the securities of which are not
registered under the Securities Act of 1933 and which is excluded from the
definition of an "investment company" under Section 3(c)(1) or 3(c)(7) of the
Investment Company Act of 1940.
"PURCHASE OR SALE OF A SECURITY" includes, among other things, the writing of
an option to purchase or sell a Security.
"SECURITY" or "SECURITIES" 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 or to purchase, any of the foregoing. The term "Security" or
"Securities" shall NOT include direct obligations of the U.S. Government,
bankers' acceptances, bank certificates of deposit, commercial paper, high
quality short-term debt instruments (including repurchase agreements), and
shares issued by "money market" mutual funds.
"SUPERVISED PERSON" means any director, managing director, officer (or other
person occupying a similar status or performing functions similar to any of
those persons) or employee of any of the Companies, and any other persons who
provide advice on behalf of any of the Companies relating to the purchase or
sale of Securities by an Investment Client and who are subject to any of the
Companies' supervision and control.
"THORNBURG FUND" means any series of Thornburg Investment Trust. "TRUST" means
Thornburg Investment Trust.
"TRUSTEE" means a Trustee of the Trust
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OPPENHEIMER FUNDS
The Right Way
to Invest
CODE OF ETHICS
--------------------------------------------------------------------------------
APPLICABLE RULES, o Rule 17j-1 under the Investment Company Act
REGULATIONS & o Section 204A of the Investment Advisers Act
OTHER SOURCES: o Rule 204A-1 under the Investment Advisers Act
o Forms N-1A and N-2
--------------------------------------------------------------------------------
RISK ADDRESSED: OFI Client Accounts are harmed due to fraudulent and/or
deceptive personal trading in securities by employees.
--------------------------------------------------------------------------------
APPLIES TO: o All OFI Advisers o SSI
o VTL o Funds
o OFI Trust o ETF Trust
o OFDI
--------------------------------------------------------------------------------
DEPARTMENTS o All Employees
--------------------------------------------------------------------------------
IMPACTED: o Compliance Department
--------------------------------------------------------------------------------
LAST UPDATED: May 2016
--------------------------------------------------------------------------------
APPROVED BY: o NY Board: May 2016
o Denver Board: May 2016
o Corporate: May 2016
--------------------------------------------------------------------------------
GLOSSARY
A. POLICY STATEMENT
OVERVIEW. The OFI Advisers, along with certain of their affiliated entities
(the "OFI Entities"), have adopted this Code of Ethics which is designed to
make certain that the personal trading and other business activities of
employees are conducted in a manner consistent with applicable law and
regulation.
B. POLICY IMPLEMENTATION
Each of the OFI Entities shall use reasonable diligence and institute
procedures necessary to prevent violations of the Code of Ethics. Refer to
Exhibit A.
1
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
The Right Way
to Invest
EXHIBIT A
CODE OF ETHICS
EFFECTIVE: MAY 26, 2016
I. POLICY STATEMENT
This Code of Ethics is designed to ensure that personal trading and other
business activities of employees are conducted in a manner consistent with
applicable laws and regulations.
II. DEFINITIONS
"1933 ACT" means the Securities Act of 1933, as amended, and the rules and
regulations adopted thereunder.
"1940 ACT" means the Investment Company Act of 1940, as amended, and the rules
and regulations adopted thereunder.
"ADVISERS ACT" means the Investment Advisers Act of 1940, as amended, and the
rules and regulations adopted thereunder.
"ADVISORY CLIENTS" means the entities, individuals or accounts to which OFI (as
defined below) provides investment advisory services pursuant to an investment
management agreement.
"APPROVED LIST" means the list of financial firms or institutions with which
Personal Accounts are permitted to be maintained.
"BENEFICIAL INTEREST" means the opportunity, directly or indirectly, through
any contract, arrangement, understanding, relationship or otherwise, to share
at any time in any economic interest or profit derived from an ownership of or
a transaction in a Security (as defined below).
An Employee (as defined below) is deemed to have a Beneficial Interest in the
following:
o Any Security held in an account registered in the name of the
Employee;
o Any Security held in an account registered in the name of the
Employee jointly with others (E. G. , joint accounts, spousal
accounts, partnerships, trusts and controlling interests in
corporations);
o Any Security held in an account registered in the name of a Family
Member (as defined below) or Domestic Partner (as defined below);
o Any Security held in an account registered in the name of the
Employee's Family Member, Domestic Partner, friend or any other
third-party (i) for which the Employee
2
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
The Right Way
to Invest
acts as trustee, executor, or guardian or provides investment or any
other advice; or (ii) over which the Employee has any form of
discretion or authority;
o Any interest(s) held by the Employee in a general or limited
partnership or limited liability company; or
o Any interest (or that of a Family Member) as a member of an
organization that is formed for the purpose of investing a pool of
money in Securities (e.g., an investment club).
Employees do not have a Beneficial Interest in Securities held by a
corporation, partnership, limited liability company or other entity in which an
Employee holds an interest, unless the Employee is a controlling equity holder
or has or shares any form of discretion or authority over the Securities held
by the entity.
Employees may not exercise investment discretion over accounts in which they
have no Beneficial Interest unless approved by the Compliance Department.
Employees must receive written approval from the Compliance Department: (i)
upon assuming power of attorney related to financial or investment matters for
any person or entity; or (ii) before accepting a position in an organization
that requires an Employee to exercise discretion or manage that organization's
investment accounts.
Employees shall contact the Compliance Department when they are not sure if
they are deemed to have a Beneficial Interest in a Security.
"CODE" means this Code of Ethics.
"DISCRETIONARY MANAGED ACCOUNT" means a Personal Account (as defined below) for
which an Employee has completely relinquished decision-making authority to a
professional money manager (who is not a Family Member or not otherwise covered
by this Code), and over which the Employee has no direct or indirect influence
or control. Such Discretionary Managed Accounts are often referred to as
"professionally managed," "controlled" or "managed" accounts.
"DOMESTIC PARTNER" means an individual, at least 18 years of age, with whom an
Employee (as defined below): (i) resides with as if married and intends to do
so indefinitely; (ii) lives with as a domestic partner for 12 consecutive
months; (iii) shares financial responsibilities and expenses; and (iv) is not
related any closer than would make the marriage illegal.
"EMPLOYEE" means any person who is an employee of OFI (as defined below) or a
"supervised person" of an adviser as defined in the Advisers Act. All Employees
are considered Access Persons as that term is defined in Rule 17j-1 under the
1940 Act.
3
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
The Right Way
to Invest
A director of OFI having no other executive responsibilities or engagement in
OFI's day-to-day activities beyond the scope of his or her directorship and who
does not make, participate in or obtain information regarding the purchase or
sale of any Fund's portfolio securities as part of his or her service as a
director, is not considered an Employee. The Compliance Department, in its sole
discretion, may determine whether any person should be designated as an
Employee or exempted from the definition of Employee for purposes of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations adopted thereunder.
"FAMILY MEMBER" means an Employee's spouse, minor children and other members of
his or her family (including, but not limited to children, stepchildren,
grandchildren, parents, step parents, grandparents, siblings, in-laws and
adoptive relationships) who share the Employee's household.
Employees shall contact the Compliance Department if they believe that a Family
Member should be exempted from the provisions of this Code.
"INDEPENDENT DIRECTOR" means any director or trustee of an Oppenheimer Fund (as
defined below) who is not an "interested person" (as defined in Section
2(a)(19) of the 1940 Act) of the Fund. An Independent Director is NOT
considered an Employee or Investment Person.
"INITIAL PUBLIC OFFERING" means an offering of securities registered under the
1933 Act, the issuer of which immediately before the registration was not
subject to the reporting requirements of Sections 13 or 15(d) of the Securities
Exchange or foreign regulatory equivalents thereof.
"INVESTMENT PERSON" means an Employee who is also: (i) a portfolio manager;
(ii) a securities analyst or trader who provides information and advice to a
portfolio manager or who helps execute a portfolio manager's investment
decisions; (iii) any other person who, in connection with his or her duties,
makes or participates in making recommendations regarding an Advisory Client's
purchase or sale of securities; or (iv) any Employee who works directly with a
Portfolio Manager or in the same department as the Portfolio Manager and is
likely to be exposed to sensitive information relating to the accounts for
which that Portfolio Manager has responsibility.
In addition to the above definitions, an Employee is an "Investment Person" if
the Employee has been notified in writing by the Compliance Department that the
Employee has been designated as an "Investment Person" due to the nature of the
Employee's duties and functions.
4
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
The Right Way
to Invest
"MANAGEMENT PERSON" means an Employee who is a member, as may be determined
from time to time, of OFI's (as defined below) Senior Leadership Team,
Valuation Committee Investment Risk Management Committee or Product Review
Committee.
In addition to the above definition, an Employee is a Management Person if the
Employee has been notified in writing by the Compliance Department that he or
she has been designated as such due to the nature of his or her duties and
functions.
"MNPI" means material, nonpublic information.
"OPPENHEIMER FUND" or "FUND" means an investment company registered under the
1940 Act sponsored and advised by OFI.
"OFI"" means OppenheimerFunds, Inc., an investment adviser registered with the
SEC, and its subsidiaries.
"PERSONAL ACCOUNT" means any account in which Securities may be held that is
owned by, or in the name of, an Employee, an Employee's Domestic Partner or
Family Member OR any such account in which an Employee, an Employee's Domestic
Partner or Family Member has a Beneficial Interest or over which an Employee,
an Employee's Domestic Partner or Family Member may exercise investment
discretion.
"PRIVATE PLACEMENT" means an offering of securities that is exempt from
registration pursuant to Section 4(2) or Section 4(6) of the 1933 Act or
pursuant to Rules 504, 505 or 506 under the 1933 Act.
"PTA" means FIS Protegent PTA, a third-party web based application that allows
Employees to report and update certain information, as required under this
Code, including brokerage accounts and security holdings. OFI uses PTA for
Employee reporting and pre-clearance requests made pursuant to the Code.
"RESTRICTED LIST" means the list of issuers for which Employees may be in
possession of MNPI. As a result of possessing such MNPI, trading in the issuer
is restricted or prohibited.
"SECURITY" means, except as noted below, generally any investment, instrument,
asset or holding, whether publicly or privately traded, any exchange traded
fund ("ETF"), any exchange traded note or any closed-end fund and any option,
future, forward contract, listed depositary receipts (E.G., American Depositary
Receipts, American Depositary Shares, Global Depositary Receipts) or other
obligation involving securities, a commodity, or an index thereof, including an
instrument whose value is derived or based on any of the above ("derivative").
A Security also
5
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
The Right Way
to Invest
includes any instrument that is convertible or exchangeable into a security or
which confers a right to purchase a security.
For purposes of the pre-clearance and disclosure of Personal Account
requirements applicable to Management Persons, the term "Security" specifically
includes shares of any Oppenheimer Fund or Sub-advised Fund; for Investment
Persons, the term "Security" specifically includes shares of any Oppenheimer
Fund or Sub-advised Fund for which the Investment Person serves in the
capacity, or perform the functions, that warrant him or her to be identified as
an Investment Person.
The term "Security" does NOT include:
o Shares of a registered open-end investment company, shares of a money
market fund that holds itself out as a money market fund under Rule
2a-7 of the 1940 Act, or shares of a unit investment trust that
invests exclusively in registered open-end investment companies;
o Securities issued by the U. S. government, its agencies,
instrumentalities and government- sponsored enterprises;
o Bankers' acceptances, bank certificates of deposit, commercial paper,
short-term debt instruments (including repurchase agreements) provided
such debt instruments have a maturity at the date of issuance of less
than 366 days;
o Insurance contracts, including life insurance or annuity contracts;
o Direct investments in real estate, private business franchises or
similar ventures; or
o Physical commodities (including foreign currencies).
"SECURITY HELD OR TO BE ACQUIRED" means any Security that, within the most
recent 15 calendar days: (i) is or has been held by an Advisory Client; or (ii)
is being considered by OFI for purchase on behalf of an Advisory Client. The
term also includes an option to purchase or sell, and any security convertible
into or exchangeable for, a Security.
"SUB-ADVISED FUND" means an investment company registered under the 1940 Act
for which OFI serves as a sub-adviser.
6
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
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III. STANDARDS OF BUSINESS CONDUCT
Although the Code is intended to provide guidance as to whether certain actions
or practices are permissible, it does not cover every conflict Employees may
face. OFI also maintains other compliance policies and procedures that may be
directly applicable to each Employee's specific responsibilities and duties.
These policies are available to Employees through OFI's internal website and
include, but are not limited to the following:
o Code of Conduct;
o Gift & Entertainment Policy;
o Statement of Policy and Procedures of OppenheimerFunds, Inc. Designed
to Detect and Prevent Insider Trading;
o Whistleblower Policy;
o Portfolio Holdings Disclosure Policy; and
o Outside Business Activities Policy.
The interests of Advisory Clients must always come first. Accordingly,
Employees must comply with the following general standards of business
conduct:
(a) COMPLIANCE WITH LAWS AND REGULATIONS. All Employees must comply with all
U. S. , foreign, state and local laws, rules and regulations applicable to
OFI's business or operations, including, but not limited to, U. S. federal
securities laws. An Employee is not permitted, in connection with the
purchase or sale, directly or indirectly, of a Security Held or to Be
Acquired by an Advisory Client to:
o employ any device, scheme or artifice to defraud such Advisory
Client;
o make to such Advisory Client any untrue statement of a material fact
or omit to state to such Advisory Client a material fact necessary in
order to make the statements made, in light of the circumstances under
which they are made, not misleading;
o engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon any such Advisory Client; and
o engage in any act, practice or course of business that operates or
would operate as a fraud or deceit on such Advisory Client.
(b) CONFLICTS OF INTEREST. OFI, as an investment adviser, and its Employees
have a fiduciary duty to act in the best interests of Advisory Clients. In
order to comply with this duty, Employees must avoid conflicts of interest
and disclose material facts concerning any potential conflict that may
arise. Conflicts of interest may arise when OFI or its
7
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
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Employees favor its or their own interests or the interests of one Advisory
Client over another or an Employee favors the interests of their Family
Members or OFI over the interests of Advisory Clients. Such favoritism is
expressly prohibited and constitutes a breach of fiduciary duties. Any
Employee who becomes aware of a potential conflict of interest must
promptly bring the matter to the attention of the Legal Department or the
Compliance Department.
(c) COMPETING WITH CLIENT TRADES. Employees are prohibited from profiting
personally by using knowledge about contemplated or pending securities
transactions or securities transactions currently under consideration for
Advisory Clients. Accordingly, an Employee may not purchase or sell a
Security for his or her Personal Account when in possession of knowledge
that an order to buy or sell the same Security has been made for an
Advisory Client or is being considered for an Advisory Client.
(d) CONFIDENTIALITY. All information concerning (i) Securities being
considered for purchase or sale on behalf of any Advisory Client; and (ii)
Securities being held in the accounts of Advisory Clients is considered
proprietary and confidential business information. With respect to the
Oppenheimer Funds, such information may only be disclosed in accordance
with the Portfolio Holdings Disclosure Policy.
(e) INSIDER TRADING. Employees are prohibited from trading, either personally
or on behalf of others, in any Security while in possession of MNPI
concerning that Security. MNPI not only relates to an issuer's securities
but also includes the recommendations of OFI and portfolio holdings and
transactions involving an Advisory Client. Accordingly, an Employee is
prohibited from purchasing or selling shares of an Oppenheimer Fund based
on MNPI that he or she may possess concerning such Fund or a Security it
holds. Employees are also prohibited from communicating MNPI to others in
violation of federal or state law and OFI's and the Employee's fiduciary
duty to Advisory Clients. Employees must immediately notify the Legal
Department or Compliance Departments if he or she has, may have or expects
to receive MNPI concerning any Security. Employees must not: (i) disclose
the information to anyone, except members of the Legal Department or
Compliance Department; (ii) purchase or sell the Securities that are the
subject of; or (iii) recommend that others purchase or sell the Securities
to which the information relates.
(f) RESTRICTIONS ON OUTSIDE BUSINESS ACTIVITIES. Employees are subject to the
OUTSIDE BUSINESS ACTIVITIES POLICY which prohibits them from engaging in
any organized or business activity (with or without compensation) outside
the firm, unless they obtain prior approval from the Compliance Department.
8
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
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IV. ESTABLISHING A PERSONAL ACCOUNT
Employees, their Domestic Partners and their Family Members may only maintain
Personal Accounts with financial firms or institutions on the Approved List,
which is maintained by the Compliance Department and available to Employees on
the OFI internal website. Employees must enter new Personal Accounts into PTA
no later than 15 calendar days after the Personal Account is opened. Employees
must obtain approval from the Compliance Department prior to opening a Personal
Account with a financial firm or institution that is NOT on the Approved List.
In addition to the above, Management Persons must enter into PTA any Personal
Accounts that hold shares of any Oppenheimer Fund or Sub-advised Fund, even if
the Personal Account might otherwise be exempt from reporting. Investment
Persons must record in PTA any Personal Accounts that hold shares of any
Oppenheimer Fund or Sub-advised Fund with respect to any Funds for which the
Investment Person serves in the capacity, or perform the functions, that
warrant him or her to be identified as an Investment Person.
Employees with Discretionary Managed Accounts must provide a copy of the
managed account agreement entered into with the applicable financial firm or
institution.
V. TRADING IN A PERSONAL ACCOUNT
(a) PRE-CLEARANCE. Except as noted below, Employees must pre-clear all
Securities transactions made in Personal Accounts through PTA. Upon
completion of certain reviews, which may include, among other things, the
Security's market capitalization, Employees will be promptly notified by
the Compliance Department with a determination regarding the trade request.
Employees may not execute a trade in a Personal Account until they are
notified by the Compliance Department that the trade has been approved.
Such approval remains in effect until the business day after it is granted,
unless otherwise specified by the Compliance Department. Any trades not
executed by the end of the business day after approval is granted must be
re-submitted for approval.
The following transactions are exempt from the pre-clearance requirement:
o Purchases or sales of Securities effected in a Discretionary Managed
Account;
o Purchases or sales of shares of any Oppenheimer Fund (see below for
pre- clearance requirements applicable to Investment Persons and
Management Persons);
o Purchases or sales of shares of an ETF; and
o Purchases or sales of Securities in a Personal Account that are made
involuntarily, such as:
o Securities received pursuant to a dividend reinvestment plan;
9
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
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o Securities issued as part of employment compensation;
o Securities received pursuant to issuer distributions due to
stock split or exercise of rights acquired as part of a pro rata
distribution to all holders; or
o Securities acquired or sold pursuant to an automatic investment
program in which regular purchases (or withdrawals) are made
according to a predetermined schedule and allocation.
(b) SHORT-TERM TRADING. Employees are prohibited from selling any Security
(including selling any ETF) within any period of sixty (60) calendar days
following the purchase of that Security, unless the Security will be sold
at a loss and the sale has been approved by the Compliance Department or is
subject to the exemptions listed below. This prohibition includes the
writing of covered calls that are exercised, causing the underlying
Security to be called away within sixty (60) calendar days following the
purchase of the underlying Security. See Section VI: "Additional
Restrictions and Prohibitions -- Futures and Options. " The 60-day holding
period is calculated using a "last-in, first-out" methodology.
The following transactions are exempt from the short-term trading requirement:
o Sales of Securities effected in a Discretionary Managed Account; and
o Sales of Securities in a Personal Account that are made
involuntarily, such as those pursuant to an automatic withdrawal
program.
With respect to purchases and sales of Oppenheimer Funds, Employees must
comply with the provisions of the short-term trading restrictions as set
forth in the applicable Oppenheimer Fund prospectus.
(c) TRADING PROVISIONS SPECIFIC TO INVESTMENT PERSONS. In addition to the
pre-clearance and short-term trading requirements listed above, Investment
Persons are subject to the following:
o Investment Persons are required to pre-clear purchases and sales of
Oppenheimer Funds and Sub-advised Funds for which the Investment
Person serves in the capacity, or perform the functions, that warrant
him or her to be identified as an Investment Person.
o Investment Persons, including Management Persons who are also
Investment Persons, may not purchase or sell any Security for their
Personal Accounts within seven calendar days before or seven calendar
days after (not including the day of the trade) the same Security is
purchased or sold for the account of an Advisory Client for whom such
Investment Person serves in the capacity, or performs the
10
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
The Right Way
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function, that warrant him or her to be identified as an Investment
Person. However, this prohibition does not apply to purchases and
sales of a Security that comply with certain specifications (E. G. ,
large market capitalization) as may be determined from time to time by
the Code of Ethics Oversight Committee.
o Transactions in Securities by Investment Persons, including
Management Persons who are also Investment Persons, may be subject to
review by the Code of Ethics Oversight Committee if an Investment
Person obtained approval for a purchase or sale of a Security in a
Personal Account, and a purchase or sale in the same Security for an
Advisory Client for which that Investment Person acts as an Investment
Person, is effected within seven calendar days following the
Investment Person's transaction. Such transactions may be subject to a
price adjustment and/or the disgorgement of profits.
(d) TRADING PROVISIONS SPECIFIC TO MANAGEMENT PERSONS. In addition to the
pre-clearance and short-term trading requirements listed above, Management
Persons are required to pre- clear purchases and sales of all Oppenheimer
Funds and Sub-advised Funds.
VI. ADDITIONAL RESTRICTIONS AND PROHIBITIONS FOR TRADING IN PERSONAL ACCOUNTS
Trading in Personal Accounts is also subject to the following restrictions:
(a) EXCESSIVE TRADING. Employees may not engage in personal trading that is
excessive or that compromises OFI's fiduciary duty to its Advisory Clients.
The Code of Ethics Oversight Committee, in its discretion, will determine
what constitutes excessive personal trading activity.
(b) FUTURES AND OPTIONS. Employees may not purchase or sell options or futures
contracts (both over-the-counter and exchange--traded) on physical
commodities. An Employee may write a call or purchase a put, as long as the
Employee owns the underlying security.
For the avoidance of doubt, the 60 day short term trading restrictions set
forth in "Trading in a Personal Account - Short Term Trading" apply to any
derivatives strategy effected in Personal Accounts.
(c) INITIAL PUBLIC OFFERINGS AND SECONDARY OFFERINGS. Employees may not
purchase securities in an Initial Public Offering or secondary offering.
(d) INVESTMENTS IN PRIVATE PLACEMENTS, HEDGE FUNDS, PRIVATE FUNDS, AND LIMITED
PARTNERSHIPS. Employees must obtain approval from the Compliance Department
prior to investing in a Private Placement, hedge fund, private fund or
other limited investment
11
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
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offering. Employees must provide documentation describing the investment
(e.g., offering memorandum, subscription documents) so as to enable the
Compliance Department to conduct an appropriate review of the investment.
(e) INVESTMENT CLUBS. Employees are prohibited from direct or indirect
participation in investment clubs in which the Employee would have a
Beneficial Interest.
(f) RESTRICTED SECURITIES. Employees may not purchase or sell the Securities
of any issuer that is on the Restricted List, as maintained by the
Compliance Department.
(g) SHORT SELLING. Employees are prohibited from selling a Security short.
This prohibition includes option strategies designed to achieve the same
result.
VII. REPORTING REQUIREMENTS AND CERTIFICATIONS
(a) INITIAL REPORTS. Within the first ten days of employment, Employees are
required to certify in PTA that they: (i) have received and read the Code;
and (ii) understand that they are subject to the requirements of the Code.
Additionally, Employees who maintain Personal Accounts shall provide the
Compliance Department with an initial holdings form and a personal
securities account form disclosing information that is not more than 45
days old (from the date the Employee became an Employee). The information
entered in PTA must include:
o Name(s) in which each Personal Account is registered and the date on
which the Personal Account was established;
o Title and type of Security, number of shares, principal amount,
interest rate and maturity (as applicable) of each Security held in
the Personal Accounts; and
o Name of the financial firm or institution with which the Personal
Account is maintained.
(b) QUARTERLY REPORTS. Within 30 days after the end of each calendar quarter,
Employees are required to certify that all transactions effected in
Securities during the quarter in Personal Account(s) have been recorded
accurately in PTA.
Involuntary purchases or sales of Securities in a Personal Account are
exempt from the Quarterly Reports requirement. These include:
o Securities received pursuant to a dividend reinvestment plan;
o Securities issued as part of employment compensation;
o Securities received pursuant to issuer distributions due to a stock
split or exercise
12
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
The Right Way
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of rights acquired as part of a pro rata distribution to all holders;
and
o Securities purchased (or sold) through automatic investment programs
in which regular purchases (or withdrawals) are made according to a
predetermined schedule and allocation.
(c) ANNUAL REPORTS. At least annually, Employees must to certify that: (i)
they have received, read and understand the Code; (ii) they are subject to
the requirements of the Code; and (iii) they have complied with the
requirements of the Code and understand their violations (if applicable) of
the Code. Additionally, Employees must certify that the following
information is recorded accurately in PTA:
o Name(s) in which Personal Accounts are registered and the date on
which each Personal Account was established;
o Title and type of Security, number of shares, principal amount,
interest rate and maturity (as applicable) of each Security held in
Personal Accounts; and
o Name of the financial firm or institution with which each Personal
Account is maintained.
VIII. INDEPENDENT DIRECTORS
An Independent Director of an Oppenheimer Fund or board of any other pooled
investment vehicle adopting this Code is required to report only those
transactions in his or her Personal Account in a Security (excluding, for
purposes of this paragraph, open-end Oppenheimer Funds) that at the time such
Independent Director knew, or in the ordinary course of fulfilling his or her
duties would have had reason to know, was purchased or sold or was being
considered for purchase or sale by an Oppenheimer Fund during the 15 calendar
day period immediately before or after the date of the Independent Director's
transaction. No report will be required for any quarter in which an Independent
Director has only exempt transactions to report.
Sanctions for any violation of the Code by an Independent Director of an
Oppenheimer Fund will be determined by a majority vote of other Independent
Directors of such Fund, as applicable.
IX. ADMINISTRATION OF THE CODE OF ETHICS
The Code of Ethics Oversight Committee is responsible for the oversight and
administration of the Code.
All violations of the Code are reported to OFI's Chief Compliance Officer.
Reports of violations of the Code, including the sanction imposed, are provided
to the Board of Directors of the Oppenheimer Funds, on a quarterly basis.
13
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
OPPENHEIMER FUNDS
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No less frequently than annually, a report will be provided to the Board of
Directors of each Oppenheimer Fund that describes any issues arising under the
Code, including, but not limited to, information about material violations of
the Code or procedures and sanctions imposed in response to the material
violations, and a certification that each Oppenheimer Fund and OFI have each
adopted procedures reasonably necessary to prevent Employees from violating the
Code.
X. PENALTIES AND SANCTIONS
Any violations and potential violations of the Code are investigated by the
Compliance Department, or, if necessary, the Code of Ethics Oversight
Committee. If a determination is made that a violation has occurred, a sanction
may be imposed. Sanctions may include, but are not limited to, one or more of
the following: a warning letter, profit disgorgement, personal trading ban,
negative adjustment to compensation, termination of employment or referral to
civil or criminal authorities or any other sanction as may be determined by the
Code of Ethics Oversight Committee.
OFI reserves the right to take any legal action it deems appropriate against
Employees who violate any provision of this Code and to seek to hold Employees
liable for any and all damages (including, but not limited to, all costs and
attorney fees) that OFI may incur as a direct or indirect result of any such
Employee's violation of this Code or related law or regulation.
XI. RECORDKEEPING
Records are retained in accordance with applicable legal and regulatory
requirements and OFI's internal policies and procedures.
XII. AMENDMENTS
Any material changes to the Code must be approved by the board of directors of
each entity adopting the Code, and by the board of directors of each
Oppenheimer Fund, including a majority of the Independent Directors or
Trustees. Approval of any material change to this Code by the board of
directors or trustees of the Oppenheimer Funds must be obtained within six
months after the change has been adopted by OFI.
14
This policy is proprietary and may not be distributed to, or shared with, any
third parties, unless required by applicable law or approved by the OFI
Compliance Department. Please direct all questions regarding OFI policies and
procedures to the OFI Compliance Department at ML-Policy and Procedure.
BS 7.26.16
CODE OF ETHICS
Implementation Date: Q2 2016
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GENERAL
The Code of Ethics is predicated on the principle that ClariVest owes a
fiduciary duty to its Clients.(1) Accordingly, Employees must avoid activities,
interests and relationships that run contrary (or appear to run contrary) to
the best interests of Clients. At all times, ClariVest will:
o PLACE CLIENT INTERESTS AHEAD OF CLARIVEST'S -- As a fiduciary,
ClariVest will serve in its Clients' best interests. In other words,
Employees may not benefit at the expense of advisory Clients.
o ENGAGE IN PERSONAL INVESTING THAT IS IN FULL COMPLIANCE WITH
CLARIVEST'S CODE OF ETHICS --Employees must review and abide by
ClariVest's Personal Securities Transaction and Insider Trading
Policies.
o AVOID TAKING ADVANTAGE OF YOUR POSITION -- Employees must not accept
investment opportunities, gifts or other gratuities from individuals
seeking to conduct business with ClariVest, or on behalf of an
advisory client, unless in compliance with the Gift Policy below.
o MAINTAIN FULL COMPLIANCE WITH THE FEDERAL SECURITIES LAWS --
Employees must abide by the standards set forth in Rule 204A-1 under
the Advisers Act and Rule 17j-1 under the IC Act.
Any questions with respect to ClariVest's Code of Ethics should be directed to
the CCO and/or the CEO or outside counsel. As discussed in greater detail
below, Employees must promptly report any violations of the Code of Ethics to
the CCO. All reported Code of Ethics violations will be treated as being made
on an anonymous basis.
POTENTIAL RISKS
In developing these policies and procedures, ClariVest considered the material
risks associated with administering the Code of Ethics. This analysis includes
risks such as:
o Access persons engaging in various personal trading practices that
wrongly use Non-Public Information. (These practices include but are
not limited to trading ahead of Clients and passing Non-Public
Information on to spouses and other persons over whose accounts the
access person has control. )
o Access persons being able to front run Clients' trades and
systematically move profitable trades to a personal account and let
less profitable trades remain in Clients' accounts.
o Personal trading that is conducted in violation of ClariVest's
policies and procedures set forth below, including personal trading
conducted by dual employees.
o Personal trading that may detract from the ability of one or more
Employees to perform services for Clients.
o The personal trading of Employees does not comply with certain
provisions of Rule 204A-1 under the Advisers Act (and Rule 17j-1 of
the IC Act), or with the provisions of the Code of Ethics.
----------
1 S.E.C. v. Capital Gains Research, Inc., 375 U.S. at 191-192 (1963).
Page 1
o Access persons not being aware of what constitutes insider
information.
o Employees serving as trustees and/or directors of outside
organizations without prior approval. (This could present a conflict
in a number of ways, for example, if ClariVest wants to recommend the
organization for investment or if the organization is one of
ClariVest's service providers. )
o Employees using firm property, including research, supplies, and
equipment, for personal benefit.
o ClariVest or its "Covered Associates" make political contributions or
coordinate political contributions in violation of Rule 206(4)-5, or
their contributions are not monitored properly.
o Employees use social networking sites in a manner that could be
construed as marketing on behalf of ClariVest.
ClariVest has established the following guidelines to effectuate and monitor
ClariVest's Code of Ethics.
GUIDING PRINCIPLES & STANDARDS OF CONDUCT
All Employees of ClariVest shall:
o Act in an ethical manner with the public, Clients, prospective
clients, employers, Employees, colleagues in the investment
profession, and other participants in the global capital markets;
o Place the integrity of the investment profession, the interests of
Clients, and the interests of ClariVest above one's own personal
financial interests;
o Adhere to the fundamental standard that you should not take
inappropriate advantage of your position;
o Avoid any actual or potential conflict of interest;
o Conduct all personal securities transactions in a manner consistent
with this policy; o Use reasonable care and exercise independent
professional judgment when conducting investment analysis, making
investment recommendations, taking investment actions, and engaging in
other professional activities;
o Practice, and encourage others to practice, in a professional and
ethical manner that will reflect favorably on the Employee, ClariVest
and the profession; and
o Comply with applicable provisions of the Federal Securities Laws.
1. PERSONAL SECURITY TRANSACTION POLICY
In order for ClariVest to minimize compliance risks such as Scalping,
Front-Running or the appearance of a conflict of interest with the trading
conducted for ClariVest Clients, Employees of ClariVest are prohibited from
engaging in transactions in publicly-traded Reportable Securities that are
equities or derivatives of equities (such as options, puts, calls, etc.) in
which the person has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership, except for (a) transactions in ETFs and
derivatives of ETFs, (b) ownership as a result of employer sponsored
compensation programs, (c) participation in an employer's qualified retirement
plan, (d) exempt securities described below in "Reportable and Exempt
Securities" or (e) exempt transactions described below in "Exceptions from
Reporting Requirements". Subject to the following paragraph, employees are
permitted to invest in privately-held Reportable Securities and publicly-traded
Reportable Securities that are not equities or derivatives of equities (such as
municipal bonds, etc.).
Employees may not participate in initial public offerings, and must have
written pre-clearance from the Compliance Department for securities
transactions involving limited offerings, including investments in an
investment company advised or sub-advised by ClariVest that would be an
investment company under IC
Page 2
Act section 3(a) but for the exclusion provided by IC Act section 3(c)(1),
3(c)(7) or 3(c)(11). (See "PRE-CLEARANCE" below for additional information.)
For purposes of this policy a limited offering shall be a security that has a
market capitalization of less than $500 million or security that is exempt from
registration under the Securities Act of 1933. The Compliance Department shall
(a) obtain from the Employee full details of the proposed transaction; and (b)
except with respect to funds advised/sub-advised by ClariVest, conclude that
the security does not fit the investment strategy recommended by ClariVest and
if so, that no Clients have any foreseeable interest in ClariVest purchasing
such security on their behalf. The Compliance Department may request a copy of
any offering materials (subscription agreement, etc.) associated with the
Limited Offering.
--------------------------------------------------------------------------------
PLEASE NOTE THAT EMPLOYEES MUST PRE-CLEAR AND REPORT ANY PERSONAL TRANSACTION IN
ANY FUND FOR WHICH CLARIVEST SERVES AS THE INVESTMENT ADVISER OR SUB-ADVISER AND
ANY OTHER REPORTABLE FUND. (SEE "PRE-CLEARANCE" BELOW FOR ADDITIONAL
INFORMATION.)
--------------------------------------------------------------------------------
REPORTABLE AND EXEMPT SECURITIES
Commodities, futures and options traded on a commodities exchange, including
currency futures are not considered securities. However, futures and options on
any group or index of securities shall be considered securities.
BENEFICIAL OWNERSHIP
Employees are considered to have beneficial ownership of securities if they
have or share a direct or indirect pecuniary interest in the securities.
Employees have a pecuniary interest in securities if they have the ability to
directly or indirectly profit from a securities transaction.
The following are examples of indirect pecuniary interests in securities;
provided however, this presumption may be rebutted:
o Securities held by members of Employees' immediate family sharing the
same household. Immediate family means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law. Adoptive relationships are included;
o Employees' interests as a general partner in securities held by a
general or limited partnership; and
o Employees' interests as a manager/member in the securities held by a
limited liability company.
Employees do not have an indirect pecuniary interest in securities held by
entities in which they hold an equity interest unless they are a controlling
equity holder or they share investment control over the securities held by the
entity.
The following circumstances constitute beneficial ownership by Employees of
securities held by a trust:
o Ownership of securities as a trustee where either the Employee or
members of the Employees' immediate family have a vested interest in
the principal or income of the trust;
o Ownership of a vested beneficial interest in a trust; and
o An Employee's status as a settlor/grantor of a trust, unless the
consent of all of the beneficiaries is required in order for the
Employee to revoke the trust.
Page 3
For purposes of clarification, in no event will an account or pooled vehicle
managed by ClariVest be subject to the Personal Security Transaction Policy,
including by virtue of the fact that ClariVest receives a performance or
incentive fee with respect to such account or vehicle.
REPORTING
QUARTERLY TRANSACTION REPORTS
Each Employee will work with the Compliance Department to ensure that such
Employee's broker-dealers send ClariVest's Compliance Department duplicate
trade confirmations and/or account statements of the Employee when possible, at
a minimum, no later than thirty (30) days after the end of each calendar
quarter.
Except as set forth in the following sentence, each Employee of ClariVest shall
provide the Compliance Department with quarterly transaction reports that
disclose all transactions in Reportable Securities in which the person has, or
by reason of such transaction acquires, any direct or indirect beneficial
ownership (except for exempt transactions listed in the section below entitled
"Exceptions from Reporting Requirements").
The quarterly transaction reports from Employees shall contain disclosure of
any transactions not reflected in a brokerage statement delivered to the
Compliance Department within thirty (30) days of quarter end. If a brokerage
statement does not include the information required on Attachment A, then that
information must be reported on the quarterly transaction report. The quarterly
transaction reports are due within thirty (30) days of quarter end and shall
contain a confirmation by the Employee that the Employee has not engaged in any
prohibited securities transaction. See Attachment A.
Employees shall also report on a quarterly basis, not later than 30 days after
the end of the calendar quarter, the name of ANY brokerage account established
by the Employee during the quarter in which any securities were held during the
quarter for the direct or indirect benefit of the Employee, the date the
account was established, and the date the report was submitted. Employees shall
also report any brokerage account closed by the Employee during such quarter.
See Attachment B.
The quarterly transaction reports and quarterly account opening/closing reports
submitted by Employees are reviewed by the Compliance Department to confirm
compliance with the Code of Ethics.
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EMPLOYEES ARE REMINDED THAT THEY MUST ALSO REPORT TRANSACTIONS BY MEMBERS OF THE
EMPLOYEE'S IMMEDIATE FAMILY INCLUDING SPOUSE, CHILDREN AND OTHER MEMBERS OF THE
HOUSEHOLD IN ACCOUNTS OVER WHICH THE EMPLOYEE HAS DIRECT OR INDIRECT INFLUENCE
OR CONTROL.
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INITIAL AND ANNUAL HOLDINGS REPORTS
New ClariVest Employees are required to report all of their Reportable
Securities holdings and Securities Accounts not later than 10 days after the
commencement of their employment (See Attachment C for a copy of the Initial
Securities Accounts Report and Attachment D for a copy of the Initial Holdings
Report). These reports must be current as of a date not more than 45 days prior
to the date the person becomes subject to this Code. Employees are permitted to
retain any Reportable Securities held by them as of their hire date. If any
Employee chooses to hold such Reportable Securities, it must obtain prior
written approval from the Compliance Department should he/she ever want to sell
any publicly-traded Reportable Security that is an equity or derivative of an
equity (other than ETFs or derivatives of ETFs). (See "PRE-CLEARANCE" below for
additional information.) The initial holdings reports and initial securities
accounts reports submitted by Employees are reviewed by the Compliance
Department to confirm compliance with the Code of Ethics.
Page 4
Existing Employees are required to provide ClariVest with a complete list of
Reportable Securities holdings and Securities Accounts on an annual basis, on
or before February 14(th) of each year. The report shall be current at least as
of December 31(st), which is a date no more than 45 days from the final date
the report is due to be submitted. (See Attachment E for a copy of the Annual
Securities Accounts Report and Attachment F for a copy of the Annual Holdings
Report). The annual holdings reports and annual securities accounts reports
submitted by Employees are reviewed by the Compliance Department to confirm
compliance with the Code of Ethics.
In the event that an Employee submits brokerage or custodial statements to
satisfy the initial and/or annual holdings report requirement, the Employee
must be certain that such statements include the information found on the
applicable Attachments.
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AS NOTED ABOVE, EMPLOYEES MUST REPORT THE NAME OF ANY BROKER, DEALER OR BANK
WITH WHICH THE EMPLOYEE MAINTAINS AN ACCOUNT IN WHICH ANY SECURITIES ARE HELD
FOR THE EMPLOYEE'S DIRECT OR INDIRECT BENEFIT. PLEASE NOTE THAT THIS REQUIREMENT
DOES NOT PROVIDE FOR ANY EXEMPTIONS TO THE DEFINITION OF A SECURITY. THUS, IF
EMPLOYEES HAVE A BENEFICIAL INTEREST IN A NON-REPORTABLE SECURITY IN AN ACCOUNT
THAT HAS NOT PREVIOUSLY BEEN REPORTED, THE NAME OF THE BROKER, DEALER OR BANK
WHERE THESE ACCOUNTS ARE MAINTAINED MUST BE REPORTED.
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EXCEPTIONS FROM REPORTING REQUIREMENTS
An Employee is not required to submit a transaction report with respect to
transactions effected pursuant to an automatic investment plan (such as a
401(k) or an employee stock ownership plan). The CCO will determine on a
case-by-case basis whether an account qualifies for either of these
exceptions.
EMPLOYEE ACCOUNTS MANAGED BY AN UNAFFILIATED MONEY MANAGER
ClariVest Employees MAY BE permitted to delegate investment authority of a
personal brokerage account to an unaffiliated money manager. The Employee may
not have any direct or indirect influence or control over the holdings or
security transactions in the account, thus constituting a "fully-discretionary"
account. Fully-discretionary accounts require PRE-APPROVAL and must be reported
when opened on the Quarterly Account Opening/Closing Reporting Form, or, where
applicable, on the Initial Securities Accounts Report and Annual Securities
Account Report.
Quarterly, Employees will certify their compliance with ClariVest's Personal
Security Transaction Policy by attesting that all security transactions were
effected at the unaffiliated money manager's sole discretion. Annually
thereafter, ClariVest will seek a certification from the unaffiliated money
manager that they have not received nor taken instruction from Employee
requesting a transaction in any particular security. Note that the Employee is
permitted to request a contribution to/withdrawal from the account, but the
unaffiliated money manager must decide which securities to buy/sell, as
applicable.
Finally, the Employee will work with the Compliance Department to ensure that
it is receiving quarterly brokerage statements from its unaffiliated money
manager.
TRADING AND REVIEW
ClariVest strictly forbids Front-Running client accounts, which is a practice
generally understood to be Employees personally trading ahead of proposed
client transactions. In order to minimize the risk of Front-Running, ClariVest
prohibits personal securities transactions in most publicly-traded Reportable
Securities
Page 5
as described above under "Personal Security Transaction Policy". The Compliance
Department will closely monitor Employees' investment patterns to confirm
compliance with these restrictions. The Compliance Associate will monitor the
CCO's personal securities transactions for compliance with the Personal
Security Transaction Policy.
If ClariVest discovers that an Employee is personally trading contrary to the
policies set forth above, the Employee shall meet with the CCO and CEO to
review the facts surrounding the transactions.
PRE-CLEARANCE
The following procedures shall apply to any situation in which an Employee must
obtain pre-clearance for a trade. Employees shall request pre-clearance in
writing (which includes requests by e-mail). Once pre-clearance is granted to
an Employee, such Employee may only transact in that security for the time
period specified by the Compliance Department. If the Employee wishes to
transact in that security on any other day, they must again obtain
pre-clearance from the Compliance Department.
REPORTING VIOLATIONS AND REMEDIAL ACTIONS
ClariVest takes the potential for conflicts of interest caused by personal
investing very seriously. As such, ClariVest requires its Employees to promptly
report any violations of the Code of Ethics to the CCO.
If any violation of ClariVest's Personal Security Transaction Policy is
determined to have occurred, the CCO may impose sanctions and take such other
actions as he/she deems appropriate, including, without limitation, requiring
that the trades in question be reversed, requiring the disgorgement of profits
or gifts, issuing a letter of caution or warning, issuing a suspension of
personal trading rights or suspension of employment (with or without
compensation), imposing a fine, making a civil referral to the SEC, making a
criminal referral, and/or terminating employment for cause or any combination
of the foregoing. All sanctions and other actions taken shall be in accordance
with applicable employment laws and regulations. Any profits or gifts forfeited
shall be paid to the applicable client(s), if any, or given to a charity, as
the CCO shall determine is appropriate.
No person shall participate in a determination of whether he or she has
committed a violation of this Policy or in the imposition of any sanction
against himself or herself; provided that such person may be given an
opportunity to provide any explanations or additional information that the CCO
may or may not consider in making his/her determination.
2. INSIDER TRADING POLICY
Section 204A of the Advisers Act requires every investment adviser to
establish, maintain, and enforce written policies and procedures reasonably
designed to prevent the misuse of material, Non-Public Information by any
person associated with such investment adviser. In accordance with Section
204A, ClariVest has instituted the following procedures to prevent the misuse
of Non-Public Information.
Securities laws have been interpreted to prohibit the following activities:
o Trading by an insider while in possession of material Non-Public
Information; or
o Trading by a non-insider while in possession of material Non-Public
Information, where the information was disclosed to the non-insider in
violation of an insider's duty to keep it confidential; or
o Communicating material Non-Public Information to others in breach of
a fiduciary duty.
WHOM DOES THE POLICY COVER?
Page 6
This policy covers all of ClariVest's Employees who (1) have access to
nonpublic information regarding any Client's purchase or sale of securities, or
nonpublic information regarding the portfolio holdings of any Reportable Fund,
or (2) is involved in making securities recommendations to Clients, or who has
access to such recommendations that are nonpublic. This policy also covers any
transactions in any securities participated in by family members, trusts or
corporations directly or indirectly controlled by such persons. In addition,
the policy applies to transactions engaged in by corporations in which the
Employee is an officer, director or 10% or greater stockholder and a
partnership of which the Employee is a partner unless the Employee has no
direct or indirect control over the partnership.
Note that this policy does not cover ClariVest's outside board members, who do
not have the access or involvement described in the first sentence of this
subsection.
WHAT INFORMATION IS MATERIAL?
Individuals may not be held liable for trading on inside information unless
the information is material. Information is generally viewed to be "material"
where: (i) there is a substantial likelihood that a reasonable investor would
consider the information important in making an investment decision; (ii) the
disclosure of the information would be viewed by the reasonable investor as
having significantly altered the 'total mix' of information made available; or
(iii) the disclosure of the information is reasonably certain to have a
substantial effect on the market price of the security. Advance knowledge of
the following types of information is generally regarded as Material:
o Dividend or earnings announcements
o Write-downs or write-offs of assets
o Additions to reserves for bad debts or contingent liabilities
o Expansion or curtailment of company or major division operations
o Merger, joint venture announcements
o New product/service announcements
o Discovery or research developments
o Criminal, civil and government investigations and indictments
o Pending labor disputes
o Debt service or liquidity problems
o Bankruptcy or insolvency problems
o Tender offers, stock repurchase plans, etc.
o Recapitalization
Information provided by a company could be material because of its expected
effect on a particular class of a company's securities, all of the company's
securities, the securities of another company, or the securities of several
companies. The misuse of material Non-Public Information applies to all types
of securities, including equity, debt, commercial paper, government securities
and options.
Material Information does not have to relate to a company's business. For
example, Material Information about the contents of an upcoming newspaper
column may affect the price of a security, and therefore be considered
material.
WHAT INFORMATION IS NON-PUBLIC?
In order for issues concerning inside trading to arise, information must not
only be material, but also Non-Public.
Page 7
Once material, Non-Public Information has been effectively distributed to the
investing public, it is no longer classified as material, Non-Public
Information. However, the distribution of Non-Public Information must occur
through commonly recognized channels for the classification to change. In
addition, the information must not only be publicly disclosed, there must be
adequate time for the public to receive and digest the information. Lastly,
Non-Public Information does not change to public information solely by
selective dissemination.
Employees must be aware that even where there is no expectation of
confidentiality, a person may become an insider upon receiving material,
Non-Public Information. Whether the "tip" made to the Employee makes him/her a
"tippee" depends on whether the corporate insider expects to benefit
personally, either directly or indirectly, from the disclosure.
The "benefit" is not limited to a present or future monetary gain; it could be
a reputational benefit or an expectation of a quid pro quo from the recipient
by a gift of the information. Employees may also become insiders or tippees if
they obtain material, Non-Public Information from acquaintances, at social
gatherings, by overhearing conversations, etc.
SELECTIVE DISCLOSURE
Employees must never disclose proposed/pending trades to any client or other
individual/entity outside of ClariVest (other than the entity trading the
security for ClariVest), except in connection with the transition of a client's
funds into or out of a ClariVest strategy. Additionally, ClariVest must be
careful when disclosing the composition of Clients' portfolios without
obtaining consent from the Compliance Department Federal Securities Laws may
specifically prohibit the dissemination of such information and doing so may be
construed as a violation of ClariVest's fiduciary duty to Clients. Selectively
disclosing the portfolio holdings of a client's portfolio to certain
investors/outside parties may also be viewed as ClariVest engaging in a
practice of favoritism. Including information regarding Clients' portfolio
holdings in marketing materials and ClariVest's website is subject to the
Compliance Department's approval in accordance with ClariVest's Marketing
policy and procedures. All inquiries that are received by Employees to disclose
portfolio holdings must be reported to the Compliance Department before such
holdings are provided. In determining whether or not to approve the
dissemination of holdings information, the Compliance Department will consider,
among other things, how current the holdings information is. However, in no
case will the Compliance Department approve the dissemination of holdings
information that is less than one (1) month old (except for limited holdings
information (such as top-ten holdings) or information provided in connection
with an upcoming account funding or transition, which may be disseminated
before it is one (1) month old). ClariVest may also maintain other practices
applicable to holdings disclosure policies as agreed with clients.
ClariVest will provide Clients with certain information relating to the
holdings or performance of their accounts, as requested. All Clients are
provided with the opportunity to request such information to ensure that no
selective disclosure of such information has occurred.
PROCEDURES TO FOLLOW IF AN EMPLOYEE BELIEVES THAT HE/SHE POSSESSES MATERIAL,
NON-PUBLIC INFORMATION
If an Employee has questions as to whether they are in possession of material,
Non-Public Information, they must inform the CCO as soon as possible. From this
point, the Employee, CCO and/or CEO will conduct research to determine if the
information is likely to be considered important to investors in making
investment decisions, and whether the information has been publicly
disseminated.
Given the severe penalties imposed on individuals and firms engaging in inside
trading, Employees:
Page 8
o Shall not trade the securities of any company in which they are
deemed insiders who may possess material, Non-Public Information about
the company.
o Shall not engage in personal securities transactions of any company,
except in accordance with ClariVest's Personal Security Transaction
Policy and the securities laws.
o Shall not discuss any potentially material, Non-Public Information
with colleagues, except as specifically required by their position.
o Shall not proceed with any trading, etc. of a company if they possess
material, Non-Public Information about that company until the CCO
informs the Employee of the appropriate course of action.
ClariVest's Compliance Department will periodically review a sampling of
employee emails and instant messages to look for evidence of violations of this
policy. If the Compliance Department locates evidence of such activity, the CCO
will inform the COO and/or CEO and discuss the appropriate response. The
Compliance Department will maintain documentation regarding any such
violations.
3. RESTRICTIONS ON SPREADING FALSE OR MISLEADING RUMORS
Market events in 2008 highlighted the potential impact of false rumors on stock
prices, and regulators including the SEC responded by reminding market
participants that they are prohibited from intentionally spreading false rumors
to impact the financial condition of an issuer.
ClariVest Employees are prohibited from spreading rumors that they know are
false or misleading with the intention of impacting a security price and/or
profiting from its dissemination; for example, by shorting a stock and saying
the company is in danger of collapse. If an Employee obtains information that
it believes may be false or misleading, the Employee will notify the CCO before
conducting any trading based on that information.
ClariVest's Compliance Department will periodically review a sampling of
Employee emails and instant messages to look for evidence of violations of this
policy. If the Compliance Department locates evidence of such activity, the CCO
will inform the COO and/or CEO and discuss the appropriate response. The
Compliance Department will maintain documentation regarding any such
violations.
4. SERVING AS OFFICERS, TRUSTEES AND/OR DIRECTORS OF OUTSIDE ORGANIZATIONS
Employees may, under certain circumstances, be granted permission to serve as
directors, trustees or officers of outside organizations. These organizations
can include public or private corporations, partnerships, charitable
foundations and other not-for-profit institutions. Employees may also receive
compensation for such activities.
As an outside board member or officer, an Employee may come into possession of
material Non-Public Information about the outside company, or other public
companies. It is critical that a proper information barrier be in place between
ClariVest and the outside organization, and that the Employee does not
communicate such information to other Employees in violation of the information
barrier.
Similarly, ClariVest may have a business relationship with the outside
organization or may seek a relationship in the future. In those circumstances,
the Employee must not be involved in the decision to retain or hire the outside
organization.
Employees are prohibited from engaging in such outside activities without the
prior approval from the CCO. See Attachment G. Approval will be granted on a
case by case basis, subject to proper resolution of potential conflicts of
interest. Outside activities will be approved only if any conflict of interest
issues can be satisfactorily resolved and all of the necessary disclosures are
made on Part 2A of Form ADV.
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5. DIVERSION OF FIRM BUSINESS OR INVESTMENT OPPORTUNITY
Except in their role as a dual employee of Eagle, no Employee may acquire, or
receive personal gain or profit from, any business opportunity that comes to
his or her attention as a result of his or her association with ClariVest and
in which he or she knows ClariVest might be expected to participate or have an
interest in participating, without disclosing in writing all necessary facts to
the CCO, offering the particular opportunity to ClariVest, and obtaining
written authorization to participate from the CCO.
Any personal or family interest of an Employee in any ClariVest business
activity or transaction must be immediately disclosed to the CCO. For example,
if an Employee becomes aware that a transaction being considered or undertaken
by ClariVest may benefit, either directly or indirectly, an Employee or a
family member thereof, the Employee must immediately disclose this possibility
to the CCO.
6. LOANS
No Employee may borrow funds from or become indebted to a client of ClariVest,
except with respect to customary personal loans (e.g., home mortgage loans,
automobile loans, lines of credit, etc.), unless the arrangement is disclosed
in writing and receives prior approval from the CCO. No Employee may use
ClariVest's name, position in a particular market or goodwill to receive any
benefit on loan transactions without the prior express written consent of the
CCO.
7. DEALINGS WITH GOVERNMENT AND INDUSTRY REGULATORS
The following policy is subject in all respects to the policies and procedures
regarding pay to play practices set forth below in this Code of Ethics.
ClariVest's policy forbids payments of any kind by it, its Employees or any
agent or other intermediary to any government official or candidate,
self-regulatory official, corporation or other similar person or entity, within
the United States or abroad, for the purpose of obtaining or retaining
business, or for the purpose of influencing favorable consideration of any
application for a business activity or other matter. This policy covers all
types of payments, even to minor government officials and industry regulators,
regardless of whether the payment would be considered legal under the
circumstances. This policy encourages Employees to avoid even the appearance of
impropriety in their dealings with industry and government regulators and
officials. No Employee can hold a public office if it in any way conflicts with
ClariVest's business.
It is expected and required that all Employees fulfill their personal
obligations to governmental and regulatory bodies. Those obligations include
the filing of appropriate federal, state and local tax returns, as well as the
filing of any applicable forms or reports required by regulatory bodies.
All Employees are required to cooperate fully with management in connection
with any internal or independent investigation and any claims, actions,
arbitrations, litigations, investigations or inquiries brought by or against
ClariVest.
8. IMPROPER USE OF CLARIVEST PROPERTY
No Employee may utilize the investment management property of ClariVest or
utilize the services of ClariVest, its principals or Employees, for his or her
personal benefit or the benefit of another person or entity (except in
connection with ClariVest's business), without approval of the CCO. For this
purpose, "investment management property" means both tangible and intangible
property, including ClariVest funds, information, business plans, business
opportunities, confidential research, intellectual property or proprietary
processes, and ideas for new research or services.
Page 10
Except for immaterial use, no Employee may utilize other property of ClariVest
or utilize the services of ClariVest, its principals or Employees, for his or
her personal benefit or the benefit of another person or entity, without
approval of the CCO (except in connection with ClariVest's business). For this
purpose, "other property" means both tangible and intangible property, including
premises, equipment and supplies.
Notwithstanding the foregoing, certain employees of ClariVest, including
ClariVest's Client Portfolio Manager and the members of ClariVest's investment
team, are dual employees of ClariVest and our affiliate Eagle. As dual
employees, these individuals perform services for both ClariVest and Eagle.
When they are performing services for ClariVest and its Clients, these
employees are subject to the supervision and control of ClariVest. When they
are performing services for Eagle and its clients, these employees are subject
to the supervision and control of Eagle.
In performing services for Eagle and its clients, the investment team dual
employees will be using property of ClariVest, including our investment
processes, to manage certain products of Eagle. ClariVest has approved of this
use of our property, and will receive compensation from Eagle in connection
therewith.
DUAL EMPLOYEE POLICIES AND PROCEDURES
All dual employees of ClariVest and Eagle are subject to this Code of Ethics,
including the personal trading restrictions set forth herein.
9. PROTECTION OF CLARIVEST'S NAME
Employees should at all times be aware that ClariVest's name, reputation and
credibility are valuable assets and must be safeguarded from any potential
misuse. Care should be exercised to avoid the unauthorized use of ClariVest's
name in any manner that could be misinterpreted to indicate a relationship
between
ClariVest and any other entity or activity.
10. EMPLOYEE INVOLVEMENT IN LITIGATION OR PROCEEDINGS
Employees must notify the CCO immediately if they become involved in or
threatened with litigation or an administrative investigation or proceeding of
any kind, are subject to any judgment, order or arrest, or are contacted by any
regulatory authority. Employees must also notify the CCO immediately of changes
to any disclosures in form U-4 or ADV Part 2B.
11. TRAVEL EXPENSES
Employees may charge against appropriate ClariVest accounts normal and
reasonable travel and travel-related expenses incurred for a ClariVest business
purpose. Such expenses may include meals and incidentals, travel costs (air,
train, etc.), lodging expenses, business phone calls and other miscellaneous
travel related expenses. When incurring such expenses, Employees must use
reasonable judgment and generally be aware of escalating travel costs. While
ClariVest has not prescribed limits on such expenses, ClariVest may reiterate
its policy with Employees as necessary.
ClariVest will pay for travel expenses (airline, hotel, meals and incidentals)
related to Employees' attendance at conferences, company visits, etc. In the
event that any such expenses are included as part of the event (i.e. a
broker-dealer charters a jet for numerous investment firms, including
ClariVest, to visit a company, etc.), ClariVest shall determine the
reasonableness of such expenses and may choose to approximate the value of such
expenses and forward the third-party a reimbursement check. ClariVest has
adopted this policy in order to avoid any perceived conflict of interest
associated with our relationships with outside service providers.
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12. POLITICAL CONTRIBUTIONS
POLICY STATEMENT ON CONTRIBUTIONS
ClariVest complies with SEC Rule 206(4)-5 regarding "pay-to-play" practices by
investment advisers.
ClariVest will not make any Contributions. No Contributions may be made by
Covered Associates without the prior approval of the Compliance Department.
Rule 206(4)-5(d) makes it unlawful for any investment adviser covered by the
rule and its Covered Associates to do anything indirectly which, if done
directly, would result in a violation of this section.
ClariVest will require its Employees to certify annually that they have not
done anything indirectly which, if done directly, would result in a violation
of Rule 206(4)-5.
POLITICAL CONTRIBUTION REVIEW AND APPROVAL FORMS
Before becoming an Employee, the prospective Employee must identify to the
Compliance Department all relevant Contributions in the previous two years
(these would include contributions by the Employee and its immediate family and
controlled-PACs, each as described in the definition of "Covered Associate").
The form of the Political Contribution Review Form is attached as Attachment
H.
Thereafter, each Employee must complete a Political Contribution Approval Form
(attached as Attachment I) and receive authorization before any additional
Contributions by a Covered Associate. A Covered Associate may be given
permission for Contributions totaling up to $350 per election to an Official
for whom the individual is entitled to vote, and up to $150 per election to an
Official for whom the individual is not entitled to vote, but approval on a
Political Contribution Approval Form is required. Contributions to political
parties and political action committees will generally be approved, but
approval on a Political Contribution Approval Form is required. Where an
employee has a periodic, on-going contribution to a political action committee
(for example, in the case of union dues where a portion of the dues go to a
PAC), the employee will be required to obtain pre-approval of such periodic
contributions at least annually and/or when he/she becomes aware that the
dollar amount of the contribution as changed.
Annually, each Employee must certify to ClariVest that (1) such Employee has
informed the members of his/her immediate family sharing the same household of
the pay to play policies and procedures set forth in ClariVest's Code of
Ethics, (2) such Employee (and its immediate family and controlled-PACs, each
as described in the definition of "Covered Associate") has complied with this
policy, and (3) such Employee (and its immediate family and controlled-PACs,
each as described in the definition of "Covered Associate") has requested and
received all required approvals for each Contribution in the past year, or give
ClariVest a report disclosing all Contributions made during that year. These
certifications are part of ClariVest's annual Compliance Manual certification
attached hereto.
CONTRIBUTION APPROVALS
No Contributions may be made without the prior written approval of the
Compliance Department. The Compliance Department will notify the Covered
Associate of approval or denial of clearance to make a Contribution. If a
Covered Associate receives approval to make a Contribution, such Covered
Associate must make that Contribution within the time period specified by the
Compliance Department. If the Contribution is not made within such time
period, the Covered Associate must request approval again. As set forth above,
where an employee has a periodic, on-going contribution to a political action
committee (for example, in the case of union dues where a portion of the dues
go to a PAC), the employee will be required to obtain pre-approval of such
periodic contributions at least annually and/or when he/she becomes aware that
the dollar amount of the contribution as changed.
REVIEW OF CONTRIBUTIONS
ClariVest will review all Contributions made by its Covered Associates to
monitor compliance with this policy. ClariVest reserves the right to require a
Covered Associate to cancel and request a reimbursement of, at the Covered
Associate's expense, any Contribution if ClariVest believes such Contribution
might
Page 12
violate this policy or appears improper. Except as required to enforce this
policy or to participate in any investigation concerning violations of
applicable law, ClariVest will keep all such information confidential.
RESTRICTIONS ON SOLICITING OR COORDINATING CONTRIBUTIONS
ClariVest and its Covered Associates may not solicit or coordinate (1)
Contributions for an Official of a Government Entity to which ClariVest is
providing (or seeking to provide) advisory services or (2) any Contribution to
a political party of a state or locality where ClariVest is providing or
seeking to provide advisory services. ClariVest's Covered Associates must
obtain pre-approval before they solicit or coordinate (1) Contributions for an
Official of a Government Entity or (2) any Contribution to a political party of
a state or locality. The form to use for this purpose is attached as Attachment
J.
RECORDKEEPING
ClariVest's Compliance Department will keep records of:
o ClariVest's Covered Associates, including their name, title(s), and
business and residence address (excluding the individuals set forth in
part (d) of the definition of "Covered Associate", as they are not
covered by the SEC's definition of "covered associate")
o All Government Entities that ClariVest has provided services to in
the past five years (but not prior to September 13, 2010). Starting
September 13, 2011, this will include Government Entities that are
investors in Covered Investment Pools
o All Contributions made to an Official of a Government Entity in
chronological order (including the name and title of the contributor
and recipient, the amount, the date, and whether the contribution was
subject to rule 206(4)-5's exception for certain returned
contributions)
o All Contributions made to a political party in chronological order
(including the name and title of the contributor and recipient, the
amount, the date, and whether the contribution was subject to rule
206(4)-5's exception for certain returned contributions)
o All Contributions made to a PAC in chronological order (including the
name and title of the contributor and recipient, the amount, the date,
and whether the contribution was subject to rule 206(4)-5's exception
for certain returned contributions)
13. SOCIAL NETWORKING
Although the SEC has not engaged in any formal rule-making with respect to the
use of social networking websites by advisers, it is possible that the use of
these sites could be deemed advertising depending on the content, context and
recipient of the information disclosed on such a site. ClariVest is adopting
this policy to minimize the risk that the use of these sites could be deemed
advertising by ClariVest.
Employees are not restricted from accessing social networking sites such as
Facebook, Twitter, LinkedIn or blogs from their work computers. However, any
access by Employees from their work computers should be limited to reasonable,
immaterial use. Moreover, use of social networking sites is subject to
ClariVest's
Employee Handbook, including, without limitation, the Operations Policies
addressing Use of Communication Systems and Internet Code of Conduct.
Unless otherwise approved in writing by the Compliance Department, employees
are prohibited from using social networking sites, blogs or bulletin boards to
engage in marketing or advertising of ClariVest's products or services.
Employees may not post any information on any social networking site, blog or
bulletin board regarding ClariVest, its Clients or investments without
pre-approval from the Compliance
Department, other than the company name, the Employee's title and employment
dates, information contained on ClariVest's website, and information contained
in the Employees' approved bio. (An
Employee may obtain a copy of their approved bio from the Compliance Department
upon request.) If an Employee would like to post any additional information
regarding ClariVest, its Clients or investments on a social networking site,
blog or bulletin board, they must obtain pre-approval from the Compliance
Page 13
Department before posting. To be clear, Employees are not required to obtain
pre-approval of their resumes before submitting them in a one-on-one
communication with a prospective employer or job search firm.
Quarterly, the Compliance Department will request employee certification of
compliance with this Social Networking policy. Additionally, a member of the
Compliance Department will periodically search Facebook, LinkedIn and Google+
for a sample of employee profiles and will review the information contained
therein to confirm it complies with the foregoing policy.
14. DISCLOSURE
ClariVest shall describe its Code of Ethics in Part 2A of Form ADV and, upon
request, furnish Clients with a copy of the Code of Ethics.
The requirement to report on issues to ClariVest's Clients, including fund and
ERISA Client's Boards, under this Code and securities regulations may include
significant conflicts of interest that arise involving the personal investment
policies, even if the conflicts have not resulted in a violation of this Code.
For example, ClariVest may be required to report to a Client's Board if a
Portfolio Manager is a director of a company whose securities are held by the
client's portfolio.
If the CCO determines that a material violation of this Code has occurred, he
or she shall promptly report the violation, and any enforcement action taken,
to ClariVest's senior management. If ClariVest's senior management determines
that such material violation appears to involve a fraudulent, deceptive or
manipulative act, ClariVest will report its findings to the fund's Board of
Directors or Trustees pursuant to Rule 17j-1.
RECORDKEEPING
ClariVest shall maintain records in the manner and to the extent set forth
below, which records shall be available for appropriate examination by
representatives of regulatory authorities or ClariVest's management.
o A copy of this Code of Ethics and any other code which is, or at any
time within the past five years has been, in effect shall be preserved
in an easily accessible place;
o A record of any violation of this Code of Ethics and of any action
taken as a result of such violation shall 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 occurs;
o A record of all written acknowledgements (annual certifications) as
required by the Manual for each person who is currently, or within the
past five years was, an Employee of ClariVest.
o A copy of each report made pursuant to this Code of Ethics by an
Employee, including any information provided in lieu of reports, shall
be preserved by the Company for at least five years after the end of
the fiscal year in which the report is made or the information is
provided, the first two years in an easily accessible place;
o A list of all persons who are, or within the past five years have
been, required to make reports pursuant to this Code of Ethics, or who
are or were responsible for reviewing these reports, shall be
maintained in an easily accessible place;
o The Company shall preserve a record of any decision, and the reasons
supporting the decision, to approve the acquisition of any Limited
Offering by Employees for at least five years after the end of the
fiscal year in which the approval is granted, the first two years in
an easily accessible place.
o [17j-1] A copy of each finding presented to the Board of a fund shall
be preserved by ClariVest for at least five years after the end of the
fiscal year in which the record is made, the first two years in an
easily accessible place.
Page 14
RESPONSIBILITY
The CCO will be responsible for administering the Code of Ethics. All questions
regarding the policy should be directed to the CCO. ClariVest shall provide
the Code of Ethics and all amendments to all Employees, and such Employees must
annually acknowledge in writing their receipt and understanding of the Code of
Ethics and such amendments.
[17j-1] In the event a material change is made to the Personal Trading Policy
of the Code of Ethics, the CCO shall inform the CCO of any fund which is a
Client of such material change to enable the fund CCO to ensure that such
material change is approved by such fund's Board no later than six months after
adoption of the material change.
Page 15
ATTACHMENT A
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QUARTERLY TRANSACTION REPORTING FORM
REPORTING EMPLOYEE NAME: ________________________ FOR QUARTER END: ____________________________________
I CERTIFY ALL THE INFORMATION IN THE FOLLOWING FORM IS TRUE AND I DID NOT
PARTICIPATE IN ANY PROHIBITED SECURITIES TRANSACTION PER THE CODE OF ETHICS FOR
THE SPECIFIED QUARTER .
SIGNATURE: ______________________________________________ DATE: _______________________________________
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TYPE (E.G., TICKER
EQUITY; OR
NUMBER FIXED CUSIP PRINCIPAL BUY (ACQUIRE)/ INTEREST RATE/ BROKER, DEALER
OF SHARES SECURITY NAME INCOME) (IF APP.) AMOUNT SELL (DISPOSE) MATURITY PRICE DATE OR BANK
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In accordance with ClariVest's Code of Ethics, please provide a list of all
reportable securities transactions that have occurred during the previous
calendar quarter in any account in which you maintain a pecuniary interest;
provided that you are not required to report (1) transactions reflected in
brokerage statements provided to the Compliance Department within 30 days of
the end of the calendar quarter or (2) transactions for which you obtained
pre-approval.
DELIVER TO THE COMPLIANCE DEPARTMENT WITHIN 30 DAYS
OF THE END OF EACH CALENDAR QUARTER.
USE ADDITIONAL SHEETS IF NECESSARY.
Page 16
ATTACHMENT B
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QUARTERLY ACCOUNT OPENING/CLOSING REPORTING FORM
REPORTING EMPLOYEE NAME: ______________________________________
FOR QUARTER END: ______________________________________________
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In accordance with ClariVest's Code of Ethics, please provide a list of all
Securities Accounts that have opened/closed during the previous calendar
quarter in which you maintain a pecuniary interest.
----------------------------------------------------------------------------------------------------------
DATE OF ACCOUNT OPENED OR
NAME OF BROKER, DEALER OR BANK ACCOUNT TITLE ACCOUNT NUMBER ESTABLISHMENT CLOSED?
----------------------------------------------------------------------------------------------------------
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I certify that this form fully discloses all of the newly opened accounts and
closed accounts in which I have a pecuniary interest. Nothing in this report
should be construed as an admission that the person making the report has any
direct or indirect beneficial ownership in the securities to which the report
relates.
____________________________________________
Print Name Reviewed by: ___________________________
____________________________________________ _________________ Date of Review: ________________________
Signature Date
Exception(s) Noted: ____No _____Yes
If Yes, Describe: ______________________
Page 17
ATTACHMENT C
INITIAL REPORTING -- SECURITIES ACCOUNTS
Employee _______________________________________________ (PRINT NAME)
Information submitted current as of __________________________ (PRINT DATE)
In accordance with ClariVest's Code of Ethics, please provide a list of all
Securities Accounts in which you have a pecuniary interest.
--------------------------------------------------------------------------------
NAME OF BROKER, DEALER OR BANK ACCOUNT TITLE ACCOUNT NUMBER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
I certify that this form fully discloses all of the Securities Accounts in
which I have a pecuniary interest.
____________________________________________________ ______________________
Signature Date
-------------------------------------------
Reviewed by: _____________________________
Date of Review: __________________________
Exception(s) Noted: ____No _____Yes
If Yes, Describe: ________________________
-------------------------------------------
Page 18
ATTACHMENT D
INITIAL REPORTING -- SECURITIES HOLDINGS
In accordance with ClariVest's Code of Ethics, please provide a list of all
reportable securities in which you have a pecuniary interest. This includes
securities held by broker-dealers and other custodians, at your home, in safe
deposit boxes, and by an issuer.
---------------------------------------------------------------------------------------------
TYPE TICKER OR
NUMBER (E.G., EQUITY; CUSIP
OF SHARES SECURITY NAME FIXED INCOME) (IF APPLICABLE) PRINCIPAL AMOUNT
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USE ADDITIONAL SHEETS AS NECESSARY.
I certify that this form fully discloses all of the reportable securities in
which I have a pecuniary interest. Nothing in this report should be construed
as an admission that the person making the report has any direct or indirect
beneficial ownership in the reportable security to which the report relates.
____________________________________________________ _________________________
Signature Date
--------------------------------------------
Reviewed by: ______________________________
Date of Review: ___________________________
Exception(s) Noted: ____No _____Yes
If Yes, Describe: ________________________
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Page 19
ATTACHMENT E
ANNUAL REPORTING -- SECURITIES ACCOUNTS
Employee _______________________________________________ (PRINT NAME)
Information submitted current as of __________________________ (PRINT DATE)
In accordance with ClariVest's Code of Ethics, please provide a list of all
Securities Accounts in which you have a pecuniary interest.
--------------------------------------------------------------------------------
NAME OF BROKER, DEALER OR BANK ACCOUNT TITLE ACCOUNT NUMBER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
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I certify that this form fully discloses all of the Securities Accounts in
which I have a pecuniary interest.
______________________________________________ ______________________________
Signature Date
-------------------------------------------
Reviewed by: ______________________________
Date of Review: ___________________________
Exception(s) Noted: ____No _____Yes
If Yes, Describe: ________________________
------------------------------------------
Page 20
ATTACHMENT F
ANNUAL REPORTING -- SECURITIES HOLDINGS
In accordance with ClariVest's Code of Ethics, please provide a list of all
reportable securities in which you have a pecuniary interest. This includes
reportable securities held by broker-dealers and other custodians, at your
home, in safe deposit boxes, and by an issuer.
---------------------------------------------------------------------------------------------
TYPE TICKER OR
NUMBER (E.G., EQUITY; CUSIP
OF SHARES SECURITY NAME FIXED INCOME) (IF APPLICABLE) PRINCIPAL AMOUNT
---------------------------------------------------------------------------------------------
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USE ADDITIONAL SHEETS AS NECESSARY.
I certify that this form fully discloses all of the reportable securities in
which I have a pecuniary interest. Nothing in this report should be construed
as an admission that the person making the report has any direct or indirect
beneficial ownership in the reportable security to which the report relates.
________________________________________________ _________________________
Signature Date
-----------------------------------------
Reviewed by: ___________________________
Date of Review: ________________________
Exception(s) Noted: ____No _____Yes
If Yes, Describe: ______________________
----------------------------------------
Page 21
ATTACHMENT G
REQUEST FOR APPROVAL OF OUTSIDE ACTIVITY FORM
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The undersigned hereby requests approval for participation in the following
outside activity:
________________________________________________________________________________
Name and address of company or organization: ___________________________________
Nature of organization's primary business or purpose: __________________________
Is this a public company? (YES/NO) If YES, stock symbol: _______________________
Complete description of anticipated role with organization: ____________________
________________________________________________________________________________
Describe any compensation you will receive: ____________________________________
If this request for approval is granted:
> I agree to notify the Chief Compliance Officer of any change in the
above information.
> I agree, for private or not-for-profit organizations, to seek
approval to retain my position, as described above, if the
organization decides to offer securities to the public, or ceases to
maintain its not-for-profit status.
> I am aware of no other EMPLOYEES who are officers or directors of the
organization noted above.
> I agree to adhere to the inside trading policies of both ClariVest
Asset Management LLC ("ClariVest") and the organization, and not to
communicate any material Non-Public information in my possession
regarding the organization to ClariVest's investment advisory or
research staff.
> I will avoid participation in discussions regarding service,
investment management, or other arrangements with ClariVest or its
affiliates, and will recuse myself from voting on any such matters.
--------------------------------------------------------------------------------
Signature of Employee : ______________________________________
Date: ___________________
Approved By: ____________________________________________
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Page 22
ATTACHMENT H
POLITICAL CONTRIBUTION REVIEW FORM
Prospective Employee _____________________________________________ (PRINT NAME)
Information submitted current as of __________________________ (PRINT DATE)
In accordance with ClariVest's Code of Ethics, please provide a list of all
Contributions you (or your immediate family and controlled-PACs, each as
described in the definition of "Covered Associate") has made in the past 2
years.
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NAME AND TITLE OF NAME AND TITLE AMOUNT DATE ENTITLED TO [COMPLIANCE USE ONLY]
CONTRIBUTOR (INCLUDING ANY VOTE FOR SUBJECT TO EXCEPTION FOR
CITY/COUNTY/STATE OR RECIPIENT? CERTAIN RETURNED
OTHER POLITICAL CONTRIBUTIONS UNDER
SUBDIVISION) OF RULE 206(4)-5(B)(3)?
RECIPIENT
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\
I certify that this form fully and accurately discloses all of the
Contributions that I (or my immediate family and controlled-PACs, each as
described in the definition of "Covered Associate") have made in the past 2
years.
_____________________________________________________ _______________________
Signature Date
--------------------------------------------
Reviewed by: _____________________________
Date of Review: __________________________
Exception(s) Noted: ____No _____Yes
If Yes, Describe: ________________________
--------------------------------------------
Page 23
ATTACHMENT I
POLITICAL CONTRIBUTION APPROVAL FORM
Employee _______________________________________________ (PRINT NAME)
Information submitted current as of __________________________ (PRINT DATE)
In accordance with ClariVest's Code of Ethics, below is a list of all
Contributions that I (or someone in my immediate family or a controlled-PAC,
each as described in the definition of "Covered Associate") would like to make.
------------------------------------------------------------------------------------------------------
NAME AND TITLE OF NAME AND TITLE AMOUNT DATE ENTITLED TO [COMPLIANCE USE ONLY]
CONTRIBUTOR (INCLUDING ANY VOTE FOR SUBJECT TO EXCEPTION FOR
CITY/COUNTY/STATE OR RECIPIENT? CERTAIN RETURNED
OTHER POLITICAL CONTRIBUTIONS UNDER
SUBDIVISION) OF RULE 206(4)-5(B)(3)?
RECIPIENT
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I certify that this form fully and accurately discloses all requested
information regarding the Contribution that I (or or someone in my immediate
family or a controlled-PAC, each as described in the definition of "Covered
Associate") would like to make.
________________________________________________________ ___________________
Signature Date
--------------------------------------------
Reviewed by: ___________________________
Date of Review: ________________________
Approval Granted?: ____No _____Yes
If Yes, Describe: ________________________
__________________________________________
__________________________________________
--------------------------------------------
Page 24
ATTACHMENT J
CONTRIBUTION COORDINATION APPROVAL FORM
Employee _______________________________________________ (PRINT NAME)
Information submitted current as of __________________________ (PRINT DATE)
In accordance with ClariVest's Code of Ethics, I (or someone in my immediate
family or a controlled-PAC, each as described in the definition of "Covered
Associate") would like to solicit or coordinate (1) Contributions for an
Official of a Government Entity or (2) any Contribution to a political party of
a state or locality, as described below:
--------------------------------------------------------------------------------
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I certify that this form fully and accurately discloses all requested
information regarding the activity that I (or someone in my immediate family or
a controlled-PAC, each as described in the definition of "Covered Associate")
would like to engage in.
_______________________________________________________ _____________________
Signature Date
-------------------------------------------
Reviewed by: ______________________________
Date of Review: ___________________________
Approval Granted? ____No _____Yes
If Yes, Describe: ________________________
__________________________________________
__________________________________________
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Page 25
Kayne Anderson Capital Advisors, L.P.
IV. CODE OF ETHICS
--------------------------------------------------------------------------------
A. GENERAL
This Code of Ethics is predicated on the principle that KACALP owes a fiduciary
duty to its clients. Accordingly, KACALP's employees must avoid activities,
interests and relationships that run contrary (or appear to run contrary) to
the best interests of clients. At all times, KACALP employees must:
o PLACE CLIENT INTERESTS AHEAD OF KACALP'S INTERESTS -- As a fiduciary,
KACALP must serve in its clients' best interests. In other words,
employees may not benefit at the expense of advisory clients. This
concept is particularly relevant when employees are making personal
investments in securities traded by advisory clients.
o ENGAGE IN PERSONAL INVESTING THAT IS IN FULL COMPLIANCE WITH KACALP'S
CODE OF ETHICS -- Employees must review and abide by KACALP's Personal
Securities Transaction and Insider Trading Policies.
o AVOID TAKING ADVANTAGE OF YOUR POSITION -- Employees should not
accept inappropriate gifts, favors, entertainment, special
accommodations, or other things of material value that could influence
(or appear to influence) their decision-making or make them feel
beholden to a person or firm.
Compliance with the provisions of this Code is a basic condition of employment
with KACALP. KACALP's reputation for fair and honest dealing with its clients
and the investment community in general is of paramount importance. Employees
are urged to seek the advice of the CCO or GC for any questions as to the
application of this Code to their individual circumstances.
All employees deemed to be Access Persons are subject to these policies. A list
of employees considered Access Persons is maintained by Compliance. For
purposes of this policy, any reference to "employee(s)" means those employees
who are Access Persons. Note, however, that the persons subject to Section C
below is broader than Access Persons, as described therein.
1. CERTIFICATION OF COMPLIANCE.
o INITIAL CERTIFICATION. KACALP provides all employees with a copy of
the Regulatory Compliance Manual at the time of initial employment.
KACALP requires all new employees to certify in writing that they have
(i) received a copy of the Manual; (ii) read and understand all
provisions of the Manual; and (iii) agreed to comply with the terms of
Manual including the Code of Ethics (the "Code").
o ACKNOWLEDGEMENT OF AMENDMENTS. KACALP provides all employees with any
material amendments to the Code. KACALP requires all employees to
certify in writing they have received, read, and understood the
amendments to the Code.
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Kayne Anderson Capital Advisors, L.P.
o ANNUAL CERTIFICATION. Annually, all employees certify that they have
read, understood, and complied with the Code of Ethics. The
certification includes a representation that the employee has made all
reports required by the Code and has not engaged in any prohibited
conduct.
2. RECORDKEEPING. Effective with the January 7, 2005 implementation date of
rule 204A-1, KACALP maintains the following records in a readily accessible
place:
o A copy of each Code that has been in effect at any time during the
past five years;
o A record of any violation of the Code and any action taken as a
result of such violation for five years from the end of the fiscal
year in which the violation occurred;
o A record of all written acknowledgments of receipt of the Code and
amendments for each person who is currently, or within the past five
years was deemed an Access Person. These records are kept for five
years after an individual ceases to be an Access person of KACALP;
o Holdings and transaction reports made pursuant to the Code;
o A list of the names of persons who are currently, or within the past
five years, were Access Persons;
o A record of any decision and supporting reasons for approving
acquisition of securities by Access Persons in limited offerings for
at least five years after the end of the fiscal year in which approval
was granted; and
o A record of any decisions that grant an Access person a waiver from
or exception to the Code.
3. ADMINISTRATION AND ENFORCEMENT OF THE CODE
o FORM ADV DISCLOSURE. KACALP includes a description of its Code of
Ethics in Form ADV, Part II, and provides a copy of this Code to any
client or prospective client upon request.
o TRAINING AND EDUCATION. The CCO periodically conducts training
regarding the Code of Ethics. Employees are required to attend
training sessions and/or read all applicable materials.
o ANNUAL REVIEW. The CCO, in conjunction with the GC, at least annually
reviews the adequacy of the Code and the effectiveness of its
implementation.
o REPORTING VIOLATIONS. KACALP requires all employees to promptly report
any
8
Kayne Anderson Capital Advisors, L.P.
apparent or suspected violations, in addition to actual or known
violations of the Code of Ethics to the CCO or the GC. Reports are
treated confidentially to the extent permitted by law, and
investigated promptly and appropriately. Reports may be submitted
anonymously.
o TYPES OF REPORTING. Employees should report the following types of
violation: non-compliance with applicable laws, rules and regulations;
fraud or illegal acts involving any aspect of the firm's business;
material misstatements in regulatory filings, internal books and
records, client records, or reports; activity that is harmful to
clients, including fund shareholders; and deviations from required
controls and procedures that safeguard clients and the firm.
o RETALIATION. Retaliation against an individual who reports a
violation is prohibited and constitutes an independent additional
violation of the Code.
4. SANCTIONS. Any violation of the Code by an employee can result in
sanctions as deemed appropriate by Senior Management. Sanctions can include
but are not limited to a letter of reprimand, disgorging of any profits
made, temporary or permanent suspension of trading for any employee or
related accounts, monetary fines, suspension or termination of employment,
or any other sanction deemed appropriate by Senior Management.
5. WAIVERS TO POLICY. Upon written request to Compliance, Compliance may
waive any non- regulatory imposed constraint for sufficient business
reasons. Waivers and supporting rationale will be maintained by the CCO.
Please direct any questions concerning the Code of Ethics to the CCO, GC,
or Senior Management.
B. OFFICERS, TRUSTEES OR DIRECTORS OF OUTSIDE ORGANIZATIONS
Employees may serve as directors, trustees or officers of outside
organizations. These organizations can include public or private
corporations, partnerships, charitable foundations, and not-for-profit
institutions. Employees may also receive compensation for such activities.
At certain times, KACALP may determine that it is in its clients' best
interests for an employee(s) to serve as officers or on the board of
directors of outside organizations. For example, a company held in clients'
portfolios may be undergoing a reorganization that may affect the value of
the company's outstanding securities and the future direction of the
company. Service with organizations outside of KACALP can, however, raise
serious regulatory issues and concerns, including conflicts of interests
and access to material non-public information.
As an outside board member or officer, an employee may come into possession
of material non- public information about the outside company, or other
public companies. It is critical that the employee does not communicate
such information to other KACALP employees who do not have a need to know
such information to perform their duties.
Similarly, KACALP may have a business relationship with the outside
organization or may seek a relationship in the future. In those
circumstances, the employee must not be involved in the
9
Kayne Anderson Capital Advisors, L.P.
decision to retain or hire KACALP
KACALP EMPLOYEES ARE PROHIBITED FROM ENGAGING IN SUCH OUTSIDE ACTIVITIES
WITHOUT THE PRIOR APPROVAL FROM THE GC OR CCO. APPROVAL WILL BE GRANTED ON
A CASE-BY-CASE BASIS, SUBJECT TO PROPER RESOLUTION OF POTENTIAL CONFLICTS
OF INTEREST. OUTSIDE ACTIVITIES WILL BE APPROVED ONLY IF ALL CONFLICT OF
INTEREST ISSUES CAN BE SATISFACTORILY RESOLVED AND ALL NECESSARY
DISCLOSURES ARE MADE ON PART II OF FORM ADV.
C. ANTI-BRIBERY POLICY/FOREIGN CORRUPT PRACTICES ACT POLICY
INTRODUCTION
KACALP is committed to conducting its business ethically and in compliance
with all applicable laws and regulations, including the U.S. Foreign
Corrupt Practices Act (FCPA) and other laws that prohibit improper payments
to obtain a business advantage.
This document describes KACALP's policy prohibiting bribery and other
improper payments in the conduct of KACALP's business operations and
employee responsibilities for ensuring implementation of the policy.
Questions about the policy or its applicability to particular circumstances
should be directed to the CCO and GC.
COMPLIANCE WITH U.S. FOREIGN CORRUPT PRACTICES ACT
The prohibition on bribery and other improper payments applies to all
business activities, but is particularly important when dealing with
government officials. The U.S. Foreign Corrupt Practices Act and similar
laws in other countries strictly prohibit improper payments to gain a
business advantage and impose severe penalties for violations. The
following summary is intended to provide personnel engaged in international
activities a basic familiarity with applicable rules so that inadvertent
violations can be avoided and potential issues recognized in time to be
properly addressed.
OVERVIEW OF THE FCPA
The PCPA is a criminal statute that prohibits improper payments to
government officials to influence performance of their official duties. It
makes it unlawful for any U.S. company and its employees or agents to
offer, promise, pay or authorize the payment of "anything of value" to any
"foreign official" - a term that is very broadly defined - to help the
company obtain or keep business or secure some other "improper business
advantage." This prohibition applies whether the offer or payment is made
directly or through another person.
In addition to prohibiting improper payments to foreign officials, the FCPA
requires U.S. companies and their controlled affiliates to keep accurate
books and records of the transactions in which they engage and to maintain
a system of internal controls that, among other things, can prevent "slush
funds" and "off-the-books" accounts that might be used to facilitate or
conceal questionable foreign payments. PCPA accounting requirements apply
to all business activities, not just those involving foreign officials.
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Kayne Anderson Capital Advisors, L.P.
The penalties for violating the FCPA are severe. For a company, potential
sanctions range from multi-million dollar fines and "disgorgement" of any
business profits from an improper payment to loss of export privileges or
eligibility to compete for U.S. government contracts. These sanctions are
in addition to potential reputational damage and investigation and defense
costs, which may arise even without a formal government prosecution. The
penalties for individuals can be even more severe, including substantial
fines and imprisonment.
POLICY OVERVIEW
KACALP strictly prohibits bribery or other improper payments in any of its
business operations. This prohibition applies to all business activities,
anywhere in the world, whether they involve government officials or are
wholly commercial. A bribe or other improper payment to secure a business
advantage is never acceptable and can expose employees and KACALP to
possible criminal prosecution, reputational harm or other serious
consequences.
This Policy is not limited to Access Persons, but rather applies to
everyone employed by or otherwise acting on behalf of KACALP, including all
officers, employees and agents or other intermediaries acting on KACALPS's
behalf. Each officer and employee of KACALP has a responsibility and
obligation to conduct KACALP's business activities ethically and in
compliance with the law. Failure to do so may result in disciplinary
action, up to and including termination of employment.
Improper payments prohibited by this policy include the following:
o Bribes and kickbacks
o Gifts or entertainment or other business promotional activities
o Covering or reimbursing an official's expenses
o Offers of employment or other benefits to a family member or friend
of a foreign official
o Political party and candidate contributions
o Charitable contributions and sponsorships
o Any other payment made or offered to obtain an undue business
advantage.
These payments should not be confused with reasonable and limited
expenditures for gifts, business entertainment and other legitimate
activities directly related to the conduct of KACALP's business. The CCO
has overall responsibility for the program, supported by Senior Management.
GC is responsible for giving advice on the interpretation and application
of this Policy, supporting training and education, and responding to
reported concerns.
Other less obvious items provided to a foreign official can also violate
the PCPA. Examples include in-kind contributions, investment opportunities,
stock options or positions in joint ventures, and favorable or steered
subcontracts. The prohibition applies whether an item would benefit the
official directly or another person, such as a family member, friend or
business associate.
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Kayne Anderson Capital Advisors, L.P.
D. GIFTS AND ENTERTAINMENT
A conflict of interest occurs when the personal interests of employees
interfere or could potentially interfere with their responsibilities to the
firm and its clients. Employees should not accept inappropriate gifts,
favors, entertainment, special accommodations, or other things of material
value that could influence (or appear to influence) their decision-making
or make them feel beholden to a person or firm. Employees should not offer
gifts, favors, entertainment, or other things of value that could be viewed
as overly generous or aimed at influencing decision-making or making a
client feel beholden to the firm or the employee.
o GIFTS. No employee may receive any gift, service, or other
things of more than a $150.00 value per year from any person or
entity that does business with or on behalf of KACALP, without
the pre-approval of Compliance. No employee may give or offer any
gift of more than $150.00 value per year to any existing clients,
prospective clients, or any entity that does business with or on
behalf of the adviser without pre-approval by Compliance.
Compliance will maintain a gift log of all gifts over $150.00
given or received from or by any KACALP employees. The gift log
will include: employee name, type of gift, dollar amount of gift,
and sender of the gift.
o CASH. No employee may give or accept cash gifts or cash
equivalents to or from a client, prospective client, or any
entity that does business with or on behalf of KACALP without
approval from Compliance.
o ENTERTAINMENT. No employee may provide or accept extravagant or
excessive entertainment to or from a client, prospective client,
or any person or entity that does or seeks to do business with or
on behalf of KACALP.
E. POLITICAL AND CHARITABLE CONTRIBUTIONS
Supervised Persons are prohibited from making political contributions for
the purpose of obtaining or retaining advisory contracts with government
entities. KACALP prohibits its supervised persons from considering KACALP's
current or anticipated business relationships as a factor in soliciting
political or charitable donations. A. POLITICAL CONTRIBUTIONS BY EMPLOYEES.
The SEC has an adopted a new pay to play anti- fraud rule for Advisers. The
new rule prohibits advisers from seeking to influence the award of advisory
contracts by a "government entity" (e. g. , public pension plans) through
political contributions to or for those officials who are in a position to
influence the awards.
There are three major aspects to this rule:
o A two-year time out. The two-year "time-out" will prohibit an
adviser from receiving compensation from a government entity for
two years after the adviser or its covered associate makes a
political contribution to a covered official of the government
entity that is in a position to influence the award of the
advisory business.
o The adviser is prohibited from paying third-party solicitor,
placement agents, and
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Kayne Anderson Capital Advisors, L.P.
other consultants to solicit government entities for advisory
business.
o The adviser and its covered associates are prohibited from
coordinating (or soliciting any person or PAC to make) any: (1)
contribution to an official of a government entity to which the
adviser is providing or seeking to provide advisory services, or
(2) payment to a political party of a state or locality where the
adviser is providing or seeking to provide advisory services to a
government entity.
B. GENERAL PROHIBITION. All employees (and their immediate family members)
are prohibited from making any contributions or gifts to, or soliciting or
coordinate any contributions or gifts for, any of the following:
o Any incumbent US state or local officeholder (including one who
is a candidate for federal office)
o Any candidate or elections winner for US state or local office
o Any staff member or employee of a US public pension fund, or any
elected or appointed trustee, fiduciary, or other official whose
official duties involve responsibility for such a fund
C. PERMISSIBLE CONTRIBUTIONS. Political contributions to US federal
officeholders and candidates that fall outside of the following exemptions
will require pre-clearance from Compliance:
o If you are entitled to vote for the government official, you may
contribute $350 or less to the official, per election (No
pre-clearance required)
o If you are not entitled to vote for the government official, you
may contribute $150 or less to the official (No pre-clearance
required)
o Any political contributions outside of the above perimeters
require pre-clearance.
o As a side note, political contributions to national parties (e.
g. , Democratic National Party, Republication National Party) are
not subject to this rule
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