Form 485APOS FIRST AMERICAN FUNDS
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1933
Act Registration No. 002-74747
1940 Act Registration No. 811-03313
As filed with the Securities and Exchange Commission on October 13, 2017
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
| Pre-Effective Amendment No. | [ ] |
| Post-Effective Amendment No. 92 | [X] |
and/or
REGISTRATION
STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
| Amendment No. 92 | [X] |
FIRST
AMERICAN FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
800
Nicollet Mall
Minneapolis, Minnesota 55402
(Address of Principal Executive Offices) (Zip Code)
(612)
303-7987
(Registrant’s Telephone Number, including Area Code)
Richard
J. Ertel
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall, BC-MN-H04N
Minneapolis, Minnesota 55402-7020
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
| [ ] | immediately upon filing pursuant to paragraph (b) of Rule 485 |
| [ ] | on (date) pursuant to paragraph (b) of Rule 485 |
| [ ] | 60 days after filing pursuant to paragraph (a)(1) of Rule 485 |
| [X] | on December 18, 2017 pursuant to paragraph (a)(1) of Rule 485 |
| [ ] | 75 days after filing pursuant to paragraph (a)(2) of Rule 485 |
| [ ] | on (date) pursuant to paragraph (a)(2) of Rule 485 |
Contents
Please find First American Funds’ Privacy Policy inside the back cover of this Prospectus.
This prospectus and the related Statement of Additional Information (SAI) do not constitute an offer to sell or a solicitation of an offer to buy shares in the funds, nor shall any such shares be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.
Investment Objective
Government Obligations Fund’s objective is to seek maximum current income to the extent consistent with the preservation of capital and maintenance of liquidity.
Fees and Expenses
The following tables describe the fees and expenses that you may pay if you buy and hold shares of the fund.
| Shareholder Fees | |
| (fees paid directly from your investment) | Class P |
| Maximum Sales Charge (Load) | None |
| Maximum Deferred Sales Charge (Load) | None |
| Annual Fund Operating Expenses | |
| (expenses that you pay each year as a percentage of the value of your investment) | |
| Management Fees | 0.10% |
| Distribution and/or Service (12b-1) Fees | None |
| Other Expenses | 0.14% |
| Total Annual Fund Operating Expenses | 0.24% |
| Less Fee Waivers1 | (0.06)% |
| Net Expenses1 | 0.18% |
| 1 | The advisor has contractually agreed to waive fees and reimburse other fund expenses through December 31, 2018, so that total annual fund operating expenses, after waivers, do not exceed 0.18%. These fee waivers and expense reimbursements may be terminated at any time after December 31, 2018, at the discretion of the advisor. Prior to that time, such waivers and reimbursements may not be terminated without the approval of the fund’s board of directors. |
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. The example also assumes that your investment has a 5% return each year and the fund’s operating expenses remain the same (except that the example incorporates the fund’s expense limitation arrangements for only the first year of each period presented). You would incur these hypothetical expenses whether or not you redeem your investment at the end of the given period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| Class P | |
| 1 year | $ 18 |
| 3 years | $ 71 |
| 5 years | $129 |
| 10 years | $300 |
| 1 | Prospectus – | First
American Money Market Funds Class P Shares |
Fund Summaries
Government Obligations Fund continued
Principal Investment Strategies
Government Obligations Fund invests exclusively in short-term U.S. government securities, including repurchase agreements secured by U.S. government securities. U.S. government securities are bonds or other debt obligations issued or guaranteed as to principal and interest by the U.S. government or one of its agencies or instrumentalities. U.S. Treasury securities and some obligations of U.S. government agencies and instrumentalities are supported by the full faith and credit of the U.S. government. Other U.S. government securities are backed by the right of the issuer to borrow from the U.S. Treasury. Still others are supported only by the credit of the issuer or instrumentality.
Principal Risks
You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not a deposit of U.S. Bank National Association and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
Principal risks of investing in this fund include:
Credit Risk — The value of your investment might decline if the issuer of an obligation held by the fund defaults on the obligation or has its credit rating downgraded.
Cybersecurity Risk — The fund may be subject to operational and informational security risks resulting from breaches in cybersecurity at the fund, the fund’s affiliates or service providers. A cybersecurity breach at an issuer of securities in which the fund invests may cause such securities to lose value.
Income Risk — The level of income you receive from the fund will be affected by movements in short-term interest rates.
Interest Rate Risk — The value of your investment might decline because of a sharp rise in interest rates that causes the value of the fund’s portfolio holdings to fall.
Liquidity Risk — The fund may not be able to sell a security in a timely manner or at a desired price, or may be unable to sell the security at all, because of a lack of demand in the market for the security.
Redemption Risk — If there are unexpectedly high redemptions of fund shares, the fund might have to sell portfolio securities prior to their maturity, possibly at a loss.
Regulatory Risk — Changes to monetary policy by the Federal Reserve or other regulatory actions may impact the fund’s operations, universe of potential investment options, and return potential.
Repurchase Agreement Risk — If the seller of a repurchase agreement defaults on its obligation to repurchase securities from the fund, the fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so.
| 2 | Prospectus – | First
American Money Market Funds Class P Shares |
Fund Summaries
Government Obligations Fund continued
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund by showing changes in the fund’s performance (for Class A shares). The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Updated performance information is available online at firstamericanfunds.com or by calling 800 677-3863.
The bar chart shows you the variability of the fund’s Class A share performance from year to year. The table illustrates the fund’s average annual total returns over the time periods indicated. Performance information for Class P shares will be provided after such shares have one full calendar year of performance.
| AVERAGE ANNUAL TOTAL RETURNS | Inception | |||
| AS OF 12/31/16 | Date | One Year | Five Years | Ten Years |
| Government Obligations Fund – Class A | 9/24/01 | 0.01% | 0.01% | 0.62% |
| 1 | Total return for the period 1/1/17 through 9/30/17 was 0.11%. |
Investment Advisor
U.S. Bancorp Asset Management, Inc. (the “advisor”)
Other Information
For important information about the purchase and sale of fund shares, tax information, and financial intermediary compensation, please see “Additional Summary Information” on page 7 of the prospectus.
| 3 | Prospectus – | First
American Money Market Funds Class P Shares |
Fund Summaries
Investment Objective
Treasury Obligations Fund’s objective is to seek maximum current income consistent with the preservation of capital and maintenance of liquidity.
Fees and Expenses
The following tables describe the fees and expenses that you may pay if you buy and hold shares of the fund.
| Shareholder Fees | |
| (fees paid directly from your investment) | Class P |
| Maximum Sales Charge (Load) | None |
| Maximum Deferred Sales Charge (Load) | None |
| Annual Fund Operating Expenses | |
| (expenses that you pay each year as a percentage of the value of your investment) | |
| Management Fees | 0.10% |
| Distribution and/or Service (12b-1) Fees | None |
| Other Expenses | 0.14% |
| Total Annual Fund Operating Expenses | 0.24% |
| Less Fee Waivers1 | (0.04)% |
| Net Expenses1 | 0.20% |
| 1 | The advisor has contractually agreed to waive fees and reimburse other fund expenses through December 31, 2018, so that total annual fund operating expenses, after waivers, do not exceed 0.20%. These fee waivers and expense reimbursements may be terminated at any time after December 31, 2018, at the discretion of the advisor. Prior to that time, such waivers and reimbursements may not be terminated without the approval of the fund’s board of directors. |
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. The example also assumes that your investment has a 5% return each year and the fund’s operating expenses remain the same (except that the example incorporates the fund’s expense limitation arrangements for only the first year of each period presented). You would incur these hypothetical expenses whether or not you redeem your investment at the end of the given period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Class P | |
| 1 year | $ 20 |
| 3 years | $ 73 |
| 5 years | $131 |
| 10 years | $302 |
| 4 | Prospectus – | First
American Money Market Funds Class P Shares |
Fund Summaries
Treasury Obligations Fund continued
Principal Investment Strategies
Under normal market conditions, Treasury Obligations Fund invests exclusively in short-term U.S. Treasury obligations, including repurchase agreements secured by U.S. Treasury obligations. The U.S. Treasury obligations in which the fund invests include U.S. Treasury bonds, notes, and bills. These types of Treasury securities are essentially the same except for differences in interest rates, maturities, and dates of issuance. U.S. Treasury obligations are backed by the full faith and credit of the U.S. government.
Principal Risks
You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not a deposit of U.S. Bank National Association and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
Principal risks of investing in this fund include:
Credit Risk — The value of your investment might decline if the issuer of an obligation held by the fund defaults on the obligation or has its credit rating downgraded.
Cybersecurity Risk — The fund may be subject to operational and informational security risks resulting from breaches in cybersecurity at the fund, the fund’s affiliates or service providers. A cybersecurity breach at an issuer of securities in which the fund invests may cause such securities to lose value.
Income Risk — The level of income you receive from the fund will be affected by movements in short-term interest rates.
Interest Rate Risk — The value of your investment might decline because of a sharp rise in interest rates that causes the value of the fund’s portfolio holdings to fall.
Liquidity Risk — The fund may not be able to sell a security in a timely manner or at a desired price, or may be unable to sell the security at all, because of a lack of demand in the market for the security.
Redemption Risk — If there are unexpectedly high redemptions of fund shares, the fund might have to sell portfolio securities prior to their maturity, possibly at a loss.
Regulatory Risk — Changes to monetary policy by the Federal Reserve or other regulatory actions may impact the fund’s operations, universe of potential investment options, and return potential.
Repurchase Agreement Risk — If the seller of a repurchase agreement defaults on its obligation to repurchase securities from the fund, the fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so.
| 5 | Prospectus – | First
American Money Market Funds Class P Shares |
Fund Summaries
Treasury Obligations Fund continued
Fund Performance
The following bar chart and table provide some indication of the potential risks of investing in the fund by showing changes in the fund’s performance (for Class A shares). The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Updated performance information is available online at firstamericanfunds.com or by calling 800 677-3863.
The bar chart shows you the variability of the fund’s Class A share performance from year to year. The table illustrates the fund’s average annual total returns over the time periods indicated. Performance information for Class P shares will be provided after such shares have one full calendar year of performance.
AVERAGE ANNUAL TOTAL RETURNS |
Inception |
|||
| AS OF 12/31/16 | Date | One Year | Five Years | Ten Years |
| Treasury Obligations Fund – Class A | 9/24/01 | 0.00% | 0.00% | 0.53% |
| 1 | Total return for the period 1/1/17 through 9/30/17 was 0.10%. |
Investment Advisor
U.S. Bancorp Asset Management, Inc.
Other Information
For important information about the purchase and sale of fund shares, tax information, and financial intermediary compensation, please see “Additional Summary Information” on page 7 of the prospectus.
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American Money Market Funds Class P Shares |
Additional Summary Information
Purchase and Sale of Fund Shares
You may purchase or redeem shares of the funds on any business day. If you are establishing an account directly with a fund, Class P shares are available for a minimum initial investment of $10 million. You can purchase or redeem shares by contacting Investor Services at 800 677-3863. The funds reserve the right to waive or lower purchase minimums and to reject any purchase order or to stop offering shares for sale at any time. You may also become a shareholder by establishing an account through various financial intermediaries authorized to offer Class P shares, including banks, registered investment advisers and other financial institutions that have agreed to provide certain account services to fund shareholders. A financial intermediary may require a minimum initial and/or additional investment amount that is different than that required for accounts held directly with the funds.
Tax Information
Dividends you receive from the funds are generally taxable as ordinary income. Dividends attributable to income from U.S. government securities may be exempt from state personal income taxes.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase a 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 website for more information.
| 7 | Prospectus – | First
American Money Market Funds Class P Shares |
The investment objective of each fund is to seek maximum current income to the extent consistent with the preservation of capital and maintenance of liquidity. Each fund’s investment objective may be changed without shareholder approval. Please remember, there is no guarantee that any fund will achieve its objective.
Principal Investment Strategies
The funds’ principal investment strategies are discussed below. These are the strategies that the funds’ investment advisor believes are most likely to be important in trying to achieve the funds’ objectives. You should be aware that each fund may also use strategies and invest in securities that are not described in this prospectus, but that are described in the SAI. For a copy of the SAI, call Investor Services at 800 677-3863.
Principal Investment Strategies Applicable to Each Fund
Each fund complies with Securities and Exchange Commission (SEC) regulations that apply to money market funds. These regulations require that each fund’s investments mature within 397 days from the date of purchase and that each fund maintain a weighted average maturity of 60 days or less and a weighted average life of 120 days or less. The funds may invest in securities with variable or floating interest rates and securities with demand features. The maturities of these securities are determined according to regulations which allow the funds to consider some of these securities as having maturities shorter than their stated maturity dates. All of the funds’ investments must be in U.S. dollar-denominated high quality securities which have been determined by the funds’ advisor to present minimal credit risk, which determination must include an analysis of the capacity of the security’s issuer or guarantor (including the provider of a conditional demand feature, when applicable) to meet its financial obligations. With limited exceptions, a fund may not invest more than 5% of its total assets in securities issued by the same issuer. Each fund must comply with weekly liquidity standards that require a fund to hold at least 30% of its total assets in cash, direct obligations of the U.S. Government, agency discount notes with remaining maturities of 60 days or less, or securities convertible into cash within five business days. Each fund must also comply with daily liquidity standards that require a fund to hold at least 10% of its total assets in cash, direct obligations of the U.S. Government, or securities convertible into cash within one business day. Each fund is limited to investing no more than 5% of its total assets in illiquid securities.
When selecting securities for each fund, the portfolio managers first consider general economic factors, market conditions, and the short-term interest rate environment in determining what types of short-term instruments to purchase. The portfolio managers then select the specific instruments to be purchased. Generally, the portfolio managers buy and hold securities until their maturities. However, the portfolio managers may sell securities for a variety of reasons, such as to adjust the portfolio’s average maturity, credit, liquidity or yield metrics.
For liquidity and to respond to unusual market conditions, the funds may hold all or a significant portion of their total assets in cash for temporary defensive purposes. This may result in a lower yield and prevent the funds from meeting their investment objectives.
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American Money Market Funds Class P Shares |
More about the Funds
Principal Investment Strategies continued
Government Obligations Fund
Government Obligations Fund pursues its objective by investing exclusively in short-term U.S. government securities, including repurchase agreements secured by U.S. government securities. U.S. government securities are bonds or other debt obligations issued or guaranteed as to principal and interest by the U.S. government or one of its agencies or instrumentalities. U.S. Treasury securities and some obligations of U.S. government agencies and instrumentalities are supported by the full faith and credit of the U.S. government. Other U.S. government securities are backed by the right of the issuer to borrow from the U.S. Treasury. Still others are supported only by the credit of the issuer or instrumentality.
U.S. government securities issued by the Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLB) are neither issued nor guaranteed by the U.S. Treasury and are not backed by the full faith and credit of the United States. These entities, however, were chartered or supported by Acts of Congress and are supported by federal subsidies, loans or other benefits. The Government National Mortgage Association (Ginnie Mae) is a wholly-owned U.S. corporation that is authorized to guarantee timely payment and interest of its securities. U.S. government securities issued by Ginnie Mae are guaranteed by the full faith and credit of the United States. Other U.S. government securities do not have an explicit guarantee but support is implied due to the government sponsorship of their mandated activities, including securities issued by the Tennessee Valley Authority and Federal Farm Credit Banks.
Treasury Obligations Fund
Under normal market conditions, Treasury Obligations Fund pursues its objective by investing exclusively in short-term U.S. Treasury obligations, including repurchase agreements secured by U.S. Treasury obligations. The U.S. Treasury obligations in which the fund invests include U.S. Treasury bonds, notes, and bills. These types of Treasury securities are essentially the same except for differences in interest rates, maturities, and dates of issuance. U.S. Treasury obligations are backed by the full faith and credit of the U.S. government.
Other Money Market Funds
Each fund may invest in other money market funds that invest in the same types of securities as the respective fund, as a non-principal investment strategy, including the other money market funds advised by the funds’ investment advisor. To avoid duplicative investment advisory fees, when a fund invests in another money market fund advised by the fund’s investment advisor, the investment advisor reimburses the fund an amount equal to the fund’s proportionate share of the investment advisory fee paid by the other money market fund to the investment advisor. If the fund invests in money market funds advised by another investment advisor, you will bear both your proportionate share of the expenses in the fund (including management and advisory fees) and, indirectly, the expenses of such other money market fund.
| 9 | Prospectus – | First
American Money Market Funds Class P Shares |
More about the Funds
Other Investment Strategies continued
Securities Lending
To generate additional income, and as a non-principal investment strategy, each fund may lend securities representing up to one-third of the value of its total assets to broker-dealers, banks, and other institutions deemed by the fund’s advisor to present minimal credit risk. When a fund loans its portfolio securities, it will receive, at the inception of each loan, cash collateral equal to at least 102% of the value of the loaned securities, which is invested consistent with the fund’s investment strategies. If the borrower fails to return the loaned securities, the fund could suffer a loss if the value of the invested collateral is insufficient to purchase replacement securities.
The principal risks of investing in each fund are identified and further discussed below.
Government Obligations Fund
| ● | Credit Risk | ● | Liquidity Risk | |
| ● | Cybersecurity Risk | ● | Redemption Risk | |
| ● | Income Risk | ● | Regulatory Risk | |
| ● | Interest Rate Risk | ● | Repurchase Agreement Risk |
Treasury Obligations Fund
| ● | Credit Risk | ● | Liquidity Risk | |
| ● | Cybersecurity Risk | ● | Redemption Risk | |
| ● | Income Risk | ● | Regulatory Risk | |
| ● | Interest Rate Risk | ● | Repurchase Agreement Risk |
Description of Principal Investment Risks
Credit Risk. The value of your investment might decline if the issuer of an obligation held by the fund defaults on the obligation or has its credit rating downgraded.
Cybersecurity Risk. With the increased use of technologies such as the Internet and the dependence on computer systems to perform necessary business functions, a fund may be subject to operational and informational security risks resulting from breaches in cybersecurity (“cyber-attacks”). A cyber-attack refers to both intentional and unintentional events that may cause a fund to lose proprietary information, suffer data corruption, or lose operational capacity. Cyber-attacks include, but are not limited to, infection by computer viruses or other malicious software code, gaining unauthorized access to systems, networks, or devices that are used to service the fund’s operations through “hacking” or other means for the purpose of misappropriating assets or sensitive information, corrupting data, or causing operational disruption.
Cybersecurity failures or breaches by the funds’ affiliates or service providers, may cause disruptions and impact the business operations, potentially resulting in financial losses to both a fund and its shareholders, the inability of fund shareholders to transact business, inability to calculate a fund’s net asset value (NAV), impediments to trading, violations of applicable privacy and other laws (including the release of private shareholder information), regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional
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American Money Market Funds Class P Shares |
More about the Funds
Description of Principal Investment Risks continued
compliance costs. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. While the advisor has risk management systems designed to prevent or reduce the impact of such cyber-attacks, there are inherent limitations in such controls, systems and protocols, including the possibility that certain risks have not been identified, as well as the rapid development of new threats. These cybersecurity risks are also present for issuers of securities in which a fund invests, which could result in material adverse consequences for such issuers, and may cause a fund’s investment in such securities to lose value and may result in financial loss for fund shareholders.
Income Risk. The level of income you receive from the fund will be affected by movements in short-term interest rates. Because the funds invest solely in U.S. government securities, U.S. Treasury obligations, or repurchase agreements secured by those securities, these funds may offer less income than money market funds investing in other high-quality money market securities.
Interest Rate Risk. The value of your investment might decline because of a sharp rise in interest rates that causes the value of the fund’s portfolio holdings to fall.
Liquidity Risk. The fund may not be able to sell a security in a timely manner or at a desired price, or may be unable to sell the security at all, because of a lack of demand in the market for the security.
Redemption Risk. If there are unexpectedly high redemptions of fund shares, the fund might have to sell portfolio securities prior to their maturity, possibly at a loss.
Regulatory Risk. Changes to monetary policy by the Federal Reserve or other regulatory actions could expose fixed income and related markets to heightened volatility, interest rate sensitivity and reduced liquidity, which may impact the funds’ operations, universe of potential investment options, and return potential.
Repurchase Agreement Risk. If the seller of a repurchase agreement defaults on its obligation to repurchase securities from the fund, the fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so.
Disclosure of Portfolio Holdings
A description of the funds’ policies and procedures with respect to the disclosure of the funds’ portfolio securities is available in the funds’ SAI.
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American Money Market Funds Class P Shares |
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall
Minneapolis, MN 55402
U.S. Bancorp Asset Management provides investment management services to individuals and institutions, including corporations, foundations, pensions, and retirement plans. As of September 30, 2017, U.S. Bancorp Asset Management had more than $73.1 billion in assets under management, including investment company assets of more than $50.1 billion. As investment advisor, U.S. Bancorp Asset Management manages the funds’ business and investment activities, subject to the authority of the funds’ board of directors.
Each fund pays the investment advisor a monthly management fee for providing investment advisory services. The table below reflects management fees paid to the investment advisor, after taking into account any fee waivers, for the funds’ most recently completed fiscal year.
| Management fee as a % of average daily net assets | ||
| Government Obligations Fund | 0.10% | |
| Treasury Obligations Fund | 0.10% |
U.S. Bancorp Asset Management may voluntarily waive or reimburse certain fees and expenses in order to maintain a zero or positive yield for each share class of each fund. These waivers and reimbursements may be terminated at any time by U.S. Bancorp Asset Management.
A discussion regarding the basis for the board’s approval of the funds’ investment advisory agreement appears in the funds’ annual report to shareholders for the fiscal year ended August 31, 2017.
Additional Compensation
U.S. Bancorp Asset Management, U.S. Bank National Association (U.S. Bank) and other affiliates of U.S. Bancorp may act as fiduciary with respect to plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) and other trust and agency accounts that invest in the First American funds. As described above, U.S. Bancorp Asset Management receives compensation for acting as the funds’ investment advisor. U.S. Bancorp Asset Management, U.S. Bank and their affiliates also receive compensation from the funds as set forth below.
Administration Services. U.S. Bancorp Asset Management and its affiliate, U.S. Bancorp Fund Services, LLC (Fund Services), act as the funds’ administrator and sub-administrator, respectively, providing administration services that include general administrative and accounting services, blue sky services and shareholder services. For such services, each fund pays U.S. Bancorp Asset Management the fund’s pro rata portion of up to 0.15%, on an annual basis, of the aggregate average daily net assets attributable to Class P shares of all First American money market funds. U.S. Bancorp Asset Management pays Fund Services a portion of its fee, as agreed to from time to time. In addition to these fees, the funds may reimburse U.S. Bancorp Asset Management for any out-of-pocket expenses incurred in providing administration services.
Custody Services. U.S. Bank provides custody services to each fund. U.S. Bank is paid monthly fees equal, on an annual basis, to 0.005% of each fund’s average daily net assets.
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American Money Market Funds Class P Shares |
More about the Funds
Investment Advisor continued
Securities Lending Services. In connection with lending their portfolio securities, the funds pay fees to U.S. Bank of 20% of each fund’s net income from securities lending transactions and U.S. Bank pays half of such fees to U.S. Bancorp Asset Management for certain securities lending services provided by U.S. Bancorp Asset Management.
Transfer Agency Services. Fund Services provides transfer agency and dividend disbursing services, as well as certain shareholder services, to the funds. Fund Services receives fees for transfer agency and dividend disbursing services on a per shareholder account basis, subject to a minimum fee per share class. In addition, the funds may reimburse Fund Services for any out-of-pocket expenses incurred in providing transfer agency services.
Other Compensation. To the extent that fund shares are held through U.S. Bank or its broker-dealer affiliate, U.S. Bancorp Investments, Inc., those entities may receive distribution and/or shareholder servicing fees from the funds’ distributor as well as other payments from the funds’ distributor and/or advisor as described below under “Shareholder Information — Additional Payments to Institutions.”
The funds are managed by a team of persons who are employed by U.S. Bancorp Asset Management.
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American Money Market Funds Class P Shares |
The funds utilize the amortized cost method of valuation to transact at a $1.00 share price. The NAV per share of each share class of a fund is calculated at the times listed below under “Calculating Net Asset Value.” If a purchase order is received on a business day by the deadline listed below under “Calculating Net Asset Value” and payment in federal funds is received by the fund by the close of the Federal Reserve wire transfer system (normally, 5:00 p.m. Central time), then dividends will begin to accrue on the same business day that the wire purchase order is received. If a purchase order is received on a business day after the deadline specified above, you will begin to accrue dividends the next business day. Also, in the event a wire purchase order is placed by the deadline specified above but an anticipated wire payment is not received by a fund by the close of the Federal Reserve wire transfer system that same day, your purchase may be cancelled and you may be liable for any resulting losses or fees incurred by the fund, the transfer agent, or the fund’s custodian. For purchase orders accompanied by check, dividends will normally begin to accrue within two business days of receipt.
Redemption proceeds to be paid by wire will normally be paid to the domestic bank account designated in the current records of the fund’s transfer agent on the same day of the redemption order, if the redemption order is accepted in proper form by the transfer agent or a financial intermediary that has been authorized to accept orders on behalf of the fund, as described herein, by the deadline listed below under “Calculating Net Asset Value.” Redemption proceeds will normally be paid by the close of the Federal Reserve wire system (normally, 5:00 p.m. Central time). Redemption proceeds to be paid by check will normally be sent to the address of record designated in the current records of the fund’s transfer agent on the next business day, but in no event more than seven days, after the redemption order is accepted in proper form by the transfer agent or a financial intermediary that has been authorized to accept orders on behalf of the fund, as described herein, by the deadline listed below under “Calculating Net Asset Value.” You will not earn a dividend on the day a redemption order is accepted, except for redemption proceeds paid by check, which earn a dividend on the day a redemption order is accepted.
You may purchase or redeem shares of the funds on any business day that the Federal Reserve Bank of New York (Federal Reserve) is open, except as noted below. In addition to weekends, the Federal Reserve is closed on the following Federal holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. A fund may close when the Federal Reserve is open and the New York Stock Exchange (NYSE) is closed, such as Good Friday. On any business day when the Securities Industry Financial Markets Association recommends that the bond markets close trading early, a fund may also close trading early.
Your purchase or redemption price will be based on that day’s NAV per share if your order is received by the funds in proper form prior to the time the fund calculates its NAV. See “Additional Information on Purchasing and Redeeming Fund Shares — Calculating Net Asset Value” below. Contact your financial intermediary to determine the time by which it must receive your order to be assured same day processing. To make sure your order is in proper form, you must follow the instructions set forth below under “Purchasing and Redeeming Fund Shares.”
Some financial intermediaries may charge a transaction-based fee for helping you purchase or redeem shares or an asset-based fee. Contact your financial intermediary for more information.
| 14 | Prospectus – | First
American Money Market Funds Class P Shares |
Shareholder Information
The funds issue their shares in multiple classes. This prospectus offers Class P shares.
If you are establishing an account directly with a fund, Class P shares are available for a minimum initial investment of $10 million. The funds reserve the right to waive or lower purchase minimums and to reject any purchase order or to stop offering shares for sale at any time. You may also become a shareholder by establishing an account through various financial intermediaries authorized to offer Class P shares, including banks, registered investment advisers and other financial institutions that have agreed to provide certain account services to fund shareholders. A financial intermediary may require a minimum initial and/or additional investment amount that is different than that required for accounts held directly with the funds. These minimum investment amounts may be based on household assets under management held with the financial intermediary or with the funds, or the capability to reach a higher level of investment than the initial amount invested, among other possible criteria.
Class P shares are offered at NAV, with no front-end or contingent deferred sales charge and no distribution (12b-1) or shareholder servicing fee.
Purchasing and Redeeming Fund Shares
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. As a result, when you open an account, we will ask for your name, permanent street address, date of birth, and social security or taxpayer identification number. Addresses containing a P.O. Box only will not be accepted. We may also ask for other identifying documents or information. You may purchase or redeem shares by calling your financial institution.
You may purchase or redeem shares of the funds on any business day through your financial intermediary. Additional information on redeeming shares through your financial intermediary can be found below under “Transactions through Financial Intermediaries.”
When purchasing shares, payment must be made by wire transfer, which can be arranged by your financial intermediary. You cannot purchase shares by wire on days when federally chartered banks are closed.
If a fund receives a redemption request by the time the fund calculates its NAV, as specified below, payment will be made the same day by transfer of federal funds if the Fedwire transfer system is available for use that day. Otherwise, payment will be made on the next business day.
Suspension or Postponement of Redemptions. Each fund reserves the right to suspend the right of shareholder redemption, or postpone the date of payment:
| ● | if emergency conditions should exist, as specified in the Investment Company Act, or as determined by the SEC, as a result of which disposal of portfolio securities or determination of the NAV of the fund is not reasonably practicable; |
| ● | for any period during which trading on the NYSE is restricted as determined by the SEC or the NYSE is closed (other than customary weekend and holiday closings); |
| ● | for any period during which the SEC has, by rule or regulation, deemed that (1) trading shall be restricted or (2) an emergency exists; or |
| ● | for such other periods as the SEC may by order permit for the protection of shareholders of the fund. |
| 15 | Prospectus – | First
American Money Market Funds Class P Shares |
Shareholder Information
Purchasing and Redeeming Fund Shares continued
In addition, in the unlikely event that the funds’ board of directors were to determine pursuant to SEC regulations that the extent of the deviation between a fund’s amortized cost per share and its market-based NAV per share may result in material dilution or other unfair results to shareholders, the board will cause the fund to take such action as it deems appropriate to eliminate or reduce to the extent practicable such dilution or unfair results, including suspending redemption of shares and liquidating the fund under Rule 22e-3 of the Investment Company Act.
Purchases In-Kind. Generally, all purchases will be in cash. However, the funds reserve the right to permit you to purchase shares through the exchange of other securities that you own if consistent with a fund’s investment objective, policies, and operations. The market value of any securities exchanged, plus any cash, must be at least $25 million. Please contact your financial intermediary or Investor Services at 800 677-3863.
Redemptions In-Kind. Generally, all redemptions will be for cash. However, the funds reserve the right to pay all or part of your redemption proceeds in readily marketable securities instead of cash. If payment by a fund is made in securities, the fund will value the securities selected in the same manner in which it computes its NAV. This process minimizes the effect of large redemptions on the fund and its remaining shareholders. If you receive redemption proceeds in-kind, you should expect to incur transaction costs upon disposition of those securities. In addition, if you receive redemption proceeds in-kind, you will be subject to market gains or losses upon the disposition of those securities.
Additional Information on Purchasing and Redeeming Fund Shares
Calculating Net Asset Value
The funds generally calculate their NAV per share as of the time specified in the table below on each business day that the funds are open, except that the NAV is generally calculated at 1:00 p.m. Central time on days on which the bond markets close early (typically on the business day preceding a Federal holiday) (an “Early Close”). Purchase and redemption orders received after closing time, including an Early Close, will be processed the next business day.
| Deadline for orders to be | |
| received in order to receive | |
| the current day’s NAV | |
| Government Obligations Fund | 3:30 p.m. Central time |
| Treasury Obligations Fund | 3:30 p.m. Central time |
A fund’s NAV is equal to the market value of its investments and other assets, less any liabilities, divided by the number of fund shares. The securities held by the funds are valued on the basis of amortized cost. This involves valuing an instrument at its cost and thereafter assuming a constant amortization of any discount or premium until the instrument’s maturity, rather than looking at actual changes in the market value of the instrument. Each fund’s NAV is normally expected to be $1 per share.
| 16 | Prospectus – | First
American Money Market Funds Class P Shares |
Shareholder Information
Additional Information on Purchasing and Redeeming Fund Shares continued
Frequent Trading of Fund Shares
The funds are designed to offer investors a liquid cash option and it is anticipated that shareholders will purchase and redeem fund shares on a frequent basis. Frequent trading by shareholders may disrupt the management of the funds and increase fund expenses. However, given the short-term nature of the funds’ investments and their use of the amortized cost method for calculating the NAV of fund shares, the funds do not anticipate that in the normal case frequent or short-term trading into and out of the funds will have significant adverse consequences for the funds and their shareholders. Accordingly, the funds’ board of directors has not adopted policies or procedures to monitor or discourage frequent or short-term trading of the funds’ shares.
Transactions through Financial Intermediaries
Each fund has authorized one or more financial intermediaries to accept purchase and redemption orders on the fund’s behalf. Financial intermediaries may include financial advisors, investment advisers, brokers, financial planners, banks, insurance companies, retirement or 401(k) plan administrators and others, including various affiliates of the funds’ advisor, that have entered into agreements with the funds’ distributor, advisor, and/or transfer agent. Such financial intermediaries may be authorized to designate other intermediaries to accept purchase and redemption orders on the fund’s behalf. The fund will be deemed to have received a purchase or redemption order when such financial intermediary or, if applicable, such financial intermediary’s authorized designee, accepts the order. Such orders will be priced at the fund’s NAV next calculated after it is accepted by the financial intermediary. In such cases, if requested by a fund, a financial intermediary will be responsible for providing information with regard to the time that such order for purchase or redemption was received. Orders submitted through a financial intermediary that has not received such authorization to accept orders on the fund’s behalf will be priced at the fund’s NAV next calculated after the fund receives and accepts the order from the financial intermediary, which may not occur on the day you submitted the order to the financial intermediary. Since not all financial intermediaries have received such authorization, you may wish to contact your financial intermediary to determine if it has received such authorization.
Each fund earns interest, dividends and other income from its investments, and distributes this income (less fund expenses) to you as dividends. Dividends from a fund’s net investment income are declared daily and paid monthly. A fund may take into account capital gains and losses (other than net long-term capital gains) in its daily dividend declarations. A fund may also make additional distributions for tax purposes if necessary.
If a fund receives your wire transfer payment for fund shares by the time the fund determines its NAV, you will begin to accrue dividends on that day. If you redeem shares, you will not receive a dividend on the day of your redemption request if your request is received by the time the fund determines its NAV.
| 17 | Prospectus – | First
American Money Market Funds Class P Shares |
Shareholder Information
Dividends and Distributions continued
Dividends will be reinvested in additional shares of the same fund, unless you request that distributions be reinvested in another First American fund or paid in cash. This request may be made on your new account form, by contacting your financial intermediary, or by calling Investor Services at 800 677-3863. Cash distributions will be paid on or about the first business day of each month. If you request that your distributions be paid in cash but those distributions cannot be delivered because of an incorrect mailing address, or if a distribution check remains uncashed for six months, the undelivered or uncashed distributions and all future distributions will be reinvested in fund shares at the current NAV.
Some of the tax consequences of investing in the funds are discussed below. More information about taxes is provided in the SAI. However, because everyone’s tax situation is unique, always consult your tax professional about federal, state, and local tax consequences.
Dividends you receive from the funds are generally taxable as ordinary income, whether you reinvest them or take them in cash. Dividends from the funds will not be eligible for the reduced rate of tax that applies to “qualified dividend income.”
Additional Payments to Institutions
The advisor and/or the distributor may pay additional compensation to investment professionals, participating institutions and “one-stop” mutual fund networks (each an “institution” and, collectively, “institutions”) out of their own resources in connection with the sale or retention of fund shares and/or in exchange for sales and/or administrative services performed on behalf of the institution’s customers. The amounts of these payments may be significant, and may create an incentive for the institution or its employees or associated persons to recommend or sell shares of the funds to you. These payments are not reflected in the fees and expenses listed in the “Fund Summaries” section of the prospectus because they are not paid by the funds.
These payments are negotiated and may be based on such factors as the number or value of First American money market fund shares that the institution sells or may sell; the value of the assets invested in the First American money market funds by the institution’s customers; reimbursement of ticket or operational charges (fees that an institution charges its representatives for effecting transactions in fund shares); lump sum payment for services provided; the type and nature of services or support furnished by the institution; and/or other measures as determined from time to time by the advisor and/or distributor.
The advisor and/or distributor may make other payments or allow other promotional incentives to institutions to the extent permitted by SEC and FINRA rules and by other applicable laws and regulations. Certain institutions may also receive payments in recognition of sub-accounting or other services they provide to shareholders or plan participants who invest in the funds through their employee benefit or retirement plan.
You can ask your institution for information about any payments it receives from the advisor and/or the distributor and from the funds, and any services your institution provides, as well as about fees and/or commissions your institution charges. You can also find more details about payments made by the advisor and/or the distributor in the funds’ SAI.
| 18 | Prospectus – | First
American Money Market Funds Class P Shares |
Shareholder Information
Shareholder Reports
Shareholder reports are mailed twice a year, in October and April. They include financial statements and performance information, and, on an annual basis, the report of independent registered public accounting firm.
In an attempt to reduce shareholder costs and help eliminate duplication, the funds will try to limit their mailings to one report for each address that lists one or more shareholders with the same last name. If you would like additional copies, please call Investor Services at 800 677-3863.
Statements and Confirmations
Statements summarizing activity in your account are mailed quarterly. Confirmations generally are mailed following each purchase or sale of fund shares. Generally, the funds do not send statements to individuals who have their shares held in an omnibus account.
| 19 | Prospectus – | First
American Money Market Funds Class P Shares |
Class P shares commenced operations as of the date of this prospectus. Accordingly, the funds do not have financial highlights with respect to Class P shares.
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First American Funds’ Privacy Policy
We want to provide an explanation to Consumers of what nonpublic personal information is and how it’s collected and used.
A “Consumer“ is considered an individual investor who invests or has invested in our products for personal, family or household purposes.
“Nonpublic personal information” is nonpublic information that we obtain while providing financial products or services to you.
How we collect your information
We obtain nonpublic information about you during the account opening process from the applications and other forms you are asked to complete and from the transactions you make with us. We may also receive nonpublic information about you from companies affiliated with us or from other companies that provide services to you.
The types of information we collect
We may collect the following nonpublic personal information about you:
| ● | Information about your identity, such as your name, address, and social security number. |
| ● | Information about your transactions with us. |
| ● | Information you provide on applications, such as your beneficiaries and banking information, if provided to us. |
Why we collect your information
We gather nonpublic personal information about you and your accounts so that we can:
| ● | Know who you are and prevent unauthorized access to your information. |
| ● | Comply with the laws and regulations that govern us. |
What information we disclose
We may share some or all of the nonpublic personal information that we collect about you with our affiliated providers of financial services, including our family of funds and their advisor, and with companies that perform shareholder services on our behalf. We do not use nonpublic information received from our affiliates for marketing purposes.
We’re permitted by law to disclose nonpublic personal information about you to other third parties in certain circumstances. For example, we may disclose nonpublic personal information about you to affiliated and nonaffiliated third parties to assist us in servicing your account (e.g., mailing of fund-related materials) and to government entities (e.g., IRS for tax purposes).
We’ll continue to adhere to the privacy policies and practices described here even after your account is closed or becomes inactive.
Confidentiality and security
To protect nonpublic personal information about you, we restrict access to such information to only those employees and authorized agents who need to use the information. We maintain physical, electronic, and procedural safeguards to maintain the confidentiality and security of nonpublic information about you. In addition, we require our service providers to restrict access to nonpublic personal information about you to those employees who need that information in order to provide products or services to you. We also require them to maintain physical, electronic, and procedural safeguards that comply with applicable federal standards and regulations to guard your information.
Additional rights and protections
You may have other privacy protections under applicable state laws. To the extent that these state laws apply, we will comply with them when we share information about you. This privacy policy does not apply to your relationship with other financial service providers, such as broker-dealers. We may amend this privacy notice at any time, and we will inform you of changes as required by law.
Our pledge applies to products and services offered by the First American Family of Funds
| NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE |
THIS PAGE IS NOT PART OF THE PROSPECTUS
First American Funds
P.O. Box 1330
Minneapolis, MN 55440-1330
The Statement of Additional Information (SAI) provides more details about the funds and their policies and is incorporated into this prospectus by reference (which means that it is legally part of this prospectus).
Additional information about the funds’ investments is available in the funds’ annual and semi-annual reports to shareholders.
You can obtain a free copy of the funds’ most recent annual or semi-annual reports or the SAI, request other information about the funds, or make other shareholder inquiries by calling Investor Services at 800 677-3863 or by contacting the funds at the address above. Annual or semi-annual reports and the SAI are also available on the funds’ Internet site at www.firstamericanfunds.com.
Information about the funds (including the SAI) can also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. To find out more about this public service, call the SEC at 1-202-551-8090. Reports and other information about the funds are also available on the EDGAR Database on the SEC’s Internet site at www.sec.gov, or you can obtain copies of this information, after paying a duplicating fee, by electronic request at the following e-mail address: [email protected], or; by writing the SEC’s Public Reference Section, Washington, D.C. 20549-1520.
| SEC file number: 811-03313 | PROMMP 10/17 |
FIRST AMERICAN FUNDS, INC.
Statement of Additional Information
____________, 2017
Money Market Funds
| Share Classes/Ticker Symbols | |||||||||
Fund |
Class A |
Class D |
Class G |
Class P |
Class T |
Class V |
Class X |
Class Y |
Class Z |
| Government Obligations Fund | FAAXX | FGDXX | -- | [ ] | -- | FVIXX | FGXXX | FGVXX | FGZXX |
| Treasury Obligations Fund | FATXX | FTDXX | STSXX | [ ] | -- | FLIXX | FXFXX | FOCXX | FUZXX |
This Statement of Additional Information (“SAI”) relates to Government Obligations Fund and Treasury Obligations Fund (each a “Fund” and collectively, the “Funds”), each of which is a series of First American Funds, Inc. (“FAF”). This SAI is not a prospectus, but should be read in conjunction with the Funds’ current Prospectuses dated December __, 2017. Class P shares are first being offered as of the date of this SAI. The financial statements included as part of the Funds’ Annual Report to shareholders for the fiscal year ended August 31, 2017 are incorporated by reference into this SAI. This SAI is incorporated into the Funds’ Prospectuses by reference. To obtain copies of Prospectuses or the Funds’ Annual Report at no charge, write the Funds’ distributor, Quasar Distributors, LLC (the “Distributor”), 615 East Michigan Street, Milwaukee, WI 53202, call Investor Services at 800 677-3863, or visit the Funds’ website at www.firstamericanfunds.com. Please retain this SAI for future reference.
i
ii
FAF was incorporated in the State of Minnesota under the name “First American Money Fund, Inc.” on October 29, 1981. FAF’s board of directors (the “Board”) and shareholders, at meetings held December 6, 1989 and January 18, 1990, respectively, approved amendments to the Articles of Incorporation providing that the name “First American Money Fund, Inc.” be changed to “First American Funds, Inc.”
As set forth in the Prospectuses, FAF is organized as a series fund, and currently issues its shares in six series. Each series of shares represents a separate investment portfolio with its own investment objective and policies (in essence, a separate mutual fund). The series of FAF to which this SAI relates are named on the cover.
Shareholders may purchase shares of each Fund through separate classes. Treasury Obligations Fund offers its shares in eight classes: Class A, Class D, Class G, Class P, Class V, Class X, Class Y, and Class Z shares. Government Obligations Fund offers its shares in seven classes: Class A, Class D, Class P, Class V, Class X, Class Y, and Class Z shares. Prior to December 1, 2003, the Class A shares were named “Class S” shares. Class P shares are first being offered as of the date of this SAI. Prior to October 14, 2016, the Class G shares were named “Reserve Class” shares and the Class V shares were named “Institutional Investor” shares. The different classes provide for variations in distribution costs, voting rights and dividends. To the extent permitted under the Investment Company Act of 1940, as amended (the “1940 Act”), the Funds may also provide for variations in other costs among the classes. Except for differences among the classes pertaining to such costs, each share of each Fund represents an equal proportionate interest in that Fund. Each of the Funds is an open-end diversified management investment company.
FAF has prepared and will provide a separate Prospectus relating to the Class A shares, the Class D shares, the Class G shares, the Class P shares, the Class V shares, the Class X shares, the Class Y shares, and the Class Z shares of the Funds. These Prospectuses can be obtained at no charge by writing Quasar Distributors, LLC at 615 East Michigan Street, Milwaukee, WI 53202, by calling First American Funds Investor Services at 800 677-3863, or by visiting the Funds’ website at www.firstamericanfunds.com.
The Bylaws of FAF provide that meetings of shareholders be held only with such frequency as required under Minnesota law and the 1940 Act. Minnesota corporation law requires only that the Board convene shareholders’ meetings when it deems appropriate. In addition, Minnesota law provides that if a regular meeting of shareholders has not been held during the immediately preceding 15 months, a shareholder or shareholders holding 3% or more of the voting shares of FAF may demand a regular meeting of shareholders by written notice given to the President or Treasurer of FAF. Within 30 days after receipt of the demand, the Board shall cause a regular meeting of shareholders to be called, which meeting shall be held no later than 90 days after receipt of the demand, all at the expense of FAF. In addition, the 1940 Act requires a shareholder vote for, among other things, all amendments to fundamental investment policies and restrictions, for approval of all investment advisory contracts and amendments thereto, and for all amendments to Rule 12b-1 distribution plans.
1
Each Fund is classified under the 1940 Act as a diversified series of an open-end management investment company. This classification cannot be changed with respect to a Fund without approval by the holders of a majority of the outstanding shares of the Fund as defined in the 1940 Act, i.e., by the lesser of the vote of (a) 67% of the shares of the Fund present at a meeting where more than 50% of the outstanding shares are present in person or by proxy, or (b) more than 50% of the outstanding shares of the Fund. The 1940 Act currently restricts each Fund, with respect to 75% of its total assets, from investing more than 5% of the value of its total assets in the outstanding securities of any one issuer, or own more than 10% of the outstanding voting securities of any one issuer, in each case other than securities issued or guaranteed by the U.S. Government or any agency or instrumentality thereof, securities of other investment companies, and cash and cash items (including receivables).
In addition to the investment objective and policies set forth in the Prospectuses and under the caption “Additional Information Concerning Fund Investments” below, the Funds are subject to the investment restrictions set forth below. The investment restrictions set forth in paragraphs 1 through 8 below are fundamental and cannot be changed with respect to a Fund without approval by the holders of a majority of the outstanding shares of the Fund as defined in the 1940 Act.
Fundamental Investment Restrictions
None of the Funds will:
| 1. | Concentrate its investments in a particular industry, except that there shall be no limitation on the purchase of obligations of domestic commercial banks, excluding for this purpose, foreign branches of domestic commercial banks. For purposes of this limitation, the U.S. Government and its political subdivisions are not considered members of any industry. Whether a Fund is concentrating in an industry shall be determined in accordance with the 1940 Act, as interpreted or modified from time to time by any regulatory authority having jurisdiction. |
| 2. | Borrow money or issue senior securities, except as permitted under the 1940 Act, as interpreted or modified from time to time by any regulatory authority having jurisdiction. |
| 3. | With respect to 75% of its total assets, purchase securities of an issuer (other than the U.S. Government, its agencies, instrumentalities or authorities or repurchase agreements fully collateralized by U.S. Government securities and other investment companies) if (a) such purchase would, at the time, cause more than 5% of the Fund’s total assets taken at market value to be invested in the securities of such issuer; or (b) such purchase would, at the time, result in more than 10% of the outstanding voting securities of such issuer being held by the Fund. |
| 4. | Invest for the primary purpose of control or management. |
| 5. | Purchase physical commodities or contracts relating to physical commodities. |
| 6. | Purchase or sell real estate unless as a result of ownership of securities or other instruments, but this shall not prevent the Funds from investing in securities or other instruments backed by real estate or interests therein or in securities of companies that deal in real estate or mortgages. |
| 7. | Act as an underwriter of securities of other issuers, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed an underwriter under applicable laws. |
| 8. | Make loans except as permitted under the 1940 Act, as interpreted or modified from time to time by any regulatory authority having jurisdiction. |
2
For purposes of applying the limitation set forth in number 1 above, according to the current interpretation by the U.S. Securities and Exchange Commission (“SEC”), a Fund would be concentrated in an industry if 25% or more of its total assets, based on market value at the time of purchase, were invested in that industry. The Funds’ concentration policy permits investment, without limit, in obligations of domestic commercial banks issued by (i) U.S. banks and (ii) U.S. branches of foreign banks (in circumstances in which the U.S. branches of foreign banks are subject to the same regulation as U.S. banks). For purposes of applying the limitation set forth in number 1 above, obligations of domestic commercial banks include fixed and variable rate certificates of deposit, time deposits, bankers’ acceptances, and other short-term obligations issued by such domestic commercial banks (not including commercial paper issued by such banks), as described under “Additional Information Concerning Fund Investments – Obligations of Banks and Other Financial Services Companies.” To the extent that such investments are consistent with a Fund’s investment objective and policies, the Fund may concentrate in such instruments when, in the opinion of the Advisor, the yield, marketability and availability of investments meeting the Fund’s quality standards in the banking industry justify any additional risks associated with the concentration of the Fund’s assets in such industry. Because Government Obligations Fund and Treasury Obligations Fund invest solely in U.S. government securities, U.S. Treasury obligations, or repurchase agreements secured by such securities, these funds will not invest in any industry. For purposes of each Fund’s concentration limitation discussed above, with respect to any investment in another money market fund, the Fund looks through to the holdings of such underlying money market fund.
For purposes of applying the limitation set forth in number 2 above, under the 1940 Act as currently in effect, the Funds are not permitted to issue senior securities, except that a Fund may borrow from any bank if immediately after such borrowing the value of such Fund’s total assets is at least 300% of the principal amount of all of the Fund’s borrowings (i.e., the principal amount of the borrowings may not exceed 33 1/3% of the Fund’s total assets). In the event that such asset coverage shall at any time fall below 300% the Fund shall, within three days thereafter (not including Sundays and holidays), reduce the amount of its borrowings to an extent that the asset coverage of such borrowings shall be at least 300%.
For purposes of applying the limitation set forth in number 8 above, there are no limitations with respect to unsecured loans made by a Fund to an unaffiliated party. However, when a Fund loans its portfolio securities, the obligation on the part of the Fund to return collateral upon termination of the loan could be deemed to involve the issuance of a senior security within the meaning of Section 18(f) of the 1940 Act. In order to avoid a violation of Section 18(f), a Fund may not make a loan of portfolio securities if, as a result, more than one-third of its total asset value (at market value computed at the time of making a loan) would be on loan. The Funds currently do not intend to make loans, unsecured or otherwise, except to the extent that investments in debt securities in accordance with Rule 2a-7 of the 1940 Act (“Rule 2a-7”) (as discussed below under “Additional Restrictions”) would be deemed to be loans.
Non-Fundamental Investment Restrictions
The following restrictions are non-fundamental and may be changed by the Board without a shareholder vote.
The Funds will not:
| 1. | Sell securities short. |
| 2. | Borrow money in an amount exceeding 10% of a Fund’s total assets. The Funds will not borrow money for leverage purposes. For the purpose of this investment restriction, the purchase of securities on a when-issued or delayed delivery basis shall not be deemed the borrowing of money. A Fund will not make additional investments while its borrowings exceed 5% of total assets. |
| 3. | Invest more than 5% of their total assets in illiquid securities. |
3
The Funds may not invest in obligations of any affiliate of U.S. Bancorp, including U.S. Bank National Association (“U.S. Bank”).
FAF has received an exemptive order (Investment Company Act Release No. 22589 dated March 28, 1997) from the SEC under which short-term investments and repurchase agreements may be entered into on a joint basis by the Funds and other funds advised by U.S. Bancorp Asset Management, Inc. (“USBAM” or the “Advisor”).
FAF has also received an exemptive order (Investment Company Act Release No. 25526 dated April 15, 2002) from the SEC which permits the Funds to participate in an interfund lending program pursuant to which the Funds and other funds advised by the Advisor may lend money directly to each other for emergency or temporary purposes. The program is subject to a number of conditions designed to ensure fair and equitable treatment of all participating funds, including the following: (1) no Fund may borrow money through the program unless it receives a more favorable interest rate than a rate approximating the lowest interest rate at which bank loans would be available to any of the participating funds under a loan agreement; and (2) no Fund may lend money through the program unless it receives a more favorable return than that available from an investment in repurchase agreements and, to the extent applicable, money market cash sweep arrangements. In addition, a Fund may participate in the program only if and to the extent that such participation is consistent with the Fund’s investment objectives and policies (for instance, money market funds would normally participate only as lenders because they rarely need to borrow cash to meet redemptions). The duration of any loans made under the interfund lending program will be limited to the time required to receive payment for the securities sold, but in no event more than 7 days. All loans will be callable by the lending Fund on one business day’s notice. A Fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to a lending Fund could result in a lost investment opportunity or additional costs. The program is subject to the oversight and periodic review of the Board of the participating Funds.
The Funds are subject to the investment restrictions of Rule 2a-7 in addition to other policies and restrictions discussed herein. Pursuant to Rule 2a-7, each Fund is required to invest exclusively in securities that mature within 397 days from the date of purchase and to maintain a weighted average maturity of not more than 60 days and a weighted average life of not more than 120 days. Under Rule 2a-7, securities that are subject to specified types of demand or put features may be deemed to mature at the next demand or put date although they have a longer stated maturity. Rule 2a-7 also requires that all investments by each Fund be limited to U.S. dollar-denominated investments that (a) present “minimal credit risk” and (b) are at the time of acquisition “Eligible Securities.” Eligible Securities are securities (i) with remaining maturities of 397 calendar days or less that the Board or its delegee determines presents minimal credit risks to the Fund, which determination must include an analysis of the capacity of a security’s issuer or guarantor (including the provider of a conditional demand feature, when applicable) to meet its financial obligations. Such analysis must include, to the extent appropriate, consideration of the following factors with respect to the security’s issuer or guarantor: (a) financial condition, (b) sources of liquidity, (c) ability to react to future market-wide and issuer- or guarantor- specific events, including the ability to repay debt in a highly adverse situations; and (d) strength of the issuer or guarantor’s industry within the economy and relative to economic trends, and the issuer or guarantor’s competitive position within its industry; (ii) that are issues by a registered investment company that is a money market fund; or (iii) that is a government security. The Advisor, pursuant to delegation by the Board, is responsible for determining that the Funds’ investments present only “minimal credit risk” and are Eligible Securities. Such determinations are subject to the oversight of, and are made pursuant to written guidelines and procedures established by, the Board.
Rule 2a-7 requires, among other things, that each Fund may not invest, other than in U.S. “Government Securities” (as defined in the 1940 Act), more than 5% of its total assets in securities issued by the issuer of the security. Each Fund must comply with weekly liquidity standards that require a Fund to hold at least 30% of its total assets in cash, direct obligations of the U.S. Government, agency discount notes with remaining maturities of 60 days or less, or securities convertible into cash within five business days. Each Fund must also comply with daily liquidity standards that require a Fund to hold at least 10% of its total assets in cash, direct obligations of the U.S. Government,
4
or securities convertible into cash within one business day. Each Fund is limited to investing no more than 5% of its total assets in illiquid securities.
As required by current SEC regulations, under normal market conditions, Government Obligations Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S. government securities, including repurchase agreements secured by U.S. government securities, and Treasury Obligations Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S. Treasury obligations, including repurchase agreements secured by U.S. Treasury obligations. Government Obligations Fund and Treasury Obligations Fund will each provide shareholders with at least 60 days advance notice before changing these policies. For purposes of each Fund’s policy, with respect to any investment in another money market fund, the Fund looks through to the holdings of such underlying money market fund.
Additional Information Concerning Fund Investments
The principal investment strategies of the Funds are set forth in the Funds’ current Prospectuses under “Fund Summaries.” This section describes in additional detail certain of the Funds’ principal investment strategies and other non-principal investment strategies. The Funds have attempted to identify investment strategies that will be employed in pursuing their investment objectives. Additional information concerning the Funds’ investment restrictions is set forth above under “Investment Restrictions.”
If a percentage limitation referred to in this SAI or in the Prospectuses is adhered to at the time of an investment, a later increase or decrease in percentage resulting from changes in values of assets will not constitute a violation of such limitation except in the case of the limitations on illiquid investments and borrowing from banks.
The securities in which the Funds invest may not yield as high a level of current income as longer term or lower grade securities. These other securities may have less stability of principal, be less liquid, and fluctuate more in value than the securities in which the Funds invest. All securities in each Fund’s portfolio are purchased with and payable in U.S. dollars.
Government Obligations Fund, as a non-principal investment strategy, may separately arrange for guarantees, letters of credit, or other forms of credit enhancement agreements (collectively, “Guarantees”) for the purpose of further securing the payment of principal and/or interest on its investment securities. Although each investment security, at the time it is purchased, must meet the Fund’s creditworthiness criteria, Guarantees sometimes are purchased from banks and other institutions (collectively, “Guarantors”) when the Advisor, through yield and credit analysis, deems that credit enhancement of certain securities is advisable.
Lending of Portfolio Securities
In order to generate additional income, each of the Funds may lend portfolio securities representing up to one-third of the value of its total assets to broker-dealers, banks or other institutional borrowers of securities. The Funds do so as a principal investment strategy. If the Funds engage in securities lending, distributions paid to shareholders from the resulting income will not be excludable from a shareholder’s gross income for income tax purposes. As with other extensions of credit, there may be risks of delay in recovery of the securities or even loss of rights in the collateral should the borrower of the securities fail financially. In these loan arrangements, the Funds will receive collateral in the form of cash, U.S. Government securities or other high-grade debt obligations equal to at least 102% of the value of the securities loaned at the inception of each loan. Collateral is marked to market daily. When a Fund lends portfolio securities, it continues to be entitled to the interest payable on the loaned securities and, in addition, receives interest on the amount of the loan at a rate negotiated with the borrower. The Funds will pay a portion of the income earned on the lending transaction to the placing broker and may pay administrative and custodial fees (including fees to U.S. Bank) in connection with these loans.
5
U.S. Bank acts as securities lending agent for the Funds and receives separate compensation for such services, subject to compliance with conditions contained in an SEC exemptive order permitting U.S. Bank to provide such services and receive such compensation. U.S. Bank receives fees up to 20% of each Fund’s net income from securities lending transactions and pays half of such fees to USBAM for certain securities lending services provided by USBAM. This may create a financial incentive for USBAM to increase its securities lending revenue by lending out as many portfolio securities as possible. To safeguard against this potential conflict of interest, the Board has adopted procedures designed to ensure that the fee arrangement and the other terms governing the relationship between each Fund and U.S. Bank, acting as securities lending agent for the Fund, are fair.
Certain of the debt obligations (including certificates of participation, variable rate demand notes, commercial paper and other short-term obligations) which the Funds may purchase may be backed by an unconditional and irrevocable letter of credit, or other form of credit or liquidity support, of a bank, savings and loan association or insurance company which assumes the obligation for payment and interest in the event of default by the issuer. Only banks, savings and loan associations, and insurance companies which, in the opinion of the Advisor, are of comparable quality to issuers of other permitted investments of the Funds, may be used for letter of credit-backed investments.
Each of the Funds may invest, to the extent permitted by the 1940 Act, in securities issued by other money market funds, provided that the permitted investments of such other money market funds constitute permitted investments of the investing Fund as a non-principal investment strategy. As a shareholder of another investment company, a Fund would bear, along with other shareholders, its pro rata portion of that company’s expenses, including advisory fees. These expenses would be in addition to the expenses that the Fund bears directly in connection with its own operations. Investment companies in which the Funds may invest may also impose a sales or distribution charge in connection with the purchase or redemption of their shares and other types of commissions or charges. Such charges will be payable by the Funds and, therefore, will be borne indirectly by their shareholders. The money market funds in which the Funds may invest include other money market funds advised by the Advisor.
Each Fund may engage in repurchase agreements as a principal investment strategy. A repurchase agreement involves the purchase by a Fund of securities with the agreement that, after a stated period of time, the original seller (the “counterparty”) will buy back the same securities (“collateral”) at a predetermined price or yield. Under normal market conditions, repurchase agreements permit the Funds to maintain liquidity and earn income over periods of time as short as overnight. Each Fund may enter into repurchase agreement transactions that are collateralized fully as defined in Rule 5b-3(c)(1) of the 1940 Act, which has the effect of enabling a Fund to look to the collateral, rather than the counterparty, for determining whether its assets are “diversified” for 1940 Act purposes. Irrespective of the type of collateral underlying a repurchase agreement, a Fund must determine that a repurchase obligation with a particular counterparty involves minimal credit risk to the Fund and otherwise satisfies the credit quality standards applicable to the acquisition of an instrument issued by such counterparty in compliance with Rule 2a-7.
Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. The Funds may also invest in tri-party repurchase agreements. Securities held as collateral for tri-party repurchase agreements are maintained in a segregated account by an unaffiliated third-party custodian bank until the maturity of the repurchase agreement. The market value of the collateral underlying the repurchase agreement will be determined on each business day. If at any time the market value of the collateral falls below the repurchase price under the repurchase agreement (including any accrued interest), the appropriate Fund will promptly receive additional collateral (so the total collateral is an amount at least equal to the repurchase price plus accrued interest).
6
Repurchase agreements involve certain risks not associated with direct investments in securities. If the counterparty defaults on its obligation to repurchase as a result of its bankruptcy or otherwise, the purchasing Fund will seek to sell the collateral, which could involve costs or delays. Although collateral will at all times be maintained in an amount at least equal to the repurchase price under the agreement (including accrued interest), a Fund would suffer a loss if the proceeds from the sale of the collateral were less than the agreed-upon repurchase price. The Advisor will monitor the creditworthiness of the firms with which the Funds enter into repurchase agreements.
Each Fund may invest in securities issued or guaranteed as to principal or interest by the U.S. Government, or agencies or instrumentalities of the U.S. Government. Making such investments is a principal investment strategy for each Fund. These investments include direct obligations of the U.S. Treasury, such as U.S. Treasury bonds, notes, and bills. These Treasury securities are essentially the same except for differences in interest rates, maturities, and dates of issuance. In addition to Treasury securities, Government Obligations Fund may invest in securities, such as notes, bonds, and discount notes, which are issued or guaranteed by agencies of the U.S. Government and various instrumentalities which have been established or sponsored by the U.S. Government. Except for U.S. Treasury securities, these U.S. Government obligations, even those which are guaranteed by federal agencies or instrumentalities, may or may not be backed by the “full faith and credit” of the United States. In the case of securities not backed by the full faith and credit of the United States, the investor must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States itself in the event the agency or instrumentality does not meet its commitment. The Advisor considers securities guaranteed by an irrevocable letter of credit issued by a government agency to be guaranteed by that agency.
U.S. Treasury obligations include bills, notes and bonds issued by the U.S. Treasury and separately traded interest and principal component parts of such obligations that are transferable through the Federal book-entry system, which are known as Separately Traded Registered Interest and Principal Securities (“STRIPS”). STRIPS are sold as zero coupon securities, which means that they are sold at a substantial discount and redeemed at face value at their maturity date without interim cash payments of interest or principal. This discount is accreted over the life of the security, and such accretion will constitute the income earned on the security for both accounting and tax purposes. Because of these features, such securities may be subject to greater interest rate volatility than interest paying U.S. Treasury obligations. A Fund’s investments in STRIPS will be limited to components with maturities less than or equal to 397 days and the Funds will not actively trade such components.
Variable and Floating Rate Instruments
Certain of the obligations in which the Funds may invest may be variable or floating rate obligations in which the interest rate is adjusted either at predesignated periodic intervals (variable rate) or when there is a change in the index rate of interest on which the interest rate payable on the obligation is based (floating rate). Interest rates on these securities are ordinarily tied to, and represent a percentage of, a widely recognized interest rate, such as the yield on 90-day U.S. Treasury bills or the prime rate of a specified bank. These rates may change as often as twice daily. Generally, changes in interest rates will have a smaller effect on the market value of variable and floating rate securities than on the market value of comparable fixed-income obligations. Thus, investing in variable and floating rate securities generally affords less opportunity for capital appreciation and depreciation than investing in comparable fixed-income securities. Variable or floating rate obligations may be combined with a put or demand feature (e.g., variable rate demand obligations or notes) that entitles the holder to the right to demand repayment in full or to resell at a specific price and/or time. Variable or floating rate obligations with a demand feature enable the Funds to purchase instruments with a stated maturity in excess of 397 calendar days in accordance with Rule 2a-7, which allows the Funds to consider certain of such instruments as having maturities that are less than the maturity date on the face of the instrument.
Variable and floating rate instruments may include variable amount master demand notes that permit the indebtedness thereunder to vary in addition to providing for periodic adjustments in the interest rate. There may be
7
no active secondary market with respect to a particular variable or floating rate instrument. Nevertheless, the periodic readjustments of their interest rates tend to assure that their value to a Fund will approximate their par value. Illiquid variable and floating rate instruments (instruments that are not payable upon seven days’ notice and do not have an active trading market) that are acquired by a Fund are subject to the Fund’s percentage limitations regarding securities that are illiquid or not readily marketable. USBAM will continuously monitor the creditworthiness of issuers of variable and floating rate instruments in which the Funds invest and the ability of issuers to repay principal and interest.
When-Issued and Delayed Delivery Securities
Each Fund may purchase securities on a when-issued or delayed delivery basis, although none of the Funds do so as a principal investment strategy. The settlement dates for these types of transactions are determined by mutual agreement of the parties and may occur a month or more after the parties have agreed to the transaction. Securities purchased on a when-issued or delayed delivery basis are subject to market fluctuation and no interest accrues to the Fund during the period prior to settlement. At the time a Fund commits to purchase securities on a when-issued or delayed delivery basis, it will record the transaction and thereafter reflect the value, each day, of such security in determining its net asset value. At the time of delivery of the securities, the value may be more or less than the purchase price. The Funds do not receive income from these securities until such securities are delivered. Each Fund will maintain cash or cash equivalents or other portfolio securities equal in value to commitments for such when-issued or delayed delivery securities. A Fund will not purchase securities on a when issued or delayed delivery basis if, as a result thereof, more than 15% of that Fund’s net assets would be so invested.
Zero-Coupon and Step-Up Coupon Securities
Government Obligations Fund may invest in zero-coupon securities and step-up coupon securities as a non-principal investment strategy. These securities are debt securities that do not make regular cash interest payments. Zero-coupon securities are securities that make no periodic interest payments, but are instead sold at discounts from face value. Step-up coupon bonds are debt securities that may not pay interest for a specified period of time and then, after the initial period, may pay interest at a series of different rates. If these securities do not pay current cash income, the market prices of these securities would generally be more volatile and likely to respond to a greater degree to changes in interest rates than the market prices of securities having similar maturities and credit qualities that pay cash interest periodically.
For liquidity and to respond to unusual market conditions, each Fund may hold all or a significant portion of their total assets in cash for temporary defensive purposes. This may result in a lower yield and prevent the Funds from meeting their investment objectives.
8
The Funds generally intend to hold their portfolio securities to maturity. In certain instances, however, a Fund may dispose of its portfolio securities prior to maturity when it appears such action will be in the best interest of the Fund because of changing money market conditions, redemption requests, or otherwise. A Fund may attempt to maximize the total return on its portfolio by trading to take advantage of changing money market conditions and trends or to take advantage of what are believed to be disparities in yield relationships between different money market instruments. Because each Fund invests in short-term securities and manages its portfolio as described above in “Investment Restrictions” and “Additional Information Concerning Fund Investments” and, as set forth in the “Fund Summaries” sections of the Funds’ Prospectuses, each Fund’s portfolio will turn over several times a year. Because brokerage commissions as such are not usually paid in connection with the purchase or sale of the securities in which the Funds invest and because the transactional costs are small, the high turnover is not expected to materially affect net asset values or yields. Securities with maturities of less than one year are excluded from required portfolio turnover rate calculations.
Disclosure of Portfolio Holdings
In order to comply with Rule 2a-7, information concerning the Funds’ portfolio holdings, as well as their weighted average maturity and weighted average life, is posted on the Funds’ website (www.firstamericanfunds.com) typically five business days after the end of each month and remains posted on the website for at least six months thereafter. In addition, each Fund files more detailed portfolio information with the SEC on Form N-MFP no later than five business days after the end of each month, which becomes publicly available on the SEC’s website (www.sec.gov) 60 days after the end of the month to which the information pertains. Each Fund is also required to file its portfolio holdings schedule with the SEC on a quarterly basis. This schedule is filed with each Fund’s annual and semi-annual reports on Form N-CSR for the second and fourth fiscal quarters and on Form N-Q for the first and third fiscal quarters. These filings are generally available within 60 days of the end of the relevant Fund’s fiscal quarter. A Fund may publish complete portfolio holdings information more frequently if it has a legitimate business purpose for doing so.
Each Fund’s portfolio holdings are also posted on the Funds’ website on a weekly basis, typically on the first business day of each week. This weekly information generally reflects holdings as of the previous Thursday and remains posted on the website until the next publication date. Until such time as it is posted, it will be Undisclosed Holdings Information, as defined below, and subject to the Funds’ procedures regarding the disclosure of Undisclosed Holdings Information.
The Board has adopted policies and procedures (the “Disclosure Policies”), which prohibit the release of information concerning portfolio holdings, or information derived therefrom (“Undisclosed Holdings Information”), that has not been made public through SEC filings or the Funds’ website. Different exceptions to this prohibition may apply depending on the type of third party that receives the Undisclosed Holdings Information. The Disclosure Policies are designed to prevent the use of portfolio holdings information to trade against the Funds, or otherwise use the information in a way that would harm the Funds, and to prevent selected investors from having nonpublic information that will allow them to make advantageous decisions with respect to purchasing and selling Fund shares.
Disclosure within the Advisor and Its Affiliates and to Fund Directors
Undisclosed Holdings Information is provided, or otherwise made available, on a daily basis (a) without prior approval, to individuals who are employed by the Advisor and who have a need to know the information, such as investment, compliance and treasury personnel, and (b) to individuals employed by affiliates of the Advisor who are not otherwise entitled to receive such information under “Disclosure to Fund Service Providers and Prospective Service Providers,” below, if (1) such individuals are subject to the Advisor’s Code of Ethics, or that of an affiliate,
9
which imposes a duty not to trade on such information; and (2) the Funds’ Chief Compliance Officer (“CCO”) has determined that improper use of such information by such individuals is not likely to affect the Funds in any material respect.
Undisclosed Holdings Information also may be provided without prior approval to directors of the Funds and the directors’ service providers, such as counsel, as part of the materials for regular or special board of directors meetings.
Disclosure to Fund Service Providers and Prospective Service Providers
The Funds’ officers may authorize disclosure of Undisclosed Holdings Information to eligible service providers and prospective service providers where such service providers require the information in the normal course of business in order to provide services to the Funds, or in anticipation of providing such services in the future. Undisclosed Holdings Information is provided, or otherwise made available, to the Advisor (as described above), custodians, auditors, accounting service providers, administrators, transfer agents, securities lending agents, outside accountants, outside counsel, financial printers, pricing services, companies that provide analytical or statistical information (including Factset Research Systems and Bloomberg LP), ratings and ranking agencies (including Morningstar, Lipper Analytical Services, Moody’s, and Standard & Poor’s Corporation), entities that provide trading, research and other investment-related services, information aggregators (including Crane Data and iMoneyNet), and financial intermediaries that include the Funds in their investment programs. The Undisclosed Holdings Information may be provided to eligible service providers as it is required, with any frequency and without any delay, provided that such organization has entered into a written agreement with the Funds, or the Funds’ authorized service providers, to maintain the information in confidence and to not use the information for any purpose other than the performance of its contractual responsibilities and duties.
Disclosure to Investors, Prospective Investors, and Investor Consultants
The Disclosure Policies provide that Undisclosed Holdings Information may be provided to individual and institutional investors, prospective investors, or investor consultants with the prior approval of the CCO in the specific instance. The CCO will only approve such disclosure after concluding that it is in the best interests of the Fund in question and its shareholders and if the recipient has agreed in writing to maintain the information in confidence and not to trade on the basis of any such information that is material nonpublic information. In considering a request for such approval, the CCO also shall identify and consider any conflict of interest between the Fund and its shareholders, on the one hand, and the Advisor and its affiliates, on the other, which is presented by the request. If the CCO determines that there is a conflict of interest, he or she will approve such disclosure only if he or she determines that such conflict is materially mitigated by the execution of a confidentiality agreement and that, despite such conflict of interest, disclosure is in the best interests of the relevant Fund and its shareholders. The CCO is responsible for the creation of a written record that states the basis for the conclusion that the disclosure is in the best interests of the relevant Fund and its shareholders.
Disclosure as Required by Applicable Law
Undisclosed Holdings Information may be disclosed to any person as required by applicable laws, rules and regulations. For example, such information may be disclosed in response to regulatory requests for information or in response to legal process in litigation matters.
Disclosure of Limited Holdings
Portfolio managers, analysts and other personnel of the Advisor may discuss portfolio information in interviews with members of the media, or in due diligence or similar meetings with clients or prospective purchasers of Fund shares or their representatives. In no case will a material number of portfolio holdings be provided that have not yet been posted on the Funds’ website or filed with the SEC unless the recipient has entered into a written agreement with the Funds to maintain the confidentiality of such information and not to trade on the basis of any
10
such information that is material nonpublic information. In addition, brokers and dealers may be provided with individual portfolio holdings in order to obtain bids or bid and asked prices (if securities held by a Fund are not priced by the Fund’s regular pricing services) or in connection with portfolio transactions.
No Compensation or Consideration
Neither the Funds, nor the Advisor or any affiliate, including the CCO or his or her designee, will solicit or accept any compensation or other consideration in connection with the disclosure of Undisclosed Holdings Information or information derived therefrom.
Chief Compliance Officer Reports to Fund Board
The CCO must provide a quarterly report to the Board addressing exceptions to these policies and procedures during the preceding quarter, if any.
Detective and Corrective Action
Any unauthorized release of Undisclosed Holdings Information which comes to the attention of an employee of the Advisor shall be reported to the CCO. The CCO shall recommend an appropriate sanction to be imposed by the individual’s supervisor if the individual releasing such information is an employee of the Advisor or other appropriate action if the individual is not an employee of the Advisor.
Designee of Chief Compliance Officer
In the event of the absence or unavailability of the CCO, all of the obligations of the CCO may be performed by the Advisor’s Chief Counsel.
*****
The following is a list of persons, other than the Advisor and its affiliates, that have been approved to receive Undisclosed Holdings Information concerning the Funds; however, certain persons may not receive such information concerning the Funds:
ADP Broker-Dealer, Inc. American Financial Printing, Inc. Aon Hewitt Ashland Partners & Company LLP Bank of America Merrill Lynch Bank of Montreal Bank of New York Mellon Bank of Nova Scotia Barclays Capital, Inc. Bloomberg LP BNP Paribas BNP Paribas Prime Brokerage, Inc. BNP Paribas Securities Corp. Broadridge Systems Ceridian Corporation Charles Schwab & Co., Inc. Comerica Bank Country Financial Crane Data Credit Agricole Corporate & Investment Bank Credit Suisse Securities (USA) LLC |
Deutsche Bank Securities, Inc. Dorsey & Whitney LLP Ernst & Young LLP FactSet Research Systems FIS Brokerage & Securities Services LLC Fitch, Inc. FT Interactive Data Goldman Sachs & Co. LLC HSBC Bank PLC HSBC Securities (USA) Inc. iMoneyNet, Inc. ING Financial Markets LLC Jefferies LLC J.P. Morgan Securities, LLC KPMG LLP Lipper Analytical Services Markit Merrill Lynch, Pierce, Fenner & Smith Incorporated Moody’s Investor Services Morgan Stanley & Co. LLC Morningstar, Inc. |
MS Securities Services, Inc. Piper Jaffray & Co. Pricing Direct RBC Capital Markets, LLC RBS Securities, Inc. Ropes & Gray LLP SG Americas Securities, LLC Societe Generale Standard & Poor’s Corporation /JJ Kenny Standard & Poor’s Rating Services State Street Bank & Trust Co. SVB Asset Management TD Securities (USA) LLC Thomson Reuters LLC UBS Securities, LLC Vision Financial Markets LLC Wells Fargo Bank, N.A. Wells Fargo Investments, LLC Wells Fargo Securities, LLC |
11
Directors and Executive Officers
Set forth below is information about the Directors and the officers of FAF. The Board consists entirely of Directors who are not “interested persons” of FAF, as that term is defined in the 1940 Act (“Independent Directors”).
Name,
Address and Year |
Position |
Term
of Office and Length of |
Principal
Occupation During |
Number
of Portfolios in |
Other Held by Director2 |
David K. Baumgardner P.O. Box 1329 Minneapolis, MN 55440-1329 (1956) |
Director | Term expiring earlier of death, resignation, removal, disqualification, or successor duly elected and qualified; Director of FAF since January 2016 | CFO, Smyth Companies, LLC (commercial package printing) (1990 to present). Formerly, Certified Public Accountant at a large regional CPA firm (1978-1986). Independent Director, First American Fund Complex since 2016 |
First American Funds Complex: 1 registered investment company, including 6 portfolios | None |
Mark E. Gaumond P.O. Box 1329 Minneapolis, MN 55440-1329 (1950)
|
Director | Term expiring earlier of death, resignation, removal, disqualification, or successor duly elected and qualified; Director of FAF since January 2016 | Retired. Formerly, Senior Vice Chair (Americas), Ernst & Young LLP (2006-2010). Certified Public Accountant and member of the American Institute of Certified Public Accountants. Director, Fishers Island Development Corporation and the Walsh Park Benevolent Corporation. Former Director, Cliffs Natural Resources, The California Academy of Sciences and Rayonier, Inc.. Independent Director, First American Fund Complex since 2016
|
First American Funds Complex: 1 registered investment company, including 6 portfolios | Director, Booz Allen Hamilton Holding Corporation (management and technology consulting); Director, Rayonier Advanced Materials, Inc. (materials manufacturer) |
Roger A. Gibson P.O. Box 1329 Minneapolis, MN 55440-1329 (1946) |
Director | Term expiring earlier of death, resignation, removal, disqualification, or successor duly elected and qualified; Director of FAF since October 1997 | Advisor/Consultant, Future Freight™, a logistics/supply chain company; former Director, Diversified Real Asset Income Fund (investment company); former Director, Charterhouse Group, Inc., a private equity firm; non-profit board member; prior to retirement in 2005, served in several executive positions for United Airlines, including Vice President and Chief Operating Officer – Cargo; Independent Director, First American Fund Complex since 1997 | First American Funds Complex: 1 registered investment company, including 6 portfolios | None |
Richard K. Riederer P.O. Box 1329 Minneapolis, MN 55440-1329 (1944) |
Chair; Director | Chair term three years; Director term expiring earlier of death, resignation, removal, disqualification, or successor duly elected and qualified; Chair of FAF’s Board since January | Owner and Chief Executive Officer, RKR Consultants, Inc., a consulting company providing advice on business strategy, mergers and acquisitions; former Director, Diversified Real Asset Income Fund (investment company); former | First American Funds Complex: 1 registered investment company, including 6 portfolios | None |
12
Name,
Address and Year |
Position |
Term
of Office and Length of Time Served |
Principal Occupation During Past
5 Years and Other Relevant |
Number
of Portfolios in |
Other |
| 2017; Director of FAF since August 2001 | Director, Cliffs Natural Resources, Inc.; Certified Financial Analyst; non-profit board member; former Chief Executive Officer and President, Weirton Steel Corporation; former Vice President and Treasurer, Harnischfeger Industries, a capital machinery manufacturer; former Treasurer and Director of Planning, Allis Chalmers Corporation, an equipment manufacturing company; former Chairman, American Iron & Steel Institute, a North American steel industry trade association; Independent Director, First American Fund Complex since 2001 and Firstar Funds 1988-2001 | ||||
James M. Wade P.O. Box 1329 Minneapolis, MN 55440-1329 (1943) |
Director | Term expiring earlier of death, resignation, removal, disqualification, or successor duly elected and qualified; Director of FAF since August 2001 | Owner and President, Jim Wade Homes, a homebuilding company; former Director, Diversified Real Asset Income Fund (investment company); formerly, Vice President and Chief Financial Officer, Johnson Controls, Inc.; Independent Director, First American Fund Complex since 2001 and Firstar Funds 1988-2001 | First American Funds Complex: 1 registered investment company, including 6 portfolios | None |
| 1 | Includes each Director’s principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to each Director’s qualifications to serve as a Director, which contributed to the conclusion that each Director should serve as a Director for FAF. |
| 2 | Includes only directorships in a company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of Section 15(d) of the Exchange Act, or any company registered as an investment company under the 1940 Act. |
Name,
Address, and Year |
Position(s)
Held |
Term
of Office and Length |
Principal Occupation(s) During Past Five Years |
Eric J. Thole U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402 (1972) 1 |
President | Re-elected by the Board annually; President of FAF since June 2014; Vice President of FAF from January 2011 through June 2014 | Chief Executive Officer and President, U.S. Bancorp Asset Management, Inc. since June 2014; Chief Operating Officer, U.S. Bancorp Asset Management, Inc. from August 2012 through June 2014 |
James D. Palmer U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402 (1964) 1 |
Vice President | Re-elected by the Board annually; Vice President of FAF since June 2014 | Chief Investment Officer, U.S. Bancorp Asset Management, Inc. |
13
Name,
Address, and Year |
Position(s)
Held |
Term
of Office and Length |
Principal Occupation(s) During Past Five Years |
Jill M. Stevenson U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402 (1965) 1 |
Treasurer | Re-elected by the Board annually; Treasurer of FAF since January 2011; Assistant Treasurer of FAF from September 2005 through December 2010 | Head of Operations and Mutual Funds Treasurer, U.S. Bancorp Asset Management, Inc. since September 2014; Mutual Funds Treasurer, U.S. Bancorp Asset Management, Inc. from January 2011 through September 2014 |
Brent G. Smith U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402 (1981) 1 |
Assistant Treasurer | Re-elected by the Board annually; Assistant Treasurer of FAF since September 2014 | Assistant Mutual Funds Treasurer, U.S. Bancorp Asset Management, Inc. since September 2014; prior thereto, Senior Fund Accountant, U.S. Bancorp Asset Management, Inc. |
Ruth M. Mayr U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402 (1959) 1 |
Chief Compliance Officer
|
Re-elected by the Board annually; Chief Compliance Officer of FAF since January 2011
|
Chief Compliance Officer, U.S. Bancorp Asset Management, Inc. |
Gayle M. Kasmani U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402 (1948) 1 |
Anti-Money Laundering Officer | Re-elected by the Board annually; Anti-Money Laundering Officer of FAF since April 2015 | Compliance Manager, U.S. Bancorp Asset Management, Inc. |
Richard J. Ertel U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402 (1967) 1 |
Secretary | Re-elected by the Board annually; Secretary of FAF since January 2011; Assistant Secretary of FAF from June 2006 through December 2010 and from June 2003 through August 2004 | Chief Counsel, U.S. Bancorp Asset Management, Inc. |
Scott F. Cloutier U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402 (1973) 1 |
Assistant Secretary | Re-elected by the Board annually; Assistant Secretary of FAF since September 2012 | Senior Corporate Counsel, U.S. Bancorp Asset Management, Inc. |
| 1 | Messrs. Thole, Palmer, Smith, Ertel and Cloutier and Mses. Stevenson, Mayr and Kasmani are each officers and/or employees of U.S. Bancorp Asset Management, Inc., which serves as investment advisor and administrator for FAF. |
The Board is responsible for overseeing generally the operation of the Funds. The Board has approved an investment advisory agreement with USBAM, as well as other contracts with USBAM, its affiliates, and other service providers.
As noted above, the Board consists entirely of Independent Directors. The Directors also serve as directors of Institutional Prime Obligations Fund, Retail Prime Obligations Fund, Retail Tax Free Obligations Fund and U.S. Treasury Money Market Fund (collectively with the Funds, the “Fund Complex”). Taking into account the number, the diversity and the complexity of the funds overseen by the Directors and the aggregate amount of assets under management in the Fund Complex, the Board has determined that the efficient conduct of its affairs makes it desirable to delegate
14
responsibility for certain matters to committees of the Board. These committees, which are described in more detail below, review and evaluate matters specified in their charters and make recommendations to the Board as they deem appropriate. Each committee may use the resources of the Funds’ counsel and auditors, counsel to the Independent Directors, if any, as well as other experts. The committees meet as often as necessary, either in conjunction with regular meetings of the Board or otherwise.
The Funds are subject to a number of risks, including, among others, investment, compliance, operational, and valuation risks. The Board’s role in risk oversight of the Funds reflects its responsibility to oversee generally, rather than to manage, the operations of the Funds. The actual day-to-day risk management with respect to the Funds resides with USBAM and the other service providers to the Funds. In line with the Board’s oversight responsibility, the Board receives reports and makes inquiries at its regular meetings or otherwise regarding various risks. However, the Board relies upon the Funds’ Chief Compliance Officer, who reports directly to the Board, and USBAM (including its Senior Business Line Risk Manager and other members of its management team) to assist the Board in identifying and understanding the nature and extent of such risks and determining whether, and to what extent, such risks may be eliminated or mitigated. Although the risk management policies of USBAM and the other service providers are designed to be effective, those policies and their implementation vary among service providers and over time, and there is no guarantee that they will be effective. Not all risks that may affect the Funds can be identified or processes and controls developed to eliminate or mitigate their occurrence or effects, and some risks are simply beyond any control of the Funds or USBAM, its affiliates or other service providers.
Standing Committees of the Board of Directors
There are currently two standing committees of the Board: Audit Committee and Governance Committee. References to the “Funds” in the committee descriptions below are to the Fund Complex. All committee members are Independent Directors.
Committee Function |
Committee Members |
Number
of Fund Complex Committee Meetings Held During FAF’s Fiscal Year Ended 8/31/17 | |
| Audit Committee | The purposes of the Committee are (1) to oversee the Funds’ accounting and financial reporting policies and practices, their internal controls and, as appropriate, the internal controls of certain service providers; (2) to oversee the quality of the Funds’ financial statements and the independent audit thereof; (3) to assist Board oversight of the Funds’ compliance with legal and regulatory requirements; and (4) to act as a liaison between the Funds’ independent auditors and the full Board. The Audit Committee, together with the Board, has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the outside auditor (or to nominate the outside auditor to be proposed for shareholder approval in any proxy statement). | Roger
A. Gibson (Chair) Richard K. Riederer James M. Wade
|
2 |
| Governance Committee | The Committee has responsibilities relating to (1) Board and Committee composition (including interviewing and recommending to the Board nominees for election as directors; reviewing the independence of all independent directors; reviewing Board composition to determine the appropriateness of adding individuals with different backgrounds or skills; reporting to the Board on which current and potential members of the Audit Committee qualify as Audit Committee Financial Experts; recommending a successor to the Board Chair when a vacancy occurs; consulting with the Board Chair on Committee assignments; and in anticipation of the Board’s request for shareholder approval of a slate of directors, recommending to the Board the slate of directors to be presented for Board and shareholder approval); (2) Committee structure (including, at least annually, reviewing each Committee’s structure | James M. Wade (Chair) David
K. Baumgardner Roger A. Gibson Richard K. Riederer
|
5 |
15
Committee Function |
Committee Members |
Number
of Fund Complex Committee Meetings Held During FAF’s Fiscal Year Ended 8/31/17 |
| and membership and reviewing each Committee’s charter and suggesting changes thereto); (3) director education (including developing an annual education calendar; monitoring independent director attendance at educational seminars and conferences; developing and conducting orientation sessions for new independent directors; and managing the Board’s education program in a cost-effective manner); and (4) governance practices (including reviewing and making recommendations regarding director compensation and director expenses; monitoring director investments in the Funds; monitoring compliance with director retirement policies; reviewing compliance with the prohibition from serving on the board of directors of mutual funds that are not part of the Fund Complex; if requested, assisting the Board Chair in overseeing self-evaluation process; in collaboration with outside counsel, developing policies and procedures addressing matters which should come before the Committee in the proper exercise of its duties; reviewing applicable new industry reports and “best practices” as they are published; reviewing and recommending changes in Board governance policies, procedures and practices; reporting the Committee’s activities to the Board and making such recommendations; reviewing and, as appropriate, recommending that the Board make changes to the Committee’s charter). |
The Governance Committee will consider shareholder recommendations for director nominees in the event there is a vacancy on the Board or in connection with any special shareholders meeting which is called for the purpose of electing directors. FAF does not hold regularly scheduled annual shareholders meetings. There are no differences in the manner in which the Governance Committee evaluates nominees for director based on whether the nominee is recommended by a shareholder.
A shareholder who wishes to recommend a director nominee should submit his or her recommendation in writing to the Chair of the Board (Mr. Riederer) or the Chair of the Governance Committee (Mr. Wade), in either case at First American Funds, P.O. Box 1329, Minneapolis, Minnesota 55440-1329. At a minimum, the recommendation should include:
| ● | the name, address, and business, educational, and/or other pertinent background of the person being recommended; |
| ● | a statement concerning whether the person is “independent” within the meaning of New York Stock Exchange and NYSE MKT listing standards and is not an “interested person” as defined in the 1940 Act; |
| ● | any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and |
| ● | the name and address of the person submitting the recommendation, together with the number of Fund shares held by such person and the period for which the shares have been held. |
The recommendation also can include any additional information that the person submitting it believes would assist the Governance Committee in evaluating the recommendation. Shareholder recommendations for nominations to the Board will be accepted on an ongoing basis and will be kept on file for consideration when there is a vacancy on the Board or prior to a shareholders meeting called for the purpose of electing directors.
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Director Ownership of Securities of the Funds or Advisor
The information in the table below discloses the dollar ranges of (i) each Director’s beneficial ownership in FAF, and (ii) each Director’s aggregate beneficial ownership in all funds within the Fund Complex, including in each case the value of fund shares elected by Directors in the Directors’ deferred compensation plan. The dollar range disclosed is based on the value of the securities as of December 31, 2016.
| Directors | |||||
| Baumgardner | Gaumond | Gibson | Riederer | Wade | |
| Aggregate Holdings – Fund Complex | — | — | — | — | $1-$10,000 |
| Government Obligations Fund | — | — | — | — | — |
| Institutional Prime Obligations Fund | — | — | — | — | — |
| Retail Prime Obligations Fund | — | — | — | — | $1-$10,000 |
| Retail Tax Free Obligations Fund | — | — | — | — | — |
| Treasury Obligations Fund | — | — | — | — | — |
| U.S. Treasury Money Market Fund | — | — | — | — | — |
As of September 30, 2017, none of the Independent Directors or their immediate family members owned, beneficially, or of record, any securities in (i) an investment advisor or principal underwriter of the Funds or (ii) a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with an investment advisor or principal underwriter of the Funds.
The Board has determined that each Director should continue to serve as such based on several factors (none of which alone is decisive). Each Director has served in their role as Director of the Funds since at least October 2006 with the exception of Messrs. Baumgardner and Gaumond who were appointed effective January 1, 2016. Each Director is knowledgeable or will become knowledgeable regarding the Funds’ business and service provider arrangements. In addition, each Director other than Messrs. Baumgardner and Gaumond, has served for a number of years as a director of other funds in the Fund Complex, as indicated in the “Independent Directors” table above. Among the factors the Board considered when concluding that an individual should serve on the Board were the following: (i) the individual’s business and professional experience and accomplishments; (ii) the individual’s ability to work effectively with other members of the Board; (iii) the individual’s prior experience, if any, serving on the boards of public companies and other complex enterprises and organizations; and (iv) how the individual’s skills, experiences and attributes would contribute to an appropriate mix of relevant skills, diversity and experience on the Board. The Board believes that, collectively, the Directors have balanced and diverse qualifications, skills, experiences, and attributes, which allow the Board to operate effectively in governing the Funds and protecting the interests of shareholders. Information about the specific qualifications, skills, experiences, and attributes of each Director, which in each case contributed to the Board’s conclusion that the Director should serve (or continue to serve) as a director of the Funds, is provided in the “Independent Directors” table above.
Effective January 1, 2016, FAF pays Directors who are not paid employees or affiliates of the Funds an annual retainer of $165,000 ($250,000 in the case of the Chair). The Audit Committee Chair receives an additional annual retainer of $15,000 and the Governance Committee Chair receives an additional annual retainer of $12,000. Prior to January 1, 2016, Directors were paid an annual retainer of $145,000 ($217,500 in the case of the Chair). The Audit Committee Chair and Governance Committee Chair each received an additional annual retainer of $11,250. Prior to Prior to January 1, 2015, Directors were paid an annual retainer of $120,000 ($198,750 in the case of the Chair). The Audit Committee Chair and the Governance Committee Chair each received an additional annual retainer of $11,250.
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Directors also receive $3,500 per day when traveling, on behalf of a Fund, out of town on Fund business which does not involve a Board or committee meeting. In addition, Directors are reimbursed for their out-of-pocket expenses in traveling from their primary or secondary residence to Board and committee meetings, on Fund business and to attend mutual fund industry conferences or seminars. The amounts specified above are allocated evenly among the funds in the Fund Complex.
Prior to January 1, 2011, the Directors could elect to defer payment of up to 100% of the fees they received in accordance with a Deferred Compensation Plan (the “Plan”). Under the Plan, a Director could elect to have his or her deferred fees treated as if they had been invested in shares of one or more funds and the amount paid to the Director under the Plan would be determined based on the performance of such investments. Effective January 1, 2011, the Directors may no longer defer payments under the Plan. The prior deferral of fees in accordance with the Plan will have a negligible impact on Fund assets and liabilities and will not obligate the Funds to retain any Director or pay any particular level of compensation. The Funds do not provide any other pension or retirement benefits to Directors.
The following table sets forth information concerning aggregate compensation paid to each Director of FAF (i) by FAF (column 2), and (ii) by FAF (column 5) during the fiscal year ended August 31, 2017. Total compensation reflected does not include the portion of the annual retainer and any additional annual retainer attributable to Mount Vernon Trust, which is paid to Directors by USBAM. No executive officer or affiliated person of FAF received any compensation from FAF in excess of $60,000 during such fiscal period.
Compensation during Fiscal Year Ended August 31, 2017
Name of Person, Position |
Aggregate |
Pension
or Retirement |
Estimated
Annual |
Total
Compensation from |
| David K. Baumgardner, Director | $ | -0- | -0- | $ |
| Mark E. Gaumond, Director | -0- | -0- | ||
| Roger A. Gibson, Director | -0- | -0- | ||
| Leonard W. Kedrowski1, retired Chair | -0- | -0- | ||
| Richard K. Riederer2, Chair | -0- | -0- | ||
| James M. Wade, Director | -0- | -0- |
1 Mr. Kedrowski retired from the Board effective December 31, 2016.
2 Mr. Riederer was appointed Chair of the Board effective January 1, 2017.
FAF, USBAM, and Quasar Distributors, LLC have each adopted a Code of Ethics pursuant to Rule 17j-1 of the 1940 Act. Each of these Codes of Ethics permits personnel to invest in securities for their own accounts, including securities that may be purchased or held by the Fund. These Codes of Ethics are on public file with, and are available from, the SEC.
Investment Advisory and Other Services for the Funds
USBAM, 800 Nicollet Mall, Minneapolis, Minnesota 55402, serves as the investment advisor and manager of the Funds. The Advisor is a wholly owned subsidiary of U.S. Bank, 800 Nicollet Mall, Minneapolis, Minnesota 55402, the nation’s fifth-largest commercial bank. U.S. Bank is, in turn, a wholly-owned subsidiary of U.S. Bancorp, 800 Nicollet Mall, Minneapolis, Minnesota 55402, which is a regional multi-state bank holding company headquartered in Minneapolis, Minnesota. U.S. Bancorp provides a wide range of financial services for consumers, businesses, government entities and other financial institutions. At June 30, 2017, U.S. Bancorp and its subsidiaries had consolidated assets of $463 billion, consolidated deposits of $347.3 billion and shareholders’ equity of $48.3 billion.
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Pursuant to an Investment Advisory Agreement, dated January 20, 1995 (the “Advisory Agreement”), the Funds engaged U.S. Bank, through its First American Asset Management division (“FAAM”), to act as investment advisor for, and to manage the investment of, the series of FAF then in existence. The Advisory Agreement was assigned to the Advisor on May 2, 2001. Under the terms of the Advisory Agreement, each Fund has agreed to pay the Advisor monthly fees calculated on an annual basis equal to 0.10% of the Fund’s average daily net assets (before any waivers).
The Advisory Agreement requires the Advisor to arrange, if requested by FAF, for officers or employees of the Advisor to serve without compensation from the Funds as Directors, officers, or employees of FAF if duly elected to such positions by the shareholders or Directors of FAF. The Advisor has the authority and responsibility to make and execute investment decisions for the Funds within the framework of the Funds’ investment policies, subject to review by the Board. The Advisor is also responsible for monitoring the performance of the various organizations providing services to the Funds, including the Funds’ distributor, shareholder services agent, custodian, and accounting agent, and for periodically reporting to the Board on the performance of such organizations. The Advisor will, at its own expense, furnish the Funds with the necessary personnel, office facilities, and equipment to service the Funds’ investments and to discharge its duties as investment advisor of the Funds.
In addition to the investment advisory fee, each Fund pays all of its expenses that are not expressly assumed by the Advisor or any other organization with which the Fund may enter into an agreement for the performance of services. Each Fund is liable for such nonrecurring expenses as may arise, including litigation to which the Fund may be a party. FAF may have an obligation to indemnify its Directors and officers with respect to such litigation. The Advisor will be liable to the Funds under the Advisory Agreement for any negligence or willful misconduct by the Advisor other than liability for investments made by the Advisor in accordance with the explicit direction of the Board or the investment objectives and policies of the Funds. The Advisor has agreed to indemnify the Funds with respect to any loss, liability, judgment, cost or penalty that a Fund may suffer due to a breach of the Advisory Agreement by the Advisor.
Prior to October 30, 2008, the Advisor had contractually agreed to waive fees and reimburse other fund expenses, so that total fund operating expenses (excluding fees paid for participation in the U.S. Department of the Treasury’s Temporary Guarantee Program for Money Market Funds), as a percentage of average daily net assets, would not exceed certain amounts through October 31, 2009. Effective October 30, 2008, for Treasury Obligations Fund and December 22, 2008, for each other Fund, the Board approved the termination of these fee waivers and reimbursements. However, the Advisor agreed to waive or reimburse certain fees and expenses, and the Board approved the suspension or reduction of 12b-1 payments, as needed, in order to maintain a yield for each share class of each Fund of at least 0%. These waivers and reimbursements by the Advisor are voluntary and may be terminated at any time by the Advisor, unless otherwise set forth in the Prospectuses. In addition, with respect to such voluntary waivers or reimbursements, the Advisor may retain the ability to be reimbursed by the Funds for such amounts prior to the end of the fiscal year. This practice would have the effect of lowering a Fund’s overall expense ratio and of increasing yield to investors, or the converse, at the time such amounts are absorbed or reimbursed, as the case may be.
The Advisor has contractually agreed to limit fund expenses, so that total fund operating expenses, as a percentage of average daily net assets, do not exceed certain amounts through December 31, 2018.
The following table sets forth total advisory fees before and after contractual and/or voluntary waivers for the Funds for the fiscal years ended August 31, 2015, August 31, 2016 and August 31, 2017.
19
Fiscal
Year Ended |
Fiscal
Year Ended |
Fiscal
Year Ended | ||||
Fund |
Advisory
Fee Before Waivers |
Advisory
Fee After Waivers |
Advisory
Fee Before Waivers |
Advisory
Fee After Waivers |
Advisory
Fee Before Waivers |
Advisory
Fee After Waivers |
| Government Obligations Fund | $ 18,636,497 | $ 17,137,706 | $ 19,720,746 | $ 19,720, 746 | $ | $ |
| Treasury Obligations Fund | 8,340,968 | 6,072,448 | 8,513,526 | 8,493,204 | ||
Additional Payments to Financial Intermediaries
In addition to the sales charge payments and the distribution, service and transfer agency fees described in the Prospectuses and elsewhere in this SAI, the Advisor and/or the Distributor may make additional payments out of its own assets to selected intermediaries that attract assets to the Funds (such as brokers, dealers, banks, registered investment advisors, retirement plan administrators and other intermediaries; hereinafter, individually, “Intermediary,” and collectively, “Intermediaries”) pursuant to arrangements involving sales, distribution, shelf space, sub-accounting, administrative or shareholder processing services.
The amounts of these payments could be significant and may create an incentive for an Intermediary or its representatives to recommend or offer shares of the Funds to its customers. The Intermediary may elevate the prominence or profile of the Funds within the Intermediary’s organization by, for example, placing a Fund on a list of preferred or recommended funds, and/or granting the Advisor and/or the Distributor preferential or enhanced opportunities to promote the Funds in various ways within the Intermediary’s organization.
These payments are made pursuant to negotiated agreements with Intermediaries. The payments do not change the price paid by investors for the purchase of a share or the amount a Fund will receive as proceeds from such sales. Furthermore, these payments are not reflected in the fees and expenses listed in the fee table section of the Funds’ Prospectuses and described above because they are not paid by the Funds.
The categories of payments described below are not mutually exclusive, and a single Intermediary may receive payments under all categories.
Marketing Support Payments and Program Servicing Payments
The Advisor and/or the Distributor may make payments for marketing support and/or program servicing to selected Intermediaries that are registered as holders or dealers of record for accounts invested in one or more of the First American Funds or that make First American Fund shares available through employee benefit plans or fee-based advisory programs to compensate them for the variety of services they provide.
Marketing Support Payments. Services for which an Intermediary receives marketing support payments may include business planning assistance, advertising, educating the Intermediary’s personnel about the First American Funds in connection with shareholder financial planning needs, placement on the Intermediary’s preferred or recommended fund company list, and access to sales meetings, sales representatives and management representatives of the Intermediary. In addition, Intermediaries may be compensated for enabling Fund representatives to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client and investor events and other events sponsored by the Intermediary.
The Advisor and/or the Distributor compensates Intermediaries differently depending upon, among other factors, the number or value of Fund shares that the Intermediary sells or may sell, the value of the assets invested in the Funds by the Intermediary’s customers, redemption rates, ability to attract and retain assets, reputation in the industry and the level and/or type of marketing assistance and educational activities provided by the Intermediary. Such payments are generally asset based but also may include the payment of a lump sum.
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Program Servicing Payments. Services for which an Intermediary receives program servicing payments typically include recordkeeping, reporting, or transaction processing, but may also include services rendered in connection with Fund/investment selection and monitoring, employee enrollment and education, plan balance rollover or separation, or other similar services. An Intermediary may perform program services itself or may arrange with a third party to perform program services.
Program servicing payments typically apply to employee benefit plans, such as retirement plans, or fee-based advisory programs, but may apply to retail sales and assets in certain situations. The payments are based on such factors as the type and nature of services or support furnished by the Intermediary and are generally asset based.
Marketing Support and Program Servicing Payment Guidelines. In the case of any one Intermediary, marketing support and program servicing payments are not expected, with certain limited exceptions, to exceed, in the aggregate, 0.47% of the average net assets of Fund shares attributable to that Intermediary on an annual basis. U.S. Bank, N.A. and its affiliates are eligible to receive payments that exceed 0.47% of the average net assets of Fund shares attributable to U.S. Bank, N.A. or its affiliates on an annual basis.
Other Payments
From time to time, the Advisor and/or the Distributor, at its expense, may provide other compensation to Intermediaries that sell or arrange for the sale of shares of the Fund(s), which may be in addition to marketing support and program servicing payments described above. For example, the Advisor and/or the Distributor may: (i) compensate Intermediaries for National Securities Clearing Corporation networking system services (e.g., shareholder communication, account statements, trade confirmations, and tax reporting) on an asset based or per account basis; (ii) compensate Intermediaries for providing Fund shareholder trading information; (iii) make one-time or periodic payments to reimburse selected Intermediaries for items such as ticket charges (i.e., fees that an Intermediary charges its representatives for effecting transactions in Fund shares) of up to $25 per purchase or exchange order, operational charges (e.g., fees that an Intermediary charges for establishing a Fund on its trading system), and literature printing and/or distribution costs; and (iv) at the direction of a retirement plan’s sponsor, reimburse or pay direct expenses of an employee benefit plan that would otherwise be payable by the plan.
When not provided for in a marketing support or program servicing agreement, the Advisor and/or the Distributor may pay Intermediaries for enabling the Advisor and/or the Distributor to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other Intermediary employees, client and investor events and other Intermediary-sponsored events, and for travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, asset retention and due diligence trips. These payments may vary depending upon the nature of the event. The Advisor and/or the Distributor makes payments for such events as it deems appropriate, subject to its internal guidelines and applicable law.
The Advisor and/or the Distributor occasionally sponsors due diligence meetings for registered representatives during which they receive updates on the Funds and are afforded the opportunity to speak with portfolio managers. Invitations to these meetings are not conditioned on selling a specific number of shares. Those who have shown an interest in the Funds, however, are more likely to be considered. To the extent permitted by their firm’s policies and procedures, all or a portion of registered representatives’ expenses in attending these meetings may be covered by the Advisor and/or the Distributor.
Certain affiliates of the Advisor and employees of the Advisor may receive cash compensation from the Advisor and/or the Distributor in connection with establishing new client relationships with the First American Funds. Total compensation of employees of the Advisor and/or the Distributor with marketing and/or sales responsibilities is based in part on their generation of new client relationships, including new client relationships with the First American Funds.
21
Other compensation may be offered to the extent not prohibited by state laws or any self-regulatory agency, such as FINRA. Investors can ask their Intermediary for information about any payments it receives from the Advisor and/or the Distributor and the services it provides for those payments.
Investors may wish to take Intermediary payment arrangements into account when considering and evaluating any recommendations relating to Fund shares.
Intermediaries Receiving Additional Payments
The following is a list of Intermediaries eligible to receive one or more of the types of payments discussed above as of September 30, 2017:
ADP Broker-Dealer, Inc.
American Enterprise Investment Services, Inc.
Ameriprise Financial Services, Inc.
Bank of New York Mellon (The)
Benefit Plans Administrative Services, Inc.
Benefit Trust Company
Charles Schwab & Co., Inc.
Comerica Bank
Country Trust Bank
ExpertPlan, Inc.
Fidelity Brokerage Services LLC / National Financial Services LLC / Fidelity Investments Institutional
Operations Company, Inc.
FIS Brokerage & Securities Services LLC
Goldman Sachs & Co. LLC
GWFS Equities, Inc.
Hartford Securities Distribution Company, Inc.
Hightower Securities, LLC
ICMA Retirement Corporation
ING Life Insurance and Annuity Company / ING Institutional Plan Services LLC
J.M. Lummis Securities, Inc.
J.P. Morgan Securities, LLC
Janney Montgomery Scott LLC
Lincoln Retirement Services Company LLC / AMG Service Corp.
LPL Financial LLC
Marshall & Ilsley Trust Company, N.A.
Massachusetts Mutual Life Insurance Company
Mercer HR Services LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merriman Curhan Ford & Co.
Mid Atlantic Capital Corporation
MSCS Financial Services, LLC
My Treasury Limited
Nationwide Financial Services, Inc.
Newport Retirement Services, Inc.
Pershing LLC
Piper Jaffray & Company
Principal Life Insurance Company
Quasar Distributors, LLC
RBC Dain Rauscher, Inc.
Reliance Trust Company
Robert W. Baird & Co., Inc.
State Street Global Markets
22
SVB Asset Management
TD Ameritrade Trust Company
TIAA-CREF Individual & Institutional Services, LLC
Treasury Curve, LLC
U.S. Bancorp Fund Services, LLC
U.S. Bancorp Investments, Inc.
U.S. Bank, N.A.
Union Bank, N.A.
VALIC Retirement Services Company
Wells Fargo Securities, LLC
Wilmington Trust Company
Wilmington Trust Retirement and Institutional Services Company
Any additions, modification or deletions to the list of Intermediaries identified above that have occurred since September 30, 2017, are not reflected.
U.S. Bancorp Asset Management, Inc. (the “Administrator”) serves as administrator pursuant to an Administration Agreement between the Administrator and the Funds, dated as of July 1, 2006. Under the Administration Agreement, the Administrator provides, or compensates others to provide, services to the Funds. These services include various oversight and legal services, accounting services and shareholder services. The Funds pay the Administrator fees which are calculated daily and paid monthly. Such fees are equal to each Fund’s pro rata share of an amount equal, on an annual basis, to 0.20% of the aggregate average daily Class A share net assets and 0.15% of the aggregate average daily net assets for all other share classes of the Funds up to $8 billion, 0.185% for Class A shares and 0.135% for all other share classes on the next $17 billion of aggregate average daily net assets, 0.17% for Class A shares and 0.12% for all other classes on the next $25 billion of aggregate average daily net assets, and 0.15% for Class A shares and 0.10% for all other classes of the aggregate average daily net assets in excess of $50 billion. The Administrator pays a portion of such fees to U.S. Bancorp Fund Services, LLC (“USBFS”), 615 East Michigan Street, Milwaukee, WI 53202, pursuant to a Sub-Administration Agreement dated July 1, 2005 whereby USBFS provides various sub-administration services. USBFS is a wholly-owned subsidiary of U.S. Bancorp.
The following table sets forth total administrative fees, after waivers, paid by each of the Funds listed below to the Administrator for the fiscal years ended August 31, 2015, August 31, 2016 and August 31, 2017:
Fund |
Fiscal
Year Ended August 31, 2015 |
Fiscal
Year Ended August 31, 2016 |
Fiscal
Year Ended August 31, 2017 |
| Government Obligations Fund | $ 938,108 | $ 16,789,233 | $ |
| Treasury Obligations Fund | 65,687 | 7,221,813 |
USBFS serves as the Funds’ transfer agent pursuant to a Transfer Agency and Shareholder Servicing Agreement between USBFS and the Funds dated June 30, 2016. Pursuant to the Transfer Agency and Shareholder Servicing Agreement, the Funds are charged transfer agent fees on a per shareholder account basis, subject to a minimum per share class fee. These fees are charged to each Fund based on the number of accounts within the Fund. The Fund reimburses USBFS for out-of-pocket expenses incurred in providing transfer agent services.
During the fiscal years ended August 31, 2015, August 31, 2016 and August 31, 2017 the Funds paid to USBFS transfer agent fees in the following amounts:
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Fiscal
Year Ended | Fiscal Year Ended August 31, 2016 | Fiscal
Year Ended | ||||||||||
| Government Obligations Fund | $ | 108,000 | $ | 115,500 | $ | |||||||
| Treasury Obligations Fund | 126,000 | 133,500 | ||||||||||
Quasar Distributors, LLC serves as the distributor for the Funds’ shares pursuant to distribution agreements applicable to the various share classes. These agreements are referred to collectively as the “Distribution Agreements.” The Distributor is a wholly owned subsidiary of U.S. Bancorp.
Fund shares and other securities distributed by the Distributor are not deposits or obligations of, or endorsed or guaranteed by, U.S. Bank or its affiliates, and are not insured by the Deposit Insurance Fund, which is administered by the FDIC.
Under the Distribution Agreements, the Distributor has agreed to perform all distribution services and functions of the Funds to the extent such services and functions are not provided to the Funds pursuant to another agreement. The shares of the Funds are distributed through the Distributor and through securities firms, financial institutions (including, without limitation, banks) and other industry professionals (the “Participating Institutions”) which enter into sales agreements with the Distributor to perform share distribution or shareholder support services.
The Distributor receives no compensation for distribution or shareholder servicing of the Class P shares.
The Distribution Agreements provide that they will continue in effect for a period of more than one year from the date of their execution only so long as such continuance is specifically approved at least annually by the vote of a majority of the Board and by the vote of the majority of those Board members who are not interested persons of FAF and who have no direct or indirect financial interest in the operation of FAF’s Rule 12b-1 Plan or in any agreement related to such plans.
The Distributor received the following compensation from the Funds during the Funds’ most recent fiscal year ended August 31, 2017:
Fiscal Year Ended August 31, 2017
Fund |
Net
Underwriting Discounts and Commissions |
Compensation
on Redemptions and Repurchases |
Brokerage |
Other
|
| Government Obligations Fund | ||||
| Treasury Obligations Fund |
| 1 | Primarily represents Rule 12b-1 fees paid to the Distributor as dealer of record on certain shareholder accounts under FAF’s Rule 12b-1 Distribution and Service Plan. Total fees paid by the Funds under FAF’s Rule 12b-1 Distribution and Service Plan are provided below. |
FAF has also adopted Plans of Distribution with respect to the Class A, Class D, and Class G shares of the Funds pursuant to Rule 12b-1 under the 1940 Act. No 12b-1 fees are paid with respect to Class P shares.
Custodian and Independent Registered Public Accounting Firm
Custodian
U.S. Bank (the “Custodian”), 1555 N. Rivercenter Drive, Suite 302, Milwaukee, WI 53212, acts as custodian of the Funds’ assets and portfolio securities pursuant to a Custodian Agreement between First Trust National Association (“First Trust”) and the Funds. First Trust’s rights and obligations under the Custodian Agreement were assigned to U.S. Bank pursuant to an Assignment and Assumption Agreement between First Trust and U.S. Bank. The Custodian takes no part in determining the investment policies of the Funds or in deciding which securities are purchased or sold by
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the Funds. The duties of the Custodian are limited to receiving and safeguarding the assets and securities of the Funds and to delivering or disposing of them pursuant to the Funds’ order.
As compensation for its services as custodian to the Funds, the Custodian is paid a monthly fee calculated on an annual basis equal to 0.005% of each such Fund’s average daily net assets. In addition, the Custodian is reimbursed for its out-of-pocket expenses incurred while providing services to the Funds. The Custodian continues to serve so long as its appointment is approved at least annually by the Board including a majority of the Directors who are not “interested persons” of FAF, as that term is defined in the 1940 Act.
Independent Registered Public Accounting Firm
Ernst & Young LLP, 155 North Wacker Drive, Chicago, Illinois, 60606, serves as the Funds’ independent registered public accounting firm, providing audit services, including audits of the annual financial statements.
Because the Funds invest primarily in short-term debt obligations, the probability of the Funds or USBAM receiving a proxy request on behalf of the Funds is remote. Nonetheless, the Funds have adopted Proxy Voting Policies and Procedures that delegate the responsibility of voting proxies to USBAM. The Proxy Voting Policies and Procedures of the Funds are attached as Appendix A.
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12 month period ended June 30, 2017 is available, without charge and upon request, by calling 800 677-3863 and on the SEC’s website at www.sec.gov.
The Funds’ portfolios are almost exclusively composed of fixed income securities and most of the portfolio transactions are made directly with the issuer of the securities or with broker-dealers acting for their own account or as agents. A Fund does not usually pay brokerage commissions on purchases and sales of fixed income securities, although the price of the securities generally includes compensation, in the form of a spread or mark-up or mark-down, which is not disclosed separately.
The Advisor determines the broker-dealers with or through which the Funds’ securities transactions are executed. The primary consideration in placing a portfolio transaction with a particular broker-dealer is efficiency in executing orders and obtaining the most favorable net prices for the Fund under the circumstances of each particular transaction. More specifically, the Advisor considers the full range and quality of the services offered by a broker-dealer. The determination may include the competitiveness of price; access to desirable securities; willingness and ability to execute difficult or large transactions; value, nature, and quality of any brokerage and research products and services provided; financial responsibility (including willingness to commit capital) of the broker-dealer; ability to minimize market impact; maintenance of the confidentiality of orders; responsiveness of the broker-dealer to the Advisor; and ability to settle trades. For transactions where competitiveness of price is the determining factor, all other factors being equal, the Advisor will seek to obtain more than one offer or bid on purchases and sales of securities to the extent they are available. The Advisor may, however, select a dealer to effect a particular transaction without communicating with all dealers who might be able to effect such transaction because of the volatility of the market and the Advisor’s desire to accept a particular price for a security because the price offered by the dealer meets the Advisor’s guidelines for profit, yield, or both. While it is the Advisor’s policy to seek the most advantageous price on each transaction, there is no assurance it will be successful in doing so on every transaction.
When consistent with the best execution objectives described above, business may be placed with broker-dealers who furnish brokerage and research products and services to the Advisor. Such brokerage and research products and services would include advice, both directly and in writing, 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,
25
as well as analyses and reports concerning issues, industries, securities, economic factors and trends and portfolio strategy. The research products and services may allow the Advisor to supplement its own investment research activities and enable it to obtain the views and information of individuals and research staffs of many different securities firms prior to making investment decisions for the Funds. To the extent portfolio transactions are effected with broker-dealers who furnish research services, the Advisor would receive a benefit, which is not capable of evaluation in dollar amounts, without providing any direct monetary benefit to the Funds from these transactions. As a general matter, the brokerage and research products and services that the Advisor receives from broker-dealers are used to service all of the Advisor’s accounts. However, any particular brokerage and research product or service may not be used to service each and every account, and may not benefit the particular accounts that generated the brokerage commissions used to acquire the product or service.
The Advisor has not entered into any formal or informal agreements with any broker-dealers, and does not maintain any “formula” that must be followed in connection with the placement of the Funds’ portfolio transactions in exchange for brokerage and research products and services provided to the Advisor. The Advisor may, from time to time, maintain an informal list of broker-dealers that will be used as a general guide in the placement of Fund business in order to encourage certain broker-dealers to provide the Advisor with brokerage and research products and services, which the Advisor anticipates will be useful to it. Any list, if maintained, would be merely a general guide, which would be used only after the primary criteria for the selection of broker-dealers (discussed above) has been met, and, accordingly, substantial deviations from the list could occur. While it is not expected that any Fund will pay brokerage commissions, if it does, the Advisor would authorize the Fund to pay an amount of commission for effecting a securities transaction in excess of the amount of commission another broker-dealer would have charged only if the Advisor determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker-dealer, viewed in terms of either that particular transaction or the Advisor’s overall responsibilities with respect to the Funds.
Generally, the Advisor does not aggregate or “bunch” fixed income securities orders. The Advisor may, however, bunch orders in the same fixed income securities for all accounts, provided that no account is favored over any other participating account, in an effort to obtain best execution at the best price available. In some cases, this system could have a detrimental effect on the price or volume of the security as far as each account is concerned. In other cases, however, the ability of the accounts to participate in volume transactions will produce better executions for each account. It is the Advisor’s policy to allocate investment opportunities among all accounts in a fair and equitable manner that does not systematically favor one account over any other, by providing buy and sell opportunities to all accounts.
No Fund effects brokerage transactions in its portfolio securities with any broker-dealer affiliated directly or indirectly with the Advisor or the Distributor unless such transactions, including the frequency thereof, the receipt of commissions payable in connection therewith, and the selection of the affiliated broker-dealer effecting such transactions, are not unfair or unreasonable to the shareholders of the Fund, as determined by the Board. Any transactions with an affiliated broker-dealer must be on terms that are both at least as favorable to the Fund as such Fund can obtain elsewhere and at least as favorable as such affiliated broker-dealer normally gives to others.
During their three most recent fiscal years ended August 31, the Funds paid no brokerage commissions to any brokers, including affiliated brokers. At August 31, 2017, the Funds did not hold securities of broker-dealers which are deemed to be “regular brokers or dealers” of the Funds under the 1940 Act (or of such broker-dealers’ parent companies).
Each share of the Funds’ $.01 par value common stock is fully paid, non-assessable, and transferable. Shares may be issued as either full or fractional shares. Fractional shares have pro rata the same rights and privileges as full shares. Shares of the Funds have no preemptive or conversion rights.
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Each share of the Funds has one vote. On some issues, such as the election of Directors, all shares of the Funds vote together as one series. The shares do not have cumulative voting rights. Consequently, the holders of more than 50% of the shares voting for the election of Directors are able to elect all of the Directors if they choose to do so. On issues affecting only a particular Fund or class, the shares of that Fund or class will vote as a separate series. Examples of such issues would be proposals to alter a fundamental investment restriction pertaining to a Fund or to approve, disapprove or alter a distribution plan pertaining to a class.
The Bylaws of FAF provide that annual shareholders’ meetings are not required and that meetings of shareholders need be held only with such frequency as required under Minnesota law and the 1940 Act.
As of September 30, 2017, the Directors and officers of FAF as a group owned less than one percent of each Fund’s outstanding shares and the Funds were aware that the persons set forth in the following table owned of record five percent or more of the outstanding shares of each class of stock of the Funds.
Class A |
Class D |
Class G |
Class T |
Class V |
Class X |
Class Y |
Class Z | |
| GOVERNMENT OBLIGATIONS FUND | ||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
US BANK N A CUST FBO FIRST AMERICAN C/C ATTN: WILLY BLOOM 1555 N RIVERCENTER DR STE 302 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
US BANK NA FBO INVESTMENT SWEEP ATTN: TINA EUMURIAN 800 NICOLLET AVE BC-MN-H18U MINNEAPOLIS MN 55402-7000 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
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| Class A | Class D | Class G | Class T | Class V | Class X | Class Y | Class Z | |
HARE & CO ATTN FRANK NOTARO 111 SANDERS CREEK PKWY EAST SYRACUSE, NY 13057-1382 |
||||||||
| TREASURY OBLIGATIONS FUND | ||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
FBS INVESTMENT SERVICES INC FOR THE EXCLUSIVE BENEFIT OF ITS CUSTOMERS ATTN MONEY FUNDS UNIT R/R 60 LIVINGSTON AVE SAINT PAUL MN 55107-2292 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
BAND & CO C/O US BANK ATTN ACM DEPT PO BOX 1787 MILWAUKEE WI 53201-1787 |
||||||||
US BANK NA MONEY CENTER CUST OMNIBUS REINVEST FBO CUSTOMERS ATTN SHANE D KITZAN 777 E WISCONSIN AVE FL 4 MILWAUKEE WI 53202-5300 |
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| Class A | Class D | Class G | Class T | Class V | Class X | Class Y | Class Z | |
HARE & CO ATTN FRANK NOTARO 111 SANDERS CREEK PKWY EAST SYRACUSE, NY 13057-1382 |
||||||||
Net Asset Value and Public Offering Price
The public offering price of the shares of a Fund generally equals the Fund’s net asset value. The net asset value per share of a Fund is calculated on each day the Fund is open for business at the time indicated in the Fund’s Prospectus. The net asset value may be calculated early on any business day when the bond markets close early (typically on the business day preceding a Federal holiday). The Funds are generally open for business each day that the Federal Reserve Bank of New York (the “Federal Reserve”) is open, except as noted below. In addition to weekends, the Federal Reserve is closed on the following Federal holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. A Fund may close when the Federal Reserve is open and the NYSE is closed, such as Good Friday. On August 31, 2017, the net asset value per share for each Fund was calculated as set forth below.
Fund |
Net Assets |
Shares Outstanding |
Net Asset Value Per Share | |||
| Government Obligations Fund | ||||||
| Class A | ||||||
| Class D | ||||||
| Class V | ||||||
| Class X | ||||||
| Class Y | ||||||
| Class Z | ||||||
| Treasury Obligations Fund | ||||||
| Class A | ||||||
| Class D | ||||||
| Class G | ||||||
| Class V | ||||||
| Class X | ||||||
| Class Y | ||||||
| Class Z |
Valuation of Portfolio Securities
The Funds’ portfolio securities are valued on the basis of the amortized cost method of valuation. This involves valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the instrument. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price a Fund would receive if it sold the instrument. During periods of declining interest rates, the daily yield on shares of a Fund computed as described above may tend to be higher than a like computation made by a fund with identical investments utilizing a method of valuation based upon market prices and estimates of market prices for all of its portfolio instruments. Thus, if the use of amortized cost by a Fund resulted in a lower aggregate portfolio value on a particular day, a prospective investor in the Fund would be able to obtain a somewhat higher yield than would result from investment in a fund utilizing solely market values, and existing investors in the Fund would receive less investment income. The converse would apply in a period of rising interest rates.
The valuation of the Funds’ portfolio instruments based upon their amortized cost and the concomitant maintenance of each Fund’s per share net asset value of $1.00 is permitted in accordance with Rule 2a-7, under which each Fund must adhere to certain conditions, including the conditions described above under “Investment Restrictions – Additional Restrictions.” It is the normal practice of the Funds to hold portfolio securities to maturity and realize par unless such sale or other disposition is mandated by redemption requirements or other extraordinary circumstances.
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The Board must establish procedures designed to stabilize, to the extent reasonably possible, each Fund’s price per share as computed for the purpose of sales and redemptions at a single value. It is the intention of each Fund to maintain a per share net asset value of $1.00. Such procedures will include review of each Fund’s portfolio holdings at such intervals as the Board may deem appropriate, to determine whether the Fund’s net asset value calculated by using available market quotations deviates from $1.00 per share and, if so, whether such deviation may result in material dilution or is otherwise unfair to existing shareholders. In the event the Board determines that a deviation which may have such a result exists, they will take such corrective action as they regard as necessary and appropriate.
Each Fund intends to qualify and to elect to be treated each year as a regulated investment company under Subchapter M of the Internal Revenue Code (the “Code”). If so qualified, each Fund will not be liable for federal income taxes to the extent it distributes its taxable income to its shareholders.
Each Fund expects to distribute net realized capital gains (if any) once each year, although it may distribute them more frequently if, for each Fund other than Institutional Prime Obligations Fund, it is necessary in order to maintain a Fund’s net asset value at $1.00 per share. Distributions of net investment income and net short-term capital gains are taxable to investors as ordinary income.
The IRS has issued final regulations that permit a simplified method of accounting for gains and losses realized upon the disposition of shares of a regulated investment company that is a money market fund, including as a result of the imposition of a liquidity fee. Very generally, rather than realizing gain or loss upon each redemption of a share, a shareholder of a money market fund using such method of accounting will recognize gain or loss with respect to such a Fund’s shares for a given computation period (the shareholder’s taxable year or shorter period selected by the shareholder) equal to the value of all the Fund shares held by the shareholder on the last day of the computation period, less the value of all Fund shares held by the shareholder on the last day of the preceding computation period, less the shareholder’s net investment in the Fund (generally, purchases minus redemptions) made during the computation period.
Under the Code, each Fund is required to withhold 28% of reportable payments (including dividends, capital gain distributions, if any, and redemptions) paid to certain shareholders who have not certified that (i) the social security number or taxpayer identification number supplied by them is correct and (ii) they are not subject to backup withholding because of previous under reporting to the IRS. These backup withholding requirements generally do not apply to shareholders that are corporations or governmental units or certain tax-exempt organizations.
Shareholders of a Fund are urged to consult their own tax advisors regarding their investment in the Fund.
Additional Information about Purchasing and Redeeming Shares
Under
certain circumstances, if no activity occurs in an account within a time period specified by state law, your shares in the funds
may be transferred to that state.
Additional Charges
Investment professionals or financial institutions may charge their customers a processing or service fee in connection with the purchase or redemption of Fund shares. The amount and applicability of such a fee is determined and disclosed to its customers by each individual investment professional or financial institution. Processing or service fees typically are fixed, nominal dollar amounts and are in addition to the sales and other charges described in the Prospectuses and this SAI. Your investment professional or financial institution will provide you with specific information about any processing or service fee you will be charged.
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Receipt of Orders by Financial Intermediaries
The Funds have authorized one or more Intermediaries to receive purchase and redemption orders on the Funds’ behalf. Intermediaries are authorized to designate other intermediaries to receive purchase and redemption orders on the Funds’ behalf. Except for Institutional Prime Obligations Fund, a Fund will be deemed to have received a purchase or redemption order when an authorized Intermediary or, if applicable, an Intermediary’s authorized designee, receives the order.
A shareholder may redeem shares of a Fund, if he or she elects the privilege on the initial shareholder application, by calling his or her financial institution to request the redemption. Pursuant to instructions received from the financial institution, redemptions will be made by check, by wire transfer or, if available, by ACH transaction.
Shareholders who did not purchase their shares through a financial institution may redeem Fund shares by telephoning 800 677-3863. At the shareholder’s request, redemption proceeds will be paid by check and mailed to the shareholder’s address of record, or ACH (if available) or wire transferred to the shareholder’s account at a domestic commercial bank that is a member of the Federal Reserve System, normally within one business day, but in no event longer than seven days after the request. ACH and wire instructions must be previously established in the account or provided in writing. The minimum amount for a wire transfer is $1,000. If at any time a Fund determines it necessary to terminate or modify this method of redemption, shareholders will be promptly notified.
In the event of drastic economic or market changes, a shareholder may experience difficulty in redeeming shares by telephone. If this should occur, another method of redemption should be considered. Neither the Administrator nor any Fund will be responsible for any loss, liability, cost or expense for acting upon wire transfer instructions or telephone instructions that they reasonably believe to be genuine. The Administrator and the Funds will each employ reasonable procedures to confirm that instructions communicated are genuine. These procedures may include recording of telephone conversations. To ensure authenticity of redemption or exchange instructions received by telephone, the Administrator examines each shareholder request by verifying the account number and/or tax identification number at the time such request is made. The Administrator subsequently sends confirmation of both exchange sales and exchange purchases to the shareholder for verification. If reasonable procedures are not employed, the Administrator and the Funds may be liable for any losses due to unauthorized or fraudulent telephone transactions.
Shareholders may redeem Fund shares by sending a written request to their investment professional, their financial institution, or the Funds. The written request should include the shareholder’s name, the Fund name, the account number, and the share or dollar amount requested to be redeemed, and should be signed exactly as the shares are registered. Shareholders should call the Funds, shareholder servicing agent or financial institution for assistance in redeeming by mail. A check for redemption proceeds normally is mailed within one business day, but in no event more than seven business days, after receipt of a proper written redemption request.
Shareholders requesting a redemption of $50,000 or more, a redemption of any amount to be sent to an address other than that on record with the Funds, or a redemption payable other than to the shareholder of record, must have signatures on written redemption requests guaranteed by:
| ● | a trust company or commercial bank, the deposits of which are insured by the Deposit Insurance Fund, which is administered by the FDIC; |
| ● | a member firm of the New York, NYSE MKT, Boston, Midwest, or Pacific Stock Exchanges or the Financial Industry Regulatory Authority; |
31
| ● | a savings bank or savings and loan association the deposits of which are insured by the Deposit Insurance Fund, which is administered by the FDIC; or |
| ● | any other “eligible guarantor institution,” as defined in the Securities Exchange Act of 1934. |
The Funds do not accept signatures guaranteed by a notary public.
The Funds and the Transfer Agent have adopted standards for accepting signature guarantees from the above institutions. The Funds may elect in the future to limit eligible signature guarantees to institutions that are members of a signature guarantee program. The Funds and the Transfer Agent reserve the right to amend these standards at any time without notice.
Redemption Before Purchase Instruments Clear
When shares are purchased by check or with funds transferred through the Automated Clearing House, the proceeds of redemption of those shares are not available until the Transfer Agent is reasonably certain that the purchase payment has cleared, which could take up to 15 calendar days from the purchase date.
Exchanging Shares among Fund Families
The Funds are offered as money market exchange vehicles for certain other mutual fund families that have entered into agreements with the Funds’ distributor or transfer agent. If you are using one of the Funds as such an exchange vehicle, you may exchange your shares only for shares of the funds in that other mutual fund family; you may not exchange your shares for shares of another Fund. You may be assessed certain transactional or service fees by your original mutual fund family in connection with any such exchange. In addition, you may be subject to the CDSC schedules, if any, of such fund family.
The Funds reserve the right, upon notice, to charge you a fee to cover the costs of special requests for information that require extensive research or employee resources. Such requests could include a request for historical account transcripts or the retrieval of a significant number of documents
The financial statements of FAF included in its Annual Report to shareholders for the fiscal period ended August 31, 2017, are incorporated herein by reference.
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First American Funds
Effective Date: 10/4/2016
Regulatory Highlights
Registered investment management companies are required to provide disclosure about how they vote proxies relating to portfolio securities they hold and to disclose the policies and procedures that they use to determine how to vote proxies relating to portfolio securities. They are also required to file with the SEC and to make available to shareholders the specific proxy votes that they cast in shareholder meetings of issuers of portfolio securities.
An investment adviser voting proxies on behalf of a fund must do so in a manner consistent with the best interests of the fund and its shareholders.
Regulatory Requirements
| ● | Release Nos. 33-8188, 34-47304, IC-25922: Disclosure of Proxy Voting Policies and Proxy Voting Records by Registered Management Investment Companies |
| ● | Company Act: Rule 30b1-4 |
Entities Affected
First American Funds
Policy Specific Terms (Refer to glossary for standard terms used)
| Institutional Advisory Clients | All clients other than the Money Market Funds whose portfolios are managed by USBAM pursuant to an investment management agreement. |
Policy Objective Statement
The objective of this policy is to ensure that proxies voted on behalf of the Funds were voted in a manner consistent with the best interests of the Funds and their shareholders.
Compliance Control Procedures
Conflicts of Interest
As an affiliate of U.S. Bancorp, a large multi-service financial institution, USBAM recognizes that there are circumstances wherein it may have a perceived or real conflict of interest in voting the proxies of issuers or proxy proponents (e.g., a special interest group) who are clients or potential clients of some part of the U.S. Bancorp enterprise. Directors and officers of such companies may have personal or familial relationships with the U.S.Bancorp enterprise and/or its employees that could give rise to potential conflicts of interest.
Proxy Voting
| ● | When a Fund proxy is received, the vote will be directed by the Chief Investment Officer. |
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Preventative Control Procedures
| ● | USBAM will vote proxies in the best interest of the Funds regardless of real or perceived conflicts of interest. To minimize this risk, the IPC will discuss conflict avoidance at least annually to ensure that appropriate parties understand the actual and perceived conflicts of interest proxy voting may face. |
| ● | If any member of the IPC becomes aware of a material conflict for USBAM, they will bring the matter to the Chief Counsel to convene a meeting of the IPC which will determine a course of action designed to address the conflict. Such actions could include, but are not limited to: |
| - | Abstaining from voting; or |
| - | Voting in proportion to the other shareholders to the extent this can be determined. |
| - | Recusing an IPC member from all discussion or consideration of the matter, if the material conflict is due to such person’s actual or potential conflict of interest. |
Detective Control Procedures
| ● | Employees must notify the CCO of any direct, indirect or perceived improper influence exerted by any employee, officer or director within the U.S. Bancorp enterprise or First American Fund complex with regard to how USBAM should vote proxies. |
| ● | The CCO, or their designee, will investigate allegations of improper influence and will report the findings to the Chief Executive Officer and the Chief Counsel. |
| ● | To ensure USBAM has met its fiduciary duty to the Funds, the Chief Investment Officer will certify quarterly that: |
| - | There were no proxies received for the Funds during the quarter; or, |
| - | If proxies were voted, that either no material conflict(s) of interest existed in connection with a proxy voted for any security held in the Funds, or if a material conflict of interest occurred in connection with a proxy voted for a security held in the Funds, the certification will require a description of the material conflict of interest, and a statement that any advice received regarding a proxy was not unduly influenced by an individual or group that may have an economic interest in the outcome of the proxy vote; and, |
| - | If proxies were received and voted against management recommendation, then the certification will require documentation of the reasons for voting against management recommendation. |
| ● | Compliance reviews the Quarterly Proxy Voting Certification for material conflicts and undue influence. |
Corrective Control Procedures
| ● | If it is determined that improper influence was attempted, appropriate action shall be taken. Such appropriate action may include disciplinary action, notification of the appropriate senior managers within the U.S. Bancorp enterprise, or notification of the appropriate regulatory authorities. In all cases, the IPC shall not consider any improper influence in determining how to vote proxies. |
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Proxy Voting for Funds Participating in Securities Lending
Certain Funds participate in U.S. Bank’s securities lending program. If a portfolio security is on loan as of the shareholder meeting record date, then the Funds will not have the right to vote the proxies.
Preventative Control Procedures
| ● | Portfolio managers and/or credit analysts, who become aware of upcoming proxy issues relating to any securities in portfolios they manage, or issuers they follow, will consider the desirability of recalling the affected securities that are on loan or restricting lending of the affected securities prior to the record date for the matter. |
| ● | If the proxy issue is determined to be material, and the determination is made prior to the shareholder meeting record date the portfolio manager(s) will contact the Securities Lending Department to recall securities on loan or restrict the loaning of any security held in any portfolio they manage, if they determine that it is in the best interest of shareholders to do so. |
Review and Reports
Detective Control Procedures
| ● | The Chief Counsel will review votes cast on behalf of portfolio securities held by the Funds, report on the results of such review to the Board at each of their regularly scheduled meetings. |
Disclosure to Shareholders
Preventative Control Procedures
| ● | USBAM’s Legal Department will cause Form N-PX to be filed with the SEC, and ensure that any other proxy voting-related filings as required by regulation or contract are timely made. |
| ● | USBAM shall make available the proxy voting record of the Funds to shareholders upon request. Additionally, USBAM shall disclose in the Funds’ registration statement that shareholders can receive, on request, the voting records for the Funds by calling a toll free number. |
| ● | The Funds’ proxy voting policy and procedures will also be made available to the public in the Funds’ registration statement which is available to the public on the SEC website. Additionally, shareholders can receive, on request, the proxy voting policies for the Funds by calling a toll free number. |
Policy Owner
| ● | Compliance Manager |
Responsible Parties
| ● | Operations |
| ● | IPC |
| ● | Compliance |
| ● | Investments |
| ● | Legal |
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Related Policies
| ● | Recordkeeping & Retention |
Related Disclosures
| ● | Form N-PX |
| ● | Registration Statement |
36
| Glossary of Standard Terms | |
| Advisor or USBAM | U.S. Bancorp Asset Management, Inc. |
| Board | First American Funds, Inc. Board of Directors |
| CCO | Chief Compliance Officer |
| Company Act | Investment Company Act of 1940 |
| Compliance | USBAM Compliance |
| CRIMS | Charles River Investment Management System |
| Employee(s) | Includes USBAM permanent employees and temporary or contract employees whose assignments exceed four weeks in a 12 month period. |
| Exchange Act | Securities Exchange Act of 1934 |
| FINRA | Financial Industry Regulatory Authority |
| First American Funds, Funds or Money Market Funds | Each series of First American Funds, Inc. whether now existing or organized in the future. |
| ICCC | Internal Compliance Controls Committee |
| IPC | Investment Practices Committee |
| Legal or Legal Department | USBAM Legal |
| NAV | Net asset value |
| Quasar | Quasar Distributors, LLC – First American Funds, Inc. FINRA member distributor |
| SAI | Statement of Additional Information |
| SEC or Commission | U.S. Securities and Exchange Commission |
| Securities Act | Securities Act of 1933 |
| USBFS | U.S. Bancorp Fund Services, LLC |
| USBI or USBII | U.S. Bancorp Investments, Inc. |
37
FIRST AMERICAN FUNDS, INC.
PART C: OTHER INFORMATION
Item 28. Exhibits
(a)(1) Amended and Restated Articles of Incorporation, as amended through January 20, 1995 (Incorporated by reference to Exhibit (1) to Post-Effective Amendment No. 22, filed on January 22, 1996 (File Nos. 002-74747 and 811-03313)).
(a)(2) Certificate of Designation dated October 2, 1997, designating Class A, B, C and D shares for Tax Free Obligations Fund and Class A shares for Treasury Obligations Fund (Incorporated by reference to Exhibit (1)(b) to Post-Effective Amendment No. 25, filed on October 7, 1997 (File Nos. 002-74747 and 811-03313)).
(a)(3) Certificate of Designation dated March 2, 1998, designating Class A or Retail shares for Government Obligations Fund (Incorporated by reference to Exhibit (1)(b) to Post-Effective Amendment No. 28, filed on March 3, 1998 (File Nos. 002-74747 and 811-03313)).
(a)(4) Certificate of Designation dated June 1, 2001, designating Class A, Y and S shares of Ohio Tax Free Obligations Fund; Class I and S shares of Prime Obligations Fund; Class S shares of Government Obligations Fund; Class S shares of Treasury Obligations Fund; and Class S shares of Tax Free Obligations Fund (Incorporated by reference to Exhibit (a)(2) to Post-Effective Amendment No. 36, filed on June 27, 2001 (File Nos. 002-74747, 811-03313)).
(a)(5) Articles of Amendment to Articles of Incorporation dated November 26, 2001 (Incorporated by reference to Exhibit (a)(3) to Post-Effective Amendment No. 40, filed on November 30, 2001 (File Nos. 002-74747, 811-03313)).
(a)(6) Certificate of Designation dated June 5, 2003, designating Class Z shares of Prime Obligations Fund (Incorporated by reference to Exhibit (a)(4) to Post-Effective Amendment No. 44, filed on June 6, 2003 (File Nos. 002-74747, 811-03313)).
(a)(7) Certificate of Designation dated December 2003, designating Class Z shares of Government Obligations Fund, Tax Free Obligations Fund, and Treasury Obligations Fund (Incorporated by reference to Exhibit (a)(5) to Post-Effective Amendment No. 47, filed on December 1, 2003 (File Nos. 002-74747, 811-03313)).
(a)(8) Certificate of Designation dated September 20, 2004, designating Class A, D, Y and Z shares of U.S. Treasury Money Market Fund (Incorporated by reference to Exhibit (a)(6) to Post-Effective Amendment No. 50, filed on October 15, 2004 (File Nos. 002-74747, 811-03313)).
(a)(9) Certificate of Designation dated May 5, 2005, designating Reserve shares of Treasury Obligations Fund (Incorporated by reference to Exhibit (1)(i) to the initial registration statement on Form N-14, filed on May 20, 2005 (File Nos. 333-125098, 811-03313)).
(a)(10) Articles of Amendment to Articles of Incorporation dated August 30, 2005 (Incorporated by reference to Exhibit (a)(10) to Post-Effective Amendment No. 55, filed on October 28, 2005 (File Nos. 002-74747, 811-03313)).
(a)(11) Certificate of Designation filed February 23, 2006, designating Institutional Investor shares of Prime Obligations Fund, Government Obligations Fund, Treasury Obligations Fund, Tax Free Obligations Fund, and U.S. Treasury Money Market Fund (Incorporated by reference to Exhibit (b) to Post-Effective Amendment No. 58, filed on October 31, 2006 (File Nos. 002-74747, 811-03313)).
(a)(12) Articles of Correction to Certificate of Designation filed February 23, 2006 (Incorporated by reference to Exhibit (b) to Post-Effective Amendment No. 58, filed on October 31, 2006 (File Nos. 002-74747, 811-03313)).
(a)(13) Certificate of Designation dated February 5, 2016 designating Class X shares of Government Obligations Fund, Prime Obligations Fund and Treasury Obligations Fund, filed on February 5, 2016 (Incorporated by reference to Exhibit (a)(13) to Post-Effective Amendment No. 75, filed on February 5, 2016 (File Nos. 002-74747, 811-03313)).
(a)(14) Certificate of Designation dated July 15, 2016 designating Class A, T, V, X, Y and Z shares of Retail Prime Obligations Fund, filed on July 18, 2016 (Incorporated by reference to Exhibit (a)(14) to Post-Effective Amendment No. 84, filed on July 18, 2016 (File Nos. 002-74747, 811-03313)).
(a)(15) Certificate of Designation dated October 11, 2016 renaming certain series and classes, filed on October 12, 2016. (Incorporated by reference to Exhibit (a)(15) to Post-Effective Amendment No. 90, filed on October 14, 2016 (File Nos. 002-74747, 811-03313)).
(a)(16) Certificate of Designation dated September 28, 2017 designating Class P shares of Government Obligations Fund and Treasury Obligations Fund, filed on September 28, 2017.*
(b) Bylaws, as amended September 19, 2017.*
(c) Not applicable.
(d)(1) Investment Advisory Agreement, dated January 20, 1995, between the Registrant and First Bank National Association (Incorporated by reference to Exhibit (5) to Post-Effective Amendment No. 22, filed on January 22, 1996 (File Nos. 002-74747, 811-03313)).
(d)(2) Assignment and Assumption Agreement, dated May 2, 2001, relating to assignment of Investment Advisory Agreement to U.S. Bancorp Piper Jaffray Asset Management, Inc. (Incorporated by reference to Exhibit (d)(2) to Post-Effective Amendment No. 51, filed on November 30, 2004 (File Nos. 002-74747, 811-03313)).
(d)(3) Amendment to Exhibit A to Investment Advisory Agreement effective October 25, 2004 (series and fees) (Incorporated by reference to Exhibit (d)(2) to Post-Effective Amendment No. 50, filed on October 15, 2004 (File Nos. 002-74747, 811-03313)).
2
(d)(4) Amendment to Investment Advisory Agreement dated as of June 21, 2005, permitting First American Funds, Inc. to purchase securities from Piper Jaffray & Co. (Incorporated by reference to Exhibit (d)(5) to Post-Effective Amendment No. 54, filed on August 16, 2005 (File Nos. 002-74747, 811-03313)).
(d)(5) Amendment to Exhibit A to Investment Advisory Agreement effective June 30, 2015 (Incorporated by reference to Exhibit (d)(5) to Post-Effective Amendment No. 76, filed on February 19, 2016 (File Nos. 002-74747, 811-03313)).
(d)(6) Expense Limitation Agreement effective October 1, 2017, between the Registrant and U.S. Bancorp Asset Management, Inc.*
(e)(1) Distribution Agreement dated July 1, 2007, between Registrant and Quasar Distributors, LLC (Incorporated by reference to Exhibit (e)(1) to Post-Effective Amendment No. 59, filed on October 31, 2007 (File Nos. 002-74747, 811-03313)).
(e)(2) Form of Dealer Agreement (Incorporated by reference to Exhibit (e)(2) to Post-Effective Amendment No. 65, filed on October 28, 2011 (File Nos. 002-74747, 811-03313)).
(f) Not applicable.
(g)(1) Custody Agreement dated July 1, 2006, between Registrant and U.S. Bank National Association (Incorporated by reference to Exhibit (g) to Post-Effective Amendment No. 58, filed on October 31, 2006 (File Nos. 002-74747, 811-03313)).
(g)(2) Amendment to Custody Agreement dated July 1, 2007 (Incorporated by reference to Exhibit (g)(2) to Post-Effective Amendment No. 59, filed on October 31, 2007 (File Nos. 002-74747, 811-03313)).
(g)(3) Amendment to Custody Agreement dated February 19, 2009 (Incorporated by reference to Exhibit (g)(3) to Post-Effective Amendment No. 62, filed on October 30, 2009 (File Nos. 002-74747, 811-03313)).
(g)(4) Amendment to Custody Agreement dated June 9, 2016. (Incorporated by reference to Exhibit (g)(4) to Post-Effective Amendment No. 81, filed on June 10, 2016 (File Nos. 002-74747, 811-03313)).
(h)(1) Administration Agreement dated as of July 1, 2006, by and between Registrant and U.S. Bancorp Asset Management, Inc. (formerly known as FAF Advisors, Inc.) (Incorporated by reference to Exhibit (h)(1) to Post-Effective Amendment No. 58, filed on October 31, 2006 (File Nos. 002-74747, 811-03313)).
(h)(2) Amended Schedule A to Administration Agreement, dated July 1, 2011, between Registrant and U.S. Bancorp Asset Management, Inc. (Incorporated by reference to Exhibit (h)(2) to Post-Effective Amendment No. 65, filed on October 28, 2011 (File Nos. 002-74747, 811-03313)).
3
(h)(3) Sub-Administration Agreement effective as of July 1, 2005, by and between U.S. Bancorp Asset Management Inc. and U.S. Bancorp Fund Services, LLC. (Incorporated by reference to Exhibit (h)(2) to Post-Effective Amendment No. 54, filed on August 16, 2005 (File Nos. 002-74747, 811-03313)).
(h)(4) Amendment to Sub-Administration Agreement effective as of January 1, 2017 by and between U.S. Bancorp Asset Management, Inc. and U.S. Bancorp Fund Services, LLC.*
(h)(5) Amended and Restated Transfer Agent and Shareholder Servicing Agreement dated as of June 30, 2016, by and among Registrant, U.S. Bancorp Fund Services, LLC, and U.S. Bancorp Asset Management, Inc. (Incorporated by reference to Exhibit (h)(4) to Post-Effective Amendment No. 84, filed on July 18, 2016 (File Nos. 002-74747, 811-03313)).
(h)(6) Amended Shareholder Service Plan and Agreement effective July 1, 2005, as further amended effective February 22, 2006 and June 13, 2017 between Registrant and U.S. Bancorp Asset Management, Inc. for Class A, Class D, Class G, Class T, Class V and Class Y shares.*
(h)(7) Securities Lending Agreement dated January 1, 2007, by and between First American Funds, Inc. - Government Obligations Fund and U.S. Bank National Association (Incorporated by reference to Exhibit (h)(8) to Post-Effective Amendment No. 60, filed on October 31, 2008 (File Nos. 002-74747, 811-03313)).
(h)(8) Amendment to Securities Lending Agreement effective January 1, 2011, by and between First American Funds, Inc. – Government Obligations Fund and U.S. Bank National Association (Incorporated by reference to Exhibit (h)(8) to Post-Effective Amendment No. 67, filed on October 30, 2012 (File Nos. 002-74747, 811-03313)).
(h)(9) Securities Lending Agreement dated January 1, 2007, by and between First American Funds, Inc. - Treasury Obligations Fund and U.S. Bank National Association (Incorporated by reference to Exhibit (h)(9) to Post-Effective Amendment No. 60, filed on October 31, 2008 (File Nos. 002-74747, 811-03313)).
(h)(10) Amendment to Securities Lending Agreement effective January 1, 2011, by and between First American Funds, Inc. – Treasury Obligations Fund and U.S. Bank National Association (Incorporated by reference to Exhibit (h)(10) to Post-Effective Amendment No. 67, filed on October 30, 2012 (File Nos. 002-74747, 811-03313)).
(h)(11) Securities Lending Agreement dated October 1, 2011, by and between First American Funds, Inc. – Institutional Prime Obligations Fund and U.S. Bank National Association (Incorporated by reference to Exhibit (h)(9) to Post-Effective Amendment No. 65, filed on October 28, 2011 (File Nos. 002-74747, 811-03313)).
(i) Opinion and Consent of Dorsey & Whitney LLP*.
(j) Consent of Ernst & Young LLP (to be filed by amendment).
(k) Not applicable.
4
(l) Not applicable.
(m)(1) Amended and Restated Distribution and Service Plan effective September 19, 2006, for Class A, Class B, Class C, Class D, and Reserve shares (Incorporated by reference to Exhibit (m) to Post-Effective Amendment No. 59, filed on October 31, 2007 (File Nos. 002-74747, 811-03313)).
(m)(2) Form of Rule 12b-1 Fee Agreement (Incorporated by reference to Exhibit (m)(2) to Post-Effective Amendment No. 67, filed on October 30, 2012 (File Nos. 002-74747, 811-03313)).
(n) Amended and Restated Multiple Class Plan Pursuant to Rule 18f-3, effective September 19, 2017.*
(o) Reserved.
(p)(1) First American Funds Code of Ethics adopted under Rule 17j-1 of the Investment Company Act of 1940 and Section 406 of the Sarbanes-Oxley Act. (Incorporated by reference to Exhibit (p)(1) to Post-Effective Amendment No. 90, filed on October 14, 2016 (File Nos. 002-74747, 811-03313)).
(p)(2) U.S. Bancorp Asset Management, Inc. Code of Ethics adopted under Rule 17j-1 of the Investment Company Act of 1940.*
(p)(3) Quasar Distributors, LLC Code of Ethics adopted under Rule 17j-1 of the Investment Company Act of 1940 (Incorporated by reference to Exhibit (p)(3) to Post-Effective Amendment No. 73, filed on October 30, 2015 (File Nos. 002-74747, 811-03313)).
(q) Power of Attorney dated September 28, 2017.*
* Filed herewith.
Item 29. Persons Controlled by or Under Common Control with the Fund
Not applicable.
Item 30. Indemnification
The Registrant’s Articles of Incorporation and Bylaws provide that the Registrant shall indemnify such persons for such expenses and liabilities, in such manner, under such circumstances, and to the full extent as permitted by Section 302A.521 of the Minnesota Statutes, as now enacted or hereafter amended; provided, however, that no such indemnification may be made if it would be in violation of Section 17(h) of the Investment Company Act of 1940, as now enacted or hereafter amended, and any rules, regulations, or releases promulgated thereunder. Section 302A.521 of the Minnesota Statutes, as now enacted, provides that a corporation shall indemnify a person made or threatened to be made a party to a proceeding by reason of the former or present official capacity of the person against judgments, penalties, fines, settlements and reasonable expenses, including attorneys’ fees and disbursements, incurred by the person in connection with the proceeding if, with respect to the acts or omissions of the
5
person complained of in the proceeding, the person has not been indemnified by another organization for the same judgments, penalties, fines, settlements, and reasonable expenses incurred by the person in connection with the proceeding with respect to the same acts or omissions; acted in good faith, received no improper personal benefit, and the Minnesota Statutes dealing with directors’ conflicts of interest, if applicable, have been satisfied; in the case of a criminal proceeding, had no reasonable cause to believe that the conduct was unlawful; and reasonably believed that the conduct was in the best interests of the corporation or, in certain circumstances, reasonably believed that the conduct was not opposed to the best interests of the corporation. The Registrant undertakes that no indemnification or advance will be made unless it is consistent with Sections 17(h) or 17(i) of the Investment Company Act of 1940, as now enacted or hereafter amended, and Securities and Exchange Commission rules, regulations, and releases (including, without limitation, Investment Company Act of 1940 Release No. 11330, September 2, 1980). Insofar as the indemnification for liability arising under the Securities Act of 1933, as amended, may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in such Act and is, therefore, 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 a director, officer, or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities 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 Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue.
Item 31. Business and Other Connections of the Investment Adviser
Information on the business of the Registrant’s investment adviser, U.S. Bancorp Asset Management, Inc. (the “Manager”), is described in the section of each series’ Statement of Additional Information, filed as part of this Registration Statement, entitled “Investment Advisory and Other Services.” The directors and officers of the Manager are listed below, together with their principal occupation or other positions of a substantial nature during the past two fiscal years.
Name and Address |
Principal Occupation(s) During the Past Two Years |
Eric J. Thole U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402
|
Chief Executive Officer and President, U.S. Bancorp Asset Management, Inc. since June 2014; Director, U.S. Bancorp Asset Management, Inc.; President, FAF since June 2014 |
James D. Palmer U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402
|
Chief Investment Officer, U.S. Bancorp Asset Management, Inc. since August 2012; Director, U.S. Bancorp Asset Management, Inc. since June 2014; Vice President, FAF since June 2014 |
Richard J. Ertel U.S. Bancorp Asset Management, Inc. |
Director, Chief Counsel and Secretary, U.S. Bancorp Asset Management, |
6
Name and Address |
Principal Occupation(s) During the Past Two Years |
|
800 Nicollet Mall Minneapolis, MN 55402
|
Inc.; Secretary, FAF |
Jill M. Stevenson U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402
|
Head of Operations and Mutual Funds Treasurer, U.S. Bancorp Asset Management, Inc. since September 2014; Treasurer, FAF |
Louis G. Martine U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402
|
Head of Distribution, U.S. Bancorp Asset Management, Inc. |
Kenneth L. Delecki U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402
|
Head of Securities Lending, U.S. Bancorp Asset Management, Inc. |
Scott F. Cloutier U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis,
MN 55402 |
Senior Corporate Counsel, U.S. Bancorp Asset Management, Inc.; Assistant Secretary, FAF |
Ruth M. Mayr U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall Minneapolis, MN 55402
|
Chief Compliance Officer, U.S. Bancorp Asset Management, Inc.; Chief Compliance Officer, FAF |
Brett E. Scribner U.S. Bank National Association 800 Nicollet Mall Minneapolis, MN 55402 |
Senior Vice President, U.S. Bancorp Asset Management, Inc.; Corporate Tax Director, U.S. Bank National Association |
Item 32. Principal Underwriters
Registrant’s distributor, Quasar Distributors, LLC (the “Distributor”) acts as principal underwriter and distributor for the following investment companies:
| 1919 Funds | Fiera Capital Funds | Perritt Funds, Inc. |
| Abbey Capital Futures Strategy Fund | First American Funds, Inc. | PIA Funds |
| AC One China Fund | First State Funds | Poplar Forest Funds |
| ACSI Funds | Fort Pitt Capital Group, Inc. | Port Street Funds |
| Academy Asset ETF Funds | Fulcrum Funds | Primecap Odyssey Funds |
| Academy Fund Trust | Fund X Funds | Prospector Funds |
| Advantus Mutual Funds | Geneva Advisors Funds | Provident Mutual Funds, Inc. |
| Aegis Funds | Glenmede Fund, Inc. | Pzena Funds |
| Akre Funds | Glenmede Portfolios | Rainier Funds |
| Allied Asset Advisors Funds | GoodHaven Funds | Rareview Funds |
| Alpha Architect Funds | Great Lakes Funds | RBC Funds Trust |
| Alpha Funds | Greenspring Fund | Reinhart Funds |
| AlphaClone ETF Fund | Green Square Capital | RiverNorth Funds |
| AlphaMark ETFs | Harding Loevner Funds | Rockefeller Funds |
7
| Alpine Equity Trust | Hennessy Funds Trust | Scharf Funds |
| Alpine Income Trust | Hodges Funds | Schneider Funds |
| Alpine Series Trust | Hood River Funds | Schooner Investment Group |
| Altair Smaller Companies Fund | Horizon Investment Funds | Scotia Funds |
| American Trust | Hotchkis & Wiley Funds | Semper Funds |
| Amplify ETFs | Huber Funds | Shenkman Funds |
| Angel Oak Funds | Infinity Q Funds | SIMS Total Return Fund |
| Appleton Partners Inc | Infusive Funds | Smith Group Funds |
| Aptus ETF | Intelligration | Snow Capital Family of Funds |
| Ballantyne ETF | Intrepid Capital Management | Soundwatch Fund |
| Barrett Growth Fund | IronBridge Funds | Spencer Capital Funds |
| Barrett Opportunity Fund | Jackson Square Partners | Stone Ridge Trust I |
| Becker Value Equity Fund | Jacob Funds, Inc. | Stone Ridge Trust II |
| Bogle Investment Management | Jensen Funds | Stone Ridge Trust III |
| Boston Common Funds | Kellner Funds | Stone Ridge Trust IV |
| Boston Partners Fund | Kensho ETFs | Stone Ridge Trust V |
| Bramshill Funds | Kirr Marbach Partners Funds, Inc | Summit Global Funds |
| Bridge Builder Trust | Lawson Kroeker Funds | Thomas White Funds |
| Bridge City Capital | LKCM Funds | Thompson IM Funds, Inc. |
| Bridges Investment Fund, Inc. | LoCorr Investment Trust | Tiedemann Funds |
| Bright Rock Funds | Logan Capital Funds | Torray Funds |
| Brookfield Investment Funds | Loncar ETFs | TorrayResolute Funds |
| Brown Advisory Funds | Lyxor Asset Management Funds | Tortoise Funds |
| Buffalo Funds | MainGate MLP Funds | Trillium Funds |
| Bushido Funds | Marketfield Fund | TrimTabs ETF |
| CAN SLIM Select Growth Fund | Matrix Asset Advisors, Inc. | Trust and Fiduciary Management |
| Capital Advisors Funds | Matson Money Funds | Services ETF |
| CG Funds Trust | Mar Vista Funds | Tygh Capital Management |
| Chase Funds | MD Sass | US Global ETFs |
| Coho Partners | Monetta Trust | USA Mutuals Funds |
| Coldstream Funds | Morgan Dempsey Funds | USCA Shield Fund |
| Collins Capital Funds | Muhlenkamp Fund | Validea Funds |
| Congress Funds | Muzinich Funds | Victory Portfolios II |
| Consilium Funds | Nicholas Funds | Vident Funds |
| Convergence Funds | Nuance Funds | Villere & Co. |
| Cove Street Capital Funds | Oakhurst Funds | Wasmer Schroeder Funds |
| Cushing Funds | Oaktree Funds | WBI Funds |
| Davidson Funds | Orinda Funds | Weiss Multi-Strategy Funds |
| Dearborn Funds | O’Shaughnessy Funds | Welton Partners |
| Diamond Hill | Osterweis Funds | Westchester Capital Funds |
| DoubleLine Funds | Otter Creek Funds | Wisconsin Capital Funds, Inc. |
| Edgar Lomax Value Fund | Pension Partners Funds | YCG Funds |
| Evercore Equity Fund | Permanent Portfolio Funds | Zevenbergen Capital Investment |
| Evermore Global Investors Trust | Pemberwick Funds | Funds |
The board members and officers of Quasar Distributors, LLC and their positions or offices with the Registrant are identified in the following table. Unless otherwise noted, the business address for each board member or officer is Quasar Distributors, LLC 615 East Michigan Street, Milwaukee, WI 53202.
Name |
Position and Offices with Underwriter |
Position and Offices with Registrant |
| James R. Schoenike | President, Board Member, General Securities Principal and FINRA Executive Officer | None |
| Joseph Neuberger | Board Member | None |
| Robert
Kern 777 East Wisconsin Avenue |
Board Member | None |
8
Name |
Position and Offices with Underwriter |
Position and Offices with Registrant |
| Milwaukee, WI 53202 | ||
| Peter Hovel | Chief Financial Officer | None |
| Susan L. LaFond | Vice President and Treasurer | None |
Brett E. Scribner 800 Nicollet Mall Minneapolis, MN 55402
|
Assistant Treasurer | None |
Andrew M. Strnad 6602 E. 75th Street Indianapolis, IN 46250
|
Vice President and Secretary | None |
| Teresa Cowan | Senior Vice President, Assistant Secretary, General Securities Principal and Chief Compliance Officer | None |
Item 33. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules promulgated thereunder are maintained by U.S. Bancorp Asset Management, Inc., 800 Nicollet Mall, Minneapolis, Minnesota, 55402, and U.S. Bancorp Fund Services, LLC, 615 E. Michigan Street, Milwaukee, Wisconsin 53202.
Item 34. Management Services
Not applicable.
Item 35. Undertakings
Not applicable.
9
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 to its Registration Statement Nos. 002-74747 and 811-03313 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 13th day of October, 2017.
| FIRST AMERICAN FUNDS, INC. | ||
| By: | /s/ Eric J. Thole | |
Eric J. Thole, President |
||
Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment to the Registration Statement has been signed below by the following persons in the capacities indicated and on October 13, 2017.
| SIGNATURE | TITLE |
| /s/ Eric J. Thole | President
|
Eric J. Thole
| |
| /s/ Jill M. Stevenson | Treasurer (principal financial/accounting officer) |
Jill M. Stevenson
| |
|
* |
Director |
David K. Baumgardner
| |
|
* |
Director |
Mark E. Gaumond
| |
| * | Director |
Roger A. Gibson
| |
| * | Chair |
Richard K. Riederer
| |
| * | Director |
| James M. Wade | |
* Richard J. Ertel, by signing his name hereto, does hereby sign this document on behalf of each of the above-named Directors of First American Funds, Inc. pursuant to the powers of attorney duly executed by such persons.
| |
| By: /s/ Richard J. Ertel | Attorney-in-Fact |
| Richard J. Ertel | |
10
Index to Exhibits
| Exhibit Number | Name of Exhibit | |
| (a)(16) | Certificate of Designation for Class P shares | |
| (b) | Amended Bylaws | |
| (d)(6) | Expense Limitation for Class P shares | |
| (h)(4) | Amendment to Sub-Administration Agreement | |
| (h)(6) | Amended Shareholder Service Plan and Agreement | |
| (i) | Opinion and Consent of Dorsey & Whitney | |
| (n) | Amended Multiple Class Plan Pursuant to Rule 18f-3 | |
| (p)(2) | Advisor Code of Ethics | |
| (q) | Power of Attorney |
11
Exhibit 99(a)(16)
FIRST AMERICAN FUNDS, INC.
CERTIFICATE OF DESIGNATION OF
SERIES C AND D, CLASS EIGHT COMMON SHARES
PURSUANT TO MINNESOTA STATUTES,
SECTION 302A.401, SUBD.3
The undersigned, being the duly elected Secretary of First American Funds, Inc., a Minnesota corporation (“FAF”), hereby certifies that the following is a true, complete and correct copy of resolutions duly adopted by a majority of the directors of the Board of Directors of the FAF on September 19, 2017:
Approval of Class P Shares of Government
Obligations Fund and
Treasury Obligations Fund
WHEREAS, management of FAF has recommended the creation of Class P Shares of Government Obligations Fund and Treasury Obligations Fund (each, a “Fund” and, collectively, the “Funds”); and
WHEREAS, the Board of Directors desires to take the actions necessary in order to establish such Class P Shares of each such Fund.
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority contained in Article 5 of the Articles of Incorporation of FAF, 20,000,000,000 of the authorized, unissued and undesignated shares of Series C Common Shares of FAF be, and hereby are, designated as Series C, Class Eight Common Shares, to be known as Government Obligations Fund, Class P Shares.
RESOLVED, FURTHER, that pursuant to the authority contained in Article 5 of the Articles of Incorporation of FAF, 20,000,000,000 of the authorized, unissued and undesignated shares of Series D Common Shares of FAF be, and hereby are, designated as Series D, Class Eight Common Shares, to be known as Treasury Obligations Fund, Class P Shares.
RESOLVED, FURTHER, that each share of each such class shall have all the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption that are set forth in FAF’s Articles of Incorporation with respect to its shares of capital stock.
RESOLVED, FURTHER, that the officers of FAF be, and the same hereby are, authorized and directed to file a Certificate of Designation with the Secretary of State of the State of Minnesota for the creation of the new classes of Common Shares of FAF as set forth above, consistent with the provisions set forth above, which Certificate of Designation shall be deemed approved and adopted by the Board of Directors as if set forth herein.
RESOLVED, FURTHER, that FAF’s Bylaws be amended to reflect the addition of such new classes.
RESOLVED, FURTHER, that the FAF Amended and Restated Multiple Class Plan Pursuant to Rule 18f-3, effective October 11, 2016, (“the Plan”) be, and the same hereby is, amended to add Class P Shares of each Fund to the list of Funds and classes which are subject to such Plan.
RESOLVED, FURTHER, that the officers of FAF be, and the same hereby are, authorized and directed, in the name and on behalf of FAF, to execute and file with the Securities and Exchange Commission an amendment to FAF’s Registration Statement on Form N-1A, and any necessary or appropriate amendments thereto, for the registration of the new classes of shares of the Funds designated above; and all actions heretofore taken by such officers with respect to such amendments are hereby ratified.
RESOLVED, FURTHER, that the officers of FAF be, and the same hereby are, authorized and directed, in the name and on behalf of FAF, to execute and file with the state securities commissions of the various states such registrations and qualifications as they deem to be necessary or appropriate in order to provide for the registration, qualification or exemption of such new classes of shares under the respective states’ securities and “Blue Sky” laws.
RESOLVED, FURTHER, that Government Obligations Fund and Treasury Obligations Fund each be, and it hereby is, authorized to issue the Class P Shares designated above in the manner and on the terms and conditions set forth in its prospectus as the same may be amended or supplemented from time to time; and upon payment therefor in accordance with such prospectus, such shares shall be duly issued and outstanding, fully paid and nonassessable.
RESOLVED, FURTHER, that the officers of FAF be, and the same hereby are, authorized and directed to take such further actions, to make such further filings, and to execute and deliver such further certificates and other instruments, as they deem upon the advice of counsel to be necessary or appropriate in order to carry out the foregoing resolutions and all actions heretofore taken by such officers with respect to the foregoing resolutions are hereby ratified.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of Designation this 28th day of September, 2017.
| /s/ Richard J. Ertel | |
| Richard J. Ertel, Secretary |
Exhibit 99(b)
As approved at Board of Directors Meeting on December 4, 1990; Amendment to Section 1.01 approved at Board of Directors Meeting on 6/1/93; Amendments to Article IV approved at Board of Directors Meeting on 9/7/93; Amendments to Section 1.01 approved at Board of Directors Meeting on 12/7/94; Amendments to Section 1.01 approved at Board of Directors Meeting on 6/4/97; Amendment to Section 1.01 approved at Board of Directors Meeting on 2/23/98; Amendment to Section 1.01 approved at Board of Directors Meeting on 12/9/98; Amendment to Section 3.13 approved at Board of Directors Meeting on 2/23/99; Amendment to Section 2.06 approved at Board of Directors Meeting on 12/8/99; Amendment to Section 1.01 approved at Board of Directors Meeting on 6/1/01; Amendment to Section 1.01 approved at Board of Directors Meeting on 6/4/03; Amendment to Section 1.01 approved at Board of Directors Meeting on 9/4/03; Amendment to Section 1.01 approved at Board of Directors Meeting on 12/3/03; Amendment to Section 1.01 approved at Board of Directors Meeting on 9/16/04; Amendment to Section 1.01 approved at Board of Directors Meeting on 2/22/06; Amendment to Section 1.01 approved at Board of Directors Meeting on 9/19/06; Amendment to Section 1.01 approved at Board of Directors Meeting on 9/23/15; Amendment to Section 13.03 approved at Board of Directors Meeting on 12/17/15. Amendment to Section 1.01 approved by Board of Directors Written Consent on 07/15/16. Amendment to Section 1.01 approved by Board of Directors Written Consent on 10/11/16. Amendment to Section 1.01 approved at Board of Directors Meeting on 9/19/17.
BYLAWS
OF
FIRST AMERICAN FUNDS, INC.
ARTICLE I.
OFFICES, CORPORATE SEAL
Section 1.01. Name. The name of the corporation is “FIRST AMERICAN FUNDS, INC.” The names of the series represented by the series of shares designated in the corporation’s articles of incorporation shall be as follows:
Series B, Class One: Institutional Prime Obligations Fund, “Class Y” (formerly Prime Obligations Fund, “Class Y”)
Series B, Class Two: Institutional Prime Obligations Fund, “Class D” (formerly Prime Obligations Fund, “Class D”)
Series B, Class Three: Institutional Prime Obligations Fund, “Class X” (formerly Prime Obligations Fund, “Class X” and Prime Obligations Fund, “Piper Shares”)
Series B, Class Four: Reserved (formerly Prime Obligations Fund, “Class B”)
Series B, Class Five: Reserved (formerly Prime Obligations Fund, “Class C”)
Series B, Class Six: Institutional Prime Obligations Fund, “Class A” (formerly Prime Obligations Fund, “Class A” and Prime Obligations Fund, “Class S”)
Series B, Class Seven: Institutional Prime Obligations Fund, “Class T” (formerly Prime Obligations Fund, “Class I”)
Series B, Class Eight: Institutional Prime Obligations Fund, “Class Z” (formerly Prime Obligations Fund, “Class Z”)
Series B, Class Nine: Institutional Prime Obligations Fund, “Class V” (formerly Prime Obligations Fund, “Institutional Investor Shares”)
Series B, Class Ten: Institutional Prime Obligations Fund, “Class Q” (formerly Prime Obligations Fund, “Class Q”)
Series C, Class One: Government Obligations Fund, “Class Y”
Series C, Class Two: Government Obligations Fund, “Class D”
Series C, Class Three: Government Obligations Fund, “Class X” (formerly “Piper Shares”)
Series C, Class Four: Government Obligations Fund, “Class A” (formerly “Class S”)
Series C, Class Five: Government Obligations Fund, “Class Z”
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Series C, Class Six: Government Obligations Fund, “Class V” (formerly “Institutional Investor Shares”)
Series C, Class Eight: Government Obligations Fund, “Class P”
Series C, Class Ten: Government Obligations Fund, “Class Q”
Series D, Class One: Treasury Obligations Fund, “Class Y”
Series D, Class Two: Treasury Obligations Fund, “Class D”
Series D, Class Three: Treasury Obligations Fund, “Class X” (formerly “Piper Shares”)
Series D, Class Four: Treasury Obligations Fund, “Class A” (formerly “Class S”)
Series D, Class Five: Treasury Obligations Fund, “Class Z”
Series D, Class Six: Treasury Obligations Fund, “Class G” (formerly “Reserve Shares”)
Series D, Class Seven: Treasury Obligations Fund, “Class V” (formerly “Institutional Investor Shares”)
Series D, Class Eight: Treasury Obligations Fund, “Class P”
Series D, Class Ten: Treasury Obligations Fund, “Class Q”
Series F, Class One: Reserved (formerly Tax Free Obligations Fund, “Piper Shares”)
Series F, Class Two: Reserved (formerly Tax Free Obligations Fund, “Class B”)
Series F, Class Three: Retail Tax Free Obligations Fund, “Class Y” (formerly Tax Free Obligations Fund, “Class Y”)
Series F, Class Four: Retail Tax Free Obligations Fund, “Class D” (formerly Tax Free Obligations Fund, “Class D”)
Series F, Class Five: Retail Tax Free Obligations Fund, “Class A” (formerly Tax Free Obligations Fund, “Class A” and Tax Free Obligations Fund, “Class S”)
Series F, Class Six: Retail Tax Free Obligations Fund, “Class Z” (formerly Tax Free Obligations Fund, “Class Z”)
Series F, Class Seven: Retail Tax Free Obligations Fund, “Class V” (formerly Tax Free Obligations Fund, “Institutional Investor Shares”)
Series G, Class One: Reserved (formerly Treasury Reserve Fund, “Class A”)
Series H, Class One: Reserved (formerly Ohio Tax Free Obligations Fund, “Class A”)
Series H, Class Two: Reserved (formerly Ohio Tax Free Obligations Fund, “Class Y”)
Series H, Class Three: Reserved (formerly Ohio Tax Free Obligations Fund, “Class S”)
Series I, Class One: U.S. Treasury Money Market Fund, “Class A”
Series I, Class Two: U.S. Treasury Money Market Fund, “Class D”
Series I, Class Three: U.S. Treasury Money Market Fund, “Class Y”
Series I, Class Four: U.S. Treasury Money Market Fund, “Class Z”
Series I, Class Five: U.S. Treasury Money Market Fund, “Class V” (formerly “Institutional Investor Shares”)
Series J, Class One: Retail Prime Obligations Fund, “Class A”
Series J, Class Two: Retail Prime Obligations Fund, “Class T”
Series J, Class Three: Retail Prime Obligations Fund, “Class V”
Series J, Class Four: Retail Prime Obligations Fund, “Class X”
Series J, Class Five: Retail Prime Obligations Fund, “Class Y”
Series J, Class Six: Retail Prime Obligations Fund, “Class Z”
Section 1.02. Registered Office. The registered office of the corporation in Minnesota shall be that set forth in the Articles of Incorporation or in the most recent amendment
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of the Articles of Incorporation or resolution of the directors filed with the Secretary of State of Minnesota changing the registered office.
Section 1.03. Other Offices. The corporation may have such other offices, within or without the State of Minnesota, as the directors shall, from time to time, determine.
Section 1.04. Corporate Seal. The corporate seal shall be circular in form and shall have inscribed thereon the name of the corporation and the word “Minnesota” and the words “Corporate Seal.” The form of the seal shall be subject to alteration by the Board of Directors, and the seal may be used by causing it or a facsimile to be impressed or affixed or printed or otherwise reproduced. Any officer or director of the corporation shall have authority to affix the corporate seal of the corporation to any document requiring the same.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 2.01. Place and Time of Meeting. Except as provided otherwise by Minnesota Statutes Chapter 302A, meetings of the shareholders may be held at any place, within or without the State of Minnesota, designated by the directors and, in the absence of such designation, shall be held at the registered office of the corporation in the State of Minnesota. The directors shall designate the time of day for each meeting and, in the absence of such designation, every meeting of shareholders shall be held at ten o’clock a.m.
Section 2.02. Regular Meetings. Annual meetings of shareholders are not required by these Bylaws. Regular meetings shall be held only with such frequency and at such times and places as provided in and required by Minnesota Statutes Section 302A.431.
Section 2.03. Special Meetings. Special meetings of the shareholders may be held at any time and for any purpose and may be called by the Chairman of the Board, the President, any two directors, or by one or more shareholders holding ten percent (10%) or more of the shares entitled to vote on the matters to be presented to the meeting.
Section 2.04. Quorum, Adjourned Meetings. The holders of ten percent (10%) of the shares outstanding and entitled to vote shall constitute a quorum for the transaction of business at any regular or special meeting. In case a quorum shall not be present at a meeting, those present in person or by proxy shall adjourn the meeting to such day as they shall, by majority vote, agree upon without further notice other than by announcement at the meeting at which such adjournment is taken. If a quorum is present, a meeting may be adjourned from time to time without notice other than announcement at the meeting. At adjourned meetings at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally noticed. If a quorum is present, the shareholders may continue to transact business until adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
Section 2.05. Voting. At each meeting of the shareholders, every shareholder having the right to vote shall be entitled to vote either in person or by proxy. Each shareholder,
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unless the Articles of Incorporation provide otherwise, shall have one vote for each share having voting power registered in his name on the books of the corporation. Except as otherwise specifically provided by these Bylaws or as required by provisions of the Investment Company Act of 1940 or other applicable laws, all questions shall be decided by a majority vote of the number of shares entitled to vote and represented at the meeting at the time of the vote. If the matter(s) to be presented at a regular or special meeting relates only to particular classes or series of the corporation, then only the shareholders of such classes or series are entitled to vote on such matter(s).
Section 2.06. Voting - Proxies. At any meeting of the shareholders, every shareholder having the right to vote shall be entitled to vote by proxy submitted by any means permitted by Minnesota Statutes Section 302A.449 or any successor provision of Minnesota Statutes. No proxy shall be voted after eleven months from its date unless it provides for a longer period.
Section 2.07. Closing of Books. The Board of Directors may fix a time, not exceeding sixty (60) days preceding the date of any meeting of shareholders, as a record date for the determination of the shareholders entitled to notice of, and to vote at, such meeting, notwithstanding any transfer of shares on the books of the corporation after any record date so fixed. The Board of Directors may close the books of the corporation against the transfer of shares during the whole or any part of such period. If the Board of Directors fails to fix a record date for determination of the shareholders entitled to notice of, and to vote at, any meeting of shareholders, the record date shall be the thirtieth (30th) day preceding the date of such meeting.
Section 2.08. Notice of Meetings. There shall be mailed to each shareholder, shown by the books of the corporation to be a holder of record of voting shares, at his address as shown by the books of the corporation, a notice setting out the date, time and place of each regular meeting and each special meeting, except where the meeting is an adjourned meeting and the date, time and place of the meeting were announced at the time of adjournment, which notice shall be mailed within the period required by law. Every notice of any special meeting shall state the purpose or purposes for which the meeting has been called, pursuant to Section 2.03, and the business transacted at all special meetings shall be confined to the purpose stated in such notice.
Section 2.09. Waiver of Notice. Notice of any regular or special meeting may be waived either before, at or after such meeting orally or in a writing signed by each shareholder or representative thereof entitled to vote the shares so represented. A shareholder by his attendance at any meeting of shareholders, shall be deemed to have waived notice of such meeting, except where the shareholder objects at the beginning of the meeting to the transaction of business because the item may not lawfully be considered at that meeting and does not participate at that meeting in the consideration of the item at that meeting.
Section 2.10. Written Action. Any action which might be taken at a meeting of the shareholders may be taken without a meeting if done in writing and signed by all of the shareholders entitled to vote on that action. If the action to be taken relates to particular classes or series of the corporation, then only shareholders of such classes or series are entitled to vote on such action.
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ARTICLE III.
DIRECTORS
Section 3.01. Number, Qualification and Term of Office. Until the first meeting of shareholders, the number of directors shall be the number named in the Articles of Incorporation. Thereafter, the number of directors shall be established by resolution of the shareholders (subject to the authority of the Board of Directors to increase or decrease the number of directors as permitted by law). In the absence of such shareholder resolution, the number of directors shall be the number last fixed by the shareholders, the Board of Directors or the Articles of Incorporation. Directors need not be shareholders. Each of the directors shall hold office until the regular meeting of shareholders next held after his election and until his successor shall have been elected and shall qualify, or until the earlier death, resignation, removal or disqualification of such director.
Section 3.02. Election of Directors. Except as otherwise provided in Sections 3.11 and 3.12 hereof, the directors shall be elected at the regular shareholders’ meeting. In the event that directors are not elected at a regular shareholders’ meeting, then directors may be elected at a special shareholders’ meeting, provided that the notice of such meeting shall contain mention of such purpose. At each shareholders’ meeting for the election of directors, the directors shall be elected by a plurality of the votes validly cast at such election. Each holder of shares of each class or series of stock of the corporation shall be entitled to vote for directors and shall have equal voting power for each share of each class or series of the corporation.
Section 3.03. General Powers.
(a) Except as otherwise permitted by statute, the property, affairs and business of the corporation shall be managed by the Board of Directors, which may exercise all the powers of the corporation except those powers vested solely in the shareholders of the corporation by statute, the Articles of Incorporation or these Bylaws, as amended.
(b) All acts done by any meeting of the Directors or by any person acting as a director, so long as his successor shall not have been duly elected or appointed, shall, notwithstanding that it be afterwards discovered that there was some defect in the election of the directors or such person acting as aforesaid or that they or any of them were disqualified, be as valid as if the directors or such other person, as the case may be, had been duly elected and were or was qualified to be directors or a director of the corporation.
Section 3.04. Power to Declare Dividends.
(a) The Board of Directors, from time to time as they may deem advisable, may declare and pay dividends in cash or other property of the corporation, out of any source available for dividends, to the shareholders of each class or series of stock of the corporation according to their respective rights and interests in the investment portfolio of the corporation issuing such class or series of stock.
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(b) The Board of Directors shall cause to be accompanied by a written statement any dividend payment wholly or partly from any source other than
(i) the accumulated and accrued undistributed net income of each class or series (determined in accordance with generally accepted accounting practice and the rules and regulations of the Securities and Exchange Commission then in effect) and not including profits or losses realized upon the sale of securities or other properties; or
(ii) the net income of each class or series so determined for the current or preceding fiscal year.
Such statement shall adequately disclose the source or sources of such payment and the basis of calculation and shall be in such form as the Securities and Exchange Commission may prescribe.
(c) Notwithstanding the above provisions of this Section 3.04, the Board of Directors may at any time declare and distribute pro rata among the shareholders of each class or series of stock a “stock dividend” out of the authorized but unissued shares of stock of each class or series, including any shares previously purchased by a class or series of the corporation.
Section 3.05. Board Meetings. Meetings of the Board of Directors may be held from time to time at such time and place within or without the State of Minnesota as may be designated in the notice of such meeting.
Section 3.06. Calling Meetings, Notice. A director may call a board meeting by giving ten (10) days notice to all directors of the date, time and place of the meeting; provided that if the day or date, time and place of a board meeting have been announced at a previous meeting of the board, no notice is required.
Section 3.07. Waiver of Notice. Notice of any meeting of the Board of Directors may be waived by any director either before, at or after such meeting orally or in a writing signed by such director. A director, by his attendance and participation in the action taken at any meeting of the Board of Directors, shall be deemed to have waived notice of such meeting, except where the director objects at the beginning of the meeting to the transaction of business because the item may not lawfully be considered at that meeting and does not participate at that meeting in the consideration of the item at that meeting.
Section 3.08. Quorum. A majority of the directors holding office immediately prior to a meeting of the Board of Directors shall constitute a quorum for the transaction of business at such meeting; provided however, notwithstanding the above, if the Board of Directors is taking action pursuant to the Investment Company Act of 1940, as now enacted or hereafter amended, a majority of directors who are not “interested persons” (as defined by the Investment Company Act of 1940, as now enacted or hereafter amended) of the corporation shall constitute a quorum for taking such action.
Section 3.09. Advance Consent or Opposition. A director may give advance written consent or opposition to a proposal to be acted on at a meeting of the Board of Directors. If such director is not present at the meeting, consent or opposition to a proposal does not
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constitute presence for purposes of determining the existence of a quorum, but consent or opposition shall be counted as a vote in favor of or against the proposal and shall be entered in the minutes or other record of action at the meeting, if the proposal acted on at the meeting is substantially the same or has substantially the same effect as the proposal to which the director has consented or objected. This procedure shall not be used to act on any investment advisory agreement or plan of distribution adopted under Rule 12b-1 of the Investment Company Act of 1940, as amended.
Section 3.10. Conference Communications. Any or all directors may participate in any meeting of the Board of Directors, or of any duly constituted committee thereof, by any means of communication through which the directors may simultaneously hear each other during such meeting. For the purposes of establishing a quorum and taking any action at the meeting, such directors participating pursuant to this Section 3.11 shall be deemed present in person at the meeting, and the place of the meeting shall be the place of origination of the conference communication. This procedure shall not be used to act on any investment advisory agreement or plan of distribution adopted under Rule 12b-1 of the Investment Company Act of 1940, as amended.
Section 3.11. Vacancies; Newly Created Directorships. Vacancies in the Board of Directors of this corporation occurring by reason of death, resignation, removal or disqualification shall be filled for the unexpired term by a majority of the remaining directors of the Board although less than a quorum; newly created directorships resulting from an increase in the authorized number of directors by action of the Board of Directors as permitted by Section 3.01 may be filled by a two-thirds (2/3) vote of the directors serving at the time of such increase; and each person so elected shall be a director until his successor is elected by the shareholders at their next regular or special meeting; provided, however, that no vacancy can be filled as provided above if prohibited by the provisions of the Investment Company Act of 1940.
Section 3.12. Removal. The entire Board of Directors or an individual director may be removed from office, with or without cause, by a vote of the shareholders holding a majority of the shares entitled to vote at an election of directors. In the event that the entire Board or any one or more directors be so removed, new directors shall be elected at the same meeting, or the remaining directors may, to the extent vacancies are not filled at such meeting, fill any vacancy or vacancies created by such removal. A director named by the Board of Directors to fill a vacancy may be removed from office at any time, with or without cause, by the affirmative vote of the remaining directors if the shareholders have not elected directors in the interim between the time of the appointment to fill such vacancy and the time of the removal.
Section 3.13. Committees. A resolution approved by the affirmative vote of a majority of the Board of Directors may establish committees having the authority of the board in the management of the business of the corporation to the extent provided in the resolution. A committee shall consist of one or more persons, who need not be directors, appointed by affirmative vote of a majority of the directors present. Committees are subject to the direction and control of, and vacancies in the membership thereof shall be filled by, the Board of Directors.
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Except as set forth in the following paragraph, a majority of the members of the committee present at a meeting is a quorum for the transaction of business, unless a larger or smaller proportion or number is provided in a resolution approved by the affirmative vote of a majority of the directors present.
If a Pricing Committee is appointed, a quorum of such committee shall consist of one member of the committee.
Section 3.14. Written Action. Any action which might be taken at a meeting of the Board of Directors, or any duly constituted committee thereof, may be taken without a meeting if done in writing and signed by all of the directors or committee members.
Section 3.15. Compensation. Directors shall receive such fixed sum per meeting attended or such fixed annual sum as shall be determined, from time to time, by resolution of the Board of Directors. All directors shall receive their expenses, if any, of attendance at meetings of the Board of Directors or any committee thereof. Nothing herein contained shall be construed to preclude any director from serving this corporation in any other capacity and receiving proper compensation therefor.
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ARTICLE IV.
OFFICERS AND CHAIRMAN OF THE BOARD OF DIRECTORS
Section 4.01. Number. The officers of the corporation shall consist of the President, one or more Vice Presidents (if desired by the Board), a Secretary, a Treasurer and such other officers and agents as may, from time to time, be elected by the Board of Directors. Any number of offices may be held by the same person.
Section 4.02. Election, Term of Office and Qualifications. The Board of Directors shall elect, from within or without their number, the officers referred to in Section 4.01 of these Bylaws, each of whom shall have the powers, rights, duties, responsibilities and terms in office provided for in these Bylaws or a resolution of the Board not inconsistent therewith. The President and all other officers who may be directors shall continue to hold office until the election and qualification of their successors, notwithstanding an earlier termination of their directorship.
Section 4.03. Resignation. Any officer (or the Chairman of the Board of Directors) may resign his office at any time by delivering a written resignation to the corporation. Unless otherwise specified therein, such resignation shall take effect upon delivery.
Section 4.04. Removal and Vacancies. Any officer (or the Chairman of the Board of Directors) may be removed from his office by a majority of the Board of Directors with or without cause. Such removal, however, shall be without prejudice to the contract rights of the person so removed. If there be a vacancy among the officers (or the Chairman of the Board of Directors) of the corporation by reason of death, resignation or otherwise, such vacancy shall be filled for the unexpired term by the Board of Directors.
Section 4.05. Chairman of the Board. The Board of Directors may elect one of its members as Chairman of the Board. The Chairman of the Board, if one is elected, shall preside at all meetings of the shareholders and directors and shall have such other duties as may be prescribed, from time to time, by the Board of Directors. The Chairman of the Board of Directors will under no circumstances be deemed to be an “officer” of the corporation, and an individual serving as Chairman of the Board of Directors will not be deemed to be an “affiliated person” with respect to the corporation (under the Investment Company Act of 1940, as amended) solely by virtue of such person’s position as Chairman of the Board of Directors of the corporation.
Section 4.06. President. The President shall have general active management of the business of the corporation. In the absence of the Chairman of the Board, he shall preside at all meetings of the shareholders and directors. He shall be the chief executive officer of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall be ex officio a member of all standing committees. He may execute and deliver, in the name of the corporation, any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the corporation and, in general, shall perform all duties usually incident to the office of the President. He shall have such other duties as may, from time to time, be prescribed by the Board of Directors.
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Section 4.07. Vice President. Each Vice President shall have such powers and shall perform such duties as may be specified in the Bylaws or prescribed by the Board of Directors or by the President. In the event of absence or disability of the President, Vice Presidents shall succeed to his power and duties in the order designated by the Board of Directors.
Section 4.08. Secretary. The Secretary shall be secretary of, and shall attend, all meetings of the shareholders and Board of Directors and shall record all proceedings of such meetings in the minute book of the corporation. He shall give proper notice of meetings of shareholders and directors. He shall keep the seal of the corporation and shall affix the same to any instrument requiring it and may, when necessary, attest the seal by his signature. He shall perform such other duties as may, from time to time, be prescribed by the Board of Directors or by the President.
Section 4.09. Treasurer. The Treasurer shall be the chief financial officer and shall keep accurate accounts of all money of the corporation received or disbursed. He shall deposit all moneys, drafts and checks in the name of, and to the credit of, the corporation in such banks and depositories as a majority of the Board of Directors shall, from time to time, designate. He shall have power to endorse, for deposit, all notes, checks and drafts received by the corporation. He shall disburse the funds of the corporation, as ordered by the Board of Directors, making proper vouchers therefor. He shall render to the President and the directors, whenever required, an account of all his transactions as Treasurer and of the financial condition of the corporation, and shall perform such other duties as may, from time to time, be prescribed by the Board of Directors or by the President.
Section 4.10. Assistant Secretaries. At the request of the Secretary, or in his absence or disability, any Assistant Secretary shall have power to perform all the duties of the Secretary, and, when so acting, shall have all the powers of, and be subject to all restrictions upon, the Secretary. The Assistant Secretaries shall perform such other duties as from time to time may be assigned to them by the Board of Directors or the President.
Section 4.11. Assistant Treasurers. At the request of the Treasurer, or in his absence or disability, any Assistant Treasurer shall have power to perform all the duties of the Treasurer, and when so acting, shall have all the powers of, and be subject to all the restrictions upon, the Treasurer. The Assistant Treasurers shall perform such other duties as from time to time may be assigned to them by the Board of Directors or the President.
Section 4.12. Compensation. The officers (and the Chairman of the Board of Directors) of this corporation shall receive such compensation for their services as may be determined, from time to time, by resolution of the Board of Directors.
Section 4.13. Surety Bonds. The Board of Directors may require any officer or agent of the corporation to execute a bond (including, without limitation, any bond required by the Investment Company Act of 1940 and the rules and regulations of the Securities and Exchange Commission) to the corporation in such sum and with such surety or sureties as the Board of Directors may determine, conditioned upon the faithful performance of his duties to the
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corporation, including responsibility for negligence and for the accounting of any of the corporation’s property, funds or securities that may come into his hands. In any such case, a new bond of like character shall be given at least every six years, so that the dates of the new bond shall not be more than six years subsequent to the date of the bond immediately preceding.
ARTICLE V.
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. Certificate for Shares.
(a) The corporation may have certificated or uncertificated shares, or both, as designated by resolution of the Board of Directors. Every owner of certificated shares of the corporation shall be entitled to a certificate, to be in such form as shall be prescribed by the Board of Directors, certifying the number of shares of the corporation owned by him. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the new shareholder the information required to be stated on certificates. Certificated shares shall be numbered in the order in which they shall be issued and shall be signed, in the name of the corporation, by the President or a Vice President and by the Secretary or an Assistant Secretary or by such officers as the Board of Directors may designate. Such signatures may be by facsimile if authorized by the Board of Directors. Every certificate surrendered to the corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 5.08.
(b) In case any officer, transfer agent or registrar who shall have signed any such certificate, or whose facsimile signature has been placed thereon, shall cease to be such an officer (because of death, resignation or otherwise) before such certificate is issued, such certificate may be issued and delivered by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
Section 5.02. Issuance of Shares. The Board of Directors is authorized to cause to be issued shares of the corporation up to the full amount authorized by the Articles of Incorporation in such classes or series and in such amounts as may be determined by the Board of Directors and as may be permitted by law. No shares shall be allotted except in consideration of cash or other property, tangible or intangible, received or to be received by the corporation under a written agreement, of services rendered or to be rendered to the corporation under a written agreement, or of an amount transferred from surplus to stated capital upon a share dividend. At the time of such allotment of shares, the Board of Directors making such allotments shall state, by resolution, their determination of the fair value to the corporation in monetary terms of any consideration other than cash for which shares are alloted. No shares of stock issued by the corporation shall be issued, sold or exchanged by or on behalf of the corporation for any amount less than the net asset value per share of the shares outstanding as determined pursuant to Article X hereunder.
Section 5.03. Redemption of Shares. Upon the demand of any shareholder, this corporation shall redeem any share of stock issued by it held and owned by such shareholder at
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the net asset value thereof as determined pursuant to Article X hereunder. The Board of Directors may suspend the right of redemption or postpone the date of payment during any period when: (a) trading on the New York Stock Exchange is restricted or such Exchange is closed for other than weekends or holidays; (b) the Securities and Exchange Commission has by order permitted such suspension; or (c) an emergency as defined by rules of the Securities and Exchange Commission exists, making disposal of portfolio securities or valuation of net assets of the corporation not reasonably practicable.
If following a redemption request by any shareholder of this corporation, the value of such shareholder’s interest in the corporation falls below the required minimum investment, as may be set from time to time by the Board of Directors, the corporation’s officers are authorized, in their discretion and on behalf of the corporation, to redeem such shareholder’s entire interest and remit such amount, provided that such a redemption will only be effected by the corporation following: (a) a redemption by a shareholder, which causes the value of such shareholder’s interest in the corporation to fall below the required minimum investment; (b) the mailing by the corporation to such shareholder of a “notice of intention to redeem”; and (c) the passage of at least sixty (60) days from the date of such mailing, during which time the shareholder will have the opportunity to make an additional investment in the corporation to increase the value of such shareholder’s account to at least the required minimum investment.
Section 5.04. Transfer of Shares. Transfer of shares on the books of the corporation may be authorized only by the shareholder named in the certificate, or the shareholder’s legal representative, or the shareholder’s duly authorized attorney-in-fact, and upon surrender of the certificate or the certificates for such shares or a duly executed assignment covering shares held in unissued form. The corporation may treat, as the absolute owner of shares of the corporation, the person or persons in whose name shares are registered on the books of the corporation.
Section 5.05. Registered Shareholders. The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of Minnesota.
Section 5.06. Transfer of Agents and Registrars. The Board of Directors may from time to time appoint or remove transfer agents and/or registrars of transfers of shares of stock of the corporation, and it may appoint the same person as both transfer agent and registrar. Upon any such appointment being made all certificates representing shares of capital stock thereafter issued shall be countersigned by one of such transfer agents or by one of such registrars of transfers or by both and shall not be valid unless so countersigned. If the same person shall be both transfer agent and registrar, only one countersignature by such person shall be required.
Section 5.07. Transfer Regulations. The shares of stock of the corporation may be freely transferred, and the Board of Directors may from time to time adopt rules and regulations with reference to the method of transfer of shares of stock of the corporation.
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Section 5.08. Lost, Stolen, Destroyed and Mutilated Certificates. The holder of any stock of the corporation shall immediately notify the corporation of any loss, theft, destruction or mutilation of any certificate therefor, and the Board of Directors may, in its discretion, cause to be issued to him a new certificate or certificates of stock, upon the surrender of the mutilated certificate or in case of loss, theft or destruction of the certificate upon satisfactory proof of such loss, theft or destruction. A new certificate or certificates of stock will be issued to the owner of the lost, stolen or destroyed certificate only after such owner, or his legal representatives, gives to the corporation and to such registrar or transfer agent as may be authorized or required to countersign such new certificate or certificates a bond, in such sum as they may direct, and with such surety or sureties, as they may direct, as indemnity against any claim that may be made against them or any of them on account of or in connection with the alleged loss, theft or destruction of any such certificate.
ARTICLE VI.
DIVIDENDS
Section 6.01. The net investment income of each class or series of the corporation will be determined, and its dividends shall be declared and made payable at such time(s) as the Board of Directors shall determine; dividends shall be payable to shareholders of record as of the date of declaration.
It shall be the policy of each class or series of the corporation to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code, so that such class or series will not be subjected to federal income tax on such part of its income or capital gains as it distributes to shareholders.
ARTICLE VII.
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. Share Register. The Board of Directors of the corporation shall cause to be kept at its principal executive office, or at another place or places within the United States determined by the board:
| (1) | a share register not more than one year old, containing the names and addresses of the shareholders and the number and classes or series of shares held by each shareholder; and |
| (2) | a record of the dates on which certificates or transaction statements representing shares were issued. |
Section 7.02. Other Books and Records. The Board of Directors shall cause to be kept at its principal executive office, or, if its principal executive office is not in Minnesota, shall make available at its registered office within ten days after receipt by an officer of the corporation of a written demand for them made by a shareholder or other person authorized by Minnesota Statutes Section 302A.461, originals or copies of:
| (1) | records of all proceedings of shareholders for the last three years; |
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| (2) | records of all proceedings of the Board of Directors for the last three years; |
| (3) | its articles and all amendments currently in effect; |
| (4) | its bylaws and all amendments currently in effect; |
| (5) | financial statements required by Minnesota Statutes Section 302A.463 and the financial statement for the most recent interim period prepared in the course of the operation of the corporation for distribution to the shareholders or to a governmental agency as a matter of public record; |
| (6) | reports made to shareholders generally within the last three years; |
| (7) | a statement of the names and usual business addresses of its directors and principal officers; |
| (8) | any shareholder voting or control agreements of which the corporation is aware; and |
| (9) | such other records and books of account as shall be necessary and appropriate to the conduct of the corporate business. |
Section 7.03. Audit; Accountant.
(a) The Board of Directors shall cause the records and books of account of the corporation to be audited at least once in each fiscal year and at such other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent public accountant or firm of independent public accountants as its Accountant to examine the accounts of the corporation and to sign and certify financial statements filed by the corporation. The Accountant’s certificates and reports shall be addressed both to the Board of Directors and to the shareholders.
(c) A majority of the members of the Board of Directors shall select the Accountant annually at a meeting held within thirty (30) days before or after the beginning of the fiscal year of the corporation or before the regular shareholders’ meeting in that year. Such selection shall be submitted for ratification or rejection at the next succeeding regular shareholders’ meeting. If such meeting shall reject such selection, the Accountant shall be selected by majority vote, either at the meeting at which the rejection occurred or at a subsequent meeting of shareholders called for the purpose.
(d) Any vacancy occurring between annual meetings, due to the death, resignation or otherwise of the Accountant, may be filled by the Board of Directors.
Section 7.04. Fiscal Year. The fiscal year of the corporation shall be determined by the Board of Directors.
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ARTICLE VIII.
INDEMNIFICATION OF CERTAIN PERSONS
Section 8.01. The corporation shall indemnify such persons, for such expenses and liabilities, in such manner, under such circumstances, and to such extent as permitted by Section 302A.521 of the Minnesota Statutes, as now enacted or hereafter amended, provided, however, that no such indemnification may be made if it would be in violation of Section 17(h) of the Investment Company Act of 1940, as now enacted or hereinafter amended.
ARTICLE IX.
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of Directors, the President, any Vice President, the Secretary or the Treasurer, may from time to time appoint an attorney or attorneys or agent or agents of the corporation, in the name and on behalf of the corporation, to cast the votes which the corporation may be entitled to cast as a stockholder or otherwise in any other corporation or association, any of whose stock or securities may be held by the corporation, at meetings of the holders of the stock or other securities of any such other corporation or association, or to consent in writing to any action by any such other corporation or association, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed on behalf of the corporation and under its corporate seal, or otherwise, such written proxies, consents, waivers or other instruments as it may deem necessary or proper; or any of such officers may themselves attend any meeting of the holders of stock or other securities of any such corporation or association and thereat vote or exercise any or all other rights of the corporation as the holder of such stock or other securities of such other corporation or association, or consent in writing to any action by any such other corporation or association.
ARTICLE X.
VALUATION OF NET ASSET VALUE
10.01. The net asset value per share of each class or series of stock of the corporation shall be determined in good faith by or under supervision of the officers of the corporation as authorized by the Board of Directors as often and on such days and at such time(s) as the Board of Directors shall determine, or as otherwise may be required by law, rule, regulation or order of the Securities and Exchange Commission.
ARTICLE XI.
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation shall, as hereinafter provided, be held by or deposited with a bank or trust company having (according to its last published report) not less than Two Million Dollars ($2,000,000) aggregate capital, surplus and undivided profits (the “Custodian”).
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This corporation shall enter into a written contract with the custodian regarding the powers, duties and compensation of the Custodian with respect to the cash and securities of this corporation held by the Custodian. Said contract and all amendments thereto shall be approved by the Board of Directors of this corporation. In the event of the Custodian’s resignation or termination, the corporation shall use its best efforts promptly to obtain a successor Custodian and shall require that the cash and securities owned by this corporation held by the Custodian be delivered directly to such successor Custodian.
ARTICLE XII.
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of the majority of the Board of Directors at any meeting provided that notice of such proposed amendment shall have been given in the notice given to the directors of such meeting. Such authority in the Board of Directors is subject to the power of the shareholders to change or repeal such bylaws by a majority vote of the shareholders present or represented at any regular or special meeting of shareholders called for such purpose, and the Board of Directors shall not make or alter any Bylaws fixing a quorum for meetings of shareholders, prescribing procedures for removing directors or filling vacancies in the Board of Directors, or fixing the number of directors or their classifications, qualifications or terms of office, except that the Board of Directors may adopt or amend any Bylaw to increase or decrease their number.
ARTICLE XIII.
MISCELLANEOUS
Section 13.01. Interpretation. When the context in which words are used in these Bylaws indicates that such is the intent, singular words will include the plural and vice versa, and masculine words will include the feminine and neuter genders and vice versa.
Section 13.02. Article and Section Titles. The titles of Sections and Articles in these Bylaws are for descriptive purposes only and will not control or alter the meaning of any of these Bylaws as set forth in the text.
Section 13.03. Forum for Adjudication of Disputes. Unless the corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Minnesota Business Corporation Act or the Articles of Incorporation or these Bylaws, (iv) any action to interpret, apply, enforce or determine the validity of the Articles of Incorporation or these Bylaws or (v) any action asserting a claim governed by the internal affairs doctrine shall be the courts of the State of Minnesota (each, a “Covered Action”). Any person purchasing or otherwise acquiring or holding any interest in shares of beneficial interest of the corporation shall be (i) deemed to have notice of and consented to the provisions of this Section 13.03, and (ii) deemed to have waived any argument
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relating to the inconvenience of the forums referenced above in connection with any action or proceeding described in this Section 13.03.
If any Covered Action is filed in a court other than the courts of the State of Minnesota (a “Foreign Action”) in the name of any shareholder, such shareholder shall be deemed to have consented to (i) the personal jurisdiction of the courts of the State of Minnesota in connection with any action brought in any such courts to enforce the first paragraph of this Section 13.03 (an “Enforcement Action”) and (ii) having service of process made upon such shareholder in any such Enforcement Action by service upon such shareholder’s counsel in the Foreign Action as agent for such shareholder. Furthermore, except to the extent prohibited by any provision of the Minnesota Business Corporation Act or the Articles of Incorporation, if any shareholder shall initiate or assert a Foreign Action without the written consent of the corporation, then each such shareholder shall be obligated jointly and severally to reimburse the corporation and any officer or trustee of the corporation made a party to such proceeding for all fees, costs and expenses of every kind and description (including, but not limited to, all reasonable attorneys’ fees and other litigation expenses) that the parties may incur in connection with any successful motion to dismiss, stay or transfer such Foreign Action based upon non-compliance with this Section 13.03.
If any provision or provisions of this Section 13.03 shall be held to be invalid, illegal or unenforceable as applied to any person or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provision(s) in any other circumstance and of the remaining provisions of this Section 13.03 (including, without limitation, each portion of any sentence of this Section 13.03 containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons and circumstances shall not in any way be affected or impaired thereby.
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Exhibit 99(d)(6)
EXPENSE LIMITATION AGREEMENT
THIS AGREEMENT is effective as of the 1st day of October, 2017, between U.S. Bancorp Asset Management, Inc., as investment advisor (the “Advisor”), and First American Funds, Inc. (“FAF”).
WHEREAS, FAF is comprised of multiple investment portfolios (each a “Fund” and, collectively, the “Funds”), each of which offers one or more classes of shares; and
WHEREAS, the Advisor wishes to contractually limit fees and reimburse expenses for certain Funds within FAF through December 31, 2018; and
WHEREAS, it is in the interests of both the Advisor and the shareholders of the Funds to limit Fund expenses as set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree that the Advisor will limit its fees and/or reimburse Fund expenses to the extent necessary to limit the annual operating expenses net of acquired fund fees and expenses of the Funds to the amounts set forth in Exhibit A hereto (which limits are set forth for each Fund on a class-by-class basis). The Advisor agrees that it may not be reimbursed by FAF for the fees waived or reimbursements made by the Advisor under the terms of this agreement. The Advisor agrees to continue the foregoing expense limits through December 31, 2018. Thereafter, any expense limit may be changed upon prior notice to FAF’s Board of Directors.
IN WITNESS WHEREOF, the parties have signed this agreement as of the day and year first above written.
| U.S. BANCORP ASSET MANAGEMENT, INC. | FIRST AMERICAN FUNDS, INC. | |||
| By: | /s/ Jill M. Stevenson | By: | /s/ James D. Palmer | |
| Name: | Jill M. Stevenson | Name: | James D. Palmer | |
| Title: | Head of Operations and Mutual Funds Treasurer | Title: | Vice President | |
Exhibit A
| Money Market Funds | Annual
Operating Expense as a Percentage of Average Daily Net Assets |
| Government Obligations Fund – Class P | 0.1800% |
| Treasury Obligations Fund – Class P | 0.2000% |
Exhibit 99(h)(4)
FIRST AMENDMENT TO THE
SUB-ADMINISTRATION AGREEMENT
THIS FIRST AMENDMENT effective as of January 1, 2017 to the Sub-Administration Agreement dated as of July 1, 2005 (the “Agreement”), is entered into by and between U.S. Bancorp Asset Management, Inc., a Delaware corporation (“USBAM”), and U.S. Bancorp, Fund Services, LLC, a Wisconsin limited liability company (“USBFS”).
RECITALS
WHEREAS, the parties have entered into the Agreement; and
WHEREAS, the parties desire to amend Section 4 (A) “Sub-Administration Fee” of the Agreement and to replace Schedule B (Out-of Pocket Expenses) with a new Fee Schedule B, and
WHEREAS, Section 8 of the Agreement allows for its amendment by a written instrument executed by all parties.
NOW, THEREFORE, the parties agree as follows:
Section 4 (A) Sub-Administration Fee including Schedule B is hereby superseded and replaced in its entirety with the following Section 4 (A) and the attached Schedule B:
4. Compensation of the Sub-Administrator
(A) Sub-Administration Fee. USBFS shall be compensated for providing the services set forth in this Agreement in accordance with the fee schedule set forth on Schedule B hereto (as amended from time to time by consent of both parties to this Agreement). USBFS shall also be reimbursed for such miscellaneous expenses as set forth on Schedule B hereto as are reasonably incurred by USBFS in performing its duties hereunder. The parties acknowledge that they are under the control of a common corporate parent and that the fees paid pursuant to this agreement will change from time to time as the needs of the parties and their corporate parents change.
Except to the extent amended hereby, the Agreement shall remain in full force and effect.
Signature pages on next page
1
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed by a duly authorized officer on one or more counterparts as of the date and year first written above.
U.s.bancorp Asset Management, Inc
| By: | /s/ Jill Stevenson | |
| Name: Jill Stevenson | ||
| Title: Head of Operations and Mutual Funds Treasurer | ||
U.S. BANCORP FUND SERVICES, LLC
| By: | /s/ Michael L. Ceccato | |
| Name: Michael L. Ceccato | ||
| Title: Senior Vice President | ||
2
Schedule B to the Sub-Administration Agreement
Fund Administration & Fund Accounting Services Fee Schedule at January, 2017
Money Market Funds
Annual Fee Based Upon Average Net Assets per Fund
1 basis point on the First American Funds assets
Money Market Funds – Multiple NAV Strike Adjustment
Two to Four NAV Strikes: 20% increase in basis points charge on Institutional Prime Obligations Fund balance
Third Party Administrative Data Charges (descriptive data for each security)
| ■ | $1 per security per month for fund administrative data (based upon U.S. Bancorp standard data services and are subject to change) |
Fund Administration Reporting
| ■ | Advisor Information Source: $150 per fund monthly charge |
| ■ | Clear Portfolio: $ 850 per fund monthly charge |
| ■ | Confluence N-MFP: $ 4000 per fund annual charge |
Miscellaneous Expenses
Including but not limited to postage, stationery, programming, special reports, third-party data provider costs (including Bloomberg, S&P, Moody’s, Morningstar GICS, MSCI, Lipper, etc.), proxies, insurance, EDGAR/XBRL filing, record retention, federal and state regulatory filing fees, expenses related to and including travel to and from Board of directors meetings, third party auditing and legal expenses, wash sales reporting (GainsKeeper), tax e-filing charges, PFIC monitoring and conversion expenses (if necessary).
Additional Services
Available but not included above are the following services – USBFS legal administration (e.g., annual legal administration and subsequent new fund launch), daily performance reporting, daily compliance testing, Section 18 compliance testing, Section 15(c) reporting, equity & fixed income attribution reporting, electronic Board book portal (BookMark), Master/Feeder Structures and additional services mutually agreed upon.
3
Fund Administration & Fund Accounting Services Fee Schedule (continued) at January, 2017
Data Services
Pricing Services (Contingent on using IDC for pricing on all funds)
$0.08 – Domestic Equities, Options, ADRs, Foreign Equities, Futures, Forwards
$0.50 – Domestic Corporates, Convertibles, Governments, Agencies, Currency Rates, Mortgage Backed
$0.80 – CMOs, Municipal Bonds, Money Market Instruments, Foreign Corporates, Convertibles, Governments, Agencies, Asset Backed, High Yield
$0.90 – Interest Rate Swaps, Foreign Currency Swaps, Total Return Swaps, Total Return Bullet Swaps
$1.00 – Bank Loans
$1.50 – Swaptions
$3.00 – Credit Default Swaps
$500 per Month Manual Security Pricing (>25 per day)
Pricing Services – Intraday Pricing Funds (Price based on 2-3 strikes; additional strikes priced separately)
$1.00 – Domestic Equities, Options, ADRs, Foreign Equities, Futures, Forwards
$1.00 – Domestic Corporates, Convertibles, Governments, Agencies, Currency Rates, Mortgage Backed
$1.00 – CMOs, Municipal Bonds, Money Market Instruments, Foreign Corporates, Convertibles, Governments, Agencies, Asset Backed, High Yield
$1.00 – Interest Rate Swaps, Foreign Currency Swaps, Total Return Swaps, Total Return Bullet Swaps
$1.00 – Bank Loans
$1.00 – Swaptions
$1.00 – Credit Default Swaps
$500 per Month Manual Security Pricing (>25per day)
Fair Value Services (Charged at the complex level)
| ■ | $0.6651 per security on the First 100 Securities |
| ■ | $0.4804 per security on the Balance of Securities |
Corporate Action and Factor Services (security paydown)
| ■ | $2.00 per Foreign Equity Security per Month |
| ■ | $1.00 per Domestic Equity Security per Month |
| ■ | $2.00 per CMOs, Asset Backed, Mortgage Backed Security per Month |
Eagle STAR Allocation Charges
| ■ | $ 1,000 per CUSIP monthly charge |
NOTE: Prices above are based on using U.S. Bancorp primary pricing service which may vary by security type and are subject to change. Use of alternative and/or additional sources may result in additional fees. Pricing vendors may designate certain securities as hard to value or as a non-standard security type, such as CLOs and CDOs, which may result in additional fees.
Miscellaneous Expenses
Including but not limited to SWIFT processing and customized reporting.
Additional Services
Master/Feeder structures and additional services mutually agreed upon.
4
Exhibit 99(h)(6)
FIRST AMERICAN FUNDS, INC.
AMENDED SHAREHOLDER SERVICE PLAN AND AGREEMENT
Effective July 1, 2005
Amended Effective February 22, 2006 and June 13, 2017
First American Funds, Inc., a Minnesota corporation (the “Fund”), is an open-end investment company registered under the Investment Company Act of 1940, as amended, and currently consisting of a number of separately managed portfolios (the “Portfolios”). The Fund desires to retain U.S. Bancorp Asset Management, Inc. (“USBAM”), a Delaware corporation, to provide, or to compensate other service providers for providing, the services described herein to clients (the “Clients”) who from time to time beneficially own Class A, Class D, Class G, Class T, Class V or Class Y shares of the Portfolios (“Shares”). USBAM is willing to provide or to compensate other service providers for providing such shareholder services in accordance with the terms and conditions of this Agreement.
This Shareholder Service Plan and Agreement does not provide for distribution-related services and is not being adopted under Rule 12b-1 under the Investment Company Act of 1940.
SECTION 1. USBAM will provide, or will enter into written agreements with service providers pursuant to which the service providers will provide, one or more of the following shareholder services to Clients who may from time to time beneficially own Shares:
| (i) | maintaining accounts relating to Clients that invest in Shares; |
| (ii) | providing information periodically to Clients showing their positions in Shares; |
| (iii) | arranging for bank wires; |
| (iv) | responding to Client inquiries relating to the services performed by USBAM or any service provider; |
| (v) | responding to inquiries from Clients concerning their investments in Shares; |
| (vi) | forwarding shareholder communications from the Fund (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to Clients; |
| (vii) | processing purchase, exchange and redemption requests from Clients and placing such orders with the Fund or its service providers; |
| (viii) | assisting Clients in changing dividend options, account designations and addresses; |
| (ix) | providing sub accounting with respect to Shares beneficially owned by Clients; |
| (x) | processing dividend payments from the Fund on behalf of Clients; and |
| (xi) | providing such other similar services as the Fund may reasonably request to the extent that USBAM and/or the service provider is permitted to do so under applicable laws or regulations. |
SECTION 2. USBAM will provide all office space and equipment, telephone facilities and personnel (which may be part of the space, equipment and facilities currently used in USBAM’s business, or any personnel employed by USBAM) as may be reasonably necessary or beneficial in order to fulfill its responsibilities under this Agreement.
SECTION 3. Neither USBAM nor any of its officers, employees or agents is authorized to make any representations concerning the Fund or the Shares except those contained in the Fund’s then-current prospectus or statement of additional information for the Shares, copies of which will be supplied to USBAM, or in such supplemental literature or advertising as may be authorized in writing.
SECTION 4. For purposes of this Agreement, USBAM and each service provider will be deemed to be independent contractors, and will have no authority to act as agent for the Fund in any matter or in any respect. By its written acceptance of this Agreement, USBAM agrees to and does release, indemnify and hold the Fund harmless from and against any and all direct or indirect liabilities or losses resulting from requests, directions, actions or inactions of or by USBAM or its officers, employees or agents regarding USBAM’s responsibilities under this Agreement, the provision of the aforementioned services to Clients by USBAM or any service provider, or the purchase, redemption, transfer or registration of Shares (or orders relating to the same) by or on behalf of Clients. USBAM and its officers and employees will, upon request, be available during normal business hours to consult with representatives of the Fund or its designees concerning the performance of USBAM’s responsibilities under this Agreement.
SECTION 5. In consideration of the services and facilities to be provided by USBAM or any service provider, each Portfolio that has issued Shares of the respective class will pay to USBAM a fee at an annual rate equal to 0.25% of the average net asset value of the Class A, Class D, Class G and Class Y shares, 0.20% of the average net asset value of the Class T shares, and 0.10% of the average net asset value of the Class V shares, which fee will be computed daily and paid monthly.
USBAM will pay any such service providers with which it enters into written agreements as contemplated by Section 1 out of the amounts so received by it. The Fund may, in its discretion and without notice, suspend or withdraw the sale of Shares of any Portfolio, including the sale of Shares to any service provider for the account of any Client or Clients. USBAM may waive all or any portion of its fee from time to time.
SECTION 6. The Fund may enter into other similar servicing agreements with any other person or persons without USBAM’s consent.
SECTION 7. By its written acceptance of this Agreement, USBAM represents, warrants, and agrees that the services provided by USBAM under this Agreement will in no event be primarily intended to result in the sale of Shares.
SECTION 8. This Agreement will become effective on the effective date specified in its caption and shall continue until terminated by either party. This Agreement is terminable with respect to the Shares of any Portfolio, without penalty, at any time by the Fund or by USBAM upon written notice to the Fund.
SECTION 9. All notices and other communications to either the Fund or to USBAM will be duly given if mailed, telegraphed, telefaxed, or transmitted by similar communications device to the appropriate address stated herein, or to such other address as either party shall so provide to the other.
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SECTION 10. This Agreement will be construed in accordance with the laws of the State of Minnesota and may not be “assigned” by either party as that term is defined in the Investment Company Act of 1940.
By their signatures, the Fund and USBAM agree to the terms of this Agreement effective as of the date set forth in its caption.
| FIRST AMERICAN FUNDS, INC. | |||
| By: | /s/ James D. Palmer | ||
| James D. Palmer | |||
| Its: | Vice President | ||
| U.S. BANCORP ASSET MANAGEMENT, INC. | |||
| By: | /s/ Jill M. Stevenson | ||
| Jill M. Stevenson | |||
| Its: | Head of Operations and Mutual Fund Treasurer | ||
| 3 |
Exhibit 99(i)
October 13, 2017
First American Funds, Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
We have acted as counsel to First American Funds, Inc., a Minnesota corporation (the “Company”), in rendering the opinion hereinafter set forth with respect to the authorization of the following series and classes of the Company’s common shares, par value $0.01 per share, which are also known by the names set forth opposite their respective series and class designations:
| Series and Class | Name | Number of Shares |
| Series C, Class Eight | Government Obligations Fund, Class P | 20,000,000,000 |
| Series D, Class Eight | Treasury Obligations Fund, Class P | 20,000,000,000 |
The shares of the Company referred to above are referred to herein collectively as the “Shares.”
We understand that the Shares are being registered under the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, pursuant to the Company’s Registration Statement on Form N-1A (File No. 2-74747) relating to such shares (the “Registration Statement”). In rendering the opinion hereinafter expressed, we have reviewed the corporate proceedings taken by the Company in connection with the authorization and issuance of the Shares, and we have reviewed such questions of law and examined copies of such corporate records of the Company, certificates of public officials and of responsible officers of the Company, and other documents as we have deemed necessary as a basis for such opinion. As to the various matters of fact material to such opinion, we have, when such facts were not independently established, relied to the extent we deemed proper on certificates of public officials and of responsible officers of the Company. In connection with such review and examination, we have assumed that all copies of documents provided to us conform to the originals and that all signatures are genuine.
In addition, in rendering the opinion hereinafter expressed, we have assumed, with the concurrence of the Company, that all of the Shares will be issued and sold upon the terms and in the manner set forth in the Registration Statement; that the Company will not issue Shares in excess of the numbers authorized in the Company’s articles of incorporation as in effect at the respective dates of issuance; and that the Company will maintain its corporate existence and good standing under the laws of the State of Minnesota in effect at all times after the date of this opinion.
Based on the foregoing, it is our opinion that the Shares issued from and after the date hereof, when issued and delivered by the Company as described in the Registration Statement, will be legally issued and fully paid and non-assessable.
In rendering the foregoing opinion, we express no opinion as to the laws of any jurisdiction other than the State of Minnesota. We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement.
| Very truly yours, | ||
| /s/ Dorsey & Whitney LLP | ||
JVH
Exhibit 99(n)
FIRST AMERICAN FUNDS, INC.
Amended and Restated Multiple Class Plan Pursuant to Rule 18f-3
Effective September 19, 2017
| I. | Preamble. |
Each of the funds listed below (each a “Fund,” and collectively the “Funds”), each a portfolio of First American Funds, Inc. (the “Company”), has elected to rely on Rule 18f-3 under the Investment Company Act of 1940, as amended (the “1940 Act”) in offering multiple classes of shares in each Fund:
| Government Obligations Fund | Treasury Obligations Fund |
| Institutional Prime Obligations Fund | U.S. Treasury Money Market Fund |
| Retail Tax Free Obligations Fund | Retail Prime Obligations Fund |
This Plan sets forth the differences among classes of shares of the Funds, including distribution arrangements, shareholder services, expense allocations, conversion and exchange options, and voting rights.
| II. | Attributes of Share Classes. |
The attributes of each existing class of the existing Funds (i.e. Class A, Class D, Class G, Class P, Class T, Class V, Class X, Class Y, and Class Z shares), with respect to distribution arrangements, shareholder services, transfer agency services, recordkeeping services, and conversion and exchange options shall be as set forth in the following materials:
| A. | Prospectuses of the various share classes of the respective Funds in the forms most recently filed with the Securities and Exchange Commission (the “SEC”) prior to the date of this Plan as amended. |
| B. | Statement of Additional Information of the Funds in the form most recently filed with the SEC prior to the date of this Plan as amended. |
| C. | First American Funds, Inc. Amended and Restated Distribution and Service Plan effective September 19, 2006. |
| D. | First American Funds, Inc. Amended Shareholder Service Plan and Agreement effective July 1, 2005, as amended effective February 22, 2006 and June 13, 2017. |
| E. | Administration Agreement with FAF Advisors, Inc. dated July 1, 2006, as amended Schedule A effective July 1, 2011. |
| F. | Amended and Restated Transfer Agent and Shareholder Servicing Agreement with U.S. Bancorp Fund Services, LLC and U.S. Bancorp Asset Management, Inc. dated June 30, 2016. |
Expenses of such existing classes of the Funds shall continue to be allocated in the manner set forth in III below. Each such existing class shall have exclusive voting rights on any matter submitted to shareholders that relates solely to its arrangement and shall have separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class.
| III. | Expense Allocations. |
Expenses of the existing classes of the existing Funds shall be allocated as follows:
| A. | Distribution fees, service fees, administration fees, transfer agency fees and recordkeeping fees relating to the respective classes of shares, as set forth in the materials referred to in II above, shall be borne exclusively by the classes of shares to which they relate. |
| B. | Except as set forth in A above, expenses of the Funds shall be borne at the Fund level and shall not be allocated on a class basis. |
Unless and until this Plan is amended to provide otherwise, the methodology and procedures for allocating income, realized gains and losses, unrealized appreciation and depreciation, and Fund-wide expenses shall be based on the net assets of each class in relation to the net assets of the Company (“relative net assets”) as set forth in Rule 18f-3(c)(1)(i).
The foregoing allocations shall in all cases be made in a manner consistent with Revenue Procedures 96-47 and 99-40 (Internal Revenue Code, Section 562) of the Internal Revenue Service.
| IV. | Amendment of Plan; Periodic Review. |
| A. | New Funds and New Classes. With respect to any new portfolio of the Company created after the date of this Plan and any new class of shares of the existing Funds created after the date of this Plan, the Board of Directors of the Company shall approve amendments to this Plan setting forth the attributes of the classes of shares of such new portfolio or of such new class of shares. |
| B. | Material Amendments and Periodic Reviews. The Board of Directors of the Company, including a majority of the independent directors, shall periodically review this Plan for its continued appropriateness and shall approve any material amendment of this Plan as it relates to any class of any Fund covered by this Plan. |
2
Exhibit 99(p)(2)
Code of Ethics - Advisor
U.S. Bancorp Asset Management, Inc.
First American Funds
Effective: 3/15/2017
INTRODUCTION
Why Do We Need the Code of Ethics?
As an investment adviser, client and fund shareholder trust is our most valuable asset. Our success largely depends on the degree of trust our clients and fund investors bestow upon us. All of us at U.S. Bancorp Asset Management (“USBAM”) are responsible for maintaining that trust, and must conduct ourselves in the very highest ethical standards. We must always place the interests of clients and fund shareholders ahead of our own and avoid actual and apparent conflicts of interest. Under Rule 204A-1 of the Investment Advisers Act of 1940, USBAM is required to establish a Code of Ethics outlining standards of conduct and compliance with federal securities laws. However, it is not enough for us to simply comply with the letter of the law. We must observe exemplary standards of honesty and integrity above and beyond the minimal legal requirements. To that end, we have adopted this Code of Ethics to help guide our conduct when the interests of our clients may not be aligned with our individual interests or the interests of USBAM. In particular, this Code deals with:
| ● | Our commitment to honest and ethical conduct; |
| ● | Individual accountability; |
| ● | Personal securities transactions; |
| ● | Trading on inside or confidential information; |
| ● | Safeguarding client and fund confidential information; |
| ● | Giving and receiving gifts; |
| ● | Outside professional opportunities; and |
| ● | Adherence to the laws, rules, and regulations that govern our business. |
This Code does not attempt to identify all possible conflicts of interest, and literal compliance with each of its specific provisions will not shield you from liability for personal trading or other conduct that violates a fiduciary duty to clients and shareholders. Violations of this Code and federal securities laws may result in sanctions, fines, suspension and/or termination of employment, SEC administrative actions, and in some cases civil or criminal penalties.
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This Code is an expression of our commitment to an ethical work place and is an integral element of the control environment required under federal law. If you know of (1) any violation of the Code; (2) any issue that you believe should be reviewed by Compliance to determine whether it meets the statutory definition of a Material Compliance Matter (a matter about which USBAM’s management or the First American Funds’ Board of Directors would reasonably need to know to oversee compliance); or (3) any violation of the federal securities laws, you must promptly report it to USBAM’s Chief Compliance Officer, or designee. It is a violation of the Code to retaliate against or harass, in any manner, any person who reports any violation or suspected violation of the Code. In addition to this Code, you are subject to U.S. Bank’s Code of Ethics and may be subject to the Code of Ethics Conduct adopted by the First American Funds (the “Funds”). Copies of these Codes may be obtained from the Compliance Department. While these codes of conduct are designed to address differing business environments and legal obligations, they are all designed to promote honest and ethical conduct. If you believe that these or other codes of conduct impose conflicting obligations on you, you should contact the Compliance Department immediately.
The Code applies to all USBAM Access Persons, and you must certify quarterly that you have received a copy of the Code, that you have been in compliance, and that you will continue to comply with its terms (Exhibit 1).
NOTE: With the exception of the Gifts & Entertainment section, this Code applies to temporary or contract workers and consultants whose assignments exceed four weeks or whose cumulative assignments exceed eight weeks over a twelve-month period.
This Code is divided into five sections:
| 1. | Personal transactions in securities and related financial instruments by Access Persons; |
| 2. | Access to and the use of confidential and non-public information when trading for client or personal accounts; |
| 3. | Safeguarding client and fund confidential information; |
| 4. | Other types of conduct that may impact or appear to impact our objectivity in dealing with our clients, suppliers, and business partners; and |
| 5. | Sanctions for violation of the Code. |
If you have any questions about USBAM’s policies on personal securities transactions, insider trading, conflicts of interest or any other aspect of the Code, please refer to the Contact List (Exhibit 2).
PERSONAL SECURITIES TRANSACTIONS
Buying and selling Securities for accounts in which you have a Beneficial Interest may conflict (or appear to conflict) with the interests of our clients for many reasons, including buying or selling a Security close in time to a client transaction, or buying or selling a Security for yourself instead of our clients. Typically, you have a Beneficial Interest in accounts maintained in your own name, joint accounts and accounts of your spouse/partner, dependents, and/or other immediate family members sharing the same household. If you have any doubt about the
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status of an account, please contact the Compliance Department. This section of the Code establishes rules for minimizing and managing these conflicts.
In the sections that follow, we will explain whether you (including your immediate family and possible others who are closely connected to you, see “Beneficial Interest”) are covered by these personal transaction rules and describe the types of accounts, Securities, and transactions that are subject to these rules. Securities include exchange- and OTC-traded instruments, as well as financial futures, derivatives and other related instruments. See the Glossary for a full definition.
If you are covered by these rules and are involved in a covered transaction you must take the following steps:
| 1. | Quarterly, you must disclose to USBAM each account (other than bank checking or other deposit account) that you maintain for holding, buying or selling Securities and related financial instruments. |
| 2. | Annually, you must disclose to USBAM all of your personal holdings in Securities and related financial instruments. |
| 3. | Quarterly, you must disclose to USBAM all of your transactions in Securities and related financial instruments. |
| 4. | Before buying or selling any covered Security, you may be required to pre-clear that purchase or sale. |
| 5. | Following each purchase or sale of a Security, your broker-dealer (or other agent) must send to USBAM a duplicate confirmation of the terms of the transaction. |
There are certain times when you may not buy or sell for your own account, and there are certain types of transactions that you may not enter into. Detailed information on these restrictions is provided below.
In addition, to streamline our monitoring process, USBAM requires you (and accounts in which you hold securities) to effect transactions through accounts maintained at:
| ● | E*Trade; |
| ● | Fidelity Investments; |
| ● | Merrill Lynch; |
| ● | UBS Financial Services; |
| ● | Schwab; |
| ● | TD Ameritrade; |
| ● | U.S. Bancorp Investments; |
| ● | U.S. Bancorp Private Client Group; or |
| ● | Morgan Stanley limited purpose USB Stock Plan account for the holding of granted USB vested stock. |
An exception to this requirement may only be granted under very limited circumstances, must be specifically authorized by the Compliance Department, a copy of the exception will be retained by the Compliance Department and you must submit reports of personal transactions. Dividend
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Reinvestment Plan (“DRIP”) and previous employer-sponsored plans for you or your spouse/partner holding company stock funds may be held at non-approved brokers. Reporting and pre-clearance requirements still apply to these accounts.
As an USBAM Access Person, your ability to conduct personal securities transactions is a privilege, not a right. At USBAM we must put our Funds’ and clients’ interests first. Please note that there may be times when you are unable to pre-clear or effect transactions because the system is unavailable (or for any other reason).
A. Who Is Covered by this Section?
The potential for a conflict of interest arises if you have access to non-public information about our clients’ or Funds’ transactions or holdings or about securities research and recommendations. This Code refers to employees with access to this kind of information as Access Persons. Access Persons generally include any employees who are in a position to exploit information about client securities transactions or holdings. Access Persons typically include trading and portfolio management assistants, sales and marketing, product, operations and IT employees. All USBAM employees are deemed Access Persons, with certain employees being classified as Restricted Access Persons. Restricted Access Persons include research analysts, traders, portfolio/fund managers, executive management, members of the Legal and Compliance Departments, and their executive or departmental assistants. If you are actually involved in making investment recommendations to our clients, participate in the determination of which investment recommendations will be made, have the power to influence management of the Funds, execute trades for any Fund or client accounts , this Code refers to you as a Restricted Access Person. Restricted Access Persons are subject to all the requirements imposed on Access Persons. Restricted Access Persons are also subject to certain other requirements. Each employee will be advised with respect to their status as an Access Person or Restricted Access Person.
B. Which Securities and Accounts Are Covered?
This Code applies to Securities and accounts in which you have Beneficial Interest. Generally, you have a Beneficial Interest in any Security or account in which you have a financial interest or have or share investment discretion. There may be accounts in which you have a financial interest but do not have investment discretion. Because these accounts involve lower risks of a conflict with our clients, USBAM may exempt them from the pre-clearance or reporting obligations of the Code. These Accounts may include trust accounts and accounts over which you have given investment discretion to a third party. If you believe an exemption should apply to an Account in which you have an interest, please contact the Compliance Department. Exceptions will be granted under very limited circumstances, must be specifically authorized by the Compliance Department, a copy of the exception will be retained by the Compliance Department, and you must submit reports of personal transactions.
Access Persons must pre-clear transactions in Securities, with the Compliance Department:
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| 1. | Publicly traded Securities (including options and futures on Securities); |
| 2. | Privately placed Securities (including options on Securities); |
| 3. | Initial Public Offerings; and |
| 4. | Corporate
and municipal bonds, and new issue debt offerings. |
Exceptions to the above exist:
| (1) | For granted USB stock and stock options held in Fidelity USB Stock Plan brokerage accounts, and USB vested stock held in Morgan Stanley limited purpose USB Stock Plan accounts only. Transactions of USB granted stock and/or stock options held in these accounts do not require pre-clearance but do require reporting. |
| (2) | For accounts where full discretion is held by a third-party, these accounts do not require pre-clearance of transactions or reporting. Please see section “G. Discretionary Accounts” for more information regarding discretionary accounts. |
NOTE: Approval for Initial Public Offerings and Private Placements will take into account, among other factors, whether the investment opportunity should be reserved for clients and whether the opportunity is being offered to the Access Person by virtue of his or her relationship to USBAM or any fund sponsored or managed by USBAM.
Transactions, except those involving Private Placements, must be executed by the close of the NYSE the same day approval is given. If a transaction is not executed that day, a new approval must be obtained from the Compliance Department.
NOTE: Only day orders will be approved. Good until cancelled (“GTC”), stop loss, and similar orders are not permitted. Limit orders must be executed the day approved.
Transactions in the following Exempt Securities do not require reporting or pre-clearance:
| 1. | Direct obligations of the Government of the United States; |
| 2. | Bankers’ acceptance, bank certificates of deposit, commercial paper; |
| 3. | High-quality short-term debt instruments including repurchase agreements; |
| 4. | Shares of open-end mutual funds for which USBAM does not serve as investment adviser or sub-adviser, or for which Quasar is not the distributor; and |
| 5. | First American Money-Market Funds. |
NOTE: Brokered certificates of deposit are publicly traded Securities and not bank products. Therefore, brokered certificates of deposit must be pre-cleared.
In addition, while the transactions in the securities listed below require pre-clearance, they will normally be approved in the absence of special circumstances. Pre-clearance is essential for
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compliance with federal securities laws. Failure to pre-clear these or any other transaction under the Code will be treated as a serious violation of the Code. In addition, some Securities are not subject to a Blackout Period, which are periods when you may not be permitted to buy or sell a Security. See Section E, below for more details. These Securities are:
| 1. | Securities whose performance are directly tied to a broad-based, publicly traded market basket or index of stocks (e.g., SPDRS, QQQ, Diamonds); |
| 2. | Shares of issuers included in the S&P 100; |
| 3. | Shares of issuers included in the S&P 500 stocks by Access Persons who are not Restricted Access Persons in amounts less than $25,000 in any single trading day; and |
| 4. | Shares of issuers included in the Russell 1000 stocks by Access Persons who are not Restricted Access Persons in amounts less than $10,000 in any single trading day. |
C. What Types of Transactions Require Reporting but not Pre-clearing?
Pre-clearance and Blackout Periods do not apply to the following transactions:
| 1. | Purchases of an employer’s stock under an employer-sponsored plan (including the employer of a spouse/partner); |
| 2. | 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 the rights were acquired from the issuer; and any sales of these rights; |
| 3. | Purchases or sales that are non-volitional on the part of the Access Person, including purchases or sales upon exercise of puts or calls written by the person (please note that you are prohibited from engaging in short-term trading), non-volitional sales from a margin account pursuant to a bona fide margin call; purchases or sales as part of divorce settlement or decree, and any other purchases or sales as determined by the Compliance Department upon request; |
| 4. | Purchases or sales of units of common/collective trust funds; |
| 5. | Transactions in derivative Securities linked to physical commodities, such as exchange-trade futures contracts on physical commodities, options on such contracts and over-the-counter derivatives related to physical commodities; and |
| 6. | Purchases and sales of open-end mutual funds for which Quasar serves as distributor that are not through an automatic investment plan, and that are not otherwise reported electronically, must be reported to the Compliance Department in writing. |
D. What Are Blackout Periods?
Because of the potential for a conflict of interest, USBAM has established certain Blackout Periods when Access Persons are not permitted to effect transactions in certain Securities:
| 1 | Access Persons may not buy or sell any Security on the same business day as any client of USBAM or Funds. |
| 2. | Restricted Access Persons may not buy or sell any Security for a period of 5 business |
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days before or after any client account or the Funds
In the event that a client trade takes place within 5 business days after you have received preclearance approval, Compliance will send you a form asking if you had any knowledge of the client trade to help detect front running. Once you have completed and returned the form, Compliance will determine if further action is necessary.
Transactions for the accounts of our clients are confidential and may contain market sensitive data. Portfolio managers, trading personnel and others shall maintain the confidentiality of such information and should only disclose transactional and holdings information on a need-to-know basis.
| E. | Are There any Restrictions on Short-Term Trading? |
Restricted Access Persons are prohibited from profiting from a purchase and sale, or sale and purchase, of the same Security (other than Exempt Securities and derivative Securities linked to physical commodities) within 60 calendar days. The restriction may be waived by the Compliance Department in special circumstances provided that the transaction would not be inconsistent with the expressed purpose of this Code and any client transaction.
This prohibition may limit your ability to use options and futures strategies. In addition, special rules apply to roll transactions. Prior to engaging in these types of transactions you should consult with the Compliance Department.
F. What Reports and Disclosures Do Access Persons Need to Make?
In order to ensure that the provisions of this Code are being observed, each Access Person is required to make the following disclosures to USBAM:
| 1. | Accounts Disclosure. Within 10 calendar days of hire date, and within 30 days of the end of each quarter, you must disclose all accounts in which you have a Beneficial Interest. Account and holdings disclosure requirements may be satisfied electronically. |
| 2. | Initial Holdings Disclosure. Within 10 calendar days of hire date, you must disclose all personal holdings of Securities in which you have a Beneficial Interest to the Compliance Department in writing. Rule 204A-1 requires that these holdings must be current as of a date no more than 45 days prior to your hire date. |
| 3. | Annual Holdings Disclosure. You must certify within 45 days of the end of each calendar year that the electronic record of your holdings provided by your broker is complete and accurate. Rule 204A-1 requires that these holdings must be current as of a date no more than 45 days prior to the date of the certification. Annual reporting requirements include holdings in DRIP programs, purchases of stock under an employer-sponsored plan, purchases affected upon the exercise of rights and non-volitional purchases or sales, such as the exercise of options. |
| 4. | Duplicate Confirmations. Each Access Person must have each broker-dealer carrying an account in which he or she has a Beneficial Interest to send to USBAM a duplicate copy of all transaction confirmations generated for the account. This can |
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be achieved either by the employee instructing the broker-dealer to provide these duplicates, or by Compliance requesting the duplicates by sending the broker-dealer a 407 Letter. We have arranged to receive electronic copies of trade confirmations from the approved brokers.
| 5. | Quarterly Transaction Statements. You must certify quarterly all Securities transactions other than transactions in exempt securities for accounts in which you have Beneficial Interest during the previous quarter. In the event no reportable transactions occurred during the quarter, the report should be so noted. Quarterly reports must be made no later than 30 days after the end of the calendar quarter and will be completed electronically through the CTI iTrade application. |
If an Access Person is on leave during the certification period and does not have access to the applicable applications, they will be asked to complete the certifications upon their return.
G. Discretionary Accounts
For Accounts where the Access Person or Restricted Access Person has given full investment authority to a third-party, there are the following differences in how the account is monitored for personal trading:
| ● | To have an account coded as a Discretionary Account in the Code of Ethics system, you will need to provide a signed and executed copy of the discretionary account to the Code of Ethics Administrator. |
| ● | Discretionary accounts do not require pre-clearance or reporting of transactions. Annually, the third-party discretionary provider will certify that the account owner exercised no discretion over the account at any point during the year. |
H. Special Discretion
The Chief Compliance Officer, or designee, shall have the authority to exempt any person or class of persons from all or a portion of the Code provided that:
| 1. | The Chief Compliance Officer, or designee, determines, that the particular application of all or a portion of the Code is not legally required; |
| 2. | The Chief Compliance Officer, or designee, determines that the likelihood of any abuse of the Code by such exempted person(s) is remote; and |
| 3. | The terms or conditions upon which any such exemption is granted is evidenced in a written instrument. |
The Chief Compliance Officer, or designee, shall also have the authority to impose such additional requirements or restrictions as it, in its sole discretion, determines appropriate or necessary.
Any exemption, and any additional requirement or restriction, may be withdrawn by the Chief Compliance Officer, or designee, at any time.
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INSIDER TRADING POLICY AND PROCEDURES
The purpose of this section of the Code is to provide reasonable assurance that material nonpublic information possessed by persons employed with USBAM is: (a) not used in connection with the purchase or sale of securities, (b) not revealed to inappropriate persons, and (c) not used improperly.
Federal law requires USBAM to establish and maintain effective policies and supervisory procedures to both detect and prevent insider trading violations. USBAM Compliance implements what are commonly referred to as “Information Barriers.” Information Barriers are designed to fulfill two roles: 1) segregate and prevent the improper dissemination of material nonpublic information that may be possessed by certain employees of USBAM; and 2) detect illegal transactions or violations of insider trading. This section is intended to protect USBAM and its employees from insider trading violations from allegations of such violations and from the appearance of impropriety.
USBAM has implemented the following policies and procedures to prevent the misuse and the appearance of misuse of material nonpublic information concerning publicly traded companies. USBAM is committed to conducting its business activities within the letter and spirit of all applicable laws and regulations and in accordance with the highest ethical standards.
Statutory Provisions and Regulations Regarding Insider Trading
Congress amended the Securities Exchange Act of 1934 (the “Exchange Act”) in 1988 with the Insider Trading and Securities Fraud Enforcement Act of 1988. In doing so, Congress explicitly mandated closer securities industry supervision of its employees.
Furthermore, under Section 204A of the Investment Advisers Act of 1940, as amended, investment advisers are required to “establish, maintain, and enforce written policies and procedures reasonably designed,” taking into consideration the nature of the entity’s business, “to prevent the misuse of material, nonpublic information.”
The misuse of material nonpublic information constitutes fraud; a term broadly defined under the federal securities laws. Rule 10b-5 under the Exchange Act provides that it is unlawful for any person, in connection with the purchase or sale of any security:
| ● | To employ any device, scheme, or artifice to defraud; |
| ● | To make any untrue statement of a material fact or to omit to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading; or |
| ● | To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. |
It is a violation of insider trading laws to trade on the basis of material nonpublic information when one owes a duty of trust or confidence to the source of the information or when one has misappropriated the information in breach of a duty of trust or confidence. Rule 10b5-1 under the Exchange Act provides that a trade is “on the basis of” material nonpublic information if the
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trader was aware of the material, non-public information when the person made the purchase or sale. While it is not necessarily a violation of Rule 10b-5 merely to trade on the basis of material nonpublic information, as a matter of USBAM policy its employees are directed not to trade on, or to tip others with respect to, material nonpublic information, whether or not the information has been obtained under circumstances that give rise to a duty of trust or confidence or claim of misappropriation.
Persons who fraudulently misuse material nonpublic information are subject to individual civil and criminal penalties (including imprisonment), U.S. Securities and Exchange Commission (“SEC”) administrative actions and discipline including fines and suspension from the industry and USBAM disciplinary sanctions that may include fines or dismissal from employment. In addition, USBAM employees who fraudulently misuse material nonpublic information subject USBAM to potential civil and criminal penalties as well as regulatory sanctions.
Definition of Material Nonpublic Information
Information is “material” if it has “market significance” in the sense that disseminating the information is likely to affect the market price of any outstanding securities, or is likely to be considered important by reasonable investors in deciding whether to trade the securities. Information is not considered “public” unless it has been reported in the news media, revealed by the issuer in a public forum, discussed in a publicly disseminated research report or otherwise made publicly available.
Materiality is a legal concept that involves an objective test based upon what a hypothetical reasonable investor would consider to be material. Therefore, for example, an analyst -- through some combination of persistence, knowledge and insight -- may consider a particular piece of information to be material to him because it completes his mosaic of information on a company as a whole, while the significance of that discrete piece of information would not be apparent to a reasonable investor. The law generally does not consider such “mosaic” information to be material.
Examples of potentially “material” information that should be reviewed carefully to determine whether they are material in the context of a particular situation include:
| ● | Earnings information, including new or changed earnings estimates; |
| ● | Mergers, acquisitions, tender offers, joint ventures, or changes in assets; |
| ● | New products or discoveries, or developments regarding customers or suppliers (e.g., the acquisition or loss of a contract); |
| ● | Significant corporate developments, such as results of tests regarding safety or effectiveness of products that may impact regulatory approvals (e.g., Federal Drug Administration testing); |
| ● | Changes in control or in management; |
| ● | Auditor resignation, change in auditors or auditor notification that the issuer may no longer rely on an auditor’s audit report; |
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| ● | Events regarding the issuer’s securities (e.g., defaults on senior securities, calls of securities for redemption, repurchase plans, stock splits or changes in dividends, changes to the rights of security holders, changes in debt ratings, advanced re-fundings, public or private sales of additional securities, including Private Investments in Public Entities; |
| ● | Bankruptcies or receiverships; |
| ● | Status of union or other significant contract negotiations; |
| ● | Confidential government information relating to government-issued securities; |
| ● | Major litigation; and |
| ● | Any other significant information that would have an impact on the price of a company’s securities. |
In addition, material nonpublic information possessed by USBAM employees could be material to a particular class of a company’s securities, all of that company’s securities, the securities of another company, or the securities of several companies. The law against “insider” trading does not exempt any type of security; in other words, it is unlawful to trade, or recommend the trading of, any security (whether taxable or tax-exempt fixed income, equity or commercial paper) based on “inside” information that is material to the market value of that security. For example, nonpublic information that a company will redeem or tender a class of its debt securities may be “material” to the market value of those securities. If so, trading those debt securities on the basis of the nonpublic information is prohibited. A recapitalization, merger or leveraged buyout may be “material” to all the equity and debt securities of the company. An acquisition may be material to the securities of both the acquirer and the acquiree. Material nonpublic information is also not limited to “company” or “corporate” information; it can relate to confidential government information relating to government-issued securities.
If there is ever a question with respect to whether information is material or public, employees are expected to contact Compliance for advice.
Tippees May Be Insiders
USBAM personnel may, depending on the circumstances, also become “insiders” or “tippees” when they obtain apparently material nonpublic information through “tips” from “insiders,” consultants, research providers, broker-dealer personnel, family members, or even by happenstance, including information derived from social situations, business gatherings, overheard conversations, or third parties. In these situations, USBAM personnel who receive such information must treat the information as material nonpublic information and must fully comply with the procedures set forth herein to prevent the misuse of that information. Under such circumstances, and as provided more specifically below, employees must immediately contact Compliance.
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Duty of Confidentiality
Just as USBAM and its personnel are prohibited from trading while in possession of material nonpublic information, they are likewise required to maintain the confidentiality of such information and not disclose, or “tip,” that information to others. In this regard, it is important to note that except as expressly provided in the following sections, this duty of confidentiality prohibits USBAM personnel from disclosing material nonpublic information to other USBAM personnel. The prohibition against disclosure or misuse of material nonpublic information also applies fully to USBAM and its employees even though USBAM (or any affiliate) is not requested or engaged to provide any services in connection with the transaction or development underlying the material nonpublic information.
Material Nonpublic Information about U.S. Bancorp
USBAM personnel are “insiders” when they possess material nonpublic information about the business or activities of U.S. Bancorp (such as unannounced results of operations, the proposed issuance of U.S. Bancorp securities or other major developments or transactions by U.S. Bancorp or its affiliates) that, when publicly disclosed, may affect the market values of U.S. Bancorp securities or securities of other companies. USBAM personnel who possess “inside” information about U.S. Bancorp must comply with all of the policies set forth herein against misuses of that information. See also the U.S. Bancorp Code of Ethics and Business Conduct.
Material Nonpublic Information about Mutual Funds
USBAM personnel are “insiders” when they possess material nonpublic information about the business or activities of any of the funds for which USBAM is an investment adviser or sub-adviser. USBAM personnel who possess “inside” information about any of the funds must comply with all of the policies set forth herein against misuses of that information. This includes the following prohibitions:
| ● | USBAM personnel may not disclose the portfolio holdings of the funds to an outside party without formal approval from the Chief Compliance Officer, or designee; and |
| ● | USBAM personnel may not buy or sell shares of the funds for personal accounts, or recommend that anyone else do so, in a manner that is designed to profit from inside information. |
Contacts with Management
In nonpublic meetings with management or any insider, whether formal or informal, it is important for USBAM personnel to remember:
| ● | USBAM personnel may not attempt to force or prompt a corporate spokesperson to selectively disclose material nonpublic information. If selective disclosure does occur as a result of such actions it is possible that the USBAM personnel involved and USBAM itself could be charged with aiding and abetting or causing a selective disclosure violation by the company; |
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| ● | Extreme care must be taken in seeking to have a corporate spokesperson comment on an analyst’s financial model or comment on the issuer’s earnings forecast. Depending on the circumstances, such comments can be deemed to be “material.” The SEC has recognized that such comments are not always material, but their materiality will be determined in hindsight. Key considerations identified by the SEC staff include the amount of time that has elapsed since the company’s last public comment (comments late in the quarter are more likely to be material) and whether there have been intervening events (confirmation of a forecast despite the loss of a key customer may be material). The staff has also cautioned that reference to a forecast, without more, could be considered a confirmation of the forecast that might “entangle” USBAM in the company’s selective disclosure. An issuer can comment on an analyst’s financial model without disclosing material nonpublic information. For example, an issuer ordinarily would not be conveying material nonpublic information if it corrected historical facts that were a matter of public record. An issuer also would not be conveying inside information if it shared seemingly inconsequential data, which, pieced together with public information by a skilled analyst with knowledge of the issuer and the industry, helps form a mosaic that reveals material nonpublic information. Further, an issuer may reveal this type of data even if, when added to the analyst’s own fund of knowledge, it is used to construct her ultimate judgments about the issuer. An issuer may not use the discussion of an analyst’s model as a vehicle for selectively communicating - either expressly or in code - material nonpublic information; |
| ● | If, in a meeting with management, USBAM personnel receive selectively disclosed material nonpublic information, USBAM personnel must comply with all of the policies and procedures set forth herein, including the prohibition against trading on the inside information. |
Consultants
Neither USBAM nor USBAM personnel may retain consultant (including research providers) to obtain material nonpublic information. Extreme caution should be exercised with regard to any consultant that claims they can obtain information before the media or promises the “first call” on investment issues. In dealing with consultants USBAM personnel should remember:
| ● | USBAM personnel are responsible for assessing all information received from consultants to determine if it constitutes, or may constitute, material nonpublic information. If material nonpublic information is received from a consultant the Procedures set forth below must be followed. |
Creditors’ Committees
In connection with high yield and distressed debt investment strategies, USBAM personnel may serve on an insolvent issuer’s creditors’ committee, or similar group, which provides USBAM with access to material nonpublic information (e.g., internal financial projections, validity of claims, likelihood of reorganization, etc.). In such situations you must notify the Chief Compliance Officer, or designee, before you agree to participate in creditors’ committees or similar groups. Members of
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the Compliance Department and/or Legal Department will review your request and notify you whether you may participate in the creditors’ committee. These situations generally require special controls beyond those contained in these Policies and Procedures. The issuer of the security for whom such committee was formed will be added to a restricted list, and the Legal and Compliance Departments will determine if additional controls should be implemented.
No less than annually, the Compliance Department will send a communication to employees who may potentially serve on a Creditors’ Committee to remind them of their responsibilities.
USBAM Policy on Insider Trading
USBAM’s policy on insider trading is that any USBAM employee in possession of material nonpublic information must preserve the confidentiality of such information and abstain from trading until the inside information is publicly disclosed. It is fundamental to this policy that:
| ● | No USBAM employee, while in possession of material nonpublic information relevant to a security, shall purchase or sell or recommend or direct the purchase or sale of such security for the account of an advisory client (including mutual funds), proprietary account or anyone else. |
| ● | No USBAM employee shall utilize or take advantage of material nonpublic information to purchase or sell securities for his or her own account, any account in which he or she has a direct or indirect beneficial interest (including accounts for family members), or any other account over which the employee has discretionary authority, a power of attorney or otherwise an ability to control. |
| ● | No USBAM employee shall disclose material nonpublic information to any other person, except for privileged discussions with USBAM’s legal counsel (in-house or outside counsel) as authorized by the Chief Compliance Officer, or designee, or the Legal Department. |
| ● | Any USBAM employee who obtains material nonpublic information that is later disclosed to the general public must allow sufficient time to elapse for the investing public to assimilate and evaluate the information before taking any action for an advisory account or his/her personal account on the basis of the disclosed facts. |
| ● | The foregoing prohibitions apply not only to the securities of the issuers to which the material nonpublic information is directly related but also to any other securities (for example, securities of companies in the same industry) that may reasonably be expected to be affected by the public disclosure of the material nonpublic information. |
Placing Companies on a Restricted List
All USBAM employees who believe they may have come into possession of material nonpublic information should immediately contact the Chief Compliance Officer, or designee. The following is the information that is generally needed when adding a company to a restricted list, although further information may be required:
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| ● | Company name |
| ● | Trading symbol (“ticker”) |
| ● | The nature of material nonpublic information and how it was obtained |
| ● | Who reported the item |
| ● | All people who have knowledge of the information |
Compliance is responsible for the adding and deleting of securities on a restricted list. The Chief Compliance Officer, designee, or Legal Department, shall take appropriate action, which may include consultation with counsel (in-house or outside), for the placing or removal of the subject company on or from a restricted list. The Compliance Department shall monitor the trading of securities of companies identified on a restricted list. If suspicious activity is detected, the Compliance Department will determine the most appropriate course of action.
Reference Securities Also Included
Trading restrictions and monitoring activity for the period in which companies are included on a restricted list will apply to the securities of such companies and to any reference securities. Reference securities are any securities into which the security of a listed company may be converted, exchanged, exercised or which may determine the value of such security.
Bringing Additional Persons “Over the Wall”
Senior management, the Chief Compliance Officer, or designee, or the Legal Department, depending on the circumstances and at their discretion, may bring some or all of USBAM’s portfolio managers, traders or research analysts “Over the Wall” (effectively limiting their trading and recommendations) to help avoid the appearance of impropriety. Such an action may be warranted, for example, where a concern exists that certain material nonpublic information known to some USBAM individuals may be attributed to others. For instance, in a case where material nonpublic information is known by one of two portfolio managers who co-manage a fund, it may, depending on the circumstances, help in avoiding the appearance of impropriety to bring the other portfolio manager “Over the Wall.”
Failure to Comply
Any violation of this section of the Code may result in disciplinary action, and, when appropriate, termination of employment and/or referral to appropriate governmental agencies.
Education and Training of Employees
USBAM requires all employees to attest to their understanding of the Code of Ethics and the Insider Trading Policy. This policy may be implemented through the use of training sessions, memos, educational articles and the following:
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| ● | All employees are required to initially sign an Acknowledgement and Agreement to Comply with USBAM’s Insider Trading Policy and Procedures. Thereafter, additional sign-offs are received on a quarterly basis. |
| ● | Code of Ethics and Insider Trading training will be conducted for all USBAM employees at least annually. |
| ● | Training sessions will be held for all new USBAM employees for the Code of Ethics, which will include training on the Insider Trading Policy. These training sessions will be held on an as needed basis with each new hire. |
Contract and temporary employees are also subject to this training unless a written exemption is provided by the Compliance Department.
Record Retention
The Compliance Department will retain all documents and records created in accordance with these Policies and Procedures. These records will be retained for at least six years, the first two years in an easily accessible location.
OTHER CONFLICTS OF INTEREST
A. May I Provide Investment Advice to Others?
You are prohibited from engaging in outside business or investment activities that may interfere with your duties with USBAM or potentially impair USBAM’s reputation. For these reasons, you may not provide investment advice to anyone other than USBAM clients (including the Funds) without prior written authorization from the Legal or Compliance Department.
B. May I Serve as a Director of Another Company?
You are prohibited from serving as a member of the board of directors (or other advisory board) of any publicly traded company absent prior authorization by the Chief Compliance Officer and the Funds’ Board of Directors. Authorization, when granted, will only be given if (i) the Funds’ Board determines that service on a board is consistent with the interests of the Funds, and the Funds’ shareholders; (ii) the Chief Compliance Officer determines that service of a board is consistent with the interest of USBAM and its clients; and (iii) both the Funds’ Board and the Chief Compliance Officer determine that service on a board presents a limited potential for any conflict of interest (at the time of the determination or in the future). In addition, U.S. Bancorp has developed additional limitations on service on a board of directors by USBAM employees. For additional information see U.S. Bancorp’s Code of Ethics or USBAM’s Compliance Department.
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C. When May I Disclose Confidential Information?
Information about our clients (including former clients) and fund shareholders, for example, their identities, financial circumstances and holdings, is highly confidential. So is information about our securities recommendations, pending transactions for a client or Fund, and Fund portfolio holdings. All of us at USBAM must keep confidential information in strict confidence. Confidential information must not be disclosed to anyone outside USBAM, including family members, except as required to effect securities transactions on behalf of a client or Fund or for other legitimate business purposes. You must observe USBAM’s procedures to safeguard the security of any confidential information.
| D. | May I Give or Receive Gifts? |
USBAM, as a policy, follows U.S. Bank’s policy regarding gifts. As a general rule, employees of USBAM must not solicit, allow yourself to be solicited, or accept gifts, entertainment, or other gratuities intended to or appearing to influence decisions or favors toward USBAM’s business to or from any client, potential client, USBAM vendor or potential vendor.
The Compliance Department shall periodically review such records and provide Department heads with exceptions.
A copy of the Bank’s policy is available on the intranet.
Meals and Entertainment
You may accept or provide reasonable business meals and entertainment if the client, potential client, USBAM vendor, or potential vendor is physically present at the business meal or entertainment. In the event that any such business meal and/or entertainment has a value exceeding $100 per person you must report the meal or entertainment no later than 30 days following the end of the quarter in which the activity occurred. The Compliance Department will review all reported gifts/entertainment on a quarterly basis and inform Department heads of any exceptions to the policy.
Meals and Entertainment with Governmental Entity and Officials
You may not accept or provide any meal or entertainment to a governmental entity or official no matter the value.
Gifts
Receipt of Gifts: You may not accept individual gifts with a value exceeding $100 from any entity or individual in aggregate, over one calendar year, even if the gift is not intended to influence your behavior, or to influence another. Additionally gift cards and gift certificates, whether to a specific establishment or for general use, are limited to a $25 maximum. The
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receipt of gifts should also be limited to commonly recognized events or occasions, such as promotions, new jobs, weddings, retirement, holidays or birthdays. Any gift given or received with a value in excess of $30 must be reported no later than the end of the quarter in which the item was received.
In isolated circumstances, when a gift is received with a value in excess of $100 and returning the gift would offend the giver, the employee may contact the Compliance Department to request an exception to the policy. If granted the employee must:
| 1. | Obtain written consent of the exception from the Compliance Department; |
| 2. | Disgorge the value above $100 via a check made out to USBAM, who will then donate it to charity; and, |
| 3. | Report the total value of the gift, with explanation of the exception, and amount disgorged. |
You may retain a gift above $100 in value if you share it among USBAM employees and report the full value of the gift, noting that it was shared with employees.
When representing USBAM, an employee may participate in random drawings where the prize has a value above $100, or $25 if a cash equivalent item. If the employee wins the prize, he or she should inform the Compliance Department as soon as practicable and provide evidence that there was no bias to the drawing (e.g., limited to specific groups, or organizations of a certain size or assets under management). If there was no bias in the random drawing, the Compliance Department will determine if any disgorgement of the amount above the acceptable level is required. The employee still has the requirement to report the entire value of the prize no later than the end of the quarter the prize was received.
Giving of Gifts: You may not give individual gifts with a value exceeding $100 to any entity or individual either doing business with USBAM or intending to influence business with USBAM during one calendar year. Gifts with a value exceeding $30 must be no later than the end of the quarter in which the item was given. This includes USBAM’s logo merchandise above the $30 threshold. Additionally gift cards and gift certificates, whether to a specific establishment or for general use, are limited to a $25 maximum.
Every quarter you must certify that you have been in compliance and will continue to comply with USBAM’s policies, including those related to gifts, meals, and entertainment. The quarterly certification is completed at the same time as your personal securities transactions certification.
Gifts to Governmental Entity and Officials
You may not accept or provide any gift to a governmental entity or official no matter the value.
E. May I Make Political and Charitable Contributions?
You must not make political contributions for the purposes of obtaining or retaining advisory contracts with government entities. In soliciting political or charitable donations from various
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people in the business community, you must never allow the present or anticipated business relationships with USBAM or any of its affiliates to be a factor in soliciting any contributions.
USBAM limits the amount of Political Contributions that can be made by its employees. For more information on these restrictions, please see the USBAM Pay to Play policy.
ENFORCEMENT OF THE CODE AND SANCTIONS
This Code has been adopted by USBAM and is administered by the Compliance Department. Failure of an employee to comply with all policies, rules and regulations may lead to disciplinary action. In considering actions to enforce the Code, the Compliance Department will consider all of the relevant facts and circumstances of the incident and the employee’s prior record of compliance with the Code. Following its review, the Compliance Department may impose or recommend sanctions as it deems appropriate, including oral reprimand, a letter of censure, a fine, a reduction in salary or position, suspension without pay, termination of personal trading privileges, and/or termination of the employment of the violator. A violator will be obligated to pay any sums due resulting from a violation by a member of his/her immediate family.
The imposition of sanctions under this Code does not preclude the imposition of additional sanctions by the Funds’ Board of Directors and cannot be deemed a waiver of any rights by any Fund or client. In addition to sanctions that may be imposed, persons who violate this Code may be subject to various penalties and sanctions including, for example, injunctions, treble damages, disgorgement of profits, fines of up to three times the profit gained or loss avoided (whether or not the violator actually benefited), and jail sentences.
NOTE: Transaction costs associated with an action and any loss realized on the transaction must be borne by the responsible employee. Gains from a sanction must be transferred to an account maintained by USBAM for distribution to charity.
Reporting to the Board
No less than annually, the Chief Compliance Officer shall submit to the Board of Directors a written report that describes any issues that have arisen under the Code (including procedures implementing the Code) since the last report to the Board of Directors, including, but not limited to, information about any material violations of the Code or procedures and sanctions imposed in response to any material violations. The Chief Compliance Officer shall also certify, in writing to the Board of Directors, that USBAM has adopted procedures reasonably necessary to prevent all Access Persons from violating the Code.
Whistleblowing Provision
The Advisor is committed to high standards of ethical, moral and legal business conduct and obligates any employee or contractor to report suspected violations or concerns regarding compliance with laws, regulations, the Code of Ethic or any policy, or suspected wrongdoings affecting the Advisor or the Funds. These may include violations of state and federal law, malfeasance, bribery, theft, gross misconduct, improper accounting, internal accounting controls,
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auditing matters relating to the Funds, or any fraud or illegal activity involving the Advisor’s business that could harm the good reputation of the Advisor and/or the Funds.
In line with this commitment, the Advisor encourages employees and contractors to raise concerns within the organization and provides reassurances that they will be protected from reprisals or harassment for Whistleblowing.
No employee or contractor of the Advisor may interfere with the good faith reporting of suspected or actual misconduct or intimidate or retaliate against any employee or contractor who makes such a report in good faith. No employee or contractors who makes a good faith report or cooperates in good faith with the Advisor’s investigation shall be subject to retaliation, including harassment or any adverse employment consequence as a result of making a report. No employee may directly or indirectly use or attempt to use their official authority or influence of their positions for the purpose of interfering with the right of another employee to make a good faith report.
The Advisor will take whatever action is necessary and appropriate to address allegations of activity that may be considered fraudulent or illegal in nature, or could potentially damage the reputation of the Advisor or the Funds.
Reporting of Suspected or Actual Concern
It is every employee and contractors obligation to report suspected or actual violations of laws, regulations and/or Advisor Policy.
Communication regarding actual or suspected wrongful conduct engaged in by an employee, contractor, third party service provider or vendor must be based on a good faith and reasonable belief that the activity both occurred and is a violation of applicable rules and regulations and/or policies. Employees who are aware of or have reason to suspect wrongful conduct should report the conduct either verbally or in writing to any of the individuals listed below.
Employee’s immediate supervisor or other Advisor senior manager
USBAM Chief Executive Officer
USBAM Legal Counsel
USBAM/Fund Chief Compliance Officer
The U.S. Bank Ethics Line at 866-ETHICS4 (866-384-4274)
Securities and Exchange Commission (https://www.sec.gov/about/offices/owb/owb-tips.shtml)
Prompt disclosure of suspected violations to the appropriate parties is vital to ensuring a thorough and timely investigations and resolution.
Good faith allegations may be made on a confidential basis or may be submitted anonymously. Confidentiality will be maintained to the fullest extent possible, regardless of the method used to report possible unethical conduct. All questions or concerns will be handled discreetly and thoroughly. Anonymous reports may be mailed along with a description of the suspected violation or other complaint or concern to:
Ruth Mayr, Chief Compliance Officer
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800 Nicollet Mall, BC-MN-H04N
Minneapolis, MN 55402
Investigation and Enforcement
Investigation – When an alleged violation is reported, the Advisor will take prompt and appropriate action depending on the nature of the concern. Initial inquiries will be made to determine whether the allegation appears credible and what type of investigation is appropriate based on the severity of the allegation.
The First American Fund Audit Committee and/or Board of Directors may receive information on each report of concern and follow-up information on actions taken. The SEC and/or other regulator may be notified.
The Advisor encourages employees to put their names to allegations because appropriate follow-up questions and investigation may not be possible unless the source of the information is identified. Every effort will be made to treat the complainant’s identity with appropriate regard for confidentiality. In the course of its investigation, however, the Advisor may find it necessary to share information with others on a “need to know” basis.
To the degree possible, the complainant will be notified of the results of any investigation.
The Chief Compliance Officer will maintain a log of all allegations, tracking their receipt, investigation and resolution.
Enforcement – the Chief Compliance Officer will work with USBAM Legal and appropriate USBAM senior leaders to recommend and implement the appropriate disciplinary action depending upon the severity of the violation. The actions may include documenting the incident of non-compliance in the employee’s personnel file, a fine, suspension of trading privileges and termination of employment. For more serious violations, the individual risks indictment, prosecution and penalties, and civil actions. For licensed individuals, serious violations may be reported to FINRA.
Any employee who knowingly or with reckless disregard for the truth gives false information or knowingly makes a false report of wrongful conduct or a subsequent false report of retaliation will be subject to disciplinary action, up to and including termination.
Safeguards
USBAM does not tolerate any retaliatory action against any individual for good-faith reporting of ethics violations, illegal conduct, suspicious activity or other serious issues. Allegations of retaliation will be appropriately investigated and, if substantiated, appropriate disciplinary action will be taken, up to and including termination. Diligent enforcement of non-retaliation measures is vital to the success of the reporting process because employees must feel they can report problems without fear of reprisals.
No employee who makes a good faith report will suffer harassment, retaliation or adverse employment consequences. Any person who retaliates against any employee who makes a good faith report is subject to discipline up to and including termination.
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If you have made a good faith allegation and feel you have suffered harassment, retaliation or adverse employment consequences you should contact any of the individuals listed below.
Employee’s immediate supervisor or other Advisor senior manager
USBAM Chief Executive Officer
USBAM Legal Counsel
USBAM/Fund Chief Compliance Officer
U.S. Bancorp’s Human Resources department
Securities and Exchange Commission (https://www.sec.gov/about/offices/owb/owb-tips.shtml)
Policy Owner
| ● | Compliance Department |
Responsible Parties
| ● | All USBAM employees |
| ● | Chief Compliance Officer, or designee, |
| ● | Compliance Department |
Related Policies
| ● | None |
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GLOSSARY
| A. | Access Persons means any directors or officer of USBAM, as well as any employee who has access to nonpublic information regarding any clients’ purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any Fund. See also Restricted Access Person. |
| B. | Beneficial Ownership of a Security is to be determined generally in the same manner as it would be under Rule 16a-1(a)(2) of the Securities Exchange Act of 1934 (“1934 Act”). This means that persons should generally consider themselves the “Beneficial Owner” of any Security in which they have a direct or indirect financial interest. In addition, persons should consider themselves the “Beneficial Owner” of any Security held by their spouse/partner, minor children, relatives who share their home, or other persons by reason of any contract, arrangement, understanding, or relationship that provides them with sole or shared voting or investment power over that Security. |
Although the following list is not exhaustive, under the 1934 Act and this Code, a person generally would be regarded to be the “Beneficial Owner” of the following Securities:
| 1. | Securities held in the person’s own name; |
| 2. | Securities held with another in joint tenancy, community property, or other joint ownership; |
| 3. | Securities held by a bank or broker as nominee or custodian on such person’s behalf or pledged as collateral for a loan; |
| 4. | Securities held by members of the person’s immediate family sharing the same household (“immediate family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse/partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships); |
| 5. | Securities held by a relative not residing in the person’s home if the person is a custodian, guardian or otherwise has or shares control over the purchase, sale, or voting of the Securities; |
| 6. | Securities held by a trust in which the person is a beneficiary and has or shares the power to make purchase or sale decisions; |
| 7. | Securities held by a trust for which the person serves as a trustee (other than an administrative trustee with no investment discretion); |
| 8. | Securities held by a general partnership or limited partnership in which the person is a general partner; |
| 9. | Securities owned by a corporation in which the person has a control position or in which the person has or shares investment control over the portfolio Securities (other than a registered investment company); |
| 10. | Securities in a portfolio giving the person certain performance-related fees; |
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| 11. | Securities held by another person or entity pursuant to any agreement, understanding, relationship or other arrangement giving the person any direct or indirect pecuniary interest. |
| C. | Blackout Periods means the time period during which buying or selling a security is prohibited. See Section E under Personal Securities Transactions. |
| D. | Control shall have the meaning as set forth in Section 2(a)(9) of the 1940 Act. For example, “control” means the power to exercise a controlling influence over the management or policies of a company. Beneficial Ownership of more than 25% of the voting securities of a company is presumed to be “control” of that company. |
| E. | Discretionary Accounts are accounts where full investment authority has been granted to a third-party via a contract or agreement between the Access Person or Restricted Access Person and the third-party. |
| F. | Exempt Security includes: |
| 1. | Direct obligations of the Government of the United States; |
| 2. | Bankers’ acceptances, bank certificates of deposit, commercial paper; |
| 3. | High-quality short-term debt instruments including repurchase agreements; |
| 4. | Shares issued by registered open-end investment companies for which USBAM does not serve as investment adviser or subadviser, and neither does Quasar serve as a distributor; and |
| 5. | Shares of any money market series of the Funds. |
| G. | Funds means the First American Funds, Inc. |
| H. | 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 Section 13 or 15(d) of the 1934 Act. |
| I. | Material Non-Public Information |
Information is “material” if it has “market significance” in the sense that disseminating the information is substantially likely to affect the market price of any outstanding securities, or is substantially likely to be considered important by reasonable investors in deciding whether to trade the securities. Information is not considered “public” unless it has been reported in the news media, revealed by the issuer in a public forum, discussed in a publicly disseminated research report, or otherwise made publicly available.
Examples of potentially “material” information that should be reviewed carefully to determine whether they are material in the context of a particular situation include:
| 1. | Information about any First American Fund’s or client account’s portfolio holdings, trading strategies, and securities transactions; |
| 2. | Earnings information, including new or changed earnings estimates; |
| 3. | Mergers, acquisitions, tender offers, joint ventures, or changes in assets; |
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| 4. | New products or discoveries, or developments regarding customers or suppliers (e.g., the acquisition or loss of a contract); |
| 5. | Significant corporate developments, such as results of tests regarding safety or effectiveness of products that may impact regulatory approvals (e.g., FDA testing); |
| 6. | Changes in control or in management; |
| 7. | Auditor resignation, change in auditors, or auditor notification that the issuer may no longer rely on an auditor’s audit report; |
| 8. | Events regarding the issuer’s securities (e.g., defaults on senior securities, calls of securities for redemption, repurchase plans, stock splits or changes in dividends, changes to the rights of security holders, changes in debt ratings, advanced refundings, public or private sales of additional securities, including Private Investments in Public Entities - “PIPES”); |
| 9. | Bankruptcies or receiverships; |
| 10. | Status of union or other significant contract negotiations; |
| 11. | Confidential government information relating to government-issued securities; |
| 12. | Major litigation; and |
| 13. | Any other significant information that would have an impact on the price of a company’s securities. |
| J. | Private Placement means an offering that is exempt from registration under the Securities Act of 1933 (“1933 Act”) pursuant to Section 4(2) or Section 4(6), or pursuant to rule 504, rule 505 or rule 506 under the 1933 Act. |
| K. | Restricted Access Person means any Access Person who is actually involved in making investment recommendations to USBAM clients, participate in the determination of which investment recommendations will be made, or has the power to influence management of the Funds, or execute trades for any Fund or client accounts. Restricted Access Persons generally include research analysts, traders, portfolio/fund managers, executive management of USBAM, members of the Legal and Compliance Departments, and their executive or departmental assistants. |
| L. | “Security” or “Securities” shall include all the instruments set forth in Section 2(a)(36) of the 1940 Act, i.e., any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, brokered or brokerage certificates of deposit, collateral-trust certificate, reorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a ‘Security’ or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. For purposes of this Code, “Security” or “Securities” shall |
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also include any futures contract, option on a futures contract, forward agreement, SWAP agreement (including caps, floors, and collars), and any other derivative instrument. “Security” or “Securities” shall not include checking and other demand or time deposits maintained at a bank or similar financial institution.
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EXHIBIT 1
ACKNOWLEDGMENT AND AGREEMENT TO COMPLY
By signing this Acknowledgement and Agreement to Comply I certify the following:
| ● | I have read and understand the Code of Ethics, (the “Code”) and have had an opportunity to ask any questions that I may have had concerning the Code. |
| ● | I understand that I am responsible for complying with the Code and agree to comply. |
| ● | I agree that I will not execute any prohibited transactions or trade without obtaining the necessary pre-clearance. |
| ● | I agree that I will not trade on the basis of insider information. |
| ● | I agree to comply with USBAM’s policies regarding other conflicts of interest, including its Gift Policy. |
| ● | I understand that the Legal and Compliance Departments can assist me with questions I may have concerning the Code. I agree to contact them if I have any questions concerning the Code or the interpretation or application of the Code to a particular situation. |
| ● | I understand that my compliance with this Code and all applicable laws is a condition of my involvement with USBAM. |
| ● | I have reported all material violations of the Code within the scope of my knowledge to the appropriate officer of USBAM. |
| ● | I understand that my violation of the Code may subject me to personal civil and criminal liability, regulatory fines and/or suspensions. I also understand that my violation of the Code subjects USBAM to civil and criminal liability as well as regulatory discipline. |
| Print Name Legibly | |
| Signature | |
| Date |
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EXHIBIT 2
CODE OF ETHICS CONTACT LIST
If
you think you or any other employee has violated the Code of Ethics, please call:
Julie Barton, Compliance Manager: 612-303-7623; Fax 612-303-4362
Ruth Mayr, Chief Compliance Officer: 612-303-4096; Fax 612-303-4767
Richard Ertel, Chief Counsel: 612-303-7987; Fax 612-303-4223
Eric Thole, CEO, USBAM: 612-303-3437
Please contact the following people with any questions concerning:
Code of Ethics Policy and Procedures:
Julie Barton, Compliance Manager: 612-303-7623; Fax 612-303-4362
Craig Jensen, Compliance Analyst: 612.303.3677; Fax 612-303-4362
Jacqueline Korus, Compliance Manager: 612-303-3441; Fax 612-303-4362
Insider Trading:
Julie Barton, Compliance Manager: 612-303-7623
Portfolio Compliance:
Ted Lautzenheiser, Compliance Manager: 612-303-0874
Jeanette Murphy, Compliance Manager: 612-303-6745
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Exhibit 99(q)
FIRST AMERICAN FUNDS, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned persons hereby constitute and appoint Eric J. Thole, Richard J. Ertel, and James D. Palmer, and each of them, his or her true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign Registration Statements on Form N-1A of the above-referenced investment companies, and any and all amendments thereto, including post-effective amendments, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, each acting alone, or the substitutes for such attorneys-in-fact and agents, may lawfully do or cause to be done by virtue hereof.
| Signature | Title | Date |
| /s/ Richard K. Riederer | Chair
|
September 28, 2017 |
| Richard K. Riederer | ||
/s/ David K. Baumgardner |
Director |
September 28, 2017 |
| David K. Baumgardner | ||
/s/ Mark E. Gaumond |
Director
|
September 28, 2017 |
| Mark E. Gaumond | ||
/s/ Roger A. Gibson |
Director |
September 28, 2017 |
| Roger A. Gibson | ||
/s/ James M. Wade |
Director |
September 28, 2017 |
| James M. Wade |
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