XXXXXX ASSOCIATES L.P., XXXXXX ASSOCIATES SECURITIES L.P. AND XXXXXX ASSOCIATES
_______________________________________________________________________________
INVESTMENT TRUST
________________
CODE OF ETHICS AND STATEMENT ON XXXXXXX XXXXXXX
_______________________________________________
AS AMENDED APRIL 24, 2006
I. DEFINITIONS
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A. FIRM OR XXXXXX. The term "Firm" or "Xxxxxx" shall include Xxxxxx
Associates L.P. ("HALP") and Xxxxxx Associates Securities L.P. ("HASLP").
B. TRUST. The term "Trust" shall mean Xxxxxx Associates Investment Trust,
including any series of shares of beneficial interest of the Trust (each, a
"Fund").
C. EMPLOYEE. The term "Employee" shall include any person employed by the
Firm, whether on a full or part-time basis and all partners, officers,
shareholders and directors (other than Non-Access Directors (as defined
below)) of the Firm.
D. ACCESS PERSON. The term "Access Person" shall have the meaning set forth
in Section 17j-1(a)(1) of the Investment Company Act of 1940 and rules
thereunder (the "Act") and Section 204A-1(e)(1) of the Investment Advisers
Act of 1940 (the "Advisers Act"). Accordingly, Access Person means any
director, officer, general partner, or Advisory Person (as defined below) of
the Fund or HALP, but shall not include any trustee of the Trust who is not
an "interested person" of the Trust and, in the case of HALP, shall not
include any Non-Access Director.
E. ADVISORY PERSON. The term "Advisory Person" shall have the meaning set
forth in Section 17j-1(a)(2) of the Act. Accordingly, Advisory Person means
any Employee of the Firm, who, in connection with his or her regular
functions or duties, makes, participates in, or obtains information
regarding the purchase or sale of Covered Securities (as defined below) by a
Client (as defined below), or whose functions relate to the making of any
recommendations with respect to purchases and sales. For the purpose of this
Code, each Employee of the Firm with an office at the Firm's principal place
of business shall be deemed to be an Advisory Person.
F. PERSONS SUBJECT TO THIS CODE. Each Employee is subject to this Code. In
addition, Non-Access Directors are subject to the following provisions of
this Code: II.A, II.B, II.C.i, II.J, and III (other than III.B.3 (i),
(ii) and (iv) and the last sentence of III.B.4).
G. COVERED SECURITY. The term "Covered Security" shall have the meaning set
forth in Section 2(a)(36) of the Act, including any right to acquire such
security, except that it shall not include securities which are direct
obligations of the Government of the United States, bankers' acceptances,
bank certificates of deposit, commercial paper, high quality short-term
debit instruments (including repurchase agreements), and shares issued by
open-end investment companies other than Reportable Funds (defined below).
In addition, all exchange-traded funds ("ETFs"), whether registered as
______________________________________________________________________
open-end management companies or unit investment trusts, shall be treated as
____________________________________________________________________________
Covered Securities for reporting purposes only.
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H. REPORTABLE FUND. The term "Reportable Fund" shall have the meaning set
forth in Section 204A-1(e)(9) of the Advisers Act. Reportable Fund means any
investment company registered under the Act that is advised or sub-advised
or distributed by the Firm or any affiliated company (e.g. IXIS Asset
Management Advisers, Xxxxxx Xxxxxx, or Xxxxxxxxxx). Reportable Funds
include, for example, open-ended investment companies and closed-end
funds/1/. A current list of Reportable Funds is maintained on the Compliance
page of the Firm's intranet site.
I. BENEFICIAL INTEREST OR OWNERSHIP. The term "beneficial interest or
ownership" shall be interpreted in the same manner as it would be under Rule
16a-1(a)(2) under the Securities Exchange Act of 1934 in determining whether
a person is subject to the provisions of Section 16 of the Securities
Exchange Act of 1934 and rules thereunder, which includes any interest in
which a person, directly or indirectly, has or shares a direct or indirect
pecuniary interest. A pecuniary interest is the opportunity, directly or
indirectly, to profit or share in any profit derived from any transaction.
Each person will be assumed to have a pecuniary interest, and therefore,
beneficial interest or ownership, in all securities held by that person,
that person's spouse, all members of that person's immediate family and
adults sharing the same household with that person (other than mere
roommates) and all minor children of that person and in all accounts subject
to their direct or indirect influence or control and/or through which they
obtain the substantial equivalent of ownership, such as trusts in which they
are a trustee or beneficiary, partnerships in which they are the general
partner, corporations in which they are a controlling shareholder or any
other similar arrangement. Any questions an Employee may have about whether
an interest in a security or an account constitutes beneficial interest or
ownership should be directed to the Firm's General Counsel or Compliance
Department. Examples of beneficial interest or ownership are attached as
Appendix A.
J. CLIENT. The term "Client" shall mean any client of HALP, including any
Fund.
K. SPECIAL COMPLIANCE PERSON. The term "Special Compliance Person" shall
mean the current Compliance Officer of IXIS Asset Management - North America.
L. NON-ACCESS DIRECTOR. The term "Non-Access Director" shall mean any person
who is a Director of Xxxxxx Associates, Inc., the corporate general partner
of HALP and HASLP, but who is not an officer or employee of any of HALP,
HASLP or Xxxxxx Associates, Inc. and who meets all of the following
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conditions:
i) He or she, in connection with his or her regular functions or
duties, does not make, participate in or obtain information
regarding the purchase or sale of Covered Securities by a registered
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/1/ Reportable Funds that are money market funds are not subject to the Code's
reporting requirements or holding periods (see Section II.G - Procedures
to Implement Trading Restrictions and Reporting Obligations).
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investment company, and whose functions do not relate to the making
of recommendations with respect to such purchases or sales;
ii) He or she does not have access to nonpublic information regarding
any Firm clients' purchases or sales of securities (other than
information contained in standard account statements or reports that
the Firm may furnish to such person in his or her capacity as a
client of the Firm), or nonpublic information regarding the
portfolio holdings of any Reportable Fund; and
iii) He or she is not involved in making securities recommendations to
Firm clients, and does not have access to such recommendations that
are nonpublic (other than information contained in standard account
statements or reports that the Firm may furnish to such person in
his or her capacity as a client of the Firm).
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II. CODE OF ETHICS
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A. GENERAL STATEMENT
Xxxxxx seeks to xxxxxx a reputation for integrity and professionalism. That
reputation is a vital business asset. The confidence and trust placed in us
by investors in mutual funds and clients with accounts advised by the Firm
is something that is highly valued and must be protected. The Firm owes a
fiduciary duty to its advisory clients, and the fundamental principle of the
Firm is that at all times the interests of its Clients come first. As a
result, any activity which creates even the suspicion of misuse of material
non-public information by the Firm or any of its Employees, which gives rise
to or appears to give rise to any breach of fiduciary duty owed to any
Client, or which creates any actual or potential conflict of interest
between any Client and the Firm or any of its Employees or even the
appearance of any conflict of interest must be avoided and is prohibited.
The Investment Company Act and rules make it illegal for any person covered
by the Code, directly or indirectly, in connection with the purchase or sale
of a security held or to be acquired by the Trust to:
i) employ any device, scheme, or artifice to defraud the Trust;
ii) make any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in
light of circumstances under which they are made, not misleading or
in any way mislead the Trust regarding a material fact;
iii) engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon the Trust; or
iv) engage in any manipulative practice with respect to the Trust.
The restrictions on personal securities transactions contained in this Code
are intended to help the Firm monitor for compliance with these prohibitions.
Additionally, the federal securities laws require that an investment adviser
maintain a record of every transaction in any Covered Security and
Reportable Fund in which an Access Person acquires any direct or indirect
beneficial interest or ownership, except any transaction in an account in
which the Access Person has no direct or indirect control or influence.
To attempt to ensure that each Person Subject to this Code satisfies this
Code and these record keeping obligations, the Firm has developed the
following rules relating to personal securities trading, outside employment,
personal investments with external investment managers and confidentiality.
The General Counsel, Chief Executive Officer, and Chief Compliance Officer,
acting in concert, have the authority to grant written waivers of the
provisions of this Code in appropriate instances. However, the Firm expects
that waivers will be granted only in rare instances, and some provisions of
the Code that are mandated by the Act or the Advisers Act cannot be waived.
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The Firm expects all Access Persons to comply with the spirit of the Code as
well as the specific rules contained in the Code. Any violations of the Code
must be reported promptly to the Firm's Chief Compliance Officer.
B. COMPLIANCE WITH FEDERAL SECURITIES LAWS
More generally, Firm personnel and Non-Access Directors are required to
comply with applicable federal securities laws at all times. Examples of
applicable federal securities laws include:
i) the Securities Act of 1933, Securities Act of 1934, Xxxxxxxx-Xxxxx
Act of 2002 and SEC rules thereunder;
ii) the Investment Advisers Act of 1940 and SEC rules thereunder;
iii) the Investment Company Act of 1940 and SEC rules thereunder;
iv) Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (privacy and security
of client non-public information); and
v) the Bank Secrecy Act, as it applies to mutual funds and investment
advisers, and SEC and Department of the Treasury rules thereunder.
C. RESTRICTIONS ON EMPLOYEE TRADING
No trading activity by an Employee in any security in which an Employee has
any beneficial interest or ownership which is also the subject of a Client
portfolio purchase or sale shall disadvantage or appear to disadvantage such
Client transaction. Further, the following specific restrictions apply to
all trading activity for Advisory Persons:
i) Any transaction in a security in anticipation of client orders
("frontrunning") is prohibited,
ii) Any transaction in a security which is the subject of a Firm
recommendation is prohibited until the tenth business day following
the dissemination of the recommendation, or any longer period
specified in this Code,
iii) Any transaction in a security which the Advisory Person knows or has
reason to believe is being purchased or sold or considered for
purchase or sale/2/ by any investment company advised by the Firm is
prohibited until the transaction by such investment company has been
completed or consideration of such transaction has been abandoned,/3/
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/2/ A security is "being considered for purchase or sale"; the earlier of,
when a recommendation to purchase or sell has been made and communicated
or the security is placed on the research project list and, with respect
to the person making the recommendation, when such person seriously
considers making such a recommendation.
/3/ Among the clients of the Firm are private investment partnerships
(partnerships) in which various Employees of the Firm have equity
interests. This trading prohibition shall not restrict purchases or sales
for the accounts of such partnerships provided that the Trust and such
accounts are treated fairly and equitably in connection with such
purchases and sales.
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iv) Any same day transaction in a security in which any Client advised
by the Firm has a pending or actual transaction is prohibited. If an
Advisory Person places a same day order for such security prior to
the Client placing an order, the Employee's order will be canceled,
v) Any transaction in a security within two business days after any
investment company advised by the Firm has traded in that security
is prohibited,
vi) Any transaction involving options, single stock futures, or other
derivatives relating to any security on the Firm's approved list or
which are held by any investment company advised by the Firm that
appears to evade the restrictions of the Code is prohibited, and
vii) Any acquisition of an equity security in an initial public offering
is prohibited.
Additionally, no Employee of the Firm shall knowingly sell to or purchase
from the Funds or the Trust any security or other property except, in the
case of the Funds, securities issued by the Funds. Neither shall the Firm,
HASL nor any Employee share in the profits or losses in any account of a
customer carried by the Firm or HASL or any other NASD member, except to the
extent provided for by Rule 205-3 of the Investment Advisors Act of 1940
and/or NASD Rule 2330.
D. PRIVATE PLACEMENTS AND INVESTMENTS WITH EXTERNAL MONEY MANAGERS.
No Advisory Person or Access Person shall acquire any security or interest
in a private placement or commit initial capital to any account for which
such person has any beneficial interest (other than non-affiliated mutual
funds where the account is held directly at such fund) with an external
investment manager without the prior written approval of the Firm's Chief
Executive Officer and Chief Compliance Officer. For purposes of this Code,
"private placement" shall mean any limited offering that is generally not
available to the public, including unregistered investment pool vehicles
(e.g., hedge funds, commodity pools), Rule 144A securities, limited
partnerships, etc.
In deciding whether to grant approval, consideration will be given to
whether the investment is consistent with the Firm's investment philosophy
and guidelines and should be offered to Clients, and whether the investment
creates an actual conflict or the appearance of a conflict of interest. An
Advisory Person who has acquired a security in a private placement must
disclose that investment to the Firm's Chief Executive Officer and Chief
Compliance Officer if such Advisory Person later participates in the
consideration of that issuer for inclusion on any list of securities
approved for purchase by Firm clients.
E. ADDITIONAL RESTRICTION ON FUND MANAGERS OF INVESTMENT COMPANY ACCOUNTS.
Any Access Person who is a fund manager of any registered investment company
that is advised by the Firm is prohibited from buying or selling a security
for an account in which he or she has a beneficial interest within fifteen
calendar days before and after the investment company that he/she manages
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trades in that security. Any profits realized on trades within the
proscribed periods shall be required to be disgorged./4/
F. CERTAIN ACCOUNTS EXEMPT FROM REQUIREMENTS OF CODE.
Any account (including open-end investment companies and limited
partnerships) for which the Firm acts as investment adviser or general
partner shall be managed in accordance with the Firm's trading procedures
for a Client account. Any such account shall be exempt from the provisions
of Sections B, C and D of Part II of this Code if (1) accounts of persons
not affiliated with the Firm are also invested in the account or (2) the
account is being operated as a model portfolio in contemplation of
management of Client accounts in the same or a similar strategy.
G. PROCEDURES TO IMPLEMENT TRADING RESTRICTIONS AND REPORTING OBLIGATIONS.
1) TRADING THROUGH XXXXXX' TRADING DESK.
All Advisory Persons who have personal accounts that hold or can hold
Covered Securities are required to maintain such accounts at Pershing LLC
("Pershing"), the Firm's prime broker. All transactions in Covered
Securities in which an Advisory Person has any beneficial interest or
ownership or in any accounts in which an Advisory Person has discretion,
other than fee paying accounts ("Advisory Person account"), must be
processed through the Firm's trading desk.
Additionally, all transactions in Reportable Funds in which an Advisory
Person has any beneficial interest or ownership must be processed
(i) directly with the fund; (ii) through the Firm's mutual fund trading desk
for the Advisory Person's Pershing brokerage account; or (iii) through the
Firm's Profit Sharing and Savings Plan. Reportable Funds are not allowed to
be held in outside brokerage accounts. An Advisory Person may have
beneficial ownership of Reportable Funds in his or her spouse's retirement
or 401(k) plan held at another bank or broker. In such instances, the
Advisory Person should contact the Chief Compliance Officer to apply for a
waiver to transact and hold Reportable Funds through the spouse's plan
Reportable Fund transactions effected pursuant to an automatic investment
plan or in any account over which the Access Person has no direct or
indirect influence or control do not need to be reported. Changes in
allocations of funds connected to an automatic investment plan are
considered volitional transactions and need to be reported.
Transactions at brokers other than Pershing or banks are not permitted
except in unusual circumstances and then only after the Advisory Person has:
(i) provided notice in writing to his/her Supervisor and the Compliance
Department prior to opening or placing an initial order in an account with
such other broker or bank, (ii) obtained the written approval of his/her
Supervisor and the Compliance Department prior to opening or placing an
initial order in such account, (iii) provided such other broker or bank with
a written notice of the Advisory Person's affiliation with Xxxxxx and
request that copies of confirmations and statements be sent to the Firm's
Compliance Department, and provide a report to the
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/4/ Any profits disgorged shall be given to a tax-exempt charitable
organization of Xxxxxx' choosing.
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Firm that includes the name of the broker or bank with whom the account was
established, the date the account was established, and the date the report
is submitted. A copy of such written notice and request should also be
provided to his/her Supervisor and the Compliance Department.
Even after an Advisory Person has obtained approval to execute transactions
through another broker or bank, the Advisory Person must still present the
Firm's trading desk with an order ticket for an order to be executed at the
other broker or bank. In those exceptional situations in which it is
inappropriate for the Firm's trading desk to place the order, the Advisory
Person must promptly present the trading desk with a completed order ticket
reflecting the details of the transaction and clearly indicating that the
transaction has been completed.
2) MONITORING OF TRADES.
Transactions for an account of an Advisory Person that are executed through
the Firm's trading desk are to be monitored by the Trading Department and
reviewed and approved by the Chief Compliance Officer (or such party to whom
he or she delegates). These transactions are non-discretionary transactions,
should be so marked on the original order ticket as "unsolicited and
unsupervised" and may not be executed if they are in conflict with
discretionary orders. Should a conflict arise, sharing of executions may be
approved by the Chief Investment Officer, or in his/her absence, the Trading
Supervisor.
The Firm's Compliance Department will access Advisory Person trade
information online from Pershing (including the title and exchange ticker
symbol or CUSIP number of each Covered Security or Reportable Fund involved,
the date of the transaction, the interest rate and maturity rate (if
applicable), the number of shares and principal amount of each Covered
Security or Reportable Fund involved, the nature of the transaction (i.e.
buy/sell), the price at which the transaction was effected, the name of the
broker or bank through which the transaction was effected, and the date on
which the report is submitted).
Transactions at brokers other than Xxxxxxxx, in addition to being placed
through the trading desk, are to be monitored by the Compliance Department.
To accomplish this, all Access Persons shall submit to the Compliance
Department within thirty days after any transaction a report which includes
the title and exchange ticker or CUSIP number of the Covered Security, the
date of the transaction, the interest rate and maturity rate (if
applicable), the number of shares and principal amount of each Covered
Security involved, the nature of the transaction (i.e. buy/sell), the price
at which the transaction was effected, the name of the broker or bank
through which the transaction was effected and the date on which the report
is submitted. This requirement may be satisfied by having the broker or bank
send the Firm duplicate copies of confirmations and statements, provided
that such confirmations and statements contain all of the information
otherwise required to be provided in the report. The Compliance Department
will maintain copies of all such transaction reports.
3) CANCELLATION OF TRADES.
Any transaction for an account of an Access Person is subject to
cancellation or reversal if it is determined by either the Chief Executive
Officer (or such party to whom he delegates), the Trading
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Supervisor, or the Compliance Department that the transaction is or was in
conflict with or appeared to be in conflict with any Client transaction or
any of the trading restrictions of this Code. Cancellations or reversals of
transactions may be required after an extended period past the settlement
date. The Trading Supervisor may also prevent the execution of orders for an
Advisory Person's account if it appears that the trade may have to be
canceled or reversed.
Client transactions include transactions for any investment company managed
by the Firm, any other discretionary advisory clients or any other accounts
managed or advised by Employees of the Firm for a fee.
The determination that a transaction of an Access Person may conflict with a
Client transaction will be subjective and individualized and may include
questions about timely and adequate dissemination of information,
availability of bids and offers, as well as many other factors deemed
pertinent for that transaction or series of transactions. It is possible
that a cancellation or reversal of a transaction could be costly to an
Access Person or his/her family. Therefore, great care is required to adhere
to the Firm's trading restrictions and avoid conflicts or the appearance of
conflicts.
4) HOLDING PERIODS FOR REPORTABLE FUNDS
No Advisory Person may purchase and sell, or conversely sell and repurchase
shares of the same Reportable Fund within 30 calendar days. This restriction
applies to purchases and sales IN ALL ACCOUNTS in which the Advisory Person
has a beneficial ownership interest, including retirement plans and 401(k)
plan investments. Note that an exchange of shares counts as a sale of shares
for purposes of this prohibition.
For purposes of applying the 30-day holding period, the most recent purchase
(or sale) will be measured against the sale (or purchase) in question. That
is, a last-in-first-out analysis will apply.
All volitional purchase and sale transactions of Reportable Funds in any
share class and in ANY account will be evaluated for purposes of applying
the Holding Period, for example if an Access Person purchased a Reportable
Fund in his Pershing brokerage account and sold the Reportable Fund in his
401(k) account within 30 days, he would have violated the Holding Period.
Hardship exemptions may be requested in advance from the Compliance
Department. The Chief Executive Officer, General Counsel, and Chief
Compliance Officer must approve any such waiver in accordance with Section
II.A, above.
5) PARTICIPATION IN DIVIDEND REINVESTMENT PLANS AND SYSTEMATIC PURCHASE
PLANS.
Advisory Persons may purchase Covered Securities through dividend
reinvestment plans or systematic purchase plans without processing such
transactions through the Firm's trading desk. Purchases are permitted only
after the Advisory Person has: (i) provided notice in writing to his/her
Supervisor and the Compliance Department prior to opening an account or
placing an initial purchase, and (ii) obtained the written approval of
his/her Supervisor and the Compliance Department prior to opening an account
or placing an initial purchase. Notice and approval shall not be required in
connection with
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purchase of shares or units of ETFs. Even after the Advisory Person has
obtained approval to invest in such a plan, the Advisory Person must provide
the Compliance Department with duplicate copies of statements within thirty
days after the end of each calendar quarter. Such report or statements must
contain all of the information required to be reported with respect to
transactions in Covered Securities under II(F)(2) above. The Compliance
Department will maintain copies of all such transaction reports.
6) REPORTING ALL OTHER SECURITIES TRANSACTIONS.
Because the obligations of an investment adviser to maintain records of
Employee's personal securities transactions is broader than the type of
transactions discussed above in this Section, all Employees have the
following additional reporting obligations. Any transaction in a Covered
Security not required to be placed through the Firm's trading desk in which
an Employee has any beneficial interest or ownership (such as, real estate
or oil and gas limited partnership interests and other privately placed
securities and funds) must be reported to the Compliance Department. This
report must be submitted within thirty days after the end of each calendar
quarter and include: the title and exchange ticker symbol or CUSIP number,
price, number of shares and principal amount of each Covered Security
involved, the date and nature of the transaction (i.e. buy/sell), the name
of the broker or bank used, if any, interest rate and maturity, if
applicable, and the date on which the report is submitted. This report may
be in any form, including a copy of a confirmation or monthly statement.
However, no report is necessary for any transaction in an account in which
the Employee has no control or influence.
7) INITIAL AND ANNUAL REPORTING REQUIREMENTS.
Each Access Person shall initially disclose in writing to the Compliance
Department or within ten calendar days of becoming an Access Person, and
annually thereafter within forty-five business days after each calendar
year-end, the title and exchange ticker or CUSIP number, type of security,
number of shares and principal amount of all Covered Securities and
Reportable Funds beneficially owned by such Access Person, and the date the
Access Person submits the report, as of the date of becoming a Access Person
or as of the preceding December 31 for annual reporting and the name of the
broker or bank with whom the Access Person maintains an account in which he
or she has beneficial ownership of any security. An Access Person need not
make an Initial or Annual Report for Covered Securities held in any account
over which the Employee has no direct or indirect influence or control.
H. CONFIDENTIALITY & OBLIGATIONS OF EMPLOYEES
During the period of employment with the Firm an Employee will have access
to certain "confidential information" concerning the Firm and its clients.
This information is a valuable asset and the sole property of the Firm and
may not be misappropriated and used outside of the Firm by an Employee or
former Employee. "Confidential Information", defined as all information not
publicly available about the business of the Firm, may include, but is not
limited to, Client and prospect names and records, research, trading and
portfolio information and systems, information concerning externally managed
entities or accounts which have been considered or made on behalf of fee
paying clients, and the financial records of the Firm and/or its Employees.
In order to protect the interests of the Firm, an Employee or ex-Employee
shall not, without the express written consent of the Firm's Chief Executive
Officer, disclose directly or indirectly confidential information to anyone
outside of the Firm. An
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Employee should be extremely careful to avoid inadvertent disclosures and to
exercise maximum effort to keep confidential information confidential. Any
questions concerning the confidentiality of information should be directed
to the Chief Executive Officer or the General Counsel. An abuse of the
Firm's policy of confidentiality could subject an Employee to immediate
disciplinary action that may include dismissal from the Firm.
I. OUTSIDE EMPLOYMENT, ASSOCIATIONS AND BUSINESS ACTIVITIES
1) OUTSIDE EMPLOYMENT AND ASSOCIATIONS.
It is Xxxxxx'x policy not to permit Advisory Persons to hold outside
positions of authority, including that of being an officer, partner,
director or employee of another business entity (except in the case of
entities managed by the Firm). Also, Xxxxxx requires that all Advisory
Persons make their positions with the Firm a full-time job. The approval of
Xxxxxx, and in some cases the approval of the NASD, is required before any
Advisory Person may hold any outside position with any business
organization, regardless of whether such position is compensated or not. Any
exception to this policy must be approved in writing by the Firm's Chief
Executive Officer (or other person as he may delegate) and the Access
Person's Supervisor, and a copy of such approval shall be provided by the
Advisory Person to the Compliance Department. Any change in the status of
such approved position immediately must be reported in writing to the
Compliance Department and the Advisory Person's Supervisor. Any income or
compensation received by an Advisory Person for serving in such position
must be paid in full to the Firm. Under no circumstance may an Advisory
Person represent or suggest that Xxxxxx has approved or recommended the
business activities of the outside organization or any person associated
with it.
2) OUTSIDE BUSINESS ACTIVITIES.
To further avoid actual or potential conflicts of interest and to maintain
impartial investment advice, and equally important, the appearance of
impartial investment advice, each Advisory Person must disclose in writing
to the Compliance Department any special relationships and/or investments or
business activities that they or their families have which could influence
the investment activities of the Firm. If an Employee has any questions
about any activities and the need for disclosure, the Employee should be
cautious and direct any questions to the Firm's General Counsel or
Compliance Department.
J. CERTIFICATION OF COMPLIANCE BY ACCESS PERSONS.
The Firm shall distribute the Code to each Employee and Non-Access Director
upon inception of employment and whenever the Code is amended, but no less
frequently than annually. Each Access Person and Non-Access Director is
required to certify in writing annually that (i) he or she has read and
understands the Code, (ii) recognizes that he or she is subject to the Code,
and, in the case of Access Persons, (iii) he or she has disclosed or
reported all Personal Securities Transactions required to be disclosed or
reported under the Code.
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Each Access Person who has not engaged in any personal securities
transactions during the preceding year for which a report was required to be
filed pursuant to the Code shall include a certification to that effect in
his or her annual certification.
K. ANNUAL REPORT TO THE TRUST'S BOARD OF TRUSTEES.
The officers of the Trust shall prepare an annual report to the board of
trustees of the Trust that:
i) summarizes existing procedures concerning personal investing and any
changes in those procedures during the past year;
ii) describes issues that arose during the previous year under the Code
or procedures concerning personal investing, including but not
limited to information about material violations of the Code and
sanctions imposed;
iii) certifies to the board that the Trust has adopted procedures
reasonably necessary to prevent its Investment Personnel and Access
Persons from violating the Code; and
iv) identifies any recommended changes in existing restrictions or
procedures based upon experience under the Code, evolving industry
practices, or developments in applicable laws or regulations.
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III. POLICY STATEMENT ON XXXXXXX XXXXXXX
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A. BACKGROUND
Trading securities while in possession of material, nonpublic information or
improperly communicating that information to others may expose you to
stringent penalties. Criminal sanctions may include a fine of up to
$1,000,000 and/or ten years imprisonment. The Securities and Exchange
Commission (SEC) can recover the profits gained or losses avoided through
the violative trading, obtain a penalty of up to three times the illicit
windfall and issue an order permanently barring you from the securities
industry. Finally, you may be sued by investors seeking to recover damages
for xxxxxxx xxxxxxx violations.
Regardless of whether a government inquiry occurs, Xxxxxx views seriously
any violation of this Policy Statement. Such violations constitute grounds
for disciplinary sanctions, including dismissal.
The law of xxxxxxx xxxxxxx is unsettled; an individual legitimately may be
uncertain about the application of the Policy Statement in a particular
circumstance. Often, a single question can forestall disciplinary action or
complex legal problems. You should direct any questions relating to the
Policy Statement to the General Counsel, or, in her absence, a member of the
Stock Selection Group, or the Compliance Department. You also must notify
the General Counsel, or, in her absence, a member of the Stock Selection
Group or the Compliance Department immediately if you have any reason to
believe that a violation of the Policy Statement has occurred or is about to
occur.
B. POLICY STATEMENT ON XXXXXXX XXXXXXX
No person to whom this Policy Statement applies may TRADE, either personally
or on behalf of others (such as Clients), while in possession of material,
nonpublic information; nor may such persons COMMUNICATE material, nonpublic
information to others in violation of the law. This Policy Statement is
drafted broadly; it will be applied and interpreted in a similar manner.
This Policy Statement applies to securities trading and information handling
by all Access Persons (including their spouses, minor children and adult
members of their households).
The section below reviews principles important to this Policy Statement.
1. WHAT IS MATERIAL INFORMATION?
Information is "material" when there is a substantial likelihood that a
reasonable investor would consider it important in making his or her
investment decisions. Generally, this is information whose disclosure will
have a substantial effect on the price of a company's securities. No simple
"bright line" test exists to determine when information is material;
assessments of materiality involve a highly fact-specific inquiry. For this
reason, you should direct any questions about whether information is
material to the General Counsel, or, in her absence, a member of the Stock
Selection Group, or Compliance Department.
13
Material information often relates to a company's results and operations
including, for example, dividend changes, earnings results, changes in
previously released earnings estimates, significant merger or acquisition
proposals or agreements, major litigation, liquidation problems, and
extraordinary management developments.
Material information also may relate to the MARKET for a company's
securities. Information about a significant order to purchase or sell
securities may, in some contexts, be deemed material. Similarly,
prepublication information regarding reports in the financial press also may
be deemed material.
2. WHAT IS NONPUBLIC INFORMATION?
Information is "nonpublic" until it has been disseminated broadly to
investors in the marketplace. Tangible evidence of such dissemination is the
best indication that the information is public. For example, information is
public after it has become available to the general public through a public
filing with the SEC or some other governmental agency, the Dow Xxxxx "tape"
or the WALL STREET JOURNAL or some other publication of general circulation,
and after sufficient time has passed so that the information has been
disseminated widely.
3. IDENTIFYING INSIDE INFORMATION
Before executing any trade for yourself or others, including Clients, you
must determine whether you have access to material, nonpublic information.
If you think that you might have access to material, nonpublic information,
you should take the following steps:
i) Immediately alert the Trading Department to restrict trading in the
security by placing the security on the restricted list maintained
in the trading room. No reason or explanation should be given to the
Trading Department for the restriction.
ii) Report the information and proposed trade immediately to the General
Counsel and the Chief Compliance Officer, or in their absence, a
member of the Stock Selection Group.
iii) Do not purchase or sell the securities on behalf of yourself or
others, including Clients.
iv) Do not communicate the information inside or outside Xxxxxx other
than to the above individuals.
v) After the above individuals have reviewed the issue, the Firm will
determine whether the information is material and nonpublic and, if
so, what action(s) the Firm should take.
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4. CONTACTS WITH PUBLIC COMPANIES
For Xxxxxx, contacts with public companies represent an important part of
our research efforts. Xxxxxx may make investment decisions on the basis of
the Firm's conclusions formed through such contacts and analysis of
publicly-available information. Difficult legal issues arise, however, when,
in the course of these contacts, an Access Person becomes aware of MATERIAL,
nonpublic information. This could happen, for example, if a company's Chief
Financial Officer prematurely discloses quarterly results to an analyst or
an investor relations representative makes a selective disclosure of adverse
news to a handful of investors. In such situations, Xxxxxx must make a
judgment as to its further conduct. To protect yourself, Clients and the
Firm, you should contact the General Counsel, or in her absence, a member of
the Stock Selection Group, or Compliance Department immediately if you
believe that you may have received material, nonpublic information.
5. TENDER OFFERS
Xxxxxx offers represent a particular concern in the law of xxxxxxx xxxxxxx
for two reasons. First, tender offer activity often produces extraordinary
gyrations in the price of the target company's securities. Trading during
this time period is more likely to attract regulatory attention (and
produces a disproportionate percentage of xxxxxxx xxxxxxx cases). Second,
the SEC has adopted a rule which expressly forbids trading and "tipping"
while in possession of material, nonpublic information regarding a tender
offer received from the tender offeror, the target company or anyone acting
on behalf of either. Employees should exercise particular caution any time
they become aware of nonpublic information relating to a tender offer.
C. PROCEDURES TO IMPLEMENT THE POLICY STATEMENT ON XXXXXXX XXXXXXX
1. PERSONAL SECURITIES TRADING
The restrictions on Employee trading and procedures to implement those
restrictions and the Firm's reporting obligations, which are set forth in
Section II above, constitute the same procedures to implement this Policy
Statement. Review those procedures carefully and direct any questions about
their scope or applicability to the General Counsel or the Compliance
Department.
2. RESTRICTIONS ON DISCLOSURES
Xxxxxx Employees shall not disclose any nonpublic information (whether or
not it is material) relating to Xxxxxx or its securities transactions to any
person outside Xxxxxx (unless such disclosure has been authorized by
Xxxxxx). Material, nonpublic information may not be communicated to anyone,
including persons within Xxxxxx, except as provided in Section III(B)(3)
above. Such information must be secured. For example, access to files
containing material, nonpublic information and computer files containing
such information should be restricted, and conversations containing such
information, if appropriate at all, should be conducted in private.
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IV. RETENTION OF RECORDS
____________________
The Compliance Department or the Secretary of the Trust will maintain the
records listed below for a period of five years. Such records shall be
maintained at the Firm's principal place of business in an easily accessible
place:
i) a list of all persons subject to the Code during that period;
ii) receipts signed by all persons subject to the Code acknowledging
receipt of copies of the Code and acknowledging that they are
subject to it;
iii) a copy of each Code of Ethics that has been in effect at any time
during the period;
iv) a copy of each report filed pursuant to the Code and a record of any
known violations and actions taken as a result thereof during the
period as well as a record of all persons responsible for reviewing
these reports; and
v) a copy of any decision and the reasons supporting the decision, to
approve the acquisition of Limited Offerings.
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ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS AND STATEMENT ON
XXXXXXX XXXXXXX
CODE OF ETHICS. Xxxxxx Associates L.P. ("HALP"), Xxxxxx Associates
Securities L.P. ("HASLP") and Xxxxxx Associates Investment Trust (the "Trust")
have adopted a written Code of Ethics and Statement on Xxxxxxx Xxxxxxx (the
"Code") to avoid potential conflicts of interest by XXXX and HASLP personnel
and to govern the use and handling of material non-public information. A copy
of the Code is attached to this acknowledgement. As a condition of your
continued employment with HALP and HASLP, and/or the retention of your
position, if any, as an officer of the Trust or a member of the board of HALP's
general partner, you are required to read, understand and abide by the Code.
COMPLIANCE PROGRAM. The Code requires that all personnel (other than
Non-Access Directors) furnish to the Compliance Department information
regarding any investment account in which you have a "beneficial interest." You
are also required to furnish to the Compliance Department copies of your
monthly or quarterly account statements, or other documents, showing all
purchases or sales of securities in any such account, or which are effected by
you or for your benefit, or the benefit of any member of your household.
Additionally, you are required to furnish a report of your personal securities
holdings within ten calendar days of commencement of your employment with HALP
or HASLP and annually thereafter. These requirements apply to any investment
account, such as an account at a brokerage house, trust account at a bank,
custodial account or similar types of accounts.
This compliance program also requires that employees report any contact with
any securities issuer, government or its personnel, or others, that, in the
usual course of business, might involve material non-public financial
information. The Code requires that employees bring to the attention of the
General Counsel any information they receive from any source, which might be
material non-public information.
Any questions concerning the Code should be directed to the General Counsel
or the Compliance Department.
I affirm that I have read and understand the Code. I agree to the terms and
conditions set forth in the Code.
---------------------------------- ------------------------
Signature Date
1
ANNUAL AFFIRMATION OF COMPLIANCE
FOR ACCESS PERSONS AND NON-ACCESS DIRECTORS
I affirm that:
1. I have again read and, during the past year to the best of my knowledge,
have complied with provisions of the Code of Ethics and Statement of Xxxxxxx
Xxxxxxx (the "Code") that pertain to me.
2. I have provided to the Compliance Department the names and addresses of each
investment account that I have with any firm, including, but not limited to,
broker-dealers, banks and others. (List of known accounts attached.) (Access
Persons only)
3. I have provided to the Compliance Department copies of account statements or
other reports showing each and every transaction in any security in which I
have a beneficial interest, as defined in the Code, during the most recently
ended calendar year
or
during the most recent calendar year there were no transactions in any security
in which I had a beneficial interest required to be reported pursuant to the
Code. (Access Persons only)
4. I have provided to the Compliance Department a report of my personal
securities holdings as of the end of the most recent calendar year, including
all required information for each security in which I have any direct or
indirect beneficial ownership. (Access Persons only)
---------------------------------- ------------------------
Signature Date
APPENDIX A
EXAMPLES OF BENEFICIAL INTEREST
For purposes of the Code, you will be deemed to have a beneficial interest
in a security if you have the opportunity, directly or indirectly, to profit or
share in any profit derived from a transaction in the security. Examples of
beneficial ownership under this definition include:
.. securities you own, no matter how they are registered, and including
securities held for you by others (for example, by a custodian or broker, or
by a relative, executor or administrator) or that you have pledged to
another (as security for a loan, for example);
.. securities held by a trust of which you are a beneficiary (except that, if
your interest is a remainder interest and you do not have or participate in
investment control of trust assets, you will not be deemed to have a
beneficial interest in securities held by the trust);
.. securities held by you as trustee or co-trustee, where either you or any
member of your immediate family (I.E., spouse, children or descendants,
stepchildren, parents and their ancestors, and stepparents, in each case
treating a legal adoption as blood relationship) has a beneficial interest
(using these rules) in the trust.
.. securities held by a trust of which you are the settlor, if you have the
power to revoke the trust without obtaining the consent of all the
beneficiaries and have or participate in investment control;
.. securities held by any partnership in which you are a general partner, to
the extent of your interest in partnership capital or profits;
.. securities held by a personal holding company controlled by you alone or
jointly with others;
.. securities held by (i) your spouse, unless legally separated, or you and
your spouse jointly, or (ii) your minor children or any immediate family
member of you or your spouse (including an adult relative), directly or
through a trust, who is sharing your home, even if the securities were not
received from you and the income from the securities is not actually used
for the maintenance of your household; or
.. securities you have the right to acquire (for example, through the exercise
of a derivative security), even if the right is not presently exercisable,
or securities as to which, through any other type of arrangement, you obtain
benefits substantially equivalent to those of ownership.
You will NOT be deemed to have beneficial ownership of securities in the
following situations:
.. securities held by a limited partnership in which you do not have a
controlling interest and do not have or share investment control over the
partnership's portfolio; and
APPENDIX A
.. securities held by a foundation of which you are a trustee and donor,
provided that the beneficiaries are exclusively charitable and you have no
right to revoke the gift.
These examples are not exclusive. There are other circumstances in which you
may be deemed to have a beneficial interest in a security. Any questions about
whether you have a beneficial interest should be directed to the General
Counsel or Compliance Department.
