Brandes Investment Partners, L.P.
Code of Ethics
April 1, 1997
A. Preamble.
This Code of Ethics is being adopted to effectuate the purposes and objectives
of Sections 204A and Section 206 of the Investment Advisers Act of 1940 (the
"Advisers Act") and Rule 204-2 under the Advisers Act and Rule 17j-1 of the
Investment Company Act of 1940. Section 204A of the Advisers Act requires the
establishment and enforcement of policies and procedures reasonably designed to
prevent the misuse of material, nonpublic information by investment advisers.
Rule 204-2 imposes record keeping requirements with respect to personal
securities transactions of certain persons employed by investment advisers.
Section 206 of the Advisers Act makes it unlawful, among other things, for an
investment adviser "to employ any device, scheme or artifice to defraud any
client or prospective clients; to engage in any transaction, practice or course
of business which operates or would operate as a fraud or deceit upon any client
or prospective client; ...or to engage in any act, practice, or course of
business which is fraudulent, deceptive or manipulative."
Rule 17j-1 makes it unlawful for any employee of Brandes Investment Partners,
L.P., or its subsidiaries (all such entities hereafter referred to as "Brandes")
in connection with the purchase or sale, directly or indirectly, by such person
of a security held or to be acquired, as defined in this section, by such
registered investment company (1) to employ any device, scheme or artifice to
defraud such registered investment company; (2) to make to such registered
investment company any untrue statement of a material fact or omit to state to
such registered investment company a material fact necessary in order to make
the statements made, in light of the circumstances under which they are made,
not misleading; (3) to engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any such registered
investment company; or (4) to engage in any manipulative practice with respect
to such registered investment company.
For purposes of Rule 17j-1, "security held or to be acquired" by a registered
investment company means any security which, within the most recent 15 days, (i)
is or has been held by such company, or (ii) is being or has been considered by
such company or its investment adviser for purchase by such company.
Brandes owes its clients the highest duty of trust and fair dealing. A
fiduciary, Brandes places clients' interests ahead of its own and holds the
fundamental principle that Brandes personnel should not take inappropriate
advantage of their positions.
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Brandes has certain responsibilities to its clients. These include assuring that
accounts are managed in a suitable manner, providing regular communications
regarding the progress of accounts, providing accurate performance numbers and
refraining from certain practices. These practices include over-trading the
account, purchasing inappropriate issues for the account, making guarantees
about future performance, making unauthorized transactions and borrowing
clients' funds or securities. Brandes maintains trading authorization only and
does not have custody of clients' funds or securities.
Brandes recognizes that its own long-term interests lie in strict adherence to
ethical treatment of its clients, thereby maintaining its reputation for honest
and fair dealing. Employees are expected to act in accordance with this basic
tenet.
While many firms forbid their employees to make investments on behalf of their
own personal accounts, Brandes believes this is an unnecessarily punitive
measure. Brandes permits its employees to trade their own accounts when the
trades are done in such a manner as to avoid conflicts of interest with clients'
transactions. Brandes regularly monitors its employees' trading activity to
assure compliance with the firm's policy.
This Code contains provisions reasonably necessary to prevent persons from
engaging in acts in violation of the law and rules and to assure that Brandes'
clients' interests are considered first. This Code also establishes procedures
reasonably necessary to prevent violations of this Code.
Each shareholder, officer, partner and employee of the administrator for Brandes
Investment Trust (the "Fund"), Investment Company Administration Corporation
(the "Administrator"), is exempt from the reporting and other requirements of
this Code of Ethics, but is required to comply with the reporting and other
requirements of the Administrator's or the Fund's code of ethics, as applicable.
B. PERSONAL TRADES POLICY
Definitions.
1. Directed Trade.
A directed trade is one for a specific security which the employee must
initiate.
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2. Employee-related account.
An "employee-related account" refers to an account for any of the
following persons:
a. the employee;
b. the employee's spouse;
c. the employee's minor child or children;
d. any other relative of the employee or employee's spouse,
sharing the same home as the employee;
e. any other person whose account is managed, controlled or
influenced by or through the employee, or to whom the employee
gives advice with regard to the acquisition or disposition of
securities, other than a Brandes client; examples of such
accounts are accounts where the employee is acting as trustee,
executor, pledgee, agent or in any similar capacity;
f. any other account in which the employee has a beneficial
ownership interest; such beneficial interest (unless otherwise
exempted) may arise where an employee has a beneficial
interest in securities under a trust, will, partnership or
other arrangement, or through a closely held corporation or
investment club.
3. Security.
"Security" shall have the meaning set forth in Section 202(a)(18) of
the Advisers Act.
C. Prohibited Transactions.
1. No employee shall violate Section 206 of the Advisers Act or rule 17j-1
of the Investment Company Act.
2. No Brandes employee shall receive during any calendar year any gift or
other consideration in merchandise, services or otherwise having a
value of more that $250 from any single person, firm, corporation,
association or other entity that does, or is seeking to do, business
with or on behalf of the Firm. Employees receiving gifts from such
sources of over $50 during any calendar year must report them promptly
to the Compliance Department.
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3. No employee shall give or offer to give anything of value to any person
for the purpose of influencing the price of any security.
4. No employee shall serve on a Board of Directors of any public company
without the prior approval of the majority of the voting members of the
Investment Committee.
5. No employee shall purchase any securities in an initial public offering
unless a waiver has been granted by any two of the following: Charles
H. Brandes, Glenn R. Carlson, Jeffrey A. Busby. Any person authorized
to purchase securities in an initial public offering shall disclose
that investment when s/he plays a part in any subsequent consideration
by Brandes of an investment in the issuer of such securities.
6. No employee shall purchase any securities in a private placement
without prior written approval of any two of the following: Charles H.
Brandes, Glenn R. Carlson, Jeffrey A. Busby.
7. No employee-related account may sell a security purchased within the
previous 60 calendar days, except a security held for at least 30 days
may be sold at a loss. Trades made in violation of this prohibition
should be canceled to an error account, if possible.
8. No employee-related account shall purchase or sell any securities on
the "Watch List." The Watch List is comprised of securities Brandes is
closely observing and anticipating imminent action in on behalf of
clients' accounts.
D. Exempted Transactions.
1. The prohibitions of Sections C7 shall not apply to:
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a. Sales of U.S. government securities; and
b. Withdrawals from open-end mutual funds, if the employee or
employee-related account owns less than 5% of the outstanding
shares of such fund;
2. The prohibitions of Sections C8 shall not apply to:
a. Purchases which are part of an automatic dividend reinvestment
plan;
b. Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its securities
and sales of such rights so acquired; and
c. Any other purchases or sales as described at Section E, infra.
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E. The Watch List
The Watch List is comprised of securities Brandes is closely observing
and anticipating imminent action in on behalf of clients' accounts and,
therefore, securities in which employees are generally prohibited from
trading.
I. Construction Procedures
1. Investment Committee designates a Watch List control person
charged with creating the weekly Watch List ("Control
Person").
2. On each business day immediately preceding the regular weekly
Investment Committee meeting, the Control Person circulates
the previous week's Watch List to all members of the Portfolio
Management Department asking them each to (a) add the name of
each and every security for which such person is preparing a
formal recommendation(1) where it is expected that such
recommendation will be presented for Investment Committee
consideration within the next two weeks; and (b) delete from
the Watch List any and all securities of which such person is
aware that its consideration for investment purposes has been
indefinitely suspended(2) or terminated for any reason
whatsoever. Members of the Portfolio Management Department
will have their responses sent back to the Control Person
prior to the Investment Committee meeting. The Control Person
revises the Watch List accordingly.
3. On each business day immediately preceding the regular weekly
Investment Committee meeting, the Control Person circulates
the previous week's Watch List to a representative of the
Trading Department asking him to (a) delete from the Watch
List any and all securities in which system-wide trading has
been completed for clients' accounts as directed by the
Investment Committee; (b) add to the Watch List those
securities which are the subject of any current and open
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(1) The term "formal recommendation" here is shorthand to mean those
activities engaged in by the PM department that are necessary and proximate to
presenting a security for the Investment Committee's consideration. At this
point in the process we should strive to identify and isolate only those
securities which will or are scheduled to be brought to the Investment
Committee's attention for definite action within the next two weeks. Securities
that are scheduled to be merely reviewed by or discussed with the Investment
Committee but are not in a price range which a member of the PM staff believes
would result in any action by the Investment Committee need not be included on
the Watch List.
(2) Indefinitely suspended, at a minimum, should refer to the case
where any definitive decision regarding the purchase or sale of a security is
unlikely to occur for more than a two-week period.
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firm-wide re-balancing or other activity in clients'
accounts(3); and (c) delete from the Watch List any securities
which were the subject of any firm-wide re-balancing or other
activity in clients' accounts and in which trading has been
completed with respect to such securities in such accounts
over the past week. The representative of the Trading
department will have his/her response sent back to the Control
Person prior to the Investment Committee meeting. The Control
Person revises the Watch List accordingly.
4. At the conclusion of the Investment Committee meeting, the
Control Person shall delete from the Watch List any and all
securities which were presented to the Investment Committee in
the form of a recommendation for purchase or sale on behalf of
clients' accounts and with respect to which a final decision
not to purchase or sell, respectively, was made by the
Investment Committee. Presumably, the Control Person will not
need to add to the Watch List any of the securities which the
Investment Committee voted to purchase or sell on behalf of
clients' accounts since these securities have been on the
Watch List for at least two weeks at this point. All
securities selected by the Investment Committee for purchase
or sale activity at the Tuesday meeting will be placed on the
Watch List and will remain on the Watch List until the Trading
Department has indicated that trading in such securities has
been completed for clients' accounts.
5. On the business day immediately following the Investment
Committee's meeting, the Control Person updates the Watch List
according to the foregoing and circulates it to appropriate
employees of the firm.
II. Special Situations
1. At any time it is concluded (outside of a regularly scheduled
Investment Committee meeting) that Brandes will engage in
transactions in a particular security for client accounts, a
voting member of the Investment Committee will instruct the
Control Person to add such security to the Watch List. Such
security will remain on the Watch List until the Trading
Department has indicated that trading in such security has
been completed for clients' accounts.
2. Blanket Prohibitions: In the interest of facilitating the
"pre-clearance" of employee trading as required herein, any
blanket prohibition regarding certain categories or types of
securities in which employees are prohibited from
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(3) "Other activity in clients' accounts" should not be interpreted to
mean purchase or sale activity in connection with account opening transactions
on behalf of new wrap or non-institutional separate account clients to the firm.
The focus here should be on identifying securities in which purchase or sale
activity was or will be conducted for clients across the board in any given
investment product offered by Brandes. Securities to be purchased in connection
with account opening activities for institutional clients should be on the Watch
List in advance of such transactions given the potential impact that such
trading could have on the market for those securities.
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effectuating any personal transactions should contain a level
of specificity that minimizes interpretive variance among
those charged with approving employee trades. The Investment
Committee, the Trading Department and the Legal Department
should arrive at a clear and exact understanding regarding the
terms of the application of any blanket prohibition prior to
the effectiveness of such prohibition.
F. Compliance Procedures.
1. Pre-clearance for 24 hours only.
All employee-related accounts shall receive prior written approval from
the Trading Strategist or the Compliance Officer before purchasing or
selling any securities except U.S. government securities; shares of
registered open-end mutual funds; securities in employee-related
accounts managed by, and maintained by the firm; securities itemized at
Section D2 (a) and (b). In the absence of these individuals, or if they
are the persons requesting approval, the Trading Strategist's designate
or a Managing Partner may give the approval. Such approval shall be for
a 24-hour period only. If an employee-related account is unable to
complete the approved transaction within a 24-hour period, the
employee-related account must receive another approval from the
individuals named above before purchasing or selling securities. If an
employee places a "limit order" on the transaction and the order is not
completed during the day on which the approval is given, the remaining
order must be re-approved by either the Trading Strategist or by the
Legal/Compliance Department.
When requesting approval of a transaction for an employee-related
account, the employee shall disclose to the person to whom s/he is
requesting approval of any conflict of interest of which the employee
is aware concerning the proposed transaction, such as the existence of
any economic relationship between the transaction which is the subject
of the pre-clearance request and securities held or to be acquired by
any Brandes client including any mutual fund portfolio managed by
Brandes.
Certain employee-related accounts may be released from the obligation
to pre-clear and report personal trades. This exemption will apply to
employee-related accounts where total investment discretion is with a
non-employee third-party where such third-party does not confer with
the employee regarding trades in such account. This exemption must be
obtained in writing from the Compliance Department.
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2. Disclosure of Personal Holdings and Employee Reporting Requirements.
a. Upon employment at Brandes, employees are required to disclose
interests in any corporation of which they are an officer or director
or which they, or a family member, hold 5% or more of the outstanding
stock. They are also required to disclose any outside business
ventures.
b. Each employee shall arrange to have duplicate confirms or statements
forwarded to the Compliance Manager for each employee-related brokerage
account.
c. Each employee shall complete a Personal Securities Transaction
Quarterly Report for each calendar quarter even if the employee does
not have any personal securities transactions to report and submit the
Report to the Compliance Department no later than 10 days after the end
of each calendar quarter.
d. Quarterly, the Compliance Officer will review employee-related
transactions, the Personal Securities Transaction Quarterly Reports
from each employee, and report the findings to the Chief Compliance
Officer.
e. If an employee-related account of a person attending an Investment
Committee meeting or if a member of the Investment Committee holds a
security, or a security economically related thereto, being considered
for purchase or sale by Brandes client accounts, such person shall
disclose to the Investment Committee his holdings of the security at
the first occasion upon which the employee becomes aware that Brandes
is considering the security for purchase for its clients including any
mutual fund portfolio managed by Brandes.
3. Annual certification of compliance.
Each employee shall certify annually that: (a) s/he has read and
understands the Code of Ethics and recognizes s/he is subject thereto;
(b) s/he has complied with the requirements of the Code of Ethics; (c)
s/he has reported all personal securities transactions required to be
reported pursuant to the requirements of the Code of Ethics; and (d)
other than as disclosed on the annual certification, s/he has no
knowledge of the existence of any personal conflict of interest which
may involve Brandes clients, such as any economic relationship between
his/her transactions and securities held or to be acquired by Brandes
clients including any mutual fund portfolio managed by Brandes.
G. Reports.
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1. The Compliance Department shall submit an annual report on compliance
with the Code of Ethics to Brandes' Managing Partners.
2. The Compliance Department shall submit a quarterly report on compliance
with the Code of Ethics to the General Council and Chief Compliance
Officer.
3. The Compliance Department or anyone who becomes aware of an apparent
violation of the Code of Ethics shall promptly report such apparent
violation to the Chief Compliance Officer.
4. The Chief Compliance Officer shall review each report of an apparent
violation and make a written determination of whether the apparent
violation could reasonably be found to have resulted in a fraud, deceit
or manipulative practice in violation of Section 206 of the Advisers
Act or Rule 17j-1 of the Investment Company Act. The written
determination shall include the Chief Compliance Officer's reasons for
his decision. If the Chief Compliance Officer finds a violation, he
shall report such violation to Brandes' Managing Partners.
5. Brandes' Managing Partners shall review the report of a violation from
the Chief Compliance Officer and determine what sanctions, if any,
should be imposed.
H. Sanctions.
The sanctions for violation of the Code of Ethics may include a letter
of censure, temporary suspension of employment, termination of
employment, disgorgement of any ill-gotten profits, and/or any other
sanction deemed appropriate by Brandes' Managing Partners.
I. Retention of Records.
This Code of Ethics, a copy of each report made by an employee
hereunder, each report made by the Compliance Department, each
determination by the Chief Compliance Officer and any action taken as a
result of a violation, shall be maintained by Brandes.
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I. POLICY STATEMENT ON INSIDER TRADING.
Every officer, partner and employee is responsible for knowing and abiding by
the terms of this policy statement.
Brandes Investment Partners, L.P., forbids any trading on behalf of
employee-related accounts (see the personal Trades Policy for a definition) or
clients accounts (such as mutual funds and private accounts managed by Brandes)
on material nonpublic information, or communicating material nonpublic
information to others in violation of the law. This conduct is referred to as
"insider trading." Brandes' policy applies to every officer, partner and
employee and extends to activities within as well as outside of their duties at
Brandes. Any questions regarding Brandes' policy and procedure should be
referred to General Counsel.
The term "insider trading" is not defined in the federal securities laws, but
generally is used to refer to the use of material nonpublic information to trade
in securities (whether or not one is an "insider") or the communication of such
material nonpublic information to others. Although United States law governs
insider trading, this law applies to information about foreign companies as well
as domestic companies. Thus, if an employee receives nonpublic material
information about a foreign company, the employee is prohibited from trading for
accounts based on that information and from communicating such information to
others.
While the law concerning insider trading is not static, it is generally
understood that the law prohibits:
1. trading by an insider, while in possession of material
nonpublic information;
2. trading by a non-insider, while in possession of material
nonpublic information, where the information either was
disclosed to the non-insider in violation of an insider's duty
to keep it confidential or was misappropriated;
3. communicating material nonpublic information to others;
The elements of insider trading and the penalties for such unlawful conduct are
discussed below.
Who is an "Insider"?
The concept of "insider" is broad. It includes officers, directors and employees
of a company. In addition, a person can be a "temporary insider" if he or she
enters into a special confidential relationship in the conduct of a company's
affairs and as a result is given access to information solely for the company's
purposes. A temporary insider can
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include, among others, a company's attorney, accountants, consultants, bank
lending officers and the employees of such organizations. In addition, Brandes
may become a temporary insider of a company it advises or for which it performs
other services. According to the Supreme Court, the company must expect the
outsider to keep the disclosed nonpublic information confidential and the
relationship must at least imply such a duty before the outsider will be
considered an insider.
What is "Material Information"?
Trading on inside information is not a basis for liability unless the
information is material. "Material information" is defined generally as
information which a reasonable investor would consider substantially important
in making his or her investment decisions, or information that is reasonably
certain to have a substantial effect on the price of a company's securities.
Information that officers, directors and employees should consider material
includes, but is not limited to: dividend changes, earnings estimates, changes
in previously released estimates, significant merger or acquisition proposals or
agreements, major litigation, liquidation problems and extraordinary management
developments.
Material information does not have to relate to a company's business. For
example, not yet released news items which might have a significant effect on
prices have been found to be material information.
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 his designated representative, in the legal department.
What is "Nonpublic Information"?
Information is nonpublic until it has been effectively communicated to the
market place. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing in Dow Jones, Reuters Economic Services, The
Wall Street Journal, or other publications of general circulation would be
considered public.
Bases for Liability
Fiduciary Duty
In 1980, the Supreme Court found that there is no general duty to disclose
before trading on material nonpublic information, but that such a duty arises
only where there is a fiduciary relationship. That is, there must be a
relationship between the parties to the
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transaction such that one party has a right to expect that the other party will
disclose any material nonpublic information or refrain from trading.
Non-insiders can acquire the fiduciary duties of insiders by entering into a
confidential relationship with the company through which they gain information
(e.g. attorneys, accountants), or they can acquire a fiduciary duty to the
company's shareholders as "tippees" if they are aware or should have been aware
that they have been given confidential information by an insider who has
violated his fiduciary duty to the company's shareholders.
However, in the "tippee" situation, a breach of duty occurs only if the insider
personally benefits, directly or indirectly, from the disclosure. The benefit
does not have to be pecuniary, but can be a gift, reputational benefit that will
translate into future earnings or even evidence of a relationship that suggests
a quid pro quo.
Misappropriation
Another basis for insider trading liability is trading which occurs on material
nonpublic information that was stolen or misappropriated from any other person.
It should be noted that "misappropriation" can be used to include a variety of
individuals not previously thought to be encompassed under the fiduciary duty.
Penalties for Insider Trading
Penalties for trading on or communicating material nonpublic information are
severe, both for individuals involved in such unlawful conduct and their
employers. A person can be subject to some or all of the penalties below even if
he or she does not personally benefit from the violation. Penalties include:
* civil injunctions
* treble damages
* disgorgement of profits
* jail sentences
* fines for the person who committed the violation of up to
three times the profit gained or losses avoided, whether or
not the person actually benefited;
* fines for the employer or other controlling person of
$1,000,000 or three times the amount of the profit gained or
loss avoided, whichever is greater.
In addition, any violation of this policy statement can be expected to result in
serious sanctions by Brandes, including termination.
Identifying Inside Information
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Before recommending or executing any trade for yourself or others, including
client accounts, 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:
a. Report the information and proposed trade immediately to the
General Counsel, or his designate.
b. Do not purchase or sell the securities on behalf of yourself
or others, including employee-related accounts and client
accounts.
c. Do not communicate the information inside or outside Brandes,
other than to Brandes' attorneys.
d. After the General Counsel, or his designate, has reviewed the
issue, the firm will determine whether the information is
material and nonpublic and, if so, what action the firm should
take.
You should consult with General Counsel, or his designate, or Brandes' outside
counsel before taking any action.
Contacts with Public Companies
Contacts with public companies represent an important part of Brandes' research
efforts. Brandes 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, a Brandes employee 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, Brandes must make a judgment as to its further
conduct. To protect yourself, your clients and Brandes, you should contact
immediately General Counsel, or his designate, if you believe that you may have
received material nonpublic information.
Tender Offers
Tender offers represent a particular concern in the law of insider trading 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 insider trading 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 offerer,
the target company or anyone acting on behalf of either. Brandes
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employees should exercise particular caution any time they become aware of
nonpublic information relating to a tender offer.
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SUPERVISORY PROCEDURES
The role of General Counsel is critical to the implementation and maintenance of
Brandes' policy and procedures against insider trading. Supervisory procedures
can be divided into two classifications - prevention of insider trading and
detection of insider trading.
Prevention of Insider Trading
To prevent insider trading, General Counsel should:
1. provide, on a regular basis, an educational program to familiarize
officers, partners and employees with Brandes' policy and procedures;
2. answer questions regarding Brandes' policy and procedures;
3. resolve issues of whether information received by an officer, partner
or employee of Brandes is material and nonpublic;
4. regularly review and update Brandes' policy and procedures;
5. implement measures to prevent dissemination of material nonpublic
information, or restrict trading of the securities involved, when it
has been determined that an officer, partner or employee of Brandes has
material nonpublic information;
6. provide that all employees obtain approval from the trading department
at Brandes prior to trades as described in the Code of Ethics. This is
an area of great concern to the SEC and Brandes.
Special Reports to Counsel
Promptly upon learning of a potential violation of this policy statement,
General Counsel should prepare a written report to Brandes' outside counsel
providing full details, which may include:
1. the name of particular securities involved, if any;
2. the date General Counsel learned of the potential violation and began
investigating;
3. the accounts and individuals involved;
4. actions taken as a result of the investigation, if any; and
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5. recommendations for further action;
Detection of Insider Trading
To detect insider trading General Counsel should:
1. review the trading activity reports filed by each officer, partner and
employee;
2. review the trading activity of accounts managed by Brandes
3. review trading activity of Brandes' own account;
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Brandes Investment Partners, L.P.
Amendment to Code of Ethics (dated April 1, 1997)
Effective March 1, 2000
The Code of Ethics for Brandes Investment Partners, L.P. and affiliates, dated
April 1, 1997, is amended hereby to include the following substantive provisions
effective March 1, 2000.
I. Policy on Participation of Employee-Related Accounts in
Initial Public Offerings, Hot IPOs and Private Placements
Initial Public Offerings ("IPO") and Hot IPOs.
No Employee-Related Account may purchase any securities in an IPO or
Hot IPO; provided, however, an Employee-Related Account may, upon the
prior written approval of Brandes, participate in the following IPOs:
(i) an IPO in connection with the de-mutualization of a savings
bank or the de-mutualization of a mutual insurance company in
which the holder of the Employee-Related Account owns a life
insurance policy;
(ii) an IPO of a spin-off company where the Employee-Related
Account owns stock in the company that spins off the issuer;
(iii) an IPO of a company in which the Employee-Related Account owns
stock in the company and the stock was acquired through
participation in a private placement previously approved by
Brandes; and
(iv) an IPO of the employer of the holder of the Employee-Related
Account.
An IPO generally means an offering of securities registered with the
Securities and Exchange Commission ("SEC"), the issuer of which,
immediately before the registration, was not required to file reports
with the SEC. See, rule 17j-1(a)(6).
Hot IPOs are securities of a public offering that trade at a premium in
the secondary market whenever such secondary market begins.
Private Placements
No Employee-Related Account may purchase any securities in a private
placement except upon the prior written approval of Brandes.
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Procedures for Obtaining Prior Written Approval of the Firm with Respect to IPOs
and Private Placements
With respect to the participation in private placements or the
permissible IPOs listed above, an Employee-Related Account may obtain
"the prior written approval of Brandes" by first submitting a written
request for approval to the Legal/Compliance Department using the
Request to Participate in an IPO/Private Placement in an
Employee-Related Account Form (attached hereto). The Legal/Compliance
Department shall review the proposed transaction to determine whether
the proposed transaction would create any material conflicts of
interests. If the Legal/Compliance Department determines that the
proposed transaction would create no material conflicts of interests,
the Legal/Compliance Department shall then seek written approval for
the transaction from two managing partners. Such written approval shall
include written justification for the decision of the managing partners
approving the transaction.
Any person authorized to purchase securities in an IPO or private
placement shall disclose that investment when s/he plays a part in any
subsequent consideration by Brandes of an investment in the issuer of
such securities.
II. Information Required in Quarterly Employee Transaction Report
Each quarterly transaction report filed for the calendar quarter ending March
31, 2000 (due April 10, 2000), and for subsequent quarters must now include all
information required under amended rule 17j-1(d)(1)(ii).(1) Quarterly Employee
Transaction Reports shall be filed with the Legal/Compliance Department no later
than 10 days after the end of a calendar quarter and must contain the following
information:
(A) With respect to any transaction during the quarter in a
Security reportable under the Code in which the employee or
Employee Related Person (as defined below) had any direct or
indirect beneficial ownership:
(1) The date of the transaction, the title, the interest
rate and maturity date (if applicable), the number of
shares and the principal amount of each Security
involved;
(2) The nature of the transaction (i.e., purchase, sale
or any other type of acquisition or disposition);
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(1) The additional information required under this amendment is: (i) the
date that the quarterly transaction report is filed; (ii) the name of any
Employee Related Account established by an employee or Employee Related Person
during that quarter; and (iii) the date the account was established. See,
amended rule 17j-1(d)(1)(ii)(A)(5) and (B).
<PAGE>
(3) The price of the Security at which the transaction
was effected;
(4) The name of the broker, dealer or bank with or
through which the transaction was effected; and
(5) The date that the report is submitted by the
employee.
(B) With respect to any Employee Related Account established by
the employee or Employee Related Person in which any
Securities were held during the quarter for the direct or
indirect benefit of the employee or Employee Related Person:
(1) The name of the broker, dealer or bank with whom the
employee or Employee Related Person established the
account;
(2) The date the account was established; and
(3) The date that the report is submitted by the
employee.
Note that employees need not file a quarterly transaction report if the
information would duplicate information that Brandes has received in a broker's
confirmation or account statement. See, amended rule 17j-1(d)(2)(v). Amended
Quarterly Employee Transaction Reports will be distributed for subsequent
reporting usage by March 31, 2000.
An Employee Related Person is any non-employee who has an Employee Related
Account as defined in the Code to which the Code's pre-clearance and reporting
procedures with respect to Securities transactions therein applies.
<PAGE>
Request to Participate in an IPO/Private Placement in an Employee-Related
Account*
Date: ___________________________
I, __________________, intend to subscribe in an initial public offering/Private
NAME OF EMPLOYEE
Placement of the security referenced below for ______________________________-
NAME ON ACCOUNT
_______________ account. I will execute the transaction only upon receiving
ACCOUNT # prior approval of the intended activity.
Security:__________________________________
Approved [ ] Denied [ ]
Reviewed by: _______________________________ Date:_________________________
Legal/Compliance Department
Reviewed by:________________________________ Date:_________________________
MANAGING PARTNER
Reviewed by:________________________________ Date:_________________________
MANAGING PARTNER
Justification for Approval:
*Please attach prospectus or offering memorandum if available.
REMINDER: No Employee Related Account may sell a security purchased within the
previous 60 calendar days, except a security held for at least 30 days may be
sold at a loss.
Legal/Compliance Department - Original Copy
Employee - Retain Copy for Personal Records
<PAGE>
Brandes Investment Partners, L.P.
Amendment to Code of Ethics (dated April 1, 1997, as amended on March 1, 2000)
Effective September 1, 2000
The Code of Ethics for Brandes Investment Partners, L.P. and affiliates
("Brandes"), dated April 1, 1997, as amended on March 1, 2000, is hereby further
amended to include the following substantive provisions effective September 1,
2000.
Reports Required
I. Initial Holdings Report
No later than 10 days after the person becomes an Employee of Brandes,
the Employee shall provide the Legal/Compliance Department with the following
information:
(A) The title, number of shares and principal amount of each Covered
Security in which the Employee had any direct or indirect beneficial
ownership(1) when the person became an Employee of Brandes;
(B) The name of any broker, dealer or bank with whom the Employee
maintained an account in which any securities were held for the direct or
indirect benefit of the Employee as of the date the person became an Employee of
Brandes; and
(C) The date that the report is submitted by the Employee.
No Initial Holdings Report is required from an Employee who was an Employee
prior to the effective date of this Amendment and who has been reporting
transactions in all his or her Employee-Related Accounts in accordance with
Brandes' Code of Ethics.
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(1) "Beneficial Ownership" is interpreted in the same manner as it is under
Rule 16a-1(a)(2) of the Securities Exchange Act of 1934 in determining whether a
person is the beneficial owner of a security and includes "any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares a direct or indirect pecuniary interest
in" a security. The term "pecuniary interest" is further defined to mean "the
opportunity, directly or indirectly, to profit or share in any profit derived
from a transaction in the subject securities." "Beneficial ownership" includes
(i) securities held by members of a person's immediate family sharing the same
household and includes any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law" and includes adoptive
relationships and (ii) a right to acquire securities through the exercise or
conversion of any derivative security, whether or not presently exercisable.
<PAGE>
II. Annual Holdings Report
Each Employee shall, on an annual basis, provide the Legal/Compliance
Department with the following information that must be current as of the
calendar year end for which the report is submitted:
(A) The title, number of shares and principal amount of each Covered
Security in which the Employee had any direct or indirect beneficial ownership;
(B) The name of any broker, dealer or bank with whom an Employee
maintains an account in which securities are held for the direct or indirect
benefit of the Employee; and
(C) The date that the report is submitted by the Employee.
The Annual Holdings Report shall be submitted no later than 30 days following
the calendar year end to which the report relates.
Please note: An Initial Holdings Report and every Annual Holdings Report filed
by an Employee shall also include a listing of all Covered Securities in any
Employee-Related Account over which either Brandes or a third party has
investment discretion for and on behalf of such Employee-Related Account.
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<PAGE>
III. Definitions
"Covered Security" means a security as defined in Section 2(a)(36) of the
Investment Company Act of 1940 Act [15 U.S.C. 80a-2(a)(36)](2), except that it
does not include:
(a) Direct obligations of the Government of the United States;
(b) Bankers' acceptances, bank certificates of deposit, commercial
paper and high quality short-term debt instruments, including
repurchase agreements; and
(c) Shares issued by any open-end investment company registered
under the U.S. Investment Company Act of 1940 (i.e., a U.S.
open-end mutual fund).
"Employee" means any person employed by Brandes on either a full or part-time
basis or any other person to whom the Code of Ethics shall apply in Brandes'
reasonable discretion.
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(2) Section 2(a)(36) of the Investment Company Act defines a "security" as
"any note, stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate, preorganization certificate or subscription,
transferable share, investment contract, voting-trust certificate, certificate
of deposit for a security, fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or privilege on any security
(including a certificate of deposit) or on any group or index of securities
(including any interest therein or based on the value thereof), or any put,
call, straddle, option, or privilege entered into on a national securities
exchange relating to foreign currency, or, in general, any interest or
instrument commonly known as a "security", or any or any certificate of interest
or participation in, temporary or interim certificate for, receipt for, guaranty
of, or warrant or right to subscribe to or purchase any of the foregoing."
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