EMPLOYEE INVESTMENT TRANSACTION POLICY
FOR
REGISTERED INVESTMENT COMPANIES ADVISED BY
FIG ADVISORS LLC
Effective _________, 2000
EMPLOYEE INVESTMENT TRANSACTION POLICY
TABLE OF CONTENTS
TABLE OF CONTENTS............................................................i
I. PREAMBLE...............................................................1
A. General Principles.........................................1
B. The General Scope Of The Policy's Application To Personal
Investment Transactions....................................2
C. The Organization Of This Policy............................3
D. Questions..................................................3
II. PERSONAL INVESTMENT TRANSACTIONS.......................................3
A. In General.................................................3
B. Reporting Obligations......................................4
1. Use Of Broker-Dealers And Futures Commission
Merchants......................................4
2. Initial Report.................................4
3. New Accounts...................................5
4. Timely Reporting of Investment Transactions....5
5. Related Accounts...............................5
6. Exemptions From Reporting......................5
C. Prohibited Or Restricted Investment Transactions...........6
1. Initial Public Offerings.......................6
2. Private Placements.............................6
D. Investment Transactions Requiring Prior Notification.......7
1. Prior Notification Procedure...................7
2. Exemptions From Prior Notification.............8
(A) Transactions Exempt From Prior
Notification.........................................8
(B) Securities Exempt From Prior
Notification.........................................8
(C) Futures Contracts Exempt From Prior
Notification.........................................8
E. Ban On Short-term Trading Profits..........................9
F. Blackout Periods...........................................9
1. Specific Blackout Periods.....................10
2. Exemptions From Blackout Restrictions.........10
III. INSIDE INFORMATION AND SERVICE AS A DIRECTOR .........................11
A. Inside Information........................................11
B. Service as a Director.....................................11
IV. EXEMPTIONS............................................................12
V. COMPLIANCE............................................................12
A. Certifications............................................12
1. Upon Receipt of This Policy...................12
2. Annual Certificate of Compliance..............13
B. Supervisory Procedures....................................13
1. The Compliance Committee......................13
2. The Compliance Officer........................14
3. Post-Trade Monitoring And Investigations......14
4. Remedial Actions..............................15
5. Reports Of Violations Requiring Significant
Remedial Action...............................15
6. Annual Reports................................16
VI. EFFECTIVE DATE........................................................16
APPENDICES
I. Definitions Of Capitalized Terms
II. Acknowledgment Of Receipt Of The Policy
III. Annual Certification Of Compliance With The Policy
IV. Initial Report Of Accounts
V. Request For Duplicate Broker Reports
VI. Investment Transaction Prior Notification Form
VII. Fully Discretionary Account Form
EMPLOYEE INVESTMENT TRANSACTION POLICY
FOR REGISTERED INVESTMENT COMPANIES ADVISED BY
FIG ADVISORS LLC
I.PREAMBLE
A.GENERAL PRINCIPLES
This Employee Investment Transaction Policy (the "Policy") is based
on the principle that you, as an officer, director or other Advisory
Employee of FIG Advisors LLC, owe a fiduciary duty of undivided loyalty to
the registered investment companies, institutional investment clients,
personal trusts and estates, guardianships, employee benefit trusts, and
other Advisory Clients which that Advisor serves.1 Accordingly, you must
avoid transactions, activities, and relationships that might interfere or
appear to interfere with making decisions in the best interests of those
Advisory Clients.
At all times, you must observe the following GENERAL PRINCIPLES:
1. YOU MUST PLACE THE INTERESTS OF ADVISORY CLIENTS FIRST.
As a fiduciary you must scrupulously avoid serving your
own personal interests ahead of the interests of Advisory
Clients. You must adhere to this general fiduciary
principle as well as comply with the Policy's specific
provisions. Technical compliance with the Policy will not
automatically insulate from scrutiny any Investment
Transaction that indicates an abuse of your fiduciary
duties or that creates an appearance of such abuse.
Your fiduciary obligation applies not only to your personal
Investment Transactions but also to actions taken on behalf of
Advisory Clients. In particular, you may not cause an Advisory
Client to take action, or not to take action, for your personal
benefit rather than for the benefit of the Advisory Client. For
example, you would violate this Policy if you caused an
--------
1 This Policy uses a number of CAPITALIZED TERMS, e.g., Advisor,
Advisory Client, Advisory Employee, Beneficial Ownership, Exempt
Security, Fixed Income Security, Fully Discretionary Account, Futures
Contract, Immediate Family, Investment Transaction, Personal Account,
Portfolio Employee, Portfolio Manager, Related Account, and Security.
The first time a capitalized term is used, a definition is stated in
the text or in a footnote. The full definitions of these capitalized
terms are set forth in Appendix I. TO UNDERSTAND YOUR
RESPONSIBILITIES UNDER THE POLICY, IT IS IMPORTANT THAT YOU REVIEW
AND UNDERSTAND ALL OF THE DEFINITIONS OF CAPITALIZED TERMS IN
APPENDIX I.
Advisory Client to purchase a Security you owned for the purpose o
increasing the value of that Security. If you are a Portfolio
Employee, you would also violate this Policy if you made a personal
investment in a Security that might be an appropriate
investment for an Advisory Client without first considering the
Security as an investment for the Advisory Client.
2. YOU MUST CONDUCT ALL OF YOUR PERSONAL INVESTMENT
TRANSACTIONS IN FULL COMPLIANCE WITH THIS POLICY AND THE
OTHER POLICIES OF FORTRESS (including the policies that
prohibit insider trading). Fortress encourages you and
your family to develop personal investment programs.
However, those investment programs must remain within
boundaries reasonably necessary to insure that
appropriate safeguards exist to protect the interests of
our Advisory Clients and to avoid even the APPEARANCE of
unfairness or impropriety. Doubtful situations should be
resolved in favor of our Advisory Clients and against
your personal Investment Transactions.
3. YOU MUST NOT TAKE INAPPROPRIATE ADVANTAGE OF YOUR
POSITION. The receipt of investment opportunities,
perquisites, gifts or gratuities from persons seeking to
do business, directly or indirectly, with Fortress, an
affiliate, or an Advisory Client could call into question
the independence of your business judgment. Doubtful
situations should be resolved against your personal
interests.
B. THE GENERAL SCOPE OF THE POLICY'S APPLICATION TO PERSONAL INVESTMENT
TRANSACTIONS
Rule 17j-1 under the Investment Company Act of 1940, as amended,
requires REPORTING of all personal Investment Transactions in Securities
(other than certain "Exempt Securities") by Advisory Employees, whether or
not they are Securities that might be purchased or sold by or on behalf of
an Advisory Client. This Policy implements that reporting requirement.
However, since a primary purpose of the Policy is to avoid conflicts
of interest arising from personal Investment Transactions in Securities and
other instruments that are held or might be acquired on behalf of Advisory
Clients, this Policy only places RESTRICTIONS on personal Investment
Transactions in such investments. This Policy also requires reporting and
restricts personal Investment Transactions in certain Futures Contracts
which, although they are not Securities, are instruments that Advisors buy
and sell for Advisory Clients.
Although this Policy applies to all officers, directors and other
Advisory Employees of the Advisor, the Policy recognizes that Portfolio
Managers, and the other Portfolio Employees who provide them with advice
and who execute their decisions, occupy more sensitive positions than other
Advisory Employees, and that it is appropriate to subject their personal
Investment Transactions to greater restrictions.
C. THE ORGANIZATION OF THIS POLICY
The remainder of this Policy is divided into four main topics.
Section II concerns PERSONAL INVESTMENT TRANSACTIONS. Section III describes
restrictions that apply to Advisory Employees who receive INSIDE
INFORMATION or seek to serve on a BOARD OF DIRECTORS OR SIMILAR GOVERNING
BODY. Section IV outlines the procedure for seeking case-by-case EXEMPTIONS
from the Policy's requirements. Section V summarizes the methods for
ensuring COMPLIANCE under this Policy. In addition, the following
APPENDICES are also a part of this Policy:
I. Definitions Of Capitalized Terms
II. Acknowledgment Of Receipt Of The Policy
III. Annual Certification Of Compliance With The Policy
IV. Initial Report Of Accounts
V. Request For Duplicate Broker Reports
VI. Investment Transaction Prior Notification Form
VII. Fully Discretionary Account Form
D. QUESTIONS
Questions regarding this Policy should be addressed to the Compliance
Officer. If you have any question regarding the interpretation of this
Policy or its application to a potential Investment Transaction, you should
consult the Compliance Officer BEFORE you execute that transaction.
II. PERSONAL INVESTMENT TRANSACTIONS
A. IN GENERAL
Subject to the limited exceptions described below, you are required
to REPORT all Investment Transactions in Securities and Futures Contracts
made by you, a member of your Immediate Family, a trust or an investment
club in which you have an interest, or on behalf of any account in which
you have an interest or which you direct. In addition, you must provide
PRIOR NOTIFICATION of certain Investment Transactions in Securities and
Futures Contracts that an Advisor holds or may acquire on behalf of an
Advisory Client. (The exercise of an option is an Investment Transaction
for purposes of these requirements.) The details of these reporting and
prior notification requirements are described below.
B. REPORTING OBLIGATIONS
1. USE OF BROKER-DEALERS AND FUTURES COMMISSION MERCHANTS
YOU MUST USE A REGISTERED BROKER-DEALER OR FUTURES COMMISSION
MERCHANT to engage in any purchase or sale of a publicly traded Security or
Futures Contract. This requirement also applies to any purchase or sale of
a Security or Futures Contract in which you have, or by reason of the
Investment Transaction will acquire, a Beneficial Ownership interest. Thus,
as a general matter, any Securities or Futures Contract transactions by
members of your Immediate Family will need to be made through a registered
broker-dealer or futures commission merchant.
2. INITIAL REPORT
Within 10 days of commencing employment or within 10 days of any
event that causes you to become subject to this Policy, you must supply to
the Compliance Officer copies of the most recent statements for each and
every Personal Account and Related Account that holds or is likely to hold
a Security or Futures Contract in which you have a Beneficial Ownership
interest, as well as copies of confirmations for any and all transactions
subsequent to the effective dates of those statements. These documents
should be supplied to the Compliance Officer by attaching them to the form
attached hereto as Appendix IV.
On that same form you should supply the name of any registered
broker-dealer and/or futures commission merchant and the number for any
Personal Account and Related Account that holds or is likely to hold a
Security or Futures Contract in which you have a Beneficial Ownership
interest for which you CANNOT supply the most recent account statement. You
must also certify, where indicated on the form, that the contents of the
form and the documents attached thereto disclose all such Personal Accounts
and Related Accounts.
In addition, you must also supply, where indicated on the form, the
following information for each Security or Futures Contract in which you
have a Beneficial Ownership interest, to the extent that this information
is not available from the statements attached to the form:
1. A description of the Security or Futures Contract, including
its name or title;
2. The quantity (e.g., in terms of numbers of shares, units or
contracts) and value (in dollars) of the Security or Future
Contract; and
3. The custodian of the Security or Futures Contract.
3. NEW ACCOUNTS
Upon the opening of a new Personal Account or a Related Account that
holds or is likely to hold a Security or a Futures Contract in which you
have a Beneficial Ownership interest, you must give written notice to the
Compliance Officer of the name of the registered broker-dealer or
futures commission merchant for that account, the identifying number for
that Personal Account or Related Account and the date that the account was
established.
4. TIMELY REPORTING OF INVESTMENT TRANSACTIONS
You must cause each broker-dealer or futures commission merchant that
maintains a Personal Account or a Related Account that holds a Security or
a Futures Contract in which you have a Beneficial Ownership interest to
provide to the Compliance Officer, on a timely basis, duplicate copies of
confirmations of all transactions in that account and of periodic
statements for that account ("Duplicate Broker Reports"). A form for that
purpose is attached hereto as Appendix V.
In addition, you must report to the Compliance Officer, on a timely basis,
any transaction in a Security or Futures Contract in which you have or
acquired a Beneficial Ownership interest that was made without the use of a
registered broker-dealer or futures commission merchant.
5. RELATED ACCOUNTS
The reporting obligations described above also apply to any Related
Account (as defined in Appendix I) and to any Investment Transaction in a
Related Account.
It is important that you recognize that the definitions of "Personal
Account," "Related Account" and "Beneficial Ownership" in Appendix I
probably will require you to provide, or to arrange for the broker-dealer
or futures commission merchant to furnish, copies of reports for any
account used by or for a member of your Immediate Family or a trust in
which you or a member of your Immediate Family has an interest, as well as
for any other accounts in which you may have the opportunity, directly or
indirectly, to profit or share in the profit derived from any Investment
Transaction in that account, including the account of any investment club
to which you belong.
6. EXEMPTIONS FROM REPORTING
You need not report Investment Transactions in any account, including
a Fully Discretionary Account, over which neither you nor an Immediate
Family Member has or had any direct or indirect influence or control. For
example, Investment Transactions in the account of your spouse in an
employee benefit plan would not have to be reported if neither you nor your
spouse has any influence or control over those Investment Transactions.
You also need not report Investment Transactions in Exempt Securities
nor need you furnish, or require a broker-dealer or futures commission
merchant to furnish, copies of confirmations or periodic statements for
accounts that hold ONLY Exempt Securities. This includes accounts that
only hold U.S. Government securities, money market interests, or shares in
registered open-end investment companies (i.e., mutual funds). This
exemption from reporting will end immediately, however, at such time as
there is an Investment Transaction in that account in a Security that is
not an Exempt Security.
C. PROHIBITED OR RESTRICTED INVESTMENT TRANSACTIONS
1. INITIAL PUBLIC OFFERINGS
As an Advisory Employee, you may not acquire Beneficial Ownership of
any Security in an initial public offering, except that, with the approval
of the Compliance Committee, you may acquire Beneficial Ownership of a
Security in an initial public offering directed or sponsored by the
Advisor. For purposes of this Policy, an initial public offering shall not
include the purchase of a Security in an initial public offering by (i) a
savings bank to its depositors, (ii) a mutual insurance company to its
policyholders, or (iii) an issuer of debt securities (other than debt
securities convertible into common or preferred stock).
2. PRIVATE PLACEMENTS
If you are a Portfolio Employee, you may not acquire Beneficial
Ownership of any Security in a private placement, or subsequently sell that
interest, unless you have received the prior written approval of the
Compliance Officer and of any supervisor designated by the Compliance
Officer. Approval will not be given unless a determination is made that the
investment opportunity should not be reserved for one or more Advisory
Clients, and that the opportunity to invest has not been offered to you by
virtue of your position with an Advisor.
If you have acquired Beneficial Ownership of Securities in a private
placement, you must disclose that investment to your supervisor when you
play a part in any consideration of any investment by an Advisory Client in
the issuer of the Securities, and any decision to make such an investment
must be independently reviewed by a Portfolio Manager who does not have a
Beneficial Ownership interest in any Securities of the issuer.
D. INVESTMENT TRANSACTIONS REQUIRING PRIOR NOTIFICATION
You must give prior notification to the Compliance Officer of ANY
Investment Transaction in Securities or Futures Contracts in a Personal
Account or Related Account, or in which you otherwise have or will acquire
a Beneficial Ownership interest, UNLESS that Investment Transaction,
Security or Futures Contract falls into one of the following categories
that are identified as "exempt from prior notification." The purpose of
prior notification is to permit the Compliance Officer and the Compliance
Committee to take reasonable steps to investigate whether that Investment
Transaction is in accordance with this Policy. Satisfaction of the prior
notification requirement does not, however, constitute approval or
authorization of any Investment Transaction for which you have given prior
notification. As a result, the primary responsibility for compliance with
this Policy rests with you.
1. PRIOR NOTIFICATION PROCEDURE
Prior notification must be given by completing and submitting to the
Compliance Officer a copy of the prior notification form attached hereto as
Appendix VII. No Investment Transaction requiring prior notification may be
executed prior to notice by the Compliance Officer that the prior
notification process has been completed. The time and date of that notice
will be reflected on the prior notification form. Unless otherwise
specified, an Investment Transaction requiring prior notification must be
placed and executed by the end of trading in New York City on the day of
notice from the Compliance Officer that the prior notification process has
been completed. If a proposed Investment Transaction is not executed (with
the exception of a limit order) within the time specified, you must repeat
the prior notification process before executing the transaction. A notice
from a Compliance Officer that the prior notification process has been
completed is no longer effective if you discover, prior to executing your
Investment Transaction, that the information on your prior notification
form is no longer accurate, or if the Compliance Officer revokes his or her
notice for any other reason.
The Compliance Officer may undertake such investigation as he or she
considers necessary to investigate whether an Investment Transaction for
which prior notification has been sought complies with the terms of this
Policy and is consistent with the general principles described at the
beginning of this Policy.
As part of that investigation, the Compliance Officer or a designee
of the Compliance Officer will determine whether there is a pending buy or
sell order in the same equity Security or Futures Contract, or a Related
Security, on behalf of an Advisory Client. If such an order exists, the
Compliance Officer will not provide notice that the prior notification
process has been completed UNTIL the Advisory Client's order is executed or
withdrawn.
2. EXEMPTIONS FROM PRIOR NOTIFICATION
Prior notification will not be required for the following Investment
Transactions, Securities and Futures Contracts. They are exempt only from
the Policy's prior notification requirement, and, unless otherwise
indicated, remain subject to the Policy's other requirements, including its
reporting requirements.
(A) TRANSACTIONS EXEMPT FROM PRIOR NOTIFICATION
Prior notification is not required for any of the following
Investment Transactions:
1. Any Investment Transaction in a Fully Discretionary Account that
has been approved as such by the Compliance Officer.
2. Purchases of Securities under dividend reinvestment plans.
3. Purchases of Securities by an exercise of rights issued to the
holders of a class of Securities pro rata, to the extent those
rights are issued with respect to Securities of which you have
Beneficial Ownership.
4. Acquisitions or dispositions of Securities as the result of a
stock dividend, stock split, reverse stock split, merger,
consolidation, spin-off or other similar corporate distribution
or reorganization applicable to all holders of a class of
Securities of which you have Beneficial Ownership.
5. Investment Transactions made by a person who serves on the
Board of Directors of an Advisor and is not involved with the
Advisory operations of such Advisor nor engages in the type of
activities described under (1) (2) or (3) under the term
Advisory Employee as defined in Appendix I.
(B) SECURITIES EXEMPT FROM PRIOR NOTIFICATION
Prior notification is not required for an Investment Transaction in
an Exempt Security, as defined in Appendix I, e.g., U.S. Government
securities, shares in registered open-end investment companies (i.e.,
mutual funds) and "high quality short-term debt instruments" (as defined in
Appendix I).
(C) FUTURES CONTRACTS EXEMPT FROM PRIOR NOTIFICATION
Prior notification is not required for an Investment Transaction in
the following Futures Contracts:
1. Currency futures.
2. U.S. Treasury futures.
3. Eurodollar futures.
4. Physical commodity futures (e.g., contracts for future delivery
of grain, livestock,fiber or metals).
5. Futures contracts to acquire Fixed Income Securities issued by a
U.S. Government agency, a foreign government, or an international
or supranational agency.
6. Futures contracts on the Standard and Poor's 500 (S&P 500) or
the Dow Jones Industrial Average or NASDAQ 100 stock indexes.
E. BAN ON SHORT-TERM TRADING PROFITS
You may not profit from the purchase and sale, or the sale and
purchase, within 60 calendar days, of the same Securities and/or Related
Security. Any such short-term trade must be reversed or unwound, or if that
is not practical, the profits must be disgorged and distributed in a manner
determined by the Compliance Committee.
This short-term trading ban does NOT apply to Investment Transactions
in Exempt Securities (as defined in Appendix I) or in Futures Contracts.
This ban also does NOT apply to a purchase or sale in connection with a
Transaction Exempt From Prior Notification (as described above in Section
II.D.2.(a)), a transaction in a Fully Discretionary Account or a
transaction exempt from the "blackout" periods pursuant to Section II.F.2
below.
You are considered to profit from a short-term trade if Securities of
which you have Beneficial Ownership (including Securities held by Immediate
Family members) are sold for more than their purchase price, even though
the Securities purchased and the Securities sold are held of record or
beneficially by different persons or entities.
F. BLACKOUT PERIODS
Your ability to engage in certain Investment Transactions may be
prohibited or restricted during the "blackout" periods described below:
1. SPECIFIC BLACKOUT PERIODS
a. You may not purchase or sell a Security, a Related
Security, or Futures Contract at a time when you
intend or know of another's intention to purchase
or sell that same Security, a Related Security, or
Futures Contract, on behalf of an Advisory Client
of ANY Advisor (the "Specific Knowledge Blackout
Period").
b. In addition, if you are a PORTFOLIO EMPLOYEE, you
may not purchase or sell a Security, a Related
Security or a Futures Contract which you are
actively considering or which you have actively
considered and rejected for purchase or sale for an
Advisory Client within the previous 15 CALENDAR
DAYS (the "15- Day Blackout Period") unless the
Compliance Officer, after consultation with your
supervisor, has approved your Investment
Transaction.3
c. Finally, if you are a PORTFOLIO MANAGER, you may
not purchase or sell a Security, a Related
Security, or Futures Contract within 7 CALENDAR
DAYS before or after a transaction in that
Security, a Related Security, or Futures Contract,
by an Advisory Client for which you are responsible
(the "7-Day Blackout Period").
For Portfolio Employees or Portfolio Managers, the Compliance Officer
will not give such notice until any applicable 15-Day Blackout Period or
7-Day Blackout Period has expired or any required approvals or exemptions
have been obtained. An Investment Transaction that violates one of these
Blackout restrictions must be reversed or unwound, or if that is not
practical, the profits must be disgorged and distributed in a manner
determined by the Compliance Committee.
2. EXEMPTIONS FROM BLACKOUT RESTRICTIONS
The foregoing blackout period restrictions do NOT apply to Investment
Transactions in:
a. Exempt Securities, as defined in Appendix I.
b. Securities of a company listed on the Standard & Poor's 100 (S & P
100) Index.
c. A Futures Contract Exempt From Prior Notification under this
Policy (as described above).
d. A Fully Discretionary Account.
III. INSIDE INFORMATION AND SERVICE AS A DIRECTOR
--------
3 SEC Rule 17j-1 places restrictions on the purchase or sale of
any "security held or to be acquired" by a registered investment
company. Rule 17j-1(e)(6) defines a "security held or to be acquired"
by a registered investment company as including any security which,
within the most recent 15 days, "is being or has been considered by
such company or its investment adviser for purchase by such company."
A. INSIDE INFORMATION
As an Advisory Employee, you must notify the General Counsel of the
Advisor if you receive or expect to receive material non-public information
about an entity that issues securities. The General Counsel will determine
the restrictions, if any, that will apply to your communications and
activities while in possession of that information. In general, those
restrictions will include:
1. An undertaking not to trade, either on your own behalf or
on behalf of an Advisory Client, in the securities of the
entity about which you have material non-public
information.
2. An undertaking not to disclose material non-public
information to other Advisory Employees.
3. An undertaking not to participate in discussions with or
decisions by other Advisory Employees relating to the
entity about which you have material non-public
information.
The General Counsel, in cooperation with the Compliance Officer, will
maintain a "restricted list" of entities about which Advisory Employees may
have material non-public information. This "restricted list" will be
available to the Compliance Officer when he or she conducts investigations
or reviews related to the Prior Notification Procedure described previously
in Section II(D)(1) or the Post-Trade Monitoring process described below in
Section V(B)(3).
B. SERVICE AS A DIRECTOR
You may not serve on the board of directors or other governing board
of any entity unless you have received the prior written approval of the
General Counsel of the Advisor. If permitted to serve on a governing board,
an Advisory Employee will be isolated from those Advisory Employees who
make investment decisions regarding the securities of that entity, through
an ethical or other procedures determined by the General Counsel of the
Advisor. In general, the ethical wall or other procedures will include:
1. An undertaking not to trade or to cause a trade on behalf
of an Advisory Client in the securities of the entity on
whose board you serve.
2. An undertaking not to disclose material non-public
information about that entity to other Advisory Employees.
3. An undertaking not to participate in discussions with or
decisions by other Advisory Employees relating to the
entity on whose board you serve.
Any entity on whose board an Advisory Employee serves will be included on
the "restricted list" referenced in subsection A, above.
IV. EXEMPTIONS
The Compliance Committee, in its discretion, may grant case-by-case
exceptions to any of the foregoing requirements, restrictions or
prohibitions, except that the Compliance Committee may not exempt any
Investment Transaction in a Security (other than an Exempt Security) or a
Futures Contract from the Policy's reporting requirements. Exemptions from
the Policy's prior notification requirements and from the Policy's
restrictions on acquisitions in initial public offerings, short-term
trading and trading during blackout periods will require a determination by
the Compliance Committee that the exempted transaction does not involve a
realistic possibility of violating the general principles described at the
beginning of this Policy. An application for a case-by-case exemption, in
accordance with this paragraph, should be made IN WRITING to the Compliance
Officer, who will promptly forward that written request to the members of
the Compliance Committee.
V. COMPLIANCE
A. CERTIFICATIONS
1. UPON RECEIPT OF THIS POLICY
Upon commencement of your employment or the effective date of this
Policy, whichever occurs later, you will be required to acknowledge receipt
of your copy of this Policy by completing and returning to the Compliance
Officer a copy of the form attached hereto as Appendix II. By that
acknowledgment, you will also agree:
1. To read the Policy, to make a reasonable effort to
understand its provisions, and to ask the Compliance
Officer questions about those provisions you find
confusing or difficult to understand.
2. To comply with the Policy, including its general
principles, its reporting requirements, its prohibitions,
its prior notification requirements, its short- term
trading and blackout restrictions.
3. To advise the members of your Immediate Family about the
existence of the Policy, its applicability to their
personal Investment Transactions, and your responsibility
to assure that their personal Investment Transactions
comply with the Policy.
4. To cooperate fully with any investigation or inquiry by
or on behalf of the Compliance Officer or the Compliance
Committee to determine your compliance with the
provisions of the Policy.
In addition, your acknowledgment will recognize that any failure to comply
with the Policy and to honor the commitments made by your acknowledgment
may result in disciplinary action, including dismissal.
2. ANNUAL CERTIFICATE OF COMPLIANCE
You are required to certify on an annual basis, on a copy of the form
attached hereto as Appendix III, that you have complied with each provision
of your initial acknowledgment (see above). In particular, your annual
certification will require that you certify that you have read and that you
understand the Policy, that you recognize that you are subject to its
provisions, that you complied with the requirements of the Policy during
the year just ended, and that you have disclosed, reported, or caused to be
reported all Investment Transactions required to be disclosed or reported
pursuant to the requirements of the Policy and that you have disclosed,
reported or caused to be reported all Personal Accounts and Related
Accounts that hold or are likely to hold a Security or Futures Contract in
which you have a Beneficial Ownership interest. In addition, you will be
required to confirm the accuracy of the record of information on file with
the Advisor with respect to such Personal Accounts and Related Accounts.
B. SUPERVISORY PROCEDURES
1. THE COMPLIANCE COMMITTEE
The Policy will be implemented, monitored and reviewed by the
Compliance Committee. The initial members of the Compliance Committee will
be appointed by the [Board of Directors] of the Advisor. The Compliance
Committee, by a simple majority of its members, may appoint new members of
the Committee, may replace existing members of the Committee, and may fill
vacancies on the Committee. Among other responsibilities, the Compliance
Committee will consider requests for case-by-case exemptions (described
above) and will conduct investigations (described below) of any actual or
suspected violations of the Policy. The Compliance Committee will determine
what remedial actions, if any, should be taken by an Advisor in response to
a violation of the Policy. The Compliance Committee will also provide
reports (described below) regarding significant violations of the Policy
and the procedures to implement the Policy. The Compliance Committee may
recommend changes to those procedures or to the Policy to the management of
the Advisors. Finally, the Compliance Committee will designate one person
to act as Compliance Officer for all Advisors.
2. THE COMPLIANCE OFFICER
The Compliance Officer designated by the Compliance Committee will be
responsible for the day-to-day administration of the Policy for all
Advisors, subject to the direction and control of the Compliance Committee.
Based on information supplied by the management of each Advisor, the
Compliance Officer will forward a copy of the Policy to each Advisory
Employee subject to the Policy and will notify each such person of his or
her designation as an Advisory Employee, Portfolio Employee or Portfolio
Manager. The Compliance Officer will also be responsible for administration
of the reporting and prior notification functions described in the
Policy, and will maintain the reports required by those functions. In
addition, the Compliance Officer will attempt to answer any questions from
an Advisory Employee regarding the interpretation or administration of the
Policy. When necessary or desirable, the Compliance Officer will consult
with the Compliance Committee about such questions. The Compliance Officer
may designate one or more Assistant Compliance Officers to whom the
Compliance Officer may delegate any of the duties described in this
paragraph or in the succeeding paragraph, and who shall be empowered to act
on the Compliance Officer's behalf when the Compliance Officer is absent or
unavailable.
3. POST-TRADE MONITORING AND INVESTIGATIONS
The Compliance Officer will review the Duplicate Broker Reports and
other information supplied for each Advisory Employee so that the
Compliance Officer can detect and prevent potential violations of the
Policy. This information may also be disclosed to the Advisor's auditors,
attorneys and regulators. If, based on his or her review of information
supplied for an Advisory Employee, or based on other information, the
Compliance Officer suspects that the Policy may have been violated, the
Compliance Officer will perform such investigations and make such inquiries
as he or she considers necessary. You should expect that, as a matter of
course, the Compliance Officer will make inquiries regarding any personal
Investment Transaction in a Security or Futures Contract that occurs on the
same day as a transaction in the same Security or Futures Contract on
behalf of an Advisory Client. If the Compliance Officer reaches a
preliminary conclusion that an Advisory Employee may have violated this
Policy, the Compliance Officer will report that preliminary conclusion in a
timely manner to the Compliance Committee and will furnish to the Committee
all information that relates to the Compliance Officer's preliminary
conclusion. The Compliance Officer may also report his or her preliminary
conclusion and the information relating to that preliminary conclusion to
the Advisor's auditors, attorneys and regulators.
Promptly after receiving the Compliance Officer's report of a
possible violation of the Policy, the Compliance Committee, with the aid
and assistance of the Compliance Officer, will conduct an appropriate
investigation to determine whether the Policy has been violated and will
determine what remedial action should be taken by the Advisor in response
to any such violation(s). For purposes of these determinations, a majority
of the Compliance Committee will constitute a quorum and action taken by a
simple majority of that quorum will constitute action by the Committee.
4. REMEDIAL ACTIONS
The remedial actions that may be recommended by the Compliance
Committee may include, but are not limited to, disgorgement of profits,
imposition of a fine, censure, demotion, suspension or dismissal. As part
of any sanction, e.g., for violation of the Policy's restrictions on
short-term trading or trading during blackout periods, you may be required
to reverse or unwind a transaction and to forfeit any profit or to absorb
any loss from the transaction. If an Investment Transaction may not be
reversed or unwound, you may be required to disgorge any profits associated
with the transaction, which profits will be distributed in a manner
prescribed by the Compliance Committee in the exercise of its discretion.
Profits derived from Investment Transactions in violation of this Policy
may not be offset by any losses from Investment Transactions in violation
of this Policy. Finally, evidence suggesting violations of criminal laws
will be reported to the appropriate authorities, as required by applicable
law.
In determining what, if any, remedial action is appropriate in
response to a violation of the Policy, the Compliance Committee will
consider, among other factors, the gravity of your violation, the frequency
of your violations, whether any violation caused harm or the potential of
harm to any Advisory Client, whether you knew or should have known that
your Investment Transaction violated the Policy, whether you engaged in an
Investment Transaction with a view to making a profit on the anticipated
market action of a transaction by an Advisory Client, your efforts to
cooperate with the Compliance Officer's investigation, and your efforts to
correct any conduct that led to a violation. In rare instances, the
Compliance Committee may find that, for equitable reasons, no remedial
action should be taken.
5. REPORTS OF VIOLATIONS REQUIRING SIGNIFICANT REMEDIAL ACTION
In a timely manner, and not less frequently than annually, the
Compliance Committee will report to the [Board of Directors] of the
Advisor, and to the directors or trustees of each investment company that
is an Advisory Client, any known Policy violation requiring significant
remedial action (as defined below) and the disposition of that violation.
For this purpose, a significant remedial action means any action that has a
significant financial effect on the violator. Evidence suggesting
violations of criminal laws will be reported to the appropriate
authorities, as required by applicable law.
6. ANNUAL REPORTS
The Compliance Committee will furnish an annual report to the [Board
of Directors] of the Advisor, and to the directors or trustees of each
investment company that is an Advisory Client, that, at a minimum, will:
1. Summarize existing procedures and restrictions concerning
personal investing by Advisory Employees and any changes in
those procedures and restrictions that were made during the
previous year;
2. Summarize any violations of the Policy that resulted in
significant remedial action
during the previous year; and
3. Describe any changes in existing procedures or restrictions
that the Compliance Committee recommends based upon its
experience under the Policy, evolving industry practices, or
developments in applicable laws or regulations.
VI. EFFECTIVE DATE
The provisions of this Policy will take effect on ____________.
Amendments to this Policy will take effect at the time such amendments are
promulgated and distributed to the Advisory Employees governed by this
Policy.
APPENDIX I
DEFINITIONS OF CAPITALIZED TERMS
The following definitions apply to the capitalized terms used in the
Policy:
ADVISOR
The term "Advisor" means any entity affiliated with FIG Advisors LLC,
whether now in existence or formed after the date hereof, that is
registered as (i) an investment advisor under the Investment Advisers Act
of 1940, as amended, or (ii) a broker-dealer under the Securities Exchange
Act of 1934, as amended, other than any such investment advisor or
broker-dealer that has adopted its own employee investment transaction
policy.
ADVISORY CLIENT
The term "Advisory Client" means a registered investment company, an
institutional investment client, a personal trust or estate, a
guardianship, an employee benefit trust, or another client with which the
Advisor by which you are employed or with which you are associated has an
investment management, advisory or sub-advisory contract or relationship.
ADVISORY EMPLOYEE
The term "Advisory Employee" means an officer, director, or employee
of an Advisor, or any other person identified as a "control person" on the
Form ADV or the Form BD filed by the Advisor with the U.S. Securities and
Exchange Commission, (1) who, in connection with his or her regular
functions or duties, generates, participates in, or obtains information
regarding that Advisor's purchase or sale of a Security by or on behalf of
an Advisory Client; (2) whose regular functions or duties relate to the
making of any recommendations with respect to such purchases or sales; or
(3) who obtains information or exercises influence concerning investment
recommendations made to an Advisory Client of that Advisor or who has line
oversight or management responsibilities over employees who obtain such
information or who exercise such influence.
BENEFICIAL OWNERSHIP
As a GENERAL MATTER, you are considered to have a "Beneficial
Ownership" interest in a Security or Futures Contract if you have the
opportunity, directly or indirectly, to profit or share in any profit
derived from a transaction in that Security. YOU ARE PRESUMED TO HAVE A
BENEFICIAL OWNERSHIP INTEREST IN ANY SECURITY OR FUTURES CONTRACT HELD,
INDIVIDUALLY OR JOINTLY, BY YOU AND/OR BY A MEMBER OF YOUR IMMEDIATE FAMILY
(AS DEFINED BELOW). In addition, unless specifically excepted by the
Compliance Officer based on a showing that your interest or control is
sufficiently attenuated to avoid the possibility of a conflict, you will be
considered to have a Beneficial Ownership interest in a Security or Futures
Contract held by: (1) a JOINT ACCOUNT to which you are a party, (2) a
PARTNERSHIP in which you are a general partner, (3) a LIMITED LIABILITY
COMPANY in which you are a manager-member, or (4) a TRUST in which you or a
member of your Immediate Family has a vested interest. Although you may
have a Beneficial Ownership interest in a Security or Futures Contract held
in a Fully Discretionary Account (as defined below), the application of
this Policy to such a Security or Futures Contract may be modified by the
special exemptions provided for Fully Discretionary Accounts.
As a TECHNICAL MATTER, the term "Beneficial Ownership" for purposes
of this Policy will be interpreted in the same manner as it would be under
SEC Rule 16a-1(a)(2) in determining whether a person has beneficial
ownership of a security for purposes of Section 16 of the Securities
Exchange Act of 1934 and the rules and regulations thereunder.
COMPLIANCE COMMITTEE
The term "Compliance Committee" means the committee of persons who
have responsibility for implementing, monitoring and reviewing the Policy,
in accordance with Section V(B)(1) of the Policy.
COMPLIANCE OFFICER
The term "Compliance Officer" means the person designated by the
Compliance Committee as responsible for the day-to-day administration of
the Policy in accordance with Section V(B)(2) of the Policy.
DUPLICATE BROKER REPORTS
The term "Duplicate Broker Reports" means duplicate copies of
confirmations of transactions in your Personal or Related Accounts and of
periodic statements for those accounts.
EXEMPT SECURITY
The term "Exempt Security" means any Security (as defined below) not
included within the definition of Security in SEC Rule 17j-1(e)(5) under
the Investment Company Act of 1940, as amended, including:
1. A direct obligation of the Government of the United States;
2. Shares of registered open-end investment companies; and
3. High quality short-term debt instruments, including, but not
limited to, bankers' acceptances, bank certificates of deposit,
commercial paper and repurchase agreements. For these purposes,
a "high quality short-term debt instrument" means any
instrument having a maturity at issuance of less than 366 days
and which is rated in one of the highest two rating categories
by a Nationally Recognized Statistical Rating Organization, or
which is unrated but is of comparable quality.
FIXED INCOME SECURITIES
For purposes of this Policy, the term "Fixed Income Securities" means
fixed income Securities issued by agencies or instrumentalities of, or
unconditionally guaranteed by, the Government of the United States,
corporate debt Securities, mortgage-backed and other asset- backed
Securities, fixed income Securities issued by state or local governments or
the political subdivisions thereof, structured notes and loan
participations, foreign government debt Securities, and debt Securities of
international agencies or supranational agencies. For purposes of this
Policy, the term "Fixed Income Securities" will not be interpreted to
include U.S. Government Securities or any other Exempt Security (as defined
above).
FULLY DISCRETIONARY ACCOUNT
The term "Fully Discretionary Account" means a Personal Account or
Related Account (as defined below) managed or held by a broker-dealer,
futures commission merchant, investment advisor or trustee as to which
neither you nor an Immediate Family Member (as defined below): (a)
exercises any investment discretion; (b) suggests or receives notice of
transactions prior to their execution; and (c) otherwise has any direct or
indirect influence or control. In addition, to qualify as a Fully
Discretionary Account, the individual broker, registered representative or
merchant responsible for that account must not be responsible for nor
receive advance notice of any purchase or sale of a Security or Futures
Contract on behalf of an Advisory Client. To qualify an account as a Fully
Discretionary Account, the Compliance Officer must receive and approve a
written notice, in the form attached hereto as Appendix VIII, that the
account meets the foregoing qualifications as a Fully Discretionary
Account.
FUTURES CONTRACT
The term "Futures Contract" includes (a) a futures contract and an
option on a futures contract traded on a U.S. or foreign board of trade,
such as the Chicago Board of Trade, the Chicago Mercantile Exchange, the
New York Mercantile Exchange, or the London International Financial Futures
Exchange (a "Publicly-Traded Futures Contract"), as well as (b) a forward
contract, a "swap", a "cap", a "collar", a "floor" and an over-the-counter
option (other than an option on a foreign currency, an option on a basket
of currencies, an option on a Security or an option on an index of
Securities, which fall within the definition of "Security") (a "Privately-
Traded Futures Contract"). You should consult with the Compliance Officer
if you have any doubt about whether a particular Investment Transaction you
contemplate involves a Futures Contract. For purposes of this definition, a
Publicly-Traded Futures Contract is defined by its expiration month, i.e.,
a Publicly-Traded Futures Contract on a U.S. Treasury Bond that expires in
June is treated as a separate Publicly-Traded Futures Contract, when
compared to a Publicly- Traded Futures Contract on a U.S. Treasury Bond
that expires in July.
IMMEDIATE FAMILY
The term "Immediate Family" means any of the following persons who
RESIDE IN YOUR HOUSEHOLD OR WHO DEPEND ON YOU FOR BASIC LIVING SUPPORT:
your spouse, any child, stepchild, grandchild, parent, stepparent,
grandparent, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including any adoptive
relationships.
INVESTMENT TRANSACTION
For purposes of this Policy, the term "Investment Transaction" means
any transaction in a Security or Futures Contract in which you have, or by
reason of the transaction will acquire, a Beneficial Ownership interest.
The exercise of an option to acquire a Security or Futures Contract is an
Investment Transaction in that Security or Futures Contract.
PERSONAL ACCOUNT
The term "Personal Account" means the following accounts that hold or
are likely to hold a Security or Futures Contract in which you have a
Beneficial Ownership interest:
o any account in your individual name;
o any joint or tenant-in-common account in which you have an
interest or are a participant;
o any account for which you act as trustee, executor, or
custodian; and
o any account over which you have investment discretion or have
the power (whether or not exercised) to direct the acquisition
or disposition of Securities or Futures Contracts (other than
an Advisory Client's account that you manage or over which you
have investment discretion), including the accounts of any
individual or entity that is managed or controlled directly or
indirectly by or through you. There is a presumption that you
can control accounts held by members of your Immediate Family
sharing the same household. This presumption may be rebutted
only by convincing evidence.
POLICY
The term "Policy" means this Employee Investment Transaction Policy.
PORTFOLIO EMPLOYEE
The term "Portfolio Employee" means a Portfolio Manager or an
Advisory Employee who provides information or advice to a Portfolio
Manager, who helps execute a Portfolio Manager's decisions, or who directly
supervises a Portfolio Manager.
PORTFOLIO MANAGER
The term "Portfolio Manager" means any employee of an Advisor who has
the authority, whether sole or shared or only from time to time, to make
investment decisions or to direct trades affecting an Advisory Client.
RELATED ACCOUNT
The term "Related Account" means any account, other than a Personal
Account, that holds a Security or Futures Contract in which you have a
direct or indirect Beneficial Ownership interest (other than an account
over which you have no investment discretion and cannot otherwise exercise
control) and any account (other than an Advisory Client's account) of any
individual or entity to whom you give advice or make recommendations with
regard to the acquisition or disposition of Securities or Futures Contracts
(whether or not such advice is acted upon).
RELATED SECURITY
The term "Related Security" means, as to any Security, any instrument
related in value to that Security, including, but not limited to, any
option or warrant to purchase or sell that Security, and any Security
convertible into or exchangeable for that Security. For example, the
purchase and exercise of an option to acquire a Security is subject to the
same restrictions that would apply to the purchase of the Security itself.
SECURITY
As a GENERAL MATTER, the term "Security" means any stock, note, bond,
debenture or other evidence of indebtedness (including any loan
participation or assignment), limited partnership interest, or investment
contract, OTHER THAN AN EXEMPT SECURITY (as defined above). The term
"Security" includes an OPTION on a Security, an index of Securities, a
currency or a basket of currencies, including such an option traded on the
Chicago Board of Options Exchange or on the New York, American, Pacific or
Philadelphia Stock Exchanges as well as such an option traded in the
over-the-counter market. The term "Security" does NOT include a physical
commodity or a Futures Contract. The term "Security" may include an
interest in a limited liability company (LLC) or in a private investment
fund.
As a TECHNICAL MATTER, the term "Security" has the meaning set forth
in Section 2(a)(36) of the Investment Company Act of 1940, which defines a
Security to mean:
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 certificate of interest or instrument
commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for,
guarantee of, warrant or right to subscribe to or purchase any of the
foregoing,
EXCEPT THAT the term "Security" does not include any Security that is an
Exempt Security (as defined above), a Futures Contract (as defined above),
or a physical commodity (such as foreign exchange or a precious metal).
