Code of Ethics
piv
s
It is the personal responsibility of every Putnam employee to avoid any
conduct that could create a conflict, or even the appearance of a
conflict, with our clients, or to do anything that could damage or
erode the trust our clients place in Putnam and its employees.
44156 3/2000
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s 1
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A
Table of Contents
Overview .........................................................iii
Preamble .........................................................vii
Definitions: Code of Ethics............................................ix
Section I. Personal Securities Rules for All Employees................1
A. Restricted List........................1
B. Prohibited Purchases and Sales.........7
C. Discouraged Transactions..............11
D. Exempted Transactions.................12
Section II. Additional Special Rules for Personal Securities
Transactions of Access Persons and Certain Investment
Professionals.............................................15
Section III. Prohibited Conduct for All Employees......................22
Section IV. Special Rules for Officers and Employees of Putnam
Europe Ltd...........................33
Section V. Reporting Requirements for All Employees....................35
Section VI. Education Requirements for All Employees....................37
Section VII. Compliance and Appeal Procedures............................39
Appendix A ............................................................41
Preamble ........................................43
Definitions: Insider Trading.........................45
Section 1. Rules Concerning Inside Information.....47
Section 2. Overview of Insider Trading.............51
Appendix B. Policy Statement Regarding Employee Trades in Shares of
Putnam Closed-End Funds.........57
Appendix C. Clearance Form for Portfolio Manager Sales Out of
Personal Account of Securities Also Held by Fund (For
compliance with "Contra-Trading" Rule).....................59
Appendix D. Procedures for Approval of New Financial Instruments.......63
Index ...........................................................65
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s 1
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A
Overview
Every Putnam employee is required, as a condition of continued employment, to
read, understand, and comply with the entire Code of Ethics. This Overview is
provided only as a convenience and is not intended to substitute for a careful
reading of the complete document.
It is the personal responsibility of every Putnam employee to avoid any conduct
that could create a conflict, or even the appearance of a conflict, with our
clients, or do anything that could damage or erode the trust our clients place
in Putnam and its employees. This is the spirit of the Code of Ethics. In
accepting employment at Putnam, every employee accepts the absolute obligation
to comply with the letter and the spirit of the Code of Ethics. Failure to
comply with the spirit of the Code of Ethics is just as much a violation of the
Code as failure to comply with the written rules of the Code.
The rules of the Code cover activities, including personal securities
transactions, of Putnam employees, certain family members of employees, and
entities (such as corporations, trusts, or partnerships) that employees may be
deemed to control or influence.
Sanctions will be imposed for violations of the Code of Ethics. Sanctions may
include bans on personal trading, reductions in salary increases or bonuses,
disgorgement of trading profits, suspension of employment, and termination of
employment.
-- Insider trading:
Putnam employees are forbidden to buy or sell any security while either
Putnam or the employee is in possession of non-public information ("inside
information") concerning the security or the issuer. A violation of
Putnam's insider trading policies may result in criminal and civil
penalties, including imprisonment and substantial fines.
-- Conflicts of interest:
The Code of Ethics imposes limits on activities of Putnam employees where
the activity may conflict with the interests of Putnam or its clients.
These include limits on the receipt and solicitation of gifts and on
service as a fiduciary for a person or entity outside of Putnam.
For example, Putnam employees generally may not accept gifts over $50 in
total value in a calendar year from any entity or any supplier of goods or
services to Putnam. In addition, a Putnam employee may not serve as a
director of any corporation without prior approval of the Code of Ethics
Officer, and Putnam employees may not be members of investment clubs.
-- Confidentiality:
Information about Putnam clients and Putnam investment activity and
research is proprietary and confidential and may not be disclosed or used
by any Putnam employee outside Putnam without a valid business purpose.
-- Personal securities trading:
Putnam employees may not buy or sell any security for their own account
without clearing the proposed transaction in advance with the Code of
Ethics Administrator.
Certain securities are excepted from this requirement (e.g., Marsh &
McLennan stock and shares of open-end (not closed-end) Putnam Funds). The
Code of Ethics Officer will permit employees to purchase or sell up to
1,000 shares of stock of an issuer whose capitalization exceeds $1
billion, but such purchases or sales must still be cleared.
Clearance must be obtained in advance, between 11:30 a.m. and 4:00 p.m. EST
on the day of the trade. Clearance may be obtained between 9:00 a.m. and
4:00 p.m. on the day of the trade for up to 1,000 shares of stock of an
issuer whose capitalization exceeds $1 billion. A clearance is valid only
for the day it is obtained. The Code also strongly discourages excessive
trading by employees for their own account (i.e., more than 10 trades in
any calendar quarter). Trading in excess of this level will be reviewed
with the Code of Ethics Oversight Committee.
-- Short Selling:
Putnam employees are prohibited from short selling any security, whether
or not it is held in a Putnam client portfolio, except that short selling
against the S&P 100 and 500 indexes and "against the box" are permitted.
-- Confirmations of trading and periodic account statements:
All Putnam employees must have their brokers send confirmations of
personal securities transactions, including transactions of immediate
family members and accounts over which the employee has investment
discretion, to the Code of Ethics Officer. Employees must contact the Code
of Ethics Administrator to obtain an authorization letter from Putnam for
setting up a personal brokerage account.
-- Quarterly and annual reporting:
Certain Putnam employees (so-called "Access Persons" as defined by the SEC
and in the Code of Ethics) must report all their securities transactions
in each calendar quarter to the Code of Ethics Officer within 10 days
after the end of the quarter. All Access Persons must disclose all
personal securities holdings upon commencement of employment and
thereafter on an annual basis. You will be notified if these requirements
apply to you. If these requirements apply to you and you fail to report as
required, salary increases and bonuses will be reduced.
-- IPOs and private placements:
Putnam employees may not buy any securities in an initial public offering
or in a private placement, except in limited circumstances when prior
written authorization is obtained.
-- Procedures for Approval of New Financial Instruments:
No new types of securities or instruments may be purchased for any Putnam
fund or other client account without the prior approval of the Risk
Management Committee.
-- Personal securities transactions by Access Persons and certain investment
professionals:
The Code imposes several special restrictions on personal securities
transactions by Access Persons and certain investment professionals, which
are summarized as follows:
-- "60-Day Holding Period". No Access Person shall profit from the
purchase and sale, or sale and purchase, of any security or related
derivative security within 60 calendar days.
-- "15-Day" Rule. Before a portfolio manager places an order to buy a
security for any portfolio he manages, he must sell from his personal
account any such security or related derivative security purchased
within the preceding 15 calendar days and disgorge any profit from
the sale.
-- "Blackout" Rules. No portfolio manager may sell any security or
related derivative security for her personal account until 15
calendar days have passed since the most recent purchase of that
security or related derivative security by any portfolio she manages.
No portfolio manager may buy any security or related derivative
security for his personal account until 15 calendar days have passed
since the most recent sale of that security or related derivative
security by any portfolio he manages.
-- "Contra-Trading" Rule. No portfolio manager may sell out of her
personal account any security or related derivative security that is
held in any portfolio she manages unless she has received the written
approval of a CIO and the Code of Ethics Officer.
-- No manager may cause a Putnam client to take action for the manager's
own personal benefit.
-- SIMILAR RULES LIMIT PERSONAL SECURITIES TRANSACTIONS BY ANALYSTS,
CO-MANAGERS, AND CHIEF INVESTMENT OFFICERS. PLEASE READ THESE RULES
CAREFULLY. YOU ARE RESPONSIBLE FOR UNDERSTANDING THE RESTRICTIONS.
This Overview is qualified in its entirety by the provisions of the Code of
Ethics. The Code requires that all Putnam employees read, understand, and comply
with the entire Code of Ethics.
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A
Preamble
It is the personal responsibility of every Putnam employee to avoid any conduct
that would create a conflict, or even the appearance of a conflict, with our
clients, or embarrass Putnam in any way. This is the spirit of the Code of
Ethics. In accepting employment at Putnam, every employee also accepts the
absolute obligation to comply with the letter and the spirit of the Code of
Ethics. Failure to comply with the spirit of the Code of Ethics is just as much
a violation of the Code as failure to comply with the written rules of the Code.
Sanctions will be imposed for violations of the Code of Ethics, including the
Code's reporting requirements. Sanctions may include bans on personal trading,
reductions in salary increases or bonuses, disgorgement of trading profits,
suspension of employment and termination of employment.
Putnam Investments is required by law to adopt a Code of Ethics. The purpose of
the law is to prevent abuses in the investment advisory business that can arise
when conflicts of interest exist between the employees of an investment adviser
and its clients. Having an effective Code of Ethics is good business practice,
as well. By adopting and enforcing a Code of Ethics, we strengthen the trust and
confidence reposed in us by demonstrating that, at Putnam, client interests come
before personal interests.
Putnam has had a Code of Ethics for many years. The first Putnam Code was
written more than 30 years ago by George Putnam. It has been revised
periodically, and was re-drafted in its entirety in 1989 to take account of
legal and regulatory developments in the investment advisory business. Since
1989, the Code has been revised regularly to reflect developments in our
business.
The Code that follows represents a balancing of important interests. On the one
hand, as a registered investment adviser, Putnam owes a duty of undivided
loyalty to its clients, and must avoid even the appearance of a conflict that
might be perceived as abusing the trust they have placed in Putnam. On the other
hand, Putnam does not want to prevent conscientious professionals from investing
for their own account where conflicts do not exist or are so attenuated as to be
immaterial to investment decisions affecting Putnam clients.
When conflicting interests cannot be reconciled, the Code makes clear that,
first and foremost, Putnam employees owe a fiduciary duty to Putnam clients. In
most cases, this means that the affected employee will be required to forego
conflicting personal securities transactions. In some cases, personal
investments will be permitted, but only in a manner which, because of the
circumstances and applicable controls, cannot reasonably be perceived as
adversely affecting Putnam client portfolios or taking unfair advantage of the
relationship Putnam employees have to Putnam clients.
The Code contains specific rules prohibiting defined types of conflicts. Because
every potential conflict cannot be anticipated in advance, the Code also
contains certain general provisions prohibiting conflict situations. In view of
these general provisions, it is critical that any individual who is in doubt
about the applicability of the Code in a given situation seek a determination
from the Code of Ethics Officer about the propriety of the conduct in advance.
The procedures for obtaining such a determination are described in Section VII
of the Code.
It is critical that the Code be strictly observed. Not only will adherence to
the Code ensure that Putnam renders the best possible service to its clients, it
will ensure that no individual is liable for violations of law.
It should be emphasized that adherence to this policy is a fundamental condition
of employment at Putnam. Every employee is expected to adhere to the
requirements of this Code of Ethics despite any inconvenience that may be
involved. Any employee failing to do so may be subject to such disciplinary
action, including financial penalties and termination of employment, as
determined by the Code of Ethics Oversight Committee or the Chief Executive
Officer of Putnam Investments.
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A
Definitions: Code of Ethics
The words given below are defined specifically for the purposes of Putnam's Code
of Ethics.
Gender references in the Code of Ethics alternate.
Rule of construction regarding time periods. Unless the context indicates
otherwise, time periods used in the Code of Ethics shall be measured
inclusively, i.e., including the dates from and to which the measurement
is made.
AccessPersons. Access Persons are (i) all officers of Putnam Investment
Management, Inc. (the investment manager of Putnam's mutual funds), (ii)
all employees within Putnam's Investment Division, and (iii) all other
employees of Putnam who, in connection with their regular duties, have
access to information regarding purchases or sales of portfolio securities
by a Putnam mutual fund, or who have access to information regarding
recommendations with respect to such purchases or sales.
Code of Ethics Administrator. The individual designated by the Code of Ethics
Officer to assume responsibility for day-to-day, non-discretionary
administration of this Code. The current Code of Ethics Administrator is
Laura Rose, who can be reached at extension 11104.
Code of Ethics Officer. The Putnam officer who has been assigned the
responsibility of enforcing and interpreting this Code. The Code of Ethics
Officer shall be the General Counsel or such other person as is designated
by the President of Putnam Investments. If the Code of Ethics Officer is
unavailable, the Deputy Code of Ethics Officer (to be appointed by the
Code of Ethics Officer) shall act in his stead.
Code of Ethics Oversight Committee. Has oversight responsibility for
administering the Code of Ethics. Members include the Code of Ethics
Officer, the Head of Investments, and other members of Putnam's senior
management approved by the Chief Executive Officer of Putnam.
Immediate family. Spouse, minor children, or other relatives living in the same
household as the Putnam employee.
PolicyStatements. The Policy Statement Concerning Insider Trading Prohibitions
attached to the Code as Appendix A and the Policy Statement Regarding
Employee Trades in Shares of Putnam Closed-End Funds attached to the Code
as Appendix B.
Private placement. Any offering of a security not to the public, but to
sophisticated investors who have access to the kind of information which
would be contained in a prospectus, and which does not require
registration with the relevant securities authorities.
Purchase or sale of a security. Any acquisition or transfer of any interest in
the security for direct or indirect consideration, and includes the
writing of an option.
Putnam. Any or all of Putnam Investments, Inc., and its subsidiaries, any one of
which shall be a "Putnam company."
Putnam client. Any of the Putnam Funds, or any advisory, trust, or other client
of Putnam.
Putnam employee (or "employee"). Any employee of Putnam.
Restricted List. The list established in accordance with Rule 1 of Section I.A.
Security. Any type or class of equity or debt security and any rights relating
to a security, such as put and call options, warrants, and convertible
securities. Unless otherwise noted, the term "security" does not include:
currencies, direct and indirect obligations of the U.S. government and its
agencies, commercial paper, certificates of deposit, repurchase
agreements, bankers' acceptances, any other money market instruments,
shares of open-end mutual funds (including Putnam open-end mutual funds),
securities of The Marsh & McLennan Companies, Inc., commodities, and any
option on a broad-based market index or an exchange-traded futures
contract or option thereon.
Transaction for a personal account (or "personal securities transaction").
Securities transactions: (a) for the personal account of any employee; (b)
for the account of a member of the immediate family of any employee; (c)
for the account of a partnership in which a Putnam employee or immediate
family member is a general partner or a partner with investment
discretion; (d) for the account of a trust in which a Putnam employee or
immediate family member is a trustee with investment discretion; (e) for
the account of a closely-held corporation in which a Putnam employee or
immediate family member holds shares and for which he has investment
discretion; and (f) for any account other than a Putnam client account
which receives investment advice of any sort from the employee or
immediate family member, or as to which the employee or immediate family
member has investment discretion.
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A
Section I. Personal Securities Rules for All Employees
A. Restricted List
RULE 1
No Putnam employee shall purchase or sell for his personal account any
security without prior clearance obtained through Putnam's Intranet
pre-clearance system or from the Code of Ethics Administrator. No
clearance will be granted for securities appearing on the Restricted
List. Securities shall be placed on the Restricted List in the following
circumstances:
(a) when orders to purchase or sell such security have been entered for
any Putnam client, or the security is being actively considered for
purchase or sale for any Putnam client;
(b) with respect to voting securities of corporations in the banking,
savings and loan, communications, or gaming (i.e., casinos)
industries, when holdings of Putnam clients exceed 7% (for public
utilities, the threshold is 4%);
(c) when, in the judgment of the Code of Ethics Officer, other
circumstances warrant restricting personal transactions of Putnam
employees in a particular security;
(d) the circumstances described in the Policy Statement Concerning
Insider Trading Prohibitions, attached as Appendix A.
Reminder: Securities for an employee's "personal account" include
securities owned by certain family members of a Putnam employee. Thus, this
Rule prohibits certain trades by family members of Putnam employees. See
Definitions. ---
Compliance with this rule does not exempt an employee from complying with
any other applicable rules of the Code, such as those described in
Section III. In particular, Access Persons and certain investment
professionals must comply with the special rules set forth in Section II.
EXCEPTIONS
A. "Large Cap" Exception. If a security appearing on the Restricted
List is an equity security for which the issuer has a market
capitalization (defined as outstanding shares multiplied by current
price per share) of over $1 billion, then a Putnam employee may
purchase or sell up to 1,000 shares of the security per day for his
personal account. This exception does not apply if the security
appears on the Restricted List in the circumstances described in
subpart (b), (c), or (d) of Rule 1.
B. Investment Grade Or Higher Fixed-Income Exception. If a security
being traded or considered for trade for a Putnam client is a
non-convertible fixed-income security which bears a rating of BBB
(Standard & Poor's) or Baa (Moody's) or any comparable rating or
higher, then a Putnam employee may purchase or sell that security
for his personal account without regard to the activity of Putnam
clients. This exception does not apply if the security has been
placed on the Restricted List in the circumstances described in
subpart (b), (c), or (d) of Rule 1.
C. Pre-Clearing Transactions Effected by Share Subscription. The
purchase and sale of securities made by subscription rather than on
an exchange are limited to issuers having a market capitalization of
$1 billion or more and are subject to a 1,000 share limit. The
following are procedures to comply with Rule 1 when effecting a
purchase or sale of shares by subscription:
(a) The Putnam employee must pre-clear the trade on the day he or
she submits a subscription to the issuer, rather than on the
actual day of the trade since the actual day of the trade
typically will not be known to the employee who submits the
subscription. At the time of pre-clearance, the employee will
be told whether the purchase is permitted (in the case of a
corporation having a market capitalization of $1 billion or
more), or not permitted (in the case of a smaller
capitalization issuer).
(b) The subscription for any purchase or sale of shares must be
reported on the employee's quarterly personal securities
transaction report, noting the trade was accomplished by
subscription.
(c) As no brokers are involved in the transaction, the
confirmation requirement will be waived for these
transactions, although the Putnam employee must provide the
Legal and Compliance Department with any transaction summaries
or statements sent by the issuer.
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SANCTION GUIDELINES
A. Failure to Pre-Clear a Personal Trade
1. First violation: One month trading ban with written warning that a
future violation will result in a longer trading ban.
2. Second violation: Three month trading ban and written notice to
Managing Director of the employee's division.
3. Third violation: Six month trading ban with possible longer or
permanent trading ban based upon review by Code of Ethics
Oversight Committee.
B. Failure to Pre-Clear Securities on the Restricted List
1. First violation: Disgorgement of any profit from the
transaction, one month trading ban, and written warning that a
future violation will result in a longer trading ban.
2. Second violation: Disgorgement of any profit from the transaction,
three month trading ban, and written notice to Managing Director of the
employee's division.
3. Third violation: Disgorgement of any profit from the
transaction, and six month trading ban with possible longer or
permanent trading ban based upon review by Code of Ethics
Oversight Committee.
NOTE: These are the sanction guidelines for successive failures to
pre-clear personal trades within a 2-year period. The Code of
Ethics Oversight Committee retains the right to increase or
decrease the sanction for a particular violation in light of the
circumstances. The Committee's belief that an employee
intentionally has violated the Code of Ethics will result in more
severe sanctions than outlined in the guidelines above. The
sanctions described in Paragraph B apply to Restricted List
securities that are: (i) small cap stocks (i.e., stocks not
entitled to the "Large Cap" exception) and (ii) large cap stocks
that exceed the daily 1,000 share maximum permitted under the
"Large Cap" exception. Failure to pre-clear an otherwise permitted
trade of up to 1,000 shares of a large cap security is subject to
the sanctions described above in Paragraph A.
IMPLEMENTATION
A. Maintenance of Restricted List. The Restricted List shall be maintained
by the Code of Ethics Administrator.
B. Consulting Restricted List. An employee wishing to trade any
security for his personal account shall first obtain clearance
through Putnam's Intranet pre-clearance system. The system may be
accessed from your desktop computer through Internet access
software and following the directions provided in the system. The
current address of the Intranet pre-clearance system can be
obtained from the Code of Ethics Administrator. Employees may
pre-clear all securities between 11:30 a.m. and 4:00 p.m. EST, and
may pre-clear purchases or sales of up to 1,000 shares of issuers
having a market capitalization of more than $1 billion between 9:00
a.m. and 4:00 p.m. EST. Requests to make personal securities
transactions may not be made using the system or presented to the
Code of Ethics Administrator after 4:00 p.m.
The pre-clearance system will inform the employee whether the
security may be traded and whether trading in the security is
subject to the "Large Cap" limitation. The response of the
pre-clearance system as to whether a security appears on the
Restricted List and, if so, whether it is eligible for the
exceptions set forth after this Rule shall be final, unless the
employee appeals to the Code of Ethics Officer, using the procedure
described in Section VII, regarding the request to trade a
particular security.
A clearance is only valid for trading on the day it is obtained.
Trades in securities listed on Asian or European stock exchanges,
however, may be executed within one business day after
pre-clearance is obtained.
If a security is not on the Restricted List, other classes of
securities of the same issuer (e.g., preferred or convertible
preferred stock) may be on the Restricted List. It is the
employee's responsibility to identify with particularity the class
of securities for which permission is being sought for a personal
investment.
If the Intranet pre-clearance system does not recognize a security,
or if an employee is unable to use the system or has any questions
with respect to the system or pre-clearance, the employee may
consult the Code of Ethics Administrator. The Code of Ethics
Administrator shall not have authority to answer any questions
about a security other than whether trading is permitted. The
response of the Code of Ethics Administrator as to whether a
security appears on the Restricted List and, if so, whether it is
eligible for the exceptions set forth after this Rule shall be
final, unless the employee appeals to the Code of Ethics Officer,
using the procedure described in Section VII, regarding the request
to trade a particular security.
C. Removal of Securities from Restricted List. Securities shall be
removed from the Restricted List when: (a) in the case of
securities on the Restricted List pursuant to Rule 1(a), they are
no longer being purchased or sold for a Putnam client or actively
considered for purchase or sale for a Putnam client; (b) in the
case of securities on the Restricted List pursuant to Rule 1(b),
the holdings of Putnam clients fall below the applicable threshold
designated in that Rule, or at such earlier time as the Code of
Ethics Officer deems appropriate; or (c) in the case of securities
on the Restricted List pursuant to Rule 1(c) or 1(d), when
circumstances no longer warrant restrictions on personal trading.
COMMENTS
1. Pre-Clearance. Subpart (a) of this Rule is designed to avoid the
conflict of interest that might occur when an employee trades for
his personal account a security that currently is being traded or is
likely to be traded for a Putnam client. Such conflicts arise, for
example, when the trades of an employee might have an impact on the
price or availability of a particular security, or when the trades
of the client might have an impact on price to the benefit of the
employee. Thus, exceptions involve situations where the trade of a
Putnam employee is unlikely to have an impact on the market.
2. Regulatory Limits. Owing to a variety of federal statutes and
regulations in the banking, savings and loan, communications, and
gaming industries, it is critical that accounts of Putnam clients
not hold more than 10% of the voting securities of any issuer (5%
for public utilities). Because of the risk that the personal
holdings of Putnam employees may be aggregated with Putnam holdings
for these purposes, subpart (b) of this Rule limits personal trades
in these areas. The 7% limit (4% for public utilities) will allow
the regulatory limits to be observed.
3. Options. For the purposes of this Code, options are treated like the
underlying security. See Definitions. Thus, an employee may not
purchase, sell, or "write" option contracts for a security that is
on the Restricted List. A securities index will not be put on the
Restricted List simply because one or more of its underlying
securities have been put on the Restricted List. The exercise of an
options contract (the purchase or writing of which was previously
pre-cleared) does not have to be pre-cleared. Note, however, that
the sale of securities obtained through the exercise of options must
be pre-cleared.
4. Involuntary Transactions. "Involuntary" personal securities transactions
are exempted from the Code. Special attention should be paid to this
exemption. (See Section I.D.)
5. Tender Offers. This Rule does not prohibit an employee from
tendering securities from his personal account in response to an
any-and-all tender offer, even if Putnam clients are also tendering
securities. A Putnam employee is, however, prohibited from tendering
securities from his personal account in response to a partial tender
offer, if Putnam clients are also tendering securities.
B. Prohibited Purchases and Sales
RULE 1
Putnam employees are prohibited from short selling any security, whether
or not the security is held in a Putnam client portfolio.
EXCEPTIONS
Short selling against the S&P 100 and 500 indexes and "against the box"
are permitted.
RULE 2
No Putnam employee shall purchase any security for her personal account
in an initial public offering.
EXCEPTIONS
Pre-existing Status Exception. A Putnam employee shall not be barred by
this Rule or by Rule 1(a) of Section I.A. from purchasing securities for
her personal account in connection with an initial public offering of
securities by a bank or insurance company when the employee's status as a
policyholder or depositor entitles her to purchase securities on terms
more favorable than those available to the general public, in connection
with the bank's conversion from mutual or cooperative form to stock form,
or the insurance company's conversion from mutual to stock form, provided
that the employee has had the status entitling her to purchase on
favorable terms for at least two years. This exception is only available
with respect to the value of bank deposits or insurance policies that an
employee owns before the announcement of the initial public offering.
This exception does not apply, however, if the security appears on the
Restricted List in the circumstances set forth in subparts (b), (c), or
(d) of Section I.A., Rule 1.
IMPLEMENTATION
A. General Implementation. An employee shall inquire, before any
purchase of a security for her personal account, whether the
security to be purchased is being offered pursuant to an initial
public offering. If the security is offered through an initial
public offering, the employee shall refrain from purchasing that
security for her personal account unless the exception applies.
B. Administration of Exception. If the employee believes the exception
applies, she shall consult the Code of Ethics Administrator concerning
whether the security appears on the Restricted List and if so, whether it
is eligible for this exception.
COMMENTS
1. The purpose of this rule is twofold. First, it is designed to
prevent a conflict of interest between Putnam employees and Putnam
clients who might be in competition for the same securities in a
limited public offering. Second, the rule is designed to prevent
Putnam employees from being subject to undue influence as a result
of receiving "favors" in the form of special allocations of
securities in a public offering from broker-dealers who seek to do
business with Putnam.
2. Purchases of securities in the immediate after-market of an initial
public offering are not prohibited, provided they do not constitute
violations of other portions of the Code of Ethics. For example,
participation in the immediate after-market as a result of a special
allocation from an underwriting group would be prohibited by Section
III, Rule 3 concerning gifts and other "favors."
3. Public offerings subsequent to initial public offerings are not
deemed to create the same potential for competition between Putnam
employees and Putnam clients because of the pre-existence of a
market for the securities.
RULE 3
No Putnam employee shall purchase any security for his personal account
in a limited private offering or private placement.
COMMENTS
1. The purpose of this Rule is to prevent a Putnam employee from
investing in securities for his own account pursuant to a limited
private offering that could compete with or disadvantage Putnam
clients, and to prevent Putnam employees from being subject to
efforts to curry favor by those who seek to do business with Putnam.
2. Exemptions to the prohibition will generally not be granted where
the proposed investment relates directly or indirectly to
investments by a Putnam client, or where individuals involved in the
offering (including the issuers, broker, underwriter, placement
agent, promoter, fellow investors and affiliates of the foregoing)
have any prior or existing business relationship with Putnam or a
Putnam employee, or where the Putnam employee believes that such
individuals may expect to have a future business relationship with
Putnam or a Putnam employee.
3. An exemption may be granted, subject to reviewing all the facts and
circumstances, for investments in:
(a) Pooled investment funds, including hedge funds, subject to the
condition that an employee investing in a pooled investment
fund would have no involvement in the activities or
decision-making process of the fund except for financial
reports made in the ordinary course of the fund's business.
(b) Private placements where the investment cannot relate, or be
expected to relate, directly or indirectly to Putnam or
investments by a Putnam client.
4. Employees who apply for an exemption will be expected to disclose to
the Code of Ethics Officer in writing all facts and relationships
relating to the proposed investment.
5. Limited partnership interests are frequently sold in private
placements. An employee should assume that investment in a limited
partnership is barred by these rules, unless the employee has
obtained, in advance of purchase, a written exemption under the ad
hoc exemption set forth in Section I.D., Rule 2. The procedure for
obtaining an ad hoc exemption is described in Section VII, Part 4.
6. Applications to invest in private placements will be reviewed by the
Code of Ethics Oversight Committee. This review will take into
account, among other factors, the considerations described in the
preceding comments.
RULE 4
No Putnam employee shall purchase or sell any security for her personal
account or for any Putnam client account while in possession of material,
nonpublic information concerning the security or the issuer.
EXCEPTIONS
NONE. Please read Appendix A, Policy Statement Concerning Insider Trading
Prohibitions.
RULE 5
No Putnam employee shall purchase from or sell to a Putnam client any
securities or other property for his personal account, nor engage in any
personal transaction to which a Putnam client is known to be a party, or
which transaction may have a significant relationship to any action taken
by a Putnam client.
EXCEPTIONS
None.
IMPLEMENTATION
It shall be the responsibility of every Putnam employee to make inquiry
prior to any personal transaction sufficient to satisfy himself that the
requirements of this Rule have been met.
COMMENT
This rule is required by federal law. It does not prohibit a Putnam
employee from purchasing any shares of an open-end Putnam fund. The
policy with respect to employee trading in closed-end Putnam funds is
attached as Appendix B.
C. Discouraged Transactions
RULE 1
Putnam employees are strongly discouraged from engaging in naked option
transactions for their personal accounts.
EXCEPTIONS
None.
COMMENT
Naked option transactions are particularly dangerous, because a Putnam
employee may be prevented by the restrictions in this Code of Ethics from
"covering" the naked option at the appropriate time. All employees should
keep in mind the limitations on their personal securities trading imposed
by this Code when contemplating such an investment strategy. Engaging in
naked options transactions on the basis of material, nonpublic
information is prohibited. See Appendix A, Policy Statement Concerning
Insider Trading Prohibitions.
RULE 2
Putnam employees are strongly discouraged from engaging in excessive
trading for their personal accounts.
EXCEPTIONS
None.
COMMENTS
1. Although a Putnam employee's excessive trading may not itself
constitute a conflict of interest with Putnam clients, Putnam
believes that its clients' confidence in Putnam will be enhanced and
the likelihood of Putnam achieving better investment results for its
clients over the long term will be increased if Putnam employees
rely on their investment -- as opposed to trading -- skills in
transactions for their own account. Moreover, excessive trading by a
Putnam employee for his or her own account diverts an employee's
attention from the responsibility of servicing Putnam clients, and
increases the possibilities for transactions that are in actual or
apparent conflict with Putnam client transactions.
2. Although this Rule does not define excessive trading, employees
should be aware that if their trades exceed 10 trades per quarter
the trading activity will be reviewed by the Code of Ethics
Oversight Committee.
D. Exempted Transactions
RULE 1
Transactions which are involuntary on the part of a Putnam employee are
exempt from the prohibitions set forth in Sections I.A., I.B., and I.C.
EXCEPTIONS
None.
COMMENTS
1. This exemption is based on categories of conduct that the Securities and
Exchange Commission does not consider "abusive."
2. Examples of involuntary personal securities transactions include:
(a) sales out of the brokerage account of a Putnam employee as a
result of bona fide margin call, provided that withdrawal of
collateral by the Putnam employee within the ten days previous
to the margin call was not a contributing factor to the margin
call;
(b) purchases arising out of an automatic dividend reinvestment
program of an issuer of a publicly traded security.
3. Transactions by a trust in which the Putnam employee (or a member of
his immediate family) holds a beneficial interest, but for which the
employee has no direct or indirect influence or control with respect
to the selection of investments, are involuntary transactions. In
addition, these transactions do not fall within the definition of
"personal securities transactions." See Definitions.
4. A good-faith belief on the part of the employee that a transaction
was involuntary will not be a defense to a violation of the Code of
Ethics. In the event of confusion as to whether a particular
transaction is involuntary, the burden is on the employee to seek a
prior written determination of the applicability of this exemption.
The procedures for obtaining such a determination appear in Section
VII, Part 3.
RULE 2
Transactions which have been determined in writing by the Code of Ethics
Officer before the transaction occurs to be no more than remotely
potentially harmful to Putnam clients because the transaction would be
very unlikely to affect a highly institutional market, or because the
transaction is clearly not related economically to the securities to be
purchased, sold, or held by a Putnam client, are exempt from the
prohibitions set forth in Sections I.A., I.B., and I.C.
EXCEPTIONS
N.A.
IMPLEMENTATION
An employee may seek an ad hoc exemption under this Rule by following the
procedures in Section VII, Part 4.
COMMENTS
1. This exemption is also based upon categories of conduct that the
Securities and Exchange Commission does not consider "abusive."
2. The burden is on the employee to seek a prior written determination
that the proposed transaction meets the standards for an ad hoc
exemption set forth in this Rule.
<PAGE>
A
Section II. Additional Special Rules for Personal Securities Transactions of
Access Persons and Certain Investment Professionals
Access Persons (including all Investment
Professionals and other employees as defined on page ix)
--------------------------------------------------------
RULE 1 No Access Person shall profit from the purchase and sale, or sale and
purchase, of any security or related derivative security within 60 calendar
days.
EXCEPTIONS
None, unless prior written approval from the Code of Ethics Officer is obtained.
Exceptions may be granted on a case-by-case basis when no abuse is involved and
the equities of the situation support an exemption. For example, although an
Access Person may buy a stock as a long-term investment, that stock may have to
be sold involuntarily due to unforeseen activity such as a merger.
IMPLEMENTATION
1. The 60-Day Rule applies to all Access Persons, as defined in the Definitions
section of the Code.
2. Calculation of whether there has been a profit is based upon the market
prices of the securities. The calculation is not net of commissions or other
sales charges.
3. As an example, an Access Person would not be permitted to sell a security
at $12 that he purchased within the prior 60 days for $10. Similarly, an
Access Person would not be permitted to purchase a security at $10 that
she had sold within the prior 60 days for $12. If the proposed transaction
would be made at a loss, it would be permitted if the pre-clearance
requirements are met. See, Section I, Rule 1.
COMMENTS
1. The prohibition against short-term trading profits by Access Persons is
designed to minimize the possibility that they will capitalize
inappropriately on the market impact of trades involving a client
portfolio about which they might possibly have information.
2. Although Chief Investment Officers, Portfolio Managers, and Analysts may
sell securities at a profit within 60 days of purchase in order to comply
with the requirements of the 15-Day Rule applicable to them (described
below), the profit will have to be disgorged to charity under the terms of
the 15-Day Rule.
3. Access Persons occasionally make a series of transactions in securities
over extended periods of time. For example, an Access Person bought 100
shares of Stock X on Day 1 at $100 per share and then bought 50 additional
shares on Day 45 at $95 per share. On Day 75, the Access Person sold 20
shares at $105 per share. The question arises whether the Access Person
violated the 60-Day Rule. The characterization of the employee's tax basis
in the shares sold determines the analysis. If, for personal income tax
purposes, the Access Person characterizes the shares sold as having a basis
of $100 per share (i.e., shares purchased on Day 1), the transaction would
be consistent with the 60-Day Rule. However, if the tax basis in the shares
is $95 per share (i.e., shares purchased on Day 45), the transaction would
violate the 60-Day Rule.
RULE 2
Access Persons must disclose all personal securities holdings to the Code of
Ethics Officer upon commencement of employment and thereafter on an annual
basis.
EXCEPTIONS
None.
COMMENT
These requirements are mandated by SEC regulations and are designed to
facilitate the monitoring of personal securities transactions. Putnam's Code of
Ethics Administrator will provide Access Persons with the form for making these
reports and the specific information that must be disclosed at the time that the
disclosure is required.
Certain Investment Professionals
--------------------------------
RULE 3 ("15-DAY" RULE)
(a) Portfolio Managers: Before a portfolio manager places an order to buy a
security for any Putnam client portfolio that he manages, he shall sell any such
security or related derivative security purchased in a transaction for his
personal account within the preceding fifteen calendar days.
(b) Co-Managers: Before a portfolio manager places an order to buy a security
for any Putnam client he manages, his co-manager shall sell any such security or
related derivative security purchased in transaction for his personal account
within the preceding fifteen calendar days.
(c) Analysts: Before an analyst makes a buy recommendation for a security, he
shall sell any such security or related derivative security purchased in a
transaction for his personal account within the preceding fifteen calendar days.
(d) Chief Investment Officers: The Chief Investment Officer of an investment
group must sell any security or related derivative security purchased in a
transaction for his personal account within the preceding fifteen calendar days
before any portfolio manager in the CIO's investment group places an order to
buy such security for any Putnam client account he manages.
EXCEPTIONS
None.
COMMENTS
1. This Rule applies to portfolio managers and Chief Investment Officers with
respect to any purchase (no matter how small) in any client account managed
or overseen by that portfolio manager or CIO (even so-called "clone
accounts"). In particular, it should be noted that the requirements of this
rule also apply with respect to purchases in client accounts, including
"clone accounts," resulting from "cash flows." To comply with the
requirements of this rule, it is the responsibility of each portfolio
manager and CIO to be aware of the placement of all orders for purchases of
a security by client accounts that he or she manages or oversees for 15
days following the purchase of that security for his or her personal
account.
2. An investment professional who must sell securities to be in compliance
with the 15-Day Rule must absorb any loss and disgorge to charity any
profit resulting from the sale.
3. This Rule is designed to avoid even the appearance of a conflict of
interest between an investment professional and a Putnam client. A more
stringent rule is warranted because, with their greater knowledge and
control, these investment professionals are in a better position than other
employees to create an appearance of manipulation of Putnam client accounts
for personal benefit.
4. "Portfolio manager" is used in this Section as a functional label, and is
intended to cover any employee with authority to authorize a trade on
behalf of a Putnam client, whether or not such employee bears the title
"portfolio manager." "Analyst" is also used in this Section as a
functional label, and is intended to cover any employee who is not a
portfolio manager but who may make recommendations regarding investments
for Putnam clients.
RULE 4 ("BLACKOUT RULE")
(a) Portfolio Managers: No portfolio manager shall: (i) sell any security or
related derivative security for her personal account until fifteen calendar days
have elapsed since the most recent purchase of that security or related
derivative security by any Putnam client portfolio she manages or co-manages; or
(ii) purchase any security or related derivative security for her personal
account until fifteen calendar days have elapsed since the most recent sale of
that security or related derivative security from any Putnam client portfolio
that she manages or co-manages.
(b) Analysts: No analyst shall: (i) sell any security or related derivative
security for his personal account until fifteen calendar days have elapsed since
his most recent buy recommendation for that security or related derivative
security; or (ii) purchase any security or related derivative security for his
personal account until fifteen calendar days have elapsed since his most recent
sell recommendation for that security or related derivative security.
(c) Chief Investment Officers: No Chief Investment Officer shall: (i) sell any
security or related derivative security for his personal account until fifteen
calendar days have elapsed since the most recent purchase of that security or
related derivative security by a portfolio manager in his investment group; or
(ii) purchase any security or related derivative security for his personal
account until fifteen calendar days have elapsed since the most recent sale of
that security or related derivative security from any Putnam client portfolio
managed in his investment group.
EXCEPTIONS
None.
COMMENTS
1. This Rule applies to portfolio managers and Chief Investment Officers with
respect to any transaction (no matter how small) in any client account
managed or overseen by that portfolio manager or CIO (even so-called
"clone accounts"). In particular, it should be noted that the requirements
of this rule also apply with respect to transactions in client accounts,
including "clone accounts," resulting from "cash flows." In order to
comply with the requirements of this rule, it is the responsibility of
each portfolio manager and CIO to be aware of all transactions in a
security by client accounts that he or she manages or oversees that took
place within the 15 days preceding a transaction in that security for his
or her personal account.
2. This Rule is designed to prevent a Putnam portfolio manager or analyst
from engaging in personal investment conduct that appears to be counter to
the investment strategy she is pursuing or recommending on behalf of a
Putnam client.
3. Trades by a Putnam portfolio manager for her personal account in the "same
direction" as the Putnam client portfolio she manages, and trades by an
analyst for his personal account in the "same direction" as his
recommendation, do not present the same danger, so long as any "same
direction" trades do not violate other provisions of the Code or the
Policy Statements.
RULE 5 ("CONTRA TRADING" RULE)
(a) Portfolio Managers: No portfolio manager shall, without prior clearance,
sell out of his personal account securities or related derivative securities
held in any Putnam client portfolio that he manages or co-manages.
(b) Chief Investment Officers: No Chief Investment Officer shall, without prior
clearance, sell out of his personal account securities or related derivative
securities held in any Putnam client portfolio managed in his investment group.
EXCEPTIONS
None, unless prior clearance is given.
IMPLEMENTATION
A. Individuals Authorized to Give Approval. Prior to engaging in any such
sale, a portfolio manager shall seek approval, in writing, of the proposed
sale. In the case of a portfolio manager or director, prior written
approval of the proposed sale shall be obtained from a chief investment
officer to whom he reports or, in his absence, another chief investment
officer. In the case of a chief investment officer, prior written approval
of the proposed sale shall be obtained from another chief investment
officer. In addition to the foregoing, prior written approval must also be
obtained from the Code of Ethics Officer.
B. Contents of Written Approval. In every instance, the written approval form
attached as Appendix C (or such other form as the Code of Ethics Officer
shall designate) shall be used. The written approval should be signed by
the chief investment officer giving approval and dated the date such
approval was given, and shall state, briefly, the reasons why the trade was
allowed and why the investment conduct pursued by the portfolio manager,
director, or chief investment officer was deemed inappropriate for the
Putnam client account controlled by the individual seeking to engage in the
transaction for his personal account. Such written approval shall be sent
by the chief investment officer approving the transaction to the Code of
Ethics Officer within twenty-four hours or as promptly as circumstances
permit. Approvals obtained after a transaction has been completed or while
it is in process will not satisfy the requirements of this Rule.
COMMENT
This Rule, like Rule 4 of this Section, is designed to prevent a Putnam
portfolio manager from engaging in personal investment conduct that appears to
be counter to the investment strategy that he is pursuing on behalf of a Putnam
client.
RULE 6
No portfolio manager shall cause, and no analyst shall recommend, a Putnam
client to take action for the portfolio manager's or analyst's own personal
benefit.
EXCEPTIONS
None.
COMMENTS
1. A portfolio manager who trades in, or an analyst who recommends,
particular securities for a Putnam client account in order to support the
price of securities in his personal account, or who "front runs" a Putnam
client order is in violation of this Rule. Portfolio managers and analysts
should be aware that this Rule is not limited to personal transactions in
securities (as that word is defined in "Definitions"). Thus, a portfolio
manager or analyst who "front runs" a Putnam client purchase or sale of
obligations of the U.S. government is in violation of this Rule, although
U.S. government obligations are excluded from the definition of
"security."
2. This Rule is not limited to instances when a portfolio manager or analyst
has malicious intent. It also prohibits conduct that creates an appearance
of impropriety. Portfolio managers and analysts who have questions about
whether proposed conduct creates an appearance of impropriety should seek
a prior written determination from the Code of Ethics Officer, using the
procedures described in Section VII, Part 3.
<PAGE>
A
Section III. Prohibited Conduct for All Employees
RULE 1
All employees must comply with applicable laws and regulations as well as
company policies. This includes tax, antitrust, and political contribution laws.
EXCEPTIONS
None.
COMMENTS
It should also be noted that the U.S. Foreign Corrupt Practices Act makes it a
criminal offense to make a payment or offer of payment to any non-U.S.
governmental official, political party, or candidate to induce that person to
affect any governmental act or decision, or to assist Putnam's obtaining or
retaining business.
RULE 2
No Putnam employee shall conduct herself in a manner which is contrary to the
interests of, or in competition with, Putnam or a Putnam client, or which
creates an actual or apparent conflict of interest with a Putnam client.
EXCEPTIONS
None.
COMMENTS
1. This Rule is designed to recognize the fundamental principle that Putnam
employees owe their chief duty and loyalty to Putnam and Putnam clients.
2. It is expected that a Putnam employee who becomes aware of an investment
opportunity that she believes is suitable for a Putnam client who she
services will present it to the appropriate portfolio manager, prior to
taking advantage of the opportunity herself.
RULE 3
No Putnam employee shall seek or accept gifts, favors, preferential treatment,
or special arrangements of material value from any broker-dealer, investment
adviser, financial institution, corporation, or other entity, or from any
existing or prospective supplier of goods or services to Putnam or Putnam Funds.
Specifically, any gift over $50 in value, or any accumulation of gifts which in
aggregate exceeds $50 in value from one source in one calendar year, is
prohibited. Any Putnam employee who is offered or receives an item prohibited by
this Rule must report the details in writing to the Code of Ethics Officer.
EXCEPTIONS
None.
COMMENTS
1. This rule is intended to permit only proper types of customary business
amenities. Listed below are examples of items that would be permitted
under proper circumstances and of items that are prohibited under this
rule. These examples are illustrative and not all-inclusive.
Notwithstanding these examples, a Putnam employee may not, under any
circumstances, accept anything that could create the appearance of any
kind of conflict of interest. For example, acceptance of any consideration
is prohibited if it would create the appearance of a "reward" or
inducement for conducting Putnam business either with the person providing
the gift or his employer.
2. This rule also applies to gifts or "favors" of material value that an
investment professional may receive from a company or other entity being
researched or considered as a possible investment for a Putnam client
account.
3. Among items not considered of "material value" which, under proper
circumstances, would be considered permissible are:
(a) Occasional lunches or dinners conducted for business purposes;
(b) Occasional cocktail parties or similar social gatherings conducted for
business purposes;
(c) Occasional attendance at theater, sporting or other entertainment
events conducted for business purposes; and
(d) Small gifts, usually in the nature of reminder advertising, such as
pens, calendars, etc., with a value of no more than $50.
4. Among items which are considered of "material value" and which are
prohibited are:
(a) Entertainment of a recurring nature such as sporting events, theater,
golf games, etc.;
(b) The cost of transportation to a locality outside the Boston
metropolitan area, and lodging while in another locality, unless such
attendance and reimbursement arrangements have received advance
written approval of the Code of Ethics Officer;
(c) Personal loans to a Putnam employee on terms more favorable than
those generally available for comparable credit standing and
collateral; and
(d) Preferential brokerage or underwriting commissions or spreads or
allocations of shares or interests in an investment for the personal
account of a Putnam employee.
5. As with any of the provisions of the Code of Ethics, a sincere belief by
the employee that he was acting in accordance with the requirements of
this Rule will not satisfy his obligations under the Rule. Therefore, an
employee who is in doubt concerning the propriety of any gift or "favor"
should seek a prior written determination from the Code of Ethics Officer,
as provided in Part 3 of Section VII.
RULE 4
No Putnam employee may pay, offer, or commit to pay any amount of consideration
which might be or appear to be a bribe or kickback in connection with Putnam's
business.
EXCEPTIONS
None.
COMMENT
Although the rule does not specifically address political contributions, Putnam
employees should be aware that it is against corporate policy to use company
assets to fund political contributions of any sort, even where such
contributions may be legal. No Putnam employee should offer or agree to make any
political contributions (including political dinners and similar fund-raisers)
on behalf of Putnam, and no employee will be reimbursed by Putnam for such
contributions made by the employee personally.
RULE 5
No contributions may be made with corporate funds to any political party or
campaign, whether directly or by reimbursement to an employee for the expense of
such a contribution. No Putnam employee shall solicit any charitable, political
or other contributions using Putnam letterhead or making reference to Putnam in
the solicitation. No Putnam employee shall personally solicit any such
contribution while on Putnam business.
EXCEPTIONS
None.
COMMENT
1. Putnam has established a political action committee (PAC) that contributes
to worthy candidates for political office. Any request received by a
Putnam employee for a political contribution must be directed to Putnam's
Legal and Compliance Department.
2. This rule does not prohibit solicitation on personal letterhead by Putnam
employees. Nonetheless, Putnam employees should use discretion in
soliciting contributions from individuals or entities who provide services
to Putnam. There should never be a suggestion that any service provider
must contribute to keep Putnam's business.
RULE 6
No unauthorized disclosure may be made by any employee or former employee of any
trade secrets or proprietary information of Putnam or of any confidential
information. No information regarding any Putnam client portfolio, actual or
proposed securities trading activities of any Putnam client, or Putnam research
shall be disclosed outside the Putnam organization without a valid business
purpose.
EXCEPTIONS
None.
COMMENT
All information about Putnam and Putnam clients is strictly confidential. Putnam
research information should not be disclosed unnecessarily and never for
personal gain.
RULE 7
No Putnam employee shall serve as officer, employee, director, trustee or
general partner of a corporation or entity other than Putnam, without prior
approval of the Code of Ethics Officer.
EXCEPTION
Charitable or Non-profit Exception. This Rule shall not prevent any Putnam
employee from serving as officer, director, or trustee of a charitable or
not-for-profit institution, provided that the employee abides by the spirit of
the Code of Ethics and the Policy Statements with respect to any investment
activity for which she has any discretion or input as officer, director, or
trustee. The pre-clearance and reporting requirements of the Code of Ethics do
not apply to the trading activities of such charitable or not-for-profit
institutions for which an employee serves as an officer, director, or trustee.
COMMENTS
1. This Rule is designed to ensure that Putnam cannot be deemed an affiliate
of any issuer of securities by virtue of service by one of its officers or
employees as director or trustee.
2. Certain charitable or not-for-profit institutions have assets (such as
endowment funds or employee benefit plans) which require prudent
investment. To the extent that a Putnam employee (because of her position
as officer, director, or trustee of an outside entity) is charged with
responsibility to invest such assets prudently, she may not be able to
discharge that duty while simultaneously abiding by the spirit of the Code
of Ethics and the Policy Statements. Employees are cautioned that they
should not accept service as an officer, director, or trustee of an
outside charitable or not-for-profit entity where such investment
responsibility is involved, without seriously considering their ability to
discharge their fiduciary duties with respect to such investments.
RULE 8
No Putnam employee shall serve as a trustee, executor, custodian, any other
fiduciary, or as an investment adviser or counselor for any account outside
Putnam.
EXCEPTIONS
Charitable or Religious Exception. This Rule shall not prevent any Putnam
employee from serving as fiduciary with respect to a religious or charitable
trust or foundation, so long as the employee abides by the spirit of the Code of
Ethics and the Policy Statements with respect to any investment activity over
which he has any discretion or input. The pre-clearance and reporting
requirements of the Code of Ethics do not apply to the trading activities of
such a religious or charitable trust or foundation.
Family Trust or Estate Exception. This Rule shall not prevent any Putnam
employee from serving as fiduciary with respect to a family trust or estate, so
long as the employee abides by all of the Rules of the Code of Ethics with
respect to any investment activity over which he has any discretion.
COMMENT
The roles permissible under this Rule may carry with them the obligation to
invest assets prudently. Once again, Putnam employees are cautioned that they
may not be able to fulfill their duties in that respect while abiding by the
Code of Ethics and the Policy Statements.
RULE 9
No Putnam employee may be a member of any investment club.
EXCEPTIONS
None.
COMMENT
This Rule guards against the danger that a Putnam employee may be in violation
of the Code of Ethics and the Policy Statements by virtue of his personal
securities transactions in or through an entity that is not bound by the
restrictions imposed by this Code of Ethics and the Policy Statements. Please
note that this restriction also applies to the spouse of a Putnam employee and
any relatives of a Putnam employee living in the same household as the employee,
as their transactions are covered by the Code of Ethics (see page x).
RULE 10
No Putnam employee may become involved in a personal capacity in consultations
or negotiations for corporate financing, acquisitions or other transactions for
outside companies (whether or not held by any Putnam client), nor negotiate nor
accept a fee in connection with these activities without obtaining the prior
written permission of the president of Putnam Investments.
EXCEPTIONS
None.
RULE 11
No new types of securities or instruments may be purchased for a Putnam fund or
other client account without the prior approval of the Risk Management
Committee.
EXCEPTIONS
None.
COMMENT
See Appendix D.
RULE 12
No employee may create or participate in the creation of any record that is
intended to mislead anyone or to conceal anything that is improper.
EXCEPTIONS
None.
COMMENT
In many cases, this is not only a matter of company policy and ethical behavior
but also required by law. Our books and records must accurately reflect the
transactions represented and their true nature. For example, records must be
accurate as to the recipient of all payments; expense items, including personal
expense reports, must accurately reflect the true nature of the expense. No
unrecorded fund or asset shall be established or maintained for any reason.
RULE 13
No employee should have any direct or indirect (including by a family member or
close relative) personal financial interest (other than normal investments not
material to the employee in the entity's publicly traded securities) in any
business, with which Putnam has dealings unless such interest is disclosed and
approved by the Code of Ethics Officer.
RULE 14
No employee shall, with respect to any affiliate of Putnam that provides
investment advisory services and is listed below in Comment 4 to this Rule, as
revised from time to time (each an "NPA"),
(a) directly or indirectly seek to influence the purchase, retention, or
disposition of, or exercise of voting, consent, approval or similar rights with
respect to, any portfolio security in any account or fund advised by the NPA and
not by Putnam,
(b) transmit any information regarding the purchase, retention or disposition
of, or exercise of voting, consent, approval or similar rights with respect to,
any portfolio security held in a Putnam or NPA client account to any personnel
of the NPA,
(c) transmit any trade secrets, proprietary information, or confidential
information of Putnam to the NPA without a valid business purpose,
(d) use confidential information or trade secrets of the NPA for the benefit of
the employee, Putnam, or any other NPA, or
(e) breach any duty of loyalty to the NPA by virtue of service as a director or
officer of the NPA.
COMMENT
1. Sections (a) and (b) of the Rule are designed to help ensure that the
portfolio holdings of Putnam clients and clients of the NPA need not be
aggregated for purposes of determining beneficial ownership under Section
13(d) of the Securities Exchange Act or applicable regulatory or
contractual investment restrictions that incorporate such definition of
beneficial ownership. Persons who serve as directors or officers of both
Putnam and an NPA would take care to avoid even inadvertent violations of
Section (b). Section (a) does not prohibit a Putnam employee who serves as
a director or officer of the NPA from seeking to influence the modification
or termination of a particular investment product or strategy in a manner
that is not directed at any specific securities. Sections (a) and (b) do
not apply when a Putnam affiliate serves as an adviser or subadviser to the
NPA or one of its products, in which case normal Putnam aggregation rules
apply.
2. As a separate entity, any NPA may have trade secrets or confidential
information that it would not choose to share with Putnam. This choice must
be respected.
3. When Putnam employees serve as directors or officers of an NPA, they are
subject to common law duties of loyalty to the NPA, despite their Putnam
employment. In general, this means that when performing their duties as
NPA directors or officers, they must act in the best interest of the NPA
and its shareholders. Putnam's Legal and Compliance Department will assist
any Putnam employee who is a director or officer of an NPA and has
questions about the scope of his or her responsibilities to the NPA.
4. Entities that are currently non-Putnam affiliates within the scope of this
Rule are: Cisalpina Gestioni, S.p.A., PanAgora Asset Management Inc.,
PanAgora Asset Management Ltd., Nissay Asset Management Co., Ltd., and
Thomas H. Lee Partners, L.P.
RULE 15
No employee shall use computer hardware, software, data, Internet, electronic
mail, voice mail, electronic messaging ("e-mail" or "cc: Mail"), or telephone
communications systems in a manner that is inconsistent with their use as set
forth in policy statements governing their use that are adopted from time to
time by Putnam. No employee shall introduce a computer "virus" or computer code
that may result in damage to Putnam's information or computer systems.
EXCEPTIONS
None.
COMMENT
1. Internet and Electronic Messaging Policies. As more and more employees of
Putnam Investments use the Internet to connect with Putnam's customers,
vendors, suppliers and other key organizations, it is important that all
Putnam employees understand the appropriate use guidelines and how to
protect assets of Putnam and its clients whenever using the Internet.
Internet access is provided to designated employees to connect with
worldwide information resources for the benefit of the company and its
clients. Such access is not intended for personal use. Employees using the
Internet or any electronic messaging system must do so in a responsible,
ethical and lawful manner.
o Putnam has adopted a Policy and Guidelines on Internet Use. A copy of this
policy statement is included in the Putnam Employee Handbook and is
available online (you may contact Putnam's Human Resources Department for
the on-line address). Failure to comply with this policy statement is a
violation of Putnam's Code of Ethics.
2. System Security Policy Statement. It is the policy of Putnam Investments to
secure its computer hardware, software, data, electronic mail, voice mail
and Internet access by placing strict controls and restrictions on their
access and use.
o Putnam has adopted a System Security Policy Statement. This policy
statement governs the use of computer hardware and software, data,
electronic mail, voice mail, Internet and commercial online services,
computer passwords and logon Ids, and workstation security. A copy of this
policy statement is included in the Putnam Employee Handbook and is
available online (you may contact Putnam's Human Resources Department for
the on-line address). Failure to comply with this policy statement is a
violation of Putnam's Code of Ethics.
3. Computer Virus Policy and Procedure. Putnam has adopted a Computer Virus
Policy and Procedure. This policy sets forth guidelines to prevent
computer viruses, procedures to be followed in the event a computer may be
infected with a virus, and a description of virus symptoms. A copy of this
policy statement is included in the Putnam Employee Handbook and is
available online (you may contact Putnam's Human Resources Department for
the on-line address). Failure to comply with this policy statement is a
violation of Putnam's Code of Ethics.
<PAGE>
A
Section IV. Special Rules for Officers and Employees of Putnam Europe Ltd.
RULE 1
In situations subject to Section I.A., Rule 1 (Restricted List Personal
Securities Transactions), the Putnam Europe Ltd. ("PEL") employee must obtain
clearance not only as provided in that rule, but also from PEL's Compliance
Officer or her designee, who must approve the transaction before any trade is
placed and record the approval.
EXCEPTIONS
None.
IMPLEMENTATION
Putnam's Code of Ethics Administrator in Boston (the "Boston Administrator") has
also been designated the Assistant Compliance Officer of PEL and has been
delegated the right to approve or disapprove personal securities transactions in
accordance with the foregoing requirement. Therefore, approval from the Code of
Ethics Administrator for PEL employees to make personal securities investments
constitutes approval under the Code of Ethics and also for purposes of
compliance with IMRO, the U.K. self-regulatory organization that regulates PEL.
The position of London Code of Ethics Administrator (the "London Administrator")
has also been created (Jane Barlow is the current London Administrator). All
requests for clearances must be made by e-mail to the Boston Administrator
copying the London Administrator. The e-mail must include the number of shares
to be bought or sold and the name of the broker(s) involved. Where time is of
the essence clearances can be made by telephone to the Boston Administrator but
they must be followed up by e-mail.
Both the Boston and London Administrators will maintain copies of all clearances
for inspection by senior management and regulators.
RULE 2
No PEL employee may trade with any broker or dealer unless that broker or dealer
has sent a letter to the London Administrator agreeing to deliver copies of
trade confirmations to PEL. No PEL employee may enter into any margin or any
other special dealing arrangement with any broker-dealer without the prior
written consent of the PEL Compliance Officer.
EXCEPTIONS
None.
IMPLEMENTATION
PEL employees will be notified separately of this requirement once a year by the
PEL Compliance Officer, and are required to provide an annual certification of
compliance with the Rule.
All PEL employees must inform the London Administrator of the names of all
brokers and dealers with whom they trade prior to trading. The London
Administrator will send a letter to the broker(s) in question requesting them to
agree to deliver copies of confirms to PEL. The London Administrator will
forward copies of the confirms to the Boston Administrator. PEL employees may
trade with a broker only when the London Administrator has received the signed
agreement from that broker.
RULE 3
For purposes of the Code of Ethics, including Putnam's Policy Statement on
Insider Trading Prohibitions, PEL employees must also comply with Part V of the
Criminal Justice Act 1993 on insider dealing.
EXCEPTIONS
None.
IMPLEMENTATION
To ensure compliance with U.K. insider dealing legislation, PEL employees must
observe the relevant procedures set forth in PEL's Compliance Manual, a copy of
which is sent to each PEL employee, and sign an annual certification as to
compliance.
<PAGE>
A
Section V. Reporting Requirements for All Employees
RULE 1
Each Putnam employee shall ensure that broker-dealers send all confirmations of
securities transactions for his personal accounts to the Code of Ethics Officer.
(For the purpose of this Rule, "securities" shall include securities of The
Marsh & McLennan Companies, Inc., and any option on a security or securities
index, including broad-based market indexes.)
EXCEPTIONS
None.
IMPLEMENTATION
1. Putnam employees must instruct their broker-dealers to send confirmations
to Putnam and must follow up with the broker-dealer on a reasonable basis
to ensure that the instructions are being followed. Putnam employees
should contact the Code of Ethics Administrator to obtain a letter from
Putnam authorizing the setting up of a personal brokerage account.
Confirmations should be submitted to the Code of Ethics Administrator.
(Specific procedures apply to employees of Putnam Europe Ltd. ("PEL").
Employees of PEL should contact the London Code of Ethics Administrator.)
Failure of a broker-dealer to comply with the instructions of a Putnam
employee to send confirmations shall be a violation by the Putnam employee
of this Rule.
COMMENTS
1. "Transactions for personal accounts" is defined broadly to include more
than transaction in accounts under an employee's own name. See Definitions.
2. A confirmation is required for all personal securities transactions,
whether or not exempted or excepted by this Code.
3. To the extent that a Putnam employee has investment authority over
securities transactions of a family trust or estate, confirmations of
those transactions must also be made, unless the employee has received a
prior written exception from the Code of Ethics Officer.
<PAGE>
RULE 2
Every Access Person shall file a quarterly report, within ten calendar days of
the end of each quarter, recording all purchases and sales of any securities for
personal accounts as defined in the Definitions. (For the purpose of this Rule,
"securities" shall include securities of The Marsh & McLennan Companies, Inc.,
and any option on a security or securities index, including broad-based market
indexes.)
EXCEPTIONS
None.
IMPLEMENTATION
All employees required to file such a report will receive a blank form at the
end of the quarter from the Code of Ethics Administrator. The form will specify
the information to be reported. The form shall also contain a representation
that employees have complied fully with all provisions of the Code of Ethics.
COMMENT
1. The date for each transaction required to be disclosed in the quarterly
report is the trade date for the transaction, not the settlement date.
2. If the requirement to file a quarterly report applies to you and you fail
to report within the required 10-day period, salary increases and bonuses
will be reduced in accordance with guidelines stated in the form.
<PAGE>
A
Section VI. Education Requirements for All Employees
Every Putnam employee has an obligation to fully understand the requirements of
the Code of Ethics. The Rules set forth below are designed to enhance this
understanding.
RULE 1
A copy of the Code of Ethics will be distributed to every Putnam employee
periodically. All Access Persons will be required to certify periodically that
they have read, understood, and will comply with the provisions of the Code of
Ethics, including the Code's Policy Statement Concerning Insider Trading
Prohibitions.
RULE 2
Every investment professional will attend a meeting periodically at which the
Code of Ethics will be reviewed.
<PAGE>
A
Section VII. Compliance and Appeal Procedures
1. Assembly of Restricted List. The Code of Ethics Administrator will
coordinate the assembly and maintenance of the Restricted List. The list
will be assembled each day by 11:30 a.m. EST. No employee may engage in a
personal securities transaction without prior clearance on any day, even if
the employee believes that the trade will be subject to an exception. Note
that pre-clearance may be obtained after 9:00 a.m. for purchases or sales
of up to 1,000 shares of issuers having a market capitalization in excess
of $1 billion.
2. Consultation of Restricted List. It is the responsibility of each employee
to pre-clear through the Intranet pre-clearance system or consult with the
Code of Ethics Administrator prior to engaging in a personal securities
transaction, to determine if the security he proposes to trade is on the
Restricted List and, if so, whether it is subject to the "Large Cap"
limitation. The Intranet pre-clearance system and the Code of Ethics
Administrator will be able to tell an employee whether a security is on the
Restricted List. No other information about the Restricted List is
available through the Intranet pre-clearance system. The Code of Ethics
Administrator shall not be authorized to answer any questions about the
Restricted List, or to render an opinion about the propriety of a
particular personal securities transaction. Any such questions shall be
directed to the Code of Ethics Officer.
3. Request for Determination. An employee who has a question concerning the
applicability of the Code of Ethics to a particular situation shall
request a determination from the Code of Ethics Officer before engaging in
the conduct or personal securities transaction about which he has a
question.
If the question pertains to a personal securities transaction, the request
shall state for whose account the transaction is proposed, the
relationship of that account to the employee, the security proposed to be
traded, the proposed price and quantity, the entity with whom the
transaction will take place (if known), and any other information or
circumstances of the trade that could have a bearing on the Code of Ethics
Officer's determination. If the question pertains to other conduct, the
request for determination shall give sufficient information about the
proposed conduct to assist the Code of Ethics Officer in ascertaining the
applicability of the Code. In every instance, the Code of Ethics Officer
may request additional information, and may decline to render a
determination if the information provided is insufficient.
The Code of Ethics Officer shall make every effort to render a
determination promptly.
No perceived ambiguity in the Code of Ethics shall excuse any violation.
Any person who believes the Code to be ambiguous in a particular situation
shall request a determination from the Code of Ethics Officer.
4. Request for Ad Hoc Exemption. Any employee who wishes to obtain an ad hoc
exemption under Section I.D., Rule 2, shall request from the Code of Ethics
Officer an exemption in writing in advance of the conduct or transaction
sought to be exempted. In the case of a personal securities transaction,
the request for an ad hoc exemption shall give the same information about
the transaction required in a request for determination under Part 3 of
this Section, and shall state why the proposed personal securities
transaction would be unlikely to affect a highly institutional market, or
is unrelated economically to securities to be purchased, sold, or held by
any Putnam client. In the case of other conduct, the request shall give
information sufficient for the Code of Ethics Officer to ascertain whether
the conduct raises questions of propriety or conflict of interest (real or
apparent).
The Code of Ethics Officer shall make every effort to promptly render a
written determination concerning the request for an ad hoc exemption.
5. Appeal to Code of Ethics Officer with Respect to Restricted List. If an
employee ascertains that a security that he wishes to trade for his
personal account appears on the Restricted List, and thus the transaction
is prohibited, he may appeal the prohibition to the Code of Ethics Officer
by submitting a written memorandum containing the same information as
would be required in a request for a determination. The Code of Ethics
Officer shall make every effort to respond to the appeal promptly.
6. Information Concerning Identity of Compliance Personnel. The names of Code
of Ethics personnel are available by contacting the Legal and Compliance
Department.
<PAGE>
Appendix A
Policy Statement Concerning Insider Trading Prohibitions
piv
s
<PAGE>
A
Preamble
Putnam has always forbidden trading on material nonpublic information ("inside
information") by its employees. Tougher federal laws make it important for
Putnam to restate that prohibition in the strongest possible terms, and to
establish, maintain, and enforce written policies and procedures to prevent the
misuse of material nonpublic information.
Unlawful trading while in possession of inside information can be a crime.
Today, federal law provides that an individual convicted of trading on inside
information go to jail for some period of time. There is also significant
monetary liability for an inside trader; the Securities and Exchange Commission
can seek a court order requiring a violator to pay back profits and penalties of
up to three times those profits. In addition, private plaintiffs can seek
recovery for harm suffered by them. The inside trader is not the only one
subject to liability. In certain cases, "controlling persons" of inside traders
(including supervisors of inside traders or Putnam itself) can be liable for
large penalties.
Section 1 of this Policy Statement contains rules concerning inside information.
Section 2 contains a discussion of what constitutes unlawful insider trading.
Neither material nonpublic information nor unlawful insider trading is easy to
define. Section 2 of this Policy Statement gives a general overview of the law
in this area. However, the legal issues are complex and must be resolved by the
Code of Ethics Officer. If an employee has any doubt as to whether she has
received material nonpublic information, she must consult with the Code of
Ethics Officer prior to using that information in connection with the purchase
or sale of a security for his own account or the account of any Putnam client,
or communicating the information to others. A simple rule of thumb is if you
think the information is not available to the public at large, don't disclose it
to others and don't trade securities to which the inside information relates. If
an employee has failed to consult the Code of Ethics Officer, Putnam will not
excuse employee misuse of inside information on the ground that the employee
claims to have been confused about this Policy Statement or the nature of the
information in his possession.
If Putnam determines, in its sole discretion, that an employee has failed to
abide by this Policy Statement, or has engaged in conduct that raises a
significant question concerning insider trading, he will be subject to
disciplinary action, including termination of employment.
THERE ARE NO EXCEPTIONS TO THIS POLICY STATEMENT AND NO ONE IS EXEMPT.
<PAGE>
A
Definitions: Insider Trading
Gender references in Appendix A alternate.
Code of Ethics Administrator. The individual designated by the Code of Ethics
Officer to assume responsibility for day-to-day, non-discretionary
administration of this Policy Statement.
Code of Ethics Officer. The Putnam officer who has been assigned the
responsibility of enforcing and interpreting this Policy Statement. The
Code of Ethics Officer shall be the General Counsel or such other person
as is designated by the President of Putnam Investments. If he is
unavailable, the Deputy Code of Ethics Officer (to be appointed by the
Code of Ethics Officer) shall act in his stead.
Immediate family. Spouse, minor children or other relatives living in the same
household as the Putnam employee.
Purchase or sale of a security. Any acquisition or transfer of any interest in
the security for direct or indirect consideration, including the writing
of an option.
Putnam. Any or all of Putnam Investments, Inc., and its subsidiaries, any one of
which shall be a "Putnam company."
Putnam client. Any of the Putnam Funds, or any advisory or trust client of
Putnam.
Putnam employee (or "employee"). Any employee of Putnam.
Security. Anything defined as a security under federal law. The term includes
any type of equity or debt security, any interest in a business trust or
partnership, and any rights relating to a security, such as put and call
options, warrants, convertible securities, and securities indices. (Note:
The definition of "security" in this Policy Statement varies significantly
from that in the Code of Ethics. For example, the definition in this
Policy Statement specifically includes securities of The Marsh & McLennan
Companies, Inc.)
Transaction for a personal account (or "personal securities transaction").
Securities transactions: (a) for the personal account of any employee; (b)
for the account of a member of the immediate family of any employee; (c)
for the account of a partnership in which a Putnam employee or immediate
family member is a partner with investment discretion; (d) for the account
of a trust in which a Putnam employee or immediate family member is a
trustee with investment discretion; (e) for the account of a closely-held
corporation in which a Putnam employee or immediate family member holds
shares and for which he has investment discretion; and (f) for any account
other than a Putnam client account which receives investment advice of any
sort from the employee or immediate family member, or as to which the
employee or immediate family member has investment discretion.
Officers and employees of Putnam Europe Ltd. ("PEL") must also consult the
relevant procedures on compliance with U.K. insider dealing legislation
set forth in PEL's Compliance Manual (see Rule 3 of Section IV of the Code
of Ethics).
<PAGE>
A
Section 1. Rules Concerning Inside Information
RULE 1
No Putnam employee shall purchase or sell any security listed on the Inside
Information List (the "Red List") either for his personal account or for a
Putnam client.
IMPLEMENTATION
When an employee contacts the Code of Ethics Administrator seeking clearance for
a personal securities transaction, the Code of Ethics Administrator's response
as to whether a security appears on the Restricted List will include securities
on the Red List.
COMMENT
This Rule is designed to prohibit any employee from trading a security while
Putnam may have inside information concerning that security or the issuer. Every
trade, whether for a personal account or for a Putnam client, is subject to this
Rule.
RULE 2
No Putnam employee shall purchase or sell any security, either for a personal
account or for the account of a Putnam client, while in possession of material,
nonpublic information concerning that security or the issuer, without the prior
written approval of the Code of Ethics Officer.
IMPLEMENTATION
In order to obtain prior written approval of the Code of Ethics Officer, a
Putnam employee should follow the reporting steps prescribed in Rule 3.
COMMENTS
1. Rule 1 concerns the conduct of an employee when Putnam possesses material
nonpublic information. Rule 2 concerns the conduct of an employee who
herself possesses material, nonpublic information about a security that is
not yet on the Red List.
2. If an employee has any question as to whether information she possesses is
material and/or nonpublic information, she must contact the Code of Ethics
Officer in accordance with Rule 3 prior to purchasing or selling any
security related to the information or communicating the information to
others. The Code of Ethics Officer shall have the sole authority to
determine what constitutes material, nonpublic information for the
purposes of this Policy Statement. An employee's mistaken belief that the
information was not material nonpublic information will not excuse a
violation of this Policy Statement.
RULE 3
Any Putnam employee who believes he may have received material, nonpublic
information concerning a security or the issuer shall immediately report the
information to the Code of Ethics Officer and to no one else. After reporting
the information, the Putnam employee shall comply strictly with Rule 2 by not
trading in the security without the prior written approval of the Code of Ethics
Officer and shall: (a) take precautions to ensure the continued confidentiality
of the information; and (b) refrain from communicating the information in
question to any person.
EXCEPTION
This rule shall not apply to material, nonpublic information obtained by Putnam
employees who are directors or trustees of publicly traded companies, to the
extent that such information is received in their capacities as directors or
trustees, and then only to the extent such information is not communicated to
anyone else within the Putnam organization.
IMPLEMENTATION
1. In order to make any use of potential material, nonpublic information,
including purchasing or selling a security or communicating the information
to others, an employee must communicate that information to the Code of
Ethics Officer in a way designed to prevent the spread of such information.
Once the employee has reported potential material, nonpublic information to
the Code of Ethics Officer, the Code of Ethics Officer will evaluate
whether information constitutes material, nonpublic information, and
whether a duty exists that makes use of such information improper. If the
Code of Ethics Officer determines either (a) that the information is not
material or is public, or (b) that use of the information is proper, he
will issue a written approval to the employee specifically authorizing
trading while in possession of the information, if the employee so
requests. If the Code of Ethics Officer determines (a) that the information
may be nonpublic and material, and (b) that use of such information may be
improper, he will place the security that is the subject of such
information on the Red List.
2. An employee who reports potential inside information to the Code of Ethics
Officer should expect that the Code of Ethics Officer will need
significant information to make the evaluation described in the foregoing
paragraph, including information about (a) the manner in which the
employee acquired the information, and (b) the identity of individuals to
whom the employee has revealed the information, or who have otherwise
learned the information. The Code of Ethics Officer may place the affected
security or securities on the Red List pending the completion of his
evaluation.
3. If an employee possesses documents, disks, or other materials containing
the potential inside information, an employee must take precautions to
ensure the confidentiality of the information in question. Those
precautions include (a) putting documents containing such information out
of the view of a casual observer, and (b) securing files containing such
documents or ensuring that computer files reflecting such information are
secure from viewing by others.
<PAGE>
A
Section 2. Overview of Insider Trading
A. Introduction
This section of the Policy Statement provides guidelines for employees as
to what may constitute inside information. It is possible that in the
course of her employment, an employee may receive inside information. No
employee should misuse that information, either by trading for her own
account or by communicating the information to others.
B. What constitutes unlawful insider trading?
The basic definition of unlawful insider trading is trading on material,
nonpublic information (also called "inside information") by an individual
who has a duty not to "take advantage" of the information. What does this
definition mean? The following sections help explain the definition.
1. What is material information?
Trading on inside information is not a basis for liability unless the
information is material. Information is "material" if a reasonable
person would attach importance to the information in determining his
course of action with respect to a security. Information which is
reasonably likely to affect the price of a company's securities is
"material," but effect on price is not the sole criterion for
determining materiality. Information that employees should consider
material includes but is not limited to: dividend changes, earnings
estimates, changes in previously released earnings estimates,
reorganization, recapitalization, asset sales, plans to commence a
tender offer, merger or acquisition proposals or agreements, major
litigation, liquidity problems, significant contracts, and
extraordinary management developments.
Material information does not have to relate to a company's business.
For example, a court considered as material certain information about
the contents of a forthcoming newspaper column that was expected to
affect the market price of a security. In that case, a reporter for
The Wall Street Journal was found criminally liable for disclosing to
others the dates that reports on various companies would appear in
the Journal's "Heard on the Street" column and whether those reports
would be favorable or not.
2. What is nonpublic information?
Information is nonpublic until it has been effectively communicated
to, and sufficient opportunity has existed for it to be absorbed by,
the marketplace. 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 Securities and Exchange Commission, or
appearing in Dow Jones, Reuters Economic Services, The Wall Street
Journal, or other publications of general circulation would be
considered public.
3. Who has a duty not to "take advantage" of inside information?
Unlawful insider trading occurs only if there is a duty not to "take
advantage" of material nonpublic information. When there is no such
duty, it is permissible to trade while in possession of such
information. Questions as to whether a duty exists are complex,
fact-specific, and must be answered by a lawyer.
a. Insiders and Temporary Insiders. Corporate "insiders" have a
duty not to take advantage of inside information. The concept
of "insider" is broad. It includes officers, directors, and
employees of a corporation. In addition, a person can be a
"temporary insider" if she enters into a special confidential
relationship with a corporation and as a result is given access
to information concerning the corporation's affairs. A
temporary insider can include, among others, accounting firms,
consulting firms, law firms, banks and the employees of such
organizations. Putnam would generally be a temporary insider of
a corporation it advises or for which it performs other
services, because typically Putnam clients expect Putnam to
keep any information disclosed to it confidential.
Example
An investment adviser to the pension fund of a large
publicly-traded corporation, Acme, Inc., learns from an Acme
employee that Acme will not be making the minimum required
annual contribution to the pension fund because of a serious
downturn in Acme's financial situation. The information
conveyed is material and nonpublic.
Comment
Neither the investment adviser, its employees, nor clients can
trade on the basis of that information, because the investment
adviser and its employees could be considered "temporary
insiders" of Acme.
b. Misappropriators. Certain people who are not insiders (or
temporary insiders) also have a duty not to deceptively take
advantage of inside information. Included in this category is
an individual who "misappropriates" (or takes for his own use)
material, nonpublic information in violation of a duty owed
either to the corporation that is the subject of inside
information or some other entity. Such a misappropriator can be
held liable if he trades while in possession of that material,
nonpublic information.
Example
The chief financial officer of Acme, Inc., is aware of Acme's
plans to engage in a hostile takeover of Profit, Inc. The
proposed hostile takeover is material and nonpublic.
COMMENT
The chief financial officer of Acme cannot trade in Profit,
Inc.'s stock for his own account. Even though he owes no duty
to Profit, Inc., or its shareholders, he owes a duty to Acme
not to "take advantage" of the information about the proposed
hostile takeover by using it for his personal benefit.
c. Tippers and Tippees. A person (the "tippee") who receives
material, nonpublic information from an insider or
misappropriator (the "tipper") has a duty not to trade while in
possession of that information if he knew or should have known
that the information was provided by the tipper for an improper
purpose and in breach of a duty owed by the tipper. In this
context, it is an improper purpose for a person to provide such
information for personal benefit, such as money, affection, or
friendship.
Example
The chief executive officer of Acme, Inc., tells his daughter
that negotiations concerning a previously-announced acquisition
of Acme have been terminated. This news is material and, at the
time the father tells his daughter, nonpublic. The daughter
sells her shares of Acme.
Comment
The father is a tipper because he has a duty to Acme and its
shareholders not to "take advantage" of the information
concerning the breakdown of negotiations, and he has conveyed
the information for an "improper" purpose (here, out of love
and affection for his daughter). The daughter is a "tippee" and
is liable for trading on inside information because she knew or
should have known that her father was conveying the information
to her for his personal benefit, and that her father had a duty
not to "take advantage" of Acme information.
A person can be a tippee even if he did not learn the
information directly from the tipper, but learned it from a
previous tippee.
Example
An employee of a law firm which works on mergers and
acquisitions learns at work about impending acquisitions. She
tells her friend and her friend's stockbroker about the
upcoming acquisitions on a regular basis. The stockbroker tells
the brother of a client on a regular basis, who in turn tells
two friends, A and B. A and B buy shares of the companies being
acquired before public announcement of the acquisition, and
regularly profit from such purchases. A and B do not know the
employee of the law firm. They do not, however, ask about the
source of the information.
Comment
A and B, although they have never heard of the tipper, are
tippees because they did not ask about the source of the
information, even though they were experienced investors, and
were aware that the "tips" they received from this particular
source were always right.
C. Who can be liable for insider trading?
The categories of individuals discussed above (insiders, temporary
insiders, misappropriators or tippees) can be liable if they trade while
in possession of material nonpublic information.
In addition, individuals other than those who actually trade on inside
information can be liable for trades of others. A tipper can be liable if
(a) he provided the information in exchange for a personal benefit in
breach of a duty and (b) the recipient of the information (the "tippee")
traded while in possession of the information.
Most importantly, a controlling person can be liable if the controlling
person "knew or recklessly disregarded" the fact that the controlled
person was likely to engage in misuse of inside information and failed to
take appropriate steps to prevent it. Putnam is a "controlling person" of
its employees. In addition, certain supervisors may be "controlling
persons" of those employees they supervise.
Example
A supervisor of an analyst learns that the analyst has, over a long
period of time, secretly received material inside information from Acme,
Inc.'s chief financial officer. The supervisor learns that the analyst
has engaged in a number of trades for his personal account on the basis
of the inside information. The supervisor takes no action.
Comment
Even if he is not liable to a private plaintiff, the supervisor can be
liable to the Securities and Exchange Commission for a civil penalty of
up to three times the amount of the analyst's profit. (Penalties are
discussed in the following section.)
D. Penalties for Insider Trading
Penalties for misuse of inside information are severe, both for
individuals involved in such unlawful conduct and their employers. A
person who violates the insider trading laws can be subject to some or
all of the penalties below, even if he does not personally benefit from
the violation. Penalties include:
-- jail sentences (of which at least one to three years must be served)
-- criminal penalties for individuals of up to $1,000,000, and for
corporations of up to $2,500,000
-- injunctions permanently preventing an individual from working in the
securities industry
-- injunctions ordering an individual to pay over profits obtained from
unlawful insider trading
-- civil penalties of up to three times the profit gained or loss
avoided by the trader, even if the individual paying the penalty did
not trade or did not benefit personally
-- civil penalties for the employer or other controlling person of up to
the greater of $1,000,000 or three times the amount of profit gained
or loss avoided
-- damages in the amount of actual losses suffered by other participants
in the market for the security at issue.
Regardless of whether penalties or money damages are sought by others, Putnam
will take whatever action it deems appropriate (including dismissal) if Putnam
determines, in its sole discretion, that an employee appears to have committed
any violation of this Policy Statement, or to have engaged in any conduct which
raises significant questions about whether an insider trading violation has
occurred.
<PAGE>
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Appendix B. Policy Statement Regarding Employee Trades in Shares of
Putnam Closed-End Funds
1. Pre-clearance for all employees
Any purchase or sale of Putnam closed-end fund shares by a Putnam employee must
be pre-cleared by the Code of Ethics Officer or, in his absence, the Deputy Code
of Ethics Officer. A list of the closed-end funds can be obtained from the Code
of Ethics Administrator. Trading in shares of closed-end funds is subject to all
the rules of the Code of Ethics.
2. Special Rules Applicable to Managing Directors of Putnam Investment
Management, Inc. and officers of the Putnam Funds
Please be aware that any employee who is a Managing Director of Putnam
Investment Management, Inc. (the investment manager of the Putnam mutual funds)
and officers of the Putnam Funds will not receive clearance to engage in any
combination of purchase and sale or sale and purchase of the shares of a given
closed-end fund within six months of each other. Therefore, purchases should be
made only if you intend to hold the shares more than six months; no sales of
fund shares should be made if you intend to purchase additional shares of that
same fund within six months.
You are also required to file certain forms with the Securities and Exchange
Commission in connection with purchases and sales of Putnam closed-end funds.
Please contact the Code of Ethics Officer or Deputy Code of Ethics Officer for
further information.
3. Reporting by all employees
As with any purchase or sale of a security, duplicate confirmations of all such
purchases and sales must be forwarded to the Code of Ethics Officer by the
broker-dealer utilized by an employee. If you are required to file a quarterly
report of all personal securities transactions, this report should include all
purchases and sales of closed-end fund shares.
Please contact the Code of Ethics Officer or Deputy Code of Ethics Officer if
there are any questions regarding these matters.
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Appendix C. Clearance Form for Portfolio Manager Sales Out of Personal
Account of Securities Also Held by Fund (For
compliance with "Contra-Trading" Rule)
TO: Code of Ethics Officer
FROM:
DATE:
RE: Personal Securities Transaction of
This serves as prior written approval of the personal securities transaction
described below:
NAME OF PORTFOLIO MANAGER CONTEMPLATING PERSONAL TRADE:
SECURITY TO BE TRADED:
AMOUNT TO BE TRADED:
FUND HOLDING SECURITIES:
AMOUNT HELD BY FUND:
REASON FOR PERSONAL TRADE:
SPECIFIC REASON SALE OF SECURITIES IS INAPPROPRIATE FOR FUND:
(Please attach additional sheets if necessary.)
APPROVED: DATE:
-------------------------------------------------------------
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A
Appendix D. Procedures for Approval of New Financial Instruments
1. Summary
a. The Putnam Risk Management Committee ("RMC") has adopted
procedures for the introduction of new instruments and
securities, focusing on, but not limited to, derivatives.
b. No new types of securities or instruments may be purchased for
any Putnam fund or other client account without the approval of
the RMC.
c. The RMC publishes from time to time a list of approved
derivatives. The purchase of any derivative not listed is
prohibited without specific authorization from the RMC.
2. Procedures
a. Introduction. The purchase and sale of financial instruments
that have not been used previously at Putnam raise significant
investment, business, operational, and compliance issues. In
order to address these issues in a comprehensive manner, the
RMC has adopted the following procedures for obtaining approval
of the use of new instruments or investments. In addition, to
provide guidance regarding the purchase of derivatives, the RMC
publishes from time to time a list of approved derivatives.
Only derivatives listed may be used for Putnam funds or
accounts unless specifically authorized by the RMC.
b. Process of approval. An investment professional wishing to
purchase a new type of investment should discuss it with the
Investment Division's Administrative office (the current contact
is Julie Malloy). Investment Division Administration will
coordinate a review of a new instrument by appropriate RMC
members from an investment, operational and compliance
perspective, including the review of instruments by the
Administrative Services Division of PFTC. Based on this review,
the RMC will then approve or disapprove the proposed new
investment. Investment professionals must build in adequate time
for this review before planned use of a new instrument. Further,
the approval of the RMC is only a general one. Individual fund
and account guidelines must be reviewed in accordance with
standard compliance procedures to determine whether purchase is
permitted. In addition, if the instrument involves legal
documentation, that documentation must be reviewed and be
completed before trading. The RMC may prepare a compliance and
operational manual for the new derivative.
3. Violations
a. Putnam's Operating Committee has determined that adherence to
rigorous internal controls and procedures for novel securities
and instruments is necessary to protect Putnam's business
standing and reputation. Violation of these procedures will be
treated as violation of both compliance guidelines and Putnam's
Code of Ethics. The RMC encourages questions and expects that
these guidelines will be interpreted conservatively.
<PAGE>
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Index
"15-Day Rule"
for transactions by managers, analysts and CIOs, 17
"60-Day Rule", 15
Analysts
special rules on trading by, 15
Appeals
Procedures, 39
Bankers' acceptances
excluded from securities, x
Blackout rule
on trading by portfolio managers, analysts and CIOs, 18
Bribes, 24
CDs
excluded from securities, x
Clearance
required for personal securities transactions, 1
Closed-end funds
rules on trading, 57
Commercial paper
excluded from securities, x
Commodities (other than securities indices)
excluded from securities, x
Computer use
compliance with corporate policies required, 30
Confidentiality
required of all employees, 25
Confirmations
of personal transactions required, 35
Conflicts of interest
with Putnam and Putnam clients prohibited, 22
Contra-trading rule
transactions by managers and CIOs, 19
Convertible securities
defined as securities, x
Corporations
covered in personal securities transactions, xi, 46
Currencies
excluded as securities, x
Director
serving as for another entity prohibited, 25
Employee
serving as for another entity prohibited, 25
Excessive short-term trading (over 10 trades)
by employees strongly discouraged, 11
Exemptions
basis for, 13
Family members
covered in personal securities transactions, xi, 45
Fiduciary
serving as for another entity prohibited, 26
Gifts
restrictions on receipt of by employees, 22
Holdings
disclosure of by investment professionals, 16
Initial public offerings/IPOs
purchases in prohibited, 8
Insider trading
policy statement and explanations, 43
prohibited, 10
Investment clubs
prohibited, 27
Investment Grade Exception
for clearance of fixed income securities on Restricted List, 2
Involuntary personal securities transactions
exempted, 12
exemption defined, 7
Large Cap exception
for clearance of securities on Restricted List, 1
Marsh & McLennan Companies stock
excluded from securities, x
Money market instruments
excluded from securities, x
Mutual fund shares (open end)
excluded from securities, x
Naked options
by employees discouraged, 11
New financial instruments
procedures for approval, 63
Non-Putnam affiliates (NPAs)
transactions and relationships with, 29
Officer
serving as for another entity prohibited, 25
Options
defined as securities, x
relationship to securities on Restricted or Red Lists, 7
Partner
serving as general partner of another entity prohibited, 26
Partnerships
covered in personal securities transactions, xi, 46
Personal securities transaction
defined, xi, 45
Pink sheet reports
quarterly reporting requirements, 36
Political contributions, 24
Portfolio managers
special rules on trading by, 15
Private offerings or placements
purchases of prohibited, 9
Putnam Europe Ltd.
special rules for, 33
Repurchase agreements
excluded from securities, x
Sale
defined, x, 45
Sanctions, vii
for failure to pre-clear properly, 4
Shares by Subscription
procedures to preclear the purchase and sales of Shares by Subscription, 2
Short sales
by employees prohibited conduct, 7
Solicitations
by Putnam employees restricted, 25
Tender offers
partial exemption from clearance rules, 7
Trustee
serving as for another entity prohibited, 26
Trusts
covered in personal securities transactions, xi, 46
U.S. government obligations
excluded from securities, x
Warrants
defined as securities, x
