MASSACHUSETTS FINANCIAL SERVICES COMPANY
STATEMENT OF POLICY ON
PERSONAL SECURITIES TRANSACTIONS
(CODE OF ETHICS)
AS ADOPTED BY THE AUDIT COMMITTEE
EFFECTIVE AS OF MARCH 1, 2000
As an investment advisory organization with substantial responsibilities to
clients, Massachusetts Financial Services Company ("MFS") has an obligation to
implement and maintain a meaningful policy governing the securities transactions
of its Directors, officers and employees ("MFS representatives").(1) This policy
is intended to minimize conflicts of interest, and even the appearance of
conflicts of interest, between members of the MFS organization and its clients
in the securities markets as well as to effect compliance with the Investment
Company Act, the Investment Advisers Act and the Securities Exchange Act. This
policy inevitably will restrict MFS representatives in their securities
transactions, but this is the necessary consequence of undertaking to furnish
investment advice to clients. In addition to complying with the specific rules,
we all must be sensitive to the need to recognize any conflict, or the
appearance of conflict, of interest whether or not covered by the rules. When
such situations occur, the interests of our clients must supersede the interest
of MFS representatives.
1. GENERAL FIDUCIARY PRINCIPLES. All personal investment activities
conducted by MFS representatives are subject to compliance with the following
principles: (i) the duty at all times to place the interests of MFS' clients
first; (ii) the requirement that all personal securities transactions be
conducted consistent with this Code of Ethics and in such a manner as to avoid
any actual or potential conflict of interest or any abuse of an individual's
position of trust and responsibility; and (iii) the fundamental standard that
MFS representatives should not take inappropriate advantage of their positions.
2. APPLICABILITY OF RESTRICTIONS AND PROCEDURES. In recognition of the
different circumstances surrounding each MFS representative's employment,
various categories of MFS employees are subject to different restrictions under
this Code of Ethics. For purposes of applying this Code of Ethics, MFS employees
are divided into the general categories of Portfolio Managers, Investment
Personnel, Access Persons and Non-Access Persons, as each such term is defined
in Appendix A to this Code of Ethics, as amended from time to time by the Audit
Committee.
As used in this Code of Ethics, the term "securities" includes not only
publicly traded equity securities, but also privately issued equity securities,
shares of closed-end funds, fixed income securities (including municipal bonds
and many types of U.S. Government securities), futures, options, warrants,
rights, swaps, commodities and other similar instruments. Moreover, the
restrictions of this Code of Ethics apply to transactions by Access Persons
involving securities and other instruments related to, but not necessarily the
same as, securities held or to be acquired on behalf of an MFS client.
3. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS.No Access Person shall
trade in any security which is subject to a pending "buy" or "sell" order, or is
being considered for purchase or
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(1) Employees of MFS Institutional Advisors, Inc., MFS Fund Distributors, Inc.,
MFS Retirement Services, Inc., MFS International Ltd., MFS International
(U.K.) Ltd., MFS Service Center, Inc., Vertex Investment Management Inc.
and MFS Heritage Trust Company also are covered by this Code of Ethics.
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sale,(2) for a client of MFS until such order is executed or withdrawn or such a
transaction is no longer being considered. In addition, no Investment Personnel
shall trade in any security after an MFS client trades in such security or such
security has been considered for purchase or sale on behalf of an MFS client
until: (i) the next business day following such trade or consideration (in the
case of a proposed trade by an Investment Personnel in the same direction as the
MFS client); or (ii) the eighth calendar day thereafter (in the case of a
proposed trade by an Investment Personnel in the opposite direction from the MFS
client's trade). No Portfolio Manager shall trade in any security within at
least seven calendar days before or after an MFS client whose account he or she
manages trades in such security or such security has been considered for
purchase or sale on behalf of such an MFS client. Any profits realized on trades
within these proscribed periods must be disgorged to the affected MFS client or,
in the event that the amount to be disgorged is relatively minor or difficult to
allocate, to charity. In addition, no MFS representative shall provide any
information about such transaction or recommendation to any person other than in
connection with the proper execution of such purchase or sale for an MFS
client's account.
Portfolio Managers should consider the problems inherent in purchasing for
their own account securities that are or may be suitable for a client's
portfolio. For example, a fortuitous early sale by the Manager for his or her
personal account may be criticized in hindsight if the same security later is
sold from the client's account at a lower price.
GIFTS AND TRANSFERS. A gift or transfer shall be excluded from the
preclearance requirements provided that the recipient represents in writing
that he, she, they or it has no present intention of selling the donated
security.
SHORT SALES. No Access Person shall effect a short sale in any security
held in a portfolio managed by MFS. Access Persons may engage in
transactions in options and futures, subject to special preclearance rules
applicable to certain of those transactions as described in Section 5
below.
INITIAL PUBLIC OFFERINGS. The purchase by Access Persons of securities
(other than securities of registered open-end investment companies) offered
at fixed public offering price by underwriters or a selling group is
prohibited.(3) Rights (including rights purchased to acquire an additional
full share) issued in respect of securities any Access Persons owns may be
exercised, subject to preclearance; the decision whether or not to grant
preclearance shall take into account, among other factors, whether the
investment opportunity should be reserved for an MFS client and whether the
investment opportunity is being or was offered to the individual by virtue
of his or her position with MFS.
PRIVATE PLACEMENTS. Any acquisition by Access Persons of securities issued
in a private placement is subject to preclearance. The decision whether or
not to grant preclearance shall take into account, among other factors,
whether the investment opportunity should be reserved
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(2) A security is deemed to have been "considered for purchase or sale" when a
recommendation to purchase or sell such security has been made and
communicated to a portfolio manager and, with respect to the person making
the recommendation, when such person seriously considers making such a
recommendation.
(3) The reason for this rule is that it precludes any possibility that Access
Persons might use MFS' clients' market stature as a means of obtaining for
themselves "hot" issues which otherwise might not be offered to them. In
addition, this rule eliminates the possibility that underwriters and
selling group members might seek by this means to gain favor with
individuals in order to obtain preferences from MFS.
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for an MFS client and whether the investment opportunity is being offered
to the individual by virtue of his or her position with MFS. Investment
Personnel who have been precleared to acquire securities in a private
placement are required to disclose that investment when they play a part in
any subsequent consideration of an investment in the issuer for an MFS
client. In such circumstances, the decision to purchase securities of the
issuer for the MFS client shall be subject to an independent review by
Investment Personnel with no personal interest in the issuer.
NOTE: Acquisitions of securities in private placements by country clubs,
yacht clubs and other similar entities need not be precleared, but are
subject to the reporting, disclosure and independent review requirements.
PROHIBITION ON SHORT-TERM TRADING PROFITS. All Investment Personnel are
prohibited from profiting in the purchase and sale, or sale and purchase,
of the same (or equivalent) securities within 60 calendar days. Any profits
realized on such short-term trades must be disgorged to the affected MFS
client (if any) or, in the event that the amount to be disgorged is
relatively minor or difficult to allocate, to charity. This restriction on
short-term trading profits shall not apply to transactions exempt from
preclearance requirements, as described in Section 8 below.
It is expected that all MFS representatives will follow these restrictions
in good faith and conduct their personal trading in keeping with the intended
purpose of this Code of Ethics. NOTE: ANY NON-ACCESS PERSON WHO RECEIVES ANY
INFORMATION ABOUT ANY PARTICULAR INVESTMENT RECOMMENDATION OR EXECUTED OR
PROPOSED TRANSACTION FOR ANY MFS CLIENT IS REQUIRED TO COMPLY WITH ALL
PRECLEARANCE AND OTHER REQUIREMENTS OF THIS CODE OF ETHICS APPLICABLE TO ACCESS
PERSONS. Any individual should feel free to take up with the Audit Committee any
case in which he or she feels inequitably burdened by these policies. The Audit
Committee may, in its sole discretion, grant appropriate exceptions from the
requirements of this Code of Ethics where warranted by applicable facts and
circumstances.
4. BENEFICIAL OWNERSHIP. The requirements of this Code of Ethics apply to
any account in which an MFS representative has (i) "direct or indirect
beneficial ownership" or (ii) any "direct or indirect influence or control."
Under applicable SEC interpretations, such "beneficial ownership" includes
accounts of a spouse, minor children and dependent relatives resident in the MFS
representative's house, as well as any other contract, relationship,
understanding or other arrangement which results in an opportunity for the MFS
representative to profit or share profits from a transaction in securities.
NOTE: The exception for accounts with respect to which an MFS
representative lacks "direct or indirect influence or control" is extremely
narrow, and should only be relied upon in cases which have been pre-approved in
writing by Stephen E. Cavan or Robert T. Burns of the Legal Department. Certain
"blind trust" arrangements approved by the Legal Department may be excluded from
the preclearance (but not the quarterly reporting) requirements of this Code of
Ethics.
5. PRECLEARANCE REQUIREMENTS. In order to facilitate compliance with this
Code of Ethics, preclearance requests must be made and approved before any
transaction may be made by an Access Person or for any other account
beneficially owned by an Access Person. A preclearance request in the form set
forth in MFS' automated Code of Ethics system, as amended from time to time,
should be completed and submitted electronically for any order for an Access
Person's own account or one described in Section 4 above, or, in the case of an
Access Person who wishes to preclear while outside of the Boston area, should
either: (i) be completed in the form attached hereto, as amended from time to
time, signed and submitted by facsimile machine, to the Compliance Department;
or (ii) be submitted by
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telephone call to the Compliance Department. Any preclearance request received
before 3:00 p.m. on a business day will be responded to as soon as available on
the following business day. Preclearance requests will be reviewed by Equity and
Fixed Income Department personnel who will be kept apprised of recommendations
and orders to purchase and sell securities on behalf of MFS clients, the
completion or cancellation of such orders and the securities currently held in
portfolios managed by MFS. Their advice will be forwarded to the Compliance
Department.
The preclearance process imposes significant burdens on the investment and
administrative departments within MFS. Accordingly, if the MFS Audit Committee
determines that an Access Person is making an excessive number of preclearance
requests, it reserves the right to limit such Access Person to a certain number
of preclearance requests per day or per period.
An Access Person who obtains electronic or written notice from the
Compliance Department indicating consent to an order which the Access Person
proposes to enter for his or her own account or one described in Section 4 above
may execute that order ONLY ON THE DAY WHEN SUCH NOTICE IS RECEIVED unless
otherwise stated on the notice. Such notices will always be electronic or in
writing; however, in the case of an Access Person who wishes to preclear a
transaction while outside the Boston area, the Compliance Department will also
provide oral confirmation of the content of the written notice.
Preclearance requests may be denied for any number of appropriate reasons,
most of which are confidential. For example, a preclearance request for a
security that is being considered for purchase or sale on behalf of an MFS
client may be denied for an extended period (E.G. 10 business days).
Accordingly, an Access Person is not entitled to receive any explanation or
reason if his or her preclearance request is denied, and repetitive requests for
an explanation by an Access Person will be deemed a violation of this Code of
Ethics.
SIGNIFICANT OWNERSHIP BY MFS CLIENTS. In cases where MFS clients own, in
the aggregate, 8% or more of the outstanding equity securities of an
issuer, requests by Access Persons to purchase the securities of such
issuer will be denied. Requests to preclear sales of such securities may be
granted, subject to the standard requirements set forth in Section 3 above.
SECURITIES SUBJECT TO AUTOMATIC PURCHASES AND SALES FOR MFS CLIENTS.
Certain MFS funds and institutional accounts are managed such that the
securities held in such portfolios are regularly purchased or sold on an
equal proportionate basis so as to preserve specified percentage weightings
of such securities across such portfolios. Requests to preclear purchases
of securities held in such portfolios will be denied. Requests to sell such
securities may be granted, subject to the standard preclearance
requirements set forth in Section 3 above.
OPTIONS AND FUTURES TRANSACTIONS. Access Persons may purchase (to open) and
sell (to close) call and put options and futures contracts on securities,
subject to the preclearance and other requirements of this Code of Ethics;
however, an Access Person may neither buy a put option on any security held
in a portfolio managed by MFS nor write (sell to open) options and futures
contracts. In the case of purchased put and call options, the preclearance
of the exercise of such options as well as their purchase and sale, is
required. Preclearance of the exercise of purchased put and call options
shall be requested on the day before the proposed exercise or, if notice to
the writer of such options is required before the proposed exercise date,
the date before notice is proposed to be given, setting forth the proposed
exercise date as well as the proposed notice date.(4)
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(4) Access Persons should note that this requirement may result in their not
being allowed to exercise an option purchased by them on the exercise date
they desire, and in the case of a "European" option on the only date on
which exercise is permitted by the terms of the option.
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Purchases and sales of options or futures contracts to "close out" existing
options or futures contracts must be precleared.(5)
MFS CLOSED-END FUNDS. All transactions effected by any MFS representative
in shares of any closed-end fund for which MFS or one of its affiliates
acts as investment adviser shall be subject to preclearance and reporting
in accordance with this Code of Ethics. Non-Access Persons are exempt from
the preclearance and reporting requirements set forth in this Code of
Ethics with respect to transactions in any other type of securities, so
long as they have not received any information about any particular
investment recommendation or executed or proposed transaction for any MFS
client with respect to such security.
6. DUPLICATE CONFIRMATION STATEMENT REQUIREMENT. In order to implement and
enforce the above policies, every Access Person shall arrange for his or her
broker to send MFS duplicate copies of all confirmation statements issued with
respect to the Access Person's transactions and all periodic statements for such
Access Person's securities accounts (or other accounts beneficially owned by
such Access Person). The Compliance Department will coordinate with brokerage
firms in order to assist Access Persons in complying with this requirement.
7. REPORTING REQUIREMENT. Each Access Person shall report on or before the
tenth day of each calendar quarter any securities transactions during the prior
quarter in accounts covered by Section 4 above. EMPLOYEES WHO FAIL TO COMPLETE
AND FILE SUCH QUARTERLY REPORTS ON A TIMELY BASIS WILL BE REPORTED TO THE AUDIT
COMMITTEE AND WILL BE SUBJECT TO SANCTIONS. Reports shall be reviewed by the
Compliance Department.
In filing the reports for accounts within these rules, please note:
(i) You must file a report for every calendar quarter even if you had no
reportable transactions in that quarter; all such reports shall be
completed and submitted in the form set forth in MFS' automated Code
of Ethics system.
(ii) Reports must show any sales, purchases or other acquisitions or
dispositions, including gifts, exercises of conversion rights and
exercises or sales of subscription rights. See Section 8 below for
certain exceptions to this requirement.
(iii) Reports will be treated confidentially unless a review of particular
reports with the representative is required by the Audit Committee.
(v) Reports are made available for review by the Boards of Trustees of MFS
investment company clients upon their request.
NOTE: Any Access Person who maintains all of his or her personal securities
accounts with one or more broker-dealer firms that send confirmation and
periodic account statements in an electronic format approved by the
Compliance Department, and who arranges for such firms to
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(5) Access Persons should note that as a result of this requirement, they may
not be able to obtain preclearance consent to close out an option or
futures contract before the settlement date. If such an option or futures
contract is automatically closed out, the gain, if any, on such transaction
will be disgorged in the manner described in Section 3 above.
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send such statements (no less frequently than quarterly) required by
Section 6 above, shall not be required to prepare and file the quarterly
reports required by this Section 7. However, each such Access Person shall
be required to verify the accuracy and completeness of all such statements
on at least an annual basis.
8. CERTAIN EXCEPTIONS.
MUTUAL FUNDS. Transactions in shares of any open-end investment companies,
including funds for which the MFS organization is investment adviser, need not
be precleared or reported.
CLOSED-END FUNDS. Automatic reinvestments of distributions of closed-end
funds advised by MFS pursuant to dividend reinvestment plans of such funds need
only be reported. All other closed-end fund transactions must be precleared and
reported.
MFS COMMON STOCK. Transactions in shares of stock of MFS need not be
precleared or reported.
LARGE CAPITALIZATION STOCKS. Transactions in securities issued by companies
with market capitalizations of at least $5 billion generally will be eligible
for automatic preclearance (subject to certain exceptions), but must be reported
and are subject to post-trade monitoring. The Compliance Department will
maintain a list of issuers that meet this market capitalization requirement. A
preclearance request for a large capitalization company will be denied whenever
deemed appropriate.
U.S. GOVERNMENT SECURITIES. Transactions in U.S. Treasury securities
(including options and futures contracts and other derivatives with respect to
such securities) need not be precleared or reported. Option and futures
contracts on U.S. Government obligations (other than U.S. Treasury securities)
and securities indices need not be precleared but must be reported. Transactions
in U.S. Government securities offered on the basis of "non-competitive tender"
need not be precleared or reported. However, U.S. Government obligations (other
than U.S. Treasury securities) offered by "subscription" must be precleared and
reported.
OTHER EXCEPTIONS. Transactions in money market instruments and in options
on broad-based indices need not be precleared, although such transactions must
be reported. In addition, the following types of transactions need not be
precleared or reported: (i) stock dividends and stock splits; (ii) foreign
currency transactions; and (iii) transactions in real estate limited partnership
interests.
9. DISCLOSURE OF PERSONAL SECURITIES HOLDINGS. All Access Persons are
required to disclose all personal securities holdings within 10 days after
becoming an Access Person (I.E. upon commencement of employment with MFS or
transfer within MFS to an Access Person position) and thereafter on an annual
basis. Reports shall be reviewed by the Compliance Department.
10. GIFTS, ENTERTAINMENT AND FAVORS. MFS representatives must not make
business decisions that are influenced or appear to be influenced by giving or
accepting gifts, entertainment or favors. Investment Personnel are prohibited
from receiving any gift or other thing of more than DE MINIMIS value from any
person or entity that does business with or on behalf of MFS or its clients.
Invitations to an occasional meal, sporting event or other similar activity will
not be deemed to violate this restriction unless the occurrence of such events
is so frequent or lavish as to suggest an impropriety.
11. SERVICE AS A DIRECTOR. All MFS representatives are prohibited from
serving on the boards
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of directors of commercial business enterprises, absent prior authorization by
the Management Committee based upon a determination that the board service would
be consistent with the interests of MFS' clients. In the relatively small number
of instances in which board service is authorized, MFS representatives serving
as directors may be isolated from other MFS representatives through "Chinese
Wall" or other appropriate procedures.
12. CERTIFICATION OF COMPLIANCE WITH CODE OF ETHICS. All MFS
representatives (including Non-Access Persons) shall be required to certify
annually that (i) they have read and understand this Code of Ethics and
recognize that they are subject to its requirements applicable to them and (ii)
they have complied with all requirements of this Code of Ethics applicable to
them, and (in the case of Access Persons) have reported all personal securities
transactions (whether pursuant to quarterly reports from the Access Person or
duplicate confirmation statements and periodic reports from the Access Person's
broker-dealer) required to be reported pursuant to this Code of Ethics. This
certification shall apply to all accounts beneficially owned by an MFS
representative.
13. BOARDS OF TRUSTEES OF MFS FUNDS. Any material amendment to this Code of
Ethics shall be subject to the approval by each of the Boards of Trustees
(including a majority of the disinterested Trustees on each such Board) of each
of the registered investment companies with respect to which MFS, or any
subsidiary of MFS, acts as investment adviser. In addition, on at least an
annual basis, MFS shall provide each such Board with a written report that: (i)
describes issues that arose during the preceding year under this Code of Ethics,
including without limitation information about any material violations of this
Code of Ethics and any sanctions imposed with respect to such violations; and
(ii) certifies to each such Board that MFS has adopted procedures reasonably
necessary to prevent Access Persons from violating this Code of Ethics.
14. SANCTIONS. Any trading for an MFS representative's account which does
not evidence a good faith effort to comply with these rules will be subject to
Audit Committee review. If the Audit Committee determines that a violation of
this Code of Ethics or its intent has occurred, it may impose such sanctions as
it deems appropriate including forfeiture of any profit from a transaction
and/or termination of employment. Any violations resulting in sanctions will be
reported to the Boards of Trustees of MFS investment company clients and will be
reflected in the employee's personnel file.
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APPENDIX A
CERTAIN DEFINED TERMS
As used in this Code of Ethics, the following shall terms shall have the
meanings set forth below, subject to revision from time to time by the Audit
Committee:
PORTFOLIO MANAGERS -- employees who are authorized to make investment
decisions for a mutual fund or client portfolio. Note: research analysts
are deemed to be Portfolio Managers with respect to the entire portfolio of
any fund managed collectively by a committee of research analysts (E.G. MFS
Research Fund).
INVESTMENT PERSONNEL -- all Portfolio Managers as well as research
analysts, traders and other members of the Equity Trading, Fixed Income and
Equity Research Departments.
ACCESS PERSONS -- all Portfolio Managers, Investment Personnel and other
members of the following departments or groups: Institutional Advisors;
Compliance; Fund Accounting; Investment Communications; and Technology
Services & Solutions ("TS&S") (excluding, however, TS&S employees who are
employed at Lafayette Corporate Center and certain TS&S employees who may
be specifically excluded by the Compliance or Legal Departments); also
included are members of the MFS Management Committee, the MFS
Administrative Committee and the MFS Operations Committee. In certain
instances, non-employee consultants and other independent contractors may
be deemed Access Persons and therefore be subject to some or all of the
requirements set forth in this Code of Ethics.
NON-ACCESS PERSONS -- all employees of the following departments or groups:
Corporate Communications; Corporate Finance; Facilities Management; Human
Resources; Internal Audit (unless undergoing an audit of an access area);
Legal; MFS Service Center, Inc. (other than TS&S employees who are employed
at 500 Boylston Street); Retired Partners; Travel and Conference Services;
the International Division; MFS International Ltd.; MFS Fund Distributors,
Inc.; and MFS Retirement Services, Inc. NOTE: ANY NON-ACCESS PERSON WHO
RECEIVES ANY INFORMATION ABOUT ANY PARTICULAR INVESTMENT RECOMMENDATION OR
EXECUTED OR PROPOSED TRANSACTION FOR ANY MFS CLIENT IS REQUIRED TO COMPLY
WITH ALL PRECLEARANCE AND OTHER REQUIREMENTS OF THIS CODE OF ETHICS
APPLICABLE TO ACCESS PERSONS. ANY NON-ACCESS PERSON WHO REGULARLY RECEIVES
SUCH INFORMATION WILL BE RECLASSIFIED AS AN ACCESS PERSON. IN ADDITION,
TRANSACTIONS IN SHARES OF THE MFS CLOSED-END FUNDS BY ALL MFS
REPRESENTATIVES ARE SUBJECT TO ALL SUCH PRECLEARANCE AND REPORTING
REQUIREMENTS (SEE SECTION 5 OF THIS CODE OF ETHICS).
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PERSONAL SECURITIES TRANSACTION
PRECLEARANCE REQUEST
[ONLY FOR USE BY MFS EMPLOYEES
NOT LOCATED IN BOSTON]
DATE:_________________________, _____
All transactions must be precleared, regardless of their size, except those in
certain specific categories of securities that are exempted under the MFS Code
of Ethics. If necessary, continue on the reverse side. Please note that special
rules apply to the preclearance of option and futures transactions. If the
transaction is to be other than a straightforward sale or purchase of
securities, mark it with an asterisk and explain the nature of the transaction
on the reverse side. Describe the nature of each account in which the
transaction is to take place, I.E., personal, spouse, children, charitable
trust, etc.
SALES
CUSIP/TICKER AMOUNT OR BROKER NATURE* OF
SECURITY NO. OF SHARES ACCOUNT
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PURCHASES
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I represent that I am not in possession of material non-public information
concerning the securities listed above or their issuer. If I am an MFS access
person charged with making recommendations to MFS with respect to any of the
securities listed above, I represent that I have not determined or been
requested to make a recommendation in that security except as permitted by the
MFS Code of Ethics.
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Signature and Date
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Name of MFS Access Person
(please print)
EXPLANATORY NOTES: This form must be filed by 3:00 p.m. on the business day
prior to the business day on which you wish to trade and covers all accounts in
which you have an interest, direct or indirect. This includes any account in
which you have "beneficial ownership" (unless you have no influence or control
over it) and non-client accounts over which you act in an advisory or
supervisory capacity. No trade can be effected until approval from the
Compliance Department has been obtained.
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* Check if you wish to claim that the reporting of the account or the
securities transaction shall not be construed as an admission that you have
any direct or indirect beneficial ownership in such account or securities.
