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EXHIBIT 99.P(9)
PIMCO CODE OF ETHICS
Effective as of March 31, 2000
INTRODUCTION
GENERAL PRINCIPLES
This Code of Ethics is based on the principle that you, as a director,
officer or other Advisory Employee of Pacific Investment Management Company
("PIMCO"), owe a fiduciary duty to, among others, the shareholders of the Funds
and other clients (together with the Funds, the "Advisory Clients") for which
PIMCO serves as an advisor or subadvisor. Accordingly, you must avoid
activities, interests and relationships that might interfere or appear to
interfere with making decisions in the best interests of our Advisory Clients.
At all times, you must observe the following GENERAL RULES:
1. YOU MUST PLACE THE INTERESTS OF OUR ADVISORY CLIENTS FIRST. In
other words, as a fiduciary you must scrupulously avoid
serving your own personal interests ahead of the interests of
our Advisory Clients. You must adhere to this general
fiduciary principle as well as comply with the Code's specific
provisions. Technical compliance with the Code's procedures
will not automatically insulate from scrutiny any trades that
indicate an abuse of your fiduciary duties or that create an
appearance of such abuse.
Your fiduciary obligation applies not only to your personal
trading activities but also to actions taken on behalf of
Advisory Clients. In particular, you may not cause an Advisory
Client to take action, or not to take action, for your
personal benefit rather than the benefit of the Advisory
Client. For example, you would violate this Code if you caused
an Advisory Client to purchase a Security or Futures Contract
you owned for the purpose of increasing the value of that
Security or Futures Contract. If you are a portfolio manager
or an employee who provides information or advice to a
portfolio manager or helps execute a portfolio manager's
decisions, you would also violate this Code if you made a
personal investment in a Security or Futures Contract that
might be an appropriate investment for an Advisory Client
without first considering the Security or Futures Contract as
an investment for the Advisory Client.
2. YOU MUST CONDUCT ALL OF YOUR PERSONAL INVESTMENT TRANSACTIONS
IN FULL COMPLIANCE WITH THIS CODE, THE PIMCO ADVISORS L.P.
INSIDER TRADING POLICY AND PROCEDURES (THE "INSIDER TRADING
POLICY"), AND THE PIMCO ADVISORS L.P. POLICY REGARDING SPECIAL
TRADING PROCEDURES FOR SECURITIES OF PIMCO
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ADVISORS L.P. (THE "SPECIAL TRADING PROCEDURES")(1) AND IN
SUCH A MANNER AS TO AVOID ANY ACTUAL OR POTENTIAL CONFLICT OF
INTEREST OR ANY ABUSE OF YOUR POSITION OF TRUST AND
RESPONSIBILITY. PIMCO encourages you and your family to
develop personal investment programs. However, those
investment programs must remain within boundaries reasonably
necessary to ensure that appropriate safeguards exist to
protect the interests of our Advisory Clients and to avoid
even the APPEARANCE of unfairness or impropriety. Accordingly,
YOU MUST COMPLY WITH THE POLICIES AND PROCEDURES SET FORTH IN
THIS CODE UNDER THE HEADING PERSONAL INVESTMENT TRANSACTIONS.
In addition, you must comply with the policies and procedures
set forth in the INSIDER TRADING POLICY AND SPECIAL TRADING
PROCEDURES, which are attached to this Code as Appendix II and
III, respectively. Doubtful situations should be resolved in
favor of our Advisory Clients and against your personal
trading.
3. YOU MUST NOT TAKE INAPPROPRIATE ADVANTAGE OF YOUR POSITION.
The receipt of investment opportunities, perquisites, gifts or
gratuities from persons seeking business with PIMCO directly
or on behalf of an Advisory Client could call into question
the independence of your business judgment. Accordingly, you
must comply with the policies and procedures set forth in this
Code under the heading GIFTS AND SERVICE AS A DIRECTOR.
Doubtful situations should be resolved against your personal
interest.
THE GENERAL SCOPE OF THE CODE'S
APPLICATIONS TO PERSONAL INVESTMENT ACTIVITIES
The Code reflects the fact that PIMCO specializes in the management of
fixed income portfolios. The vast majority of assets PIMCO purchases and sells
on behalf of its Advisory Clients consist of corporate debt Securities, U.S. and
foreign government obligations, asset-backed Securities, money market
instruments, foreign currencies, and futures contracts and options with respect
to those instruments. For its StocksPLUS Funds, PIMCO also purchases futures and
options on the S & P 500 index and, on rare occasions, may purchase or sell
baskets of the stocks represented in the S & P 500. For its Convertible Bond
Fund and other Advisory Clients, PIMCO purchases convertible securities that may
be converted or exchanged into underlying shares of common stock. Other PIMCO
Funds may also invest in convertible securities. The Convertible Bond Fund and
other Advisory Clients may also invest a portion of their assets in common
stocks.
Rule 17j-1 under the Investment Company Act of 1940 requires REPORTING
of all personal transactions in Securities (other than certain Exempt
Securities) by certain persons, whether or
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PIMCO expects Allianz of America ("AZOA") to acquire a majority
interest in PIMCO Advisors L.P. ("PALP") in the second quarter of 2000. When
that acquisition is consummated, the Special Trading Procedures for PALP
securities will no longer apply since PALP securities will not be publicly owned
or traded.
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not they are Securities that might be purchased or sold by PIMCO on behalf of
its Advisory Clients. The Code implements that reporting requirement.
However, since the purpose of the Code is to avoid conflicts of
interest arising from personal trading activities in Securities and other
instruments that are held or might be acquired on behalf of our Advisory
Clients, this Code only places RESTRICTIONS on personal trading activities in
such investments. As a result, this Code does not place restrictions (beyond
reporting) on personal trading in most individual equity Securities. Except for
the small number of Portfolio Employees who are responsible for PIMCO's
Municipal Bond Fund, this Code also does not place restrictions (beyond
reporting) on personal trading in Tax-Exempt Municipal Bonds. Although equities
and Tax-Exempt Municipal Bonds are Securities, they are not purchased or sold by
PIMCO on behalf of the vast majority of PIMCO's Advisory Clients and PIMCO has
established special procedures to avoid conflicts of interest that might
otherwise arise from personal trading in those Securities. On the other hand,
this Code does require reporting and restrict trading in certain Futures
Contracts which, although they are not Securities, are instruments in which
PIMCO frequently trades for many of its Advisory Clients.
This Code applies to PIMCO's officers and directors as well as to all
of its Advisory Employees. The Code recognizes that portfolio managers and the
investment personnel who provide them with advice and who execute their
decisions occupy more sensitive positions than other Advisory Employees and that
it is appropriate to subject their personal investment activities to greater
restrictions.
THE ORGANIZATION OF THE CODE
The remainder of this Code is divided into three sections. The first
section concerns PERSONAL INVESTMENT TRANSACTIONS. The second section describes
the restrictions on GIFTS AND SERVICE AS A DIRECTOR. The third section
summarizes the methods for ensuring COMPLIANCE under the Code. In addition, the
following APPENDICES are also a part of this Code:
I. Definitions of Capitalized Terms.
II. The PIMCO Advisors L.P. Insider Trading Policy and Procedures.
III. The PIMCO Advisors L.P. Policy Regarding Special Trading Procedures for
Securities of PIMCO Advisors L.P.
IV. Form for Acknowledgment of Receipt of this Code.
V. Form for Annual Certification of Compliance with this Code.
VI. Form for Initial Report of Accounts.
VII. Form for Quarterly Report of Investment Transactions.
VIII. Form for Annual Holdings Report.
IX. Preclearance Request Form
X. List of PIMCO Compliance Officers.
QUESTIONS
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Questions regarding this Code should be addressed to a Compliance
Officer listed on Appendix X. Those Compliance Officers compose the PIMCO
Compliance Committee.
PERSONAL INVESTMENT TRANSACTIONS
IN GENERAL
Subject to the limited exceptions described below, you are required to
report all Investment Transactions in SECURITIES AND FUTURES CONTRACTS made by
you, a member of your Immediate Family or a trust in which you have an interest,
or on behalf of any account in which you have an interest or which you direct.
In addition, you must PRECLEAR certain Investment Transactions in SECURITIES AND
FUTURES CONTRACTS THAT PIMCO HOLDS OR MAY ACQUIRE ON BEHALF OF AN ADVISORY
CLIENT, INCLUDING CERTAIN INVESTMENT TRANSACTIONS IN RELATED SECURITIES.
The details of these reporting and preclearance requirements are
described below. This Code uses a number of capitalized terms, e.g. Advisory
Employee, Beneficial Ownership, Designated Equity Security, Exempt Security,
Fixed Income Security, Fund, Futures Contract, Immediate Family, Initial Public
Offering, Investment Transaction, Personal Account, Portfolio Employee, Private
Placement, Qualified Foreign Government, Related Account, Related Security, and
Security. The definitions of these capitalized terms are set forth in Appendix
I. TO UNDERSTAND YOUR RESPONSIBILITIES UNDER THE CODE, IT IS IMPORTANT THAT YOU
REVIEW AND UNDERSTAND THE DEFINITIONS IN APPENDIX I.
REPORTING OBLIGATIONS
Notification Of Reporting Obligations
As an Advisory Employee, you are required to report accounts and
Investment Transactions in accordance with the requirements of this Code.
Use Of Broker-Dealers And Futures Commission Merchants
Unless you are an independent director, YOU MUST USE A REGISTERED
BROKER-DEALER OR REGISTERED FUTURES COMMISSION MERCHANT to engage in any
purchase or sale of a publicly-traded Security or Publicly-Traded Futures
Contract. This requirement also applies to any purchase or sale of a
publicly-traded Security or of a Publicly-Traded Futures Contract in which you
have, or by reason of the Investment Transaction will acquire, a Beneficial
Ownership interest. Thus, as a general matter, any Investment Transaction in
publicly-traded Securities or Publicly-Traded Futures Contracts by members of
your Immediate Family will need to be made through a registered broker-dealer or
futures commission merchant.
Initial Report
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Within 10 days after commencing employment or within 10 days of any
event that causes you to become subject to this Code (e.g. promotion to a
position that makes you an Advisory Employee), you shall supply to a Compliance
Officer copies of the most recent statements for each and every Personal Account
and Related Account that holds or is likely to hold a Security or a Futures
Contract in which you have a Beneficial Ownership interest, as well as copies of
confirmations for any and all Investment Transactions subsequent to the
effective date of those statements. These documents shall be supplied to the
Compliance Officer by attaching them to the form appended hereto as Appendix VI.
On that same form you shall supply the name of any broker, dealer, bank
or futures commission merchant and the number for any Personal Account and
Related Account that holds or is likely to hold a Security or a Futures Contract
in which you have a Beneficial Ownership interest for which you cannot supply
the most recent account statement. You shall also certify, where indicated on
the form, that the contents of the form and the documents attached thereto
disclose all such Personal Accounts and Related Accounts.
In addition, you shall also supply, where indicated on the form, the
following information for each Security or Futures Contract in which you have a
Beneficial Ownership interest, to the extent that this information is not
available from the statements attached to the form:
1. A description of the Security or Futures Contract, including
its name or title;
2. The quantity (e.g. in terms of numbers of shares, units or
contracts) and principal amount (in dollars) of the Security
or Futures Contract; and
3. The name of any broker, dealer, bank or futures commission
merchant with which you maintained an account in which the
Security or Futures Contract was held.
New Accounts
Immediately upon the opening of a NEW Personal Account or a Related
Account that holds or is likely to hold a Security or a Futures Contract, you
shall supply a Compliance Officer with the name of the broker, dealer, bank or
futures commission merchant for that account, the identifying number for that
Personal Account or Related Account, and the date the account was established.
Timely Reporting Of Investment Transactions
You must cause each broker, dealer, bank or futures commission merchant
that maintains a Personal Account or a Related Account that holds a Security or
a Futures Contract in which you have a Beneficial Ownership interest to provide
to a Compliance Officer, on a timely basis, duplicate copies of trade
confirmations of all Investment Transactions in that account and of periodic
statements for that account ("duplicate broker reports").
In addition, you must report to a Compliance Officer, on a timely
basis, any Investment Transaction in a Security or a Futures Contract in which
you have or acquired a Beneficial
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Ownership interest that was established without the use of a broker, dealer,
bank or futures commission merchant.
Quarterly Certifications And Reporting
At the end of the first, second and third calendar quarters, a
Compliance Officer will provide you with a list of all accounts that you have
previously identified to PIMCO as a Personal Account or a Related Account that
holds or is likely to hold a Security or Futures Contract. Within 10 days after
the end of that calendar quarter, you shall make any necessary additions,
corrections or deletions to that list and return it to a Compliance Officer with
a certification that: (a) the list, as modified (if necessary), represents a
complete list of the Personal Accounts and Related Accounts that hold Securities
or Futures Contracts in which you have or had a Beneficial Ownership interest
and for which PIMCO should have received or will receive timely duplicate broker
reports for the calendar quarter just ended, and (b) the broker, dealer, bank or
futures commission merchant for each account on the list has been instructed to
send a Compliance Officer timely duplicate broker reports for that account.
You shall provide, on a copy of the form attached hereto as Appendix
VII, the following information for each Investment Transaction during the
calendar quarter just ended, to the extent that the duplicate broker reports for
that calendar quarter did not supply this information to PIMCO:
1. The date of the Investment Transaction, the title, the
interest rate and maturity date (if applicable), the number of
shares or contracts, and the principal amount of each Security
or Futures Contract involved;
2. The nature of the Investment Transaction (i.e. purchase, sale
or any other type of acquisition or disposition);
3. The price of the Security or Futures Contract at which the
transaction was effected; and
4. The name of the broker, dealer, bank, or futures commission
merchant with or through which the transaction was effected.
You shall provide similar information for the fourth calendar quarter on a copy
of the form attached hereto as Appendix VIII, which form shall also be used for
the Annual Holdings Report described below.
Annual Holdings Reports
Beginning with calendar year 2000, a Compliance Officer will provide to
you, promptly after the end of the calendar year, a list of all accounts that
you have previously identified to PIMCO as a Personal Account or a Related
Account that held or was likely to hold a Security or Futures Contract during
that calendar year. Within 10 days after the end of that calendar year, you
shall make any necessary additions, corrections or deletions to that list and
return it to a
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Compliance Officer with a certification that: (a) the list, as
modified (if necessary), represents a complete list of the Personal Accounts and
Related Accounts that held Securities or Futures Contracts in which you had a
Beneficial Ownership interest as of the end of that calendar year and for which
PIMCO should have received or will receive an account statement of holdings as
of the end of that calendar year, and (b) the broker, dealer, bank or futures
commission merchant for each account on the list has been instructed to send a
Compliance Officer such an account statement.
You shall provide, on a copy of the form attached hereto as Appendix
VIII, the following information for each Security or Futures Contract in which
you had a Beneficial Ownership interest, as of the end of the previous calendar
year, to the extent that the previously referenced account statements have not
supplied or will not supply this information to PIMCO:
1. The title, quantity (e.g. in terms of numbers of shares, units
or contracts) and principal amount of each Security or Futures
Contract in which you had any Beneficial Ownership interest;
and
2. The name of any broker, dealer, bank or futures commission
merchant with which you maintain an account in which any such
Securities or Futures Contracts have been held or are held for
your benefit.
In addition, you shall also provide, on that same form, Investment Transaction
information for the fourth quarter of the calendar year just ended. This
information shall be of the type and in the form required for the quarterly
reports described above.
Related Accounts
The reporting and certification obligations described above also apply
to any Related Account (as defined in Appendix I) and to any Investment
Transaction in a Related Account.
It is important for you to recognize that the definitions of "Related
Account" and "Beneficial Ownership" in Appendix I may require you to provide, or
to arrange for the broker, dealer, bank or futures commission merchant to
furnish, copies of reports for any account used by or for a member of your
Immediate Family or a trust in which you or a member of your Immediate Family
has any vested interest, as well as for any other accounts in which you may have
the opportunity, directly or indirectly, to profit or share in the profit
derived from any Investment Transaction in that account.
Exemptions From Reporting
You need not report Investment Transactions in any account over which
neither you nor an Immediate Family Member has or had any direct or indirect
influence or control.
You also need not report Investment Transactions in Exempt Securities
(as defined in Appendix I) nor need you furnish, or require a broker, dealer,
bank or futures commission merchant to furnish, copies of confirmations or
periodic statements for accounts that hold only
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Exempt Securities. This includes accounts that only hold U.S. Government
Securities, money market interests, or shares in open-end mutual funds. This
exemption from reporting shall end immediately, however, at such time as there
is an Investment Transaction in that account in a Futures Contract or in a
Security that is not an Exempt Security.
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PROHIBITED INVESTMENT TRANSACTIONS
Initial Public Offerings of Equity Securities
If you are a Portfolio Employee (as defined in Appendix I), you may not
acquire Beneficial Ownership of any equity Security in an Initial Public
Offering.
Private Placements and Initial Public Offering of Debt Securities
If you are a Portfolio Employee, you may not acquire a Beneficial
Ownership interest in any Security through a Private Placement (or subsequently
sell it), or acquire a Beneficial Ownership interest in any debt Security in an
Initial Public Offering unless you have received the prior written approval of
the Chief Executive Officer of PIMCO or of a Compliance Officer listed on
Appendix X. Approval will not be given unless a determination is made that the
investment opportunity should not be reserved for one or more Advisory Clients,
and that the opportunity to invest has not been offered to you by virtue of your
position with PIMCO.
If, after receiving the necessary approval, you have acquired a
Beneficial Ownership interest in Securities through a Private Placement, you
must DISCLOSE that investment when you play a part in any consideration of any
investment by an Advisory Client in the issuer of the Securities, and any
decision to make such an investment must be INDEPENDENTLY REVIEWED by a
portfolio manager who does not have a Beneficial Ownership interest in any
Securities of the issuer.
PIMCO Advisors L.P.
You may not engage in any Investment Transaction in interests in PIMCO
Advisors L.P. ("PALP"), except in compliance with the Special Trading Procedures
applicable to such transactions.(2)
PRECLEARANCE
All Investment Transactions in Securities and Futures Contracts in a
Personal Account or Related Account, or in which you otherwise have or will
acquire a Beneficial Ownership interest, must be precleared by a Compliance
Officer unless an Investment Transaction, Security or Futures Contract falls
into one of the following categories that are identified as "exempt from
preclearance."
Preclearance Procedure
Preclearance shall be requested by completing and submitting a copy of
the preclearance request form attached hereto as Appendix IX to a Compliance
Officer. No Investment Transaction subject to preclearance may be effected prior
to receipt of written authorization of
(2) As indicated in note 1, above, those procedures will expire and no longer
be effective after AZOA completes its acquisition of a majority interest in
PALP.
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the transaction by a Compliance Officer. The authorization and the date of
authorization will be reflected on the preclearance request form. Unless
otherwise specified, that authorization shall be effective, unless revoked,
until the earlier of: (a) the close of business on the day the authorization is
given, or (b) until you discover that the information on the preclearance
request form is no longer accurate.
The Compliance Officer from whom authorization is sought may undertake
such investigation as he or she considers necessary to determine that the
Investment Transaction for which preclearance has been sought complies with the
terms of this Code and is consistent with the general principles described at
the beginning of the Code.
Before deciding whether to authorize an Investment Transaction in a
particular Security or Futures Contract, the Compliance Officer shall determine
and consider, based upon the information reported or known to that Compliance
Officer, whether within the most recent 15 days: (a) the Security, the Futures
Contract or any Related Security is or has been held by an Advisory Client, or
(b) is being or has been considered for purchase by an Advisory Client. The
Compliance Officer shall also determine whether there is a pending BUY or SELL
order in the same Security or Futures Contract, or in a Related Security, on
behalf of an Advisory Client. If such an order exists, authorization of the
personal Investment Transaction shall not be given until the Advisory Client's
order is executed or withdrawn. This prohibition may be waived by a Compliance
Officer if he or she is convinced that: (a) your personal Investment Transaction
is necessary, (b) your personal Investment Transaction will not adversely affect
the pending order of the Advisory Client, and (c) provision can be made for the
Advisory Client trade to take precedence (in terms of price) over your personal
Investment Transaction.
Exemptions From Preclearance
Preclearance shall NOT be required for the following Investment
Transactions, Securities and Futures Contracts. They are exempt only from the
Code's preclearance requirement, and, unless otherwise indicated, remain subject
to the Code's other requirements, including its reporting requirements.
Investment Transactions Exempt From Preclearance
Preclearance shall NOT be required for any of the following Investment
Transactions:
1. Any transaction in a Security or Futures Contract in an
account that is managed or held by a broker, dealer, bank,
futures commission merchant, investment adviser, commodity
trading advisor or trustee and over which you do not exercise
investment discretion, have notice of transactions prior to
execution, or otherwise have any direct or indirect influence
or control. There is a presumption that you can influence or
control accounts held by members of your Immediate Family
sharing the same household. This presumption may be rebutted
only by convincing evidence.
2. Purchases of Securities under dividend reinvestment plans.
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3. Purchases of Securities by exercise of rights issued to the
holders of a class of Securities pro rata, to the extent they
are issued with respect to Securities in which you have a
Beneficial Ownership interest.
4. Acquisitions or dispositions of Securities as the result of a
stock dividend, stock split, reverse stock split, merger,
consolidation, spin-off or other similar corporate
distribution or reorganization applicable to all holders of a
class of Securities in which you have a Beneficial Ownership
interest.
Securities Exempt From Preclearance
Regardless Of Transaction Size
Preclearance shall NOT be required for an Investment Transaction in the
following Securities or Related Securities, regardless of the size of that
transaction:
1. All "Exempt Securities" defined in Appendix I, i.e. U.S.
Government Securities, shares in open-end mutual funds, and
high quality short-term debt instruments.
2. All closed-end mutual funds (other than PIMCO Commercial
Mortgage Securities Trust, Inc.), and rights distributed to
shareholders in closed-end mutual funds.
3. All options on any index of equity Securities.
4. All Fixed Income Securities issued by agencies or
instrumentalities of, or unconditionally guaranteed by, the
Government of the United States.
5. All options on foreign currencies or baskets of foreign
currencies (whether or not traded on an exchange or board of
trade).
6. EXCEPT FOR DESIGNATED EQUITY SECURITIES (as defined in
Appendix I and discussed below), all equity Securities or
options, warrants or other rights to equity Securities.
Securities Exempt from Preclearance
Depending On Transaction Size
Preclearance shall NOT be required for an Investment Transaction in the
following Securities or Related Securities if they do not exceed the specified
transaction size thresholds (which thresholds may be increased or decreased by
PIMCO upon written notification to employees in the future depending on the
depth and liquidity of Fixed Income Securities or Tax-Exempt Municipal Bonds
market):
1. Purchases or sales of up to $1,000,000 (in market value or
face amount whichever is greater) per calendar month per
issuer of Fixed Income Securities issued by a Qualified
Foreign Government.
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2. Purchases or sales of the following dollar values (measured in
market value or face amount, whichever is greater) of
corporate debt Securities, mortgage-backed and other
asset-backed Securities, Tax-Exempt Municipal Bonds, taxable
state, local and municipal Fixed Income Securities, structured
notes and loan participations, and foreign government debt
Securities issued by non-qualified foreign governments
(hereinafter collectively referred to as "Relevant Debt
Securities"):
a. Purchases or sales of up to $100,000 per calendar
month per issuer if the original issue size of any
Relevant Debt Security being purchased or sold was
less than $50 million;
b. Purchases or sales of up to $500,000 per calendar
month per issuer if the original issue size of any
Relevant Debt Security being purchased or sold was at
least $50 million but less than $100 million; or
c. Purchases or sales of up to $1,000,000 per calendar
month per issuer if the original issue size of any
Relevant Debt Security being purchased or sold was at
least $100 million.
Preclearance of Designated Equity Securities
If a Compliance Officer receives notification from a Portfolio Employee
that an equity Security or an option, warrant or other right to an equity
Security is being considered for purchase or sale by PIMCO on behalf of one of
its Advisory Clients, the Compliance Officer will send you an e-mail message or
similar transmission notifying you that this equity Security or option, warrant
or other right to an equity Security is now a "Designated Equity Security." A
current list of Designated Equity Securities (if any) will also be available on
the PIMCO intranet site. You must preclear any Investment Transaction in a
Designated Equity Security or a Related Security during the period when that
designation is in effect.
Futures Contracts Exempt From Preclearance
Regardless Of Transaction Size
Preclearance shall NOT be required for an Investment Transaction in the
following Futures Contracts, regardless of the size of that transaction (as
indicated in Appendix I, for these purposes a "Futures Contract" includes a
futures option):
1. Currency Futures Contracts.
2. U.S. Treasury Futures Contracts.
3. Eurodollar Futures Contracts.
4. Futures Contracts on any index of equity Securities.
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5. Futures Contracts on physical commodities or indices thereof
(e.g. contracts for future delivery of grain, livestock, fiber
or metals whether for physical delivery or cash).
6. Privately-Traded Contracts.
Futures Contracts Exempt From Preclearance
Depending On Transaction Size
Preclearance shall NOT be required for an Investment Transaction in the
following Futures Contracts if the total number of contracts purchased or sold
during a calendar month does not exceed the specified limitations:
1. Purchases or sales of up to 50 PUBLICLY-TRADED FUTURES
CONTRACTS to acquire Fixed Income Securities issued by a
particular Qualified Foreign Government.
2. Purchases or sales of up to 10 OF EACH OTHER INDIVIDUAL
PUBLICLY-TRADED FUTURES CONTRACT if the open market interest
for such Futures Contract as reported in The Wall Street
Journal on the date of your Investment Transaction (for the
previous trading day) is at least 1,000 contracts. Examples of
Futures Contracts for which this exemption would be available
include a Futures Contract on a foreign government debt
Security issued by a non-qualified foreign government as well
as a 30-day federal funds Futures Contract.
For purposes of these limitations, a Futures Contract is defined by its
expiration month. For example, you need not obtain preclearance to purchase 50
December Futures Contracts on German Government Bonds and 50 March Futures
Contracts on German Government Bonds. Similarly, you may roll over 10 September
Fed Funds Futures Contracts by selling those 10 contracts and purchasing 10
October Fed Funds Futures Contracts since the contracts being sold and those
being purchased have different expiration months. On the other hand, you could
not purchase 10 January Fed Funds Future Contracts if the open interest for
those contracts was less than 1,000 contracts, even if the total open interest
for all Fed Funds Futures Contracts was greater than 1,000 contracts.
Additional Exemptions From Preclearance
The Compliance Committee may exempt other classes of Investment
Transactions, Securities or Futures Contracts from the Code's preclearance
requirement upon a determination that they do not involve a realistic
possibility of violating the general principles described at the beginning of
the Code.
Preclearance Required
Given the exemptions described above, preclearance shall be required
for Investment Transactions in:
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1. Designated Equity Securities.
2. Relevant Debt Securities (as defined under the section
"Securities Exempt from Preclearance Depending on Transaction
Size, paragraph 2") in excess of the per calendar month per
issuer thresholds specified for purchases or sales of those
Securities.
3. More than $1,000,000 per calendar month in debt Securities of
a Qualified Foreign Government.
4. Related Securities that are exchangeable for or convertible
into one of the Securities requiring preclearance under (1),
(2), or (3) above.
5. More than 50 Publicly-Traded Futures Contracts per calendar
month to acquire Fixed Income Securities issued by a
particular Qualified Foreign Government.
6. More than 10 of any other individual Publicly-Traded Futures
Contract or any Publicly-Traded Futures Contract for which the
open market interest as reported in The Wall Street Journal on
the date of your Investment Transaction (for the previous
trading day) is less than 1,000 contracts, unless the Futures
Contract is exempt from preclearance regardless of transaction
size.
7. Any other Security or Publicly-Traded Futures Contract that is
not within the "exempt" categories listed above.
8. PIMCO Commercial Mortgage Securities Trust, Inc.
SHORT-TERM TRADING PROFITS
You may not profit from the purchase and sale, or the sale and
purchase, within 60 calendar days, of FIXED INCOME SECURITIES, TAX-EXEMPT
MUNICIPAL BONDS OR RELATED SECURITIES. Portfolio Employees may not profit from
the purchase and sale, or the sale and purchase, within 60 calendar days, of
DESIGNATED EQUITY SECURITIES. Any such short-term trade must be unwound, or if
that is not practical, the profits must be contributed to a charitable
organization.
This ban does NOT apply to Investment Transactions in U.S. Government
Securities, most equity Securities, mutual fund shares, index options or Futures
Contracts. This ban also does not apply to a purchase or sale in connection with
one of the four categories of Investment Transactions Exempt From Preclearance
described on pages 9-10, above.
You are considered to profit from a short-term trade if Securities in
which you have a Beneficial Ownership interest are sold for more than their
purchase price, even though the Securities purchased and the Securities sold are
held of record or beneficially by different persons or entities.
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BLACKOUT PERIODS
You MAY NOT purchase or sell a Security, a Related Security or a
Futures Contract at a time when you intend or know of another's intention to
purchase or sell that Security or Futures Contract on behalf of any Advisory
Client.
As noted previously in the description of the Preclearance Process, a
Compliance Officer may not preclear an Investment Transaction in a Security or a
Futures Contract at a time when there is a pending BUY OR SELL order in the same
Security or Futures Contract, or a Related Security, until that order is
executed or withdrawn.
These prohibitions do not apply to Investment Transactions in any
Futures Contracts that are exempt from preclearance regardless of transaction
size.
GIFTS AND SERVICE AS A DIRECTOR
GIFTS
You MAY NOT accept any investment opportunity, gift, gratuity or other
thing of more than nominal value from any person or entity that does business,
or desires to do business, with PIMCO directly or on behalf of an Advisory
Client (a "Giver"). You MAY, however, accept gifts from a single Giver so long
as their aggregate annual value does not exceed $500, and you MAY attend
business meals, sporting events and other entertainment events at the expense of
a Giver (without regard to their aggregate annual value), so long as the expense
is reasonable and both you and the Giver are present.
SERVICE AS A DIRECTOR
If you are an Advisory Employee, you may not serve on the board of
directors or other governing board of a publicly traded entity, other than of a
Fund for which PIMCO is an advisor or subadvisor, unless you have received the
prior written approval of the Chief Executive Officer and the Chief Legal
Officer of PIMCO. Approval will not be given unless a determination is made that
your service on the board would be consistent with the interests of our Advisory
Clients. If you are permitted to serve on the board of a publicly traded entity,
you will be ISOLATED from those Advisory Employees who make investment decisions
with respect to the Securities of that entity, through a "Chinese Wall" or other
procedures.
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COMPLIANCE
CERTIFICATIONS
Upon Receipt Of This Code
Upon commencement of your employment or the effective date of this
Code, whichever occurs later, you shall be required to acknowledge receipt of
your copy of this Code by completing and returning a copy of the form attached
hereto as Appendix IV. By that acknowledgment, you will also agree:
1. To read the Code, to make a reasonable effort to understand
its provisions, and to ask questions about those provisions
you find confusing or difficult to understand.
2. To comply with the Code, including its general principles, its
reporting requirements, its preclearance requirements, and its
provisions regarding gifts and service as a director.
3. To advise the members of your Immediate Family about the
existence of the Code, its applicability to their personal
trading activity, and your responsibility to assure that their
personal trading activity complies with the Code.
4. To cooperate fully with any investigation or inquiry by or on
behalf of a Compliance Officer to determine your compliance
with the provisions of the Code.
In addition, your acknowledgment will recognize that any failure to comply with
the Code and to honor the commitments made by your acknowledgment may result in
disciplinary action, including dismissal.
Annual Certificate Of Compliance
You are required to certify on an annual basis, on a copy of the form
attached hereto as Appendix V, that you have complied with each provision of
your initial acknowledgment (see above). In particular, your annual
certification will require that you certify that you have read and that you
understand the Code, that you recognize you are subject to its provisions, that
you complied with the requirements of the Code during the year just ended and
that you have disclosed, reported, or caused to be reported all Investment
Transactions required to be disclosed or reported pursuant to the requirements
of the Code.
POST-TRADE MONITORING
The Compliance Officers will review the duplicate broker reports and
other information supplied to them concerning your personal Investment
Transactions so that they can detect and prevent potential violations of the
Code. The Compliance Officers will perform such investigation and make such
inquiries as they consider necessary to perform this function. You agree to
cooperate with any such investigation and to respond to any such inquiry. You
should
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<PAGE> 17
expect that, as a matter of course, the Compliance Officers will make inquiries
regarding any personal Investment Transaction in a Security or Futures Contract
that occurs on the same day as a transaction in the same Security or Futures
Contract on behalf of an Advisory Client.
REMEDIAL ACTIONS
If you violate this Code, you are subject to remedial actions, which
may include, but are not limited to, disgorgement of profits, imposition of a
fine, censure, demotion, suspension or dismissal. As part of any sanction, you
may be required to reverse an Investment Transaction and to forfeit any profit
or to absorb any loss from the transaction.
The Compliance Committee shall have the ultimate authority to determine
whether you have violated the Code and, if so, the remedial actions it considers
appropriate. In making its determination, the Compliance Committee shall
consider, among other factors, the gravity of your violation, the frequency of
your violations, whether any violation caused harm or the potential of harm to
any Advisory Client, your efforts to cooperate with their investigation, and
your efforts to correct any conduct that led to a violation.
REPORTS TO DIRECTORS AND TRUSTEES
Reports Of Significant Remedial Actions
The General Counsel of PIMCO Advisors L.P. and the directors or
trustees of any affected Fund that is an Advisory Client will be informed on a
timely basis of each SIGNIFICANT REMEDIAL ACTION taken in response to a
violation of this Code. For this purpose, a significant remedial action will
include any action that has a significant financial effect on the violator.
Reports of Material Changes To The Code
PIMCO will promptly advise the directors or trustees of any Fund that
is an Advisory Client if PIMCO makes any material change to this Code.
Annual Reports
PIMCO's management will furnish a written report annually to the
General Counsel of PIMCO Advisors L.P. and to the directors or trustees of each
Fund that is an Advisory Client. Each report, at a minimum, will:
1. Describe any significant issues arising under the Code, or
under procedures implemented by PIMCO to prevent violations of
the Code, since management's last report, including, but not
limited to, information about material violations of the Code
or those procedures and sanctions imposed in response to
material violations; and
2. Certify that PIMCO has adopted procedures reasonably necessary
to prevent Advisory Employees from violating the Code.
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RECORDKEEPING
Beginning on the effective date of this Code, PIMCO will maintain, at
its principal place of business, the following records, which shall be available
to the Securities and Exchange Commission or any representative of the
Commission at any time and from time to time for reasonable periodic, special or
other examination:
1. PIMCO's Chief Compliance Officer shall maintain, in any easily
accessible place:
(a) a copy of PIMCO's current Code and of each
predecessor of that Code that was in effect at any
time within the previous five (5) years;
(b) a record of any violation of the Code, and of any
action taken as a result of the violation, for at
least five (5) years after the end of the fiscal year
in which the violation occurred;
(c) a copy of each report made by an Advisory Employee
pursuant to this Code, including any duplicate broker
report submitted on behalf of that Advisory Employee,
for at least two (2) years after the end of the
fiscal year in which that report was made or that
information was provided;
(d) a record of all persons, currently or within the past
five (5) years, who are or were required to make
reports pursuant to this Code or who are or were
responsible for reviewing such reports; and
(e) a copy of each report to the General Counsel of PIMCO
Advisors L.P. or to the directors or trustees of each
Fund that is an Advisory Client for at least two (2)
years after the end of the fiscal year in which that
report was made.
2. PIMCO shall also maintain the following additional records:
(a) a copy of each report made by an Advisory Employee
pursuant to this Code, including any duplicate broker
report submitted on behalf of that Advisory Employee,
for at least five (5) years after the end of the
fiscal year in which that report was made or that
information was provided;
(b) a copy of each report to the General Counsel of PIMCO
Advisors L.P. or to the directors or trustees of each
Fund that is an Advisory Client for at least five (5)
years after the end of the fiscal year in which that
report was made; and
(c) a record of any decision, and the reasons supporting
the decision, to approve the acquisition by a
Portfolio Employee of a Beneficial Ownership interest
in any Security in an Initial Public Offering or in a
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Private Placement for at least five (5) years after
the end of the fiscal year in which such approval was
granted.
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APPENDIX I
DEFINITIONS OF CAPITALIZED TERMS
The following definitions apply to the capitalized terms used in the
Code:
ADVISORY EMPLOYEE
The term "Advisory Employee" means: (1) a director, officer, general
partner or employee of PIMCO who, in connection with his or her regular
functions or duties, makes, participates in, or obtains information regarding
the purchase or sale of a Security or Futures Contract by PIMCO on behalf of an
Advisory Client, or whose functions relate to the making of any recommendations
with respect to such purchases or sales, or (2) or a natural person in a control
relationship to PIMCO, or an employee of any company in a control relationship
to PIMCO, who: (a) makes, participates in, or obtains information regarding the
purchase or sale of a Security by a Fund that is an Advisory Client, or whose
functions relate to the making of any recommendations with respect to such
purchases or sales, or (b) obtains information concerning recommendations to a
Fund with regard to the purchase or sale of a Security by the Fund.
BENEFICIAL OWNERSHIP
As a GENERAL MATTER, you are considered to have a "Beneficial
Ownership" interest in a Security or a Futures Contract if you have the
opportunity, directly or indirectly, to profit or share in any profit derived
from an Investment Transaction in that Security or Futures Contract. YOU ARE
PRESUMED TO HAVE A BENEFICIAL OWNERSHIP INTEREST IN ANY SECURITY OR FUTURES
CONTRACT HELD, INDIVIDUALLY OR JOINTLY, BY YOU OR A MEMBER OF YOUR IMMEDIATE
FAMILY (AS DEFINED BELOW). In addition, unless specifically excepted by a
Compliance Officer based on a showing that your interest in a Security or
Futures Contract is sufficiently attenuated to avoid the possibility of
conflict, you will be considered to have a Beneficial Ownership interest in a
Security or Futures Contract held by: (1) a JOINT ACCOUNT to which you are a
party, (2) a PARTNERSHIP in which you are a general partner, (3) a LIMITED
LIABILITY COMPANY in which you are a manager-member, or (4) a TRUST in which you
or a member of your Immediate Family has a vested interest.
As a TECHNICAL MATTER, the term "Beneficial Ownership" for purposes of
this Code shall be interpreted in the same manner as it would be under SEC Rule
16a-1(a)(2) (17 C.F.R. ss.240.16a-1(a)(2)) in determining whether a person has a
beneficial ownership interest in a Security for purposes of Section 16 of the
Securities Exchange Act of 1934 and the rules and regulations thereunder.
DESIGNATED EQUITY SECURITY
The term "Designated Equity Security" shall mean any equity Security,
option, warrant or other right to an equity Security designated as such by a
Compliance Officer, after receiving notification from a Portfolio Employee that
said Security is being considered for purchase or sale by PIMCO on behalf of one
of its Advisory Clients.
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EXEMPT SECURITY
The term "Exempt Security" shall mean any Security not included within
the definition of Covered Security in SEC Rule 17j-l(a)(4) (17 C.F.R. ss.
17j-1(a)(4)), including:
1. Direct obligations of the Government of the United States;
2. Shares issued by open-end Funds; and
3. Bankers' acceptances, bank certificates of deposit, commercial
paper and high quality short-term debt instruments, including
repurchase agreements. For these purposes, a "high quality
short-term debt instrument" means any instrument having a
maturity at issuance of less than 366 days and that is rated
in one of the two highest rating categories by a Nationally
Recognized Statistical Rating Organization.
FIXED INCOME SECURITY
For purposes of this Code, the term "Fixed Income Security" shall mean
a fixed income Security issued by an agency or instrumentality of, or
unconditionally guaranteed by, the Government of the United States, a corporate
debt Security, a mortgage-backed or other asset-backed Security, a taxable fixed
income Security issued by a state or local government or a political subdivision
thereof, a structured note or loan participation, a foreign government debt
Security, or a debt Security of an international agency or a supranational
agency. For purposes of this Code, the term "Fixed Income Security" shall not be
interpreted to include a U.S. Government Security or any other Exempt Security
(as defined above) nor shall it be interpreted to include a Tax-Exempt Municipal
Bond (as defined below).
FUND
The term "Fund" means an investment company registered under the
Investment Company Act.
FUTURES CONTRACT
The term "Futures Contract" includes (a) a futures contract and an
option on a futures contract traded on a United States or foreign board of
trade, such as the Chicago Board of Trade, the Chicago Mercantile Exchange, the
London International Financial Futures Exchange or the New York Mercantile
Exchange (a "Publicly-Traded Futures Contract"), as well as (b) a forward
contract, a swap, a cap, a collar, a floor and an over-the-counter option (other
than an option on a foreign currency, an option on a basket of currencies, an
option on a Security or an option on an index of Securities) (a
"Privately-Traded Contract"). Consult with a Compliance Officer prior to
entering into a transaction in case of any doubt. For purposes of this
definition, a Publicly-Traded Futures Contract is defined by its expiration
month, i.e. a Publicly-Traded Futures Contract on a U.S. Treasury Bond that
expires in June is treated as a separate Publicly-Traded Futures Contract, when
compared to a Publicly-Traded
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Futures Contract on a U.S. Treasury Bond that expires in July.
IMMEDIATE FAMILY
The term "Immediate Family" means any of the following persons who
RESIDE IN YOUR HOUSEHOLD OR DEPEND ON YOU FOR BASIC LIVING SUPPORT: your spouse,
any child, stepchild, grandchild, parent, stepparent, grandparent, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including any adoptive relationships.
INITIAL PUBLIC OFFERING
The term "Initial Public Offering" means an offering of securities
registered under the Securities Act of 1933 (15 U.S.C. ss. 77a), the issuer of
which, immediately before the registration, was not subject to the reporting
requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. ss. 78m or ss. 78o(d)).
INVESTMENT TRANSACTION
For purposes of this Code, the term "Investment Transaction" means any
transaction in a Security or Futures Contract in which you have, or by reason of
the transaction will acquire, a Beneficial Ownership interest, and includes,
among other things, the writing of an option to purchase or sell a Security.
PERSONAL ACCOUNT
The term "Personal Account" means the following accounts that hold or
are likely to hold a Security (as defined below) or a Futures Contract (as
defined above) in which you have a Beneficial Ownership interest: any account in
your individual name; any joint or tenant-in-common account in which you have an
interest or are a participant; any account for which you act as trustee,
executor, or custodian; any account over which you have investment discretion or
otherwise can exercise control (other than non-related clients' accounts over
which you have investment discretion), including the accounts of entities
controlled directly or indirectly by you; and any other account in which you
have a Beneficial Ownership interest (other than such accounts over which you
have no investment discretion and cannot otherwise exercise control).
PORTFOLIO EMPLOYEE
The term "Portfolio Employee" means: (1) a portfolio manager or any
employee of PIMCO (or of any company in a control relationship with PIMCO) who,
in connection with his or her regular functions or duties, makes or participates
in making recommendations regarding the purchase or sale of securities by a
Fund, or (2) any natural person who controls PIMCO and who obtains information
concerning recommendations made to a Fund that is an Advisory Client regarding
the purchase or sale of Securities by the Fund. For these purposes, "control"
has the same meaning as in Section 2(a)(9) of the Investment Advisers Act (15
U.S.C. ss. 80a-2(a)(9)).
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PRIVATE PLACEMENT
The term "Private Placement" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) or
Section 4(6) (15 U.S.C. ss. 77d(2) or ss. 77d(6)) or pursuant to SEC Rules 504,
505 or 506 (17 C.F.R. ss.ss. 230.504, 230.505, or 230.506) under the Securities
Act of 1933.
QUALIFIED FOREIGN GOVERNMENT
The term "Qualified Foreign Government" means a national government of
a developed foreign country with outstanding Fixed Income Securities in excess
of fifty billion dollars. A list of Qualified Foreign Governments will be
prepared as of the last business day of each calendar quarter, will be available
from the Chief Compliance Officer, and will be effective for the following
calendar quarter.
RELATED ACCOUNT
The term "Related Account" means any account, other than a Personal
Account, that holds a Security or Futures Contract in which you have a
Beneficial Ownership interest.
RELATED SECURITY
The term "Related Security" shall mean any option to purchase or sell,
and any Security convertible into or exchangeable for, a Security that is or has
been held by PIMCO on behalf of one of its Advisory Clients or any Security that
is being or has been considered for purchase by PIMCO on behalf of one of its
Advisory Clients.
SECURITY
As a GENERAL MATTER, the term "Security" shall mean any stock, note,
bond, debenture or other evidence of indebtedness (including any loan
participation or assignment), limited partnership interest or investment
contract OTHER THAN AN EXEMPT SECURITY (as defined above). The term "Security"
includes an option on a Security, on an index of Securities, on a currency or on
a basket of currencies, including such an option traded on the Chicago Board of
Options Exchange or on the New York, American, Pacific or Philadelphia Stock
Exchanges, as well as such an option traded in the over-the-counter market. The
term "Security" shall not include a Futures Contract or a physical commodity
(such as foreign exchange or a precious metal).
As a TECHNICAL MATTER, the term "Security" shall have the meaning set
forth in Section 2(a)(36) of the Investment Company Act of 1940 (15 U.S.C. ss.
80a-2(a)(36)), which defines a Security to mean:
Any note, stock, treasury stock, bond debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization certificate of
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other
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mineral rights, any put, call, straddle, option, or privilege on any security
(including a certificate of deposit) or on any group or index of securities
(including any interest therein or based on the value thereof), or any put,
call, straddle, option, or privilege entered into on a national securities
exchange relating to foreign currency, or, in general, any interest or
instrument commonly known as a "security", or any certificate of interest or
instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, warrant or right to subscribe to or purchase, any of the foregoing, except
that the term "Security" shall not include any Security that is an Exempt
Security (as defined above), a Futures Contract or a physical commodity (such as
foreign exchange or precious metal).
TAX-EXEMPT MUNICIPAL BOND
The term "Tax-Exempt Municipal Bond" shall mean any Fixed Income
Security exempt from federal income tax that is issued by a state or local
government or a political subdivision thereof.
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APPENDIX II
INSIDER TRADING POLICY AND PROCEDURES
PIMCO ADVISORS L.P.
Effective as of May 1, 1996
SECTION I. POLICY STATEMENT ON INSIDER TRADING.
A. POLICY STATEMENT ON INSIDER TRADING.
PIMCO ADVISORS L.P. ("PALP"), ITS AFFILIATED SUBPARTNERSHIPS,
PIMCO PARTNERS, G.P. ("PIMCO GP") AND PIMCO FUNDS DISTRIBUTORS LLC ("PFD")
(collectively the "Company" or "PIMCO Advisors") FORBID ANY OF THEIR OFFICERS,
DIRECTORS OR EMPLOYEES FROM TRADING, EITHER PERSONALLY OR ON BEHALF OF OTHERS
(such as, mutual funds and private accounts managed by PALP or its affiliated
Subpartnerships), ON THE BASIS OF MATERIAL, NON-PUBLIC INFORMATION OR
COMMUNICATING MATERIAL, NON-PUBLIC INFORMATION TO OTHERS IN VIOLATION OF THE
LAW. THIS CONDUCT IS FREQUENTLY REFERRED TO AS "INSIDER TRADING."
The term "insider trading" is not defined in the federal
securities laws, but generally is used to refer to the use of material,
non-public information to trade in securities or to communications of material,
non-public information to others in breach of a fiduciary duty.
While the law concerning insider trading is not static, it is
generally understood that the law prohibits:
(1) trading by an insider, while in possession of material, non-public
information; or
(2) trading by a non-insider, while in possession of material,
non-public information, where the information was disclosed to the
non-insider in violation of an insider's duty to keep it
confidential; or
(3) communicating material, non-public information to others in breach
of a fiduciary duty.
This communication applies to every such officer, director and employee
and extends to activities within and outside their duties at PIMCO Advisors.
Every officer, director and employee must read and retain this policy statement.
Any questions regarding this policy statement and the related procedures set
forth herein should be referred to a Compliance Officer of PALP or the
applicable subpartnership.
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The remainder of this memorandum discusses in detail the elements of
insider trading, the penalties for such unlawful conduct and the procedures
adopted by the Company to implement its policy against insider trading.
1. TO WHOM DOES THIS POLICY APPLY?
This Policy applies to all employees, officers and directors (direct or
indirect) of the Company ("Covered Persons"), as well as to any transactions in
any securities participated by family members, trusts or corporations controlled
by such persons. In particular, this Policy applies to securities transactions
by:
\/ the Covered Person's spouse;
\/ the Covered Person's minor children;
\/ any other relative living in the Covered Person's household;
\/ a trust in which the Covered Person has a beneficial interest,
unless such person has no direct or indirect control over the
trust;
\/ a trust as to which the Covered Person is a trustee;
\/ a revocable trust as to which the Covered Person is a settlor;
\/ a corporation of which the Covered Person is an officer, director
or 10% or greater stockholder; or
\/ a partnership of which the Covered Person is a partner (including
most investment clubs), unless the Covered Person has no direct or
indirect control over the partnership.
2. WHAT IS MATERIAL INFORMATION?
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment decisions,
or information that is reasonably certain to have a substantial effect on the
price of a company's securities.
Although there is no precise, generally accepted definition of
materiality, information is likely to be "material" if it relates to significant
changes affecting such matters as:
dividend or earnings expectations;
write-downs or write-offs of assets;
additions to reserves for bad debts or contingent liabilities;
expansion or curtailment of company or major division operations;
proposals or agreements involving a joint venture, merger,
acquisition, divestiture, or leveraged buy-out;
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new products or services;
exploratory, discovery or research
developments;
criminal indictments, civil litigation or government
investigations;
disputes with major suppliers or customers or significant changes
in the relationships with such parties;
labor disputes including strikes or lockouts;
substantial changes in accounting methods;
major litigation developments;
major personnel changes;
debt service or liquidity problems;
bankruptcy or insolvency;
extraordinary management developments;
public offerings or private sales of debt or equity securities;
calls, redemptions or purchases of a company's own stock;
issuer tender offers or
recapitalizations.
Information provided by a company could be material because of its
expected effect on a particular class of the company's securities, all of the
company's securities, the securities of another company, or the securities of
several companies. Moreover, the resulting prohibition against the misuses of
"material" information reaches all types of securities (whether stock or other
equity interests, corporate debt, government or municipal obligations, or
commercial paper) as well as any option related to that security (such as a put,
call or index security).
Material information does not have to relate to a company's
business. For example, in Carpenter v. U.S., 108 U.S. 316 (1987), the Supreme
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 and whether those reports would be
favorable or not.
3. WHAT IS NON-PUBLIC INFORMATION?
In order for issues concerning insider trading to arise,
information must not only be "material," it must be "non-public." "Non-public"
information is information which has not been made available to investors
generally. Information received in circumstances indicating that it is not yet
in general circulation or where the recipient knows or should know that the
information could only have been provided by an "insider" is also deemed
"non-public" information.
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At such time as material, non-public information has been
effectively distributed to the investing public, it is no longer subject to
insider trading restrictions. However, for "non-public" information to become
public information, it must be disseminated through recognized channels of
distribution designed to reach the securities marketplace.
To show that "material" information is public, you should be able
to point to some fact verifying that the information has become generally
available, for example, disclosure in a national business and financial wire
service (Dow Jones or Reuters), a national news service (AP or UPI), a national
newspaper (The Wall Street Journal or The New York Times), or a publicly
disseminated disclosure document (a proxy statement or prospectus). The
circulation of rumors or "talk on the street," even if accurate, widespread and
reported in the media, does not constitute the requisite public disclosure. The
information must not only be publicly disclosed, there must also be adequate
time for the market as a whole to digest the information. Although timing may
vary depending upon the circumstances, a good rule of thumb is that information
is considered non-public until the third business day after public disclosure.
Material, non-public information is not made public by selective
dissemination. Material information improperly disclosed only to institutional
investors or to a fund analyst or a favored group of analysts retains its status
as "non-public" information which must not be disclosed or otherwise misused.
Similarly, partial disclosure does not constitute public dissemination. So long
as any material component of the "inside" information possessed by the Company
has yet to be publicly disclosed, the information is deemed "non-public" and may
not be misused.
Information Provided in Confidence. Occasionally, one or more
directors, officers, or employees of companies in PIMCO Advisors may become
temporary "insiders" because of a fiduciary or commercial relationship. For
example, personnel at PALP or a subpartnership may become insiders when an
external source, such as a company whose securities are held by one or more of
the accounts managed by PALP or a subpartnership, entrusts material, non-public
information to the Company portfolio managers or analysts with the expectation
that the information will remain confidential.
As an "insider," the Company has a fiduciary responsibility not to
breach the trust of the party that has communicated the "material, non-public"
information by misusing that information. This fiduciary duty arises because the
Company has entered or has been invited to enter into a commercial relationship
with the client or prospective client and has been given access to confidential
information solely for the corporate purposes of that client or prospective
client. This obligation remains whether or not the Company ultimately
participates in the transaction.
Information Disclosed in Breach of a Duty. Analysts and portfolio
managers at PIMCO Advisors must be especially wary of "material, non-public"
information
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disclosed in breach of a corporate insider's fiduciary duty. Even where there is
no expectation of confidentiality, a person may become an "insider" upon
receiving material, non-public information in circumstances where a person
knows, or should know, that a corporate insider is disclosing information in
breach of the fiduciary duty he or she owes the corporation and its
shareholders. Whether the disclosure is an improper "tip" that renders the
recipient a "tippee" depends on whether the corporate insider expects to benefit
personally, either directly or indirectly, from the disclosure. In the context
of an improper disclosure by a corporate insider, the requisite "personal
benefit" may not be limited to a present or future monetary gain. Rather, a
prohibited personal benefit could include a reputational benefit, an expectation
of a quid pro quo from the recipient or the recipient's employer by a gift of
the "inside" information.
A person may, depending on the circumstances, also become an "insider"
or "tippee" when he or she obtains apparently material, non-public information
by happenstance, including information derived from social situations, business
gatherings, overheard conversations, misplaced documents, and "tips" from
insiders or other third parties.
4. IDENTIFYING MATERIAL INFORMATION?
Before trading for yourself or others, including investment companies
or private accounts managed by PALP or its affiliated Subpartnerships, in the
securities of a company about which you may have potential material, non-public
information, ask yourself the following questions:
i. Is this information that an investor could consider important in making
his or her investment decisions? Is this information that could
substantially affect the market price of the securities if generally
disclosed?
ii. To whom has this information been provided? Has the information been
effectively communicated to the marketplace by being published in
Reuters, The Wall Street Journal or other publications of general
circulation.
Given the potentially severe regulatory, civil and criminal sanctions
to which you and PIMCO Advisors and its personnel could be subject, any
director, officer and employee uncertain as to whether the information he or she
possesses is "material, non-public" information should immediately take the
following steps:
i. Report the matter immediately to a Compliance Officer or the Chief
Executive Officer of PALP;
ii. Do not purchase or sell the securities on behalf of yourself or others,
including investment companies or private accounts managed by PALP or
the applicable affiliated subpartnership; and
II-10
<PAGE> 30
iii. Do not communicate the information inside or outside the Company, other
than to a Compliance Officer or the Chief Executive Officer of PALP.
After a Compliance Officer or the Chief Executive Officer has reviewed
the issue, you will be instructed to continue the prohibitions against trading
and communication or will be allowed to trade and communicate the information.
5. PENALTIES FOR INSIDER TRADING.
Penalties for trading on or communicating material, non-public
information are severe, both for individuals involved in such unlawful conduct
and their employers. A person can be subject to some or all of the penalties
below even if he or she does not personally benefit from the violation.
Penalties include:
civil injunctions
treble damages
disgorgement of profits
jail sentences
fines for the person who committed the violation of up to three times
the profit gained or loss avoided, whether or not the person actually
benefited, and fines for the employer or other controlling person of up
to the greater of $1,000,000 or three times the amount of the profit
gained or loss avoided.
In addition, any violation of this policy statement can be expected to
result in serious sanctions by PIMCO Advisors, including dismissal of the
persons involved.
SECTION II. PROCEDURES TO IMPLEMENT PIMCO ADVISORS' POLICY.
A. PROCEDURES TO IMPLEMENT THE POLICY AGAINST INSIDER TRADING.
The following procedures have been established to aid the officers,
directors and employees of PIMCO Advisors in avoiding insider trading, and to
aid the Company in preventing, detecting and imposing sanctions against insider
trading. Every officer, director and employee of PIMCO Advisors must follow
these procedures or risk serious sanctions, including dismissal, substantial
personal liability and criminal penalties.
TRADING RESTRICTIONS AND REPORTING REQUIREMENTS
1. No employee, officer or director of the Company who possesses material,
non-public information relating to the Company or any of its affiliates
or subsidiaries, may buy or sell any securities of the Company or
engage in any other action to take advantage of, or pass on to others,
such material, non-public information.
II-11
<PAGE> 31
2. No employee, officer or director of the Company who obtains material,
non-public information which relates to any other company or entity in
circumstances in which such person is deemed to be an insider or is
otherwise subject to restrictions under the federal securities laws may
buy or sell securities of that company or otherwise take advantage of,
or pass on to others, such material, non-public information.
3. No employee, officer or director of the Company shall engage in a
securities transaction with respect to the securities of PIMCO
Advisors, except in accordance with the specific procedures published
from time to time by the company.
4. Each employee, officer or director of the Company shall submit reports
of every securities transaction involving securities of PIMCO Advisors
to a Compliance Officer in accordance with the terms of the Company's
Code of Ethics as they relate to any other securities transaction.
5. No Employee (as such term is defined in the applicable Code of Ethics)
shall engage in a securities transaction with respect to any securities
of any other company, except in accordance with the specific procedures
set forth in the Company's Code of Ethics.
6. Employees shall submit reports concerning each securities transaction
in accordance with the terms of the Code of Ethics and verify their
personal ownership of securities in accordance with the procedures set
forth in the Code of Ethics.
7. Because even inadvertent disclosure of material, non-public information
to others can lead to significant legal difficulties, officers,
directors and employees of the Company should not discuss any
potentially material, non-public information concerning the Company or
other companies, including other officers, employees and directors,
except as specifically required in the performance of their duties.
B. CHINESE WALL PROCEDURES.
The Insider Trading and Securities Fraud Enforcement Act requires the
establishment and strict enforcement of procedures reasonably designed to
prevent the misuse of "inside" information.(1) Accordingly, you should not
discuss material, non-public information about the Company or other companies
with anyone, including other employees, except as required in the performance of
your regular duties. In addition, care should be taken so that such information
is secure. For example, files containing
------------------------------
(1) The antifraud provisions of United States securities laws reach insider
trading or tipping activity worldwide which defrauds domestic securities
markets. In addition, the Insider Trading and Securities Fraud Enforcement Act
specifically authorizes the SEC to conduct investigations at the request of
foreign governments, without regard to whether the conduct violates United
States law.
II-12
<PAGE> 32
material, non-public information should be sealed; access to computer files
containing material, non-public information should be restricted.
C. RESOLVING ISSUES CONCERNING INSIDER TRADING.
The federal securities laws, including the laws governing insider
trading, are complex. If you have any doubts or questions as to the materiality
or non-public nature of information in your possession or as to any of the
applicability or interpretation of any of the foregoing procedures or as to the
propriety of any action, you should contact a Compliance Officer. Until advised
to the contrary by a Compliance Officer, you should presume that the information
is material and non-public and you should NOT trade in the securities or
disclose this information to anyone.
II-13
<PAGE> 33
APPENDIX III
PIMCO ADVISORS L.P.
POLICY REGARDING SPECIAL TRADING PROCEDURES
FOR SECURITIES OF PIMCO ADVISORS L.P.
Effective as of May 1, 1996
INTRODUCTION
PIMCO Advisors L.P. (as defined below) has adopted an Insider Trading
Policy and Procedures applicable to all personnel which prohibits insider
trading in any securities, and prohibits all employees from improperly using or
disclosing material, non-public information, a copy of which has been supplied
to you.
For the purposes of this memorandum, the term the "Company" shall
include PIMCO Advisors L.P. ("PALP"), PIMCO Partners, G.P. ("PIMCO GP"), PIMCO
Funds Distributors LLC ("PFD") and any entity in relation to which PALP acts as
a general partner or owns 50% or more of one the issued and outstanding stock.
PERSONS TO WHOM THIS SPECIAL TRADING POLICY APPLIES
This Policy applies to all employees of the Company and, in the case of
PALP, the inside members of the Operating Board and the Equity Board ("Covered
Persons"), as well as to any transactions in securities participated in by
family members, trusts or corporations controlled by a Covered Person. In
particular, this Policy applies to securities transactions by:
a. the Covered Person's spouse;
b. the Covered Person's minor children;
c. any other relatives living in the Covered Person's household;
d. a trust in which the Covered Person has a beneficial interest,
unless such Covered Person has no direct or indirect control over
the trust;
e. a trust as to which the Covered Person is a trustee;
f. a revocable trust as to which the Covered Person is a settlor;
g. a corporation of which the Covered Person is an officer, director
or 10% or greater stockholder; or
h. a partnership of which the Covered Person is a partner (including
most investment clubs), unless the Covered Person has no direct or
indirect control over the partnership.
<PAGE> 34
The family members, trust and corporations listed above are hereinafter
referred to as "Related persons."
SECURITIES TO WHICH THIS SPECIAL TRADING POLICY APPLIES
Unless stated otherwise, the following Special Trading Procedures apply
to all transactions by Covered Persons and their Related Persons involving any
class or series of units of limited partner interest of PALP or other securities
of PALP, including options and other derivative securities (such as a put, call
or index security) in relation to such securities (the "PALP Securities").
SPECIAL TRADING PROCEDURES RELATING TO SECURITIES OF PIMCO ADVISORS L.P.
1. TRADING WINDOWS
There are times when the Company may be engaged in a material
non-public development or transaction. Even if you are not aware of this
development or transaction, if you trade PALP's Securities before such
development or transaction is disclosed to the public, you might expose yourself
and the Company to a charge of insider trading that could be costly and
difficult to refute. In addition, such a trade by you could result in adverse
publicity to you or the company.
Therefore, the following rule shall apply: each Covered Person and all
of such person's Related Persons may only purchase or sell PALP Securities
during four "trading windows" that occur each year. The four trading windows
consist of the months of February, May, August and November. TRADING ON THE
BASIS OF MATERIAL NON-PUBLIC INFORMATION OR COMMUNICATING MATERIAL NON-PUBLIC
INFORMATION TO OTHERS AT ANY TIME, INCLUDING IN A TRADING WINDOW, IS A VIOLATION
OF THE LAW AND A VIOLATION OF THIS POLICY.
In accordance with the procedure for waivers described below, in
special circumstances a waiver may be given to allow a trade to occur outside of
a trading window.
Employees of PALP should be aware that there are potential tax
consequences for such employees resulting from the ownership of PALP Securities.
Each such employee contemplating purchasing PALP Securities should discuss the
matter with such employee's tax advisor.
The exercise of options to purchase PALP Securities for cash are not
Covered to the procedures outlined above, but the securities so acquired may not
be sold except during a trading window and after all other requirements of this
policy have been satisfied.
<PAGE> 35
2. POST-TRADE REPORTING
All Covered Persons shall submit to a Compliance Officer a report of
every securities transaction in PALP Securities in which they and any of their
Related Persons have participated as soon as practicable following the
transaction and in any event not later than the fifth day after the end of the
month in which the transaction occurred. The report shall include: (1) the date
of the transaction and the title and number of shares or principal amount of
each security involved; (2) the nature of the transaction (i.e., purchase, sale
or any other type of acquisition or disposition); (3) the price at which the
transaction was effected; and (4) the name of the broker/dealer with or through
whom the transaction was effected. In addition, on an annual basis, each Covered
Person must confirm the amount of PALP Securities which such person and his her
Related Persons beneficially own.
Each Covered Person (and not the Company) is personally responsible for
insuring that his or her transactions comply fully with any and all applicable
securities laws, including, but not limited to, the restrictions imposed under
Section 16(b) of the Securities and Exchange Act of 1934 and Rule 144 under the
Securities Act of 1933.
3. RESOLVING ISSUES CONCERNING INSIDER TRADING
If you have any doubts or questions as to whether information is
material or non-public, or as to the applicability or interpretation of any of
the foregoing procedures, or as to the propriety of any action, you should
contact a Compliance Officer before trading or communicating the information to
anyone. Until these doubts or questions are satisfactorily resolved, you should
presume that the information is material and non-public and you should NOT trade
in the securities or communicate this information to anyone.
4. MODIFICATIONS AND WAIVERS
The Company reserves the right to amend or modify this policy statement
at any time. Waiver of any provision of this policy statement in a specific
instance may be authorized in writing by a Compliance Officer and either the
Chief Executive Officer of PALP or any member of the Operating Committee of
PALP, and any such waiver shall be reported to the Equity and Operating Boards
of PALP at the next regularly scheduled meeting of each.
<PAGE> 36
APPENDIX IV
ACKNOWLEDGMENT OF RECEIPT
OF THE
CODE OF ETHICS
AND THE
INSIDER TRADING POLICY AND PROCEDURES OF
PACIFIC INVESTMENT MANAGEMENT COMPANY
I hereby certify that I have received the attached Code of Ethics and
Insider Trading Policy and Procedures. I hereby agree to read the Code, to make
a reasonable effort to understand its provisions and to ask questions about
those provisions I find confusing or difficult to understand. I also agree to
comply with the Code, including its general principles, its reporting
requirements, its preclearance requirements, and its provisions regarding gifts
and service as a director. I also agree to advise members of my Immediate Family
about the existence of the Code of Ethics, its applicability to their personal
trading activity, and my responsibility to assure that their personal trading
activity complies with the Code of Ethics. Finally, I agree to cooperate fully
with any investigation or inquiry by or on behalf of a Compliance Officer to
determine my compliance with the provisions of the Code. I recognize that any
failure to comply in all aspects with the Code and to honor the commitments made
by this acknowledgment may result in disciplinary action, including dismissal.
Date:
------------------------ --------------------------------------
Signature
--------------------------------------
Print Name
<PAGE> 37
APPENDIX V
ANNUAL CERTIFICATION OF COMPLIANCE
WITH THE
CODE OF ETHICS OF
PACIFIC INVESTMENT MANAGEMENT COMPANY
I hereby certify that I have complied with the requirements of the Code
of Ethics and Insider Trading Policy and Procedures that have applied to me
during the year ended December 31, 200_. In addition, I hereby certify that I
have read the Code and understand its provisions. I also certify that I
recognize that I am subject to the provisions of the Code and that I have
disclosed, reported, or caused to be reported all transactions required to be
disclosed or reported pursuant to the requirements of the Code. I recognize that
any failure to comply in all aspects with the Code and that any false statement
in this certification may result in disciplinary action, including dismissal.
Date:
------------------------ --------------------------------------
Signature
--------------------------------------
Print Name
<PAGE> 38
APPENDIX VI
INITIAL REPORT OF ACCOUNTS
PURSUANT TO THE
CODE OF ETHICS OF
PACIFIC INVESTMENT MANAGEMENT COMPANY
In accordance with the Code of Ethics, I have attached to this form
copies of the most recent statements for each and every Personal Account and
Related Account that holds or is likely to hold a Security or Futures Contract
in which I have a Beneficial Ownership interest, as well as copies of
confirmations for any and all Investment Transactions subsequent to the
effective dates of those statements.(3)
In addition, I hereby supply the following information for each and
every Personal Account and Related Account in which I have a Beneficial
Ownership interest for which I cannot supply the most recent account statement:
<TABLE>
<S> <C>
(1) Name of employee:
--------------------------------------------
(2) If different than #1, name of the person
in whose name the account is held:
--------------------------------------------
(3) Relationship of (2) to (1):
--------------------------------------------
(4) Firm(s) at which Account is maintained:
--------------------------------------------
--------------------------------------------
--------------------------------------------
(5) Account Number(s):
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
(6) Phone number(s) of Broker or Representative:
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
</TABLE>
------------------------------
(3) The Code of Ethics uses various capitalized terms that are defined in
Appendix I to the Code. The capitalized terms used in this Report have the same
definitions.
<PAGE> 39
(7) Account holdings:
<TABLE>
<CAPTION>
Name of Security Quantity Principal Amount Custodian
<S> <C> <C> <C> <C>
1.
------------------- -------------- --------------- -------------------
2.
------------------- -------------- --------------- -------------------
3.
------------------- -------------- --------------- -------------------
4.
------------------- -------------- --------------- -------------------
5.
------------------- -------------- --------------- -------------------
</TABLE>
(Attach additional sheets if necessary)
I also supply the following information for each and every Security or
Futures Contract in which I have a Beneficial Ownership interest, to the extent
this information is not available elsewhere on this form or from the statements
and confirmations attached to this form. This includes Securities or Futures
Contracts held at home, in safe deposit boxes, or by an issuer.
<TABLE>
<CAPTION>
Person Who Description
Owns the Security of the Security
Or Futures Contract Or Futures Contract Quantity Principal Amount Custodian
------------------- ------------------- -------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
1.
------------------- ----------------- ----------------- ----------------- -----------------
2.
------------------- ----------------- ----------------- ----------------- -----------------
3.
------------------- ----------------- ----------------- ----------------- -----------------
4.
------------------- ----------------- ----------------- ----------------- -----------------
5.
------------------- ----------------- ----------------- ----------------- -----------------
</TABLE>
(Attach additional sheets if necessary.)
I hereby certify that this form and the attachments (if any) identify
all of the Personal Accounts, Related Accounts, Securities and Futures Contracts
in which I have a Beneficial Ownership interest as of this date.
--------------------------------------
Signature
--------------------------------------
Print Name
Date:
----------------------------
Attachments
<PAGE> 40
APPENDIX VII
PACIFIC INVESTMENT MANAGEMENT COMPANY
PIMCO FUNDS DISTRIBUTORS LLC
QUARTERLY REPORT OF INVESTMENT TRANSACTIONS
FOR THE QUARTER ENDED MARCH 31, 2000
================================================================================
Please mark one of the following:
|_| No reportable Investment Transactions have occurred.
|_| Except as indicated below, all reportable Investment Transactions
were made through Personal Accounts and Related Accounts identified on the
attached list, which, except as indicated, represents a complete list of the
Personal Accounts and Related Accounts that hold Securities or Futures Contracts
in which I have or had a Beneficial Ownership interest and for which PIMCO
should have received or will receive timely duplicate broker reports for the
calendar quarter just ended.4 I hereby certify that the broker, dealer, bank or
futures commission merchant for each such account has been instructed to send a
Compliance Officer timely duplicate broker reports for that account.
The following information for Investment Transactions during the calendar
quarter just ended does not appear on the duplicate broker reports referenced
above.
<TABLE>
<S><C>
Transaction Title, Interest Rate and Maturity Number of Shares or Contracts
Date Date of Security or Futures Contract And Principal Amount
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Nature of Transaction Transaction Broker, Dealer,
(i.e., Buy or Sell) Price Bank or FCM
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
SPECIAL NOTE TO PIMCO FUNDS DISTRIBUTORS LLC REGISTERED REPS AND ACCESS PERSONS:
You will not have to fill out an extra form for each quarter for PIMCO Funds
Distributors LLC.
SIGNED:
----------------------------------------------------
PRINT NAME:
-----------------------------------------------------
DATE:
-----------------------------------------------------
</TABLE>
-------------------------------
(1) The Code of Ethics uses various capitalized terms that are defined in
Appendix I to the Code. The capitalized terms used in this Report have the same
definitions.
<PAGE> 41
1. Please see the CODE OF ETHICS for a full description of the Investment
Transactions that must be reported.
2. TRANSACTION DATE. In the case of a market transaction, state the trade
date (not the settlement date).
3. TITLE OF SECURITY OR FUTURES CONTRACT. State the name of the issuer and
the class of the Security (e.g., common stock, preferred stock or
designated issue of debt securities). For Fixed Income Securities,
please provide the Security's interest rate and maturity date. For a
Futures Contract, state the title of any Security subject to the
Futures Contract and the expiration date of the Futures Contract.
4. NUMBER OF SHARES OR CONTRACTS AND PRINCIPAL AMOUNT. State the number of
shares of Securities, the face amount of Fixed Income Securities or the
units of other securities. For options, state the amount of securities
subject to the option. Provide the principal amount of each Security or
Futures Contract. If your ownership interest was through a spouse,
relative or other natural person or through a partnership, trust, other
entity, state the entire quantity of Securities or Futures Contracts
involved in the transaction. You may indicate, if you wish, the extent
of your interest in the transaction.
5. NATURE OF TRANSACTION. Identify the nature of the transaction (e.g.,
purchase, sale or other type of acquisition or disposition).
6. TRANSACTION PRICE. State the purchase or sale price per share or other
unit, exclusive of brokerage commissions or other costs of execution.
In the case of an option, state the price at which it is currently
exercisable. No price need be reported for transactions not involving
cash.
7. BROKER, DEALER, BANK OR FCM EFFECTING TRANSACTION. State the name of
the broker, dealer, bank or FCM with or through which the transaction
was effected.
8. SIGNATURE. Sign and date the report in the spaces provided.
9. FILING OF REPORT. A report should be filed NOT LATER THAN 10 CALENDAR
DAYS after the end of each calendar quarter with:
PIMCO
ATTN: Compliance Officer
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
10. DUPLICATE BROKER REPORTS. Please remember that duplicates of all trade
confirmations, purchase and sale reports, and periodic statements must
be sent to the firm by your broker. You should use the address above.
<PAGE> 42
APPENDIX VIII
PACIFIC INVESTMENT MANAGEMENT COMPANY
PIMCO FUNDS DISTRIBUTORS LLC
ANNUAL HOLDINGS REPORT AND
FOURTH QUARTER REPORT OF INVESTMENT TRANSACTIONS
================================================================================
FOR THE YEAR AND QUARTER ENDED DECEMBER 31, 2000
================================================================================
I hereby certify that, except as indicated below, all Securities or
Futures Contracts in which I had a Beneficial Ownership interest at the end of
the 2000 calendar year were held in Personal Accounts or Related Accounts
identified on the attached list, for which PIMCO should have received or will
receive an account statement of holdings as of the end of that calendar year.5 I
hereby certify that the broker, dealer, bank or futures commission merchant for
each such account has been instructed to send a Compliance Officer timely
duplicate broker reports, including a statement of holdings in that account as
of the end of the calendar year.
The following information describes other Securities or Futures Contracts in
which I had a Beneficial Ownership interest as of the end of the 2000 calendar
year:
<TABLE>
<S><C>
Title, Interest Rate and Maturity Number of Shares or Contracts Broker, Dealer,
Date of Security or Futures Contract And Principal Amount Bank or FCM
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
----------------------------
(1) The Code of Ethics uses various capitalized terms that are defined in
Appendix I to the Code. The capitalized terms used in this Report have the same
definitions.
<PAGE> 43
Except as indicated below, all reportable Investment Transactions during
the quarter ended December 31, 2000, were made through Personal Accounts and
Related Accounts identified on the attached list, which, except as indicated,
represents a complete list of the Personal Accounts and Related Accounts that
hold Securities or Futures Contracts in which I have or had a Beneficial
Ownership interest and for which PIMCO should have received or will receive
timely duplicate broker reports for the calendar quarter just ended.
The following information for Investment Transactions during the calendar
quarter just ended does not appear on the duplicate broker reports referenced
above.
<TABLE>
<S><C>
Transaction Title, Interest Rate and Maturity Number of Shares or Contracts
Date Date of Security or Futures Contract And Principal Amount
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Nature of Transaction Transaction Broker, Dealer,
(i.e., Buy or Sell) Price Bank or FCM
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
SPECIAL NOTE TO PIMCO FUNDS DISTRIBUTORS LLC REGISTERED REPS AND ACCESS PERSONS:
You will not have to fill out an extra form for each year for PIMCO Funds
Distributors LLC.
SIGNED:
-----------------------------------------------------
PRINT NAME:
----------------------------------------------------
DATE:
----------------------------------------------------
</TABLE>
<PAGE> 44
1. Please see the CODE OF ETHICS for a full description of the Investment
Transactions that must be reported.
2. TRANSACTION DATE. In the case of a market transaction, state the trade
date (not the settlement date).
3. TITLE OF SECURITY OR FUTURES CONTRACT. State the name of the issuer and
the class of the Security (e.g., common stock, preferred stock or
designated issue of debt securities). For Fixed Income Securities,
please provide the Security's interest rate and maturity date. For a
Futures Contract, state the title of any Security subject to the
Futures Contract and the expiration date of the Futures Contract.
4. NUMBER OF SHARES OR CONTRACTS AND PRINCIPAL AMOUNT. State the number of
shares of Securities, the face amount of Fixed Income Securities or the
units of other securities. For options, state the amount of securities
subject to the option. Provide the principal amount of each Security or
Futures Contract. If your ownership interest was through a spouse,
relative or other natural person or through a partnership, trust, other
entity, state the entire quantity of Securities or Futures Contracts
involved in the transaction. You may indicate, if you wish, the extent
of your interest in the transaction.
5. NATURE OF TRANSACTION. Identify the nature of the transaction (e.g.,
purchase, sale or other type of acquisition or disposition).
6. TRANSACTION PRICE. State the purchase or sale price per share or other
unit, exclusive of brokerage commissions or other costs of execution.
In the case of an option, state the price at which it is currently
exercisable. No price need be reported for transactions not involving
cash.
7. BROKER, DEALER, BANK OR FCM EFFECTING TRANSACTION. State the name of
the broker, dealer, bank or FCM with or through which the transaction
was effected.
8. SIGNATURE. Sign and date the report in the spaces provided.
9. FILING OF REPORT. A report should be filed NOT LATER THAN 10 CALENDAR
DAYS after the end of each calendar quarter with:
PIMCO
ATTN: Compliance Officer
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
10. DUPLICATE BROKER REPORTS. Please remember that duplicates of all trade
confirmations, purchase and sale reports, and periodic statements must
be sent to the firm by your broker. You should use the address above.
<PAGE> 45
Appendix IX
PRECLEARANCE REQUEST FORM
This form must be submitted to a Compliance Officer before executing
any Investment Transaction for which preclearance is required under the PIMCO
Code of Ethics. Before completing this form, you should review the PIMCO Code,
including the terms defined in that Code. The capitalized terms used in this
form are governed by those definitions. In addition, the Code provides
information regarding your preclearance obligations under the Code, and
information regarding the Transactions, Securities and Futures Contracts that
are exempt from the Code's preclearance requirement.(6)
No Investment Transaction subject to preclearance may be effected prior
to receipt of written authorization of that Investment Transaction by a
Compliance Officer. Unless otherwise specified, that authorization shall be
effective, unless revoked, until the earlier of (a) the close of business on the
date authorization is given, or (b) until you discover that information on this
preclearance request form is no longer accurate.
<TABLE>
<S> <C>
(1) Your Name:
-------------------------------------
(2) If the Investment Transaction will be in someone else's name or
in the name of a trust, the name of that person or trust:
-------------------------------------
The relationship of that person or trust to you:
-------------------------------------
(3) Name of the firm (e.g., broker, dealer, bank, futures
commission merchant) through which the Investment Transaction will
be executed:
-------------------------------------
The relevant account number at that firm:
-------------------------------------
(4) Issuer of the Security or identity of the Futures Contract for
which preclearance is requested:
-------------------------------------
The relevant CUSIP number or call symbol:
-------------------------------------
(5) The maximum number of shares, units or contracts for which
preclearance is requested, or the market value or face amount of
the Fixed Income Securities for which preclearance is requested:
-------------------------------------
(6) The type of Investment Transaction for which preclearance is
requested (check all that apply): Purchase Sale Market Order
---- --- ----
Limit Order (Price Of Limit Order: )
---- -------
PLEASE ANSWER THE FOLLOWING QUESTIONS TO THE BEST OF YOUR KNOWLEDGE AND BELIEF:
(a) Do you possess material nonpublic information regarding the Security or
Futures Contract identified above or regarding the issuer of that Security? Yes No
---- ----
(b) Is the Security or Futures Contract identified above held by any PIMCO
Advisory Client or is it a Related Security (as defined in the PIMCO Code)?
Yes No
---- ----
</TABLE>
------------------------------
(6) Preclearance is required for any Investment Transaction in Securities,
Related Securities or Future Contracts in a Personal Account or a Related
Account in which you have or will acquire a Beneficial Ownership interest.
<PAGE> 46
<TABLE>
<S><C>
(c) Is there a pending buy or sell order on behalf of a PIMCO Advisory
Client for the Security or Futures Contract identified above or for a
Security for which the Security identified above is a Related Security? Yes No
---- ----
(d) Do you intend or do you know of another's intention to purchase or sell the
Security or Futures Contract identified above, or a Security for which the
Security identified above is a Related Security, on behalf of a PIMCO
Advisory Client? Yes No
---- ----
(e) Has the Security or Futures Contract identified above or a Related
Security been considered for purchase by a PIMCO Advisory Client within the
most recent 15 days? (Note: rejection of any opportunity to purchase the
Security or Futures Contract for an Advisory Client would require an
affirmative response to this question.) Yes No
---- ----
(f) If you are a Portfolio Employee, is the Security being acquired in an
Initial Public Offering?(7) Yes No
---- ----
(g) If you are a Portfolio Employee, are you acquiring or did you acquire
Beneficial Ownership of the Security in a Private Placement?(8) Yes No
---- ----
(h) If you are seeking preclearance of a purchase or sale of Securities, have
you purchased or sold the same or similar Securities, or have you acquired
or disposed of a Beneficial Ownership interest in the same or similar
Securities, within the past 60 calendar days?(9)
Yes No
---- ----
</TABLE>
BY EXECUTING THIS FORM, YOU HEREBY CERTIFY THAT YOU HAVE REVIEWED THE PIMCO CODE
OF ETHICS AND BELIEVE THAT THE INVESTMENT TRANSACTION FOR WHICH YOU ARE
REQUESTING PRECLEARANCE COMPLIES WITH THE GENERAL PRINCIPLES AND THE SPECIFIC
REQUIREMENTS OF THE PIMCO CODE.
--------------------------------------
Employee Signature
--------------------------------------
Print or Type name
--------------------------------------
Date Submitted
-----------------------------------
(7) Under the PIMCO Code, Portfolio Employees generally are not permitted to
acquire Securities in an Initial Public Offering.
(8) The PIMCO Code applies special rules to the acquisition of Securities
through a Private Placement and to the disposition of Securities acquired
through a Private Placement.
(9) Under the PIMCO Code, you may not profit from short-term trades in Fixed
Income Securities. A Portfolio Employee may not profit from short-term trades in
Designated Equities Securities and a Municipal Bond Portfolio Employee may not
profit from short-term trades in Tax-Exempt Municipal Bonds. This rule does not
apply to transactions in U.S. Government Securities, mutual fund shares, index
options or Futures Contracts.
<PAGE> 47
You are authorized to execute the Investment Transaction described above. Unless
indicated otherwise below, this authorization remains effective, unless revoked,
until: (a) the close of business today, or (b) until you discover that the
information on this request form is no longer accurate.
-------------------------------------------------
Compliance Officer
-------------------------------------------------
Date of Authorization
<PAGE> 48
APPENDIX X
COMPLIANCE OFFICERS
PACIFIC INVESTMENT MANAGEMENT COMPANY
March 31, 2000
PIMCO's Compliance Officers, as of March
31, 2000, are:
Denise C. Seliga
(Chief Compliance Officer)
Mohan V. Phansalkar
Ernest L. Schmider
Richard M. Weil
