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Exhibit (p)(9)
BENNETT LAWRENCE MANAGEMENT, LLC
POLICY & PROCEDURES REGARDING TRADING,
OPERATIONS & COMPLIANCE
This Policy Statement must be read and signed by each person who is a Member or
employee of Bennett Lawrence Management, LLC and every consultant thereof who:
(1) makes any securities recommendations;
(2) participates in determining which securities recommendations shall be
made; or
(3) obtains, in connection with his or her duties, information concerning
which securities are to be recommended, prior to such recommendation
actually being made.
All persons described in the preceding sentence are referred to in this Policy
Statement as "Employees."
SECTION I. POLICY STATEMENT ON INSIDER TRADING
A. POLICY STATEMENT ON INSIDER TRADING
Bennett Lawrence Management, LLC (the "Firm" or "Bennett Lawrence")
seeks to foster a reputation for integrity and professionalism. That reputation
is a vital business asset. The confidence and trust placed in us by our clients
is something to be valued and protected. Accordingly, this Policy Statement
implements procedures to deter the misuse of material, nonpublic information in
securities transactions.
Bennett Lawrence forbids any Employee from trading on material
nonpublic information in violation of the law, either personally or on behalf of
others, including institutional and individual accounts managed by the Firm.
This conduct is frequently referred to as "insider trading". The Firm's policy
applies to all Employees and extends to activities within and outside their
duties at the Firm. Every Employee should read and retain this Policy Statement.
The law of insider trading is unsettled; an individual may be
legitimately uncertain about the application of this Policy Statement in a
particular circumstance. Often, a single question can result in the avoidance of
disciplinary action 'or complex legal problems. Accordingly, any questions
regarding the Firm's policy and procedures should be referred immediately to the
Firm's Managing Member, Mr. Suydam Van Zandt Schreiber (or in his absence Mr.
Robert Deaton, Portfolio Manager). You must also notify the Managing Member
immediately if you have any reason to believe that there has been a violation of
this Policy Statement, or that one is about to occur.
The term "insider trading" is not expressly defined in the federal
securities laws, but generally is used to refer to the use of material nonpublic
information to trade in securities (whether or not one is an "insider")
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or to the communication of material non-public information to others.
While the law concerning insider trading is evolving, it is generally
understood that the law prohibits:
1) trading by an "insider," while in possession of "material nonpublic
information," or
2) trading by a non-insider, while in possession of material nonpublic
information, where the information either was disclosed to the
non-insider in violation of an insider's duty to keep it confidential
or was misappropriated, or
3) communicating material nonpublic information to others.
Stated simply, no person to whom this Policy Statement applies,
including you, may trade, either personally or on behalf of others (such as the
accounts managed by Bennett Lawrence), while in possession of material,
nonpublic information which relates to such security; nor may any of the Firm's
personnel communicate such information to others in violation of the law. The
following sections review principles important to the Policy Statement.
1. WHO IS AN INSIDER?
The concept of "insider" is broad. It includes officers, directors and
employees of a company. In addition, a person can be a "temporary insider" if he
or she enters into a special confidential relationship in the conduct of a
company's affairs and as a result is given access to information solely for the
company's purposes. Temporary insiders can include, among others, a company's
attorneys, accountants, consultants, bank lending officers, and the employees of
such organizations. The company must expect the outsider to keep the disclosed
nonpublic information confidential and the relationship must at least imply such
a duty before the outsider will be considered an insider.
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 influence reasonable investors in
determining whether to trade the securities to which the information relates.
Information that maybe considered material includes, but is not limited to:
- dividend changes
- earnings results
- changes in previously released earnings estimates
- write-down of assets or additions to reserves for bad
debts or contingent liabilities
- the expansion or a curtailment of operations
- new products or discoveries
- significant merger or acquisition proposals or
agreements
- major litigation
- liquidity problems
- extraordinary management developments
- public offerings
- changes of debt ratings
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- recapitalizations.
YOU SHOULD BE PARTICULARLY CAREFUL WHEN MAKING RECOMMENDATIONS ABOUT PUBLIC
COMPANIES WITH WHOM YOU HAVE HAD CONTACT AND OBTAINED INFORMATION WHICH MAY BE
NONPUBLIC, AND WHEN TRADING DURING ANY PERIOD OF TENDER OFFER ACTIVITY.
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 Wall Street Journal reporter was found criminally liable for
disclosing to others the dates that reports on various companies would appear in
the Journal's "Heard on the Street" column and whether those reports would be
favorable or not.
3. WHAT IS NONPUBLIC INFORMATION?
Information is "nonpublic" until it has been effectively communicated
to the marketplace. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing on the Dow Jones "tape", or in Reuters Economic
Services, The Wall Street Journal or other publications of general circulation
would be considered public.
4. PENALTIES FOR INSIDER TRADING
Penalties for trading on or communicating material nonpublic
information are severe, both for individuals involved in such unlawful conduct
and their employers. A person can be subject to some or all of the penalties
below even if he or she does not personally benefit from the violation.
Penalties include:
- criminal sanctions
- civil injunctions
- treble damages
- disgorgement of profits
- jail sentences of up to 10 years
- fines for the person who committed the violation of
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.
Regardless of whether a government inquiry occurs, Bennett Lawrence
views seriously any violation of this Policy Statement. Violations of the Policy
Statement on Insider Trading constitute grounds for disciplinary sanctions,
including dismissal of the persons involved.
B. POLICY STATEMENT ON IMPROPER PERSONAL TRADING
No securities transaction for an Employee's account will be approved if
it appears that the basis for the decision is the activity of a client of the
Firm, the concurrent dissemination of significant Firm research which is likely
to have an impact on the price of the stock at the time of the proposed
transaction, or a conflict with Firm research, or trading activity.
Additionally, as many stocks seem to the subject of "rumors", any Employee who
proposes to buy a security which is the subject of a general "rumor" must also
be prepared to explain and document, if asked, an investment rationale for
purchasing the security. Transactions in securities wherein the
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"rumor" source appears to be an "insider" or results from the breach of a
confidential or privileged relationship are prohibited.
"Front-running" is the advance buying or selling with the knowledge of
research recommendations to be made, or substantial orders from customers, due
to be executed in the market. Front-running gives the Employee substantial
advantages over the customer and is therefore prohibited. Employees should be
mindful of the fact that when a recommendation is made to a customer in a
particular security, personal activity in that security by Employees will be
restricted until the client has had an opportunity to act upon the
recommendation. Additionally, if any employee trades in a security and
subsequently recommends it to customers, that action may constitute
front-running or if any employee trades in a security at a discounted price and
client pays the full price that action may constitute scalping. Accordingly,
Employees who recommend securities to customers must not execute transactions
for their own accounts except as specified in Section II of this policy.
Violations of the Policy Statement on Improper Personal Trading
constitute grounds for trade cancellations and other sanctions, including
dismissal of the persons involved if violations are repeated or deemed to be
willful.
SECTION II. PROCEDURES TO IMPLEMENT THE FIRM'S POLICIES AGAINST
UNLAWFUL OR IMPROPER TRADING
The following procedures have been established to aid Employees of
Bennett Lawrence in avoiding insider and improper trading, and to aid the Firm
in preventing, detecting and imposing sanctions against insider and improper
trading. Every Employee of Bennett Lawrence should follow these procedures or
risk serious sanctions, including dismissal, substantial personal liability and
criminal penalties. If you have any questions about these procedures you should
consult the Managing Member promptly.
1. IDENTIFYING INSIDER INFORMATION
Before trading for yourself or others, including institutional and
individual accounts managed by the Firm, in the securities of a company about
which you may have potential inside information, ask yourself the following
questions:
i. Is the information material? Is this information that
an investor would consider important in making his or
her investment decisions? Is this information that
would influence a reasonable investor in determining
to trade the securities of the company relating to
the information?
ii. Is the information nonpublic? To whom has this
information been provided? Has the information been
effectively communicated to the marketplace by being
published in The Wall Street Journal or other
publications of general circulation or been
circulated through other means such as the Dow Jones
broad tape?
If, after consideration of the above, you believe that the information
is material and nonpublic, or if you have questions as to whether the
information is material and nonpublic, you should take the following steps in
order to protect yourself, our clients and the Firm:
i. Report the matter immediately to the Managing Member.
ii. Do not purchase or sell the securities on behalf of
yourself or others, including
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institutional and individual accounts managed by the
Firm.
iii. Do not communicate the information inside or outside
the Firm, other than to the Managing Member.
iv. After the Managing Member has reviewed the issue, he
will advise you whether you will be allowed to trade
and communicate the information.
2. PERSONAL SECURITIES TRADING
Client Priority Rule. Personal securities trading that may conflict
with the interests of any client is strictly prohibited. Therefore, in addition
to strictly avoiding practices of insider trading, each Employee must give
priority on all purchases and sales to all clients of Bennett Lawrence before
placing orders for their own accounts. This means that:
(1) You may not purchase or sell (long or short) any shares of a
security that you know will be, or currently are being
purchased or sold for the account of any client of the Firm,
until such time as all of the Firm's clients have completed
such planned purchases or sales.
(2) You may not knowingly purchase or sell any security, directly
or indirectly, in such a way as to adversely affect a client's
transaction.
(3) You may not use your knowledge of client transactions to
profit personally from the market effect of such transactions
(or give such information to a third person who may so profit,
except to the extent necessary to effectuate such
transactions).
(4) You may not purchase any security in a public offering unless
and until the Firm has determined that the purchase of such
security is not recommended for any client (or if such
security is being recommended to one or more clients, that the
purchase of additional quantities of such securities by
clients is not recommended).
Compliance Requirements. In order to insure compliance with the client
priority rule, you must provide the Managing Member with an initial holdings
report listing all securities you own at the time you first become an Employee
as well as an annual holdings report listing all securities you own at each
calendar year end. In each case, you must provide the name of the broker, dealer
or bank with which you have an account and a list of securities being held in
each account. Before placing any trade for your personal account or other
account where you have trading authority, you must first speak with the Managing
Member and receive his consent for the trade. In his absence, you must speak
with and secure the consent of Mr. Robert Deaton, Portfolio Manager. The
Managing Member must first speak with and secure the consent of Ms. Kelly Horan
(the "Review Officer") before effecting personal securities transactions. In her
absence, Ms. Jane Fisher will act as the Review Officer. When Mr. Deaton wishes
to place a trade in the absence of the Managing Member, Mr. Deaton must speak
with and secure the consent of the Review Officer as well as one other Member of
Bennett Lawrence before effecting the trade. The Managing Member will review the
trade at his earliest convenience, and does reserve the right to cancel Mr.
Deaton's trade upon his review. A WRITTEN CONFIRMATION IN THE FORM OF A
COMPLETED EMPLOYEE BUY/SELL REQUEST (SEE EXHIBIT 6) IS THE FORM OF CONSENT
REQUIRED UNDER THIS PROCEDURE.
In addition to the foregoing procedure, each Employee of Bennett
Lawrence shall cause his or her broker-dealers) to send duplicate confirmations
of each of the following securities transactions to Bennett
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Lawrence, attention: Mr. Suydam Van Zandt Schreiber (or, in Mr. Schreiber's
case, attention: Review Officer): Every securities transaction in which an
Employee, any member of an Employee's immediate family (including spouse, minor
children and adults living in the same household as such Employee), or any trust
of which an Employee is a trustee or in which an Employee has a beneficial
interest, has participated. The Review Officer shall prepare a report of these
possible policy violations which shall be submitted to the Managing Member.
These confirmations shall include:
(1) the name of the security,
(2) date of the transaction,
(3) quantity purchased or sold,
(4) price, and
(5) broker-dealer through which the transaction was effected.
This requirement is mandated by Rule 204-2(a)(12) under the Investment Advisers
Act of 1940.
3. RESTRICTING ACCESS TO MATERIAL NONPUBLIC INFORMATION
Information in your possession that you identify as material and
nonpublic may not be communicated to anyone, including persons within Bennett
Lawrence, except as permitted by Section II Item 1 above. In addition, care
should be taken to secure such information against inadvertent disclosure. For
example, files containing material nonpublic information should be locked;
access to computer files containing material nonpublic information should be
restricted.
4. RESOLVING ISSUES CONCERNING INSIDER TRADING
If, after consideration of the items set forth in Section II Item 1,
doubt remains as to whether information is material or nonpublic, or if there is
any unresolved question as to the applicability or interpretation of the
foregoing procedures, or as to the propriety of any action, it must be discussed
with the Managing Member or, in his absence, the Portfolio Manager, or, in Mr.
Schreiber's case, with the Review Officer before trading or communicating the
information to anyone.
5. ACKNOWLEDGMENT
I have read and understand Bennett Lawrence's Policy Statement on
Insider Trading (i.e., Section I above). I have also read and understand the
foregoing Procedures to Implement the Finn's Policies Against Unlawful or
Improper Trading (i.e., Section II above) and agree to comply in all respects
with such procedures.
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Signature Date
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Please Print Name
SECTION III. SUPERVISORY PROCEDURES
The role of the Managing Member of Bennett Lawrence Management, LLC, is
critical to the implementation and maintenance of the Firm's policy and
procedures against insider trading. Supervisory
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Procedures can be divided into two classifications -- prevention of insider
trading and improper personal trading and detection of insider trading and
improper personal trading.
1. PREVENTION OF INSIDER TRADING AND IMPROPER PERSONAL TRADING
To prevent insider trading and improper personal trading, the Managing
Member and/or the Review Officer should:
i. answer questions regarding Bennett Lawrence's policy and
procedures prohibiting insider trading and improper personal
trading,
ii. resolve issues of whether information received by an Employee
of Bennett Lawrence is material and nonpublic,
iii. review on a regular basis and update as necessary Bennett
Lawrence's policy and procedures,
iv. when it has been determined that an Employee of Bennett
Lawrence has material nonpublic information,
1. implement measures to prevent dissemination of such
information, and
2. if necessary, restrict other Employees from trading
the affected securities.
v. promptly review, and either approve or disapprove, IN WRITING,
each request of an Employee for clearance to trade in
specified securities, pursuant to Section II Item 2 of the
Procedures to Implement the Firm's Policy Against Unlawful or
Improper Trading. Trading by the Managing Member must be
approved or disapproved by the Review Officer.
2. DETECTION OF INSIDER TRADING AND IMPROPER PERSONAL TRADING
To detect insider trading, the Managing Member and/or the Review
Officer shall:
i. review each day's trading activity by Employees as
reflected on the employee trading tickets and
duplicate confirmations sent to Bennett Lawrence,
ii. review, at least quarterly, the trading activity of
institutional and individual accounts managed by
Bennett Lawrence,
iii. review, at least quarterly, trading activity, if any,
of Bennett Lawrence's own account, and
iv. coordinate the review of such reports with other
appropriate Employees of Bennett Lawrence.
3. REMEDIAL ACTION AND SPECIAL REPORTS
Promptly, upon learning of a potential violation of this Policy
Statement, the Managing Member and/or the Review Officer should conduct a prompt
investigation to determine whether an actual violation has
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occurred. Indicators of potential violations of the Firm's policies against
improper trading include, without limitation:
i. personal trading in a security that has never been
considered for recommendation to clients,
ii. trades for which no WRITTEN confirmation of consent
was issued in advance of the trades,
iii. personal trading in a particular security on the same
day as client trading in such security (whether or
not the personal trading was at a price more
favorable than the client trading),
iv. personal trading in a particular security in the
opposite direction as client trading in the same
security within two (2) days following such client
trading, and
iv. personal trading in a particular security within two
(2) days before any client trading, whether or not in
the same direction.
Following any investigation of a potential violation of this Policy
Statement, whether internal or by a regulatory agency, the Managing Member
and/or the Review Officer shall prepare a WRITTEN report providing full details,
including the name(s) of the affected securities, the names) of the person(s)
and the account(s) involved, the date(s) of the potentially unlawful or improper
transaction(s), the date(s) on which the potential violation(s) was (were)
discovered and the action(s) taken (or to be taken) as a result of the
investigation, if any.
4. ANNUAL REVIEW
The Managing Member and/or the Review Officer shall annually review the
Policy and Procedures Regarding Trading, Operations & Compliance and update any
procedures necessary to detect and prevent insider trading and, generally,
improve Bennett Lawrence's existing policies and procedures, as warranted.
Annually, each Employee will be required to sign the acknowledgment stating they
have read, understand and agree to comply with all such policies and procedures.
5. NEW ACCOUNT OPENINGS
A Member or the Review Officer must review and approve the opening of
each new client account.
i. At the time that a client contract is prepared and
issued, a copy of Part II of the Firm's Form ADV or
other current disclosure document must be sent to the
client. It is the Firm's procedure to send a copy of
the disclosure document with the investment
management agreement and to include in the contract
an acknowledgment of receipt by the client. Where the
written disclosure has not been delivered to the
prospective client at least 48 hours prior to the
client's signing of the investment management
agreement, the client must have the right to
terminate the agreement without penalty within five
business days as required by SEC Rule 204-3.
ii. Each investment management agreement should be dated
currently with the date on which the written
disclosure is delivered.
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iii. Contracts with clients should specifically provide
that they cannot be assigned without consent.
iv. There should be formal documentation of client
financial condition and investment objectives,
including any reasonable client restrictions on the
management of the account.
6. PROCEDURES PERTAINING TO THE SOLICITATION OR EXECUTION OF ALL FIRM
TRANSACTIONS
i. Any general advertising of the Firm's service,
including any brochure discussing the Firm, its
investment approach, its general or particular
services and any material relating to its
performance, must be reviewed for compliance with
Section 206 of the Investment Advisers Act of 1940.
ii. Procedures must be instituted to assure that any cash
payments for client solicitation are made in
accordance with Rule 206(4)-3 of the Investment
Advisers Act of 1940.
7. PROCEDURE PERTAINING TO THE HANDLING OF ALL CLIENT COMPLAINTS
Complaints should be reported to the Managing Member immediately. The
Managing Member and/or the Review Officer will look into the complaint and
communicate promptly with the client in order to respond to the client's
complaint.
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