Exhibit (p)(iii) under Form N-1A
Exhibit 99 under Item 601/Reg.S-K
CODE OF ETHICS FOR ACCESS PERSONS
TABLE OF CONTENTS
SECTION PAGE
1. General Fiduciary Principles 2
2. Definitions 2
3. Exempt Transactions 5
4. Prohibited Transactions and Activities 5
5. Pre-clearance Requirement and Exempted 7
Transactions
6. Prohibition on the Receipt of Gifts 8
7. REPORTING REQUIREMENTS 9
----------------------
Initial Reporting Requirements 9
Quarterly Reporting Requirements 9
Annual Reporting Requirements 10
Exemption for Disinterested Directors 11
8. Sanctions 11
Procedures for Prior Approval of Personal 12
Securities Transactions by Access Persons
o Preclearing Foreign Securities 13
Procedures for the Reporting and Review of 18
Personal Transaction Activity
CODE OF ETHICS REGARDING PERSONAL SECURITIES TRADING
Pursuant to rule 17j-1 under the Investment Company Act of 1940, this Code of
Ethics has been adopted on behalf of the Adviser, the Underwriters, and each
investment company that is both advised and distributed by an Adviser and an
Underwriter.*
I. GENERAL FIDUCIARY PRINCIPLES
A. Each Access Person:
1. must place the Funds' interests ahead of the Access Person's personal
interests;
2. must avoid conflicts or apparent conflicts of interest with the Funds; and
3. must conduct his or her personal transactions in a manner which neither
interferes with Fund portfolio transactions nor otherwise takes unfair or
inappropriate advantage of the Access Person's relationship to the Fund.
The failure to recommend or purchase a Covered Security for
the Fund may be considered a violation of this Code.
B. Every Access Person must adhere to these general fiduciary principles, as
well as comply with the specific provisions and Associated Procedures of
this Code. TECHNICAL COMPLIANCE WITH THE TERMS OF THIS CODE AND THE
ASSOCIATED PROCEDURES MAY NOT BE SUFFICIENT WHERE THE TRANSACTIONS
UNDERTAKEN BY AN ACCESS PERSON SHOW A PATTERN OF ABUSE OF THE ACCESS
PERSON'S FIDUCIARY DUTY.
II. DEFINITIONS
A. The "1940 Act" means the Investment Company Act of 1940, as amended.
B. "Access Person" means any director, trustee, officer, managing general
partner, general partner, or Advisory Person of a Fund, of the Underwriter,
and of the Adviser and all family members permanently residing in the same
household. (If non-family members also reside in the household, the Access
Person must either declare that the Access Person has no influence on the
investment decisions of the other party or the Access Person must report
the party as an Access Person.).
C. "Adviser" means any registered investment adviser that is an affiliate or
subsidiary of Federated Investors, Inc.
D. "Advisory Person" means (i) any employee of the Underwriter, of the Adviser
or of any company in a control relationship to the Underwriter (which would
include any operating company that is an affiliate or a subsidiary of
Federated Investors, Inc.), who, in connection with the employee's regular
functions or duties, makes, participates in, or obtains information
regarding the purchases or sales of a Covered Security by the Fund, or
whose functions relate to the making of any recommendations with respect to
such purchases or sales; and (ii) any natural person in a control
relationship to the Fund who obtains information concerning recommendations
made to the Fund with regard to the purchase or sale of a Covered Security.
E. "Associated Procedures" means those policies, procedures and/or statements
that have been adopted by the Underwriter, the Adviser or the Fund, and
which are designed to supplement this Code and its provisions.
F. "Beneficial ownership" will be attributed to an Access Person in all
instances where the Access Person (i) possesses the ability to purchase or
sell the Covered Securities (or the ability to direct the disposition of
the Covered Securities); (ii) possesses voting power (including the power
to vote or to direct the voting) over such Covered Securities; or (iii)
receives any benefits substantially equivalent to those of ownership.
Beneficial ownership shall be interpreted in the same manner as it would be
in determining whether a person is subject to the provisions of Section
16a-1(a)(2) of the Securities Exchange Act of 1934, and the rules and
regulations thereunder, except that the determination of direct or indirect
beneficial ownership shall apply to all Covered Securities which an Access
Person has or acquires.
G. "Control" shall have the same meaning as that set forth in Section 2(a)(9)
of the 1940 Act.
H. Except as provided in this definition, "Covered Security" shall include any
Security, including without limitation: equity and debt securities;
derivative securities, including options on and warrants to purchase equity
or debt securities; shares of closed-end investment companies; investments
in unit investment trusts; and Related Securities. "Related Securities" are
instruments and securities that are related to, but not the same as, a
Covered Security. For example, a Related Security may be convertible into a
Covered Security, or give its holder the right to purchase the Covered
Security. For purposes of reporting, "Covered Security" shall include
futures, swaps and other derivative contracts.
"Covered Security" shall not include: direct obligations of the Government
of the United States (regardless of their maturities); bankers' acceptances;
bank certificates of deposit; commercial paper; high quality short-term debt
instruments, including repurchase agreements; and shares of registered open-end
investment companies.
I. "Disinterested director" means a director, trustee, or managing general
partner of the Fund who is not an "interested person" of the Fund within
the meaning of Section 2(a)(19) of the 1940 Act.
J. "Fund" means each investment company registered under the 1940 Act (and any
series or portfolios of such company) and any other account advised by an
Adviser.
K. "Initial Public Offering" means an offering of securities registered under
the Securities Act of 1933, 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.
L. "Investment Personnel" include: Access Persons with direct responsibility
and authority to make investment decisions affecting the Fund (such as
portfolio managers and chief investment officers); Access Persons who
provide information and advice to such portfolio managers (such as
securities analysts); and Access Persons who assist in executing investment
decisions for the Fund (such as traders).
M. "Private Placement" or "limited offering" means an offering that is exempt
from registration under Section 4(2) or Section 4(6) of the Securities Act
of 1933 or pursuant to rule 504, rule 505 or rule 506 under the Securities
Act of 1933.
N. "Purchase or sale of a Covered Security" includes, INTER ALIA, the writing
of an option, future or other derivative contract to purchase or sell a
Covered Security.
O. "Security" shall have the meaning set forth in Section 2(a)(36) of the 1940
Act.
P. "Underwriter" means Federated Securities Corp. and Edgewood Services, Inc.
III. EXEMPT TRANSACTIONS
The prohibitions or requirements of Section 4 and Section 5 of this Code
shall not apply to:
A. Purchases or sale of the following Securities:
1. direct obligations of the Government of the United States (regardless of
their maturities). This exemption does not apply to indirect obligations of
the U.S. Government, including FNMAs, GNMAs or FHLMCs.
2. bankers' acceptances;
3. bank certificates of deposit;
4. commercial paper;
5. high quality short-term debt instruments, including repurchase
agreements; and
6. shares of registered open-end investment companies.
B. Purchases or sales effected in any account over which the Access Person has
no direct or indirect influence or control.
IV. PROHIBITED TRANSACTIONS AND ACTIVITIES
A. Every Access Person is prohibited from acquiring any Security distributed
in an initial public offering; however, subject to provisions of this Code
and its Associated Procedures, an Access Person may acquire the security in
the secondary market.
B. Every Access Person is prohibited from acquiring any Security in a private
placement or other limited offering, without the express prior approval of
the Compliance Department. In instances where an Investment Personnel,
after receiving prior approval, acquires a Security in a private placement,
the Investment Personnel has an affirmative obligation to disclose this
investment to the Chief Investment Officer (or his designee) if the
Investment Personnel participates in any subsequent consideration of any
potential investment by the Fund in the issuer of that Security. Following
a purchase by an Investment Personnel in an approved personal transaction,
any purchase by the Fund of Securities issued by the same company (other
than secondary market purchases of publicly traded Securities) will be
subject to an independent review by the Compliance Department.
C. Every Access Person is prohibited from executing a personal transaction in
any Covered Security on a day during which the Fund has a pending "buy" or
"sell" order for that Covered Security, until the Fund's orders are either
executed or withdrawn.
All Investment Personnel are prohibited from purchasing or selling any
Covered Security within seven (7) calendar days AFTER the Fund purchases or
sells the same Covered Security. Members of an Investment Personnel group, as
defined by the Compliance Department, are prohibited from purchasing or selling
any Covered Security within seven (7) days BEFORE any Fund advised by that group
purchases or sells the same Covered Security.
D. Every Access Person is prohibited from profiting in the purchase and sale,
or sale and purchase, of the same (or equivalent) Covered Security within
60 calendar days. For purposes of this prohibition, each personal
transaction in the Covered Security will begin a new 60 calendar day
period. As an illustration, if an Access Person purchases 1000 shares of
Omega Corporation on June 1st, 500 shares on July 1st, and 250 shares on
August 1st, the profit from the sale of the 1000 shares purchased on June
1st is prohibited for any transaction prior to October 1st (i.e., 60
calendar days following August 1st). In circumstances where a personal
transaction in a Covered Security within the proscribed period is
involuntary (for example, due to unforeseen corporate activity, such as a
merger), the Access Person must notify the Compliance Department.
In circumstances where an Access Person can document personal exigencies, the
Chief Compliance Officer may grant an exemption from the prohibition of
profiting in the purchase and sale, or sale and purchase, of the same (or
equivalent) Covered Security within 60 calendar days. Such an exemption is
wholly within the discretion of the Chief Compliance Officer, and any
request for such an exemption will be evaluated on the basis of the facts
of the particular situation.
E. All Investment Personnel are prohibited from serving on the boards of
directors of any issuer of a Covered Security, absent express prior
authorization from the Compliance Department. Authorization to serve on the
board of such a company may be granted in instances where the Compliance
Department determines that such board service would be consistent with the
interests of the Investment Company and its shareholders. If prior approval
to serve as a director of a company is granted, Investment Personnel have
an affirmative duty to recuse themselves from participating in any
deliberations by the Fund regarding possible investments in the securities
issued by the company on whose board the Investment Personnel sit. (This
shall not limit or restrict service on the Board of Federated Investors,
Inc.)
F. Every Access Person is prohibited from purchasing or selling, directly or
indirectly, any Covered Security in which he or she has, or by reason of
such transaction acquires, a direct or indirect beneficial ownership
interest and which he or she knows, or should have known, at the time of
such purchase or sale:
1. is being considered for purchase or sale by the Fund; or
2. is being purchased or sold by the Fund.
G. Every Access Person is prohibited, in connection with the purchase or sale,
directly or indirectly, by the Access Person of a Security Held or to be
Acquired by the Fund:
1. from employing any device, scheme or artifice to defraud the Fund;
2. from making any untrue statement of a material fact to the Fund or omit to
state a material fact necessary in order to make the statements made to the
Fund, in light of the circumstances under which they are made, not
misleading;
3. from engaging in any act, practice or course of business that operates or
would operate as a fraud or deceit on the Fund; or
4. from engaging in any manipulative practice with respect to the Fund.
Examples of this would include causing the Fund to purchase a Covered
Security owned by the Access Person for the purpose of supporting or driving up
the price of the Covered Security, and causing the Fund to refrain from selling
a Covered Security in an attempt to protect the value of the Access Person's
investment, such as an outstanding option. One test which will be applied in
determining whether this prohibition has been violated will be to review the
Covered Securities transactions of Access Persons for patterns. However, it is
important to note that a violation could result from a single transaction if the
circumstances warranted a finding that the provisions of Section 1 of this Code
have been violated.
H. Notwithstanding the other restrictions of this Code to which Disinterested
directors are subject, subparagraphs (a) through (d) of this Section 4
shall not apply to Disinterested directors.
V. PRE-CLEARANCE REQUIREMENT AND EXEMPTED TRANSACTIONS
A. Every Access Person is prohibited from executing a personal transaction in
any Covered Security (including transactions in pension or profit-sharing
plans in which the Access Person has a beneficial interest), without
express prior approval of the Compliance Department, in accordance with the
Associated Procedures governing pre-clearance. A purchase or sale of
Covered Securities not otherwise approved pursuant to the Associated
Procedures may, upon request made prior to the personal transaction,
nevertheless receive the approval of the Compliance Department if such
purchase or sale would be: only remotely potentially harmful to the Fund;
very unlikely to affect a highly institutional market; or clearly not
related economically to the securities to be purchased, sold or held by the
Fund. Notwithstanding the receipt of express prior approval, any purchases
or sales by any Access Person undertaken in reliance on this provision
remain subject to the prohibitions enumerated in Section 4 of this Code.
B. The pre-clearance requirement in Section 5(a) SHALL NOT apply to:
1. Purchases or sales which are non-volitional on the part of either the
Access Person or the Fund, subject to the provisions of Section 4 (g) of
this Code.
2. Purchases which are either made solely with the dividend proceeds received
in a dividend reinvestment plan; or part of an automatic payroll deduction
plan, whereby an employee purchases securities issued by an employer.
3. Purchases effected upon the exercise of rights issued by an issuer PRO RATA
to all holders of a class of its Covered Securities, to the extent such
rights were acquired from such issuer, and any sales of such rights so
acquired.
4. Purchases and sales of a Security that represents an interest in certain
indices as determined by the Compliance Department.
5. Transactions in a Covered Security which involve the giving of gifts or
charitable donations.
6. Purchases and sales of Covered Securities executed by a person deemed to be
an Access Person SOLELY by reason of his position as an Officer and/or
Director or Trustee of the Fund. This exemption does not apply to those
persons who are Officers and/or Directors of an Underwriter or Adviser.
C. Notwithstanding the other restrictions of this Code to which Disinterested
directors are subject, Section 5 shall not apply to Disinterested
directors.
VI. PROHIBITION ON THE RECEIPT OF GIFTS
Every Access Person is prohibited from receiving any gift, favor,
preferential treatment, valuable consideration, or other thing of more than a DE
MINIMIS value in any year from any person or entity from, to or through whom the
Fund purchases or sells Securities, or an issuer of Securities. For purposes of
this Code, "DE MINIMIS value" is equal to $100 or less. This prohibition shall
not apply to:
1. salaries, wages, fees or other compensation paid, or expenses paid or
reimbursed, in the usual scope of an Access Person's employment
responsibilities for the Access Person's employer;
2. the acceptance of meals, refreshments or entertainment of reasonable value
in the course of a meeting or other occasion, the purpose of which is to
hold bona fide business discussions;
3. the acceptance of advertising or promotional material of nominal value,
such as pens, pencils, note pads, key chains, calendars and similar items;
4. the acceptance of gifts, meals, refreshments, or entertainment of
reasonable value that are related to commonly recognized events or
occasions, such as a promotion, new job, Christmas, or other recognized
holiday; or
5. the acceptance of awards, from an employer to an employee, for recognition
of service and accomplishment.
VII. REPORTING
Every Access Person is required to submit reports of transactions in
Covered Securities to the Compliance Department as indicated below. Any such
report may contain a statement that the report shall not be construed as an
admission by the person making such report that he or she has any direct or
indirect beneficial ownership in the Covered Security to which the report
relates.
INITIAL REPORTING REQUIREMENTS
A. Within 10 calendar days of commencement of employment as an Access Person,
the Access Person will provide a list including:
1. the title, number of shares and principal amount of each Covered Security
in which the Access Person had any direct or indirect beneficial ownership
when the person became an Access Person;
2. the name of any broker, dealer or bank maintaining an account in which any
Security was held for the direct or indirect benefit of the Access Person
as of the date of employment as an Access Person; and
3. the date the report is submitted to the Compliance Department.
B. Every Access Person is required to direct his broker to forward to the
Chief Compliance Officer (or his designee), on a timely basis, duplicate
copies of both confirmations of all personal transactions in Covered
Securities effected for any account in which such Access Person has any
direct or indirect beneficial ownership interest and periodic statements
relating to any such account.
QUARTERLY REPORTING REQUIREMENTS
C. Every Access Person shall report the information described in Section 7(d)
of this Code with respect to transactions in any Covered Security (other
than those personal transactions in Securities exempted under Section 3 of
this Code) in which such Access Person has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership.
D. Every report shall be made not later than 10 calendar days after the end of
the calendar quarter in which the transaction to which the report relates
was effected, shall be dated and signed by the Access Person submitting the
report, and shall contain the following information:
1. the date of the transaction, the title and the number of shares, the
principal amount, the interest rate and maturity date, if applicable of
each Covered 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;
4. the name of the broker, dealer or bank through whom the transaction was
effected; and
5. if there were no personal transactions in any Covered Security during the
period, either a statement to that effect or the word "None" (or some
similar designation).
E. Every Access Person shall report any new account established with a broker,
dealer or bank in which any Security was transacted or held for the direct
or indirect benefit of the Access Person during the quarter. The report
shall include the name of the entity with whom the account was established
and the date on which it was established.
ANNUAL REPORTING REQUIREMENTS
F. Every Access Person, on an annual basis or upon request of the Compliance
Department, will be required to furnish a list including the following
information (which information must be current as of a date no more than 30
days before the report is submitted) within 10 calendar days of the
request:
1. the title, number of shares and principal amount of each Covered Security
in which the Access Person had any direct or indirect beneficial ownership;
2. the name of any broker, dealer or bank maintaining an account in which any
Covered Security was held for the direct or indirect benefit of the Access
Person; and
3. the date the report is submitted to the Compliance Department.
G. In addition, every Access Person is required, on an annual basis, to
certify that they have received, read, and understand the provisions of
this Code and its Associated Procedures, and that they recognize that they
are subject to its provisions. Such certification shall also include a
statement that the Access Person has complied with the requirements of this
Code and its Associated Procedures and that the Access Person has disclosed
or reported all personal transactions in Securities that are required to be
disclosed or reported pursuant to the requirements of this Code.
EXEMPTION FOR DISINTERESTED DIRECTORS
H. A Disinterested director is exempt from the "initial reporting
requirements" and "annual reporting requirements" contained in Section 7.
I. A Disinterested director shall be exempt from the "quarterly reporting
requirements" contained in Section 7, so long as at the time of the
personal transaction in the Covered Security, the Disinterested director
neither knew, nor, in the ordinary course of fulfilling his official duties
as a director of the Fund, should have known that during the 15-day period
immediately preceding or after the date of the transaction in the Covered
Security by the Disinterested director the Covered Security was purchased
or sold by the Fund, or considered for purchase or sale.
VIII. SANCTIONS
A. Upon discovering a violation of this Code or its Associated Procedures, the
Compliance Department may take such actions or impose such sanctions, if
any, as it deems appropriate, including, but not limited to:,
1. a letter of censure;
2. suspension;
3. a fine;
4. the unwinding of trades;
5. the disgorging of profits; or
6. the termination of the employment of the violator.
(In instances where the violation is committed by a member of the Access
Person's household, any sanction would be imposed on the Access Person.)
B. The filing of any false, incomplete or untimely reports, as required by
Section 7 of this Code, may be considered a violation of this Code.
C. All material violations of this Code and any sanctions imposed with respect
thereto shall be reported to the Board of Directors of the Fund at least
annually.
PROCEDURES FOR PRIOR APPROVAL OF PERSONAL SECURITIES TRANSACTIONS BY ACCESS
PERSONS
PROCESS
PRECLEARANCE APPROVAL USING TRADECOMPLY
A. An Access Person (defined to include all members of the Access Person's
household) who wishes to effect a personal securities transaction, whether
a purchase, sale, or other disposition, must preclear the Covered Security
in TradeCOMPLY prior to engaging in the transaction. [Because TradeComply
does not include securities being contemplated for purchase by the
Federated Global Management portfolio managers, Access Persons executing
transactions in foreign securities must complete additional preclearance
steps. See "Preclearing Foreign Securities".]
B. When trading options, the Access Person must preclear the underlying
security before entering into the option contract.
C. Based on established criteria, TradeCOMPLY determines whether the
contemplated transaction should be permitted. The primary criteria applied
is whether the Covered Security is on the Federated Equity Watch List
(which is updated weekly in TradeCOMPLY) or Open Order lists, or whether
the Covered Security was traded by any of the Federated advised funds (fund
trade information is updated nightly in TradeCOMPLY).
D. Approval is either granted or denied immediately in TradeCOMPLY.
E. If approval is denied, the Access Person is given a specific reason for the
denial. The contemplated personal transaction in that Covered Security is
prohibited until prior approval is subsequently granted upon request in
TradeCOMPLY.
F. If approval is granted, the Access Person is free to effect the personal
transaction in that Covered Security DURING THAT TRADING DAY ONLY. In this
regard, open orders for more than one trading day (good till cancel) must
be approved daily in TradeCOMPLY to comply with the Code.
G. All trade requests and their dispositions are maintained in TradeCOMPLY and
reviewed by the Compliance Department in conjunction with other information
provided by Access Persons in accordance with the Code.
H. The Compliance Department reviews all exceptions generated on TradeComply
due to a fund trade occurring after preclearance approval has been granted.
The Compliance Department determines the appropriate action to be taken to
resolve each exception.
PRECLEARING FOREIGN SECURITIES
I. All access persons wishing to execute a personal trade in a foreign
security must first preclear the security in TradeComply. TradeComply will
approve or deny the preclearance request based on its knowledge of any fund
activity in the security as well as the access person's trading
restrictions as defined by their assigned compliance group. If the
preclearance request in TradeComply is denied (Red Light), then the
personal trade may not be executed. If, however, the preclearance request
in TradeComply is approved (Green Light or Yellow Light), then the access
person MUST OBTAIN A SECOND PRECLEARANCE APPROVAL from the Federated Global
trading desk prior to executing the personal trade.
J. The Head Trader or Senior Vice President in the New York office will be
responsible for granting or denying approval to the SECOND preclearance
request. If approval is granted, then the personal trade may be executed by
the access person. If, however, approval is denied then the personal trade
may not be executed (even though the first approval was granted in
TradeComply.)
K. If approval is granted, the following "Personal Transaction Notification"
form must be completed so that the Head Trader can maintain a record of all
preclearance requests.
L. The Head Trader sends a copy of any completed forms, whether approval was
granted or denied, to the Compliance Department.
If extraordinary circumstances exist, an appeal may be directed to the
Chief Compliance Officer Brian Bouda at (412) 288-8634. Appeals are solely
within the discretion of the Chief Compliance Officer.
TRANSACTIONS COVERED AND EXEMPTIONS
These procedures apply to Access Persons' personal transactions in "Covered
Security" as defined in Section 2 of the Code. A Covered Security includes:
equity and debt securities; options and warrants to purchase equity or debt
securities; shares of closed-end investment companies; and investments in unit
investment trusts.
These procedures do NOT apply to contemplated transactions in the following
instruments:
A. direct obligations of the Government of the United States (regardless of
their maturities). This exemption does not apply to indirect obligations of
the U.S. Government, including FNMAs, GNMAs or FHLMCs.);
B. bankers' acceptances;
C. bank certificates of deposit;
D. commercial paper;
E. high quality short-term debt instruments, including repurchase agreements;
and
F. shares of registered open-end investment companies;
In addition, these procedures do NOT apply to the following transactions:
G. Purchases or sales effected in any account over which the Access Person has
no direct or indirect influence or control;
H. Purchases or sales which are non-volitional on the part of either the
Access Person or the Fund, subject to the provisions of the Code;
I. Purchases which are either: made solely with the dividend proceeds received
in a dividend reinvestment plan; or part of an automatic payroll deduction
plan, whereby an employee purchases securities issued by an employer; and
J. Purchases effected upon the exercise of rights issued by an issuer PRO RATA
to all holders of a class of its Securities, to the extent such rights were
acquired from such issuer, and any sales of such rights so acquired.
K. Purchases and sales of a Security that represents an interest in certain
indices as determined by the Compliance Department.
L. Transactions in a Covered Security which involve the giving of gifts or
charitable donations.
M. Purchases and sales of Covered Securities executed by a person deemed to be
an Access Person SOLELY by reason of his position as an Officer and/or
Director or Trustee of the Fund. This exemption does not apply to those
persons who are Officers and/or Directors of an Underwriter or Adviser.
SANCTIONS
Failure to comply with the preclearance process may result in any of the
following sanctions being imposed as deemed appropriate by the Compliance
Department:
1. a letter of censure;
2. suspension;
3. a fine;
4. the unwinding of trades;
5. the disgorging of profits; or
6. the termination of the employment of the violator.
B. (In instances where the violation is committed by a member of the Access
Person's household, any sanction would be imposed on the Access Person.)
PERSONAL TRANSACTION NOTIFICATION
I, intend to buy/sell shares of for my personal account or an account for which
I have discretion. I am aware of no conflict this transaction may pose with any
mutual fund managed by Federated Investors or Federated Global Research.
Signed by:
------------------------------
Date:
------------------------------
Acknowledged by:
(Head Trader or Sr. VP)
Date
Broker-Dealer Name
Address
RE: Your Name
Brokerage Account Number: 1234-5678
Dear Sir/Madam:
As a(n) [employee] [relative residing in the household of an employee] of
Federated Investors, I am subject to certain requirements applicable to my
personal securities transactions, in accordance with the Codes of Ethics adopted
by the various investment companies, investment advisers and broker/dealers
affiliated with Federated Investors. These requirements also assist Federated
Investors in carrying out its responsibilities under the Insider Trading and
Security Fraud Enforcement Act of 1988. Among these requirements is my
obligation to provide to Federated Investors duplicate brokerage confirmations
and account statements.
Therefore, I hereby request that you provide duplicate confirmations and
account statements with respect to securities in which I have any beneficial
ownership or interest, including securities held in street name or in house,
family, joint or partnership accounts. These duplicate account memoranda should
occur with respect to all transactions including, but not limited to, those
involving options, warrants, shares of closed end investment companies and
futures contracts. Please forward this information to:
Brian P. Bouda
Chief Compliance Officer
Federated Investors, Inc.
Federated Investors Tower
Pittsburgh, PA 15222-3779
Any questions concerning these matters can be directed to Lisa Ling at
(412) 288-6399. Your serious attention to this matter is greatly appreciated.
Sincerely,
PROCEDURES FOR THE REPORTING AND REVIEW OF PERSONAL TRANSACTION ACTIVITY
INITIAL REPORTING PROCESS
I. A member of the Compliance Department meets with each new Access Person and
reviews the Code of Ethics, the Insider Trading Policy and the procedures
for preclearing personal securities transactions through TradeCOMPLY.
II. The Access Person is required to complete the "Certification and
Acknowledgment Form" to acknowledge his/her understanding of the Code of
Ethics and return it to the designated Compliance Assistant within 10
calendar days.
III. In addition, the Access Person is required to complete the "Personal
Security Portfolio Form" which includes the following information:
A. the title, number of shares and principal amount of each Covered Security
in which the Access Person had any direct or indirect beneficial ownership
when the person became an Access Person;
B. the name and address of any broker, dealer or bank with whom the Access
Person maintained an account in which any Covered Security was held for the
direct or indirect benefit of the Access Person as of the date of
employment as an Access Person; and
C. the date the report is submitted to the Compliance Department
IV. A separate form must be completed for the Access Person and all household
members as defined in Section 2(c) of the Code. The signed form(s) must be
returned to the Compliance Department within 10 calendar days.
V. A member of the Compliance Department inputs current portfolio holdings
information into TradeCOMPLY as "initial" holdings.
VI. The Compliance Department notifies each broker, dealer or bank that
duplicate confirmations and statements for the Access Person and household
members, if applicable, must be sent to Brian P. Bouda, Chief Compliance
Officer, effective immediately.
QUARTERLY REPORTING PROCESS
I. On the first business day after each calendar quarter end, the Compliance
Assistant sends an e-mail to each Access Person giving step-by-step
instructions on how to complete the quarterly reporting requirements using
TRADECOMPLY.
II. Within 10 calendar days of the quarter end, the Access Person is required
to:
A. review for accuracy all Covered Security transactions recorded during the
previous calendar quarter in all personal and household member accounts;
B. review all open account information, including names of brokers, banks and
dealers, addresses and account numbers;
C. notify the Compliance Department of any new accounts established with
brokers, banks or dealers during the quarter and the date the account was
established;
D. resolve any discrepancies with the Compliance Department;
E. record an electronic signature on TradeCOMPLY.
III. Covered Security transactions executed by any Access Person during the
calendar quarter are reviewed by Lisa Ling, Compliance Officer,
periodically throughout the quarter using the Compliance Monitor function
in TradeCOMPLY.
IV. The Compliance Department issues memos to each Access Person if any
transactions he or she has executed during the quarter have been deemed to
be either exceptions to or violations of the Code's requirements.
V. Based on the activity and the responses to the memos, the Compliance
Department may impose any of the sanctions identified in Section 8.
ANNUAL REPORTING PROCESS
I. At least annually, the Compliance Department requires that each Access
Person read the Code and certify and acknowledge his/her understanding of
the Code and its requirements.
II. This re-certification is required to be completed within 10 calendar days
of the request. The Compliance Department monitors compliance with this
requirement through the electronic signatures on TradeCOMPLY.
III. At the same time, the Compliance Department provides each Access Person
with a current list of securities held in the Access Person's account(s) on
TradeComply.
IV. Within 10 calendar days of the request, the Access Person is required to:
A. review for accuracy all securities held in all personal and household
member accounts, including the title, number of shares and principal amount
of each Covered Security in which the Access Person had any direct or
indirect beneficial ownership;
B. review all open account information, including names of brokers, banks and
dealers, addresses and account numbers;
C. notify the Compliance Department of any new accounts established with
brokers, banks or dealers;
D. resolve any discrepancies with the Compliance Department;
E. record an electronic signature on TradeCOMPLY.
REPORTING TO THE BOARD OF DIRECTORS
I. Each quarter, the Compliance Department reports any violations of the Code
to the Board of Directors. Violations of the Code include:
A. failure to preclear a transaction;
B. failure to complete the initial, quarterly or annual reporting requirements
timely, regardless of whether the Access Person executed any transactions;
C. recognition of a profit on the sale of a security held less than 60 days;
D. failure to comply with the receipt of gifts requirements; and
E. any trends or patterns of personal securities trading which are deemed by
the Compliance Department to be violations of the Code.
II. The Compliance Department provides the Board with the name of the Access
Person; the type of violation; the details of the transaction(s); and the
types of sanctions imposed, if any.
RECORDKEEPING REQUIREMENTS
The Compliance Department maintains the following books and records in
TradeComply for a period no less than 6 calendar years:
A. a copy of the Code of Ethics;
B. a record of any violation of the Code of Ethics and any action taken as a
result of the violation;
C. a copy of each report made by an Access Person, including initial,
quarterly and annual reporting;
D. a record of all Access Persons (current and for the past five years);
E. a record of persons responsible for reviewing reports; and
F. a copy of any supporting documentation used in making decisions regarding
action taken by the Compliance Department with respect to personal
securities trading.
