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LOOMIS, SAYLES & CO., L.P.
Code of Ethics
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Policy on Personal Trading and
Related Activities
by Loomis, Sayles Personnel
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January 14, 2000
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TABLE OF CONTENTS
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1. INTRODUCTION.................................................................................................. 1
2. STATEMENT OF GENERAL PRINCIPLES............................................................................... 1
3. OVERVIEW...................................................................................................... 2
3.1 Provisions of the Code Applicable to You............................................................ 2
3.2 A Few Key Terms..................................................................................... 4
4. SUBSTANTIVE RESTRICTIONS ON PERSONAL TRADING AND RELATED ACTIVITIES -- PROHIBITED OR RESTRICTED ACTIVITIES.... 6
4.1 Competing with Client Trades........................................................................ 6
4.2 Personal Use of Client Trading Knowledge............................................................ 7
4.3 Disclosure of Client Trading Knowledge.............................................................. 7
4.4 Transacting in Securities Under Consideration or Pending Execution.................................. 7
4.5 Initial Public Offerings and Private Placements..................................................... 7
4.6 Participation in Investment Clubs and Private Pooled Vehicles....................................... 8
4.7 Good Until Canceled and Limit Orders................................................................ 8
4.8 Investment Personnel Seven-Day Blackout............................................................. 9
4.9 Research Analyst Three-Day Blackout Before Recommendation........................................... 9
4.10 Access Person Seven-Day Blackout After Recommendation............................................... 10
4.11 Short Term Trading Profits.......................................................................... 10
4.12 Short Sales......................................................................................... 10
4.13 Futures and Related Options......................................................................... 10
4.14 Acceptance of Gifts................................................................................. 11
4.15 Public Company Board Service and Other Affiliations................................................. 11
5. PRECLEARANCE, DOCUMENT DELIVERY AND REPORTING PROCEDURES...................................................... 11
5.1 Preclearance........................................................................................ 11
5.2 Transaction Reporting Requirements.................................................................. 12
5.3 Initial and Annual Personal Holdings Reporting Requirements......................................... 14
5.4 Brokerage Confirmations and Statements.............................................................. 14
5.5 Review of Reports by Review Officer................................................................. 14
6. EXEMPT SECURITIES AND EXEMPT TRANSACTIONS..................................................................... 14
6.1 Exempt Securities................................................................................... 14
6.2 Exempt Transactions................................................................................. 15
6.3 Exemption for Investment Personnel from Seven-Day Blackout for Certain Transactions in Large
Capitalization Stocks............................................................................... 16
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6.4 Other Exemptions Granted by the Review Officer...................................................... 17
7. SANCTIONS..................................................................................................... 17
8. RECORDKEEPING REQUIREMENTS.................................................................................... 18
9. MISCELLANEOUS................................................................................................. 18
9.1 Confidentiality..................................................................................... 18
9.2 Notice to Access Persons, Investment Personnel and Research Analysts as to Status; Notice to Review
Officer of Engagement of Independent Contractors.................................................... 19
9.3 Initial and Annual Certification of Compliance...................................................... 19
9.4 Questions and Educational Materials................................................................. 19
GLOSSARY OF TERMS..................................................................................................... G-1
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LOOMIS, SAYLES & CO., L.P.
Code of Ethics
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Policy on Personal Trading and
Related Activities
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1. INTRODUCTION
This Code of Ethics ("Code") of Loomis, Sayles & Co., L.P. ("Loomis,
Sayles") governs personal trading in securities and related activities by you
and, in some circumstances, your family members and others in a similar
relationship to you.
The policies in this Code reflect Loomis, Sayles' desire to detect and
prevent not only situations involving actual or potential conflicts of interest
or unethical conduct, but those situations involving even the appearance of
these.
2. STATEMENT OF GENERAL PRINCIPLES
It is the policy of Loomis, Sayles that no Loomis, Sayles personnel shall
engage in any act, practice or course of conduct that would violate this Code,
the fiduciary duty owed by Loomis, Sayles and its personnel to our clients,
Section 206 of the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the provisions of Section 17(j) of the Investment Company Act of
1940, as amended (the "1940 Act"), and Rule 17j-1 thereunder. The fundamental
position of Loomis, Sayles is, and has been, that we must at all times place the
interests of our clients first. Accordingly, your personal financial
transactions (and in some cases, those of your family members and others in a
similar relationship to you) and related activities must be conducted
consistently with this Code and in such a manner as to avoid any actual or
potential conflict of interest or abuse of your position of trust and
responsibility. Further, you must not take inappropriate advantage of your
position with or on behalf of any our clients.
Without limiting in any manner the fiduciary duty owed by Loomis, Sayles
personnel to clients, it should be noted that Loomis, Sayles considers it proper
that purchases and sales be made by its personnel in the marketplace of
securities owned by our clients, provided that such securities transactions
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comply with the spirit of, and the specific restrictions and limitations set
forth in, this Code. Loomis, Sayles believes this policy not only encourages
investment freedom and results in investment experience, but also fosters a
continuing
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personal interest in such investments by those responsible for the continuous
supervision of our clients' portfolios. It is also evidence of our confidence in
the investments made for our clients.
In making personal investment decisions, however, you must exercise extreme
care to ensure that the prohibitions of this Code are not violated. Further,
you should conduct your personal investing in such a manner as to eliminate the
possibility that your time and attention are devoted to your personal
investments at the expense of time and attention that should be devoted to
management of a client's portfolio.
It is not intended that these policies will specifically address every
situation involving personal trading. These policies will be interpreted and
applied, and exceptions and amendments will be made, by Loomis, Sayles in a
manner considered fair and equitable, but in all cases with the view of placing
our clients' interests paramount. It also bears emphasis that technical
compliance with the procedures, prohibitions and limitations of this Code will
not automatically insulate you from scrutiny of, and sanctions for, securities
transactions which indicate an abuse of your fiduciary duty to any client of
Loomis, Sayles.
You are encouraged to bring any questions you may have about these policies
to the personnel in the Legal and Compliance Department, who will assist you.
Boldfaced terms appearing in these policies have special meaning. Please see
the Glossary for definitions of these terms. Also, see the "Explanatory Notes"
appearing throughout (and made a part of) this Code for clarification of certain
provisions.
3. OVERVIEW
This Code governs personal trading and related activities by Loomis, Sayles
personnel, and in some circumstances by their family members and others in a
similar relationship to Loomis, Sayles personnel.
3.1 Provisions of the Code Applicable to You
The Code contains substantive rules you must observe. You must also follow
certain procedural requirements designed to enforce and verify compliance with
the Code. The Code also provides for sanctions for violations of either
substantive or procedural requirements. The Code consists of three types of
requirements applicable to you. These three types of Code provisions can be
summarized as follows:
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3.1.1 Substantive Restrictions on Personal Trading and Related
Activities. (Section 4)
As a Loomis, Sayles employee, your personal securities trading,
outside affiliations and receipt of gifts are subject to restrictions, and in
some cases, prohibitions. Certain of these activities, such as competing with
client trades and making personal use and benefit from client trades, are
obviously unethical, and the basis for prohibitions on these activities is self
evident. Others, such as purchases of initial public offerings and private
placements, trading during specified black out periods, short-term trading and
public company board service, are restricted because they present actual or
perceived conflicts of interest. These restrictions or prohibitions are based
on SEC rules or positions, industry "best practices" recommendations, and
Loomis, Sayles, policies.
3.1.2 Preclearance, Document Delivery and Reporting. (Section 5)
With certain limited exceptions (described in Section 6) you must pre-
clear every personal securities transaction you propose to enter. You must also
arrange for the delivery by your broker to the Legal and Compliance Department
of duplicate copies of your brokerage confirmation statements and account
statements, either in paper form or, through arrangements with certain brokers
approved by the Legal and Compliance Department, electronically. Likewise, you
must report your personal securities transactions to the Legal and Compliance
Department on a monthly basis either directly, or through arrangements, approved
by the Legal and Compliance Department, by which your broker provides the Legal
and Compliance Department with electronic duplicate copies of your brokerage
confirmation statements and account statements. Finally, you must disclose your
personal securities holdings on an annual basis (and, for new employees, upon
commencing employment). Certain restrictions apply differently to different
types of personnel. You will be notified from time to time of the category (or
categories) into which you fall, and where appropriate, of the accounts or
specific securities with respect to which you are considered to be in such
category.
3.1.3 Sanctions. (Section 7)
The sanctions for violating the Code may be severe. They range from
warnings and fines to suspension or termination of employment, and, in some
cases, to referral to regulatory agencies for civil or criminal proceedings
against the individual involved.
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3.2 A Few Key Terms
As noted above, Boldfaced terms have special meaning in this Code. The
application of a particular Code requirement to you may hinge on the elements of
the definition of these terms. See the Glossary at the end of this Code for
definitions of these terms. In order to have a basic understanding of the Code,
however, you must have an understanding of the terms "Security" and "Beneficial
Ownership" as used in the Code.
3.2.1 Security.
This Code generally relates to transactions in and ownership of
investment that is a Security. For purposes of the Code, Security is
interpreted as defined in Rule 17j-1 under the 1940 Act and Rule 204-2(a)(12)
under the Advisers Act or any applicable successor provision. Currently, this
means any type of equity or debt security (such as common and preferred stocks,
and corporate and government bonds or notes) and any instrument representing, or
any rights relating to, a security (such as certificates of participation,
depository receipts, put and call options, warrants, convertible securities and
securities indices).
EXCEPT that Security for this purpose does not include:
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. shares of registered open-end investment companies (mutual funds)
whether or not affiliated with Loomis, Sayles
. direct obligations of the United States Government (i.e., Treasury
securities, as distinct from U.S. Government agencies or
instrumentalities)
. bankers' acceptances
. bank certificates of deposit
. commercial paper
. repurchase agreements
. other money market instruments
Explanatory Note:
Shares of closed-end funds, municipal obligations and securities
issued by agencies and instrumentalities of the U.S. government
(e.g., GNMA obligations) are Securities.
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3.2.2 Beneficial Ownership.
The Code governs any Security in which you have a direct or indirect
"Beneficial Ownership." This term encompasses not only "ownership" by you in
the usual sense, but any interest which gives you an ability to profit or enjoy
economic benefits from a Security.
Beneficial Ownership for purposes of the Code is interpreted as that
term is defined from time to time in Rule 17j-1 under the 1940 Act and Rule 204-
2(a)(12) under the Advisers Act or any applicable successor provision.
Currently, this means a direct or indirect "pecuniary interest" that is held or
shared by you directly or indirectly (through any contract, arrangement,
understanding, relationship or otherwise) in a Security. The term "pecuniary
interest" in turn generally means your opportunity directly or indirectly to
receive or share in any profit derived from a transaction in a Security whether
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or not the Security or the relevant account is in your name or is held in an
ordinary brokerage or retirement plan account. Although this concept is subject
to a variety of SEC rules and interpretations, you should know that you are
presumed under the Code to have an indirect pecuniary interest as a result of:
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. ownership of a Security by your spouse or minor children;
. ownership of a Security by your other family members sharing your
household (including an adult child, a stepchild, a grandchild, a
parent, stepparent, grandparent, sibling, mother- or father-in-
law, sister- or brother-in-law, and son- or daughter-in-law);
. your share ownership, partnership interest or similar interest in
the portfolio securities held by a corporation, general or
limited partnership or similar entity you control;
. your right to receive dividends or interest from a Security even if
that right is separate or separable from the underlying securities;
. your interest in a Security held for the benefit of you alone or
for you and others in a trust or similar arrangement (including
any present or future right to income or principal); and
. your right to acquire a Security through the exercise or conversion
of a "derivative security."
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Explanatory Note:
Note that you are presumed to have a Beneficial Ownership in any
Security held by family members who share your household. In
certain unusual cases this presumption will not apply if the
Review Officer determines, based on all of the relevant facts,
that the attribution of these family member's Security
transactions to you is inappropriate.
In the case of unmarried persons who share a household and
combine their financial resources in a manner similar to that of
married persons, each person will be presumed to have a
Beneficial Ownership in the securities and transactions of the
other.
The Loomis, Sayles Funded Pension Plan, and any account of an
Access Person, even if also a client account, will be subject to
this Code as an account in which an Access Person has a
Beneficial Ownership.
4. SUBSTANTIVE RESTRICTIONS ON PERSONAL TRADING AND RELATED ACTIVITIES--
PROHIBITED OR RESTRICTED ACTIVITIES
The following are substantive prohibitions and restrictions on your
personal trading and related activities. Please note that different types of
prohibitions and restrictions apply to different types of personnel. In
general, the prohibitions set forth below relating to trading activities apply
to accounts holding Securities in which an Access Person has a Beneficial
Ownership. However, as noted above in the Statement of General Principles,
technical compliance with these provisions will not insulate you from scrutiny
of, and sanctions for, Securities transactions which indicate an abuse of your
fiduciary duty.
4.1 Competing with Client Trades.
No Access Person may, directly or indirectly, purchase or sell a Security
in such a way that the Access Person knew, or reasonably should have known, that
such a Security transaction competes in the market with any actual or considered
Security transaction for any client of Loomis, Sayles, or otherwise personally
acts to injure any Loomis, Sayles client's Security transactions.
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4.2 Personal Use of Client Trading Knowledge.
No Access Person may use the knowledge of Securities purchased or sold by
any client of Loomis, Sayles or Securities being considered for purchase or sale
by any client of Loomis, Sayles to profit personally, directly or indirectly, by
the market effect of such transactions.
4.3 Disclosure of Client Trading Knowledge.
No Access Person may, directly or indirectly, communicate to any person who
is not an Access Person or other approved agent of Loomis, Sayles (e.g., legal
counsel) any non-public information relating to any client of Loomis, Sayles or
any issuer of any Security owned by any client of Loomis, Sayles, including,
without limitation, the purchase or sale or considered purchase or sale of a
Security on behalf of any client of Loomis, Sayles, except to the extent
necessary to comply with applicable law or to effectuate Securities transactions
on behalf of the client of Loomis, Sayles.
4.4 Transacting in Securities Under Consideration or Pending Execution.
No Access Person may, directly or indirectly, execute a personal Securities
transaction on a day during on which: (a) the same Security or an Equivalent
Security is being considered for purchase or sale by a client; or (b) the same
Security or an Equivalent Security is the subject of a pending "buy" or "sell"
order, until that Security ceases being considered for purchase or sale or the
buy or sell order is executed or withdrawn.
Explanatory Note:
You may assume that a Security is not being considered for
purchase or sale or the subject of a pending buy or sell order if
you receive a preclearance to trade the Security, as described in
Section 5, unless you have actual knowledge to the contrary.
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4.5 Initial Public Offerings and Private Placements.
Without obtaining prior written approval from the Review Officer, no Access
Person may, directly or indirectly, purchase any Security sold in an Initial
Public Offering or pursuant to a Private Placement Transaction.
Explanatory Note:
An Access Person seeking approval to acquire a Security in an
Initial Public Offering or Private Placement Transaction must
submit a request in the form prescribed by the Review
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Officer from time to time describing the issuer and the
investment.
In considering such a request, the Review Officer will take into
account, among other considerations, whether the investment
opportunity should be reserved for Loomis, Sayles clients,
whether the opportunity is being offered to you by virtue of your
position at Loomis, Sayles and whether the opportunity is likely
to present actual or perceived conflicts of interest with Loomis,
Sayles' duties to its clients.
It should be understood that approval of these transactions will
be given only in special circumstances, and normally will be
denied.
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If you have been authorized to acquire a Security in a Private
Placement Transaction, you must disclose such investment when you
are involved in a client's subsequent consideration of an
investment in the issuer, even if that investment involves a
different type or class of Security. In such circumstances, the
client's decision to purchase securities of the issuer must be
independently reviewed by an Investment Person with no personal
interest in the issuer.
4.6 Participation in Investment Clubs and Private Pooled Vehicles.
No Access Person shall participate in an investment club or invest in a
hedge fund, or similar private organized investment pool (but not on SEC
registered open-end mutual fund) without express permission of the Review
Officer.
4.7 Good Until Canceled and Limit Orders.
No Access Person shall place any "good until canceled" or "limit" order
with any broker except that an Access Person may utilize a "day order with a
limit" so long as the transaction is consistent with provisions of this Code,
including the preclearance procedures.
Explanatory Note:
All orders must expire at the end of the trading day they are
precleared and made. "Good until canceled" and "limit" orders
that do not expire at the end of that trading day are
inconsistent with the preclearance timing aspects of this Code of
Ethics.
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4.8 Investment Personnel Seven-Day Blackout.
Except as set forth in Section 6.3 below, no Investment Person shall,
directly or indirectly, purchase or sell any Security within a period of seven
(7) calendar days before and after the date that a client with respect to which
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he or she is designated by the Review Officer as an Investment Person has
purchased or sold such Security.
Explanatory Note:
The "seven days before" element of this restriction is based on
the premise that an Investment Person can normally be expected to
know, when he or she is effecting a personal trade, whether any
client as to which he is designated an Investment Person will be
trading in the same Security seven days later. An Investment
Person has an affirmative obligation to recommend and/or effect
suitable and attractive trades for clients regardless of whether
such trade will cause a prior personal trade to be considered in
apparent violation of this restriction. It would constitute a
breach of fiduciary duty and a violation of this Code to delay or
fail to make any such recommendation or transaction in order to
avoid a conflict with this restriction.
Of course, in particular cases a change of circumstance, a firm
or client initiated liquidation, rebalancing or other decision or
similar event may occur after an Investment Person's personal
trade which gives rise to an opportunity or necessity for his or
her client to trade in that Security which did not exist or was
not anticipated by that person at the time of that person's
personal trade. The Review Officer will review any extenuating
circumstances which may warrant waiving of any remedial actions
in a particular situation involving an apparently inadvertent
violation of this restriction.
4.9 Research Analyst Three-Day Blackout Before Recommendation.
During the three (3) business day period before the issuance of a
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Recommendation by a Research Analyst with respect to a Security, that Research
Analyst may not purchase or sell that Security.
Explanatory Note:
Of course, in particular cases a news release, change of
circumstance or similar event may occur after a Research
Analyst's personal trade which gives rise to a need, or makes it
appropriate, for a Research Analyst to issue a Recommendation
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which news, circumstance or event did not exist or was not
anticipated by a Research Analyst at the time of the Research
Analyst's personal trade. The Review Officer will review any
extenuating circumstances which may warrant waiving of any
remedial sanctions in a particular situation involving an
apparently inadvertent violation of this restriction. A Research
Analyst has an affirmative duty to make unbiased Recommendations
and issue reports, both with respect to their timing and
substance, without regard to his or her personal interest. It
would constitute a breach of a Research Analyst's fiduciary duty
and a violation of this Code to delay or fail to issue a
Recommendation in order to avoid a conflict with this provision.
4.10 Access Person Seven-Day Blackout After Recommendation.
During the seven (7) day period after a Recommendation is issued with
respect to a Security, no Access Person may purchase or sell that Security.
4.11 Short Term Trading Profits.
No Access Person may profit from the purchase and sale, or conversely the
sale and purchase, of the same or equivalent Security within 60 calendar days.
Any profits generated on such transactions (calculated in a manner determined
appropriate under the circumstances by the Review Officer) will be disgorged.
Exceptions may be requested (in advance) from the Review Officer. Such
exceptions will be granted only in cases in which there are extenuating
circumstances and no actual or apparent conflict exists between such
transactions and a client's transactions.
4.12 Short Sales.
No Access Person may purchase a put option or sell a call option, sell a
Security short or otherwise take a short position in a Security then being
managed by Loomis, Sayles on a discretionary basis in a client account, unless
there is a corresponding long position in the underlying Security. Short
selling against the box is permitted, as is purchasing a put or selling a call
option on a broad based index.
4.13 Futures and Related Options.
No Access Person shall use futures or related options on a Security to
evade the restrictions of this Code. In other words, no Access Person may use
futures or related options transactions with respect to a Security if this Code
would prohibit taking the same position directly in the Security.
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4.14 Acceptance of Gifts.
Without obtaining prior written approval of the Review Officer, no Access
Person may accept any gift or other thing of more than de minimis value from any
person or entity that does business with Loomis, Sayles. The Review Officer
will, from time to time, issue guidelines as to the type and value of items that
would be considered subject to this restriction.
4.15 Public Company Board Service and Other Affiliations.
No Access Person may serve on the board of directors of any publicly traded
company, absent prior written approval by the Review Officer. In determining
whether to approve such board service, the Review Officer will consider whether
such service will involve an actual or perceived conflict of interest with
client trading, place impediments on Loomis Sayles' ability to trade on behalf
of clients or otherwise materially interfere with the effective discharge of
Loomis Sayles' or the Access Person's duties to clients. Likewise, absent prior
written approval by the Review Officer, no Access Person shall accept any other
service, employment, engagement, connection, association or affiliation in or
with any enterprise, business or otherwise which may present such actual or
perceived conflicts, place impediments on trading or otherwise materially
interfere with the effective discharge of Loomis Sayles' or the Access Person's
responsibilities to clients.
5. PRECLEARANCE, DOCUMENT DELIVERY AND REPORTING PROCEDURES
5.1 Preclearance
With certain limited exceptions, set forth in Section 6 below, every Access
Person must pre-clear (by written, telephonic or electronic means specified by
the Review Officer from time to time) all personal Security transactions in
which he or she has or would acquire Beneficial Ownership. Any transaction
approved pursuant to the preclearance request procedure must be executed by the
end of the trading day on which it is approved unless the Review Officer extends
the preclearance for an additional trading day. If the Access Person's trade
has not been executed by the end of the same trading day (or the next trading
day in the case of an extension), the "preclearance" will lapse and the Access
Person may not trade without again seeking and obtaining preclearance of the
intended trade.
Pre-clearance requests will be accepted and responded to only during hours
specified by the Review Officer from time to time.
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If after preclearance is given and before it has lapsed, an Access Person
becomes aware that a Security as to which he or she obtained pre-clearance has
become the subject of a buy or sell order or has become a Security being
considered for purchase or sale, the Access Person who obtained the preclearance
must consider the preclearance revoked. If the transaction has already been
executed before the Access Person becomes aware of such facts no violation will
be considered to occur as a result of the Access Person's transactions.
Generally preclearance will be denied:
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. if Loomis, Sayles has an unfilled order for that Security placed
with a broker-dealer, the Security is on the Loomis, Sayles
"Restricted List" or "Concentration List" (or such other trading
restriction list as Loomis, Sayles, may from time to time
establish) or the Security is otherwise being considered for
purchase or sale,
. if the trade is otherwise prohibited under the substantive rules
set forth in Section 4 above (e.g., the requesting person is an
Investment Person and his or her client accounts have traded in
the same Security within seven calendar days).
If an Access Person has actual knowledge that a requested transaction is
nevertheless in violation of this Code, approval of the request will not protect
the Access Person from being considered in violation of the Code.
5.2 Transaction Reporting Requirements
5.2.1 Accounts Subject to Reporting.
Unless utilizing an alternative reporting procedure described in
Section 5.2.3 below, each Access Person must file (by paper or electronic means
specified by the Review Officer from time to time) a report on all Security
transactions made during each monthly period in which such Access Person has, or
by reason of such transactions acquires or disposes of, any Beneficial Ownership
of a Security, or as to which the Access Person has any direct or indirect
influence or control (even if such Access Person has no Beneficial Ownership in
such Security). (Official Loomis, Sayles client accounts in which no Loomis,
Sayles employee has a Beneficial Ownership are not control accounts for this
purpose.) Control accounts subject to reporting include accounts managed by an
Access Person, accounts of trusts for which an Access Person serve as trustee or
co-trustee and similar accounts. Such report is required whether or not such
transactions were precleared or subject to preclearance.
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5.2.2 Transaction Reporting Procedure.
Every transaction report must be made not later than ten (10) calendar
days after the end of each calendar month in which the transaction(s) to which
the report relates was effected. All reports must contain the information
required from time to time by Rule 17j-1 under the 1940 Act and Rule 204-
2(a)(12) under the Advisers Act or any applicable successor provision. A list of
the specific items of information then required will be set forth in a reporting
form or other materials provided by the Review Officer from time to time.
If no transactions in any securities required to be reported were
effected during a monthly period by an Access Person, such Access Person shall
nevertheless submit a report within the time-frame specified above stating that
no reportable securities transactions were effected.
In addition, with respect to each account maintained by the Access
Person during the period subject to reporting under Section 5.2.1, whether or
not a transaction occurred in such an account, the transaction report must
contain the brokerage account identification information required from time to
time by Rule 17j-1 under the 1940 Act and Rule 204-2(a)(12) under the Advisers
Act or any applicable successor provision. A list of the specific items of
information then required will be set forth in a reporting form or other
materials provided by the Review Officer from time to time.
Every report concerning a securities transaction prohibited under
Section 4, with respect to which the Access Person relies upon one of the
exemptions from substantive restrictions or preclearance requirements provided
in Section 6 shall contain a brief statement of the exemption relied upon and
the circumstances of the transactions.
5.2.3 Alternative Transaction Reporting Procedures
The Review Officer may from time to time specify one or more personal
trading arrangements that permit or require the use of approved alternative
reporting procedures. These arrangements may include effecting all transactions
through a Loomis, Sayles trading desk or through approved brokerage firms, or
similar arrangements, in each case that would permit the Review Officer to
receive directly electronic or other information reports on the Access Person's
trading without the intervention of the Access Person.
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5.3 Initial and Annual Personal Holdings Reporting Requirements
Within 10 days after becoming an Access Person, each Access Person must
file with the Review Officer a report (by paper or electronic means specified by
the Review Officer from time to time) of such Securities in which such Access
Person has a Beneficial Ownership or as to which such Access Person has direct
or indirect influence or control. In addition, at least annually thereafter, by
a date specified by the Review Officer, each Access Person must file with the
Review Officer a dated report on a form and in a manner specified by the Review
Officer of Securities in which such Access Person has a Beneficial Ownership or
over which such Access Person has direct or indirect influence or control. In
the case of the initial holdings report, the information must be as of the date
the person became an Access Person. In the case of the annual holdings report,
the information in the report shall be as of a date within 30 days of filing the
report. In each case, this report must contain the information required from
time to time by Rule 17j-1 under the 1940 Act and Rule 204-2(a)(12) under the
Advisers Act or any applicable successor provision. A list of the specific
items of information then required will be set forth in a reporting form or
other materials provided by the Review Officer from time to time.
5.4 Brokerage Confirmations and Statements
Each Access Person must arrange for his or her broker to supply to the
Review Officer, on a timely basis, duplicate copies of all confirmations of all
Security transactions and copies of periodic statements for all accounts holding
Securities in which the Access Person has Beneficial Ownership or as to which
such Access Person has direct or indirect influence or control. Access Persons
who maintain accounts with institutions that agree to provide such information
in an approved electronic format may be eligible for an exemption from some of
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the transaction reports required by the Code with respect to those accounts.
See Section 5.2.3.
5.5 Review of Reports by Review Officer
The Review Officer shall establish procedures as the Review Officer may
from time to time determine appropriate, for the review of the information
required to be compiled under this Code regarding transactions by Access
Persons.
6. EXEMPT SECURITIES AND EXEMPT TRANSACTIONS
6.1 Exempt Securities
Transactions in the following types of Securities are exempt from the
substantive trading restrictions and the preclearance requirements, but not
------- ------------ ------------ ------------ ---
reporting, requirements of this Code:
---------
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. shares of unit investment trusts as to which entity's investment
portfolio the Access Person has no direct or indirect influence
or control (other than open-ended registered investment
companies, shares of which are not considered "securities" at all
for these purposes);
. bonds issued or guaranteed by any sovereign government or its
agencies, instrumentalities or authorities or supra-national
issuers (other than direct U.S. government obligations which are
not considered "Securities" at all for these purposes) in each
case, as designated by the Review Officer from time to time;
. Securities of small, private businesses owned or operated by the
family of the Access Person; and
. "index baskets" and options, futures or other derivatives in each
case tied to recognized broad market indices.
6.2 Exempt Transactions.
The following types of transactions are exempt from the trading
-------
restrictions, and the preclearance requirements, but not reporting, requirements
------------ ------------ ------------ --- ---------
of this Code:
. purchases or sales of Securities for an account over which you
have no direct or indirect influence or control;
. purchases or sales of Securities which occur as a result of
operation of law, or any margin call (provided such margin call
does not result from your withdrawal of collateral within 10 days
before the call and you have no involvement in the selection of
the specific Securities to be sold);
. purchases of Securities which are part of an automatic dividend
reinvestment plan, automatic payroll deduction program, automatic
cash purchase or withdrawal program or other similar automatic
transaction program, but only to the extent you have made no
voluntary adjustment (up or down) in the rate at which you
purchase or sell;
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. purchases of Securities made by exercising rights distributed by
an issuer pro rata to all other holders of a class of its
Securities or other interests, to the extent such rights were
acquired by you from the issuer, and sales of such rights so
acquired;
. tenders of Securities pursuant to tender offers which are
expressly conditioned on the tender offeror's acquisition of all
of the Securities of the same class; and
. transactions in Securities by your spouse (or person in a similar
relationship such that the presumption of Beneficial Ownership
arises) employed at another investment firm or similar entity,
provided that: (a) you have no direct or indirect influence or
control over the transaction; (b) the transactions are effected
solely through an account separate from your account and (c) the
Review Officer has specifically exempted the spousal or similar
account from certain trading restrictions and preclearance
requirements.
Explanatory Note:
Transactions in such spousal or similar relationship accounts
that are exempted from trading restrictions and preclearance
requirements will be subject to special scrutiny and may be
subject to additional policies or restrictions in the discretion
of the Review Officer to ensure that these accounts are not being
used to circumvent the policies and purposes of this Code.
6.3 Exemption for Investment Personnel from Seven-Day Blackout for Certain
Transactions in Large Capitalization Stocks.
An Investment Person may, without regard to the Investment Personnel Seven-
Day Blackout restriction set forth in Section 4.8 above, purchase or sell a
publicly traded equity security of an issuer having a market capitalization of
at least U.S. $5 billion in one or more transactions having an aggregate value
not exceeding U.S. $10,000 in any one day. Such transactions shall otherwise be
subject to all other substantive and procedural provisions of this Code,
including the preclearance provisions.
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6.4 Other Exemptions Granted by the Review Officer.
Subject to applicable law, the Review Officer may from time to time grant
exemptions from the trading restrictions, preclearance requirements or other
provisions of this Code with respect to particular individuals, types of
transactions or Securities, where in the opinion of the Review Officer such an
exemption is appropriate in light of all the surrounding circumstances.
7. SANCTIONS
Any violation of the substantive or procedural requirements of this Code
will result in the imposition of such sanctions as the Review Officer may deem
appropriate under the circumstances of the particular violation, as well as the
violator's past history of violations. These sanctions may include, but are not
limited to:
. a letter of caution or warning;
. payment of monies, such as a fine, disgorgement of profits
generated or payment of losses avoided, or restitution to an
affected client;
. suspension of personal trading privileges;
. actions affecting employment status, such as suspension of
employment without pay, demotion or termination of employment;
and
. referral to the SEC, other civil authorities or criminal
authorities;
In applying sanctions, the Review Officer will be guided by sanctions
guidelines established by senior management, from time to time, setting forth
suggested sanctions for specific types of violations, including a schedule of
escalating penalties for repeat violations in some areas. Serious violations,
including those involving deception, dishonesty or knowing breaches of law or
fiduciary duty, will result in one or more of the most severe violations
regardless of the violator's history of prior compliance.
Fines, penalties and disgorged profits will be donated to a charity
selected by the relevant employee or as determined by the Review Officer.
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8. RECORDKEEPING REQUIREMENTS
Loomis, Sayles shall maintain and preserve records relating to this Code of
the type and in the manner and form and for the time period prescribed from time
to time by applicable law. Currently, Loomis, Sayles is required by law to
maintain and preserve:
. in an easily accessible place, a copy of this Code (and any prior
code of ethics that was in effect at any time during the past
five years) for a period of five years;
. in an easily accessible place a record of any violation of this
Code and of any action taken as a result of such violation for a
period of five years following the end of the fiscal year in
which the violation occurs;
. a copy of each report (or information provided in lieu of a
report) submitted under this Code for a period of five years,
provided that for the first two years such copy must be preserved
in an easily accessible place;
. in an easily accessible place, a list of all persons who are, or
within the past five years were, required to make, or were
responsible for reviewing, reports pursuant to this Code;
. a copy of each report provided to any Investment Company as
required by paragraph (c)(2)(ii) of Rule 17j-1 under the 1940 Act
or any successor provision for a period of five years following
the end of the fiscal year in which such report is made, provided
that for the first two years such record shall be preserved in an
easily accessible place; and
. a written record of any decision, and the reasons supporting any
decision, to approve the purchase by an Access Person of any
Security in an Initial Public Offering or Private Placement
Transaction for a period of five years following the end of the
fiscal year in which the approval is granted.
9. MISCELLANEOUS
9.1 Confidentiality
Information obtained from any Access Person hereunder will normally be kept
in strict confidence by Loomis, Sayles, but may under certain circumstances be
provided to third parties. For example, reports of Securities transactions and
violations hereunder will be made available to the SEC or any other regulatory
or
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self-regulatory organization to the extent required by law or regulation, and in
certain circumstances, may in Loomis, Sayles' discretion be made available to
other civil and criminal authorities. In addition, information regarding
violations of this Code may be provided to clients or former clients of Loomis,
Sayles.
9.2 Notice to Access Persons, Investment Personnel and Research Analysts
as to Status; Notice to Review Officer of Engagement of Independent
Contractors
Loomis, Sayles shall periodically identify all persons who are considered
to be "Access Persons," "Investment Personnel" and "Research Analysts" and any
accounts or types of accounts or Securities covered as to which a designation of
Investment Personnel or Research Analysts may apply, inform such persons of
their respective reporting and duties under the Code and provide such persons
with copies of this Code.
Any person engaging an independent contractor shall notify the Review
Officer of this engagement and provide to the Review Officer information
concerning the independent contractor sufficient to permit the Review Officer to
make a determination as to whether such independent contractor shall be
designated as an Access Person.
9.3 Initial and Annual Certification of Compliance
Each Access Person must, upon becoming an Access Person and annually
thereafter, (by paper or electronic means specified by the Review Officer from
time to time) acknowledge that he or she has received, read and understands this
Code and recognizes that he or she is subject hereto, and certify that he or she
will (in the case of a new Access Person) and has during the past year (in the
case of an annual certification) complied with the requirements of this Code of
Ethics, except as otherwise disclosed in writing to the Review Officer.
9.4 Questions and Educational Materials
You are encouraged to bring to the Legal and Compliance Department any
questions you may have about interpreting or complying with this Code, about
Security accounts or personal trading activities of you or of your family or
household members, about your legal or ethical responsibilities or about similar
matters that may involve this Code.
The Legal and Compliance Department may from time to time circulate
educational materials or bulletins designed to assist you in understanding and
carrying out your duties under this Code.
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GLOSSARY OF TERMS
The boldface terms used throughout this policy have the following meanings:
1. "Access Person" means an "access person" as defined from time to time
in Rule 17j-1 under the 1940 Act or any applicable successor
provision. Currently, this means any director, general partner or
officer of Loomis, Sayles, or any Advisory Person (as defined below)
of Loomis, Sayles.
2. "Advisory Person" means an "advisory person" and "advisory
representative" as defined from time to time in Rule 17j-1 under the
1940 Act and Rule 204-2(a)(12) under the Advisers Act, respectively,
or any applicable successor provision. Currently, this means (i) every
employee of Loomis, Sayles (or of any company in a Control
relationship to Loomis, Sayles), 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 by Loomis,
Sayles on behalf of clients, or whose functions relate to the making
of any recommendations with respect to such purchases or sales; and
(ii) every natural person in a Control relationship to Loomis, Sayles
who obtains information concerning recommendations made to a client
with regard to the purchase or sale of a Security. Advisory Person
also includes: (a) any other employee designated by the Review Officer
as an Advisory Person under this Code; and (b) any independent
contractor (or similar person) engaged by Loomis, Sayles designated as
such by the Review Officer as a result of such independent
contractor's access to information about the purchase or sale of
Securities by Loomis, Sayles on behalf of clients (by being present in
Loomis, Sayles offices, having access to computer data or otherwise).
3. "Beneficial Ownership" is defined in Section 3.2.2 of the Code.
4. "Control" means "control" as defined from time to time in Rule 17j-1
under the 1940 Act and Rule 204-2(a)(12) under the Advisers Act or any
applicable successor provision. Currently, this means the power to
exercise a controlling influence over the management or policies of
Loomis, Sayles, unless such power is solely the result of an official
position with Loomis, Sayles.
5. "Initial Public Offering" means an "initial public offering" as
defined from time to time in Rule 17j-l under the 1940 Act or any
applicable successor provision. Currently, this means any offering of
securities registered under the Securities Act of 1933 the issuer of
which immediately before the offering, was not subject to the
reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934.
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6. "Investment Company" means any Investment Company registered as such
under the 1940 Act and for which Loomis, Sayles serves as investment
adviser or subadviser.
7. "Investment Person" means all Portfolio Managers of Loomis, Sayles and
other Advisory Persons who assist the Portfolio Managers in making and
implementing investment decisions for an Investment Company or other
client of Loomis, Sayles, including, but not limited to, designated
Research Analysts and traders of Loomis, Sayles. A person is
considered an Investment Person only as to those client accounts or
types of client accounts as to which he or she is designated by the
Review Officer as such. As to other accounts, he or she is simply an
Access Person.
8. "Portfolio Manager" means any individual employed by Loomis, Sayles
who has been designated as a Portfolio Manager by Loomis, Sayles. A
person is considered a Portfolio Manager only as to those client
accounts as to which he or she is designated by the Review Officer as
such. As to other client accounts, he or she is simply an Access
Person.
9. "Private Placement Transaction" means a "limited offering" as defined
from time to time in Rule 17j-l under the 1940 Act or any applicable
successor provision. Currently, this means an offering exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2)
or 4(6) or Rule 504, 505 or 506 under that Act.
10. "Recommendation" means any initial rating or change therein, in the
case of an equity Security, or any initial rating or status, or change
therein in the case of a fixed income Security in either case issued
by a Research Analyst.
11. "Research Analyst" means any individual employed by Loomis, Sayles who
has been designated as a Research Analyst by Loomis, Sayles. A person
is considered a Research Analyst only as to those Securities which he
or she is assigned to cover and about which he or she issues research
reports to other Investment Personnel. As to other accounts, he or
she is simply an Access Person.
12. "Review Officer" means the General Counsel or such other officer or
employee of Loomis, Sayles designated from time to time by Loomis,
Sayles to receive and review reports of purchases and sales by Access
Persons, and to address issues of personal trading. "Alternate Review
Officer(s)" means the employee or employees of Loomis, Sayles
designated from time to time by Loomis, Sayles to receive and review
reports of purchases and sales, and to address issues of personal
trading, by the Review Officer, and to act for the Review Officer in
the absence of the Review Officer.
13. "Security" is defined in Section 3.2.1 of the Code.
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