PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion: (i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion. (ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a web-based portal or other interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser. (iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made with respect to the Model Portfolio or any Model Portfolio Update. (iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion. (v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunder. (vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay Manager; provided, however, that the Sub-Adviser shall not be responsible for any such losses or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement. (vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both parties. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”). (b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense: (i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement; (ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund; (iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio; (iv) employ professional portfolio managers and, if deemed necessary, securities analysts who provide research services to the Sub-Adviser; (v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations; (vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”); (vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser with (a) current copies of the compliance policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures (including the Model Portfolio Procedures) that occurred in connection with the provision of services to the Fund, (c) a copy of the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary of any reviews, proceedings or examinations, including their findings, undertaken by a regulatory agency with respect to the Sub-Adviser, and (e) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation of the Federal Securities Laws (as such term is defined in Rule 38a-1); (viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted by the Board in compliance with applicable law, including without limitation, Rules 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 under the 1940 Act, and the Pricing and Valuation Procedures (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser; (ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics; (x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries submitted to the Sub-Adviser in writing; (xi) furnish to the Trustees such information as may reasonably be requested in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto; (xii) to the extent called for by the Pricing and Valuation Procedures, or as reasonably requested by the Fund, provide the Fund with information and advice regarding assets in the Allocated Portion to assist the Fund in (i) determining the appropriate valuations of such assets, the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such assets and whether liquidity information provided by the Fund’s liquidity classification agents is reasonable; and (iii) risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program; (xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); and (xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements therein not misleading. (c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules and any other applicable state and/or self-regulatory organization regulations; and (iii) maintain errors and omissions insurance in an amount at least equal to that disclosed to the Board in connection with their approval of this Agreement. (d) The Fund or its agent will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder. (e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In the case of notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion:
(i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion.
(ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a web-based portal or other interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser. For avoidance of doubt, with respect to any updates to the Model Portfolio it is understood that the Sub-Adviser will deliver the corresponding Model Portfolio Update to the Overlay Manager on at least a one day lag, but in no event with greater than a one week lag. Sub-Adviser shall not be liable to the extent that Sub-Adviser’s delivery of the Model Portfolio or any Model Portfolio Update is not received within the agreed upon timeframe by the Overlay Manager as a result of any technical issues with the Designated Portal.
(iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made by Sub-Adviser with respect to the Model Portfolio or any Model Portfolio Update.
(iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion.
(v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunder.
(vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay ManagerManager within the timeframe as agreed upon between Adviser and Sub-Adviser; provided, however, that the Sub-Adviser shall not be responsible for any such losses or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement. In the event that the Fund, or the Overlay Manager on behalf of the Fund, requests reimbursement for a realized loss due to a trade error as a result of a failure of the Sub-Adviser to properly maintain or update the Model Portfolio, the Fund or Overlay Manager, as applicable, shall provide information to the Sub-Adviser describing the reasonable basis for the determination that such error is attributed to the Sub-Adviser and the analysis regarding the amount of loss. For the avoidance of doubt, the Sub-Adviser shall not be responsible for any payments under this paragraph (vi) absent such information from the Fund or the Overlay Manager.
(vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), as applicable, and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both parties. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”).
(b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense:
(i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement;
(ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund;
(iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio;
(iv) employ professional portfolio managers and, if deemed necessary, securities analysts who provide research services with respect to the Sub-AdviserModel Portfolio;
(v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations;
(vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”);
(vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser with (a) current copies of the compliance policies and procedures manual (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures manual (including the Model Portfolio Procedures) that occurred in connection with the provision of services to the Fund, (c) a copy of the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary subject to Section 13 of this Agreement, the opportunity to review and/or discuss with the Sub-Adviser during normal business hours the substance of any reviews, proceedings or examinations, including their findings, undertaken by correspondence between the Sub-Adviser and a regulatory agency in connection with respect regulatory examinations or proceedings related to the Sub-AdviserServices, and (e) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation of the Federal Securities Laws (as such term is defined in Rule 38a-1);
(viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted by the Board in compliance with applicable law, including without limitation, Rules 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 limitation requirements under the 1940 Act, and the Pricing and Valuation Procedures (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser;
(ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics;
(x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries regarding Sub-Adviser’s duties and obligations under this Agreement submitted to the Sub-Adviser in writing, within a reasonable period of time as agreed upon between Sub-Adviser and Adviser;
(xi) furnish to the Adviser or the Board of Trustees such information as may reasonably be requested by the Board of Trustees in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto;
(xii) to the extent called for by the Pricing and Valuation Procedures, or as reasonably requested by the Fund, provide the Fund with information and advice regarding assets in the Allocated Portion which are consistent with the Model Portfolio to assist the Fund in (i) determining the appropriate valuations of such assets, the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such assets and whether liquidity information provided by the Fund’s liquidity classification agents is reasonable; and (iii) risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program;
(xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); and
(xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements therein not misleading.
(c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules Rules, as necessary to perform it duties hereunder, and any other applicable state and/or self-regulatory organization regulations; and (iii) maintain adequate errors and omissions insurance in an amount at least equal to that disclosed to the Board in connection with their approval of this Agreementinsurance.
(d) The Fund Fund, the Adviser or its agent their respective agents will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder.
(e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In To the case of extent the Sub-Adviser receives notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion:
(i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion.
(ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a web-based portal or other interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser.
(iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made with respect to the Model Portfolio or any Model Portfolio Update.
(iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion.
(v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunder.
(vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay Manager; provided, however, that the Sub-Adviser shall not be responsible for any such losses or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement.
(vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both parties. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”).
(b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense:
(i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement;
(ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund;
(iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio;
(iv) employ professional portfolio managers and, if deemed necessary, securities analysts who provide research services to the Sub-AdviserFund;
(v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations;
(vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”);
(vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser with (a) current copies of the compliance policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures (including the Model Portfolio Procedures) that occurred in connection with the provision of services to the Fund, (c) a copy of the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary copies or summaries of any reviews, proceedings or examinations, including their findings, undertaken by correspondence between the Sub-Adviser and a regulatory agency in connection with respect to regulatory examinations or proceedings and copies of such letters and responses will be made available by the Sub-Adviser during the Adviser’s on-site or virtual visits, and (e) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation of the Federal Securities Laws (as such term is defined in Rule 38a-1);
(viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted by the Board in compliance with applicable law, including without limitation, Rules 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 under the 1940 Act, and the Pricing and Valuation Procedures (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser;
(ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics;
(x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries submitted to the Sub-Adviser in writing;
(xi) furnish to the Trustees such information as may reasonably be requested in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto;
(xii) to the extent called for by the Pricing and Valuation Procedures, or as reasonably requested by the Fund, provide the Fund with information and advice regarding assets in the Allocated Portion to assist the Fund in (i) determining the appropriate valuations of such assets, the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such assets and whether liquidity information provided by the Fund’s liquidity classification agents is reasonable; and (iii) risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program;
(xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); and
(xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements therein not misleading.
(c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules and any other applicable state and/or self-regulatory organization regulations; and (iii) maintain errors and omissions insurance in an amount at least equal to that disclosed to the Board in connection with their approval of this Agreement.
(d) The Fund or its agent will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder.
(e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In the case of notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion:
(i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion.
(ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a web-based portal or other interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser.
(iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made with respect to the Model Portfolio or any Model Portfolio Update.
(iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion.
(v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunder.
(vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay Manager; provided, however, that the Sub-Adviser shall not be responsible for any such losses or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement.
(vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both parties. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”).
(b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense:
(i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement;
(ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund;
(iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio;
(iv) employ professional portfolio managers and, if deemed necessary, securities analysts who provide research services to the Sub-Adviser;
(v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations;
(vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”);
(vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser with (a) current copies of the compliance policies and procedures relevant to the provision of the Services (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures (including the Model Portfolio Procedures) that occurred in connection with the provision of services Services to the Fund, (c) a copy of the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary copies of any reviews, proceedings or examinations, including their findings, undertaken by correspondence between the Sub-Adviser and a regulatory agency in connection with respect regulatory examinations or proceedings relevant to the Sub-Adviserprovision of the Services, and (e) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation violations of the Federal Securities Laws (as such term is defined in Rule 38a-1);
(viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted by the Board in compliance with applicable law, including without limitation, Rules 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 under the 1940 Act, and the Pricing and Valuation Procedures (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser;
(ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics;
(x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries submitted to the Sub-Adviser in writing;
(xi) furnish to the Trustees such information as may reasonably be requested in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto;
(xii) to the extent called for by the Pricing and Valuation Procedures, or as reasonably requested by the Fund, provide the Fund with information and advice regarding assets in the Allocated Portion to assist the Fund in (i) determining the appropriate valuations of such assets, the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such assets and whether liquidity information provided by the Fund’s liquidity classification agents is reasonableassets; and (iii) risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program;
(xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); provided however that nothing shall prohibit disclosure of the constituents of the Model Portfolio, to the extent it does not differ from Sub-Adviser’s standard model portfolio, in connection with the provision of similar services to other clients as contemplated by Section 10 below; and
(xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements therein not misleading.
(c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules and any other applicable state and/or self-regulatory organization regulations; and (iii) maintain errors and omissions insurance in an amount at least equal to that disclosed to the Board in connection with their approval of this Agreement.
(d) The Fund or its agent will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder.
(e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In the case of notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion:
(i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion.
(ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a web-based portal or other interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser.
(iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made with respect to the Model Portfolio or any Model Portfolio Update.
(iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion.
(v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunder.
(vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay Manager; provided, however, that the Sub-Adviser shall not be responsible for any such losses losses, errors or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement.
(vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both parties. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”).
(b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense:
(i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement;
(ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund;
(iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio;
(iv) employ professional portfolio managers and, if deemed necessary, securities analysts who provide research services to the Sub-AdviserFund;
(v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations;
(vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”);
(vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser with (a) current copies of the compliance policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures (including the Model Portfolio Procedures) that occurred in connection with the provision of services to the Fund, (c) a copy of the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary copies of any reviews, proceedings or examinations, including their findings, undertaken by correspondence between the Sub-Adviser and a regulatory agency in connection with respect to the Sub-Adviserregulatory examinations or proceedings, and (e) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation of the Federal Securities Laws (as such term is defined in Rule 38a-1);
(viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted by the Board in compliance with applicable law, including without limitation, Rules 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 under the 1940 Act, and the Pricing and Valuation Procedures (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser;
(ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics;
(x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries submitted to the Sub-Adviser in writing;
(xi) furnish to the Trustees such information as may reasonably be requested in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto;
(xii) to the extent called for by the Pricing and Valuation Procedures, or as reasonably requested by the Fund, provide the Fund with information and advice regarding assets in the Allocated Portion to assist the Fund in (i) determining the appropriate valuations of such assets, the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such assets and whether liquidity information provided by the Fund’s liquidity classification agents is reasonable; and (iii) with respect to the allocated portion, and to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Fund’s Derivative Risk Manager with its risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program. The Adviser retains ultimate responsibility for compliance with Rule 18f-4 of the 1940 Act ;
(xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); and
(xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements directly or indirectly related to the Sub-Adviser therein not misleading.
(c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules and any other applicable state and/or self-regulatory organization regulations; and (iii) maintain errors and omissions insurance in an amount at least equal to that disclosed to the Board in connection with their approval of this Agreement.
(d) The Fund or its agent will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder.
(e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action action, file proofs of claims or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In the case of notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion:
(i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion.
(ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a web-based portal or other interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser.
(iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made with respect to the Model Portfolio or any Model Portfolio Update.
(iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion.
(v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunder.
(vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay Manager; provided, however, that the Sub-Adviser shall not be responsible for any such losses or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement.
(vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both parties. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”).
(b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense:
(i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon reasonable request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement;
(ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund;
(iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio;
(iv) employ professional portfolio managers and, if deemed necessary, securities analysts who provide research services to the Sub-AdviserFund;
(v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations;
(vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”);
(vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser with (a) current copies of the compliance policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures (including the Model Portfolio Procedures) that occurred in connection with the provision of services to the Fund, (c) a copy of the the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary copies of any reviews, proceedings or examinations, including their findings, undertaken by correspondence between the Sub-Adviser and a regulatory agency in connection with respect to the Sub-Adviserregulatory examinations or proceedings, and (e) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation of the Federal Securities Laws (as such term is defined in Rule 38a-1);
(viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted by the Board in compliance with applicable law, including without limitation, Rules 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 under the 1940 Act, and the Pricing and Valuation Procedures (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable immediately upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser;
(ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics;
(x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries submitted to the Sub-Adviser in writing;
(xi) furnish to the Trustees such information as may reasonably be requested in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto;
(xii) to the extent called for by the Pricing and Valuation Procedures, or as reasonably requested by the Fund, provide the Fund with information and advice regarding assets in the Allocated Portion to reasonably assist the Fund in (i) determining the appropriate valuations of such assets, the assets in the Model Portfolio and the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such the assets and whether liquidity information provided by in the Fund’s liquidity classification agents is reasonableModel Portfolio; and (iii) risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program;. For the avoidance of doubt the Adviser hereby acknowledges (i) compliance with Rule 22e-4 under the 1940 Act, including any liquidity determinations for securities or instruments held by the Fund, is the responsibility of the Fund; (ii) the Sub-Adviser is not the pricing or valuation agent for the Fund and therefore is not responsible for valuing the Fund’s securities, including for purposes of calculating the Fund’s net asset value; and (iii) the Sub-Adviser is not the Fund’s derivatives risk manager, as that term is defined under Rule 18f-4 of the 1940 Act.
(xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); provided however that nothing shall prohibit disclosure of the constituents in the Model Portfolio in connection with the provision of similar services to other clients if it does not differ from Sub-Adviser’s standard model portfolio, as contemplated by Section 10 below; and
(xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements therein not misleading. The Adviser and the Trust shall request and obtain the prior written consent of the Sub-Adviser prior to publishing or distributing any communications or materials that go beyond just including the Sub-Adviser Disclosure or such information as the name of the Sub-Adviser or any trademark, service xxxx, symbol or logo of the Sub-Adviser.
(c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules and any other applicable state and/or self-regulatory organization regulations; and (iii) maintain errors comprehensive general liability coverage and omissions insurance in an amount at least equal to that disclosed to will carry a fidelity bond covering it and each of its employees and authorized agents with limits of not less than those considered commercially reasonable and appropriate under the Board in connection with their approval of this Agreementcurrent industry practices.
(d) The Fund or its agent will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder.
(e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In the case of notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion:
(i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion.
(ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a web-based portal or other interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser.
(iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made with respect to the Model Portfolio or any Model Portfolio Update.
(iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion.
(v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunder.
(vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay Manager; provided, however, that the Sub-Adviser shall not be responsible for any such losses or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement.
(vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both parties. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”).
(b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense:
(i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon reasonable request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement;
(ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund;
(iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio;
(iv) employ professional portfolio managers and, if deemed necessarynecessary by Sub-Adviser, securities analysts who provide research services to the Sub-AdviserFund;
(v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations;
(vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”);
(vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser with (a) current copies of the compliance policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures (including the Model Portfolio Procedures) that occurred in connection with the provision of services to the Fund, (c) a copy of the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary summaries of any reviews, proceedings or examinations, including their findings, undertaken by correspondence between the Sub-Adviser and a regulatory agency in connection with respect to regulatory examinations or proceedings and the Sub-AdviserAdviser will discuss such correspondence further with Adviser or the Trust’s Chief Compliance Officer; provided, however, that Sub-Adviser may redact information as necessary to maintain confidentiality of client information, and (e) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation of the Federal Securities Laws (as such term is defined in Rule 38a-1);
(viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted by the Board in compliance with applicable law, including without limitation, Rules 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 under the 1940 Act, and the Pricing and Valuation Procedures (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser;
(ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics;
(x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries submitted to the Sub-Adviser in writing;
(xi) furnish to the Trustees such information as may reasonably be requested in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto;
(xii) to the extent called for by the Pricing and Valuation Procedures, or as reasonably requested by the Fund, provide the Fund with information and advice regarding assets in the Allocated Portion to assist the Fund in (i) determining the appropriate valuations of such assets, the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such assets and whether liquidity information provided by the Fund’s liquidity classification agents is reasonable; and (iii) risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program;
(xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); and
(xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements therein not misleading.
(c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules and any other applicable state and/or self-regulatory organization regulations; and (iii) maintain errors and omissions insurance in an amount at least equal to that disclosed to the Board in connection with their approval of this Agreement.
(d) The Fund or its agent will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder.
(e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In the case of notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion:
(i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion.
(ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a webweb- or cloud-based portal or other communication or transmission interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall shall, subject to its policies and procedures and disclosures made in its Form ADV-Part 2A, provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser.
(iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made with respect to the Model Portfolio or any Model Portfolio Update.
(iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion.
(v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunderthereunder or similar reports that are required to be filed only by the investment manager with “investment discretion” of the securities held in the Fund in foreign jurisdictions.
(vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay Manager; provided, however, that the Sub-Adviser shall not be responsible for any such losses or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement.
(vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both partiesparties in writing, which may consist of agreement via email correspondence notwithstanding the formal notice provisions of Section 20 of this Agreement. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the effective documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”).
(b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense:
(i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement, which the Sub-Adviser is not restricted from furnishing due to contractual obligations) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement;
(ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Adviser and/or the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund;
(iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio;
(iv) employ professional portfolio managers and, if deemed necessary, securities analysts who provide research services to the Sub-AdviserFund;
(v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations;
(vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”);
(vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser via any reasonably requested means, including submission to an electronic portal, which may be updated from time to time by the Chief Compliance Office of the Trust or the Adviser via email notice notwithstanding the formal notice provisions of Section 20 of this Agreement with (a) current copies of the compliance policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures (including the Model Portfolio Procedures) that occurred in connection with the provision of services to the Fund, (c) a copy of the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary written summaries of any reviews, proceedings or examinations, including their findings, undertaken by correspondence between the Sub-Adviser and a regulatory agency in connection with respect to the Subregulatory examinations or proceedings, (e) copies of any deficiency letters and/or correspondence from a regulatory agency closing-Adviser, out a regulatory examination or proceeding; and (ef) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation of the Federal Securities Laws (as such term is defined in Rule 38a-1);
(viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted or approved by the Board in compliance with applicable law, including without limitation, Rules 2a-4, 2a-5, 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 under the 1940 Act, and the Pricing and Valuation Procedures Act (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser;
(ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics;
(x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries submitted to the Sub-Adviser in writing;
(xi) furnish to the Trustees such information as may reasonably be requested in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto;
(xii) to the extent called for by the Pricing and Valuation Fund Procedures, or as reasonably requested by the FundFund or Adviser, provide the Fund and Adviser with information and advice regarding assets in the Allocated Portion to assist the Fund and Adviser in (i) determining the appropriate valuations fair value of such assets, the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such assets and whether liquidity information provided by the Fund’s liquidity classification agents is reasonable; and (iii) risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program;
(xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); and
(xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements therein not misleading.
(c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules and Rules, any other applicable federal regulations and state and/or self-regulatory organization regulations; and (iii) maintain errors and omissions insurance in an amount at least equal to that disclosed to the Board in connection with their approval of this Agreement.
(d) The Fund or its agent will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder.
(e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In the case of notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
PROVISION OF INVESTMENT SUB-ADVISORY SERVICES. (a) Within the framework of the Fund’s investment objective, policies and restrictions as set forth in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time, and the Investment Guidelines (as defined in Section 2(a)), and subject to the supervision of the Board and the Adviser, the Sub-Adviser shall provide the following non-discretionary investment advisory services with respect to the Allocated Portion:
(i) The Sub-Adviser shall construct and maintain on a continuous basis a model portfolio representing the Sub-Adviser’s recommendations as to the securities to be purchased, sold or retained by the Fund with respect to the Allocated Portion (the “Model Portfolio”), which Model Portfolio will be used by the Overlay Manager in the investment of the assets of the Allocated Portion in accordance with the Overlay Manager Agreement. The Sub-Adviser shall be responsible for updating or changing the Model Portfolio’s investment recommendations as may be necessary or advisable, which may consist of additions, removals or adjustments of the constituent securities or the weightings of the constituent securities comprising the Model Portfolio (each, a “Model Portfolio Update”). The Sub-Adviser has adopted policies and procedures and/or put in place appropriate internal controls to ensure the Model Portfolio is maintained and updated accurately as necessary or advisable and operates as intended with respect to the Allocated Portion.
(ii) The Sub-Adviser shall provide the Model Portfolio and each Model Portfolio Update to the Overlay Manager using a web-based portal or other interface or methodology designated by the Overlay Manager or the Adviser (the “Designated Portal”). In connection with the foregoing, the Sub-Adviser shall provide such information concerning the Model Portfolio and/or the Model Portfolio Update in such manner as reasonably required by the Designated Portal, or otherwise as the Adviser or the Overlay Manager may reasonably request. The Sub-Adviser shall provide each Model Portfolio Update to the Overlay Manager and/or the Adviser with such frequency as determined by the Adviser to be necessary or appropriate and at the reasonable request of the Adviser or as otherwise directed by the Adviser.
(iii) The Sub-Adviser is responsible for verifying the accuracy and completeness of the Model Portfolio and each Model Portfolio Update. The Sub-Adviser is responsible for confirming that the Model Portfolio and each Model Portfolio Update has been timely and accurately provided to the Overlay Manager or as otherwise directed by the Adviser, and the Sub-Adviser shall promptly report to the Adviser any errors made with respect to the Model Portfolio or any Model Portfolio Update.
(iv) The Sub-Adviser acknowledges that the Sub-Adviser shall not have investment discretion with respect to any of the securities that are purchased or sold on behalf of the Allocated Portion and shall have no authority or responsibility to place orders for the execution of purchase and sale transactions on behalf of the Allocated Portion. The Sub-Adviser further acknowledges that the Overlay Manager shall have certain discretion, as specified in the Overlay Manager Agreement, regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion.
(v) With respect to the Allocated Portion, the Sub-Adviser will not exercise “investment discretion” of the securities held in the Fund within the meaning of Section 13(f) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and shall not be responsible for filing any required reports pursuant to Sections 13(f), 13(d) and 13(g) of the Exchange Act and the rules thereunder.
(vi) The Sub-Adviser is responsible to the extent that any trade error losses or compliance violations incurred by the Fund and/or the Adviser are solely the result of the Sub-Adviser’s failure to properly maintain or update the Model Portfolio or failure to properly provide the Model Portfolio or any Model Portfolio Update to the Overlay Manager; provided, however, that the Sub-Adviser shall not be responsible for any such losses or compliance violations that result from the manner or timing in which the Overlay Manager exercises discretion regarding the timing and manner of implementing the Model Portfolio’s recommendations on behalf of the Allocated Portion pursuant to the Overlay Manager Agreement.
(vii) In providing the Services under this Agreement, the Sub-Adviser shall construct, maintain and update the Model Portfolio in accordance with the Fund’s investment objective, policies, and restrictions as provided in the Fund’s Prospectus and Statement of Additional Information, as currently in effect and as amended or supplemented from time to time and provided to the Sub-Adviser, in compliance with the Investment Guidelines furnished pursuant to Section 2(a), and in compliance with the requirements applicable to registered investment companies under applicable laws, including, but not limited to, the 1940 Act, the Commodity Exchange Act (the “CEA”) and the rules of the National Futures Association (the “NFA Rules”), and those requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. From time to time, the Adviser or the Fund may provide the Sub-Adviser with written copies of other investment policies, guidelines and restrictions applicable to the Sub-Adviser’s construction, maintenance and updating of the Model Portfolio, which shall become effective at such time as agreed upon by both parties. Nothing herein shall be construed to relieve the Sub-Adviser of responsibility for the Model Portfolio’s compliance with the documents, requirements, limitations and instructions referenced in this Section 3(a)(vii) (collectively, the “Model Portfolio Compliance Limitations”).
(b) In addition to providing the non-discretionary investment advisory services set forth in Section 3(a) above with respect to the Allocated Portion, the Sub-Adviser will, at its own expense:
(i) advise the Adviser and the Fund in connection with investment policy decisions to be made by it regarding the Allocated Portion and, upon request, furnish the Adviser and the Fund with periodic and special reports (including any research, economic and statistical data, as applicable to the Sub-Adviser’s responsibilities under this Agreement) on the Model Portfolio and its constituent securities and on the performance of its obligations under this Agreement;
(ii) submit such reports and information as the Adviser or the Fund may reasonably request to assist the Fund’s custodian (the “Custodian”) in its determination of the market value of securities held in the Fund;
(iii) obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities or other financial instruments that are included in the Model Portfolio or considered for inclusion in the Model Portfolio;
(iv) employ professional portfolio managers and, if deemed necessary, securities analysts who provide research services to the Sub-AdviserFund;
(v) prior to each delivery of a Model Portfolio Update to the Adviser and/or the Overlay Manager, monitor the Model Portfolio’s compliance with the Model Portfolio Compliance Limitations;
(vi) adopt written policies and procedures reasonably designed to prevent violation by the Sub-Adviser, or any of its supervised persons (as such term is defined in the Advisers Act), of the Advisers Act and the rules thereunder and all other laws and regulations relevant to the performance of its duties under this Agreement (the “Model Portfolio Procedures”);
(vii) to the extent reasonably requested by the Trust or the Adviser, use its best efforts to assist the Chief Compliance Officer of the Trust in respect of Rule 38a-1 under the 1940 Act including, without limitation, providing the Chief Compliance Officer of the Trust or the Adviser with (a) current copies of the compliance policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser in effect from time to time (including prompt notice of any material changes thereto), (b) reports of any violations of the Sub-Adviser’s compliance policies and procedures (including the Model Portfolio Procedures) that occurred in connection with the provision of services to the Fund, (c) a copy of the Sub-Adviser’s annual compliance report as required by Rule 206(4)-7 of the Advisers Act, (d) a summary copies of any reviews, proceedings or examinations, including their findings, undertaken by correspondence between the Sub-Adviser and a regulatory agency in connection with respect to the Sub-Adviserregulatory examinations or proceedings, and (e) upon request, a certificate of the Chief Compliance Officer of the Sub-Adviser to the effect that the policies and procedures (including the Model Portfolio Procedures) of the Sub-Adviser are reasonably designed to prevent violation of the Federal Securities Laws (as such term is defined in Rule 38a-1);
(viii) as applicable to the Sub-Adviser’s responsibilities under this Agreement, comply with all procedures and policies adopted by the Board in compliance with applicable law, including without limitation, Rules 10f-3, 12d3-1, 17a-7, 17e-1 and 17j-1 under the 1940 Act, and the Pricing and Valuation Procedures (together, the “Fund Procedures”) provided to the Sub-Adviser by the Adviser or the Fund and notify the Adviser as soon as reasonably practicable upon (a) detection of any breach of such Fund Procedures or (b) determination that a Fund Procedure conflicts with a procedure adopted by the Sub-Adviser;
(ix) maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act, a copy of which will be provided to the Adviser and the Fund, including any amendments thereto, and institute and enforce procedures reasonably necessary to prevent “access persons,” as such term is defined in Rule 17j-1, from violating its Code of Ethics;
(x) promptly complete and return to the Adviser or the Trust any compliance questionnaires or other inquiries submitted to the Sub-Adviser in writing;
(xi) furnish to the Trustees such information as may reasonably be requested in order for the Board to evaluate this Agreement or any proposed amendments thereto for the purposes of approving this Agreement, the renewal thereof or any amendment hereto;
(xii) to the extent called for by the Pricing and Valuation Procedures, or as reasonably requested by the Fund, provide the Fund with information and advice regarding assets in the Allocated Portion to assist the Fund in (i) determining the appropriate valuations of such assets, the appropriate pricing sources for such assets, and whether pricing information provided by the Fund’s pricing agents is reasonable; (ii) determining the appropriate liquidity classifications of such assets and whether liquidity information provided by the Fund’s liquidity classification agents is reasonable; and (iii) risk identification, risk assessment, and monitoring of risk guidelines with respect to the Fund’s derivatives risk management program;
(xiii) except as necessary to perform its duties and obligations under this Agreement or except as otherwise permitted by the Fund Procedures, shall treat confidentially, and shall not disclose without the consent of the Fund, all information in respect of the Model Portfolio, including, without limitation, the identification and market value or other pricing information of any and all securities or other investments that are constituents in the Model Portfolio, and any and all changes of securities or other investments effected for the Model Portfolio by a Model Portfolio Update (including past, pending and proposed changes); and
(xiv) upon request, will review the Fund’s Summary Prospectus, Prospectus, Statement of Additional Information, periodic reports to shareholders, reports and schedules filed with the Securities and Exchange Commission (the “SEC”) (including any amendment, supplement or sticker to any of the foregoing) and advertising and sales material relating to the Fund (collectively, the “Disclosure Documents”) in order to ensure that, with respect to the disclosure about the Sub-Adviser, the manner in which the Sub-Adviser provides the Services to the Allocated Portion and information relating directly or indirectly to the Sub-Adviser (the “Sub-Adviser Disclosure”), such Disclosure Documents contain no untrue statements of material fact and do not omit any statement of material fact required to be stated therein or necessary to make the statements therein not misleading.
(c) In providing Services under this Agreement, the Sub-Adviser shall (i) maintain all licenses and registrations necessary to perform its duties hereunder in good order; (ii) conduct its operations at all times in conformance with the Advisers Act, the 1940 Act, the CEA, the NFA Rules and any other applicable state and/or self-regulatory organization regulations; and (iii) maintain errors and omissions insurance in an amount at least equal to that disclosed to the Board in connection with their approval of this Agreement.
(d) The Fund or its agent will timely provide the Sub-Adviser with such information as may be reasonably necessary or appropriate in order for the Sub-Adviser to perform its responsibilities hereunder.
(e) The Adviser will be responsible for all class actions and lawsuits involving the Fund or securities held, or formerly held, in the Fund. The Sub-Adviser is not required to take any action or to render investment-related advice with respect to lawsuits involving the Fund, including those involving securities presently or formerly held in the Fund, or the issuers thereof, including actions involving bankruptcy. In the case of notices of class action suits received by the Sub-Adviser involving issuers presently or formerly held in the Fund, the Sub-Adviser shall promptly forward such notices to the Adviser and, with the consent of the Adviser, may provide information about the Fund to third parties for purposes of participating in any settlements relating to such class actions.
Appears in 1 contract
Samples: Investment Sub Advisory Agreement (Bridge Builder Trust)
