EX-99.P.2
FIDUCIARY SERVICES - CODE OF ETHICS
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I. GENERAL PROVISIONS
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UMB Bank(1), Scout Investment Advisors, Inc. "SIA", the UMB Scout Funds "Scout
Funds" and their associates have an overriding fiduciary obligation to their
clients and/or the shareholders of the Scout Funds and other advisory clients.
All associates need to be mindful of what this means when engaging in
professional and personal activities. Specifically, associates have a duty and
requirement to:
o Place the clients' interests first;
o Conduct all personal transactions in accordance with this Code of
Ethics and in compliance with applicable laws and regulations;
o Avoid actual or potential conflicts of interest (or when this is not
possible, fully disclose them to the client) or any abuse of their
position of trust and responsibility and not take inappropriate
advantage of their position;
o Maintain the confidentiality of the identity of security holdings and
financial circumstances of clients; o Maintain their independence in
the investment decision-making process applicable to the degree they
participate in the investment decision-making process;
o Comply with applicable Federal securities laws(2); and
o Report any violations of this Code of Ethics promptly to the Chief
Compliance Officer of SIA, to the Chief Compliance Officer of the Scout
Funds, or to the UMBFC Director of Fiduciary Compliance (hereafter
collectively referenced as Compliance Officer).
Implementation and interpretation of this Code of Ethics are the primary
responsibilities of the Compliance Officer. In administering these
responsibilities, the Compliance Officer may consult with SIA or UMB Bank
management(3), and/or General Counsel as appropriate regarding violations of the
Code and in applying penalties as identified on Appendix A - Schedule of
Potential Penalties. Any alleged violations of this Code must be reported to the
Compliance Officer.
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(1) All references to UMB Bank include reference to any of the national and/or
state bank charters or trust companies within UMB Financial Corporation (UMBFC).
(2) Applicable Federal Securities Laws include specifically the Securities Act
of 1933, the Securities Exchange Act of 1934, the Xxxxxxxx -Xxxxx Act of 2002,
the Investment Company Act of 1940 "Investment Company Act", the Investment
Advisers Act of 1940 "Investment Advisers Act", Title V of the
Xxxxx-Xxxxx-Xxxxxx Act, any rules adopted by the SEC under any of these
statutes, the Bank Secrecy Act as it applies to mutual funds and investment
advisers, and any rules adopted there under by the SEC or the Department of
Treasury.
(3) Reference to SIA or UMB Bank Management may include senior management of
either organization including Chairman, President, Chief Executive Officer,
Executive Vice President, Chief Investments Officer and/or Chief Fiduciary
Officer.
Reference within the Code pertaining to Management, the UMB Bank Trust Policy
Committee "Trust Policy Committee" or SIA Board decision authority is applied as
follows:
o Management shall have authority regarding associates that functionally
report directly or indirectly to that manager.
o The Trust Policy Committee shall have authority regarding associates
that are UMB Bank associates and not SIA associates.
o The SIA Board shall have authority regarding associates that are SIA
associates.
Management, the Trust Policy Committee or SIA Board may take disciplinary action
and/or impose sanctions including, but not limited to, termination of
employment, suspension, imposition of a fine, revocation of personal trading
privileges and/or disgorgement of profits resulting from the violation.
Financial penalties for noncompliance will be contributed to a charitable
foundation or to a charity as the Trust Policy Committee or the SIA Board
decides. Additional consequences for noncompliance and actions are not limited
to the penalties listed depending upon the circumstances of noncompliance.
Furthermore, violations of the Code of Ethics may also be violations of the law
and may result in civil and/or criminal penalties.
CONFIDENTIALITY
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All persons subject to this Code are required to file various reports and/or
certifications with the Compliance Officer as specified within this Code of
Ethics. The Compliance Officer will take reasonable means to protect the privacy
of personal information collected in implementing this Code. If a violation
occurs or a matter is in need of resolution, only the minimum information as
determined by the Compliance Officer will be disclosed as needed to communicate
or facilitate consideration with appropriate individuals of any matter under
this Code of Ethics. Information may also be disclosed to the extent necessary
to implement and enforce the provisions of this Code of Ethics or to respond to
appropriate regulatory requests.
II. PERSONS SUBJECT TO THIS CODE OF ETHICS
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This Code of Ethics primarily pertains to individuals within the UMB Bank Asset
Management Division, SIA, and the Scout Funds. Other individuals within UMB
Financial Corporation "UMBFC" or its affiliates may be subject to the provisions
of this Code depending upon their role relative to advisory accounts of the UMB
Bank Asset Management Division, SIA or the Scout Funds or their access to
nonpublic information regarding the Scout Funds or other clients advised by SIA.
The controls, reports, and provisions of this Code are designed to comply with
the requirements of the Investment Company Act Rule 17j-1, the Investment
Advisers Act Rule 204A-1, and National Bank regulation 12CFR12.7(a)(4), as well
as, address risks related to advisory services for mutual funds and advisory
clients.
Covered Persons and Access Persons are defined within Appendix B but are
highlighted by function as follows:
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FUNCTION COVERED PERSON ACCESS PERSON
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Scout Fund Trustees or Officers X X
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SIA Directors or Officers X X
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Trust Investment Committee Member X X
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Fund Manager X X
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Portfolio Manager (non-Fund Manager) X X
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UMBIA/SIA Associates X X
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Trust & Custody Support Services Staff X X
w/Access to mutual fund and SIA Advisory
client account position and trading
information
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Security Administration Staff X X
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Trust Advisors & Assistants X
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Others (as determined by the Compliance X X
Officer) with Access to Nonpublic Information
regarding the Scout Funds
or other SIA advisory clients.(4)
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Others (as determined by the Compliance X
Officer) with Access to Nonpublic
Information regarding other discretionary
accounts of UMB Bank.
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Reporting requirements under this Code vary depending upon a person's
classification. Determination as to what provisions apply to a particular
individual rest with the Compliance Officer subject to the provisions of this
Code and regulatory requirements. If persons subject to this Code have any
doubts as to which provisions apply, they should contact the Compliance Officer
for further clarification.
The Compliance Officer shall identify all persons who are considered to be
Covered Persons and Access Persons, and shall inform such persons of their
respective duties and provide them with copies of the Code of Ethics and any
related procedures, forms, training information or amendments to the Code. All
Covered Persons and Access Persons shall provide the Compliance Officer with a
written acknowledgment of their receipt of the Code and any amendments thereto.
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(4) Personnel in affiliated companies of UMBFC may have access to
nonpublic information but are not included herein if covered by a separate Code
of Ethics and such Code sufficiently addresses risks inherent.
III. STANDARDS OF BUSINESS CONDUCT
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COMPLIANCE WITH LAWS AND REGULATIONS
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Covered Persons are required to comply with Applicable Federal Securities Laws.
These persons are not permitted, in connection with the purchase or sale,
directly or indirectly, by the person of a Security Held or to be acquired by a
Client(5) to:
1. Defraud such client in any manner;
2. Mislead such client, including by making a statement that omits
material facts;
3. Engage in any act, practice or course of conduct that operates or would
operate as a fraud or deceit upon such client;
4. Engage in any manipulative practice with respect to such client; or
5. Engage in any manipulative practice with respect to securities,
including price manipulation.
CONFLICTS OF INTEREST
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Covered Persons have an affirmative duty of care, loyalty, honesty, and good
faith, and to act in the best interests of their clients. Compliance with this
duty is best served by avoiding conflicts of interest and by fully disclosing
all material facts concerning any conflict that does arise with respect to any
client. A "conflict of interest" occurs when an individual's personal interests
interfere or appear to interfere with client interests. A conflict may arise
when a person takes actions or has interests that make it difficult to perform
his or her duties with respect to the client objectively and effectively.
Conflicts of interest may also arise when a person receives improper benefits,
or members of his or her family receive improper personal benefits resulting
from his or her position.
Covered Persons must avoid conduct or activities that may appear to be a
conflict or impropriety. Any Covered Person that feels a need to disclose a
potential conflict should first discuss the potential conflict with his/her
supervisor and/or the Compliance Officer.
Additional conflicts may include:
Conflicts Among Client Interests
Covered Persons should not favor the interests of one client over
another client. Inappropriate favoritism of one client over another
client constitutes a breach of fiduciary duty.
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(5) Rule 17j-1 of the Investment Company Act defines a Security Held or to be
Acquired by a Client relative to mutual fund clients as: (i) Any Covered
Security which, within the most recent 15 days: (A) Is or has been held by the
Fund: or (B) Is being or has been considered by the Fund or its investment
adviser for purchase by the Fund: and (ii) Any option to purchase or sell, and
any security convertible into or exchangeable for, a Covered Security.
Competing with Client Trades
Covered Persons are prohibited from competing with client securities
transactions by profiting personally, directly or indirectly, from
personal securities trades by using knowledge about pending or
potential securities transactions for clients.
Disclosure of Personal Interest
Covered Persons are prohibited from recommending, implementing or
considering any securities transaction for a client without having
disclosed any material beneficial ownership, business or personal
relationship, or other material interest in the issuer or its
affiliates, to the Compliance Officer. For purposes of this paragraph,
material beneficial ownership is an investment in amount that could
potentially alter judgment regarding the security and, at a minimum, is
defined as the Covered Person having beneficial ownership of 1% of more
of any class of common equity securities of the subject company. If the
beneficial ownership is concluded to present a material conflict, the
Covered Person may not participate in any decision-making process
regarding the securities of that issuer. Research analysts with a
material personal interest are precluded from covering the issuer. If
the Covered Person has any doubts as to whether a particular investment
could potentially impair judgment, the Covered Person should contact
the Compliance Officer to discuss details of the holding or activity.
The Compliance Officer will consult with the Chief Investment Officer
(CIO) or legal counsel in rendering a decision and notify the CIO of
the material personal interests identified.
Vendors and Suppliers
Covered Persons must disclose personal investments or other interests
in vendors or suppliers with respect to which the Covered Person
negotiates or makes decisions regarding the selection of that vendor or
supplier for services provided to clients. The Covered Person must
disclose this interest to the Compliance Officer. If the Compliance
Officer determines the beneficial ownership presents a material
conflict, the Covered Person may not participate in any decision-making
process regarding procurement of the services of that vendor or
supplier for clients or by UMB Bank, SIA, or the Scout Funds.
Transactions with Clients
Covered Persons are prohibited from knowingly purchasing from or
selling to a client any security or other property, except securities
issued by the client.
IV. XXXXXXX XXXXXXX
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Xxxxxxx xxxxxxx involves the purchase or sale of securities of a company or
other entity while in possession of material, nonpublic information (also called
"inside information") about the company or entity. Any person who purchases or
sells securities while in possession of material inside information or who
communicates or "tips" such inside information to anyone else who trades
securities on such information, violates this Code of Ethics and may violate
United States securities laws. Federal law imposes obligations on employers to
ensure that their employees do not improperly trade securities using inside
information. Any Covered Person who becomes aware of material nonpublic
information should not, without first discussing the information with the
Compliance Officer:
o Trade in the securities of such company for a personal or
client's account
o Recommend transactions in the security
o Disclose (tip) the information to others.
Appendix C - UMB Scout Funds and Scout Investment Advisors Xxxxxxx Xxxxxxx
Policies and Procedures (Xxxxxxx Xxxxxxx Policy) is included for detailed
policies and procedures governing xxxxxxx xxxxxxx. The Xxxxxxx Xxxxxxx Policy is
incorporated as part of this Code of Ethics and for purposes of applying this
Code's provisions.
V. OTHER PROVISIONS APPLICABLE TO COVERED PERSONS AND ACCESS PERSONS
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GIFTS
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Covered Persons should exercise good judgment in accepting anything of value.
Covered Persons shall not solicit for themselves, or any third party, anything
of value from anyone in return for any business, service, or confidential or
proprietary information. Furthermore, Covered Persons are prohibited from
accepting anything of value from anyone as a condition of obtaining the business
of UMB Bank, SIA, or the Scout Funds or any of their subsidiary or affiliated
companies, either before or after the transaction is discussed or consummated.
Gifts should never be accepted in circumstances in which it appears to others
that business judgment has been compromised. This does not prohibit associates
and officers from accepting something of nominal value from a customer or
supplier doing or seeking to do business with UMB Bank, SIA or the Scout Funds
without the risk of corruption or breach of trust. Cash and checks, however,
should not be accepted regardless of amount. The following are examples of
exceptions to the general rule:
o The acceptance of gifts, gratuities, amenities, or favors based on
obvious family or personal relationships where the circumstances
make it clear that those relationships are the motivating factor;
o The acceptance of meals, refreshments, travel arrangements,
accommodations or entertainment, all of reasonable value and in
the course of business at which the giver is present, such as an
occasional business meal, golf outing or sporting event. This
exception does not apply to instances where the giver is a
broker-dealer or vendor from whom soft dollar services are
received;
o The acceptance of advertising or promotional material of reasonable
value (a real or perceived value of $50 or less), such as pens,
pencils, notepads, key chains, calendars and similar items;
o The acceptance of discounts or rebates on merchandise or services that
do not exceed those available to other customers; or
o The acceptance of gifts of reasonable value (a real or perceived value
of $100 or less) that are related to commonly recognized events or
occasions, such as a promotion, wedding, retirement, holiday or
religious celebration.
INITIAL PUBLIC OFFERINGS
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Covered Persons who are not Independent Scout Fund Trustees shall not purchase
any securities in an initial public offering.(6)
MARKET TIMING
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Covered Persons are prohibited from engaging in any trading activities
potentially injurious to the Scout Funds or within any other mutual funds
advised by SIA as such activity is defined by the funds. This includes patterns
of frequent trading or market timing when discouraged or prohibited by SIA's
fund clients.
SERVICE AS A DIRECTOR
---------------------
Covered Persons, other than Independent Scout Fund Trustees, are prohibited from
serving on the boards of directors of publicly traded companies, absent prior
authorization from the Trust Policy Committee or SIA Board of Directors.
DISCLOSURE OF HOLDINGS OR TRANSACTION INFORMATION
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Covered Persons are prohibited from disclosing holdings or transaction
information of the Scout Funds, fiduciary accounts or advisory clients other
than to the client or others legally entitled to the information. Disclosures
related to the holdings or transactions in the Scout Funds are subject to the
fund's policy on Disclosure of Portfolio Holdings expressed in the Scout Funds'
Compliance Manual. Any questions regarding the disclosure of holdings or
transaction information should be posed to the Compliance Officer.
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(6) "Initial Public Offering" means an offering of securities registered under
the Securities Act of 1933, the issue of which, immediately before the
registration, was not subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934.
DISCLOSURE OF APPROVED SECURITIES LISTS
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Covered Persons are not to disclose Approved Securities(7) lists or any
information regarding what securities are on the list, or changes to the list,
unless to support an operational need and if approval is received from the
Compliance Officer. It is required of Covered Persons to properly safeguard
Approved Securities lists and ensure that unauthorized access is not attained.
Access to approved securities lists will be limited to persons with a need to
know.
PARTICIPATION IN INVESTMENT CLUBS
---------------------------------
Access Persons are prohibited from participating in or contributing to
Investment Clubs without notifying the Compliance Officer. The Compliance
Officer in consultation with the Chief Investment Officer and/or legal counsel
may prohibit your participation in or contribution to an Investment Club.
Transactions in Covered Securities are subject to the same preclearance,
blackout, and reporting requirements as the Access Persons' other accounts.
VI. REPORTING REQUIREMENTS
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The table on the next page categorizes Covered Persons and depicts operation of
the Code relative to each group. Following the chart are detailed descriptions
of applicable restrictions and reporting requirements.
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(7) Reference to Approved Securities Lists refers to the list of securities
approved for investment in UMB Bank or SIA discretionary or advisory accounts.
The reference includes securities which have been approved by the Trust Policy
Committee or the SIA Board, or are in the process of being recommended for
inclusion upon the Approved Securities List.
UMB BANK ASSET MANAGEMENT DIVISION, SCOUT INVESTMENT ADVISORS, AND UMB SCOUT
FUNDS CODE OF ETHICS REPORTING REQUIREMENTS
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GROUP PRECLEARANCE BLACK OUT INITIAL/ANNUAL INITIAL/ BROKER QUARTERLY QUARTERLY
REQUIREMENTS RESTRICTION RECEIPT, ANNUAL CONFIRMS/ PST PST IF
ACKNOWLEDGMENT, HOLDINGS STATEMENTS REPORTS >$10K PER
AND REPORT QUARTER
AFFIRMATION
------------------------------------------------- ------------ ----------- --------------- -------- ----------- ---------- ---------
Scout Fund Trustees (Independent) X X(8)
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Scout Fund Trustees (Not Independent) & Officers X X X X
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SIA Directors & Officers X X X X
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Trust Investment Committee Members X X X X X X
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Fund Managers X X X X X X
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Portfolio Managers (non-Fund Mgrs) X X X X X X
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UMBIA/SIA Associates X X X X X X
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Trust and Custody Support Services Staff X X X X
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Securities Administration Staff X X X X
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Trust Advisers & Assistants X X
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Others (as determined by the Compliance X X X X X X
Officer) with Access to Nonpublic Information
regarding the Scout Funds or other SIA advisory
clients.
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Others (as determined by the Compliance Officer) X X
with Access to Nonpublic Information regarding
other discretionary accounts of UMB Bank.
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(8) (ii) A director of a Fund who is not an "interested person" of the Fund
within the meaning of section 2(a)(19) of the Act [15 U.S.C. 80a-2(a)(19) ],
and who would be required to make a report solely by reason of being a Fund
director, need not make: (A) An initial holdings report under paragraph
(d)(1)(i) of this section and an annual holdings report under paragraph
(d)(1)(iii) of this section; and (B) A quarterly transaction report under
paragraph (d)(1)(ii) of this section, unless the director knew or, in the
ordinary course of fulfilling his or her official duties as a Fund director,
should have known that during then 15-day period immediately before or after the
director's transaction in a Covered Security, the Fund purchased or sold the
Covered Security, or the Fund or its investment adviser considered purchasing
or selling the Covered Security.
PRECLEARANCE OF TRADES
----------------------
Access Persons identified on the preceding chart as subject to preclearance or
otherwise notified by the Compliance Officer must pre-clear with the Compliance
Officer certain equity security transactions in Covered Securities and Limited
Offerings9 in which he or she has Beneficial Ownership (Covered Securities and
Beneficial Ownership are defined in Appendix B).
Exceptions to this preclearance requirement for equity transactions include:
o Purchases or sales over which an Access Person has NO DIRECT OR
INDIRECT INFLUENCE OR CONTROL;
o Purchase or sales of securities which are NON-VOLUNTARY on the part of
the Access Person, including mergers,
recapitalizations or similar transactions;
o Transactions in securities issued by any company in the STANDARD AND
POOR'S 500 INDEX, but these securities are still subject to all
reporting requirements set forth in Sections on Initial/Annual Holdings
Reports and Quarterly Personal Securities Transaction Reports;
o Securities transactions in stocks of companies with MARKET
CAPITALIZATION OF $2 BILLION OR GREATER at the time of purchase or
sale, but these securities are still subject to all reporting
requirements set forth in Sections on Initial/Annual Holdings Reports
and Quarterly Personal Securities Transactions Reports;
o Purchases or sales pursuant to an AUTOMATIC INVESTMENT PLAN (AIP)
except for the initial execution of the AIP or any changes to the plan
(not including cessation);
o Purchases that are part of an issuer's automatic DIVIDEND REINVESTMENT
PLAN;
o Purchases effected upon the EXERCISE OF RIGHTS issued by an issuer pro
rata to all holders of a class of its securities, to the extent such
rights were acquired from the issuer, and sales of such rights are so
acquired;
o Transactions in EXCHANGE TRADED FUNDS THAT ARE BASED ON A BROAD-BASED
SECURITIES INDEX, but these securities are still subject to all
reporting requirements set forth in Sections on Initial/Annual Holdings
Reports and Quarterly Personal Securities Transaction Reports; or
o Transactions in OPEN-END INVESTMENT COMPANY SHARES including shares of
mutual funds advised by XXX, but mutual fund securities advised by XXX
are still subject to all reporting requirements set forth in Sections
on Initial/Annual Holdings reports and Quarterly Personal Securities
Transaction Reports.
Requests for approval must be submitted to the designated person by email, on a
prescribed form or via electronic system form as authorized or directed by the
Compliance Officer. Content of the preclearance request shall completely
disclose the details of the requested transaction. A preclearance authorization
expires after 3 business days after which, a new preclearance request must be
submitted prior to engaging in the transaction.
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(9) "Limited Offering" means an offering that is exempt from registration under
the Securities Act of 1933 pursuant to section 4(2) or section 4(6) or pursuant
to Rule 504, Rule 505, or Rule 506 under the Securities Act of 1933.
BLACKOUT RESTRICTIONS
---------------------
Access Persons identified on the chart on page nine as subject to blackout
restrictions or as otherwise notified by the Compliance Officer are subject to
blackout restrictions pertaining to certain equity securities transactions in
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Covered Securities that he or she has Beneficial Ownership. Persons subject to
blackout restrictions are prohibited from trading in equity securities included
on the blackout list. A blackout list will be maintained by the Compliance
Officer in consultation with key Asset Management Division associates. Various
factors will lead to inclusion of a security's placement on the list that may
include but is not limited to:
o Liquidity characteristics;
o Exposure to inside information;
o Planned or impending trading activity by UMB Bank or SIA; or
o Status relative to Approved Securities Lists.
If an Access Person already owns an equity security that is subject to this
blackout restriction, that person may request approval from the Compliance
Officer to dispose of the security or enter into a hedge transaction with regard
to that security pending approval of the Compliance Officer.
The following transaction exceptions preempt these blackout restrictions:
o Purchases or sales over which an Access Person has NO DIRECT OR
INDIRECT INFLUENCE OR CONTROL;
o Purchase or sales of securities which are NON-VOLUNTARY on the part of
the Access Person, including mergers, recapitalizations or similar
transactions;
o Purchases or sales pursuant to an AUTOMATIC INVESTMENT PLAN (AIP)
except for the initial execution of the AIP or any changes to the plan
(not including cessation);
o Purchases that are part of an issuer's automatic DIVIDEND REINVESTMENT
PLAN; or
o Purchases effected upon the EXERCISE OF RIGHTS issued by an issuer pro
rata to all holders of a class of its securities, to the extent such
rights were acquired from issuer, and sales of such rights are so
acquired;
INITIAL/ANNUAL RECEIPT, ACKNOWLEDGEMENT AND AFFIRMATION
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Initial Certification
Upon hire and upon initial delivery of this Code of Ethics, the Compliance
Officer will require all Covered Persons to certify in writing that they have:
(a) received a copy of this Code of Ethics; (b) read and understand all
provisions of the Code; and (c) agreed to comply with the terms of the Code. The
Covered Person will be required to return this certification within 10 days of
being notified of becoming a Covered Person.
Acknowledgement of Amendments
The Compliance Officer will provide Covered Persons with any amendments to the
Code and Covered Persons will be required to submit a written acknowledgement
that they have received, read, and understood the amendments to the Code.
Annual Certification
The Compliance Officer will request that all Covered Persons annually certify
that they have read, understood, and complied with the Code of Ethics. The
certification will further include a representation that the Covered Person has
made all of the reports required by the Code and has not engaged in any
prohibited conduct. If the Covered Person is unable or unwilling to provide such
certification, the Covered Person is required to provide a self-report of any
apparent violations of the Code.
Further, SIA associates are required to certify annually that they are not
subject to any of the disciplinary events listed in Item 11 in the current Form
ADV, Part 1 or disclose matters for which need to be reflected in the ADV(10).
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(10) The following events are presumed to be material and subject to disclosure
in Form ADV. If a management person (1) has been involved in a criminal or civil
action in which he/she was convicted of, pled guilty or nolo contendere to (a)
any felony; (b) a misdemeanor that involved investments or an investment-related
business, fraud, false statements or omissions, wrongful taking of property,
bribery, perjury, forgery, counterfeiting, or extortion; or (c) a conspiracy to
commit any of these offenses; (2) is named subject of a pending criminal
proceeding that involves an investment-related business, fraud, false statements
or omissions, wrongful taking of property, bribery, forgery, counterfeiting,
extortion, or a conspiracy to commit any of these offenses; (3) was found to
have been involved in a violation of an investment-related statute or regulation
or (4) was the subject of any order, judgment, or decree permanently or
temporarily enjoining, or otherwise limiting a management person from engaging
in any investment-related activity, or from violating any investment-related
statute, rule or order. Further, certain similar administrative proceedings
before the SEC or an SRO are also disclosable.
INITIAL/ANNUAL HOLDINGS REPORT
------------------------------
Access Persons, other than Independent Trustees, are required to submit to the
Compliance Officer a report of all holdings in Covered Securities in which he or
she has Beneficial Ownership within 10 days of becoming an Access Person and at
least once each 12-month period thereafter as prompted by the Compliance
Officer. Access Persons are:
o Not required to submit this report with regard to securities held in
accounts over which the Access Person had NO DIRECT OR INDIRECT
INFLUENCE OR CONTROL.
o Not required to include securities that are excluded from the
definition of Covered Securities. Specifically,
- Direct obligations of the U.S. Government,
- Bankers' acceptances, Bank certificates of deposit, Commercial paper
and high quality short-term debt instruments including
repurchase agreements;
- Shares issued by money market funds;
- Shares issued by open-end funds other than funds for which SIA
serves as investment adviser; and
- Shares issued by unit investment trusts that are invested
exclusively in one or more open-end funds, none of which SIA serves
as investment adviser.
o Required to report holdings and related required information noted
below of any FUND FOR WHICH XXX SERVES AS AN INVESTMENT ADVISER.
The holdings report shall contain content as specified in the request and shall
be current as of a date no more than 45 days prior to the date the person
becomes an Access Person or 45 days prior to the date the annual report was
submitted. The content of holdings reports must include:
A) The title and type of security, and as applicable the exchange
ticker symbol or CUSIP number, number of shares, and principal
amount of each reportable security in which the Access Person has
any direct or indirect beneficial ownership;
B) The name of any broker, dealer or bank with which the Access
Person maintains an account in which any securities are held for
the Access Person's direct or indirect benefit;
C) The date the Access Person submits the report; D) The date the
information is "as of"; and
E) Signature of the Access Person evidencing the assertion contained
upon the report.
QUARTERLY PERSONAL SECURITIES TRANSACTIONS (PST) REPORTS
--------------------------------------------------------
Access Persons, other than Independent Trustees, are required to submit to the
Compliance Officer quarterly PST Reports identifying each transaction where the
Access Person had, or as a result of the transaction, acquired any direct or
indirect Beneficial Ownership in Covered Securities. Access Persons are:
o Not required to submit this report with regard to securities
transactions within accounts over which the Access Person had NO DIRECT
OR INDIRECT INFLUENCE OR CONTROL;
o Not required to submit a PST report with respect to transactions
affected pursuant to an AUTOMATIC INVESTMENT PLAN "AIP", INCLUDING
DIVIDEND REINVESTMENT PLANS "DRIP" except for the initial set-up of the
AIP/DRIP or any changes made to the plan other than cessation. Access
Persons are required to report changes to any existing AIP/DRIPs or
when setting up the AIP/DRIP in Covered Securities not otherwise exempt
from reporting.
o Not required to submit a report related to the Covered Security if the
Covered Securities transactions are within accounts maintained at
entities appearing on the Approve Financial Institutions List and the
Compliance Officer has affirmed timely receipt (no later than 30 days
after end of applicable quarter) of ELECTRONIC TRADE CONFIRMATIONS OR
ACCOUNT STATEMENTS WITH CONTENT MEETING REGULATORY REQUIREMENTS.
o Required to include transactions in MUTUAL FUNDS ADVISED BY SIA not
otherwise exempted above.
The Compliance Officer will maintain and distribute the Approved Financial
Institutions List, as needed.
If a new account has been added during the quarter or accounts are maintained at
an entity not on the Approved Financial Institutions List, no later than 10 days
after the end of a calendar quarter, Access Persons are required to file a
Quarterly PST Report. The report must be signed and filed with the Compliance
Officer using the prescribed form showing with respect to any reportable
transaction:
o The date of the transaction, the title and exchange ticker symbol or
CUSIP number, the interest rate and maturity date (if applicable), the
number of shares and the principal amount (if applicable) of each
reportable security involved;
o The nature of the transaction (e.g., purchase, sale);
o The price of the security at which the transaction was effected;
o The name of the broker, dealer, or bank with or through which the
transaction was effected; and
o The date the report is submitted.
The Quarterly PST Report shall also include with respect to any account
established during the quarter containing securities held for the direct or
indirect benefit of the Access Person:
o The name of the broker, dealer or bank with whom the Access Person
established the account;
o The date the account was established; and
o The date the report is submitted.
All content requirements specified above will be collected on an approved
Quarterly PST Report form that will be made available in advance of the
reporting date unless the Access Person does not have to submit a quarterly PST
report by operation of the criteria noted above. The forms are to be provided in
accordance with instructions on the form.
QUARTERLY PST REPORTS FOR COVERED PERSONS WHO ARE NOT ACCESS PERSONS
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For Covered Persons who are not Access Persons (highlighted upon the table in
the column headed Quarterly PST if >$10K per quarter), the Compliance Officer
will send an email each quarter requesting affirmation whether the Covered
Person has transactions in Covered Securities that in aggregate exceed $10,000
during the calendar quarter. If the response is "yes", then the Covered Person
is required to file a Quarterly PST Report in accordance with instructions
identified upon the form. If the response is "no", no further reporting is
required.
BROKER CONFIRMATIONS/STATEMENTS
-------------------------------
All Access Persons are to maintain accounts that contain Covered Securities
which the Access Person has Beneficial Ownership with entities that are
identified upon the Approved Financial Institutions List unless the Compliance
Officer and CIO has provided an exception based on circumstances and factors as
determined by them. The purpose for this requirement is to ensure privacy and
proper analysis of personal securities activities. Although privacy of personal
security information is always emphasized, automation will facilitate a secure
delivery of this information.(11) Entities that appear on this approved list
provide electronic delivery of trade confirmations and/or account statements.
All Access Persons are required to instruct any brokers, dealers, banks or other
entity, with which they maintain an account holding Covered Securities where the
Access Person has Beneficial Ownership, to provide automated transaction
information with instructions to be supplied.
------------------------------
(11) Implementation of an electronic system is contemplated at the time of
approval of this Code of Ethics. Until such time as the system is operational,
the Compliance Officer may defer requiring paper trade confirmations and/or
account statements to the address noted within this section. Upon implementation
of the system, this footnote will no longer be valid.
In the case that manual trade confirmations and statements are authorized, the
Access Person is to instruct the financial institution to deliver this
information to:
Scout Investment Advisors, Inc.
Attn: Fiduciary Services Compliance
0000 Xxxxx Xxxx, Xxxxxxxx 0000000
Xxxxxx Xxxx, XX 00000
EXCEPTIONS FROM REPORTING REQUIREMENTS FOR INDEPENDENT DIRECTORS/TRUSTEES
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Trustees of the Scout Funds who are not "interested persons" of the Fund as
defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended
("Independent Trustees"), and who would be required to make a report solely by
reason of being a Fund Trustee, need not make:
(1) An initial holdings report and an annual holdings report under this
section; and
(2) A Quarterly PST Report under this section, unless the Trustee knew or
in the ordinary course of fulfilling his or her official duties as a
Fund Trustee, should have known that during the 15-day period
immediately before or after the Trustee's transaction in a Covered
Security, the Scout Funds purchased or sold the Covered Security, or
the Scout Funds or SIA considered purchasing or selling the Covered
Security.
VII. REVIEW OF REPORTS
--------------------------
The Compliance Officer shall be responsible for reviewing the initial and annual
holdings reports and the Quarterly PST Reports, broker confirmations or
statement required under Section VI of this Code of Ethics. In connection with
the review of these reports, the Compliance Officer shall take appropriate
measures to determine whether each reporting person has complied with the
provisions of this Code of Ethics and any related procedures adopted by SIA, UMB
Bank and the Scout Funds. Any violations of the Code shall be reported promptly
to SIA or UMB Bank Management.
Compliance Officers will assess Access Person trading activities and compare
these activities to trading activity with certain accounts managed by UMB Bank
and SIA, including the Scout Funds. Factors that will be considered in assessing
whether personal trading activity represents a concern are not limited to a
determination as to whether the security traded reflected a Blackout restriction
violation. Factors may include one or more of the following, but not necessarily
be limited to:
o The nature of the Access Person's role relative to discretionary
accounts.
o The Access Person's access to nonpublic information regarding fund and
SIA advisory client holdings.
o The timing of the Access Person's receipt of information that
contributes to that person being an Access Person (e.g., knowledge of
trade activity before or shortly
after trade placed by a managed account reflects different risk profile
than receipt of a recommended list once a quarter).
o Impact of UMB Bank and SIA trading volume in a particular security in
comparison to market trading volume.
o Proximity of the Access Person trade in relation to the trade within
the managed account (+- 7 business days, for example) and whether the
trade took place before or after the trade within the managed account.
o Patterns of trading activity within the Access Person's account, and
within the managed account if the Access Person has a vital role
supporting the investment decisions in the managed accounts.
VIII. APPLICABILITY OF THE CODE OF ETHICS TO INDEPENDENT TRUSTEES OF THE
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SCOUT FUNDS
--------------------
The Independent Trustees of the Scout Funds are considered Access Persons of the
Funds. In general, they are subject to the Standards of Business Conduct with
respect to the Compliance with Laws and Regulations; Conflicts of Interest;
Xxxxxxx Xxxxxxx and Annual Certification provisions of the Code.
The Independent Trustees are not subject to the substantive restrictions under
the IPO, Limited Offerings, Preclearance of Trades and Broker
Confirmations/Statements provisions of the Code. Independent Trustees are not
subject to the Initial and Annual Holdings reporting requirements. Independent
Trustees also are generally not subject to the Blackout provisions and Quarterly
Personal Transactions Reporting requirements, unless the Trustee knew or in the
ordinary course of fulfilling his or her official duties as a Fund Trustee,
should have known that during the 15-day period immediately before or after the
Trustee's transaction in a Covered Security, the Fund purchased or sold the
Covered Security, or the Fund or its investment adviser considered purchasing or
selling the Covered Security.
IX. APPROVAL OF CODE OF ETHICS AND AMENDMENTS TO CODE OF ETHICS
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The Board of Trustees of the Scout Funds, including a majority of the Trustees
who are not interested persons, initially must approve this Code of Ethics and
any material amendment thereto no later than six months after adoption of the
material change. Before submitting the Code of Ethics and any material changes
to the Board for approval, the CCO shall provide a certification to the Board of
Trustees of the Scout Funds that the Scout Funds, SIA and UMB Bank have adopted
procedures reasonably necessary to prevent Access Persons from violating the
Code of Ethics.
X. ANNUAL REPORT TO THE BOARD OF TRUSTEES OF THE SCOUT FUNDS
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On an annual basis, the Chief Compliance Officer of the Scout Funds must furnish
to the Board of Directors/Trustees of the Scout Funds a written report that:
1. Describes any issues arising under the Code of Ethics or procedures
since the last report to the Board of Trustees, including, but not
limited to, information about material violations of the Code or
procedures and sanctions imposed in response to the material
violations;
2. Identifies any recommended changes to existing restrictions or
procedures based upon the experience under the Code, evolving industry
practices and developments in applicable laws or regulations; and
3. Certifies that the Scout Funds, SIA and UMB Bank have adopted
procedures reasonably necessary to prevent Access Persons from
violating the Code.
XI. RECORDS
----------------
A. SIA, UMB Bank and the Scout Funds shall maintain records at their
principal place of business in the manner and extent set forth below:
1. A copy of each Code of Ethics currently in effect, or at any time
within the past five years was in effect must be maintained in an
easily accessible place;
2. A record of any violation of the Code of Ethics, and of any actions
taken as a result of the violation, must be maintained in an easily
accessible place for at least five years after the end of the fiscal
year in which the violation occurs;
3. A copy of each report made by an Access Person as required under the
Code of Ethics, including any information provided in lieu of reports
in the form of duplicate trade confirmations or account statements,
must be maintained for at least five years after the end of the fiscal
year in which the report was made, the first two years in an easily
accessible place;
4. A record of all persons, currently or within the past five years, who
are or were required to make initial, annual or quarterly transaction
reports under this Code or who are or were responsible for reviewing
these reports, must be maintained in an easily accessible place; and
5. A copy of each annual report made to the Board of Trustees of the Scout
Funds must be maintained for at least five years after the end of the
fiscal year in which it is made, the first two years in an easily
accessible place.
B. The Scout Funds or SIA must maintain a record of any decision, and the
reasons supporting the decision, to approve the acquisition by investment
personnel as defined within Rule 17j-1 of the Investment Company Act of IPOs and
Limited Offerings for at least five years after the end of the fiscal year in
which the approval was granted.
APPENDIX A - SCHEDULE OF POTENTIAL PENALTIES
--------------------------------------------
---------------------------------------- ----------------------------------
FIRST VIOLATION FIRST PENALTY
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Reports not returned in timely manner. Report to Senior Management.
Financial penalty of
$25 per quarter.
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Accepting gifts that violate Surrender difference between
Provisions of the Code value of gift and $100
---------------------------------------- ----------------------------------
Failure to advise Compliance of broker, Financial penalty of $25
dealer or bank security accounts. per quarter
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Failure to pre-clear trade prior Financial penalty of $50
to execution. per quarter
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Blackout Restriction Violation. Financial penalty of $100
and disgorgement of
profit made.(12)
---------------------------------------- ----------------------------------
Any Access Person trading upon Disgorgement of profit made.
knowledge of upcoming Fund decision.
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Acting on Insider Information. Disgorgement of profit made.
---------------------------------------- ----------------------------------
For each additional violation occurring during a rolling 12-month period, the
financial penalties mentioned above will increase by One-Hundred Percent (100%)
for each occurrence.
For example, on a Failure To Preclear Violation:
1st Quarter with violation(s) $50
2nd Quarter with violation(s) $100
3rd Quarter with violation(s) $200
Sanctions may include, but are not limited to, termination of employment,
suspension, imposition of a fine, and/or disgorgement of profit.
The Compliance Officer may recommend no action be taken as a result of a
violation or issue warning letters depending upon circumstances of each
violation.
--------------------------------------
(12) Blackout restriction violations occurring within Investment Club accounts
or accounts that involve pecuniary interests of someone or something that is not
a Covered Person or Access Person will be assessed on a case-by-case basis and
may result in disgorgement of profits as determined by the Trust Policy
Committee, SIA Board or the Scout Funds Board.
APPENDIX B - DEFINITIONS
------------------------
For purposes of this Code of Ethics, the term "COVERED PERSONS" means:
o Directors, officers and employees or other person of UMB Bank or SIA,
or affiliates, who make investment recommendations or decisions for UMB
Bank Asset Management Division customers or SIA customers;
o Directors, officers and employees or other persons of UMB Bank or SIA
that participate in the determination of the recommendations or
decisions;
o In connection with their duties, persons that obtain information
concerning which securities are purchased, sold or recommended for
purchase or sale by the advisory customers of the banks' Asset
Management customers or SIA; or
o Directors, officers, employees, or agents who otherwise meet the
definition of Access Person as established by Rule 17j-1 or Rule 204A-1
are also Covered Persons for purposes of applying the provisions of the
Code.
For purposes of this Code of Ethics, the term "ACCESS PERSON" means:
Any officer, director (or other person occupying a similar status or performing
similar functions) or employee of SIA or UMB Bank or other person who provides
investment advice on behalf of SIA or UMB Bank and who:
o is subject to the control and supervision of SIA or UMB Bank;
o has access to non-public information regarding any SIA advisory
client's purchase or sale of securities, or regarding the portfolio
holdings of the Scout Funds; or
o is involved in making securities recommendations to SIA advisory
clients or who has access to such recommendations that are non-public.
In addition, "ACCESS PERSON" means:
o any director, trustee or officer of the Scout Funds;
o any director or officer of SIA;
o any director or officer of UMB Bank and any employee of the
Scout Funds, SIA or UMB Bank (or any director, officer or
general partner or employee of any company in a control
relationship to the Scout Funds, SIA or UMB Bank) who, in
connection with his or her regular functions or duties, makes,
participates in or obtains information regarding the purchase
or sale of securities by the Scout Funds, or whose functions
relate to the making of any recommendations with respect to
such purchases or sales; and
o any natural person in a control relationship to the Scout
Funds, SIA or UMB Bank who obtains information concerning the
recommendations made to the Scout Funds with regard to the
purchase or sale of a security by the Scout Funds.
APPENDIX B - DEFINITIONS (CONTINUED)
------------------------------------
"COVERED SECURITY" means a security as defined in Section 202(a)(18) of the
Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"),
Section 2(a)(36) of the Investment Company Act of 1940, as amended (the "1940
Act"), except that it does not include (1) direct obligations of the Government
of the United States; (2) banker's acceptances, bank certificates of deposit;
commercial paper and high quality short-term debt instruments, including
repurchase agreements; (3) shares issued by money market funds registered under
the 1940 Act; (4) shares issued by open-end investment companies registered
under the 1940 Act other than the Scout Funds and other funds advised by XXX;
and (5) shares issued by unit investment trusts that are invested exclusively in
one or more open-end investment companies registered under the 1940 Act, none of
which are the Scout Funds or other funds advised by SIA.
"BENEFICIAL OWNERSHIP" includes ownership of a security in which the Access
Person or Covered Person has a direct or indirect pecuniary interest. A direct
pecuniary interest is the opportunity, directly or indirectly, to profit, or to
share the profit, from the transaction. An indirect pecuniary interest is any
nondirect financial interest, but is specifically defined in the rules to
include securities held by members of the employee's immediate family sharing
the same household; securities held by other relatives whose investments the
employee directs or controls, whether the person lives with the employee or not,
as well as accounts of another person (individual, partner, corporation, trust,
custodian, or other entity) if by reason of contract, understanding,
relationship, agreement or other arrangement the employee obtains or may obtain
therefrom a direct or indirect pecuniary interest; securities held by a
partnership of which the employee is the general partner; securities held by a
trust of which the employee is the settler if the employee can revoke the trust,
or a beneficiary if the employee has or shares investment control with the
trustee; and equity securities which may be acquired upon exercise of an option
or other right through conversion. A person does not derive a direct or indirect
pecuniary interest by virtue of serving as a trustee or executor unless the
person or a member of the person's immediate family has a vested interest in the
income or corpus of the trust or estate. Questions regarding beneficial
ownership should be directed to the Compliance Officer.
APPENDIX C - UMB SCOUT FUNDS AND SCOUT INVESTMENT ADVISORS XXXXXXX XXXXXXX
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POLICIES AND PROCEDURES
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