For period
ending
January 31,
2016
Exhibit 77Q1
File number
811-8764
SUB-ADVISORY AGREEMENT
Agreement made as of September 28, 2015 between UBS Global Asset
Management Americas) Inc. (UBS Global AM), a Delaware corporation, and
Xxxxx Global Partners plc (Sub-Adviser), an English company (the
Agreement).
RECITALS
(1) UBS Global AM has entered into a Management Agreement dated
as of August 1, 2008 (Management Agreement) with PACE Select Advisors
Trust (Trust), an open-end management investment company registered
under the Investment Company Act of 1940, as amended (1940 Act), with
respect to PACE International Fixed Income Investments (Portfolio);
(2) UBS Global AM desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global AM and the Portfolio, and in doing
so UBS Global AM agrees to be treated as an Intermediate Customer in
accordance with the FSA Rules; and
(3) The Sub-Adviser is willing to furnish such services; Now, therefore,
in consideration of the premises and mutual covenants herein contained, UBS
Global AM and the Sub-Adviser agree as follows:
1. Appointment. UBS Global AM hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Portfolio for the period and on the
terms set forth in this Agreement. The Sub-Adviser accepts that appointment
and agrees to render the services herein set forth, for the compensation herein
provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the Trusts Board of Trustees
(the Board) and review by UBS Global AM, and any written guidelines adopted by
the Board or UBS Global AM, the Sub-Adviser will provide a continuous
investment program for all or a designated portion of the assets (Segment) of
the Portfolio, including investment research and discretionary management
with respect to all securities and investments and cash equivalents in the
Portfolio or Segment. The Sub-Adviser will determine from time to time what
investments will be purchased, retained or sold by the Portfolio or Segment.
The Sub-Adviser will be responsible for placing purchase and sell orders for
investments and for other related transactions for the Portfolio or Segment.
The Sub-Adviser will be responsible for voting proxies of issuers of securities
held by the Portfolio or Segment. The Sub-Adviser understands that the
Portfolios assets need to be managed so as to permit the Portfolio
to qualify or to continue to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, as amended (Code). The Sub-
Adviser will provide services under this Agreement in accordance with the
Portfolios investment objective, policies and restrictions as stated in the
Trusts currently effective registration statement under the 1940 Act, and any
amendments or supplements thereto (Registration Statement).
(b) The Sub-Adviser agrees that it will not consult with any other sub-adviser
(Other Sub-Adviser) for the Trust or Portfolio concerning any transaction by
the Portfolio or Segment in securities or other assets, including (i) the
purchase by the Portfolio or Segment of a security issued by the Other
Sub-Adviser, or an affiliate of the Other Sub-Adviser, to the Trust or Portfolio
except as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its affiliate, is
the principal underwriter.
(c) The Sub-Adviser agrees that, in placing orders with brokers, it will obtain
the best net result in terms of price and execution; provided that, on behalf
of the Portfolio, the Sub-Adviser may, in its discretion, use brokers that
provide the Sub-Adviser with research, analysis, advice and similar services
to execute portfolio transactions on behalf of the Portfolio, and the Sub-
Adviser may pay to those brokers in return for brokerage and research services
a higher commission than may be charged by other brokers, subject to the Sub-
Advisers determination in good faith that such commission is reasonable in
terms either of the particular transaction or of the overall responsibility
of the Sub-Adviser to the Portfolio and its other clients and that the total
commissions paid by the Portfolio or Segment will be reasonable in relation to
the benefits to the Portfolio over the long term. In no instance will
portfolio securities be purchased from or sold to UBS Global AM or the Sub-
Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder. The Sub-
Adviser may aggregate sales and purchase orders with respect to the assets of
the Portfolio or Segment with similar orders being made simultaneously for
other accounts advised by the Sub-Adviser or its affiliates. Whenever the
Sub-Adviser simultaneously places orders to purchase or sell the same security
on behalf of the Portfolio and one or more otheraccounts advised by the Sub-
Adviser, the orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable over time to each account.
UBS Global AM recognizes that in some cases this procedure may adversely
affect the results obtained for the Portfolio or Segment.
(d) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations
promulgated thereunder with respect to transactions by the Sub-Adviser on
behalf of the Portfolio or Segment, and will furnish the Board and UBS Global
AM with such periodic and special reports as the Board or UBS Global AM
reasonably may request. In compliance with the requirements of Rule 31 a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Portfolio are the property of the Trust, agrees to preserve
for the periods prescribed by Rule 31 a-2 under the 1940 Act any records that
it maintains for the Portfolio and that are required to be maintained by Rule
31a-1 under the 1940 Act, and further agrees to surrender promptly to the Trust
any records which it maintains for the Portfolio upon request by the Trust.
(e) At such times as shall be reasonably requested by the Board or UBS Global
AM, the Sub-Adviser will provide the Board and UBS Global AM with economic
and investment analyses and reports as well as quarterly reports setting forth
the performance of the Portfolio or Segment and make available to the Board
and UBS Global AM any economic, statistical and investment services that the
Sub-Adviser normally makes available to its institutional or other customers.
(f) In accordance with procedures adopted by the Board, as amended from
time to time, the Sub-Adviser is responsible for assisting in the fair
valuation of all portfolio securities in the Portfolio or Segment and will use
its reasonable efforts to arrange for the provision of a price or prices from
one or more parties independent of the Sub-Adviser for each portfolio security
for which the custodian does not obtain prices in the ordinary course of
business from an automated pricing service.
3. Further Duties. In all matters relating to the performance of this
Agreement, the Sub-Adviser will seek to act in conformity with the Trusts
Trust Instrument, By-Laws and Registration Statement and with the written
instructions and written directions of the Board and UBS Global AM; and will
comply with the requirements of the 1940 Act, and the Investment Advisers
Act of 1940, as amended (Advisers Act), and the rules under each, the Code,
and all other federal and state laws and regulations applicable to the Trust
and the Portfolio. UBS Global AM agrees to provide to the Sub-Adviser copies
of the Trusts Trust Instrument, By-Laws, Registration Statement, written
instructions and directions of the Board and UBS Global AM, and any
amendments or supplements to any of these materials as soon as practicable
after such materials become available; and further agrees to identify to the
Sub-Adviser in writing any broker-dealers that are affiliated with UBS Global
AM (other than UBS Financial Services Inc. and UBS Global Asset Management
(US) Inc.).
4. Expenses. During the terms of this Agreement, the Sub-Adviser will bear all
expenses incurred by it in connection with its services under this Agreement.
The Sub-Adviser shall not be responsible for any expenses incurred by the
Trust, the Portfolio or UBS Global AM.
5. Compensation.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, UBS Global AM, not the Portfolio, will pay to the
Sub-Adviser a fee, computed daily and payable monthly, at an annual rate of
[ ] % of the average daily net assets of the Portfolio or Segment allocated to
its management (computed in the manner specified in the Management
Agreement), and will provide the Sub-Adviser with a schedule showing the
manner in which the fee was computed. If the Sub-Adviser is managing a
Segment, its fees will be based on the value of the assets of the Portfolio
within the Sub-Advisers Segment.
(b) The fee shall be accrued daily and payable monthly to the Sub-Adviser on
or before the last business day of the next succeeding calendar month.
(c) If this Agreement becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month
or from the beginning of such month to the date of termination, as the case
maybe, shall be pro-rated according to the proportion which such period bears
to the full month in that such effectiveness or termination occurs.
6. Limitation Of Liability.
(a) The Sub-Adviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Portfolio, the Trust or its shareholders or
by UBS Global AM in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility for any other
series of the Trust, for any portion of the Portfolio not managed by the Sub-
Adviser or for the acts or omissions of any other sub-adviser to the Trust or
Portfolio.
In particular, in the event the Sub-Adviser shall manage only a portion of the
Portfolios investments, the Sub-Adviser shall have no responsibility for the
Portfolios being in violation of any applicable law or regulation or investment
policy or restriction applicable to the Portfolio as a whole or for the
Portfolios failing to qualify as a regulated investment company under the Code,
if the securities and other holdings of the Segment of the Portfolio managed by
the Sub-Adviser are such that such Segment would not be in such violation or
fail to so qualify if such Segment were deemed a separate series of the Trust
or a separate regulated investment company under the Code. Nothing in this
section shall be deemed a limitation or waiver of any obligation or duty that
may not by law be limited or waived.
7. Representations of Sub-Adviser. The Sub-Adviser represents, warrants and
agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement;
(iii) has met, and will seek to continue to meet for so long as this Agreement
remains in effect, any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory agency,
necessary to be met in order to perform the services contemplated by this
Agreement; (iv) has the authority to enter into and perform the services
contemplated by this Agreement; and (v) will promptly notify UBS Global AM
of the occurrence of any event that would disqualify the Sub-Adviser from
serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide UBS Global AM
and the Board with a copy of such code of ethics, together with evidence of its
adoption. Within fifteen days of the end of the last calendar quarter of each
year that this Agreement is in effect, the president or a vice-president of the
Sub-Adviser shall certify to UBS Global AM that the Sub-Adviser has complied
with the requirements of Rule 17j-1 during the previous year and that there has
been no material violation of the Sub-Advisers code of ethics or, if such a
violation has occurred, that appropriate action was taken in response to such
violation. Upon the written request of UBS Global AM, the Sub-Adviser shall
permit UBS Global AM, its employees or its agents to examine the reports
required to be made by the Sub-Adviser pursuant to Rule 17j-1 and all other
records relevant to the Sub-Advisers code of ethics.
(c) The Sub-Adviser has provided UBS Global AM with a copy of its Form ADV,
as most recently filed with the Securities and Exchange Commission (SEC),
and promptly will furnish a copy of all amendments to UBS Global AM at least
annually.
(d) The Sub-Adviser will notify UBS Global AM of any change of control of the
Sub-Adviser, including any change of its general partners or 25% shareholders
or 25% limited partners, as applicable, and any changes in the key personnel
who are either the portfolio manager(s) of the Portfolio or senior management
of the Sub-Adviser, in each case prior to or promptly after such change.
(e) The Sub-Adviser agrees that neither it, nor any of its affiliates, will in
any way refer directly or indirectly to its relationship with the Trust, the
Portfolio; UBS Global AM or any of their respective affiliates in offering,
marketing or other promotional materials without the express written consent
of UBS Global AM.
(f) The Sub-Adviser hereby represents and warrants that it has (i) a sanctions
policy in place and communicated to all employees and (ii) adequate sanctions
compliance controls reasonably designed to ensure compliance with US, UN,
EU and Swiss sanctions laws and regulations and local applicable sanctions
laws (the "Sanctions Laws") The Sub-Adviser further represents and warrants
that (i) it will not undertake investments or engage in activity that involves
either directly or indirectly countries, regimes, jurisdictions or sanctioned
parties (individuals / entities) subject to any Sanctions Laws and (ii) will
not invest in securities / issuers mentioned on the "Sanctions Securities List
(SSSL)" and the list of "Companies Verifiably Involved in Controversial
Weapons (Ethix List)" provided by UBS and updated from time to time.
8. Services Not Exclusive. The services furnished by the Sub-Adviser
hereunder are not to be deemed exclusive, and except as the Sub-Adviser may
otherwise agree in writing, the Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not
impaired thereby. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Sub-Adviser, who may also be a
trustee, officer or employee of the Trust, to engage in any other business or
to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a dissimilar
nature.
9. Duration and Termination.
(a) This Agreement shall become effective upon the date first above written,
provided that this Agreement shall not take effect unless it has first been
approved (i) by a vote of a majority of those trustees of the Trust who are not
parties to this Agreement or interested persons of any such party
(Independent Trustees), cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the Portfolios
outstanding voting securities, unless UBS Global AM has authority to enter
into this Agreement pursuant to exemptive relief from the SEC without a vote
of the Portfolios outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from its effective date. Thereafter, if not
terminated, this Agreement shall continue automatically for successive
periods of twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Trustees,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by the Board or by vote of a majority of the outstanding voting
securities of the Portfolio.
(c) Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of
a majority of the outstanding voting securities of the Portfolio on 30 days
written notice to the Sub-Adviser. This Agreement may also be terminated,
without the payment of any penalty, by UBS Global AM: (i) upon 120 days
written notice to the Sub-Adviser; (ii) upon material breach by the Sub-Adviser
of any of the representations, warranties and agreements set forth in
Paragraph 7 of this Agreement; or (iii) immediately if, in the reasonable
judgment of UBS Global AM, the Sub-Adviser becomes unable to discharge its
duties and obligations under this Agreement, including circumstances such as
financial insolvency of the Sub-Adviser or other circumstances that could
adversely affect the Portfolio. The Sub-Adviser may terminate this Agreement
at any time, without the payment of any penalty, on 120 days written notice to
UBS Global AM. This Agreement will terminate automatically in the event of
its assignment or upon termination of the Management Agreement, as it
relates to this Portfolio.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. To the extent required by applicable law,
no amendment of this Agreement shall be effective until approved (i) by a vote
of a majority of the Independent Trustees, and (ii) if the terms of this
Agreement shall have changed, by a vote of a majority of the Portfolios
outstanding voting securities (except in the case of (ii), pursuant to the
terms and conditions of the SEC order permitting it to modify the Agreement
without such vote).
11. Governing Law. This Agreement shall be construed in accordance with the
1940 Act and the laws of the State of New York, without giving effect to the
conflicts of laws principles thereof. To the extent that the applicable laws
of the State of New York conflict with the applicable provisions of the 1940
Act, the latter shall control.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms majority of the outstanding voting securities,
affiliated person, interested person, assignment, broker, investment adviser,
net assets, sale, sell and security shall have the same meanings as such terms
have in the 1940 Act, subject to such exemption as may be granted by the SEC
by any rule, regulation or order. Where the effect of a requirement of the
federal securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the SEC, whether of special
or general application, such provision shall be deemed to incorporate the
effect of such rule, regulation or order. This Agreement may be signed in
counterpart.
13. Notices. Any notice herein required is to be in writing and is deemed to
have been given to the Sub-Adviser or UBS Global AM upon receipt of the
same at their respective addresses set forth below. All written notices
required or permitted to be given under this Agreement will be delivered by
personal service, by postage mail return receipt requested or by facsimile
machine or a similar means of same delivery which providers evidence of
receipt (with a confirming copy by mail as set forth herein). All notices
provided to UBS Global AM will be sent to the attention of its General Counsel.
All notices provided to the Sub-Adviser will be sent to the attention of the
Compliance Officer.
In witness whereof, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
UBS Global Asset Management
(Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attest:
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxx Xxxx
Name: Xxxx Xxxxxxx Name: Xxxx Xxxx
Title: Director Title: Exec. Director
Xxxxx Global Partners plc
Sion Hall
00 Xxxxxxxx Xxxxxxxxxx
Xxxxxx, XX0X 0XX, Xxxxxxx
Attest:
By: By: /s/ Xxxx Xxxxxx
Name: Name: Xxxx Xxxxxx
Title: Title: Director
