XXXX, XXXXXX & CO. LLC
XXXX XXXXXX DISTRIBUTOR LLC
(TOGETHER, "LORD XXXXXX")
AND
XXXX XXXXXX FAMILY OF FUNDS (THE "FUNDS")
CODE OF ETHICS
______________
I. STANDARDS OF BUSINESS CONDUCT AND ETHICAL PRINCIPLES
____________________________________________________
XXXX XXXXXX'X FOCUS ON HONESTY AND INTEGRITY HAS BEEN A CRITICAL PART OF ITS
CULTURE SINCE THE FIRM'S FOUNDING IN 1929. XXXX XXXXXX IS A FIDUCIARY TO THE
FUNDS AND TO ITS OTHER CLIENTS. IN RECOGNITION OF THESE FIDUCIARY OBLIGATIONS,
THE PERSONAL INVESTMENT ACTIVITIES OF ANY OFFICER, DIRECTOR, TRUSTEE OR
EMPLOYEE OF THE FUNDS OR ANY PARTNER OR EMPLOYEE OF XXXX XXXXXX WILL BE
GOVERNED BY THE FOLLOWING GENERAL PRINCIPLES: (1) COVERED PERSONS/1/ HAVE A
DUTY AT ALL TIMES TO PLACE FIRST THE INTERESTS OF FUND SHAREHOLDERS AND, IN THE
CASE OF EMPLOYEES AND PARTNERS OF XXXX XXXXXX, BENEFICIARIES OF MANAGED
ACCOUNTS; (2) ALL SECURITIES TRANSACTIONS BY COVERED PERSONS SHALL BE CONDUCTED
CONSISTENT WITH THIS CODE AND IN SUCH A MANNER AS TO AVOID ANY ACTUAL OR
POTENTIAL CONFLICT OF INTEREST OR ANY ABUSE OF AN INDIVIDUAL'S POSITION OF
TRUST AND RESPONSIBILITY; (3) COVERED PERSONS SHOULD NOT TAKE INAPPROPRIATE
ADVANTAGE OF THEIR POSITIONS WITH LORD XXXXXX OR THE FUNDS; (4) COVERED PERSONS
MUST COMPLY WITH THE FEDERAL SECURITIES LAWS; AND (5) COVERED PERSONS ARE
REQUIRED TO MAINTAIN ALL INTERNALLY DISTRIBUTED AND/OR PROPRIETARY INFORMATION
AS CONFIDENTIAL; THIS INFORMATION SHOULD NOT BE DISCLOSED OR DISCUSSED WITH
PEOPLE OUTSIDE XXXX XXXXXX.
II. SPECIFIC PROHIBITIONS
_____________________
NO PERSON COVERED BY THIS CODE, SHALL PURCHASE OR SELL A SECURITY, EXCEPT AN
EXCEPTED SECURITY, IF THERE HAS BEEN A DETERMINATION TO PURCHASE OR SELL SUCH
SECURITY FOR A FUND (OR, IN THE CASE OF ANY EMPLOYEE OR PARTNER OF XXXX XXXXXX,
FOR ANOTHER CLIENT OF XXXX XXXXXX), OR IF SUCH A PURCHASE OR SALE IS UNDER
CONSIDERATION FOR A FUND (OR, IN THE CASE OF AN EMPLOYEE OR PARTNER OF XXXX
XXXXXX, FOR ANOTHER CLIENT OF XXXX XXXXXX), NOR MAY SUCH PERSON HAVE ANY
DEALINGS IN A SECURITY THAT HE MAY NOT PURCHASE OR SELL FOR ANY OTHER ACCOUNT
IN WHICH HE HAS BENEFICIAL OWNERSHIP, OR DISCLOSE THE INFORMATION TO ANYONE,
UNTIL SUCH PURCHASE, SALE OR CONTEMPLATED ACTION HAS EITHER BEEN COMPLETED OR
ABANDONED.
--------
/1/ See Definitions in Section IX
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
III. OBTAINING ADVANCE APPROVAL
__________________________
EXCEPT AS PROVIDED IN SECTIONS V AND VI OF THIS CODE, ALL PROPOSED TRANSACTIONS
IN SECURITIES (PRIVATELY OR PUBLICLY OWNED) BY COVERED PERSONS, EXCEPT
TRANSACTIONS IN EXCEPTED SECURITIES AND EXCEPTED TRANSACTIONS, SHOULD BE
APPROVED CONSISTENT WITH THE PROVISIONS OF THIS CODE. IN ORDER TO OBTAIN
APPROVAL, THE COVERED PERSON MUST SEND THEIR REQUEST TO THE LEGAL DEPARTMENT.
THE APPROVAL REQUEST FORM AND INSTRUCTIONS FOR COMPLETING THE FORM CAN BE FOUND
UNDER "LEGAL DEPARTMENT/CODE OF ETHICS" IN THE PUBLIC FOLDERS ON YOUR COMPUTER.
AFTER APPROVAL HAS BEEN OBTAINED, THE COVERED PERSON MAY ACT ON IT WITHIN THE
TWO BUSINESS DAYS FOLLOWING THE DATE OF APPROVAL, UNLESS HE SOONER LEARNS OF A
CONTEMPLATED ACTION BY XXXX XXXXXX. AFTER THE TWO BUSINESS DAYS, OR UPON
HEARING OF SUCH CONTEMPLATED ACTION, A NEW APPROVAL MUST BE OBTAINED.
FURTHERMORE, IN ADDITION TO THE ABOVE REQUIREMENTS, PARTNERS AND EMPLOYEES
DIRECTLY INVOLVED MUST DISCLOSE INFORMATION THEY MAY HAVE CONCERNING SECURITIES
THEY MAY WANT TO PURCHASE OR SELL TO ANY PORTFOLIO MANAGER WHO MIGHT BE
INTERESTED IN THE SECURITIES FOR THE PORTFOLIOS THEY MANAGE.
IV. REPORTING AND CERTIFICATION REQUIREMENTS; BROKERAGE CONFIRMATIONS
_________________________________________________________________
(1) EXCEPT AS PROVIDED IN SECTIONS V AND VI OF THIS CODE, WITHIN 30 DAYS
FOLLOWING THE END OF EACH CALENDAR QUARTER EACH COVERED PERSON MUST
FILE WITH XXXX XXXXXX'X CHIEF COMPLIANCE OFFICER A SIGNED PERSONAL
SECURITIES TRANSACTION REPORTING FORM. THE FORM MUST BE SIGNED AND
FILED WHETHER OR NOT ANY SECURITY TRANSACTION HAS BEEN EFFECTED. IF
ANY TRANSACTION HAS BEEN EFFECTED DURING THE QUARTER FOR THE COVERED
PERSON'S ACCOUNT OR FOR ANY ACCOUNT IN WHICH HE HAS A DIRECT OR
INDIRECT BENEFICIAL OWNERSHIP, IT MUST BE REPORTED. EXCEPTED FROM
THIS REPORTING REQUIREMENT ARE TRANSACTIONS EFFECTED IN ANY ACCOUNTS
OVER WHICH THE COVERED PERSON HAS NO DIRECT OR INDIRECT INFLUENCE OR
CONTROL (A "FULLY DISCRETIONARY ACCOUNT," AS DEFINED IN SECTION VI)
AND TRANSACTIONS IN EXCEPTED SECURITIES. SECURITIES ACQUIRED IN AN
EXCEPTED TRANSACTION SHOULD BE REPORTED, EXCEPT THAT SECURITIES
ACQUIRED THROUGH AN AUTOMATIC INVESTMENT PLAN DO NOT NEED TO BE
REPORTED, UNLESS ANY TRANSACTION IS OUTSIDE THE PRE-SET SCHEDULE OR
A PRE-EXISTING ALLOCATION. XXXX XXXXXX'X CHIEF COMPLIANCE OFFICER
AND/OR PERSONS UNDER HIS DIRECTION ARE RESPONSIBLE FOR REVIEWING
THESE TRANSACTIONS AND MUST BRING ANY APPARENT VIOLATION TO THE
ATTENTION OF XXXX XXXXXX'X GENERAL COUNSEL. THE PERSONAL SECURITIES
TRANSACTION REPORTING FORM OF THE CHIEF COMPLIANCE OFFICER SHALL BE
REVIEWED BY THE GENERAL COUNSEL.
(2) EACH EMPLOYEE AND PARTNER OF XXXX XXXXXX WILL UPON COMMENCEMENT OF
EMPLOYMENT (WITHIN 10 BUSINESS DAYS) (THE "INITIAL REPORT") AND
ANNUALLY THEREAFTER (THE "ANNUAL REPORT") DISCLOSE ALL PERSONAL
SECURITIES HOLDINGS AND ANNUALLY CERTIFY THAT: (I) THEY HAVE READ
AND UNDERSTAND THIS CODE AND RECOGNIZE THEY ARE SUBJECT HERETO; AND
(II) THEY HAVE COMPLIED WITH THE REQUIREMENTS OF THIS CODE AND
DISCLOSED OR REPORTED ALL SECURITIES TRANSACTIONS REQUIRED TO BE
DISCLOSED OR REPORTED PURSUANT TO THE REQUIREMENTS OF THIS CODE.
SECURITY HOLDINGS INFORMATION FOR THE INITIAL REPORT AND THE ANNUAL
REPORT MUST BE CURRENT AS OF A
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
2
DATE NOT MORE THAN 45 DAYS PRIOR TO THE DATE OF THAT REPORT.
SECURITIES HOLDINGS OF LORD XXXXXX MUTUAL FUNDS PURCHASED DIRECTLY
FROM THE FUND OR PURCHASED THROUGH THE LORD XXXXXX 401(K) RETIREMENT
PLAN ARE NOT REQUIRED TO BE DISCLOSED. XXXX XXXXXX EMPLOYEES AND
PARTNERS MUST DISCLOSE HOLDINGS OF LORD XXXXXX MUTUAL FUNDS
PURCHASED THROUGH A BROKER/DEALER OTHER THAN LORD XXXXXX DISTRIBUTOR
LLC.
(3) EACH EMPLOYEE AND PARTNER OF XXXX XXXXXX WILL DIRECT HIS BROKERAGE
FIRMS TO SEND COPIES OF ALL TRADE CONFIRMATIONS AND ALL MONTHLY
STATEMENTS DIRECTLY TO THE LEGAL DEPARTMENT.
(4) EACH EMPLOYEE AND PARTNER OF XXXX XXXXXX WHO HAS A
FULLY-DISCRETIONARY ACCOUNT SHALL DISCLOSE ALL PERTINENT FACTS
REGARDING SUCH ACCOUNT TO XXXX XXXXXX'X CHIEF COMPLIANCE OFFICER
UPON COMMENCEMENT OF EMPLOYMENT. EACH SUCH EMPLOYEE OR PARTNER SHALL
THEREAFTER ANNUALLY CERTIFY ON THE PRESCRIBED FORM THAT HE OR SHE
HAS NOT AND WILL NOT EXERCISE ANY DIRECT OR INDIRECT INFLUENCE OR
CONTROL OVER SUCH ACCOUNT, AND HAS NOT DISCUSSED ANY POTENTIAL
INVESTMENT DECISIONS WITH SUCH INDEPENDENT FIDUCIARY IN ADVANCE OF
ANY SUCH TRANSACTIONS. SUCH INDEPENDENT FIDUCIARY SHALL CONFIRM
INITIALLY, AND ANNUALLY THEREAFTER, THE ACCURACY OF THE FACTS AS
STATED BY THE LORD XXXXXX EMPLOYEE OR PARTNER.
V. SPECIAL PROVISIONS APPLICABLE TO OUTSIDE DIRECTORS AND TRUSTEES OF THE FUNDS
____________________________________________________________________________
THE PRIMARY FUNCTION OF THE OUTSIDE DIRECTORS AND TRUSTEES OF THE FUNDS IS
TO SET POLICY AND MONITOR THE MANAGEMENT PERFORMANCE OF THE FUNDS' OFFICERS
AND EMPLOYEES AND THE PARTNERS AND EMPLOYEES OF LORD XXXXXX INVOLVED IN THE
MANAGEMENT OF THE FUNDS. ALTHOUGH THEY RECEIVE INFORMATION AFTER THE FACT AS
TO PORTFOLIO TRANSACTIONS BY THE FUNDS, OUTSIDE DIRECTORS AND TRUSTEES ARE
NOT GIVEN ADVANCE INFORMATION AS TO THE FUNDS' CONTEMPLATED INVESTMENT
TRANSACTIONS.
AN OUTSIDE DIRECTOR OR TRUSTEE WISHING TO PURCHASE OR SELL ANY SECURITY WILL
THEREFORE GENERALLY NOT BE REQUIRED TO OBTAIN ADVANCE APPROVAL OF HIS
SECURITY TRANSACTIONS. IF, HOWEVER, DURING DISCUSSIONS AT BOARD MEETINGS OR
OTHERWISE AN OUTSIDE DIRECTOR OR TRUSTEE SHOULD LEARN IN ADVANCE OF THE
FUNDS' CURRENT OR CONTEMPLATED INVESTMENT TRANSACTIONS, THEN ADVANCE
APPROVAL OF TRANSACTIONS IN THE SECURITIES OF SUCH COMPANY(IES) SHALL BE
REQUIRED FOR A PERIOD OF 30 DAYS FROM THE DATE OF SUCH BOARD MEETING. IN
ADDITION, AN OUTSIDE DIRECTOR OR TRUSTEE CAN VOLUNTARILY OBTAIN ADVANCE
APPROVAL OF ANY SECURITY TRANSACTION OR TRANSACTIONS AT ANY TIME.
NO REPORT DESCRIBED IN SECTION IV (1) WILL BE REQUIRED OF AN OUTSIDE
DIRECTOR OR TRUSTEE UNLESS HE KNEW, OR IN THE ORDINARY COURSE OF FULFILLING
HIS OFFICIAL DUTIES AS A DIRECTOR OR TRUSTEE SHOULD HAVE KNOWN, AT THE TIME
OF HIS TRANSACTION, THAT DURING THE 15-DAY PERIOD IMMEDIATELY BEFORE OR
AFTER THE DATE OF THE TRANSACTION (I.E., A TOTAL OF 30 DAYS) BY THE OUTSIDE
DIRECTOR OR TRUSTEE SUCH SECURITY WAS OR WAS TO BE PURCHASED OR SOLD BY ANY
OF THE FUNDS OR SUCH A PURCHASE OR SALE WAS OR WAS TO BE CONSIDERED BY A
FUND. IF HE MAKES ANY TRANSACTION REQUIRING SUCH A REPORT, HE MUST REPORT
ALL SECURITIES TRANSACTIONS EFFECTED DURING THE QUARTER FOR HIS ACCOUNT OR
FOR ANY ACCOUNT IN WHICH HE HAS A DIRECT OR INDIRECT
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
3
BENEFICIAL OWNERSHIP INTEREST AND OVER WHICH HE HAS ANY DIRECT OR INDIRECT
INFLUENCE OR CONTROL. EACH OUTSIDE DIRECTOR AND TRUSTEE WILL DIRECT HIS
BROKERAGE FIRM TO SEND COPIES OF ALL CONFIRMATIONS OF SECURITIES
TRANSACTIONS TO THE LEGAL DEPARTMENT, AND ANNUALLY MAKE THE CERTIFICATION
REQUIRED UNDER SECTION IV(2)(I) AND (II). OUTSIDE DIRECTORS' AND TRUSTEES'
TRANSACTIONS IN EXCEPTED SECURITIES ARE EXCEPTED FROM THE PROVISIONS OF THIS
CODE.
IT SHALL BE PROHIBITED FOR AN OUTSIDE DIRECTOR OR TRUSTEE TO TRADE ON
MATERIAL NON-PUBLIC INFORMATION. PRIOR TO ACCEPTING AN APPOINTMENT AS A
DIRECTOR OF ANY PUBLIC COMPANY, AN OUTSIDE DIRECTOR OR TRUSTEE WILL ADVISE
XXXX XXXXXX AND DISCUSS WITH XXXX XXXXXX'X MANAGING PARTNER WHETHER
ACCEPTING SUCH APPOINTMENT CREATES ANY CONFLICT OF INTEREST OR OTHER ISSUES.
IF AN OUTSIDE DIRECTOR OR TRUSTEE, WHO IS A DIRECTOR OR AN EMPLOYEE OF, OR
CONSULTANT TO, A COMPANY, RECEIVES A GRANT OF OPTIONS TO PURCHASE SECURITIES
IN THAT COMPANY (OR AN AFFILIATE), NEITHER THE RECEIPT OF SUCH OPTIONS, NOR
THE EXERCISE OF THOSE OPTIONS AND THE RECEIPT OF THE UNDERLYING SECURITY,
REQUIRES ADVANCE APPROVAL FROM XXXX XXXXXX. FURTHER, NEITHER THE RECEIPT NOR
THE EXERCISE OF SUCH OPTIONS AND RECEIPT OF THE UNDERLYING SECURITY IS
REPORTABLE BY SUCH OUTSIDE DIRECTOR OR TRUSTEE.
VI. ADDITIONAL REQUIREMENTS RELATING TO PARTNERS AND EMPLOYEES OF LORD XXXXXX
_________________________________________________________________________
IT SHALL BE PROHIBITED FOR ANY PARTNER OR EMPLOYEE OF XXXX XXXXXX:
(1) TO OBTAIN OR ACCEPT FAVORS OR PREFERENTIAL TREATMENT OF ANY KIND OR
GIFT OR OTHER THING (OTHER THAN AN OCCASIONAL MEAL OR TICKET TO A
SPORTING EVENT OR THEATRE, OR COMPARABLE ENTERTAINMENT, WHICH IS
NEITHER SO FREQUENT NOR SO EXTENSIVE AS TO RAISE ANY QUESTION OF
PROPRIETY) HAVING A VALUE OF MORE THAN $100 FROM ANY PERSON OR
ENTITY THAT DOES BUSINESS WITH OR ON BEHALF OF THE FUNDS; PROVIDED,
HOWEVER, THAT A PARTNER OR EMPLOYEE, ACTING ON BEHALF OF LORD,
XXXXXX & CO. LLC, MAY GIVE ONE OR MORE GIFTS INDIVIDUALLY OR
COLLECTIVELY VALUED AT MORE THAN $100 TO AN INVESTMENT ADVISORY
CLIENT (BUT IN NO EVENT TO AN INVESTOR IN SHARES OF THE FUNDS) IN
ORDER TO COMMEMORATE THE LENGTH OF THE CLIENT'S RELATIONSHIP WITH
XXXX XXXXXX, IF SUCH GIFT(S) ARE APPROVED BY XXXX XXXXXX'X MANAGING
PARTNER OR THE PARTNER RESPONSIBLE FOR THE INSTITUTIONAL MARKETING
DEPARTMENT AND BY XXXX XXXXXX'X GENERAL COUNSEL. FOR ADDITIONAL
INFORMATION ON GIFTS AND ENTERTAINMENT, PLEASE REFER TO XXXX
XXXXXX'X GIFTS AND ENTERTAINMENT POLICY AND PROCEDURES;
(2) TO TRADE ON MATERIAL NON-PUBLIC INFORMATION OR OTHERWISE FAIL TO
COMPLY WITH THE FIRM'S STATEMENT OF POLICY AND PROCEDURES ON RECEIPT
AND USE OF INSIDE INFORMATION ADOPTED PURSUANT TO SECTION 15(F) OF
THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 204A OF THE
INVESTMENT ADVISERS ACT OF 1940. FOR ADDITIONAL INFORMATION
REGARDING THESE POLICIES AND PROCEDURES, PLEASE REFER TO XXXX
XXXXXX'X INSIDE INFORMATION POLICY;
(3) TO TRADE IN OPTIONS WITH RESPECT TO SECURITIES COVERED UNDER THIS
CODE;
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
4
(4) TO PROFIT IN THE PURCHASE AND SALE, OR SALE AND PURCHASE, OF THE
SAME (OR EQUIVALENT) SECURITIES WITHIN 60 CALENDAR DAYS (ANY PROFITS
REALIZED ON SUCH SHORT-TERM TRADES SHALL BE DISGORGED TO THE
APPROPRIATE FUND OR AS OTHERWISE DETERMINED);
(5) TO TRADE IN FUTURES OR OPTIONS ON COMMODITIES, CURRENCIES OR OTHER
FINANCIAL INSTRUMENTS, ALTHOUGH THE FIRM RESERVES THE RIGHT TO MAKE
RARE EXCEPTIONS IN UNUSUAL CIRCUMSTANCES WHICH HAVE BEEN APPROVED BY
THE FIRM IN ADVANCE;
(6) TO ENGAGE IN SHORT SALES OR PURCHASE SECURITIES ON MARGIN;
(7) TO BUY OR SELL ANY SECURITY WITHIN SEVEN BUSINESS DAYS BEFORE OR
AFTER ANY FUND (OR OTHER LORD XXXXXX CLIENT) TRADES IN THAT SECURITY
(ANY PROFITS REALIZED ON TRADES WITHIN THE PROSCRIBED PERIODS SHALL
BE DISGORGED TO THE FUND (OR THE OTHER CLIENT) OR AS OTHERWISE
DETERMINED);
(8) TO SUBSCRIBE TO NEW OR SECONDARY PUBLIC OFFERINGS, EVEN THOUGH THE
OFFERING IS NOT ONE IN WHICH THE FUNDS OR XXXX XXXXXX'X ADVISORY
ACCOUNTS ARE INTERESTED;
(9) TO BECOME A DIRECTOR OF ANY COMPANY WITHOUT XXXX XXXXXX'X PRIOR
CONSENT AND IMPLEMENTATION OF APPROPRIATE SAFEGUARDS AGAINST
CONFLICTS OF INTEREST;
(10) TO ENGAGE IN MARKET TIMING ACTIVITIES WITH RESPECT TO THE FUNDS;
(11) TO PURCHASE ANY SECURITY OF A COMPANY THAT HAS A MARKET
CAPITALIZATION AT THE TIME OF PURCHASE BELOW $3 BILLION; OR
(12) TO PARTICIPATE IN AN OUTSIDE BUSINESS ACTIVITY WITHOUT XXXX XXXXXX'X
PRIOR CONSENT.
ANY PURCHASE OF A FUND (OTHER THAN XXXX XXXXXX U.S. GOVERNMENT & GOVERNMENT
SPONSORED ENTERPRISES MONEY MARKET FUND) BY A PARTNER OR EMPLOYEE OF XXXX
XXXXXX (WHETHER WITH RESPECT TO THE LORD XXXXXX 401(K) RETIREMENT PLAN OR IN
ANY OTHER ACCOUNT) MUST BE HELD FOR A MINIMUM OF 60 DAYS. THIS 60-DAY MINIMUM
HOLDING PERIOD ALSO APPLIES TO ANY OTHER MUTUAL FUND ADVISED OR SUB-ADVISED BY
XXXX XXXXXX. ANY REQUEST FOR AN EXCEPTION TO THIS REQUIREMENT MUST BE APPROVED
IN WRITING IN ADVANCE BY XXXX XXXXXX'X MANAGING PARTNER AND ITS GENERAL COUNSEL
(OR BY THEIR DESIGNEES). XXXX XXXXXX SHALL PROMPTLY REPORT TO THE FUNDS' BOARDS
ANY APPROVED EXCEPTION REQUEST TO THIS MINIMUM HOLDING PERIOD.
IN CONNECTION WITH ANY PARTNER'S OR EMPLOYEE'S REQUEST FOR APPROVAL OF AN
ACQUISITION OF ANY SECURITIES IN A PRIVATE PLACEMENT, THE LEGAL DEPARTMENT'S
CONSIDERATION OF THE REQUEST WILL TAKE INTO ACCOUNT, AMONG OTHER FACTORS,
WHETHER THE INVESTMENT OPPORTUNITY SHOULD BE RESERVED FOR ANY OF THE FUNDS AND
THEIR SHAREHOLDERS (OR OTHER CLIENTS OF XXXX XXXXXX) AND WHETHER THE
OPPORTUNITY IS BEING OFFERED TO THE INDIVIDUAL BY VIRTUE OF THE INDIVIDUAL'S
POSITION WITH XXXX XXXXXX OR THE FUNDS. AN INDIVIDUAL'S INVESTMENT IN
PRIVATELY-PLACED SECURITIES WILL BE DISCLOSED TO THE MANAGING PARTNER OF XXXX
XXXXXX IF SUCH INDIVIDUAL IS INVOLVED IN CONSIDERATION OF AN INVESTMENT BY A
FUND (OR OTHER CLIENT) IN THE ISSUER OF SUCH SECURITIES. IN SUCH CIRCUMSTANCES,
THE FUND'S (OR OTHER CLIENT'S) DECISION TO PURCHASE SECURITIES OF THE ISSUER
WILL BE SUBJECT TO INDEPENDENT REVIEW BY PERSONNEL WITH NO PERSONAL INTEREST IN
THE ISSUER.
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
5
IF A SPOUSE OF A PARTNER OR EMPLOYEE OF XXXX XXXXXX WHO IS A DIRECTOR OR AN
EMPLOYEE OF, OR A CONSULTANT TO, A COMPANY, RECEIVES A GRANT OF OPTIONS TO
PURCHASE SECURITIES IN THAT COMPANY (OR AN AFFILIATE), NEITHER THE RECEIPT
NOR THE EXERCISE OF THOSE OPTIONS REQUIRES ADVANCE APPROVAL FROM XXXX XXXXXX
OR REPORTING. ANY SUBSEQUENT SALE OF THE SECURITY ACQUIRED BY THE OPTION
EXERCISE BY THAT SPOUSE WOULD REQUIRE ADVANCE APPROVAL AND IS A REPORTABLE
TRANSACTION.
ADVANCE APPROVAL IS NOT REQUIRED FOR TRANSACTIONS IN ANY ACCOUNT OF A
COVERED PERSON IF THE COVERED PERSON HAS NO DIRECT OR INDIRECT INFLUENCE OR
CONTROL WITH RESPECT TO TRANSACTIONS IN THE ACCOUNT (A "FULLY-DISCRETIONARY
ACCOUNT"). A COVERED PERSON WILL BE DEEMED TO HAVE "NO DIRECT OR INDIRECT
INFLUENCE OR CONTROL" OVER AN ACCOUNT ONLY IF: (I) INVESTMENT DISCRETION FOR
THE ACCOUNT HAS BEEN DELEGATED TO AN INDEPENDENT FIDUCIARY AND SUCH
INVESTMENT DISCRETION IS NOT SHARED WITH THE EMPLOYEE; (II) THE COVERED
PERSON CERTIFIES IN WRITING THAT HE OR SHE HAS NOT AND WILL NOT DISCUSS ANY
POTENTIAL INVESTMENT DECISIONS WITH SUCH INDEPENDENT FIDUCIARY BEFORE ANY
TRANSACTION; (III) THE INDEPENDENT FIDUCIARY CONFIRMS IN WRITING THE
REPRESENTATIONS BY THE COVERED PERSON REGARDING THE COVERED PERSON'S HAVING
NO DIRECT OR INDIRECT INFLUENCE OR CONTROL OVER THE ACCOUNT;/2/ AND (IV) THE
CHIEF COMPLIANCE OFFICER OF XXXX XXXXXX HAS DETERMINED THAT THE ACCOUNT
SATISFIES THESE REQUIREMENTS. ANNUALLY THEREAFTER, THE COVERED PERSON AND
THE INDEPENDENT FIDUCIARY SHALL CERTIFY IN WRITING THAT THE REPRESENTATIONS
OF SUBPARAGRAPHS (II) AND (III) OF THIS PARAGRAPH REMAIN CORRECT.
TRANSACTIONS IN FULLY-DISCRETIONARY ACCOUNTS BY AN EMPLOYEE OR PARTNER OF
XXXX XXXXXX ARE NOT SUBJECT TO THE POST-TRADE REPORTING REQUIREMENTS OF THIS
CODE.
VII. ENFORCEMENT AND REPORTING OF VIOLATIONS
_______________________________________
THE GENERAL COUNSEL FOR XXXX XXXXXX AND XXXX XXXXXX'X CHIEF COMPLIANCE
OFFICER ARE CHARGED WITH THE RESPONSIBILITY OF ENFORCING THIS CODE, AND MAY
APPOINT ONE OR MORE EMPLOYEES TO AID THEM IN CARRYING OUT THEIR ENFORCEMENT
RESPONSIBILITIES. THE CHIEF COMPLIANCE OFFICER SHALL IMPLEMENT A PROCEDURE
TO MONITOR COMPLIANCE WITH THIS CODE THROUGH AN ONGOING REVIEW OF PERSONAL
TRADING RECORDS PROVIDED UNDER THIS CODE AGAINST TRANSACTIONS IN THE FUNDS
AND MANAGED PORTFOLIOS. ANY VIOLATION OF THIS CODE OF ETHICS MUST BE
REPORTED PROMPTLY TO XXXX XXXXXX'X CHIEF COMPLIANCE OFFICER, OR, IN HIS
ABSENCE, TO XXXX XXXXXX'X GENERAL COUNSEL. THE CHIEF COMPLIANCE OFFICER
SHALL BRING TO THE ATTENTION OF THE FUNDS' AUDIT COMMITTEES ANY APPARENT
VIOLATIONS OF THIS CODE, AND THE ACTION WHICH HAS BEEN TAKEN BY XXXX XXXXXX
AS A RESULT OF SUCH VIOLATION, AND THE FUNDS' AUDIT COMMITTEES SHALL
CONSIDER WHAT ADDITIONAL ACTION, IF ANY, IS APPROPRIATE. THE RECORD OF ANY
VIOLATION OF THIS CODE AND ANY ACTION TAKEN AS A RESULT THEREOF, WHICH MAY
INCLUDE SUSPENSION OR REMOVAL OF THE VIOLATOR FROM HIS POSITION, SHALL BE
MADE A PART OF THE PERMANENT RECORDS OF THE AUDIT COMMITTEES OF THE FUNDS.
LORD XXXXXX SHALL PROVIDE EACH EMPLOYEE AND PARTNER WITH A COPY OF THIS
CODE, AND OF ANY AMENDMENTS TO THE CODE, AND
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/2/ Certain accounts managed by third parties that are registered investment
advisers, such as separately managed accounts in programs sponsored by
broker-dealers (SMAs), will not be subject to the requirement of a
written verification by the independent fiduciary. For such accounts,
the Covered Person will continue to be required to certify annually in
writing that he or she has not and will not discuss potential investment
decisions with the independent fiduciary.
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
6
EACH EMPLOYEE AND PARTNER SHALL ACKNOWLEDGE, IN WRITING, HIS OR HER RECEIPT
OF THE CODE AND ANY AMENDMENT, WHICH MAY BE PROVIDED ELECTRONICALLY. XXXX
XXXXXX'X GENERAL COUNSEL SHALL PREPARE AN ANNUAL ISSUES AND CERTIFICATION
REPORT TO THE DIRECTORS OR TRUSTEES OF THE FUNDS THAT (A) SUMMARIZES LORD
XXXXXX'X PROCEDURES CONCERNING PERSONAL INVESTING, INCLUDING THE PROCEDURES
FOLLOWED BY XXXX XXXXXX IN DETERMINING WHETHER TO GIVE APPROVALS UNDER
SECTION III AND THE PROCEDURES FOLLOWED BY THE COMPLIANCE AND LEGAL
DEPARTMENTS IN DETERMINING WHETHER ANY FUNDS HAVE DETERMINED TO PURCHASE OR
SELL A SECURITY OR ARE CONSIDERING SUCH A PURCHASE OR SALE, AND ANY CHANGES
IN THOSE PROCEDURES DURING THE PAST YEAR, AND CERTIFIES TO THE DIRECTORS OR
TRUSTEES THAT THE PROCEDURES ARE REASONABLY NECESSARY TO PREVENT VIOLATIONS,
AND (B) IDENTIFIES ANY RECOMMENDED CHANGES IN THE RESTRICTIONS IMPOSED BY
THIS CODE OR IN SUCH PROCEDURES WITH RESPECT TO THE CODE AND ANY CHANGES TO
THE CODE BASED UPON EXPERIENCE WITH THE CODE, EVOLVING INDUSTRY PRACTICES OR
DEVELOPMENTS IN THE REGULATORY ENVIRONMENT, AND (C) SUMMARIZES ANY APPARENT
VIOLATIONS OF THIS CODE OVER THE PAST YEAR AND ANY SANCTIONS IMPOSED BY XXXX
XXXXXX IN RESPONSE TO THOSE VIOLATIONS, INCLUDING ANY ADDITIONAL ACTION
TAKEN BY THE AUDIT COMMITTEE OF EACH OF THE FUNDS WITH RESPECT TO ANY SUCH
VIOLATION.
THE AUDIT COMMITTEE OF EACH OF THE FUNDS AND THE GENERAL COUNSEL OF LORD
XXXXXX MAY DETERMINE IN PARTICULAR CASES THAT A PROPOSED TRANSACTION OR
PROPOSED SERIES OF TRANSACTIONS DOES NOT CONFLICT WITH THE POLICY OF THIS
CODE AND EXEMPT SUCH TRANSACTION OR SERIES OF TRANSACTIONS FROM ONE OR MORE
PROVISIONS OF THIS CODE.
VIII. WHISTLEBLOWER PROCEDURES
________________________
ANY LORD XXXXXX EMPLOYEE MAY REPORT, EITHER VERBALLY OR IN WRITING,
COMPLAINTS AND ANY OTHER CONCERNS REGARDING INSTANCES OF CORPORATE FRAUD,
INTERNAL CONTROLS, VIOLATIONS OF LAW OR UNETHICAL BUSINESS CONDUCT ON A
CONFIDENTIAL BASIS TO XXXXX XXXXXXXX, PARTNER, HUMAN RESOURCES. COMPLAINTS
AND CONCERNS RELATED TO THE ABOVE ITEMS MAY BE REVIEWED WITH XXXX XXXXXX'X
MANAGING PARTNER OR GENERAL COUNSEL AND MAY BE DISCLOSED TO THE AUDIT
COMMITTEES OF THE FUNDS. CONFIDENTIALITY WILL BE MAINTAINED TO THE EXTENT
POSSIBLE TO CONDUCT AN APPROPRIATE REVIEW.
ANY LORD XXXXXX EMPLOYEE WHO MAKES A GOOD FAITH REPORT OF THE TYPE DESCRIBED
ABOVE WILL NOT BE DISCHARGED, SUSPENDED, HARASSED, OR RETALIATED AGAINST AS
A RESULT OF SUBMITTING SUCH COMPLAINT OR CONCERN.
IX. DEFINITIONS
___________
"COVERED PERSON" MEANS ANY OFFICER, DIRECTOR, TRUSTEE, DIRECTOR OR EMPLOYEE
OF ANY OF THE FUNDS AND ANY PARTNER OR EMPLOYEE OF XXXX XXXXXX. (SEE ALSO
DEFINITION OF "BENEFICIAL OWNERSHIP.")
"EXCEPTED SECURITIES" ARE BANKERS' ACCEPTANCES, BANK CERTIFICATES OF
DEPOSIT, COMMERCIAL PAPER, AND OTHER HIGH QUALITY SHORT-TERM DEBT
INSTRUMENTS, INCLUDING REPURCHASE
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
7
AGREEMENTS, SHARES OF MONEY MARKET FUNDS, SHARES OF OTHER U.S. REGISTERED
OPEN-END INVESTMENT COMPANIES (OTHER THAN THE LORD XXXXXX FUNDS OR OTHER
FUNDS FOR WHICH LORD XXXXXX ACTS AS THE INVESTMENT ADVISER OR SUB-ADVISER)
AND DIRECT OBLIGATIONS OF THE U.S. GOVERNMENT. TRANSACTIONS IN EXCEPTED
SECURITIES DO NOT REQUIRE PRIOR APPROVAL OR REPORTING. PLEASE NOTE THAT
SHARES OF CLOSED-END INVESTMENT COMPANIES, EXCHANGE TRADED UNIT-INVESTMENT
TRUSTS ("UITS") AND EXCHANGE TRADED FUNDS ("ETFS") ARE ALL TREATED AS COMMON
STOCK UNDER THE CODE. ALSO PLEASE NOTE THAT THE EXCEPTION FOR OTHER MUTUAL
FUNDS INCLUDES ONLY OPEN-END FUNDS REGISTERED IN THE U.S., AND THAT
TRANSACTIONS AND HOLDINGS IN OFFSHORE FUNDS ARE REPORTABLE. IN ADDITION,
EQUITY SECURITIES ISSUED BY U.S. GOVERNMENT AGENCIES, AUTHORITIES OR
INSTRUMENTALITIES ARE NOT CONSIDERED "EXCEPTED SECURITIES."
"EXCEPTED TRANSACTIONS" MEANS TRANSACTIONS IN THE SHARES OF THE LORD XXXXXX
FUNDS OR OTHER MUTUAL FUNDS FOR WHICH LORD XXXXXX ACTS AS THE INVESTMENT
ADVISER OR SUB-ADVISER; TRANSACTIONS IN DEBT SECURITIES ISSUED BY U.S.
GOVERNMENT AGENCIES, AUTHORITIES OR INSTRUMENTALITIES; SECURITIES ACQUIRED
THROUGH TENDER OFFERS OR SPIN-OFFS; SECURITIES RECEIVED DUE TO A MERGER OR
ACQUISITION; THE SALE OF 300 SHARES OR LESS OF A S&P 500 STOCK; AND ANY
SECURITIES PURCHASED THROUGH AN AUTOMATIC INVESTMENT PLAN, SUCH AS DIVIDEND
REINVESTMENT PROGRAMS ("DRIPS") AND/OR EMPLOYEE STOCK OWNERSHIP PLANS
("ESOPS"). PLEASE NOTE THAT ANY SALES MADE FROM DRIPS AND/OR ESOPS REQUIRE
_____
PRE-APPROVAL AS DESCRIBED IN SECTION III OF THIS CODE./3/
"OUTSIDE DIRECTORS AND TRUSTEES" ARE DIRECTORS AND TRUSTEES WHO ARE NOT
"INTERESTED PERSONS" AS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED.
"SECURITY" MEANS ANY STOCK, BOND, DEBENTURE OR IN GENERAL ANY INSTRUMENT
COMMONLY KNOWN AS A SECURITY AND INCLUDES A WARRANT OR RIGHT TO SUBSCRIBE TO
OR PURCHASE ANY OF THE FOREGOING AND ALSO INCLUDES THE WRITING OF AN OPTION
ON ANY OF THE FOREGOING.
"BENEFICIAL OWNERSHIP" IS INTERPRETED IN THE SAME MANNER AS IT WOULD BE
UNDER SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 16A-1
THEREUNDER. ACCORDINGLY, "BENEFICIAL OWNER" INCLUDES ANY COVERED PERSON WHO,
DIRECTLY OR INDIRECTLY, THROUGH ANY CONTRACT, ARRANGEMENT, UNDERSTANDING,
RELATIONSHIP OR OTHERWISE, HAS OR SHARES A DIRECT OR INDIRECT PECUNIARY
INTEREST (I.E., THE ABILITY TO SHARE IN PROFITS DERIVED FROM SUCH SECURITY)
IN ANY EQUITY SECURITY, INCLUDING:
(I) SECURITIES HELD BY A PERSON'S IMMEDIATE FAMILY SHARING THE
SAME HOUSE (WITH CERTAIN EXCEPTIONS);
(II) A GENERAL PARTNER'S INTEREST IN PORTFOLIO SECURITIES HELD BY A
GENERAL OR LIMITED PARTNERSHIP;
(III) A PERSON'S INTEREST IN SECURITIES HELD IN TRUST AS TRUSTEE,
BENEFICIARY OR SETTLOR, AS PROVIDED IN RULE 16A-8(B); AND
--------
/3/ Excepted Transactions do not require prior approval, but all Excepted
Transactions are subject to the reporting requirements of Section IV and
VI. No report, however, is required with respect to transactions effected
pursuant to an automatic investment plan, such as DRIPs and ESOPs, except
that any transaction that overrides the pre-set schedule or a pre-existing
allocation of the automatic investment plan must be included in the next
Personal Securities Transaction Reporting Form filed following that
transaction.
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
8
(IV) A PERSON'S RIGHT TO ACQUIRE SECURITIES THROUGH OPTIONS, RIGHTS
OR OTHER DERIVATIVE SECURITIES.
"FEDERAL SECURITIES LAWS" INCLUDE THE SECURITIES ACT OF 1933, THE SECURITIES
EXCHANGE ACT OF 1934, THE XXXXXXXX-XXXXX ACT OF 2002, THE INVESTMENT COMPANY
ACT OF 1940, THE INVESTMENT ADVISERS ACT OF 1940, TITLE V OF THE XXXXX-XXXXX
XXXXXX ACT, AND ANY RULES ADOPTED BY THE SEC UNDER ANY OF THOSE STATUTES,
THE BANK SECRECY ACT AS IT APPLIES TO MUTUAL FUNDS AND INVESTMENT ADVISERS,
AND ANY RULES ADOPTED THEREUNDER BY THE SEC OR THE DEPARTMENT OF THE
TREASURY. A BRIEF SUMMARY OF THE REQUIREMENTS OF THOSE LAWS AS THEY APPLY TO
MUTUAL FUNDS AND INVESTMENT ADVISERS IS ATTACHED TO THIS CODE AS EXHIBIT 1.
"GENDER/NUMBER" WHENEVER THE MASCULINE GENDER IS USED IN THIS CODE, IT
INCLUDES THE FEMININE GENDER AS WELL, AND THE SINGULAR INCLUDES THE PLURAL
AND THE PLURAL INCLUDES THE SINGULAR, UNLESS IN EACH CASE THE CONTEXT
CLEARLY INDICATES OTHERWISE.
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
9
EXHIBIT 1
TO CODE OF ETHICS
--------------------------------------------------------------------------------
The Code of Ethics requires that all Covered Persons must comply with the
Federal Securities Laws. Brief summaries of these laws are set forth below.
I. THE SECURITIES ACT OF 1933 ("1933 ACT")
_______________________________________
The 1933 Act governs the public offering of securities of mutual funds and
other issuers, and establishes civil liability for false or misleading
activities during such offerings. This law was enacted "to provide full and
fair disclosure of the character of securities sold in interstate and
foreign commerce" and to prevent related frauds. Thus, the 1933 Act requires
mutual funds and other public issuers to register their securities with the
SEC. This process requires disclosures to the SEC and investors of
information relating to the issuer, the securities and other matters. The
1933 Act provides a specific civil remedy for purchasers of securities
offered by a materially false or misleading registration statement. A
registration statement is false or misleading if it contains "an untrue
statement of material fact or omit[s] to state a material fact required to
be stated therein, or necessary to make the statements therein not
misleading."
II. THE SECURITIES EXCHANGE ACT OF 1934 ("1934 ACT")
________________________________________________
The 1934 Act regulates various organizations involved in the offer, sale and
trading of securities. It regulates, among others, broker-dealers such as
Xxxx Xxxxxx Distributor. The 1934 Act accomplishes its goals in large part
by requiring that these regulated organizations register with the SEC and
subjects them to regular reporting requirements and examinations by the SEC.
The 1934 Act includes anti-fraud provisions that make it unlawful for any
person, among other actions, to directly or indirectly: (1) employ any
device, scheme, or artifice to defraud; (2) make any untrue statement of a
material fact or to omit to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they were
made, not misleading; or (3) engage in any act, practice, or course of
business which operates or would operate as a fraud or deceit upon any
person, in connection with the purchase or sale of any security.
III. THE INVESTMENT COMPANY ACT OF 1940 ("1940 ACT")
______________________________________________
The 1940 Act regulates mutual funds as well as their investment advisers and
principal underwriters. The 1940 Act was designed "to mitigate and, so far
as is feasible, to eliminate" various abuses involving mutual funds,
including: (1) inadequate, inaccurate or unclear disclosure with respect to
a mutual fund and its securities; (2) self-dealing by insiders; (3) the
issuance of securities with inequitable terms that fail to protect the
privileges and preferences of outstanding security holders; (4) inequitable
methods of control and irresponsible management; and (5) unsound or
misleading accounting methods. The 1940 Act seeks to accomplish the
foregoing goals by, among other things: (1) establishing registration and
reporting requirements; (2) prohibiting various affiliated transactions;
(3) regulating the sale and redemption of mutual fund shares;
(4) establishing special corporate governance standards relating to the
composition
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
10
and activities of mutual fund boards of directors; and (5) providing the SEC
with extensive inspection and enforcement powers.
IV. THE INVESTMENT ADVISERS ACT OF 1940 ("ADVISERS ACT")
___________________________________________________
The Advisers Act regulates investment advisers. Xxxx Xxxxxx is registered as
an investment adviser. Among other matters, the Advisers Act regulates the
fee arrangements and certain other contract terms of an investment advisory
agreement. The Act also prohibits advisers from engaging in any conduct that
would defraud their clients. Xxxx Xxxxxx has a fiduciary duty to act in the
best interests of its clients. The SEC has construed this fiduciary duty
broadly and applies the Act's anti-fraud prohibition aggressively to protect
clients.
V. THE XXXXXXXX-XXXXX ACT OF 2002 ("XXXXXXXX-XXXXX ACT")
____________________________________________________
The Xxxxxxxx-Xxxxx Act implemented new corporate disclosure and financial
reporting requirements by, among other actions, creating a new oversight
board for the accounting profession, mandating new measures to promote
auditor independence, adding new disclosure requirements for investment
companies and other public companies, and strengthening criminal penalties
for securities fraud. This statute was adopted in direct response to
widespread corporate scandals at public corporations that manifested a lack
of adequate internal controls and oversight.
VI. THE XXXXX-XXXXX-XXXXXX ACT (THE "ACT")
_____________________________________
In relevant part, the Act requires financial institutions to comply with
certain privacy requirements regarding personal information relating to
their customers. The Act requires the SEC to establish for financial
institutions (including investment companies, investment advisers and
broker-dealers) appropriate standards to protect customer information. The
Act and the SEC's privacy rules have three primary purposes: (1) to require
financial institutions to notify consumers of their privacy policies and
practices; (2) to describe the circumstances under which financial
institutions may disclose non-public personal information regarding
customers to unaffiliated third parties; and (3) to provide a method for
customers to opt out of such disclosures, subject to certain exceptions.
Xxxx Xxxxxx has implemented policies, procedures and training to protect the
integrity and privacy of its clients' information.
VII. THE BANK SECRECY ACT
____________________
The USA PATRIOT Act of 2001 (the "Act") amended the Bank Secrecy Act to
include mutual funds among the types of financial institutions that are
required to establish anti-money laundering compliance programs. The Act
requires all such institutions to develop and institute anti-money
laundering programs that, at a minimum: (1) include internal policies,
procedures, and controls; (2) designate a compliance officer to administer
and oversee the program; (3) provide for ongoing employee training; and
(4) include an independent audit function to test the program. The Lord
Xxxxxx Funds and Xxxx Xxxxxx have adopted an anti-money laundering
compliance program designed to meet these requirements.
Lord, Xxxxxx & Co. Code of Ethics--, Octomber 24, 2006
11
