Personal Securities Trading
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1 Personal Securities Trading
Firm personnel may invest for their own accounts or have a financial interest in the same securities or other investments that the firm recommends to its clients and may engage in transactions that are the same as transactions recommended to or made for client accounts involving reportable securities. Such transactions are typically permitted but may require to be pre-cleared and reported in compliance with the firm’s policy on personal securities.
Reports of personal transactions in securities by firm personnel are reviewed by the CCO quarterly or more frequently if deemed appropriate. In an effort to reduce or eliminate certain conflicts of interest, the firm may choose to create a list of securities that restricts APs from trading or purchasing (i.e., restricted list).
Except for the senior-most firm officer, no AP may pre-clear their own trades, review their own required reports, or otherwise serve as the final point of review of their own actions involving such activity.
1.1 Personal Trading Restrictions
1.1.1 Trading Pre-Clearance
APs are required to pre-clear all personal securities transactions involving restricted securities through the CCO or designee prior to the transaction, with the following exceptions:
Purchases which are part of a dividend reinvestment plan (DRIP); or
Any acquisition of a security through stock dividends, dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs or similar corporate reorganization or distributions generally applicable to all holders of the same class of securities and without any investment decisions being taken by the AP.
This obligation applies to transactions in which the AP has either direct or beneficial ownership. The clearance will be effective through the end of the business day on which it was granted and is automatically revoked if the AP or CCO discovers that the information provided at the time the personal trade was approved is no longer accurate.
Pre-clearance will be granted when there are no active client orders in the market in the restricted security and there are no violations of the firm’s policy involving personal security transactions.
1.1.2 Restricted Securities
Restricted securities are defined as all publicly traded debt and equity securities, derivatives of and securities exchangeable into publicly traded debt and equity securities (options, warrants, convertibles, etc.), as well as IPOs, ETFs, ETNs, and limited offerings; with the following Reporting Exceptions:
US Treasury securities
bankers’ acceptances
certificates of deposit (CDs)
repurchase agreements
commercial paper
open end mutual funds (including all money market funds) and variable insurance contracts held directly with the issuer (aka. “fund-direct” or “subscription way” securities)
Restricted Period: The price paid or received by a client account for any restricted security should not be adversely affected by an AP buying or selling the same restricted security on the same day. Therefore, APs may possibly not be allowed to trade a restricted security on the same day as a client unless the trade is part of a block (aggregated) trade executed by the firm. Furthermore, when the firm has an open order for the purchase or sale of a restricted security for any of its clients, APs may possibly not be allowed to affect personal transactions in such a restricted security until the day after the client’s order is completely filled, unless the trade is part of a block (aggregated) trade executed by the firm.
Short Swing Profits: APs may not profit from the purchase and sale or sale and purchase of the same restricted security within 30 calendar days. Nothing in this restriction shall be deemed to prohibit the avoidance of loss through trading within a period shorter than 30 calendar days.
Exceptions: Exceptions must be requested of and approved by the CCO, in writing, and are typically only granted for the execution of a closing position involving a derivative product (i.e., option, warrant, etc.) where the AP has held a position in such a product for more than 30 calendar days (in the event of a gain) and where the product will expire concurrent with or before the end of the restricted period.
1.2 Securities Holdings Reports
Initial Holdings Report*
Except as noted below (see Reporting Exceptions), APs will report to the CCO within 10 days of hiring or before opening an account thereafter with the following initial holdings information (which must be current within 30 days prior to be provided) involving:
Name of each custodian, broker/dealer or bank the AP maintains an account where any securities were held for the direct or indirect benefit of the AP.
Account number and type registration (individual, joint, etc.) for each AP account.
Type of securities (equities/debt), number of shares or principal amount of each security the AP has had either direct or indirect beneficial ownership.
Date the report was submitted by the AP.
Quarterly Reports*
Except as otherwise noted (see Reporting Exceptions), every AP will report, no later than 30 days following the end of each calendar quarter, to the CCO the following:
With respect to transactions in any security in which any AP has, or by reason of such transactions acquires, any direct or indirect ownership in the security involved;
Date of transaction, title and type of securities, interest rate and maturity date (if applicable), and number of shares (equities) or principal amount (debt securities) of each security involved.
Nature of transaction (purchase, sale or any other type of acquisition or disposition).
Price of security at which the transaction was effected.
Name of the custodian, broker/dealer or bank through which the transaction occurred.
Date the report was submitted by/for the AP.
With respect to any account established by the AP in which any securities were held during the quarter for the direct or indirect benefit of the AP:
Name of the custodian, broker/dealer or bank with whom the account was established.
Date the account was established.
Date the report was submitted by/for the AP.
Annual Holdings Reports*
Except as otherwise provided below (see Reporting Exceptions), each AP will report to the CCO no later than 30 days following the end of the calendar year:
Name of each custodian, broker/dealer or bank the AP maintains an account where any securities were held for the direct or indirect benefit of the AP.
Account number and type registration (individual, joint, etc.) for each AP account.
Type of securities (equities/debt), number of shares or principal amount of each security the AP has had either direct or indirect beneficial ownership.
Date the report was submitted by the AP.
*NOTE: A lack of a transaction report submission by an AP will be interpreted as a lack of any transaction during the period. Should it later be determined that a transaction in fact occurred, the AP will be referred to the CCO.
1.3 Review of Transactions / Brokerage Accounts
On no less than a quarterly basis, the CCO or qualified designee will review AP accounts and transactions of the firm’s APs and any required related parties (i.e., certain immediate family members) the CCO has determined must provide such reports. The report review will be conducted to determine indications of potential conflicts of interest, insider trading activity, or other activity that may be considered inconsistent with firm policy.
The CCO or designee will retain copies of the account statements reviewed as documentary evidence of the completion of this review for a period of five years following termination of the account or the AP/related person’s relationship with the firm. The CCO or qualified designee’s review of an individual’s brokerage account(s) held at the firm’s custodian of record will also be deemed to include the “transaction” review.