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Personal Securities Trading Policy

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Personal Securities Trading Policy
Compliance
I-A-045
December 1, 2014
Applicable to: All BNY Mellon employees
I-A-045: Personal Securities Trading Policy
Table of Contents
A.
Introduction/Purpose .........................................................................................1
B.
Applicability and Scope .....................................................................................1
C.
Policy Details/Discussion...................................................................................1
1.
General Requirements ..................................................................................................... 1
2.
Additional Requirements .................................................................................................. 3
3.
Compliance with this Policy ............................................................................................. 3
4.
Reporting Violations ......................................................................................................... 4
5.
Policy Administration ........................................................................................................ 4
D.
Roles and Responsibilities ................................................................................4
1.
Ethics Office ..................................................................................................................... 4
2.
Function-Level Compliance Unit ...................................................................................... 5
3.
Business Management .................................................................................................... 5
4.
Legal Department............................................................................................................. 6
5.
Technology Department ................................................................................................... 6
6.
Investment Ethics Council (IEC) ...................................................................................... 6
E.
Questions ..........................................................................................................6
F.
Ownership .........................................................................................................6
G.
Related Policies ................................................................................................6
H.
Revision History ................................................................................................6
Appendix A: Requirements for Monitored Employees ................................................. 7
A.
Monitored Personal Trading Activity .................................................................. 7
B.
PTA Reporting...................................................................................................7
1.
Initial Reporting ................................................................................................................ 7
2.
Annual Reporting ............................................................................................................. 7
C.
Updating PTA ....................................................................................................7
1.
New Accounts .................................................................................................................. 7
2.
Gifts and Inheritances ...................................................................................................... 8
3.
Updating Holdings ............................................................................................................ 8
D.
Approved Broker-Dealers ..................................................................................8
E.
Account Statements and Trade Confirmations .................................................. 8
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I-A-045: Personal Securities Trading Policy
F.
Classification-Specific Requirements................................................................. 8
G.
Summary...........................................................................................................8
Appendix B: Requirements for ADM Employees .......................................................... 9
A.
Proprietary Funds ..............................................................................................9
B.
PTA Reporting...................................................................................................9
C.
Preclearing Trades in PTA ................................................................................9
1.
De Minimis Transactions .................................................................................................. 9
2.
Proprietary Fund Transactions in the Company’s 401(k) plan ...................................... 10
D.
Profit Disgorgement on Short-Term Trading .................................................... 10
E.
Initial Public Offerings...................................................................................... 10
F.
Private Placements ......................................................................................... 11
1.
Acquisition ...................................................................................................................... 11
2.
Approval Considerations ................................................................................................ 11
3.
Approval to Continue to Hold Existing Investments ....................................................... 11
G.
Additional Reporting Requirements for ADM Employees ................................. 11
1.
Special Purpose ADM Quarterly Securities Report ....................................................... 11
2.
Contemporaneous Disclosure........................................................................................ 11
H.
Restrictions for ADM Employees ..................................................................... 13
I.
Additional Requirements for Micro-Cap ADM (MCADM) Employees ONLY..... 13
1.
Transactions and Holdings in Micro-Cap Securities ...................................................... 13
2.
Requirement for Newly Designated MCADM Employees ............................................. 13
Appendix C: Additional Requirements for Investment Employees .............................. 14
A.
Proprietary Funds ............................................................................................ 14
B.
PTA Reporting................................................................................................. 14
C.
Preclearing Trades in PTA .............................................................................. 14
1.
De Minimis Transactions ................................................................................................ 14
2.
Proprietary Fund Transactions in the Company’s 401(k) plan ...................................... 15
D.
Profit Disgorgement on Short-Term Trading .................................................... 16
Appendix D: Requirements for Insider Risk, Fund Service, Service, and Fund Officer
Employees .................................................................................................................17
A.
Insider Risk Employees ................................................................................... 17
1.
Exempt Securities .......................................................................................................... 17
2.
Preclearing Trades in PTA ............................................................................................. 17
B.
Fund Officer, Fund Service, and Service Employees....................................... 17
1.
Company Oversight ....................................................................................................... 17
2.
Quarterly Reporting in PTA – For Fund Officer Employees and non-U.S.-based Fund
Service Employees Only ............................................................................................... 17
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I-A-045: Personal Securities Trading Policy
Appendix E: Requirements for PREG Employees ...................................................... 19
A.
Exempt Securities ........................................................................................... 19
B.
Preclearing Trades in PTA .............................................................................. 19
C.
Trading in Company Securities ....................................................................... 19
1.
General Restrictions ...................................................................................................... 19
2.
Company 401(k) Plan .................................................................................................... 19
3.
Company Employee Stock Options ............................................................................... 19
4.
Company Employee Stock Purchase Plan (ESPP) ....................................................... 19
5.
Blackout Period Trading Implications Profit Disgorgement/Loss Recognition ............... 20
Appendix F: Trade Preclearance Requirements......................................................... 21
A.
General Preclearance Requirements............................................................... 21
1.
Obtain Preclearance Prior to Initiating a Transaction .................................................... 21
2.
Execute Trade Within Preclearance Window (Preclearance Expiration)....................... 21
3.
Exemptions from the Requirement to Preclear .............................................................. 21
B.
Preclearance Rules for Company Stock in Retirement and Benefit Plans ....... 22
1.
Company 401(k) Plan .................................................................................................... 22
2.
Company Employee Stock Options ............................................................................... 22
3.
Company Restricted Stock/Units ................................................................................... 23
4.
Company Employee Stock Purchase Plan (ESPP) ....................................................... 23
Appendix G: Summary of Select Policy Requirements by Employee Classification .... 24
Appendix H: Definitions.............................................................................................. 26
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I-A-045: Personal Securities Trading Policy
A. Introduction/Purpose
Employees or other supervised persons (as defined in the Investment Advisers Act of 1940 –
the “Advisers Act”) of the Bank of New York Mellon Corporation and its subsidiaries (the
“Company”) are subject to certain laws and/or regulations governing personal securities
trading, including the securities laws of various jurisdictions, Rule 204A-1 of the Advisers Act,
and Rule 17j-1 of the Investment Company Act of 1940. In order to ensure that all employees’
personal investments are free from conflicts of interest and are in full compliance with the laws
and regulations of all jurisdictions in which the Company does business, the Company has
established limitations on personal trading. This policy describes the requirements and
restrictions related to personal securities transactions.
B. Applicability and Scope
All employees of the Company that are deemed to be controlled by the Company or have
otherwise agreed to be bound by its provisions are subject to this policy. This includes all fulltime and part-time, benefited and non-benefited, and exempt and non-exempt employees. The
policy’s applicability to consultants and contract or temporary employees (including interns) is
determined on a case-by-case basis.
C. Policy Details/Discussion
1. General Requirements
The following general requirements apply to all employees of the Company. In addition to
the below standards of conduct, employees must also comply with any additional
requirements as described in the next section of this policy (See Additional Requirements).
a) Fiduciary Duty
In some circumstances, the Company and its employees may owe a fiduciary duty to a
client. Among the duties that an employee owes a client when acting as a fiduciary on
their behalf is not to engage in personal securities transactions that may be deemed to
take inappropriate advantage of his/her position in relation to that client. You must be
mindful of this obligation, use your best efforts to honor it, and report promptly to the
Ethics Office and your Compliance Officer any Company employee that fails to meet
this obligation. With respect to the potential conflicts of interest that personal securities
trading activity or other actions may engender, please also refer to the Company’s
Code of Conduct and the policy on Business Conflicts of Interest (Corporate Policy I-A035).
b) Protecting Material Nonpublic Information and Compliance with
Securities Laws
In carrying out your job responsibilities, you must, at a minimum, comply with all
applicable legal requirements and securities laws. As an employee, you may receive
information about the Company, its clients, or other parties that for various reasons
must be treated as confidential. With respect to these parties, you are not permitted to
divulge to anyone (except as may be permitted by your business and in accordance
with approved procedures) current portfolio positions (different rules will determine
what is deemed to be “current”), current or anticipated portfolio transactions, or
programs or studies of the Company or any client. You must comply with measures in
place to preserve the confidentiality of information. Refer to the Company’s Code of
Conduct for additional guidance.
Securities laws generally prohibit the trading of securities while aware of material
nonpublic information (MNPI) regarding the issuer of those securities and/or about the
portfolio holdings, transactions or recommendations with respect to fiduciary accounts;
this is generically known as “insider trading.” Any person who passes along material
nonpublic information upon which a trade is based (“tipping”) may also be liable.
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I-A-045: Personal Securities Trading Policy
Employees who possess material nonpublic information about an issuer of securities
(whether that issuer is the Company, another company, a client or supplier, any fund
or other issuer) must not trade in that issuer’s securities, either for their own accounts
or for any account over which they exercise investment discretion. Refer to the
Company’s Securities Firewalls Policy (Corporate Policy I-A-046) for guidance in
determining when information is material and/or nonpublic and how to handle such
information.
c) Trading in BNY Mellon Securities
All employees who trade in Company securities must be aware of their responsibilities
to the Company and must be sensitive to even the appearance of impropriety. The
following restrictions apply to all transactions in the Company’s publicly traded
securities, whether owned directly (i.e., in your name) or indirectly (see indirect
ownership in Appendix H, Definitions).
•
Short Sales – You are prohibited from engaging in short sales of Company
securities.
•
Short-Term Trading – You are prohibited from purchasing and selling or from
selling and purchasing any Company securities within any 60 calendar day
period. In addition to other potential sanctions, you will be required to disgorge
any profits on such short-term trades as calculated in accordance with
procedures established by the Ethics Office.
•
Margin Transactions – You are prohibited from purchasing Company
securities on margin; however, you may use Company securities to
collateralize full-recourse loans for non-securities purposes or for the
acquisition of securities other than those issued by the Company.
•
Option Transactions – You are prohibited from engaging in any derivative
transaction involving or having its value based upon any securities issued by
the Company (or the values thereof), including the buying and writing of overthe-counter and exchange traded options.
•
Major Company Events – You are prohibited from transacting in the
Company’s securities if you have knowledge of major Company events that
have not been publicly announced. This prohibition expires 24 hours after a
public announcement is made.
d) Trading in Non-Company Securities
You must be sensitive to any impropriety in connection with your personal securities
transactions in securities of any issuer, including those owned indirectly (see indirect
ownership in Appendix H, Definitions). You must refer to the Company’s Code of
Conduct for employee investment restrictions with parties that do business with the
Company. In addition, you are prohibited from front running and scalping.
e) Spread Betting
Taking bets on securities pricing to reflect market movements activities as a
mechanism for avoiding the preclearance restrictions on personal securities trading
arising under the provisions of this policy is prohibited. Such transactions themselves
constitute transactions in securities for the purposes of the policy and are subject to all
of the provisions applicable to other non-exempted transactions.
f) Initial Public Offerings
You are prohibited from acquiring securities through an allocation by the underwriter of
an initial public offering (IPO) without the prior approval of the Ethics Office or, in some
cases, the Investment Ethics Council (IEC). Approval is only given when the allocation
comes through an employee of the issuer, who has a direct family relationship to the
BNY Mellon employee. Approval may not be available to employees of registered
December 1, 2014
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I-A-045: Personal Securities Trading Policy
broker-dealers due to certain laws and regulations (e.g., FINRA rules in the U.S.). If
you have any questions as to whether a particular offering constitutes an IPO, consult
the Ethics Office before submitting an indication of interest to purchase the security.
g) Private Placements
•
Acquisition – You are prohibited from acquiring any security in a private
placement unless you obtain prior written approval from the Ethics Office, your
Compliance Officer, and the Operating Committee member who represents
your business or department. In some cases, employees may be required to
receive prior written approval from the IEC. In order to receive approval,
employees must complete and submit to the Ethics Office the Private
Placement Request Form, which can be found on MySource or can be
obtained by sending an email to the Securities Trading Policy Help Line at
securitiestradingpolicyhelp@bnymellon.com.
•
Subsequent Actions – Should you participate in any subsequent
consideration of credit for the issuer or of an investment in the issuer for an
advised account, you are required to disclose your investment to your
Compliance Officer. The decision to transact in such securities for an advised
account is subject to independent review.
2. Additional Requirements 1
This policy imposes additional requirements and limitations on employees based on the
nature of their job activities; therefore, each employee is assigned a classification.
Classification assignments are the responsibility of business/functional-level compliance
and business management, in consultation with the Ethics Office. The Ethics Office notifies
employees of their designation into one or more of the following classifications:
Access Decision Maker (ADM) Employee*
Dreyfus/FINRA Employee*
Investment Employee*
Pre-Release Earning Group (PREG) Employee*
Insider Risk Employee*
Fund Officer*
Fund Service Employee*
Non-Classified Employee
Service Employee*
3. Compliance with this Policy
Generally, as an employee of the Company, you may be held personally liable for any
improper or illegal acts committed during the course of your employment; non-compliance
with this policy may be deemed to encompass one of these acts. Accordingly, you must
read this policy and comply with the spirit and the strict letter of its provisions. Failure to
comply may result in the imposition of serious sanctions, which may include, but are not
limited to, the disgorgement of profits, cancellation of trades, selling of positions,
suspension of personal trading privileges, dismissal, and referral to law enforcement or
regulatory agencies.
The provisions of the policy have worldwide applicability and cover trading in any part of
the world, subject to the provisions of any controlling local law. To the extent any particular
portion of the policy is inconsistent with, or in particular less restrictive than such laws, you
must consult with the Manager of the Ethics Office.
1
With the exception of Non-Classified Employees, employees in all other classifications are considered to
be “Monitored Employees” [denoted by an (*)]. Due to the nature of their job activities and in addition to
the General Requirements of this policy, Monitored Employees are also subject to the requirements listed
in Appendix A (Requirements for Monitored Employees). Non-Classified Employees do not have any
additional requirements.
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I-A-045: Personal Securities Trading Policy
4. Reporting Violations
To report a known or suspected violation of this policy, immediately contact the Ethics
Office or your Compliance Officer. You may also report known or suspected violations
anonymously through BNY Mellon’s Ethics Help Line or Ethics Hot Line.
5. Policy Administration
Various departments, business units, teams, and employees within the Company are
responsible for managing, overseeing, and/or providing support for the administration of
this policy. The specific responsibilities and procedural requirements for these various
administrators are described in Section D.
D. Roles and Responsibilities
1. Ethics Office
The Corporate Ethics Office, led by the Chief Compliance and Ethics Officer (CCEO),
must:
•
Develop, interpret and administer the Policy. (Note: Amendments of the policy will
be made, or waivers of its terms will be granted, at the discretion of the Manager of
the Ethics Office only and with the concurrence of other officers or directors of the
Company, where required (e.g., U.S. mutual fund directors). Any waiver or
exemption must be evidenced in writing to be official.)
•
Maintain the following records in a readily accessible place, for five years from
their creation (unless otherwise noted below):






A copy of each version of the Policy, including amendments, in existence for
any period of time;
A record of any violation of the Policy and any action taken as a result of such
violation for five years from the end of the fiscal year in which the violation
occurred;
A record of acknowledgement of receipt of the Policy by each person who
currently, or at any time in the prior five years, was required to receive a copy
pursuant to some law, rule, or regulation;
All holdings or transaction reports made pursuant to the terms of the Policy
(only the past two years in a readily accessible place);
A list of names and designations of all employees of the company who are
designated as “supervised persons” of an SEC Registered Investment Advisor;
A record of any decision and supporting reasons for approving the acquisition
of securities by personnel subject to the Policy in limited offerings.
•
Identify all Compliance Officers who are responsible for reviewing employee
reports and other records.
•
Set standards for compliance monitoring and testing of compliance with this Policy.
•
Maintain electronic systems to support personal trading and ensure system
enhancements are properly controlled and tested prior to implementation.
•
Provide training during major acquisitions, significant system implementations or
modifications.
•
Use their best efforts to assure that requests for preclearance, personal securities
transaction reports and reports of securities holdings are treated as “personal and
confidential.” (The company may be required by law to review, retain, and in some
circumstances, disclose such documents. Therefore, such documents must be
available for inspection by appropriate regulatory agencies and by other parties
within and outside the Company as are necessary to evaluate compliance with or
sanctions under the Policy or other requirements applicable to the Company.)
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I-A-045: Personal Securities Trading Policy
•
Oversee the activities of the IEC.
•
Determine appropriate sanctions for Policy violations and maintain a record of all
such sanctions.
•
Maintain a list (the “Restricted List”) of companies whose securities employees in
their line of business or firm are restricted from trading for various reasons. Such
trading restrictions may be appropriate to protect the Company and its employees
from potential violations, or the appearance of violations, of securities laws. This
list must not be distributed outside of the Compliance Office or Ethics Office and its
contents are confidential.
•
Calculate and collect disgorgements of profits.
•
Ensure an annual certification of compliance with the Policy is collected.
•
Where agreed upon with a line of business or sector, oversee collection of
reporting requirements including obtaining required securities account statements
and trade transaction details, and monitoring to trading to detect violations of
Policy.
•
Oversee approvals of investments in initial public offerings, acquisitions of private
investments, and withdrawal requests for affiliated hedge/private equity funds.
•
Review account documentation to determine if an employee account can be
deemed a non-discretionary (managed) account.
2. Function-Level Compliance Unit
Compliance units at the Function level, under the supervision of Business Compliance
Directors, must:
•
Ensure that employees are properly classified under the Policy, including
consultants, independent contractors and other temporary employees.
•
Provide training to employees on the Policy or various systems utilized for
compliance.
•
Report violations of the Policy to the Ethics Office and to the Board of Directors at
the appropriate investment subsidiary, if necessary.
•
Ensure data required to perform compliance monitoring (e.g. Restricted Lists,
Portfolio Manager Codes, Designated Approvers) is provided to the Ethics Office.
•
Oversee collection of reporting requirements including obtaining required securities
account statements and trade transaction details and monitoring to trading to
detect violations of Policy, unless the Ethics Office is performing those functions
for the line of business.
•
Oversee the timely completion of all required employee reports and certifications.
•
In consultation with business management, construct and provide a list of
securities appropriate for Policy restrictions.
•
Approve requests for investment that have been delegated by Policy or the Ethics
Office to the line of business.
•
Provide timely updates to the list of Proprietary Funds (those that are advised,
subadvised or underwritten by the line of business) to the Ethics Office.
3. Business Management
Management of the company’s business and business partner groups will:
•
Ensure that managers communicate an employee’s classification under this Policy
and that proper training of the Policy requirements has been provided.
December 1, 2014
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I-A-045: Personal Securities Trading Policy
•
In consultation with the function-level compliance unit, construct and provide a list
of securities appropriate for Policy restrictions.
•
Enforce compliance with the Policy.
4. Legal Department
The Legal Department of the company has the following responsibilities:
•
Provide legal analysis of new and revised legislation of all jurisdictions regarding
personal securities trading laws and regulations.
•
Participate in the review of Policy amendments.
5. Technology Department
The Technology Department of the company has the following responsibilities:
•
Provide support for internally hosted applications to ensure systems function
properly, including various files are properly loaded into the system.
•
Develop an alert process to detect any failed or non-received files.
•
Ensure all software updates or hardware installations are adequately tested.
6. Investment Ethics Council (IEC)
The company formed an Investment Ethics Council, which is composed of investment,
legal, risk management, compliance and ethics representatives of the company and its
affiliates. The IEC will:
•
Approve any substantive amendments (along with appropriate concurrence of third
parties) to the Policy
•
Provide interpretive guidance to the Ethics Office when requested
•
Approve/disapprove actions taken in connection with the personal trading activities
of employees subject to the Policy
•
Oversee the personal trading activities of employees designated as ADM
Employees
E. Questions
Questions regarding this policy or personal securities trading must be directed to the Securities
Trading Policy Help Line by phone at 1-800-963-5191 or by email at
securitiestradingpolicyhelp@bnymellon.com. If calling from outside of the United States or
Canada, dial the appropriate international access code and then 1-800-963-5191-2.
F. Ownership
The Ethics Office owns this policy.
G. Related Policies
•
I-A-010: Code of Conduct
•
I-A-035: Business Conflicts of Interest
•
I-A-046: Securities Firewall Policy
H. Revision History
•
December 1, 2014 (Current, reviewed and reformatted)
•
November 2013
December 1, 2014
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I-A-045: Personal Securities Trading Policy
Appendix A: Requirements for Monitored
Employees
In addition to the General Requirements as described in this policy, Monitored Employees (i.e., all
employees excluding Non-Classified Employees) are also subject to the following requirements:
A. Monitored Personal Trading Activity
In order to ensure compliance with securities laws and to avoid even the appearance of a
conflict of interest, the Ethics Office monitors the personal trading activities of Monitored
Employees. Trading is monitored electronically via the Personal Trading Assistant (PTA)
System. The Ethics Office will grant Monitored Employees secure access to the PTA so that
they can fulfill their PTA reporting requirements as described below.
B. PTA Reporting
1. Initial Reporting
Within 10 calendar days of being assigned a classification, you must file an Initial Broker
Accounts Report and an Initial Holdings Report in the PTA. The Initial Broker Accounts
Report must contain a listing of all accounts that trade or are capable of trading securities
(excluding exempt securities) and that are owned directly by you or of which you have
indirect ownership. The Initial Holdings Report must contain a listing of all securities
(excluding exempt securities) held in the aforementioned accounts and any securities
(excluding exempt securities) held outside of these accounts (e.g., physical securities held
in a safe deposit box, paper certificates, etc.). Both the Initial Broker Accounts Report and
the Initial Holdings Report must be an accurate recording of security accounts and security
holdings within the last 45 calendar days after receiving your employee classification.
Note: Monitored Employees are required to report any directly- or indirectly-owned
accounts that have the capability of holding securities (excluding exempt securities),
regardless of what the accounts are currently holding. For example, if an account contains
only exempt securities but has the capability of holding non-exempt securities, the account
must be reported.
2. Annual Reporting
On an annual basis and within 30 calendar days after the end of the year, Monitored
Employees are required to file an Annual Holdings Report in the PTA. The Annual
Holdings Report must contain a current listing of securities (excluding exempt securities)
held in all accounts that trade or are capable of trading securities (excluding exempt
securities) and that are owned directly by you or of which you have indirect ownership.
The Annual Holdings Report must also contain a current listing of securities (excluding
exempt securities) held outside of the aforementioned accounts (e.g., physical securities
held in a safe deposit box, paper certificates, etc.). The securities information included in
the report must be current within 45 calendar days of the date the report is submitted.
Additionally, as part of this annual reporting requirement, Monitored Employees must also
certify that they have read, understand, and complied with this policy.
C. Updating PTA
1. New Accounts
Monitored Employees are responsible for adding to the PTA as soon as possible any new
brokerage accounts that are opened after the Initial Broker Accounts Report has been
submitted. This requirement applies to both accounts that are owned directly by you or of
which you have indirect ownership.
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I-A-045: Personal Securities Trading Policy
2. Gifts and Inheritances
Monitored Employees who give or receive a gift of securities (excluding exempt securities)
or receive an inheritance that includes securities (excluding exempt securities) must report
the activity in the PTA within 10 calendar days. The report must disclose the name of the
person receiving or giving the gift or inheritance, date of the transaction, and name of the
broker through which the transaction was effected (if applicable). A gift of securities must
be one where the donor does not receive anything of monetary value in return.
3. Updating Holdings
You are required to update in the PTA any changes to your securities (excluding exempt
securities) holdings that occur as a result of corporate actions, dividend reinvestments, or
similar activity. These adjustments must be reported as soon as possible, but no less than
annually. Non-U.S.-based Monitored Employees, including Fund Service and Fund Officer
Employees, are required to submit to Local Compliance, upon receipt from their broker,
trade confirmations or contract notes for trades in non-exempt securities.
D. Approved Broker-Dealers
All U.S.-based Monitored Employees must maintain any directly- or indirectly-owned brokerage
accounts at specific broker-dealers that have been approved by the company. Monitored
Employees living outside the U.S. are not subject to this requirement. U.S.-based Monitored
Employees should refer to MySource to obtain the current list of approved broker-dealers. Any
exceptions to this requirement must be approved, in writing, by the Ethics Office.
E. Account Statements and Trade Confirmations
U.S.-based Monitored Employees who receive an exception to the approved broker-dealer
requirement or who are in the process of moving their account(s) to an approved broker-dealer
must instruct their non-approved broker-dealer, trust account manager, or other entity holding
their securities to submit duplicate statements and trade confirmations directly to the company.
Non-U.S.-based Monitored Employees are required to submit their trade confirmations/contract
notes and account statements to their Local Compliance. This requirement applies to both
directly- and indirectly-owned accounts and includes any account that has the capability of
holding securities (excluding exempt securities) regardless of what the account is currently
holding. For securities held outside of an account (such as those held directly with an issuer or
maintained in paper certificate form), Monitored Employees must comply with the company’s
request to confirm transactions and holdings.
F. Classification-Specific Requirements
In addition to the General Requirements of the policy and the preceding Requirements for
Monitored Employees, ADM, Investment, Insider Risk, Fund Service, Service, Fund Officer,
and PREG Employees must also adhere to the requirements of their assigned classification(s).
Employees should refer to Appendices B through E for the specific additional requirements of
their assigned classification(s).
G. Summary
Refer to Appendix G for a summary of select policy requirements by employee classification.
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I-A-045: Personal Securities Trading Policy
Appendix B: Requirements for ADM Employees
In addition to the General Requirements of this policy and the Requirements for Monitored
Employees (Appendix A), employees who are classified as ADM Employees are also subject to the
following requirements:
A. Proprietary Funds
Proprietary Funds are non-exempt securities for ADM Employees. As such, ADM Employees
are required to report in the PTA any Proprietary Funds held in brokerage accounts or directly
with the mutual fund company. A list of Proprietary Funds is published on MySource or can be
obtained by sending an email to the Securities Trading Policy Help Line at
securitiestradingpolicyhelp@bnymellon.com.
B. PTA Reporting
Quarterly Reporting
In addition to the Initial and Annual Reporting that must be completed by all Monitored
Employees, ADM Employees are also subject to Quarterly Reporting. On a quarterly basis and
within 30 calendar days after the end of the quarter, ADM Employees are required to file a
Quarterly Transactions Report in the PTA. The Quarterly Transactions Report must contain the
following:
•
A listing of all transactions in securities (excluding exempt securities) that occurred
throughout the most recent calendar quarter;
•
A current listing of all securities accounts that trade or are capable of trading securities
and that are owned directly by you or of which you have indirect ownership;
•
A current listing of securities (excluding exempt securities) held in the aforementioned
accounts, and;
•
A current listing of securities (excluding exempt securities) held outside of the
aforementioned accounts (e.g., physical securities held in a safe deposit box, paper
certificates, etc.).
All reported information must be current within 45 calendar days of the date the report is
submitted. Additionally, as part of this quarterly reporting requirement, employees must also
certify that they have read, understand, and complied with this policy.
C. Preclearing Trades in PTA
ADM Employees are required to receive preclearance approval in PTA prior to executing
trades in all securities (excluding exempt securities). ADM Employees must preclear trades in
Proprietary Funds. Refer to Appendix F for trade preclearance requirements and see below for
details regarding de minimis transactions and Proprietary Fund transactions in the Company’s
401(k) plan.
1. De Minimis Transactions
ADM Employees will generally not be given preclearance approval to execute a transaction
in any security for which there is a pending buy or sale order for an affiliated account (other
than an index fund) in the business unit where the ADM Employee has access to
information about pending transactions. In certain circumstances, the Preclearance
Compliance Officer may approve certain de minimis transactions even when the firm is
trading such securities. Note: Some ADM Employees who are also Portfolio Managers
may not be eligible for this de minimis exemption. Questions should be directed to the
Preclearance Compliance Officer or the Ethics Office.
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a) Restrictions and Conditions
•
Employee preclearance is required prior to executing the transaction.
•
If the transaction is a 60 day trade, recognized profit disgorgement will be
applicable. (Refer to Section C for information about profit disgorgement on
short-term trades.)
•
Preclearance Compliance Officers are limited to applying this de minimis
standard to only two trades in the securities of any one issuer in each calendar
month.
•
Employees must cooperate with the Preclearance Compliance Officer’s
request to document market capitalization amounts.
b) Transaction Limits
The following transaction limit is available for this de minimis exception: The dollar
value from transacting in 100 shares or $10,000 (whichever value is greater) for
companies with a market capitalization of $5 billion or higher. Note: Currency is listed
in USD. For all other countries, use the local currency’s USD equivalent and/or U.S.
share amount.
2. Proprietary Fund Transactions in the Company’s 401(k) plan
ADM Employees are required in most situations to preclear Proprietary Fund trades.
However, the treatment of Proprietary Fund trades in the company’s 401(k) plan is
dependent upon the type of plan.
a) Non-Self-Directed Accounts (Includes Tier 1 - LifePath Index Funds, Tier
2 - Passively Managed Index Funds, and Tier 3 - Actively Managed Funds)
The movements of balances into or out of Proprietary Funds are deemed to be
purchases or redemptions of those Proprietary Funds for purposes of the holding
period requirement, but are exempt from the general preclearance requirement.
Accordingly, you do not need to preclear these movements, but must get prior
approval from the Preclearance Compliance Officer if it is within 60 calendar days of an
opposite transaction in shares of the same fund. In lieu of transaction reporting,
employees are deemed to consent to the company obtaining transaction information
from plan records. Such movements must be reflected in your holdings reports.
b) Self-Directed Accounts (Tier 4 – Large Selection of Mutual Funds and
Exchange Traded Funds)
Treated like any other Proprietary Fund account. This means that the reporting,
preclearance, and holding period requirements apply.
D. Profit Disgorgement on Short-Term Trading
Any profits recognized from purchasing then selling or selling then purchasing the same or
equivalent (derivative) securities within any 60 calendar day period must be disgorged. For
purposes of disgorgement, profit recognition is based upon the difference between the most
recent purchase and sale prices for the most recent transactions. Accordingly, profit
recognition for disgorgement purposes may differ from the capital gains calculations for tax
purposes. Sixty-day transactions in securities that are exempt from preclearance and trades of
Proprietary Funds held within the BNY Mellon 401(k) will not be subject to disgorgement. The
disposition of any disgorged profits will be at the discretion of the company, and the employee
will be responsible for any tax and related costs.
E. Initial Public Offerings
ADM Employees must obtain approval from the IEC prior to acquiring securities through an
allocation by the underwriter of an initial public offering.
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F. Private Placements
1. Acquisition
ADM Employees must receive approval from the IEC prior to acquiring any security in a
private placement.
2. Approval Considerations
The IEC will generally not approve requests in which any managed fund or account is
authorized to invest within the ADM’s fund complex. The IEC will take into account the
specific facts and circumstances of the request prior to reaching a decision on whether to
authorize a private placement investment. These factors include, among other things,
whether the opportunity is being offered to an individual by virtue of their position with the
company or its affiliates or their relationship to a managed fund or account and whether or
not the investment opportunity being offered to the employee could be re-allocated to a
client. ADM Employees must comply with requests for information and/or documentation
necessary for the IEC to satisfy itself that no actual or potential conflict, or appearance of a
conflict, exists between the proposed private placement purchase and the interests of any
managed fund or account.
3. Approval to Continue to Hold Existing Investments
Within 90 days of being designated an ADM Employee, employees holding private
placement securities must request and receive written authorization from the IEC to
continue to hold these securities.
G. Additional Reporting Requirements for ADM Employees
ADM Employees have two additional reporting requirements. These requirements are
described below. Note: It is an ADM Employee’s responsibility to confirm with their
Preclearance Compliance Officer whether he or she is required to comply with the below
additional reporting requirements.
1. Special Purpose ADM Quarterly Securities Report
ADM Employees are required to submit quarterly to their Preclearance Compliance Officer
the “Special Purpose ADM Quarterly Securities Report.” A form for completing this report
can be obtained from the Preclearance Compliance Officer, on MySource, or by emailing
the Securities Trading Policy Help Line at securitiestradingpolicyhelp@bnymellon.com.
This report must be submitted within 30 calendar days of each quarter’s end and includes
information on securities and/or transactions owned directly or indirectly. The report must
contain information on:
•
Securities owned at any time during the quarter, which were either recommended
for a transaction or in a portfolio managed by the ADM Employee during the
quarter.
•
Holdings or transactions in private placements.
•
Holdings in securities with a market capitalization that was equal to or less than
$250 million. For all other countries, use the local currency’s USD equivalent.
•
Exemption – ADM Employees do not need to report any security that is defined as
an exempt security or is otherwise expressly exempt from preclearance.
2. Contemporaneous Disclosure
Prior to an ADM Employee making or acting upon a portfolio recommendation (e.g., buy,
hold, or sell) in a security directly or indirectly owned, written authorization must be
obtained. The reason for disclosure is to ensure that management can consider whether
the portfolio recommendation or transaction is for the purpose of affecting the value of a
personal securities holding. Contemporaneous Disclosure forms can be obtained from the
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Preclearance Compliance Officer, on MySource, or by emailing the Securities Trading
Policy Help Line at securitiestradingpolicyhelp@bnymellon.com. Under no circumstances
can an ADM Employee provide portfolio recommendations or place trades based on their
potential impact to his/her personal securities holdings, nor can he or she refuse to take
such action to avoid submitting a Contemporaneous Disclosure. The ADM Employee’s
fiduciary duty to make portfolio recommendations and trades solely in the best interest of
the client must always take precedence.
a) Approval
•
Approval must be obtained from the ADM Employee’s CIO or CEO, or their
designee, prior to the first such portfolio recommendation or transaction in a
particular security in a calendar month. Disclosure forms for subsequent
transactions in the same security are not required for the remainder of the
calendar month so long as purchases/sells in all portfolios do not exceed the
maximum number of shares, options, or bonds disclosed on the disclosure
form. If the ADM Employee seeks to effect a transaction or makes a
recommendation in a direction opposite of the most recent disclosure form, a
new disclosure form must be completed prior to the transaction or
recommendation.
b) Exemption to the Contemporaneous Disclosure Requirement
•
ADM Employees who are index fund managers and have no investment
discretion in replicating an index model or clone portfolio do not need to
comply with this disclosure requirement. This exemption does not apply in the
following circumstances:
•
If the ADM Employee recommends a security that is not in the clone or model
portfolio or recommends a model or clone security in a different percentage
than the model or clone amounts.
•
If the ADM Employee recommends individual securities to clients, even if the
company shares control of the investment process with other parties.
c) Securities Exempt from Reporting
Certain securities are exempt from the requirement to submit a Contemporaneous
Disclosure. They are:
•
Exempt securities as defined in Definitions.
•
Holdings of debt securities, which do not have a conversion feature and are
rated investment grade or better by a nationally recognized statistical rating
organization or unrated, but of comparable quality.
•
Holdings of equity securities of the following:




December 1, 2014
In the U.S., the top 200 issuers on the Russell list and other companies
with a market capitalization of $20 billion or higher.
In the U.K., the top 100 companies on the FTSE All Share Index and other
companies with a market capitalization of the £ USD equivalent.
In Japan, the top 100 companies of the TOPIX and other companies with a
market capitalization of the ¥ USD equivalent.
In Brazil, companies on the IBr-X and other companies with a market
capitalization of the R USD equivalent.
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H. Restrictions for ADM Employees
7 Day Blackout Period
•
Prohibition
It is impermissible for an ADM Employee to buy or sell a security (owned directly or
indirectly) within 7 calendar days before and 7 calendar days after their investment
company or managed account has effected a transaction in that security. This is
known as the “7 Day Blackout Period.”
•
Disgorgement Required
If an ADM Employee initiates a transaction within the 7 Day Blackout Period, in
addition to being subject to sanctions for violating the Policy, profits recognized from
the transaction must be disgorged in accordance with guidance provided by the IEC.
The IEC has determined that the following transactions will not be subject to this
disgorgement requirement:


•
In the U.S., the dollar value from transacting in 100 shares or $10,000 (whichever
value is greater) for companies with a market capitalization of $5 billion or higher.
In all other countries, the greater of the USD equivalent or 100 shares for
companies with a USD equivalent market capitalization.
Exemption
Portfolio Managers who manage broad-based index funds, which replicate exactly, a
clone, or model, are exempt from the 7 Day Blackout Period.
I. Additional Requirements for Micro-Cap ADM (MCADM) Employees
ONLY
1. Transactions and Holdings in Micro-Cap Securities
In recognition of the potential for price volatility in micro-cap securities, the company
requires that approvals be obtained prior to a MCADM Employee placing a trade in their
direct and indirectly owned accounts. The market capitalization approval thresholds are
listed below. Note: Currency is listed in USD. For all other countries, use the local
currency’s USD equivalent.
•
Threshold 1
Without the prior written approval of the IEC, MCADM Employees may not trade
the securities of companies with a market capitalization of $100 million or less.
•
Threshold 2
Without the prior written approval of the immediate supervisor and the Chief
Investment Officer (CIO), MCADM Employees may not trade the securities of
companies with a market capitalization that is more than $100 million but less than
or equal to $250 million.
•
Exemption
Micro-cap securities acquired involuntarily (e.g., inheritance, gift, spin-off, etc.) are
exempt from these above restrictions; however, they must be disclosed in a memo
to the Preclearance Compliance Officer within 10 calendar days of the involuntary
acquisition.
2. Requirement for Newly Designated MCADM Employees
Newly designated MCADM Employees must obtain the approval of the CIO or Chief
Executive Officer and provide a copy of the approval to the Preclearance Compliance
Officer to continue holding micro-cap securities with a market capitalization equal to or less
than $250 million. For all other countries, use the local currency’s USD equivalent.
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Appendix C: Additional Requirements for
Investment Employees
In addition to the General Requirements of this policy and the Requirements for Monitored
Employees (Appendix A), employees who are classified as Investment Employees are also subject
to the following requirements:
A. Proprietary Funds
Proprietary Funds are non-exempt securities for Investment Employees. As such, Investment
Employees are required to report in the PTA any Proprietary Funds held in brokerage accounts
or directly with the mutual fund company. A list of Proprietary Funds is published on MySource
or can be obtained by sending an email to the Securities Trading Policy Help Line at
securitiestradingpolicyhelp@bnymellon.com.
B. PTA Reporting
Quarterly Reporting
In addition to the Initial and Annual Reporting that must be completed by all Monitored
Employees, Investment Employees are also subject to Quarterly Reporting. On a quarterly
basis and within 30 calendar days after the end of the quarter, Investment Employees are
required to file a Quarterly Transactions Report in the PTA. The Quarterly Transactions Report
must contain the following:
•
A listing of all transactions in securities (excluding exempt securities) that occurred
throughout the most recent calendar quarter;
•
A current listing of all securities accounts that trade or are capable of trading securities
and that are owned directly by you or of which you have indirect ownership;
•
A current listing of securities (excluding exempt securities) held in the aforementioned
accounts, and;
•
A current listing of securities (excluding exempt securities) held outside of the
aforementioned accounts (e.g., physical securities held in a safe deposit box, paper
certificates, etc.).
All reported information must be current within 45 calendar days of the date the report is
submitted. Additionally, as part of this quarterly reporting requirement, employees must also
certify that they have read, understand, and complied with this policy.
C. Preclearing Trades in PTA
Investment Employees are required to receive preclearance approval in PTA prior to executing
trades in all securities (excluding exempt securities). Investment Employees must preclear
trades in Proprietary Funds. Refer to Appendix F for trade preclearance requirements and see
below for details regarding de minimis transactions and Proprietary Fund transactions in the
company’s 401(k) plan.
1. De Minimis Transactions
Investment Employees will generally not be given preclearance approval to execute a
transaction in any security for which there is a pending buy or sale order for an affiliated
account (other than an index fund) in the business unit where the Investment Employee
has access to information about pending transactions. In certain circumstances, the
Preclearance Compliance Officer may approve certain de minimis transactions even when
the firm is trading such securities.
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a) Restrictions and Conditions
•
Employee preclearance is required prior to executing the transaction.
•
If the transaction is a 60 day trade, recognized profit disgorgement will be
applicable.
•
Preclearance Compliance Officers are limited to applying this de minimis
standard to only two trades in the securities of any one issuer in each calendar
month.
•
Employees must cooperate with the Preclearance Compliance Officer’s
request to document market capitalization amounts.
b) Transaction Limits
The below transaction limits are available for this de minimis exception. Note:
Currency is listed in USD. For all other countries, use the local currency’s USD
equivalent and/or U.S. share amount.
•
Transactions up to $50,000 for companies having a market capitalization of
$20 billion or more.
•
The dollar value from transacting in 250 shares or $25,000 (whichever value is
greater) for companies having a market capitalization between $5 billion and
$20 billion.
•
The dollar value from transacting in 100 shares or $10,000 (whichever value is
greater) for companies having a market capitalization between $250 million
and $5 billion.
2. Proprietary Fund Transactions in the Company’s 401(k) plan
Investment Employees are required in most situations to preclear Proprietary Fund trades.
However, the treatment of Proprietary Fund trades in the company’s 401(k) plan is
dependent upon the type of plan.
a) Non-Self-Directed Accounts (Includes Tier 1 - LifePath Index Funds, Tier
2 - Passively Managed Index Funds, and Tier 3 - Actively Managed Funds)
The movements of balances into or out of Proprietary Funds are deemed to be
purchases or redemptions of those Proprietary Funds for purposes of the holding
period requirement but are exempt from the general preclearance requirement.
Accordingly, you do not need to preclear these movements, but you must get prior
approval from the Preclearance Compliance Officer if it is within 60 calendar days of an
opposite transaction in shares of the same fund. In lieu of transaction reporting,
employees are deemed to consent to the company obtaining transaction information
from plan records. Such movements must be reflected in your holdings reports.
b) Self-Directed Accounts (Tier 4 – Large Selection of Mutual Funds and
Exchange Traded Funds)
Treated like any other Proprietary Fund account. This means that the reporting,
preclearance, and holding period requirements apply.
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D. Profit Disgorgement on Short-Term Trading
Any profits recognized from purchasing then selling or selling then purchasing the same or
equivalent (derivative) securities within any 60 calendar day period must be disgorged. For
purposes of disgorgement, profit recognition is based upon the difference between the most
recent purchase and sale prices for the most recent transactions. Accordingly, profit
recognition for disgorgement purposes may differ from the capital gains calculations for tax
purposes. Sixty-day transactions in securities that are exempt from preclearance and trades of
Proprietary Funds held within the BNY Mellon 401(k) will not be subject to disgorgement. The
disposition of any disgorged profits will be at the discretion of the company, and the employee
will be responsible for any tax and related costs.
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Appendix D: Requirements for Insider Risk, Fund
Service, Service, and Fund Officer Employees
A. Insider Risk Employees
In addition to the General Requirements of this policy and the Requirements for Monitored
Employees (Appendix A), employees who are classified as Insider Risk Employees are also
subject to the following requirements:
1. Exempt Securities
In addition to the exempt securities as listed in Appendix H: Definitions, Proprietary Funds,
Exchange Traded Funds, and municipal bonds are also considered to be exempt securities
for Insider Risk Employees. In all instances that the term “exempt securities” is used
throughout this policy, Insider Risk Employees may also include Proprietary Funds,
Exchange Traded Funds, and municipal bonds.
2. Preclearing Trades in PTA
Insider Risk Employees are required to receive preclearance approval in PTA prior to
executing trades in all securities (excluding exempt securities). Insider Risk Employees
must preclear Exchange Traded Notes (ETNs). Refer to Appendix F for trade
preclearance requirements.
B. Fund Officer, Fund Service, and Service Employees
In addition to the General Requirements of this policy and the Requirements for Monitored
Employees (Appendix A), employees who are classified as Fund Officer, Fund Service, and
Service Employees are also subject to the following requirement:
1. Company Oversight
While Fund Officer, Fund Service, and Service Employees are subject to many of the same
requirements as the other employee classifications, Fund Officer, Fund Service, and
Service Employees are not required to preclear trades, and therefore, are not subject to
pre-trade denials of those trades. However, unlike the other employee classifications,
Fund Officer, Fund Service, and Service Employees are subject to a post-trade backtesting analysis that is designed to accumulate and assess employee trading activity that
mirrors company or client trades. Trading activity that mirrors company or client trades may
result in a change to the employee’s classification that will require future preclearance
approval.
2. Quarterly Reporting in PTA – For Fund Officer Employees and non-U.S.based Fund Service Employees Only
In addition to the Initial and Annual Reporting that must be completed by all Monitored
Employees, Fund Officer Employees and non-U.S.-based Fund Service Employees are
also subject to Quarterly Reporting. On a quarterly basis and within 30 calendar days after
the end of the quarter, these employees are required to file a Quarterly Transactions
Report in the PTA. The Quarterly Transactions Report must contain the following:
•
A listing of all transactions in securities (excluding exempt securities) that occurred
throughout the most recent calendar quarter;
•
A current listing of all securities accounts that trade or are capable of trading
securities and that are owned directly by you or of which you have indirect
ownership;
•
A current listing of securities (excluding exempt securities) held in the
aforementioned accounts, and;
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•
A current listing of securities (excluding exempt securities) held outside of the
aforementioned accounts (e.g., physical securities held in a safe deposit box,
paper certificates, etc.).
All reported information must be current within 45 calendar days of the date the report is
submitted. Additionally, as part of this quarterly reporting requirement, employees must
also certify that they have read, understand, and complied with this policy.
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Appendix E: Requirements for PREG Employees
In addition to the General Requirements of this policy and the Requirements for Monitored
Employees (Appendix A), employees who are classified as PREG Employees are also subject to
the following requirements:
A. Exempt Securities
Excluding company securities, all securities are exempt for PREG Employees. In all instances
that the term “exempt securities” is used throughout this policy, PREG Employees should note
that this includes all securities except company securities. Only company securities are
reportable for PREG Employees.
B. Preclearing Trades in PTA
PREG Employees are required to receive preclearance approval in PTA prior to executing
trades in company securities only. Refer to Appendix F for trade preclearance requirements.
C. Trading in Company Securities
1. General Restrictions
Every quarter, the Company imposes a restriction on PREG employees. These employees
are deemed to have access to inside information with respect to the Company’s financial
results and are prohibited from trading in the Company’s securities from 12:01 AM Eastern
Standard Time, on the 15th day of the month preceding the end of each calendar quarter
through the first trading day after the public announcement of the company’s earnings for
that quarter. This period of time is during which PREG employees are prohibited from
trading in the Company’s securities is known as the 24-Hour Blackout Period. For
example, if earnings are released on Wednesday at 9:30 AM Eastern Standard Time,
PREG Employees cannot trade the Company’s securities until Thursday at 9:30 AM
Eastern Standard Time. Non-trading days, such as weekends or holidays, are not counted
as part of the restricted period. Occasionally, the Company may extend the restricted
period for some or all PREG Employees.
2. Company 401(k) Plan
•
Changes in Your Company Stock Holdings – During quarterly blackout periods,
PREG Employees are prohibited from making payroll deduction or investment
election changes that would impact their future purchases in company stock.
These changes must be made when the blackout period is not in effect.
•
Reallocating Balances in Company 401(k) Plan – PREG Employees are
prohibited from reallocating balances in their company 401(k) if the reallocating
action impacts their holdings in company stock.
3. Company Employee Stock Options
PREG Employees are prohibited from exercising options during the blackout period.
4. Company Employee Stock Purchase Plan (ESPP)
During quarterly blackout periods, PREG employees are prohibited from enrolling in or
making payroll deduction changes in the ESPP. These changes must be made when the
blackout period is not in effect.
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5. Blackout Period Trading Implications Profit Disgorgement/Loss Recognition
Any trade in BNY Mellon securities made during the 24-Hour Blackout Period must be
reversed and any corresponding profit recognized from the reversal is subject to profit
disgorgement. The employee will incur any loss resulting from the reversal of a blackout
period trade. Profit disgorgement will be in accordance with procedures established by
senior management. For purposes of disgorgement, profit recognition is based upon the
difference between the most recent purchase and sale prices for the most recent
transaction(s). Accordingly, profit recognition for disgorgement purposes may differ from
the capital gains calculations for tax purposes and the employee will be responsible for any
tax costs associated with the transaction(s).
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Appendix F: Trade Preclearance Requirements
ADM Employees, Investment Employees, Insider Risk Employees, and PREG Employees are
required to preclear trades in all securities (excluding exempt securities). All other employees are
not subject to the below trade preclearance requirements.
A. General Preclearance Requirements
1. Obtain Preclearance Prior to Initiating a Transaction
In order to trade securities (excluding exempt securities), ADM Employees, Investment
Employees, Insider Risk Employees, and PREG Employees are required to submit a
preclearance request in the PTA system and receive notice that the preclearance request
was approved prior to placing a security trade. Unless expressly exempt (See exemptions
below), all securities transactions are covered by this preclearance requirement. Although
preclearance approval does not obligate an employee to place a trade, preclearance
should not be made for transactions the employee does not intend to make. You may not
discuss the response to a preclearance request with anyone (excluding any account coowners or indirect owners).
2. Execute Trade Within Preclearance Window (Preclearance Expiration)
For ADM and Investment Employees, preclearance authorization will expire at the end of
the second business day after it is received. For Insider Risk and PREG Employees,
preclearance authorization will expire at the end of the third business day after it is
received. The day authorization is granted is considered the first business day. See
example below. Note: Preclearance time stamps in PTA are in Eastern Standard Time
(EST).
Example
An ADM Employee requests and receives trade preclearance approval on Monday at 3 PM
EST. The preclearance authorization is valid until the close of business on Tuesday. An
Insider Risk Employee’s window would be one day longer and would therefore be valid
until the close of business on Wednesday.
Note of Caution
Employees who place “limit”, “stop-loss”, “good-until-cancelled”, or “standing buy/sell”
orders are cautioned that transactions receiving preclearance authorization must be
executed before the preclearance expires. At the end of the preclearance authorization
period, any unexecuted order must be canceled. A new preclearance authorization may
be requested; however, if the request is denied, the trade order with the broker-dealer must
be canceled immediately.
3. Exemptions from the Requirement to Preclear
Preclearance is not required for the following security transactions:
•
Exempt securities as defined in the Definitions.
•
Non-financial commodities (e.g., agricultural futures, metals, oil, gas, etc.),
currency, and financial futures (excluding stock and narrow-based stock index
futures),
•
ETFs and funds to include proprietary funds that are based on the following
indices; the S&P 100, Russell 200, Eurostoxx 50, FTSE 100, Nikkei 225, A50
ETFs and the CSI 300. The same indices with larger participation (e.g., S&P 500,
Russell 1000) would also be exempt. A complete list of exempt ETFs and
Proprietary Funds is listed on MySource. Only securities on the published list
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are exempt from preclearance, Derivative securities based on these indices
still require preclearance.
•
Involuntary on the part of an employee (such as stock dividends or sales of
fractional shares); however, sales initiated by brokers to satisfy margin calls are
not considered involuntary and must be precleared,
•
Pursuant to the exercise of rights (purchases or sales) issued by an issuer pro rata
to all holders of a class of securities, to the extent such rights were acquired from
such issuer,
•
Sells effected pursuant to a bona fide tender offer,
•
Pursuant to an automatic investment plan, including payroll withholding to
purchase Proprietary Funds.
B. Preclearance Rules for Company Stock in Retirement and Benefit
Plans
1. Company 401(k) Plan
a) Changes in Your Company Stock Holdings
Preclearance is not required for changes in your company stock holdings held within
the company 401(k) Plan that result from the following:
•
Changes in your payroll deduction contribution percentage,
•
Changes in investment elections regarding the future purchase of company
stock.
b) Reallocating Balances in Company 401(k) Plan
The purchase or sell of company stock resulting from a reallocation does not require
preclearance but is considered a purchase or sale of company stock for purposes of
the short-term trading prohibition. As a result, a subsequent trade in company stock in
the opposite direction of the reallocation occurring within a 60 calendar day period
would result in a short-term trading prohibition. Changes to existing investment
allocations in the plan or transactions in company stock occurring outside the plan will
not be compared to reallocation transactions in the plan for purposes of the 60 day
trading prohibition. Profits recognized through short-term trading in company stock in
the plan will not generally be required to be disgorged; however, the Legal Department
will be consulted to determine the proper disposition of short-term trading prohibitions
involving Operating Committee members.
c) Rebalancing Company 401(k) Plan
The purchase or sell of company stock resulting from rebalancing (i.e., the automatic
movement of balances to pre-established investment election allocation percentages)
is not subject to preclearance and is not considered a purchase or sale of company
stock for purposes of the short-term trading prohibition.
2. Company Employee Stock Options
•
Preclearance approval is required prior to the exercise of stock option grants.
•
Preclearance is not required for the receipt of a stock option grant or the
subsequent vesting of the grant.
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3. Company Restricted Stock/Units
Preclearance is not required for the following:
•
The receipt of an award of company restricted stock/units.
•
The subsequent vesting of the company stock/unit award; however you are
required to report these shares upon vesting in the PTA system and preclear
subsequent sells.
•
The sale (through company-approved procedures) of a portion of the company
stock received in a restricted stock award at the time of vesting in order to pay for
tax withholding.
4. Company Employee Stock Purchase Plan (ESPP)
•
Preclearance is required for the following:


•
The sale of stock from the ESPP Plan. Note: The sale of stock from the
Company ESPP will be compared to transactions in company securities
outside of the Company ESPP to ensure compliance with the short-term (60
day) trading prohibition.
The sale of stock withdrawn previously from the ESPP. Like stock sold directly
from the ESPP, sales will be compared to transactions in company securities
outside of the ESPP to ensure compliance with the short-term (60 day) trading
prohibition.
Preclearance is not required for your enrollment in the plan, changes in your
contribution to the plan, or shares acquired through the reinvestment of dividends.
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Appendix G: Summary of Select Policy
Requirements by Employee Classification
Selected Policy
Requirements
ADM
Investment
Employees
Insider
Fund Service,
Service, Fund
Officer, and
Dreyfus/FINRA
Employees
PREG
Employees
U.S.-based employees –
required to use approved
broker-dealer
X
X
X
X
X
Initial Accounts and
Holdings Reports (filed
within 10 days of being
classified)
X
X
X
X
X
Annual Certification (filed
within 30 days of yearend)
X
X
X
X
X
Quarterly Certification
(filed within 30 days of
quarter-end)
X
Only applies to
Fund Officers
and non-U.S.
based Fund
Service
Employees
X
X
X
X
X
(BNYM
stock
only)
Preclearance window (in
business days, includes
day approval granted)
2 days
2 days
3 days
3 days
Preclear Proprietary
Funds, Exchange Traded
Funds (ETFs), municipal
bonds, and all other nonexempt securities
X
X
Preclear Exchange
Traded Notes (ETNs)
X
X
Subject to 7+ - day
blackout period
X
Preclear trades
Additional approvals
required for personal
trades in micro-cap
securities
Short-term trading (60
days) profit disgorgement
on all trades
December 1, 2014
NonClassified
X
X
(MCADMs
only)
X
X
Page 24
I-A-045: Personal Securities Trading Policy
Selected Policy
Requirements
ADM
Investment
Employees
Insider
Fund Service,
Service, Fund
Officer, and
Dreyfus/FINRA
Employees
PREG
NonClassified
Employees
Short-term trading (60
days) profit disgorgement
on BNYM stock
X
X
X
X
X
X
Prohibited from buying
BNYM stock on margin,
short selling BNYM, and
trading in BNYM
derivatives (options)
X
X
X
X
X
X
Initial public offerings are
prohibited (refer to Policy
waiver requirements)
X
X
X
X
X
X
Private Placements
require Ethics Office preapproval
X
X
X
X
X
X
December 1, 2014
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I-A-045: Personal Securities Trading Policy
Appendix H: Definitions
Access Decision Maker (ADM) Employee
An employee designated as such by the Investment Ethics Council. Generally, employees are
considered to be ADM Employees if they are Portfolio Managers or Research Analysts and
make or participate in recommendations or decisions regarding the purchase or sale of
securities for mutual funds or managed accounts. Portfolio Managers of broad-based index
funds and traders are not typically classified as ADM Employees.
Automatic Investment Plan
A program in which regular periodic purchases (withdrawals) are made automatically to/from
investment accounts in accordance with a predetermined schedule and allocation. Examples
include: Dividend Reinvestment Plans (DRIPS), payroll deductions, bank account drafts or
deposits, automatic mutual fund investments/withdrawals (PIPS/SWIPS), and asset allocation
accounts.
Compliance Officer
Any individual whose primary job duties include responsibility for ensuring that all applicable
laws, regulations, policies, procedures, and the Code of Conduct are followed. For purposes of
this policy, the term “Compliance Officer” and “Preclearance Compliance Officer” are used
interchangeably.
Direct Family Relationship
For purposes of this policy, an employee’s immediate family as defined by “indirect ownership”
in Appendix H, Definitions.
Dreyfus/FINRA Group Employee
An employee who is subject to regulation resulting from his/her registration with FINRA.
Employee
An individual employed by BNY Mellon or its more-than-50%-owned direct or indirect
subsidiaries. This includes all full-time and part-time, benefited and non-benefited, and exempt
and non-exempt employees in all world-wide locations.
Exempt Securities
Securities exempt from reporting. All securities require reporting unless expressly exempt by
this policy. The below securities are exempt for all classifications of employees. There may be
additional exempt securities based on an employee’s classification. Refer to the applicable
Appendix for your classification for any additional security exemptions.
•
Cash and cash-like securities (e.g., bankers acceptances, bank CDs and time
deposits, money market funds, commercial paper, repurchase agreements).
•
Direct obligations of the sovereign governments of the United States (U.S. employees
only), United Kingdom (U.K. employees only) and Japan (Japan employees only).
Obligations of other instrumentalities of the U.S., U.K., and Japanese governments or
quasi-government agencies are not exempt.
•
High-quality, short-term debt instruments having a maturity of less than 366 days at
issuance and rated in one of the two highest rating categories by a nationally
recognized statistical rating organization or which is unrated but of comparable quality.
•
Securities issued by open-end investment companies (i.e., mutual funds and variable
capital companies) that are not Proprietary Funds or Exchange Traded Funds (Note:
Proprietary Funds and Exchange Traded Funds are considered non-exempt securities
for ADM and Investment Employees only)
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I-A-045: Personal Securities Trading Policy
•
Securities in non-company 401(k) plans (e.g., spouse’s plan, previous employer’s plan,
etc.).
•
Securities in 529 plans, provided they are not invested in Proprietary Funds (Note:
Proprietary Funds and Exchange Traded Funds are considered non-exempt securities
for ADM and Investment Employees only)
•
Fixed annuities.
•
Variable annuities that are not invested in Proprietary Fund sub-accounts (Note:
Variable annuities that are invested in Proprietary Fund sub-accounts are considered
non-exempt securities for ADM and Investment Employees only)
•
Securities held in approved non-discretionary (managed) accounts
•
Stock held in a bona fide employee benefit plan of an organization not affiliated with
the Company on behalf of an employee of that organization, who is a member of the
Company employee’s immediate family. For example, if an employee’s spouse works
for an organization unrelated to the Company, the employee is not required to report
for transactions that his/her spouse makes in the unrelated organization’s company
stock so long as they are part of an employee benefit plan. This exemption does not
apply to any plan that allows the employee to buy and sell securities other than those
of their employer. Such situations would subject the account to all requirements of this
policy.
Fund Officer Employee
An employee who is not in the Asset Management or Wealth Management businesses and, in
the normal conduct of his/her job responsibilities, serves as an officer of a fund, is not required
to preclear trading activity by a fund, and does not attend board meetings.
Fund Service Employee
An employee who is not in the Asset Management or Wealth Management businesses and
whose normal job responsibilities involve maintaining the books and records of mutual funds
and/or managed accounts.
Front Running
The purchase or sale of securities for your own or the company’s accounts on the basis of your
knowledge of the company’s or company’s clients trading positions or plans.
Index Fund
An investment company or managed portfolio (including indexed accounts and model-driven
accounts) that contain securities in proportions designed to replicate the performance of an
independently maintained, broad-based index or that is based not on investment discretion but
on computer models using prescribed objective criteria to replicate such an independently
maintained index.
Indirect Ownership
Generally, you are the indirect owner of securities if you are named as power of attorney on the
account or, through any contract, arrangement, understanding, relationship, or otherwise, you have
the opportunity, directly or indirectly, to share at any time in any profit derived from a transaction in
them (a “pecuniary interest”). Common indirect ownership situations include, but are not limited to:
•
Securities held by members of your immediate family by blood, marriage, adoption, or
otherwise, who share the same household with you.

“Immediate family” includes your spouse, domestic partner, children (including
stepchildren, foster children, sons-in-law and daughters-in-law), grandchildren,
parents (including step-parents, mothers-in-law and fathers-in-law), grandparents,
and siblings (including brothers-in-law, sisters-in-law and stepbrothers and
stepsisters).
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I-A-045: Personal Securities Trading Policy
•
Partnership interests in a general partnership or a general partner in a limited
partnership. Passive limited partners are not deemed to be owners of partnership
securities absent unusual circumstances, such as influence over investment decisions.
•
Corporate shareholders who have or share investment control over a corporation’s
investment portfolio.
•
Trusts in which the parties to the trust have both a pecuniary interest and investment
control.
•
Derivative securities – You are the indirect owner of any security you have the right to
acquire through the exercise or conversion of any option, warrant, convertible security
or other derivative security, whether or not presently exercisable.
•
Securities held in investment clubs.
Initial Public Offering (IPO)
The first offering of a company's securities to the public.
Insider Risk Employee
A classification of employees that in the normal conduct of their job responsibilities are likely to
receive or be perceived to be aware of or receive material nonpublic information concerning
the company’s clients. Employees in this classification typically include, but are not limited to,
Risk and Legal personnel. All members of the company’s Operating Committee (excluding
Pershing Operating Committee Members who are covered by the Pershing trading policy), who
are not otherwise classified as Investment Employees, will be classified as Insider Risk
Employees.
Investment Clubs
Organizations whose members make joint decisions on which securities to buy or sell. The
securities are generally held in the name of the investment club. Prior to participating in an
investment club, all employees (excluding Non-Classified Employees) are required to obtain
written permission from their Preclearance Compliance Officer. Employees who receive
permission to participate in an investment club are subject to the requirements of this policy.
Investment Company
A company that issues securities that represent an undivided interest in the net assets held by
the company. Mutual funds are open-end investment companies that issue and sell
redeemable securities representing an undivided interest in the net assets of the company.
Investment Employee
An employee who, in the normal conduct of his/her job responsibilities, has access (or are
likely to be perceived to have access) to nonpublic information regarding any advisory client’s
purchase or sale of securities or nonpublic information regarding the portfolio holdings of any
Proprietary Fund, is involved in making securities recommendations to advisory clients, or has
access to such recommendations before they are public. This classification typically includes
employees in the Asset Management and Wealth Management businesses, including:
•
Certain employees in fiduciary securities sales and trading, investment management
and advisory services, investment research and various trust or fiduciary functions;
Employees of a Company business regulated by certain investment company laws.
Examples are:


In the U.S., employees who are “advisory persons” or “access persons” under Rule
17j-1 of the Investment Company Act of 1940 or “access persons” under Rule
204A-1 of the Advisers Act.
In the U.K., employees in companies undertaking specified activities under the
Financial Services and Markets Act 2000 (Regulated Activities), Order 2001, and
regulated by the Financial Conduct Authority.
December 1, 2014
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I-A-045: Personal Securities Trading Policy
•
Any member of the company’s Operating Committee who, as part of his/her usual
duties, has management responsibility for fiduciary activities or routinely has access to
information about advisory clients’ securities transactions.
Investment Ethics Council (IEC)
Council having oversight responsibility for issues related to personal securities trading and
investment activity by ADM Employees. The members are determined by the Chief
Compliance & Ethics Officer.
Manager of the Ethics Office
An individual appointed by the Chief Compliance & Ethics Officer to manage the Ethics Office.
Micro-Cap Access Decision Maker (MCADM) Employee
A subset of ADM Employees who make recommendations or decisions regarding the purchase
or sale of any security of an issuer with a small market capitalization. The market capitalization
threshold used when determining if an ADM Employee is considered a MCADM Employee is a
market capitalization equal to or less than $250 million (For all other countries, the local
currency’s USD equivalent is used.)
Money Market Fund
A mutual fund that invests in short-term debt instruments where its portfolio is valued at
amortized cost so as to seek to maintain a stable net asset value (typically, of $1 per share).
Non-Discretionary (Managed) Account
An account in which the employee has a beneficial interest but no direct or indirect control over
the investment decision making process. It may be exempted from preclearance and reporting
procedures only if the Ethics Office is satisfied that the account is truly non-discretionary (i.e.,
the employee has given total investment discretion to an investment manager and retains no
ability to influence specific trades).
Non-Self-Directed Accounts
The portion of the Company 401(k) balance invested in Tier 1 - LifePath Index Funds, Tier 2 Passively Managed Index Funds, Tier 3 - Actively Managed Funds, and/or BNY Mellon stock.
Operating Committee
The Operating Committee of BNY Mellon.
Option
A security which gives the investor the right, but not the obligation, to buy or sell a specific
security at a specified price within a specified time frame. For purposes of compliance with this
policy, an employee who buys/sells an option is deemed to have purchased/sold the underlying
security when the option was purchased/sold. Four combinations are possible as described
below:
Call Options
•
If an employee buys a call option, the employee is considered to have purchased the
underlying security on the date the option was purchased.
•
If an employee sells a call option, the employee is considered to have sold the
underlying security on the date the option was sold (for covered call writing, the sale of
an out-of-the-money option is not considered for purposes of the 60 day trading
prohibition). Please note that this would not apply to covered calls on BNY Mellon
stock as option trades of Company stock are prohibited.
Put Options
•
If an employee buys a put option, the employee is considered to have sold the
underlying security on the date the option was purchased.
December 1, 2014
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I-A-045: Personal Securities Trading Policy
•
If an employee sells a put option, the employee is considered to have bought the
underlying security on the date the option was sold.
Preclearance Compliance Officer
A person designated by the Ethics Office and/or the Investment Ethics Council to administer,
among other things, employees’ preclearance requests for a specific business (For purposes of
this policy, the term “Compliance Officer” and “Preclearance Compliance Officer” are used
interchangeably).
Pre-Release Earnings Group (PREG)
The Pre-Release Earnings Group consists of all members of the Company’s Operating
Committee and any individual determined by the Company’s Corporate Finance Department to
be a member of the group.
Private Placement
An offering of securities that is exempt from registration under various laws and rules, such as
the Securities Act of 1933 in the U.S. and the Listing Rules in the U.K. Such offerings are
exempt from registration because they do not constitute a public offering. Private placements
can include limited partnerships, certain cooperative investments in real estate, co-mingled
investment vehicles such as hedge funds, and investments in privately-held and family owned
businesses. For the purpose of this policy, time-shares and cooperative investments in real
estate used as a primary or secondary residence are not considered to be private placements.
Proprietary Fund
An investment company or collective fund for which a Company subsidiary serves as an
investment adviser, sub-adviser or principal underwriter. The Proprietary Funds listing can be
found on MySource on the Compliance and Ethics homepage or it can be obtained by sending
an email to the Securities Trading Policy Help Line at
securitiestradingpolicyhelp@bnymellon.com.
Scalping
The purchase or sale of securities for clients for the purpose of affecting the value of a security
owned or to be acquired by you or the company.
Security
Any investment that represents an ownership stake or debt stake in a company, partnership,
governmental unit, business or other enterprise. It includes stocks, bonds, notes, evidences of
indebtedness, certificates of participation in any profit-sharing agreement, collateral trust
certificates, and certificates of deposit. It also includes security-based swaps and many types
of puts, calls, straddles and options on any security or group of securities; fractional undivided
interests in oil, gas, or other mineral rights; and investment contracts, variable life insurance
policies and variable annuities whose cash values or benefits are tied to the performance of an
investment account. It does not include currencies. Unless expressly exempt, all securities
transactions are covered under the provisions of this policy (See exempt securities).
Self-Directed Accounts
An account established as part of the company 401(k) plan that offers employees the
opportunity to build and manage their own investment portfolio through the purchase and sale
of a broad variety of Exchange Traded Funds, Proprietary Funds, and non-Proprietary Funds.
Service Employee
A classification of employees who are not employees in the Asset Management or Wealth
Management businesses, but in the normal conduct of their job responsibilities have access to
post-trade information, including security transactions and portfolio holdings information.
Employees in this classification may include, but are not limited to, Compliance, Audit, and
Technology personnel.
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I-A-045: Personal Securities Trading Policy
Short Sale
The sale of a security that is not owned by the seller at the time of the trade.
Spread Betting
A type of speculation that involves taking a bet on the price movement of a security. A spread
betting company quotes two prices, the bid and offer price (also, called the spread), and
investors bet whether the price of the underlying security will be lower than the bid or higher
than the offer. The investor does not own the underlying security in spread betting, they simply
speculate on the price movement of the stock.
Tender Offer
An offer to purchase some or all shareholders' shares in a corporation. The price offered is
usually at a premium to the market price.
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