EXHIBIT(17)(a)
CODE OF ETHICS AND PERSONAL TRADING GUIDELINES
MORGAN STANLEY INVESTMENT MANAGEMENT
EFFECTIVE DECEMBER 15, 2006
TABLE OF CONTENTS (1)
I. INTRODUCTION............................................................ 3
A. GENERAL.............................................................. 3
B. STANDARDS OF BUSINESS CONDUCT........................................ 3
C. OVERVIEW OF CODE REQUIREMENTS........................................ 3
D. DEFINITIONS.......................................................... 4
E. GROUNDS FOR DISQUALIFICATION FROM EMPLOYMENT......................... 7
F. OTHER POLICIES AND PROCEDURES........................................ 7
II. PRE-CLEARANCE REQUIREMENTS............................................. 7
A. EMPLOYEE SECURITIES ACCOUNTS......................................... 8
B. PERSONAL TRADING..................................................... 10
C. OTHER PRE-CLEARANCE REQUIREMENTS..................................... 13
III. REPORTING REQUIREMENTS................................................ 13
A. INITIAL HOLDINGS AND BROKERAGE ACCOUNT(S) REPORTS AND CERTIFICATION.. 13
B. Quarterly Transactions Report........................................ 14
C. ANNUAL HOLDINGS REPORT AND CERTIFICATION OF COMPLIANCE............... 14
IV. OUTSIDE ACTIVITIES AND PRIVATE PLACEMENTS.............................. 15
A. APPROVAL TO ENGAGE IN AN OUTSIDE ACTIVITY............................ 15
B. APPROVAL TO INVEST IN A PRIVATE PLACEMENT............................ 15
C. APPROVAL PROCESS..................................................... 16
D. CLIENT INVESTMENT INTO PRIVATE PLACEMENT............................. 16
V. POLITICAL CONTRIBUTIONS................................................. 16
VI. GIFTS AND ENTERTAINMENT................................................ 16
VII. CONSULTANTS AND TEMPORARY EMPLOYEES................................... 17
VIII. REVIEW, INTERPRETATIONS AND EXCEPTIONS............................... 17
IX. ENFORCEMENT AND SANCTIONS.............................................. 17
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(1) Previous versions: August 16, 2002, February 24, 2004, June 15, 2004,
December 31, 2004.
I. INTRODUCTION(2)
A. GENERAL
The Morgan Stanley Investment Management ("MSIM") Code of Ethics (the
"Code") is reasonably designed to prevent legal, business and ethical
conflicts, to guard against the misuse of confidential information,
and to avoid even the appearance of impropriety that may arise in
connection with your personal trading and outside activities as an
MSIM employee. It is very important for you to read the "Definitions"
section below to understand the scope of this Code, including the
individuals, accounts, securities and transactions it covers. You are
required to acknowledge receipt and your understanding of this Code at
the start of your employment at MSIM or when you become a Covered
Person, as defined below, when amendments are made, and annually.
B. STANDARDS OF BUSINESS CONDUCT
MSIM seeks to comply with the Federal securities laws and regulations
applicable to its business. This Code is designed to assist you in
fulfilling your regulatory and fiduciary duties as an MSIM employee as
they relate to your personal securities transactions.
- Fiduciary Duties.
As an MSIM employee, you owe a fiduciary duty to MSIM's Clients.
This means that in every decision relating to personal
investments, you must recognize the needs and interests of
Clients and place those ahead of any personal interest or
interest of the Firm.
- Personal Securities Transactions and Relationship to MSIM's
Clients.
MSIM generally prohibits you from engaging in personal trading in
a manner that would distract you from your daily
responsibilities. MSIM strongly encourages you to invest for the
long term and discourages short-term, speculative trading. You
are cautioned that short-term strategies may attract a higher
level of regulatory and other scrutiny. Excessive or
inappropriate trading that interferes with job performance or
that compromises the duty that MSIM owes to its Clients will not
be tolerated.
If you become aware that you or someone else may have violated any
aspect of this Code, you must report the suspected violation to
Compliance immediately.
C. OVERVIEW OF CODE REQUIREMENTS
Compliance with the Code is a matter of understanding its basic
requirements and making sure the steps you take regarding activities
covered by the Code are in accordance with the letter and spirit of
the Code. Generally, you have the following obligations:
ACTIVITY CODE REQUIREMENTS
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Employee Securities Account(s) -Pre-clearance, Reporting
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(2) This Code is intended to fulfill MSIM's requirements under Rule 204A-1 of
the Investment Advisers Act of 1940 (Advisers Act) and Rule 17j-1 under the
Investment Company Act of 1940 (Company Act). Please note that there is a
separate Fund Code for each of the Morgan Stanley and Van Kampen fund
families.
Personal Trading -Pre-clearance, Holding Period, Reporting
Participating in an Outside Activity -Pre-clearance, Reporting
Investing in a Private Placement -Pre-clearance, Reporting
Political Contributions -Pre-clearance, Reporting
Gifts and Entertainment -Reporting
You must examine the specific provisions of the Code for more details
on each of these activities and are strongly urged to consult with
Compliance if you have any questions.
D. DEFINITIONS
These definitions are here to help you understand the application of
the Code to various activities undertaken by you and other persons
related to you who may be covered by the Code. They are an integral
part of the Code and a proper understanding of them is essential.
Please refer back to these Definitions as you read the Code.
- "Client" means and includes shareholders or limited partners of
registered and unregistered investment companies and other
investment vehicles, institutional, high net worth and retail
separate account clients, employee benefit trusts and all other
types of clients advised by MSIM.
- "Compliance" means your local Compliance group (New York, London,
Singapore, Tokyo and Mumbai).
- "Consultant" means a non-employee of MSIM who falls under the
definition of a Covered Person.
- "Covered Persons"(3) means and includes:
- All MSIM employees;
- All directors, officers and partners of MSIM;
- Any person who is subject to the supervision and control of
MSIM and (1) provides investment advice on behalf of MSIM,
or (2) who has access to nonpublic information regarding any
Client's purchase or sale of securities, or (3) who is
involved in making securities recommendations to Clients, or
(4) who has access to such recommendations that are
nonpublic (such as certain consultants, leased workers or
temporary employees).
- Any personnel with responsibilities related to MSIM or who
support MSIM as a business and have frequent interaction
with Covered Persons or Investment Personnel as determined
by Compliance (e.g., IT, Internal Audit, Legal, Compliance,
Corporate Services and Human Resources).
THE DEFINITION OF "COVERED PERSON" MAY VARY BY LOCATION.
PLEASE CONTACT COMPLIANCE IF YOU HAVE ANY QUESTION AS TO
YOUR STATUS AS A COVERED PERSON.
- Any other persons falling within such definition under Rule
17j-1 of the Company Act or Rule 204A-1 under the Advisers
Act and such other persons that may be so deemed
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(3) The term "Access Person" is no longer used in this Code in order to avoid
confusion with the Morgan Stanley Code of Conduct.
by Compliance from time to time.
- "Covered Securities" includes generally all equity or debt
securities, including derivatives of securities (such as options,
warrants and ADRs), futures, commodities, securities indices,
exchange-traded funds, open-end mutual funds for which MSIM acts
as adviser or sub-adviser, closed-end funds, corporate and
municipal bonds and similar instruments, but do not include
"Exempt Securities," as defined below. Please refer to Schedule A
for application of the Code to various security types.
- "Employees" means MSIM employees. For purposes of this Code, all
Employees are considered Covered Persons.
- "Employee Securities Account" is any account in your own name and
other accounts you could be expected to influence or control, in
whole or in part, directly or indirectly, whether for securities
or other financial instruments, and that are capable of holding
Covered Securities, as defined below. This includes accounts
owned by you and:
- accounts of your spouse or domestic partner;
- accounts of your children or other relatives of you or your
spouse or domestic partner who reside in the same household
as you and to whom you contribute substantial financial
support (e.g., a child in college that is claimed as a
dependent on your income tax return or who receives health
benefits through you);
- accounts where you obtain benefits substantially equivalent
to ownership of securities;
- accounts that you or the persons described above could be
expected to influence or control, such as:
- joint accounts;
- family accounts;
- retirement accounts ;
- corporate accounts;
- trust accounts for which you act as trustee where you
have the power to effect investment decisions or that
you otherwise guide or influence;
- arrangements similar to trust accounts that benefit you
directly;
- accounts for which you act as custodian; and
- partnership accounts.
- "Exempt Securities" are securities that are not subject to the
pre-clearance, holding and reporting requirements of the Code,
such as:
- Bankers' acceptances, bank certificates of deposit and
commercial paper;
- High quality short-term debt instruments, including
repurchase agreements (which for these purposes are
repurchase agreements and any instrument that has a
maturity at issuance of fewer than 366 days that is
rated in one of the two highest categories by a
nationally recognized statistical rating organization);
- Direct obligations of the U.S. Government(4);
- Shares held in money market funds;
- Variable insurance products that invest in funds for
which MSIM does not act as adviser or sub-adviser; and
- Open-end mutual funds for which MSIM does not act as
adviser or sub-adviser.
Please refer to Schedule A for application of the Code to various
security types.
- "Firm" means Morgan Stanley, MSIM's parent company.
- "Investment Personnel" means and includes:
- Employees in the Global Equity, Global Fixed Income and
Alternative Investments Groups, including portfolio
managers, traders, research analysts, support staff,
etc., and any other Covered Person who obtains or has
access to information concerning investment
recommendations made to any Client; and
- Any persons designated as Investment Personnel by
Compliance.
- "IPO" means an initial public offering of equity securities
registered with the U.S. Securities and Exchange Commission or a
foreign financial regulatory authority.
- "Morgan Stanley Broker" means a broker-dealer affiliated with
Morgan Stanley.
- "Morgan Stanley Investment Management" or "MSIM" means the
companies and businesses comprising Morgan Stanley's Investment
Management Division. See Schedule B.
- "Mutual Funds" includes all open-end mutual funds and similar
pooled investment vehicles established in non-U.S. jurisdictions,
such as registered investment trusts in Japan, but do not include
shares of open-end money market mutual funds (unless otherwise
directed by Compliance).
- "Outside Activity" means any organized or business activity
conducted outside of MSIM. This includes, but is not limited to,
participation on a board of a charitable organization, part-time
employment or formation of a limited partnership.
- "Portfolio Managers" are Employees who are primarily responsible
for the day-to-day management of a Client portfolio.
- "Private Placement" means a securities offering that is exempt
from registration under certain provisions of the U.S. securities
laws and/or similar laws of non-U.S. jurisdictions (if you are
unsure whether the securities are issued in a private placement,
please consult with Compliance).
- "Proprietary or Sub-advised Mutual Fund" means any open-end
Mutual Fund for which MSIM acts as investment adviser or sub-
adviser.
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(4) Includes securities that are backed by the full faith and credit of the
U.S. Government for the timely payment of principal and interest, such as
Ginnie Maes, U.S. Savings Bonds, and U.S. Treasuries, and equivalent
securities issued by non-U.S. governments.
- "Research Analysts" are Employees whose assigned duties solely
are to make investment recommendations to or for the benefit of
any Client portfolio.
- Senior Loan Employee" means any MSIM employee who has knowledge
of, or has access to, investment decisions of any MSIM senior
loan fund.
- "Unit Investment Trust(s)" or "UIT(s)" include registered trusts
in which a fixed, unmanaged portfolio of securities is purchased.
E. GROUNDS FOR DISQUALIFICATION FROM EMPLOYMENT
Pursuant to the terms of Section 9 of the Advisers Act, no director,
officer or employee of MSIM may become, or continue to remain, an
officer, director or employee without an exemptive order issued by the
U.S. Securities and Exchange Commission if such director, officer or
employee:
- within the past ten years has been convicted of any felony
or misdemeanor (i) involving the purchase or sale of any
security; or (ii) arising out of his or her conduct as an
underwriter, broker, dealer, investment adviser, municipal
securities dealer, government securities broker, government
securities dealer, transfer agent, or entity or person
required to be registered under the U.S. Commodity Exchange
Act, or as an affiliated person, salesman or employee of any
investment company, bank, insurance company or entity or
person required to be registered under the U.S. Commodity
Exchange Act; or
- is or becomes permanently or temporarily enjoined by any
court from: (i) acting as an underwriter, broker, dealer,
investment adviser, municipal securities dealer, government
securities broker, government securities dealer, transfer
agent, or entity or person required to be registered under
the U.S. Commodity Exchange Act, or as an affiliated person,
salesman or employee of any investment company, bank,
insurance company or entity or person required to be
registered under the U.S. Commodity Exchange Act; or (ii)
engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the
purchase or sale of any security.
You are obligated to report any conviction or injunction described
here to Compliance immediately.
F. OTHER POLICIES AND PROCEDURES
In addition to this Code, you are also subject to the Morgan Stanley
Investment Management Compliance Manuals and the Morgan Stanley Code
of Conduct.
Please contact Compliance for additional policies applicable in your
region.
II. PRE-CLEARANCE REQUIREMENTS
A. EMPLOYEE SECURITIES ACCOUNTS
Generally, you must maintain all Employee Securities Accounts that may
invest in Covered Securities at a Morgan Stanley Broker. Situations in
non-U.S. offices may vary. New Employees must transfer, at their
expense, their Employee Securities Account(s) to a Morgan Stanley
Broker as soon as practical (generally within 30 days of becoming a
Covered Person). FAILURE TO DO SO WILL BE CONSIDERED A SIGNIFICANT
VIOLATION OF THIS CODE.
- Process for Opening a Morgan Stanley Brokerage Account.
In order to open an account at a Morgan Stanley Broker, you are
required to pre-clear the account by submitting a completed and
signed copy of the Account Pre-Approval Form to Compliance. See
Schedule C. This approval process is necessary to enable
Compliance to initiate the automated reporting of your account
information and activity. You are responsible for reporting your
Morgan Stanley Brokerage account number to Compliance as soon as
it becomes available. The process in non-U.S. offices may vary.
- Non-Morgan Stanley Accounts by Special Permission only.
Exceptions to the requirement to maintain Employee Securities
Accounts at a Morgan Stanley Broker are rare and will be granted
only with the prior written approval of Compliance. If your
request is approved, you will be required to ensure that
duplicate confirmations and statements are sent to Compliance.
Situations in non-U.S. offices may vary.
If you maintain an outside account without appropriate approval,
you must immediately disclose this to Compliance.
- Individual Savings Accounts (for employees of MSIM Ltd.)
MSIM Ltd. employees are permitted to establish ISAs with outside
managers but details may require pre-clearance. The degree of
reporting that will be required will depend on the type of ISA
held. Fully discretionary managed ISAs (i.e. an independent
manager makes the investment decisions) may be established and
maintained without the prior approval of Compliance, provided
that you exercise no influence or control on stock selection or
other investment decisions. Once an ISA is established, details
must be disclosed via the Firm's Outside Business Interests
system "OBI". Non-discretionary ISAs (including single company
ISAs) where an employee makes investment decisions may only be
established and maintained if pre-clearance from Compliance is
sought, duplicate statements are supplied to Compliance and the
Code of Ethics quarterly and annual reporting requirements are
met.
- Mutual Fund Accounts
You may open an account for the purchase of Proprietary or
Sub-advised Mutual Funds, such as an account directly with a fund
transfer agent, if a completed and signed copy of an Account
Pre-Approval Form and is submitted to Compliance for approval.
See Schedule C. If approved, and if the account is held outside
of Morgan Stanley (i.e. for Sub-advised Funds), duplicate
confirmations of all transactions and statements must be sent to
Compliance.
Please note that you may open a Mutual Fund-only account (i.e.
accounts at Vanguard or Fidelity which may not hold any Covered
Security) WITHOUT PRIOR APPROVAL FROM COMPLIANCE.
- Discretionary Managed Accounts.
You may open a fully discretionary managed account
("Discretionary Managed Account") at Morgan Stanley if the
account meets the standards set forth below. In certain
circumstances and with the prior written approval of Compliance,
you may appoint non-Morgan Stanley managers (e.g., trust
companies, banks or registered investment advisers) to manage
your account.
In order to establish a Discretionary Managed Account, you must
grant to the manager COMPLETE INVESTMENT DISCRETION over your
account. Pre-clearance is not required for trades in this
account; however, you may not participate, directly or
indirectly, in individual investment decisions or be made aware
of such decisions before transactions are executed. This
restriction does not preclude you from establishing investment
guidelines for the manager, such as indicating industries in
which you desire to invest, the types of securities you want to
purchase or your overall investment objectives. However, those
guidelines may not be changed so frequently as to give the
appearance that you are actually directing account investments.
To open a Discretionary Managed Account, you must submit the
Account Pre-Approval Form to Compliance, along with the required
documentation (i.e. the advisory agreement or contract with the
manager). See Schedule C. If it is managed by a non-Morgan
Stanley manager, you must designate duplicate copies of trade
confirmations and statements to be sent to Compliance. To the
extent that you direct trades in a Discretionary Managed Account
for tax purposes, you must obtain pre-clearance for each of these
transactions from Compliance.
- Issuer Purchase Plans.
You may open an account directly with an issuer to purchase its
shares, such as a dividend reinvestment plan, or "DRIP," by
notifying your local Compliance group and by pre-clearing the
initial purchase of shares. See Schedule C. You must also report
holdings annually to Compliance.
- Other Morgan Stanley Accounts:
Employee Stock Purchase Plan (ESPP)
Employee Stock Ownership Plan (ESOP)
Employee Incentive Compensation Plan (EICP)
Morgan Stanley 401(k) (401(k)).
You do not have to pre-clear participation in the Morgan Stanley
ESPP, ESOP, EICP or 401(k) Plan with Compliance. However, you
must disclose participation in any of these plans (quarterly,
upon initial participation, and on annual certifications).
NOTE: PARTICIPATION IN A NON-MORGAN STANLEY 401(K) PLAN OR
SIMILAR ACCOUNT THAT PERMITS YOU TO TRADE COVERED SECURITIES MUST
BE PRE-APPROVED BY COMPLIANCE.
- Investment Clubs
You may not participate in or solicit transactions on behalf of
investment clubs in which members pool their funds to make
investments in securities or other financial products.
- 529 Plans
You do not have to pre-clear participation in a 529 Plan with
Compliance.
B. PERSONAL TRADING
You are required to obtain pre-clearance of personal securities
transactions in Covered Securities, other than transactions in
Proprietary or Sub-advised Mutual Funds. Exempt Securities do not
require pre-clearance. Please see the Securities Transaction Matrix
attached as Schedule A for additional information about when
pre-clearance is or may not be required.
- Initiating a Transaction.(5)
Pre-clearance must be obtained by entering the trade request into
the Trade Pre-Clearance System by typing "TPC" into your internet
browser. For regions without access to TPC, please complete the
Personal Securities Transaction Approval Form and submit it to
Compliance. See Schedule C. Once Compliance has performed the
necessary checks, Compliance will notify you promptly regarding
your request.
- Pre-Clearance Valid for One Day Only.
If your request is approved, such approval is valid only for the
day it is granted. Any transaction not completed on that day will
require a new approval. This means that open orders, such as
limit orders and stop-loss orders, must be pre-cleared each day
until the transaction is effected. (6)
- Holding Requirement and Repurchase Limitations
Proprietary or Sub-advised Mutual Funds
You may not redeem or exchange Proprietary Mutual Funds (i.e.,
Morgan Stanley or Van Kampen funds) until at least 60 calendar
days from the purchase trade date.
Sub-advised Mutual Funds are not subject to a holding period but
do carry a reporting requirement, as detailed below.
All other Covered Securities
You may not sell a Covered Security until you have held it for at
least 30 days.
If you sell a Covered Security, you may not repurchase the same
security for at least 30 days.
MSAITM Employees. In case of selling equity and equity-linked
notes, Covered Persons at MSAITM must hold such instruments for
at least six months; however, Compliance may grant an exception
if the instruments are held for at least 30 calendar days from
the date of purchase. This includes transactions in MS stock.
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(5) Will change once pre-clearance is automated.
(6) In the case of trades in international markets where the market has already
closed, transactions must be executed by the next close of trading in that
market.
- Restrictions and Requirements for Portfolio Managers and
Investment Personnel.
Blackout Period. No purchase or sale transaction may be made in
any Covered Security or a related investment (i.e., derivatives)
by a Portfolio Manager for a period of seven calendar days before
or seven calendar days after the Portfolio Manager purchases or
sells the security on behalf of a Client. A Portfolio Manager may
request an exception from the blackout period if the Covered
Security was traded for an index fund or index portfolio.
In addition, Investment Personnel who have knowledge of a
Portfolio Manager's trading activity are subject to the same
blackout period.
Investment Personnel must also obtain an additional signature
from their manager prior to pre-clearance.
UITs. Investment Personnel involved in determining the
composition of a UIT portfolio, or who have knowledge of the
composition of a UIT portfolio prior to deposit, are considered
Portfolio Managers and may not buy or sell a Covered Security
within seven calendar days before or seven calendar days after
such Covered Security is included in the initial deposit of a UIT
portfolio.
Closed-End Funds. Portfolio Managers are permitted to purchase
closed-end funds that they manage and that are not traded on an
exchange with prior approval from Compliance.
- Restrictions for Research Analysts
Research Analysts may not own or trade any Covered Security for
which he or she provides research coverage. If a Research Analyst
commences research coverage for a Covered Security that he or she
already owns, the Research Analyst may be asked to sell the
Covered Security to avoid any potential or actual conflict of
interest.
- Restrictions for Senior Loan Employees
Senior Loan Employees may not purchase any Covered Security
issued by any company that has a loan or loans held in any senior
loan fund.
As a reminder, Senior Loan Employees are also subject to the MSIM
Senior Loan Firewall Procedures.
- Transactions in Morgan Stanley (MS) Stock
You may only transact in MS stock during designated window
periods. If you are purchasing or selling MS stock through a
brokerage account, you must pre-clear the transaction through
Compliance. All other holding and reporting requirements for
Covered Securities also apply.
For MSAITM employees, as noted above, a six-month holding period
applies.
You do not have to pre-clear transactions in MS stock sold out of
your EICP, ESOP, ESPP or 401(k) Plan.
Additional Restrictions for "Access Persons."
Morgan Stanley imposes additional restrictions on selling MS
stock for Access Persons, defined as:
- Morgan Stanley and Van Kampen Management Committee members;
- Managing Directors (and other employees with the highest
title in a business or infrastructure unit, e.g., Executive
Vice President); and
- Certain other employees who are considered to be Access
Persons because of their job functions. (Global Compliance
will contact you on a quarterly basis if you fall into this
category.)
Firm policy requires Access Persons to hold a position in MS
stock for a minimum of six months in their employee and
employee-related accounts. Shares acquired as part of
equity-based compensation are exempt from this holding period
requirement. In addition, Access Persons may not transact in the
common stock or options of Goldman Sachs, Merrill Lynch or Lehman
Brothers, except during a window period. Additionally, employees
may never buy or sell MS stock if in possession of material,
non-public information regarding Morgan Stanley.
- Trading Derivatives
You may not trade forward contracts, physical commodities and
related derivatives, currencies, over-the-counter warrants or
swaps. In addition, you may not trade futures under this Code.
The following is a list of permitted options trading:
Call Options.
LISTED CALL OPTIONS. You may purchase a listed call option only
if the call option has a period to expiration of at least 30 days
from the date of purchase and you hold the call option for at
least 30 days prior to sale. If you choose to exercise the
option, you must also hold the underlying security delivered
pursuant to the exercise for 30 days.
COVERED CALLS. You may also sell (or "write") a call option only
if you have held the underlying security (in the corresponding
quantity) for at least 30 days.
Put Options.
LISTED PUT OPTIONS. You may purchase a listed put option only if
the put option has a period to expiration of at least 30 days
from the date of purchase and you hold the put option for at
least 30 days prior to sale. If you purchase a put option on a
security you already own, you may only exercise the put once you
have held the underlying security for 30 days.
SELLING PUTS. You may not sell ("write") a put.
PLEASE NOTE THAT YOU MUST OBTAIN PRE-CLEARANCE TO EXERCISE AN
OPTION AS WELL AS TO PURCHASE OR SELL AN OPTION.
- Other Restrictions
IPOS AND NEW ISSUES. Consistent with the Code of Conduct, you and
your Employee Securities Account(s) are prohibited from acquiring
any equity security in an IPO.
Please note that this restriction applies to your immediate
family as well, REGARDLESS of whether the accounts used to
purchase IPOs are considered Employee Securities Accounts.
Purchases of new issue debt are permitted, provided such
purchases are pre-cleared and meet other relevant requirements of
the Code.
OPEN CLIENT ORDERS. Personal trade requests will be denied if
there is an open order for any Client in the same security or
related security. Exemptions are granted if the Covered Security
is being purchased or sold for a passively-managed index fund or
index portfolio.
SHORT SALES. You may not engage in short selling of Covered
Securities.
RESTRICTED LIST. You may not transact in Covered Securities that
appear on the Firmwide Restricted List. Compliance will check the
Restricted List as part of its pre-clearance process.
- Other Criteria Considered in Pre-Clearance
In spite of adhering to the requirements specified throughout
this Section, Compliance, in keeping with the general principles
and objectives of the Code, may refuse to grant pre-clearance of
a Personal Securities Transaction in its sole discretion without
being required to specify any reason for the refusal.
- Reversal and Disgorgement
Any transaction that is prohibited by this Section may be
required to be reversed and any profits (or any differential
between the sale price of the Personal Security Transaction and
the subsequent purchase or sale price by a relevant Client during
the enumerated period) will be subject to disgorgement at the
discretion of Compliance. Please see the Code Section regarding
Enforcement and Sanctions below.
C. OTHER PRE-CLEARANCE REQUIREMENTS
Please note that the following activities also require pre-clearance
under the Code:
- Outside Activities
- Investments in Private Placements
- Political Contributions
Please refer to the Sections below for more details on the additional
Code requirements regarding these activities.
III. REPORTING REQUIREMENTS
A. INITIAL HOLDINGS AND BROKERAGE ACCOUNT(S) REPORTS AND CERTIFICATION
When you begin employment with MSIM or you otherwise become a Covered
Person, you must provide an Initial Listing of Securities Holdings and
Brokerage Accounts Report to Compliance no later than 10 days after
you become a Covered Person. The information must not be more than 45
days old from the day you became a Covered Person and must include:
- the title and type, and as applicable the exchange ticker
symbol or CUSIP number, number of shares and principal
amount of any Covered Security;
- the name of any broker-dealer, bank or financial institution
where you hold an Employee Securities Account;
- any Outside Activities; and
- the date you submitted the Initial Holdings Report.
- Certification
All new Covered Persons will receive training on the principles
and procedures of the Code. As a Covered Person, you must also
certify that you have read, understand and agree to abide by the
terms of the Code. See Schedule C.
B. QUARTERLY TRANSACTIONS REPORT
You must submit a Quarterly Transaction Report no later than 10
calendar days after the end of each calendar quarter to Compliance.
The report must contain the following information about each
transaction involving a Covered Security:
- the date of the transaction, the title, and as applicable
the exchange ticker symbol or CUSIP number, interest rate
and maturity date, number of shares and principal amount of
any Covered Security;
- the nature of the transaction (i.e. purchase, sale or other
type of acquisition or disposition);
- the price of the security at which the transaction was
effected;
- the name of the broker-dealer or bank with or through which
the transaction was effected; and
- the date you submitted the Quarterly Report.
- Exceptions
You do not have to submit a Quarterly Transactions Report if it
would duplicate information in broker trade confirmations or
account statements Compliance already receives or may access,
such as Morgan Stanley brokerage accounts pre-approved by
Compliance, direct accounts for the purchase of Proprietary
Mutual Funds and employee-benefit related accounts (i.e. Morgan
Stanley 401(k), ESPP, ESOP, and EICP). For non-Morgan Stanley
confirmations and account statements, Compliance must receive
this information no later than 30 days after the end of the
applicable calendar quarter.
A reminder to complete the Quarterly Transaction Report will be
provided to you by Compliance at the end of each calendar
quarter. See Schedule C.
C. ANNUAL HOLDINGS REPORT AND CERTIFICATION OF COMPLIANCE
Annually, you must report holdings and transactions in Covered
Securities by completing the Annual Holdings Report and Certification
of Compliance, which includes the following information:
- a listing of your current Morgan Stanley brokerage
account(s);
- a listing of all securities beneficially owned by you in
these account(s);
- all your approved Outside Activities, including non-Morgan
Stanley brokerage accounts, Private Placements and Outside
Activities; and
- all other investments you hold outside of Morgan Stanley
(such as DRIPs, other 401(k)s and any securities held in
certificate form).
The information must not be more than 45 days old on the day you
submit the information to Compliance. You must also certify that you
have read and agree to abide by the requirements of the Code and that
you are in compliance with the Code. The Report must be submitted
within 30 days after the end of each year.
The link to the Annual Holdings Report and Certification of Compliance
will be provided to you by Compliance within the first week of each
calendar year. See Schedule C.
IV. OUTSIDE ACTIVITIES AND PRIVATE PLACEMENTS
A. APPROVAL TO ENGAGE IN AN OUTSIDE ACTIVITY
You may not engage in any Outside Activity, REGARDLESS OF WHETHER OR
NOT YOU RECEIVE COMPENSATION, without prior approval from Compliance.
If you receive approval, it is your responsibility to notify
Compliance immediately if any conflict or potential conflict of
interest arises in the course of the Outside Activity.
Examples of an Outside Activity include providing consulting services,
organizing a company, giving a formal lecture or publishing a book or
article, accepting compensation from any person or organization other
than the Firm, serving as an officer, employee, director, partner,
member, or advisory board member of a company or organization not
affiliated with the Firm, whether or not related to the financial
services industry (including charitable organizations or activities
for which you do not receive compensation). Generally, you will not be
approved for any Outside Activity related to the securities or
financial services industry other than activities that reflect the
interests of the industry as a whole and that are not competitive with
those of the Firm.
A request to serve on the board of any company, especially the board
of a public company, will be granted in very limited instances only.
If you receive an approval, your directorship will be subject to the
implementation of information barrier procedures to isolate you from
making investment decisions for Clients concerning the company in
question, as applicable.
B. APPROVAL TO INVEST IN A PRIVATE PLACEMENT
You may not invest in a Private Placement of any kind without prior
approval from Compliance. Private Placements include investments in
privately held corporations, limited partnerships, tax shelter
programs and
hedge funds (including those sponsored by Morgan Stanley or its
affiliates).
C. APPROVAL PROCESS
You may request pre-clearance of Outside Activities and Private
Placements by using the web-based Outside Business Interest (OBI)
system, which can be found under Quick Links on the Legal and
Compliance Division portal. You must complete the Form, (including
obtaining your supervisor's signature), before you submit the request
to Compliance.
D. CLIENT INVESTMENT INTO PRIVATE PLACEMENT
If you have a personal position in an issuer through a Private
Placement, you must contact Compliance immediately if you are involved
in considering any subsequent investment decision on behalf of a
Client regarding any security of that issuer or its affiliate. In
these instances, the relevant Chief Investment Officer will make an
independent determination of the final investment decision and
document the same, with a copy to Compliance.
V. POLITICAL CONTRIBUTIONS
Morgan Stanley places certain restrictions and obligations on its employees
in connection with their political contributions and solicitation
activities. Morgan Stanley's Policy on U.S. Political Contributions and
Activities (the "Policy") is designed to permit Employees, Morgan Stanley
and the Morgan Stanley Political Action Committee to pursue legitimate
political activities and to make political contributions to the extent
permitted under applicable regulations. The Policy prohibits any political
contributions, whether in cash or in kind, to state or local officials or
candidates in the United States that are intended or may appear to
influence the awarding of municipal finance business to Morgan Stanley or
the retention of that business.
You are required to obtain pre-clearance from Compliance prior to making
any political contribution to or participating in any political
solicitation activity on behalf of a U.S. federal, state or local political
candidate, official, party or organization by completing a Political
Contributions Pre-Clearance Form. See Schedule C. is available from
Compliance.
Restricted Persons, as defined in the Policy, and certain executive
officers are required to report to Compliance, on a quarterly basis, all
state and local political contributions. Compliance will distribute
disclosure forms to the relevant individuals each quarter. The information
included on these forms will be used by Morgan Stanley to ensure compliance
with the Policy and with any applicable rules, regulations and
requirements. In addition, as required by applicable rules, Morgan Stanley
will disclose to the appropriate regulators on a quarterly basis any
reported political contributions by Restricted Persons.
VIOLATIONS OF THIS POLICY CAN HAVE SERIOUS IMPLICATIONS ON MORGAN STANLEY'S
ABILITY TO DO BUSINESS IN CERTAIN JURISDICTIONS. CONTACT COMPLIANCE IF YOU
HAVE ANY QUESTIONS.
VI. GIFTS AND ENTERTAINMENT
Morgan Stanley's Code of Conduct sets forth specific conditions under which
employees and their family members may accept or give gifts or
entertainment. In general, employees and their families may not accept or
give gifts or special favors (other than an occasional non-cash gift of
nominal value) from or to any person or organization with which Morgan
Stanley has a current or potential
business relationship. Please contact Compliance for your region's Gifts
and Entertainment policy.
VII. CONSULTANTS AND TEMPORARY EMPLOYEES
Consultants and other temporary employees who fall under the definition of
a Covered Person by virtue of their duties and responsibilities with MSIM
(i.e. any person who is subject to the supervision and control of MSIM and
(1) provides investment advice on behalf of MSIM, or (2) who has access to
nonpublic information regarding any Client's purchase or sale of
securities, or (3) who is involved in making securities recommendations to
Clients, or (4) who has access to such recommendations that are nonpublic
(such as certain consultants, leased workers or temporary employees) must
adhere to the following Code provisions:
- Reporting on an initial, quarterly and annual basis;
- Duplicate confirmations and statements sent to Compliance for
transactions in any Covered Security;
- Restriction from participating in any IPOs;
- Pre-clearance of any Outside Activities and Private Placements.
Only consultants or temporary employees hired for more than one year are
required to transfer any brokerage accounts to Morgan Stanley.
VIII. REVIEW, INTERPRETATIONS AND EXCEPTIONS
Compliance is responsible for administering the Code and reviewing your
Initial, Quarterly and Annual Reports. Compliance has the authority to make
final decisions regarding Code policies and may grant an exception to a
policy as long as it determines that no abuse or potential abuse is
involved. Compliance will grant exceptions only in rare and unusual
circumstances, such as financial hardship. You must contact Compliance with
any questions regarding the applicability, meaning or administration of the
Code, including requests for an exception, in advance of any contemplated
transaction.
IX. ENFORCEMENT AND SANCTIONS
All violations of this Code must be reported to the Chief Compliance
Officer and on a quarterly basis to senior management and the applicable
funds' board of directors. MSIM may impose sanctions as appropriate,
including notifying the Covered Person's manager, issuing a reprimand
(orally or in writing), monetary fine, demotion, suspension or termination
of employment. The following is a schedule of sanctions for failure to
abide by the requirements of the Code. VIOLATIONS ARE CONSIDERED ON A
CUMULATIVE BASIS.
These sanctions are intended to be guidelines only. Compliance, in its
discretion, may recommend imposition of more severe sanctions if deemed
warranted by the facts and circumstances of each violation. Senior
management at MSIM, including the Chief Compliance Officer, are authorized
to determine the choice of sanctions to be imposed in specific cases,
including termination of employment.
Sanctions may vary based on regulatory concerns in your jurisdiction.
VIOLATION SANCTION
--------- --------
FAILING TO COMPLETE DOCUMENTATION OR 1st Offense Letter of Warning
MEET REPORTING REQUIREMENTS (I.E. ANNUAL
CERTIFICATION OR CODE OF ETHICS 2nd Offense Violation Letter PLUS $200 Fine
ACKNOWLEDGEMENT; PROVISION OF STATEMENTS
AND CONFIRMS) IN A TIMELY MANNER 3rd Offense Violation Letter and $300 Fine
PLUS 3-month trading ban
FAILING TO OBTAIN AUTHORIZATION FOR A 1st Offense Letter of Warning; possible
TRADE OR TRADING ON DAY AFTER reversal of trade with any
PRE-CLEARANCE IS GRANTED FOR A PERSONAL profits donated to charity
SECURITIES TRANSACTION
2nd Offense Violation Letter; possible
reversal of trade with any
profits donated to charity PLUS a
fine representing 5% of net trade
amount donated to charity
3rd Offense Violation Letter; possible
reversal of trade with any
profits donated to charity and a
fine representing 5% of net trade
amount donated to charity PLUS a
3-month trading ban
TRADING WITHIN 30 DAY HOLDING PERIOD (6 1st Offense Letter of Warning; mandatory
MONTHS FOR MSAITM) OR TRADING MS STOCK reversal of trade with any
OUTSIDE DESIGNATED WINDOW PERIODS profits donated to charity
2nd Offense Violation Letter; mandatory
reversal of trade with any
profits donated to charity PLUS a
fine representing 5% of net trade
amount donated to charity
Violation Letter; mandatory
reversal of trade with any
profits donated to charity and a
3rd Offense fine representing 5% of net trade
amount donated to charity, PLUS a
3-month trading ban.
VIOLATION SANCTION
--------- --------
FAILING TO GET OUTSIDE BROKERAGE ACCOUNT 1st Offense Letter of Warning; account moved
APPROVED to a MS Broker immediately
2nd Offense Violation Letter; account moved
to a MS Broker immediately, PLUS
$200 fine
3rd Offense Violation Letter; account moved
to a MS Broker immediately, PLUS
$300 fine
FAILING TO GET AN OUTSIDE ACTIVITY OR 1st Offense Letter of Warning; possible
PRIVATE PLACEMENT PRE-APPROVED) termination of OBI
2nd Offense Violation Letter; possible
termination of OBI PLUS $200 fine
3rd Offense Violation Letter; termination of
OBI PLUS $300 fine
TRADING IN SEVEN DAY BLACKOUT PERIOD OR 1st Offense Letter of Warning; reversal of
PURCHASING AN IPO trade with any profits donated to
charity
2nd Offense Violation Letter, reversal of
trade with any profits donated to
charity, PLUS a fine representing
5% of net trade amount donated to
charity and a ban from trading
for three months
3rd Offense Violation Letter, reversal of
trade with any profits donated to
charity, a fine representing 5%
of net trade amount donated to
charity and a ban from trading
for SIX months
FRONT RUNNING (TRADING AHEAD OF A Each case to be considered on its merits.
CLIENT) Possible termination and reporting to
regulatory authorities.
INSIDER TRADING (TRADING ON MATERIAL Each case to be considered on its merits.
NON-PUBLIC INFORMATION) Possible termination and reporting to
regulatory authorities.
SCHEDULE A
SECURITIES TRANSACTION MATRIX
Pre-Clearance Reporting Holding
TYPE OF SECURITY Required Required Required
- ---------------- ------------- --------- --------
COVERED SECURITIES
EXEMPT SECURITIES
Pooled Investment Vehicles:
Closed-End Funds Yes Yes Yes
Open-End Mutual Funds advised or sub-advised by No Yes Yes
MSIM
Unit Investment Trusts No Yes No
Exchange Traded Funds (ETFs) Yes Yes Yes
Equities:
MS Stock(7) Yes Yes Yes
Common Stocks Yes Yes Yes
ADRs Yes Yes Yes
DRIPs(8) Yes Yes Yes
Stock Splits No Yes Yes
Rights Yes Yes Yes
Stock Dividend No Yes Yes
Warrants (Exercised) Yes Yes Yes
Preferred Stock Yes Yes Yes
Initial Public Offerings (equity IPOs) PROHIBITED
Hedge Funds Yes Yes No
Derivatives
MS (stock options) Yes Yes Yes
Common Stock Options Yes Yes Yes
Forward Contracts PROHIBITED
Commodities PROHIBITED
Currencies PROHIBITED
OTC warrants or swaps PROHIBITED
Futures PROHIBITED
Fixed Income Instruments:
Fannie Mae Yes Yes Yes
Freddie Mac Yes Yes Yes
Corporate Bonds Yes Yes Yes
Convertible Bonds (converted) Yes Yes Yes
Municipal Bonds Yes Yes Yes
New Issues (fixed income) Yes Yes Yes
Private Placements (e.g. limited partnerships) Yes Yes N/A
Outside Activities Yes Yes N/A
Investment Clubs PROHIBITED
Mutual Funds (open-end) not advised or sub-advised No No No
by MSIM
US Treasury(9) No No No
CDs No No No
Money Markets No No No
GNMA No No No
Commercial Paper No No No
Bankers' Acceptances No No No
High Quality Short-Term Debt Instruments(10) No No No
- ----------
(7) Employees may only transact in MS stock during designated window periods.
(8) Automatic purchases for dividend reinvestment plan are not subject to
pre-approval requirements.
(9) For international offices, the equivalent shares in fixed income securities
issued by the government of their respective jurisdiction (i.e.
international government debt).
(10) For which these purposes are repurchase agreements and any instrument that
has a maturity at issuance of fewer than 366 days that is rated in one of
the two highest categories by a nationally recognized statistical rating
organization.
SCHEDULE B
MSIM AFFILIATES
Registered Investment Advisers
Morgan Stanley Investment Advisors Inc.
Morgan Stanley Investment Management Inc.
Morgan Stanley AIP GP LP
Morgan Stanley AIP LP
Private Investment Partners, Inc.
Morgan Stanley Hedge Fund Partners GP LP
Morgan Stanley Hedge Fund Partners LP
Van Kampen Asset Management
Van Kampen Advisors Inc.
Morgan Stanley Investment Management Limited (London)
Morgan Stanley Investment Management Company (Singapore)
Morgan Stanley Asset & Investment Trust Management Co., Limited (Tokyo)
Morgan Stanley Investment Management Private Limited (Mumbai)*
Broker-Dealers
Morgan Stanley Distributors Inc.
Morgan Stanley Distribution Inc.
Transfer Agents
Morgan Stanley Services Company Inc.
Morgan Stanley Trust Co.
Van Kampen Investments, Inc.
Van Kampen Funds Inc.
Van Kampen Trust Company
Van Kampen Investor Services Inc.
* Not registered with the Securities and Exchange Commission.
SCHEDULE C
CODE OF ETHICS FORMS
Procedures in non-U.S. offices may vary
Account Opening Forms
Brokerage
Mutual Funds
Discretionary Managed Accounts
Dividend Reinvestment Plans (DRIPs) (As per the Code of Ethics, you must only
pre-clear the ________________________________ initial purchase in a DRIP Plan)
Transaction Pre-Clearance
Trade Pre-Clearance System
Outside Business Interest System (Outside Activities and Private Placements)
Political Contributions
Reporting Forms
Initial Holdings Report (Please contact your local Compliance group)
Quarterly Transactions Report
Annual Holdings Report and Certification of Compliance (Please contact your
local Compliance group)
Certification
Initial Certification (Please contact your local Compliance group)
Certification of Amended Code
Annual Certification