Code of Ethics of
[] John Hancock Life Insurance Company
[] John Hancock Variable Series Trust I
[] Signator Investors, Inc.
(together, called "John Hancock")
July 19, 2001
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General Principles................................................................................................2
1. To Whom Does This Code Apply?................................................................................2
2. Overview of Policies in the Code of Ethics...................................................................4
3. Policies Outside the Code of Ethics..........................................................................5
>> Company Conflict & Business Practice Policy...............................................................5
>> JHLICO Inside Information Policy and Procedures...........................................................5
>> JHFS Inside Information Policy and Blackout Periods for JHFS Stock........................................6
>> JHFS Fair Disclosure Policy...............................................................................6
>> JHFS Policy Regarding Communications with Analysts, Investors and the Media...............................7
4. Policies in the Code of Ethics...............................................................................7
>> Restriction on Gifts......................................................................................7
>> Preclearance of Securities Transactions...................................................................7
>> Open Order Blackout.......................................................................................9
>> Ban on IPOs...............................................................................................9
>> Disclosure of Private Placement Conflicts................................................................10
>> Seven Day Blackout Period................................................................................10
>> Ban on Short-Term Profits................................................................................11
>> Actual Trade Blackout....................................................................................11
5. Reports and Other Disclosures Outside the Code of Ethics....................................................12
>> Broker Letter/Duplicate Confirm Statements...............................................................12
6. Reports and Other Disclosures In the Code of Ethics.........................................................12
>> Initial Holdings Report and Annual Holdings Report.......................................................12
>> Quarterly Transaction Reports............................................................................13
>> Initial and Annual Certifications........................................................................14
7. Limited Access Persons......................................................................................14
8. Sub-Advisers................................................................................................14
9. Reporting Violations........................................................................................14
10. Interpretation and Enforcement..............................................................................14
Appendix A: Sample Regulatory Concerns and Examples.............................................................16
Appendix B: Code of Ethics Contacts.............................................................................17
Appendix C: Categories of Personnel.............................................................................18
Appendix D: Pre-clearance Procedures............................................................................19
Appendix E: Limited Access Persons..............................................................................22
Appendix F: Sub-Advisers........................................................................................23
Appendix G: Administration and Recordkeeping for the VST........................................................25
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General Principles
Each person within the John Hancock organization is responsible for maintaining
the very highest ethical standards when conducting business. This means that:
o You have a duty at all times to place the interests of our clients
first.
o All of your personal securities transactions must be conducted
consistent with this Code of Ethics and in such a manner as to avoid any
actual or potential conflict of interest or other abuse of your position
of trust and responsibility.
o You should not take inappropriate advantage of your position or engage
in any fraudulent or manipulative practice with respect to our clients'
accounts. See Exhibit A.
1. To Whom Does This Code Apply?
This Code of Ethics applies to you if you are:
o A director, officer or employee of John Hancock Life Insurance Company;
or
o A trustee or officer of the John Hancock Variable Series Trust I (the
"VST"); or
o A director, officer or employee of Signator Investors, Inc.
("Signator") who participates in making recommendations for, or
receives information about, portfolio trades of the VST funds; or
o Any other person deemed an Access Person by the Chief Investment
Compliance Officer or the VST Compliance Officer.
There are six main categories of persons covered by this Code of Ethics, taking
into account their positions, duties and access to information regarding
portfolio trades. You have been notified about which of these categories applies
to you, based on the Office of Investment Compliance's understanding of your
current role, and whether your designation is for VST purposes. If you have a
level of investment access beyond your assigned category, or if you are promoted
or change duties and as a result should more appropriately be included in a
different category, it is your responsibility to notify your Code of Ethics
contact person, who is identified in Appendix B, or Jude A. Curtis, Chief
Investment Compliance Officer.
Note: Dual Access Levels. Because this Code of Ethics covers John Hancock's
investment advisory business as well as the VST, a very limited number of
individuals who are involved in both activities will have an access level for
John Hancock's investment advisory business and an access level for the VST
which are different. These individuals must follow the reporting obligations and
restrictions applicable to both levels (although there will be substantial
overlap between levels).
If you are a supervisor, and a person joins the Company who will be under your
supervision or a person who was under your supervision leaves the Company, you
are responsible for making sure that your Code of Ethics contact person is
notified.
2
The basic definitions of the main categories of persons, with examples, are
provided below. The more detailed definitions of each category are attached as
Appendix C.
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Level 1 Level 2 Level 3 Level 4 Non-Access Person
Access Person Access Person Access Person Access Person
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
A person who regularly A person who A person who does not A senior officer who A person who is not
participates in the regularly has access regularly have, but does not regularly a Level 1, 2, 3 or 4
investment process to trade data, but may have limited, work on or receive Access Person
does not participate access to trade data information about
in the investment investment matters
process
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Examples: Examples: Examples: Examples: Examples:
- --------- -------- -------- -------- --------
o Portfolio o Auditing o Information o Senior o Human
managers o Compliance Technology Officers who Resources
o Analysts o Investment Services are not in o Sales
o Traders Accounting o Public Levels 1, 2 or Associates
o Investment Relations 3 o Accounts
Law Division o Real Estate Payable
Law Division
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
3
2. Overview of Policies in the Code of Ethics
Please refer to the following chart to determine which policies apply to your
category. These policies are described in detail below.*
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Level 1 Level 2 Level 3 Level 4 Non-Access
Access Person Access Person Access Person Access Person Person
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General Principles (p. 2) yes yes yes yes yes
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Policies in the code
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Restriction on gifts yes yes yes yes yes
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Pre-clearance requirement yes yes no no no
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Open order blackout yes no no no no
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Ban on IPOs yes no no no no
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Disclosure of private placement yes no no no no
conflicts
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Seven day blackout period yes no no no no
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Ban on short-term profits yes (VST only) no no no no
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Actual Trade Blackout yes (VST only) yes (VST only) no no no
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Reports and other disclosures outside the code
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Broker letter/duplicate confirms yes yes yes yes no
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Reports and other disclosures in the code
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Initial/annual holdings reports yes (VST only) yes (VST only yes (VST only) no no
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Quarterly transaction reports yes yes yes no no
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Initial/annual certifications yes yes yes yes no
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*This chart summarizes the policies in this Code of Ethics. As is discussed in
Section 3, Policies Outside the Code of Ethics, there are other policies which
apply to directors, officers and employees of John Hancock. These policies
contain a number of other requirements, including blackout periods for
transactions in John Hancock Financial Services, Inc. ("JHFS") stock and
preclearing of transactions in JHFS stock by directors, executive officers and
certain employees. Please refer to those policies for guidance on their
requirements.
4
3. Policies Outside the Code of Ethics
John Hancock has certain policies that are not part of the Code
of Ethics, but are equally important. They include the following:
>> Company Conflict & Business Practice Policy
-------------------------------------
A conflict of interest occurs when your Applies to: Level 1 Access Persons
private interests interfere or could Level 2 Access Persons
potentially interfere Persons with your Level 3 Access Persons
responsibilities at work. You must not place Level 4 Access Persons
yourself or the company in a position of Non-Access Persons
Non-Access actual or potential conflict. -------------------------------------
This Policy covers a number of important issues and applies to all John Hancock
personnel. For example, you cannot serve as a director of any company without
first obtaining the required written executive approval.
Other important issues in this Policy include:
o personal investments or business relationships
o misuse of inside information
o receiving or giving of gifts, entertainment or favors
o misuse or misrepresentation of your corporate position
o disclosure of confidential or proprietary information
o antitrust activities
o political campaign contributions and expenditures on public officials
>> JHLICO Inside Information Policy and Procedures
The antifraud provisions of the federal -------------------------------------
securities laws generally prohibit persons Applies to: Level 1 Access Persons
with material non-public information from Level 2 Access Persons
trading on or communicating the information Level 3 Access Persons
to others. Sanctions for violations can Level 4 Access Persons
include civil injunctions, permanent bars Non-Access Persons
from thesecurities industry, civil penalties -------------------------------------
up to three times the profits made or losses
avoided, criminal fines and jail sentences.
The rules (and sanctions) in this area apply
to all John Hancock personnel and extend to
activities both related and unrelated to
your job duties.
As an investment adviser, John Hancock Life Insurance Company is required to
have an Inside Information Policy and Procedures. This policy covers a number of
important issues pertaining to its investment advisory activities, such as:
o The misuse of material non-public information
o The information barrier procedure
o The "restricted list" and the "watch list"
o Broker letters and duplicate confirmation statements (see section 5 of this
Code of Ethics).
5
>> JHFS Inside Information Policy and Blackout Periods for JHFS Stock
John Hancock Financial Services, Inc. -------------------------------------
("JHFS"), the publicly traded parent of John Applies to: Level 1 Access Persons
Hancock Life Insurance Company, has a Policy Level 2 Access Persons
Regarding Insider Trading and Dissemination Level 3 Access Persons
of Inside Information, which covers, among Level 4 Access Persons
other topics, prohibitions on trading while Non-Access Persons
in possession of inside information about -------------------------------------
JHFS or any other company, and misuse of
inside information about JHFS or any other
company. This policy applies to all John
Hancock personnel.
One of the important provisions in the JHFS Inside Information Policy concerns
blackout periods for trading in JHFS common stock. Directors, senior officers
and certain other employees designated by their sector as having potential
access to inside information about John Hancock because of their job
responsibilities may not trade JHFS common stock during specific "blackout"
periods starting on the last business day of each fiscal quarter and ending at
the end of the day after the day of a public announcement of quarterly or annual
earnings. Trading may occur outside the blackout period unless prohibited under
the JHFS insider trading policy due to possession of inside information or other
restrictions.
More information about the JHFS blackout periods and whether those restrictions
apply to you may be obtained from Marcia Casey, Senior Counsel, at (617)
572-9183, or Donna Rothbart, at (617) 572-0175.
>> JHFS Fair Disclosure Policy
The JHFS Fair Disclosure Policy governs the -------------------------------------
communications of JHFS representatives with Applies to: Level 1 Access Persons
investors, investor representatives, Level 2 Access Persons
analysts and other investment professionals, Level 3 Access Persons
and applies to all John Hancock personnel. Level 4 Access Persons
The Fair Disclosure Policy is intended to Non-Access Persons
ensure that John Hancock representatives -------------------------------------
comply with SEC Regulation FD (for "Fair
Disclosure") which is designed to prevent
selective disclosure by public companies to
shareholders and the financial community.
The Fair Disclosure Policy addresses a
number of topics relating to those
communications and provides guidance on and
procedures governing those communications.
More information about the JHFS Fair Disclosure Policy may be obtained from
Marcia Casey, Senior Counsel, at (617) 572-9183, or James G. Marchetti, Vice
President and Counsel, at (617) 572-9193.
6
>> JHFS Policy Regarding Communications with Analysts, Investors and the Media
The JHFS Policy Regarding Communications -------------------------------------
with Analysts, Investors and the Media, Applies to: Level 1 Access Persons
which is different than the JHFS Fair Level 2 Access Persons
Disclosure Policy, identifies additional Level 3 Access Persons
requirements and procedures governing Level 4 Access Persons
communications with analysts, investors and Non-Access Persons
the media. This policy applies to all John -------------------------------------
Hancock personnel.
More information about the JHFS Policy Regarding Communication with Analysts,
Investors and the Media may be obtained from Marcia Casey, Senior Counsel, at
(617) 572-9183, or James G. Marchetti, Vice President and Counsel, at (617)
572-9193.
4. Policies in the Code of Ethics
For purposes of the following policies, a personal account is any account in
your name, or any account in which you have a direct or indirect beneficial
interest.
>> Restriction on Gifts
You and your family cannot accept -------------------------------------
preferential treatment or favors from Applies to: Level 1 Access Persons
securities brokers or dealers or other Level 2 Access Persons
organizations with which John Hancock might Level 3 Access Persons
transact business. For the protection of Level 4 Access Persons
both you and John Hancock, the appearance of Non-Access Persons
a possible conflict of interest exercise -------------------------------------
caution in any instance in which business
travel and lodging are paid for by someone
other than John Hancock. The purpose of this
policy is to minimize the basis for any
charge that you used your John Hancock
position to obtain for yourself
opportunities which otherwise would not be
offered to you.
Please see the Company Conflict and Business Practice Policy's "Compensation and
Gifts" section for additional details regarding restrictions on gifts and
exceptions for "nominal value" gifts.
>> Preclearance of Securities Transactions
If you are a Level 1 Access person or a -------------------------------------
Level 2 Access person, you must "preclear" Applies to: Level 1 Access Persons
(i.e.: receive advance approval of) any Level 2 Access Persons
personal securities transactions. The -------------------------------------
preclearance policy applies to trades for
your personal accounts, those of a spouse,
"significant other," minor children or
family members sharing your household, as
well as all accounts over which you have
discretion or give advice or information.
Due to this preclearance requirement,
participation in investment clubs is
prohibited.
7
The following securities are exempt from the preclear policy: (1) direct
obligations of the U.S. Government, (2) shares of all open-end mutual funds, (3)
bankers' acceptances, bank certificates of deposit, commercial paper and high
quality short-term debt instruments, including repurchase agreements. Shares of
closed end mutual funds, such as exchange traded index funds, REITs and
"Spiders" ("SPY"), are not exempted from preclearance without an exemption
granted under Section 10 of this Code of Ethics.
Ordinarily, Level 1 and Level 2 Access Persons, who are not VST Access Persons,
do not have to preclear transactions in securities issued by JHFS, including
JHFS stock and stock options. However, VST Access Persons are required to
preclear transactions in securities issued by JHFS, which includes the sale or
purchase of JHFS stock or the receipt or exercise of JHFS stock options.
Level 3 and Level 4 Access persons are not required to preclear trades. However,
please keep in mind that Level 3 and Level 4 Access persons are required to
report securities transactions after every trade by submitting duplicate
confirmation statements, as described in section 5 of this Code of Ethics.
The preclearance policy is designed to proactively identify possible "problem
trades" that raise frontrunning or other conflict of interest concerns (example:
when a Level 1 Access person trades a security on the same day as a John Hancock
client). Please keep in mind that even if you receive a preclearance, or are
exempt from preclearing a securities transaction, you are still prohibited from
engaging in any fraud or manipulative practice (such as frontrunning) with
respect to a John Hancock client or a VST fund.
You preclear a trade by following the steps outlined in the preclearance
procedures, which are attached as Appendix D. Please note that:
o You may not trade until clearance is received.
o Clearance approval is valid only for the request date and next business
date for Level 1 preclearers and the date granted for Level 2
preclearers.
o A separate procedure should be followed for requesting preclearance of a
private placement or a derivative, as detailed in Appendix D. The Office
of Investment Compliance must maintain a five-year record of all
clearances of private placement purchases by some access persons, and
the reasons supporting the clearances.
NOTE: Other Obligations to Preclear JHFS Stock. Directors and executive officers
must preclear their transactions in JHFS stock with Marcia Casey, Senior
Counsel, (617) 572-9183, or James G. Marchetti, Vice President and Counsel,
(617) 572-9193. In addition, certain employees designated as part of the
Company's stock repurchase program must preclear purchases and sales of JHFS
stock with Marcia Casey or James G. Marchetti.
8
>> Open Order Blackout
If you are a Level 1 Access person, you are -------------------------------------
prohibited from buying or selling a security Applies to: Level 1 Access Persons
on a day in which a portfolio or account -------------------------------------
managed by John Hancock has a pending buy or
sell order for that security until that
order is executed or withdrawn.
You will be required to sell any security purchased in violation of this policy
unless it is determined that no conflict of interest exists in relation to that
security. Any profits realized on trades in violation of this policy must be
surrendered by check payable to John Hancock Life Insurance Company and will be
contributed by John Hancock to a charity designated by John Hancock.
This policy applies to holdings in your personal accounts, those of a spouse,
"significant other," minor children or family members sharing your household, as
well as all accounts over which you have discretion or give advice or
information.
>> Ban on IPOs
If you are a Level 1 Access person, you may -------------------------------------
not acquire securities in an initial public Applies to: Level 1 Access Persons
offering. You may not purchase any newly- -------------------------------------
issued securities until the next business
(trading) day after the offering date. This
policy applies to trades for your personal
accounts, those of a spouse, "significant
other," minor children or family members
sharing your household, as well as all
accounts over which you have discretion or
give advice or information.
There are two main reasons for this prohibition: (1) these purchases may suggest
that persons have taken inappropriate advantage of their positions for personal
profit; and (2) these purchases may create at least the appearance that an
investment opportunity that should have been available to the client was
diverted to the personal benefit of an individual employee.
You may request an exemption for certain investments that do not create a
potential conflict of interest, such as: (1) securities of a mutual bank or
mutual insurance company received as compensation in a demutualization and other
similar non-voluntary stock acquisitions; or (2) fixed rights offerings.
If you are registered with Signator Investors, Inc., you are prohibited from
acquiring securities in an initial public offering, regardless of whether you
are a Level 1, 2, 3 or 4 Access person or a Non-Access person. You should
consult the Insurance and Securities Market Conduct Manual for additional
guidance if you are registered with Signator Investors, Inc.
9
>> Disclosure of Private Placement Conflicts
If you are a Level 1 Access person and you -------------------------------------
own securities purchased in a private Applies to: Level 1 Access Persons
placement (such as a limited partnership), -------------------------------------
you must disclose that holding when you
participate in a decision to purchase or
sell that same issuer's securities for a
John Hancock client's account. Private
placements are securities exempt from SEC
registration under section 4(2), section
4(6) or rules 504 -506 of the Securities Act
of 1933.
The investment decision must be subject to an independent review by investment
personnel with no personal interest in the issuer. This policy applies to
holdings in your personal accounts, those of a spouse, "significant other,"
minor children or family members sharing your household, as well as all accounts
over which you have discretion or give advice or information.
The purpose of this policy is to provide appropriate scrutiny in situations in
which there is a potential conflict of interest.
Level 1 Access persons (as well as Level 2 Access persons who are not subject to
this disclosure obligation) must pre-clear any investment in a private placement
by you, your spouse, "significant other," minor children or family members
sharing your household, as well as for any accounts over which you have
discretion or give advice or information.
>> Seven Day Blackout Period
If you are a portfolio manager (or were -------------------------------------
identified to the Office of Investment Applies to: Level 1 Access Persons
Compliance as part of a portfolio management -------------------------------------
team), you are prohibited from buying or
selling a security within seven calendar
days before and after that security is
traded for a portfolio or account that you
manage unless no conflict of interest exists
in relation to that security.
In addition, all Level 1 Access persons are prohibited from knowingly buying or
selling a security within seven calendar days before and after that security is
traded for a portfolio or account managed by John Hancock unless no conflict of
interest exists in relation to that security. If a portfolio or account managed
by John Hancock trades in a security within seven calendar days before or after
you trade in that security, you may be required to demonstrate that you did not
know that the trade was being considered for that portfolio or account.
You will be required to sell any security purchased in violation of this policy
unless it is determined that no conflict of interest exists in relation to that
security. Any profits realized on trades during a seven day blackout period must
be surrendered by check payable to John Hancock Life Insurance Company and will
be contributed by John Hancock to a charity designated by John Hancock.
10
This policy applies to holdings in your personal accounts, those of a spouse,
"significant other" or family members sharing your household, as well as all
accounts over which you have discretion or give advice or information.
>> Ban on Short-Term Profits
If you are a Level 1 Access person for the -------------------------------------
VST, you cannot profit from the purchase and Applies to: Level 1 Access Persons
sale (or sale and purchase) of the same (or (VST Only)
equivalent) securities within 60 calendar -------------------------------------
days. The purpose of this policy is to
address the risk, real or perceived, of
frontrunning or other abusive practices
involving short-term personal trading. Any
profits realized on short-term trades must
be surrendered by check payable to John
Hancock Life Insurance Company and will be
contributed by John Hancock to a charity
designated by John Hancock.
This policy applies to trades for your personal accounts, those of a spouse,
"significant other," minor children or family members sharing a household, as
well as all accounts over which you have discretion or give advice or
information. If you give away a security, it is considered a sale.
You may invest in derivatives or sell short provided the transaction period
exceeds the 60-day holding period.
You may request an exemption from this policy for involuntary sales due to
unforeseen corporate activity (such as a merger), or hardship reasons (such as
unexpected medical expenses) by sending an e-mail to Jude A. Curtis, VST
Compliance Officer.
NOTE: Short Swing Profit Rules for JHFS Directors and Executive Officers. JHFS
directors and executive officers are subject to different regulations and rules
on short swing profits relating to trading in JHFS stock. Questions regarding
the short swing profit rules should be directed to Marcia Casey, Senior Counsel,
at (617) 572-9183, or James G. Marchetti, Vice President and Counsel, at (617)
572-9193.
>> Actual Trade Blackout
If you are a Level 1 Access person for the -------------------------------------
VST or a Level 2 Access person for the VST, Applies to: Level 1 Access Persons
you are Applies to: prohibited from buying (VST Only)
or selling a security in Level 1 Access Level 2 Access Persons
which a VST fund has traded during the past (VST Only)
five Persons business days. -------------------------------------
You will be required to sell any security purchased in violation of this policy
unless it is determined that no conflict of interest exists in relation to that
security. Any profits realized on trades in violation of this policy must be
surrendered by check payable to John Hancock Life Insurance Company and will be
contributed by John Hancock to a charity designated by John Hancock.
11
This policy applies to holdings in your personal accounts, those of a spouse,
"significant other," minor children or family members sharing your household, as
well as all accounts over which you have discretion or give advice or
information.
5. Reports and Other Disclosures Outside the Code of Ethics
>> Broker Letter/Duplicate Confirm Statements
As required by the JHLICO Inside Information -------------------------------------
Policy, if you are a Level 1, 2, 3 or 4 Applies to: Level 1 Access Persons
Access Applies to: person, you must inform Level 2 Access Persons
your stockbroker that you Level 1 Access are Level 3 Access Persons
employed by an investment adviser or broker. Level 4 Access Persons
Persons Your broker is subject to certain -------------------------------------
rules designed to prevent favoritism toward
your accounts. You may not accept negotiated
commission rates that you believe may be
more favorable than the broker grants to
accounts with similar characteristics.
When you open or close a brokerage account, before any trades are made, you
must:
o notify your Code of Ethics contact person, who is identified in Exhibit
B, so that the contact person can send to the broker a letter notifying
the broker of the requirement to send duplicate confirmation statements.
o ensure that your broker sends duplicate confirmations on a timely basis
to the Compliance Office, T-30.
These requirements apply to holdings in your personal accounts, those of a
spouse, "significant other," minor children or family members sharing your
household, as well as all accounts over which you have discretion or give advice
or information.
6. Reports and Other Disclosures In the Code of Ethics
>> Initial Holdings Report and Annual Holdings Report
You must file an initial holdings report -------------------------------------
within 10 calendar days after becoming a Applies to: Level 1 Access Persons
Level 1, Level 2 or Applies to: Level 3 (VST Only)
Access person for the VST. You must also Level 2 Access Persons
Level 1 Access file an annual holdings (VST Only)
report (as of Persons December 31st) within Level 3 Access Persons
30 calendar days after the calendar year (VST Only)
end. These reports must cover all (VST Only) -------------------------------------
holdings in your personal accounts, those of
a spouse, "significant other," minor
children or family members sharing your
household, as well as all accounts over
which you have discretion or give advice or
information.
12
You must report:
o holdings of all securities except: (1) direct obligations of the U.S.
Government, (2) shares of open-end mutual funds, (3) bankers'
acceptances, bank certificates of deposit, commercial paper and high
quality short-term debt instruments, including repurchase agreements.
Shares of closed end mutual funds, such as exchange traded index funds,
REITs, and "Spiders" ("SPY"), are not exempted. Because this requirement
only applies to VST Access Persons, holdings of securities issued by
JHFS, including JHFS stock and stock options, must be reported on these
holding reports.
o all securities brokerage accounts (including brokerage accounts that
only contain securities exempt from reporting, such as shares of
open-end mutual funds).
>> Quarterly Transaction Reports
You must file a quarterly transaction report -------------------------------------
within 10 calendar days after the end of a Applies to: Level 1 Access Persons
Applies to: calendar quarter if you are a Level 2 Access Persons
Level 1, Level 2 Level 1 Access or Level 3 Level 3 Access Persons
Access person. This report must Persons -------------------------------------
cover all transactions during the past
calendar quarter in your personal accounts,
those of a spouse, "significant other,"
minor children or family members sharing
your household, as well as all accounts over
which you have discretion or give advice or
information.
You must report:
o transactions in all securities except: (1) direct obligations of the
U.S. Government, (2) open-end mutual funds, (3) bankers' acceptances,
bank certificates of deposit, commercial paper and high quality
short-term debt instruments, including repurchase agreements. Shares of
closed end mutual funds, such as exchange traded index funds, REITs and
"Spiders" ("SPY"), are not exempted.
o the opening of any securities brokerage account (including brokerage
accounts that only contain securities exempt from reporting, such as
shares of open-end mutual funds).
Level 1, Level 2 and Level 3 Access Persons, who are not VST Access Persons, do
not need to report transactions in securities issued by JHFS, including JHFS
stock and stock options, in quarterly reports. VST Access Persons who are
required to file quarterly reports must report all transactions in securities
issued by JHFS, including JHFS stock and stock options, within the reporting
period.
13
>> Initial and Annual Certifications
If you are a Level 1, 2, 3 or 4 Access -------------------------------------
person, you must provide initial and annual Applies to: Level 1 Access Persons
Applies to: certifications at dates Level 2 Access Persons
designated by the Office Level 1 Access of Level 3 Access Persons
Investment Compliance that: (1) you have Level 4 Access Persons
read Persons and understood this Code of -------------------------------------
Ethics, (2) you recognize that you are
subject to its policies; and (3) you will
comply or have complied with its
requirements. You are required to make this
certification to demonstrate that you
understand the importance of these policies
and your responsibilities under the Code.
7. Limited Access Persons
There is an additional category of persons called "Limited Access" persons. This
category consists only of directors of John Hancock Life Insurance Company and
trustees of the VST who are not also officers of John Hancock Life Insurance
Company.
A more detailed definition of Limited Access persons, and a list of the policies
that apply to them, is attached as Appendix E.
8. Sub-Advisers
A sub-adviser to a VST fund has a number of responsibilities under this Code of
Ethics, as described in Appendix F.
9. Reporting Violations
If you know of any violation of our Code of Ethics, you have a responsibility to
immediately report it. You should also report any deviations from the controls
and procedures that safeguard John Hancock and the assets of our clients.
You can report confidentially to:
o Jude A. Curtis, Chief Investment Compliance Officer (572-6990); or
o Your manager or department head.
10. Interpretation and Enforcement
This Code of Ethics cannot anticipate every situation in which personal
interests may be in conflict with the interests of our clients. You should be
responsive to the spirit and intent of this Code of Ethics as well as its
specific provisions.
When any doubt exists regarding any Code of Ethics provision or whether a
conflict of interest with clients might exist, you should discuss the
transaction beforehand with the Chief Investment Compliance Officer, Jude A.
Curtis, at (617) 572-6990.
14
The Code of Ethics is designed to detect and prevent fraud against clients and
VST investors, and to avoid the appearance of impropriety. If you feel
inequitably burdened by any policy, you should feel free to contact Chief
Investment Compliance Officer, Jude A. Curtis for an exception to this policy.
Exceptions may be granted by the Office of Investment Compliance where warranted
by applicable facts and circumstances.
The Office of Investment Compliance may grant a general exception to certain
restrictions in this Code of Ethics for trades in large capitalization stocks.
Preclearance of these transactions would, however, still be required.
To provide assurance that policies are effective, Compliance will monitor and
check personal securities transaction reports and certifications against client
or fund portfolio transactions. Other internal auditing procedures may be
adopted from time to time. Additional administration and recordkeeping
procedures are described in Appendix G.
The Office of Investment Compliance will refer violations to the Ethics
Committee for review and appropriate action. The Ethics Committee includes the
Chief Investment Officer, the Chief Investment Compliance Officer and another
senior officer from the Investment Sector. The following factors will be
considered when the Ethics Committee determines a fine or other disciplinary
action:
o the person's position and function (senior personnel may be held to a higher
standard);
o the amount of the trade;
o whether the funds or accounts hold the security and were trading the same day;
o whether the violation was by a family member.
o whether the person has had a prior violation and which policy was involved.
o whether the employee self-reported the violation.
Violations by NASD registered persons are reported to the NASD Compliance
Officer at John Hancock Life Insurance Company.
Sanctions for violations could include fines, limitation of personal trading
activity, suspension, termination of employment and/or a report to the
appropriate regulatory authority.
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Appendix A: Sample Regulatory Concerns and Examples
By way of example only, the following constitute fraudulent or manipulative
practices and are of great concern to law enforcement agencies:
o Frontrunning
Example: In your capacity as a portfolio manager, you decide to
purchase a substantial position in a XYZ security for
client accounts because you think it is undervalued.
You also want to invest in the XYZ security for your
personal account. You place your order before the
client orders so that you will obtain the lowest price.
o Trading on inside information
Example: In the course of a Committee of Finance meeting, you
learn that the management of ABC Corporation seeks
financing from the Company to take ABC private in a
leveraged buy-out. Upon leaving the meeting, you direct
your broker to purchase ABC stock, although the
proposed buy-out has not been publicly disclosed.
o Tipping inside information
Example: In your capacity as an analyst researching Acquirer
Corp., you are provided with non-public information
that Acquirer plans to make a hostile takeover offer
for Target Corporation. You improperly mention this
information to an employee of an affiliated
mutual fund, who then trades on the information.
o Misappropriation of client investment opportunity
Example: You are approached by a broker about an opportunity to
buy the last remaining interest in a private placement
for a client account. Although this would be an
appropriate and good investment for the client account,
you decide to purchase this private placement for your
own account.
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Appendix B: Code of Ethics Contacts
The following individuals serve as Code of Ethics contacts for these respective
groups:
Bond and Corporate Finance Group
Cyndy Cavanaugh
Ext. 24612
ccavanaugh@jhancock.com
Fax (617) 572-5493
Fran DaSilva
Ext. 24534
fmdasilva@jhancock.com
Fax (617) 572-5493
John Hancock Variable Series Trust I
Maryellen Carney
Ext. 21079
mcarney@jhancock.com
Fax (617) 572-5029
Paul Lau
Ext. 25810
pclau@jhancock.com
Fax (617) 572-5029
All Others
Donna Rothbart
Ext. 20175
dmrothbart@jhancock.com
Fax (617) 572-9125
Joan Fontes
Ext. 26619
jfontes@jhancock.com
Fax (617) 572-9125
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Appendix C: Categories of Personnel
You have been notified about which of these categories applies to you, based on
the Office of Investment Compliance's understanding of your current role, and
whether your designation is for VST purposes. If you have a level of investment
access beyond that category, or if you are promoted or change duties and as a
result should more appropriately be included in a different category, it is your
responsibility to immediately notify your Code of Ethics contact person.
1) Level 1 Access person: You are a Level 1 Access person if you are an officer
or employee of John Hancock Life Insurance Company who, in connection with
your regular functions or duties, makes or participates in making
recommendations regarding the purchase or sale of securities for a John
Hancock client.
(examples: portfolio managers, analysts, traders)
2) Level 2 Access person: You are a Level 2 Access person if you are an
officer or employee of John Hancock Life Insurance Company who: (i) in
connection with your regular functions or duties, makes, participates in,
or obtains information regarding the purchase or sale of securities by a
John Hancock client; or (ii) your functions relate to the making of any
recommendation regarding the purchase or sale of securities by a John
Hancock client.
(examples: Auditing, Office of Investment Compliance, Investment
Accounting, Investment Law Division)
3) Level 3 Access person: You are a Level 3 Access person if you are an
officer or employee of John Hancock Life Insurance Company who, in
connection with your regular functions or duties, does not make or
participate in the purchase or sale of securities by a John Hancock client,
but may have limited access to information regarding those purchases or
sales.
(examples: Information Technology Services, Public Relations, Real Estate
Law Division)
4) Level 4 Access person: You are a Level 4 Access person if you are an
officer of John Hancock Life Insurance Company who in connection with your
regular functions or duties, does not make, participate in, obtain, or have
access to information regarding the purchase or sale of securities by a
John Hancock client.
(examples: senior officers who are not in Level 1, 2 or 3)
5) Non-Access person: You are a non-access person if you are an employee of
John Hancock Life Insurance Company who does not fit the definitions of any
of the other five categories (Level 1 Access person, Level 2 Access person,
Level 3 Access person, Level 4 Access person, or Limited Access person). To
be a non-access person, you must not obtain or have access to information
regarding the purchase or sale of securities by a John Hancock client in
connection with your regular functions or duties.
(examples: Human Resources, Retail Sales, Accounts Payable)
6) Limited Access Person: Please see Appendix E for this definition.
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Appendix D: Pre-clearance Procedures
PRE-CLEARANCE PROCEDURES
You should read the Code of Ethics to determine whether you must obtain a
pre-clearance before you enter into a securities transaction. If you are
required to obtain a preclearance, you should follow the procedures detailed
below.
1. Pre-clearance for Public Securities (Levels 1 and 2 Access Persons):
A request to pre-clear must be entered into the pre-clear system called iTrade
before the purchase or sale of any securities.
The pre-clear system, iTrade, is web-based and can be accessed at
http://cornishrex03/itrade/itrade.asp You will need to enter your regular user
id (the id you use to enter your computer daily) and your Web Security Services
password to login to use iTrade.
If you have already registered for a Web Security Services password, but forget
your password, you should contact CSS at (617) 572-6950 to have your password
re-set. If you do not have a Web Security Services Password, you may register as
follows:
1) Go to Internet Explorer and connect to the Hancock Hub Home Page on
the John Hancock intranet.
2) When you are at the Hub, go to Quick Links and click on Web Security
Services.
3) Under General Information, click on New User Password Registration.
4) Click on Register Online.
5) At this point, you will be forwarded to the registration screen.
Please read the instructions and make sure you enter your user ID and
password in lower case.
6) After you have successfully registered your Web Security Services
password, follow the directions to log out.
7) If you need assistance with registering, contact CSS at 572-6950.
You can also access iTrade when you dial in to the JH Network from your home
computer or laptop. For more information on network dial-in, contact CSS
customer support.
Your Code of Ethics contact (See Appendix B) can provide you with a user's
manual with detailed instructions on submitting a trade request. If you are
unable to access iTrade, please notify your Code of Ethics contact.
The following information will be required to submit your pre-clear request:
[] Ticker symbol
[] Name of security to trade
[] Cusip number (9 alpha-numeric characters)
[] Trade type (e.g. buy/sell)
[] Brokerage firm
[] Brokerage account number
[] Quantity
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Level 1 Access Persons - You must enter your pre-clear request by 11:00 a.m. You
will normally be notified the same day via Microsoft Outlook as to whether
clearance has been granted. Because preclearing for Level 1 Access Persons
involves a manual process, you may, however, be notified the next business day.
CLEARANCE APPROVAL FOR LEVEL 1 ACCESS PERSONS IS VALID FOR THE REQUEST DATE AND
THE NEXT BUSINESS DAY ONLY. YOU MAY NOT TRADE UNTIL CLEARANCE IS RECEIVED.
Level 2 Access Persons - You must enter your request during the day you wish to
trade. You will receive automatic feedback from iTrade as to whether clearance
has been granted.
CLEARANCE APPROVAL FOR LEVEL 2 ACCESS PERSONS IS VALID ONLY FOR THE DATE
GRANTED. YOU MAY NOT TRADE UNTIL CLEARANCE IS RECEIVED.
2. Pre-clearance Procedures for Derivatives, Futures, Options and Short Sales:
You may request pre-clearance of short sales or transaction in futures, options
and other derivatives, by sending an e-mail to your Code of Ethics contact (See
Appendix B) with a cc: to Jude A. Curtis, Chief Investment Compliance Officer.
The request must include, if applicable:
[] The associate's name
[] The associate's department
[] The date of the request
[] The complete name of the security
[] A description of the security including its relationship to an
underlying common stock or stock index
[] The duration or description of the contract or exercise period
[] Any potential conflict, present or future, with trading for JH client
accounts and whether the security might be offered as an inducement to
later recommend publicly traded securities for any client account
[] The seller and whether or not the seller is one with whom the associate
does business on a regular basis
Clearance of such securities may be denied if the transaction could create the
appearance of impropriety.
3. Pre-Clearance for Private Placements (Level 1 & Level 2 Access Persons Only):
You may request a pre-clearance to purchase or sell a private placement security
by sending an e-mail to your Code of Ethics contact (See Appendix B) with a cc:
to Jude A. Curtis, Chief Investment Compliance Officer. The request must
include:
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[] The associate's name
[] The associate's department
[] The complete name of the security
[] The seller and whether or not the seller is one with whom the
associates does business on a regular basis
[] Any potential conflict, present or future, with JH client trading
activity and whether the security might be offered as an inducement to
later recommend publicly traded securities for any client account
[] The date of the request
Clearance of private placements may be denied if the transaction could create
the appearance of impropriety. Exemptions to participate in initial public
offerings will also be denied if the transaction is prohibited for a person due
to his or her access category under the code of ethics.
* * * * *
If you have questions or require assistance entering a trade, please call your
Code of Ethics contact listed on Appendix B.
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Appendix E: Limited Access Persons
You are a Limited Access person if you are a director of John Hancock Life
Insurance Company or a trustee of the John Hancock Variable Series Trust I and
you are not an officer or employee of John Hancock Life Insurance Company or the
John Hancock Variable Series Trust I.
The following policies apply to your category. These policies are described in
detail in the Code of Ethics.
o Fundamental concept
o JHFS and JHLICO inside information policies and other policies identified in
Section 3 of the Code*
o Broker letter/duplicate confirms*
o Quarterly transaction reports*
o Initial and annual certifications*
*Exception: If you are an independent trustee of the VST:
-----------
o you are exempt from the JHFS and JHLICO inside information
policies (although you should not trade on any material inside
information that you learned through the Trust) and the other
policies identified in Section 3 of the Code.
o you are exempt from the broker letter/duplicate confirms
requirement.
o you do not have to file a quarterly transaction report unless you
knew (or should have known) that during the 15 calendar days
before or after you trade a security, either:
(i) a VST fund purchased or sold the same security, or
(ii) a VST fund or a VST sub-adviser considered purchasing or
selling the same security.
This policy applies to holdings in your personal accounts, those of
a spouse, "significant other" or family members sharing your
household, as well as all accounts over which you have discretion
or give advice or information. If this situation occurs, it is your
responsibility to contact Maryellen Carney, Office of Investment
Compliance, at (617) 572-1079, and she will assist you with the
requirements of the quarterly transaction report.
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Appendix F: Sub-Advisers
A sub-adviser to a VST fund has a number of responsibilities under this Code of
Ethics. If John Hancock determines that a sub-adviser has failed to comply with
the provisions of Rule 17j-1, John Hancock may deem the sub-adviser's directors,
officers or employees to be subject to this Code of Ethics.
>> Approval of Code of Ethics
Each sub-adviser to a VST fund must provide a copy of its code of ethics and
each amendment to that code to the VST Compliance Officer; and each such code or
material amendment shall be submitted to the VST Trustees for their approval
before hiring and within six months of any material amendment. Whenever a
sub-adviser provides a code of ethics or material amendment to its code of
ethics to the VST Compliance Officer, the sub-adviser must provide a
certification to the VST Trustees that it has adopted procedures reasonably
necessary to prevent Access Persons from violating the sub-adviser's code of
ethics. The trustees will give their approval if they determine that the code:
o contains provisions reasonably necessary to prevent the sub-adviser's
Access Persons (as defined in Rule 17j-1) from engaging in any conduct
prohibited by Rule 17j-1;
o requires the sub-adviser's Access Persons to make reports to at least
the extent required in Rule 17j-1(d);
o requires the sub-adviser to institute appropriate procedures for review
of these reports by management or compliance personnel (as contemplated
by Rule 17j-1(d)(3));
o provides for notification of the sub-adviser's Access Persons in
accordance with Rule 17j-1(d)(4); and
o requires the sub-adviser's Access Persons who are Investment Personnel
to obtain the pre-clearances required by Rule 17j-1(e);
>> Reports and Certifications
By March 31 of each year, each sub-adviser must provide an annual report and
certification to John Hancock and the VST Trustees in accordance with Rule
17j-1(c)(2)(ii), covering the previous calendar year. The sub-adviser must also
provide other reports or information that John Hancock may reasonably request,
including,
o A quarterly report to John Hancock identifying any material violation
of the sub-adviser's code of ethics by access persons or investment
personnel to any VST fund it sub-advises, including the resolution or
planned resolution of the violation, or a certification that no such
violation occurred. This obligation may be fulfilled through the
sub-adviser's response to the VST Quarterly Regulatory Checklist.
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o Immediate notification, through a phone call and a follow-up Code of
Ethics Exceptions Reporting Form or a similar written communication
containing all the information on that form, of any material violation
of the sub-adviser's code of ethics, including the resolution or
planned resolution of the violation.
o Information or assistance as may be necessary or appropriate to enable
John Hancock to timely prepare and deliver to the Trustees, on at least
a quarterly basis, a report on compliance activities and, on an annual
basis, a written certification of compliance with the sub-adviser's
code of ethics.
>> Recordkeeping Requirements
The sub-adviser must maintain all records for its Access Persons as required by
Rule 17j-1(f).
>> Disclosure of Purchases or Sales
Other than in the normal course of business with John Hancock's investment
operations, in response to questioning during meetings of the VST Trustees or
John Hancock Retail Sector Investment Management Review Committee and as
otherwise disclosed in writing and approved by the VST Compliance Officer, no
employee of a sub-adviser shall discuss in the presence of a John Hancock
associate, any purchases or sales made or to be made by a Fund within fifteen
calendar days before or after a Fund executes a trade in that security.
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Appendix G: Administration and Recordkeeping for the VST
>> Adoption and Approval
The Trustees of the VST must approve the code of ethics of an adviser,
sub-adviser or affiliated principal underwriter before initially retaining its
services.
Any material change to a code of ethics of John Hancock Life Insurance Company,
or a sub-adviser to a fund must be approved by the Trustees of the VST,
including a majority of trustees who are not interested persons, no later than
six months after adoption of the material change.
>> Administration
No less frequently than annually, John Hancock Life Insurance Company will
furnish to the Trustees of the VST a written report that:
o describes issues that arose during the previous year under the code of ethics
or the related procedures, including, but not limited to, information about
material code or procedure violations, and
o certifies that each entity has adopted procedures reasonably necessary to
prevent its access persons from violating its code of ethics.
>> Recordkeeping
The VST Compliance Officer will maintain:
o a copy of the current code of ethics for the John Hancock Variable Series
Trust I and John Hancock Life Insurance Company, and a copy of each code
of ethics in effect at any time within the past five years.
o a record of any violation of those code of ethics, and of any action
taken as a result of the violation, for six years.
o a copy of each report made by an Access person under those code of
ethics, for six years (the first two years in a readily accessible
place).
o a record of all persons, currently or within the past five years, who are
or were required to make reports under those code of ethics. This record
will also indicate who was responsible for reviewing these reports.
o a copy of each code of ethics report to the Trustees, for six years (the
first two years in a readily accessible place).
o a record of any decision, and the reasons supporting the decision, to
approve the acquisition by a Level 1 Access person of initial public
offering securities or private placement securities, for six years.
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